2023 Annual Report of Luzhou Laojiao Co., Ltd.
Luzhou Laojiao Co., Ltd.
2023 Annual Report
April 2024
1
2023 Annual Report of Luzhou Laojiao Co., Ltd.
2023 Annual Report
Section I Important Statements, Contents and Definitions
The Board of Directors, Board of Supervisors, directors, supervisors and senior management guarantee
that the information presented in this report is free of any false records, misleading statements or
material omissions, and shall individually and together be legally liable for truthfulness, accuracy and
completeness of its contents.
Liu Miao, responsible person for the Company, Xie Hong, responsible person for accounting work and
Song Ying, responsible person for the Company’s financial affairs (Accounting Supervisor) have
warranted that the financial statements in this report are true, accurate and complete.
Other directors attended the board meeting to deliberate this report by themselves except the following
directors.
Position of directors who
Name of directors who did not Reason for not attending
did not attend the meeting Name of deputies
attend the meeting in person the meeting in person
in person
Liu Miao Chairman of the board Work Lin Feng
Affected by risks, uncertainties and assumptions, the forward-looking statements concerning business
objectives and future plans made in this report based on the subjective assumptions and judgments of
the future policies and economic conditions may be significantly different from the actual results. Such
statements shall not be considered as virtual promises of the Company to investors, and the investors
and relevant persons shall maintain adequate risk awareness and shall understand the differences
between plans, forecasts and commitments.
In the annual report, the potential risks in the operation of the Company have been disclosed. Investors
are kindly reminded to pay attention to possible investment risks.
The profit distribution plan approved by the board of directors: based on 1,471,987,769 shares, a cash
dividend of CNY 54.00 (tax inclusive) will be distributed for every 10 existing shares held, 0 shares of
bonus shares (tax inclusive), and reserves would not be converted into share capital.
This Report has been prepared in both Chinese and English. Should there be any discrepancies or
misunderstandings between the two versions, the Chinese version shall prevail.
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2023 Annual Report of Luzhou Laojiao Co., Ltd.
Contents
Section I Important Statements, Contents and Definitions......................................... 2
Section II Company Profile and Key Financial Results .............................................. 6
Section III Management Discussion and Analysis .................................................... 12
Section IV Corporate Governance ............................................................................ 53
Section V Environmental and Social Responsibility ................................................ 79
Section VI Significant Events ................................................................................... 91
Section VII Changes in Shares and Information about Shareholders....................... 99
Section VIII Preferred Shares ..................................................................................110
Section IX Information about Bond ......................................................................... 111
Section X Financial Report ......................................................................................117
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2023 Annual Report of Luzhou Laojiao Co., Ltd.
Documents Available for Reference
1. Financial statements signed and stamped by the responsible person for the Company, the
responsible person for accounting work and the responsible person for the Company’s financial affairs
(Accounting Supervisor);
2. The original of the auditor’s report with the seal of the accounting firm, and signed and stamped by
CPAs; and
3. The originals of all company documents and announcements that are disclosed to the public during
the reporting period.
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2023 Annual Report of Luzhou Laojiao Co., Ltd.
Definitions
Term Reference Definition
Company, the Company, Luzhou
Refer to Luzhou Laojiao Co., Ltd.
Laojiao
Laojiao Group Refer to Luzhou Laojiao Group Co., Ltd.
XingLu Group Refer to Luzhou XingLu Investment Group Co., Ltd.
State-owned Assets Supervision and Administration
SASAC of Luzhou Refer to
Commission of Luzhou
Huaxi Securities Refer to Huaxi Securities Co., Ltd.
Luzhou Bank Refer to Luzhou Bank Co., Ltd.
Sales Company Refer to Luzhou Laojiao Sales Co., Ltd.
Brewing Company Refer to Luzhou Laojiao Brewing Co., Ltd.
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2023 Annual Report of Luzhou Laojiao Co., Ltd.
Section II Company Profile and Key Financial Results
1. Corporate information
Stock abbreviation Luzhou Laojiao Stock code 000568
Stock exchange where
the shares of the Shenzhen Stock Exchange
Company are listed
Name of the Company
泸州老窖股份有限公司
in Chinese
Abbr. of the Company
泸州老窖
name in Chinese
Name of the Company
Luzhou Laojiao Co., Ltd.
in English (if any)
Abbr. of the Company
LZLJ
name in English (if any)
Legal representative Liu Miao
Registered address Guojiao Square, Luzhou City, Sichuan Province, China
Postal code 646000
The Company’s registered address has changed from 46 Guihua Street,
Past changes of
Luzhou City, Sichuan Province, China to Guojiao Square, Luzhou City,
registered address
Sichuan Province, China in 2000.
Luzhou Laojiao Command Center, 71 Nanguang Road, Luzhou City, Sichuan
Business address
Province, China
Postal code 646000
Company website www.lzlj.com
E-mail lzlj@lzlj.com
2. Contact us
Representative for securities
Secretary of the board
affairs
Name Li Yong Wang Chuan
Luzhou Laojiao Command Center, 71 Nanguang Road, Luzhou
Address
City, Sichuan Province, China
Tel. (0830)2398826 (0830)2398826
Fax (0830)2398864 (0830)2398864
E-mail dsb@lzlj.com dsb@lzlj.com
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2023 Annual Report of Luzhou Laojiao Co., Ltd.
3. Information disclosure and place where the annual report is kept
Stock exchange website where this
China Securities Journal, Securities Times, Securities Daily
Report is disclosed
Media and website where this Report
http://www. cninfo.com.cn
is disclosed
Place where the annual report of the
Board office
Company is kept
4. Company registration and alteration
Unified social credit code 91510500204706718H
Changes in main business activities
since the Company was listed (if None
any)
Before September 2009, the controlling shareholder was the
Changes of controlling shareholders SASAC of Luzhou. After the equity transfer in September 2009,
of the Company (if any) the controlling shareholder was changed to Laojiao Group, but the
actual controller is still the SASAC of Luzhou.
5. Other relevant information
Accounting firm engaged by the Company
Name of the accounting
Sichuan Huaxin (Group) CPA Firm
firm
Business address of the 28/F., South Jinmaolidu, NO.18 Ximianqiao Street, Chengdu City,
accounting firm Sichuan Province.
Name of accountants for
Li Wulin, Tang Fangmo, and Fan Bo
writing signature
Sponsors engaged by the Company to continuously perform its supervisory function during the
reporting period
□ Applicable N/A
Financial adviser engaged by the Company to continuously perform its supervisory function during
the reporting period.
Applicable N/A
6. Key accounting data and financial indicators
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2023 Annual Report of Luzhou Laojiao Co., Ltd.
Whether the Company performed a retroactive adjustment to or restatement of accounting data.
Yes No
2023 2022 YoY Change 2021
Operating revenues
30,233,301,388.26 25,123,563,271.62 20.34% 20,642,261,724.37
(CNY)
Net profits
attributable to
13,246,394,700.59 10,365,383,281.80 27.79% 7,955,554,351.73
shareholders of the
Company (CNY)
Net profits
attributable to
shareholders of the
13,150,392,806.65 10,321,481,236.93 27.41% 7,884,384,055.60
Company before
non-recurring gains
and losses (CNY)
Net cash flows from
operating activities 10,648,364,935.46 8,262,648,269.72 28.87% 7,698,648,104.51
(CNY)
Basic earnings per
9.02 7.06 27.76% 5.43
share (CNY/share)
Diluted earnings per
9.02 7.06 27.76% 5.43
share (CNY/share)
Weighted average
35.07% 33.32% 1.75% 31.15%
ROE
At the end of 2023 At the end of 2022 YoY Change At the end of 2021
Total assets (CNY) 63,294,455,201.60 51,385,481,354.52 23.18% 43,211,782,005.68
Net assets
attributable to
41,391,410,494.89 34,207,871,130.03 21.00% 28,040,247,005.94
shareholders of the
Company (CNY)
Whether the lower of the net profits attributable to shareholders of the Company before and after non-
recurring gains and losses was negative for the last three accounting years, and the latest auditor’s
report indicated that there was uncertainty about the Company’s ability to continue as a going
concern
Yes No
Whether the lower of the net profits attributable to shareholders of the Company before and after non-
recurring gains and losses was negative
Yes No
7. Differences in accounting data under domestic and overseas
accounting standards
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2023 Annual Report of Luzhou Laojiao Co., Ltd.
7.1. Differences in the net profits and net assets disclosed in the financial reports
prepared under the international and China accounting standards
Applicable N/A
No such differences for the reporting period.
7.2. Differences in the net profits and net assets disclosed in the financial reports
prepared under the overseas and China accounting standards
Applicable N/A
No such differences for the reporting period.
8. Key financial results by quarter
Unit: CNY
Q1 Q2 Q3 Q4
Operating revenues 7,610,153,819.27 6,982,897,954.87 7,349,670,544.39 8,290,579,069.73
Net profits
attributable to
3,712,618,630.92 3,377,808,156.15 3,475,695,183.38 2,680,272,730.14
shareholders of the
Company
Net profits
attributable to
shareholders of the
3,688,940,523.35 3,351,998,052.28 3,448,863,775.13 2,660,590,455.89
Company before
non-recurring gains
and losses
Net cash flows from
1,508,783,232.53 4,138,977,564.51 3,404,807,099.84 1,595,797,038.58
operating activities
Whether there are any material differences between the financial indicators above or their summations
and those which have been disclosed in quarterly or semi-annual reports
Yes No
9. Non-recurring profits and losses
Applicable N/A
Unit: CNY
Item 2023 2022 2021 Note
Profit or loss from
disposal of non-
current assets See "Section X Note
44,694,238.37 19,805,093.70 -347,429.88
(including the write- 5.48" for details.
off portion of the
impairment
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2023 Annual Report of Luzhou Laojiao Co., Ltd.
provision)
Government grants
accounted for, in the
profit or loss for the
current period
(except for the
government grants
closely related to the
business of the
See "Section X Note
Company and given 51,950,003.11 34,931,161.52 51,756,953.15
5.44" for details.
in accordance with
defined criteria and
in compliance with
government policies,
and have a
continuing impact on
the Company's profit
or loss)
Gain or loss on fair-
value changes in
financial assets and
liabilities held by a
non-financial
enterprise, as well as
See "Section X Note
on disposal of
68,181,502.73 -2,585,156.72 6,352,241.79 5.45 and 5.46" for
financial assets and
details.
liabilities (exclusive
of the effective
portion of hedges
that is related to the
Company's normal
business operations)
Reversed portions of
impairment
allowances for
receivables which 80,000,000.00
are tested
individually for
impairment
Other non-operating
income and See "Section X Note
expenditure except -35,875,412.66 7,873,927.25 -40,241,672.68 5.49 and 5.50" for
above-mentioned details.
items
Less: Corporate
31,697,444.12 14,413,895.31 24,082,098.59
income tax
Minority
1,250,993.49 1,709,085.57 2,267,697.66
interests (after tax)
Total 96,001,893.94 43,902,044.87 71,170,296.13 --
Other items that meet the definition of non-recurring gain/loss:
Applicable N/A
No such cases for the reporting period.
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2023 Annual Report of Luzhou Laojiao Co., Ltd.
Explain the reasons if the Company classifies any non-recurring gain/loss item mentioned in the
Explanatory Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to
the Public-Non-Recurring Gains and Losses as a recurring gain/loss item.
Applicable N/A
No such cases for the reporting period.
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2023 Annual Report of Luzhou Laojiao Co., Ltd.
Section III Management Discussion and Analysis
1. Industry overview for the reporting period
In 2023, as the consumer market gradually returned to normal, the baijiu industry showed a trend of
the coexistence of consumption upgrading and degradation, intensified differentiation, and more
intense competition. Capacity optimisation, quality upgrading, technological innovation, cultural
development, consumer experience, and service enhancement became the era characteristics for the
baijiu industry of high-quality development. The industry development showed an increasingly
obvious trend of concentrating on well-known production areas, famous brands, excellent culture, and
high quality. The baijiu industry was gradually entering the era of existing competition and giant
competition. Only enterprises that could create excellent products and services for consumers, had
sound governance structures, and social values could stand out.
2. Business scope in the reporting period
The Company shall comply with the disclosure requirements for companies engaging in food & liquor
and wine production of the Guidelines No. 3 of the Shenzhen Stock Exchange on Sel f-regulation of
Listed Companies—Industry-specific Information Disclosure.
Holding three food business licenses, the Company operates within the baijiu subdivision industry
which belongs to the liquor & wine, beverage and refined tea production industry with specialized
baijiu product design, production and sales as its main business model. The Company’s primary
products are baijiu series such as "National Cellar 1573" and "Luzhou Laojiao", and its main
comprehensive performance indicators rank high in the baijiu industry. For the reporting period,
operating revenue amounted to CNY 30.233 billion, up 20.34% year on year; and the net profit
attributable to the shareholders of the listed company reached CNY 13.246 billion, up 27.79% year on
year.
For the Company's brand operations, please refer to "4.1 Overview" under “4. Analysis of main
business” in this section. The Company’s main products are classified as follows:
Main product types Classification criteria Representative brand name
National Cellar 1573, Luzhou
Tax-inclusive sales price ≥ CNY
Mid- and high-end baijiu Laojiao Tequ, and Century-old
150 per bottle
Luzhou Laojiao Jiaoling Baijiu
Tax-inclusive sales price < CNY Luzhou Laojiao Touqu and Luzhou
Other baijiu
150 per bottle Laojiao Hey Guys
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2023 Annual Report of Luzhou Laojiao Co., Ltd.
Main sales models:
Currently, the Company has two main sales models:
1. Traditional channel operation model: It is mainly authorized distribution of the offline distributors. The
Company establishes cooperative relationships with the distributors by product lines and regions. The
Company directly supplies goods to the distributors, and then distributors sell them to consumers and
terminal outlets.
2. Emerging channel operation model: It is mainly online sales operations. The Company establishes
cooperative relationships with e-commerce platforms, self-media and webcasters, and sells the goods
to consumers through flagship stores, specialty stores, live streaming rooms on online platforms and
other network terminals.
Distribution models:
Applicable □N/A
1. Main sales models
Unit: CNY
Gross YoY change of YoY change of
YoY change of
Operating revenue Cost of sales profit operating gross profit
cost of sales
margin revenue margin
By sales model
Traditional channel 28,657,038,767.86 3,143,781,427.06 89.03% 22.98% 6.94% 1.65%
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2023 Annual Report of Luzhou Laojiao Co., Ltd.
operation model
Emerging channel
1,420,240,091.72 340,763,293.04 76.01% -2.97% 24.17% -5.24%
operation model
2. Distributors
Increased
Number of Decreased
number YoY change of
distributors at number during
Region during the number of Reason for any significant change
the end of the the reporting
reporting distributors (%)
reporting period period
period
Domestic 1710 28 21 0.41
Overseas 104 2 24 -17.46
3. Main settlement method for distributors and distribution method
The Company's main settlement method for distributors is payment before delivery. The distribution
method is authorized distribution.
4. Top five distributors
The Company had no accounts receivable from the top five distributors at the end of the period. For
details, please refer to Section III 4.2.8. "Main customers and suppliers".
Store sales terminals accounted for more than 10%
□ Applicable N/A
Online direct sales
Applicable □N/A
For the sales of the Company's main products, please refer to Section III 4.2.1. "Breakdown of
operating revenues". The Company's complete series of products are sold online. Its main cooperation
platforms included JD.com and Tmall.
Sales price of main products contributing over 10% of the total operating revenues for the current
period changed by more than 30% from the previous reporting period
□ Applicable N/A
Purchase model and purchase content
Unit: CNY
Purchase model Purchase content Amount of main purchase content
Organic raw grains are purchased
through cooperative model and
supplied by organic raw grain bases;
Raw materials 3,656,343,649.12
other raw grains and packaging
materials are purchased through bid
invitation
Purchase based on the unified
pricing of the National Development
and Reform Commission and the Fuels and energies 184,372,751.40
price bureau, and purchase through
bid invitation
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2023 Annual Report of Luzhou Laojiao Co., Ltd.
Purchase through bid invitation Low-value consumables 64,065,969.51
The purchase of raw materials from cooperatives or farmers accounted for more than 30% of the total
purchase amount
□ Applicable N/A
The price of main raw materials purchased externally changed by more than 30% year-on-year
□ Applicable N/A
Main production model:
The Company's main production model is self-production.
Commissioned processing and production
□ Applicable N/A
Main breakdown items of cost of sales
Unit: CNY
2023 2022
By business
Item As % of cost of As % of cost of YoY Change
segment Amount Amount
sales sales
Baijiu Raw materials 2,938,909,467.97 84.34% 2,757,973,459.70 85.80% 6.56%
Baijiu Labor costs 261,260,432.24 7.50% 208,363,976.36 6.48% 25.39%
Manufacturing
Baijiu 284,374,819.89 8.16% 247,916,280.85 7.71% 14.71%
overhead
Production volume and inventory
1. Production volume, sales volume and inventory of main products
YoY change YoY change
Production
Product Sales volume Inventory of production of sales YoY change Description of
volume
classification (ton) (ton) volume volume of inventory major changes
(ton)
(%) (%)
Mid- and
high-end 31,258.42 37,583.88 36,551.55 -23.43 1.24 -14.75
baijiu
The YoY decrease
in inventory was
mainly due to the
Other baijiu 52,698.07 58,694.24 5,699.32 11.94 19.64 -51.27 increased sales
volume of other
baijiu in the current
period.
2. Inventory at the end of the reporting period
Unit: Ton
Finished baijiu Semi-finished baijiu (including base baijiu)
42,250.87 430,838.17
3. Capacity
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2023 Annual Report of Luzhou Laojiao Co., Ltd.
Unit: Ton
Main products Design capacity Actual capacity Capacity in progress
Baijiu 170,000 170,000 80,000
3. Analysis of core competitiveness
A. Geographical advantage
Luzhou City, where the Company is located, is known as the “City of Baijiu” and the origin of China’s
strong aromatic baijiu culture. It sits in the transitional area between the southern rim of the Sichuan
Basin and the Yunnan-Guizhou Plateau, featuring a warmer and more humid sub-tropical climate
compared to other areas at the same latitude, with a temperature above 0℃ throughout the year. The
unique climate and soil are agreeable to grow grains for baijiu brewing. The glutinous red sorghum and
soft wheat grown in this area are the primary raw materials for the baijiu of the Company. The cellars in
which the Company brews its baijiu are made of the local loessal clay characterized by strong viscosity,
rich minerals and excellent moisture retention. In addition, the abundant and quality water in the region
creates a unique geographical advantage for the production of the Company’s baijiu.
B. Advantage of cellars and brewing technique
Aged cellars are the most essential condition for a strong aromatic baijiu maker to produce good quality
baijiu. The Cellars of National Treasure 1573, founded in 1573, was granted by the State Council as the
first Cultural Relic of National Importance in the industry under the Protection of the State in December
1996. 1,619 cellars of Luzhou Laojiao which have been continuously used for over 100 years, together
with its 16 ancient brewing workshops and three natural cellar holes, were all selected as the fourth
batch of Cultural Relics of National Importance under the Protection of the State in 2013. They are
unique resources that cannot be replicated. In both 2006 and 2012, Luzhou Laojiao Daqu Cellars were
twice selected into the preliminary list of China for World Heritage. In November 2018, Luzhou Laojiao
Cellars and Brewing Workshops were selected into China’s Industrial Heritage List. The time-honored
Traditional Brewing Technique of Luzhou Laojiao is a 24-generation inheritance and a classic brewing
technique for strong aromatic baijiu. This technique was selected as the first batch of National
Intangible Cultural Heritage in May 2006. The Cellars of National Treasure 1573 and the Traditional
Brewing Technique of Luzhou Laojiao together provide the most essential basis and assurance for the
quality of the product series of National Cellar 1573 and Luzhou Laojiao. Additionally, Huangyi Brewery
Eco-Park has moved into full production in late 2020. Upholding the cultural connotations of
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2023 Annual Report of Luzhou Laojiao Co., Ltd.
“inheritance of ancient ways, pure-grain brewing, traditional techniques, and intelligent technologies”,
the Company carried out brewing technical renovation featuring automatic, intelligent and information
technology-based transformation. As such, it has established a baijiu brewery eco-park comprising
brewing workshops, leaven making workshops, and base baijiu storage cellars, along with energy and
sewage treatment facilities. This brewery eco-park brings with it new production capacities of 100,000
tons of quality pure-grain solid baijiu and 100,000 tons of leaven in addition to a new storage capacity of
380,000 tons of baijiu per year, marking a substantial increase in the Company’s production capacity.
C. Brand advantage
Brand is a key business resource for baijiu producers. The Company’s reputation is greatly built on its
superiority in brand. National Cellar 1573, which is of a connoisseurship level, is a world-famous high-
end brand. Luzhou Laojiao Tequ, a classic brand for strong aromatic baijiu, was selected in 1952 by the
first national tasting competition judges as one of the four most famous baijiu brands in China. It is the
only strong aromatic baijiu brand that won the title of “National Famous Baijiu” for five consecutive times,
as well as the pioneer with regard to the “Tequ” variety of baijiu. In recent years, the Company has
successfully put in place a brand system of “dual brands, three product series, and major single
products” with great clarity and focus. The programs carried out to promote the brand of National Cellar
1573 and revive the brand of Luzhou Laojiao have produced remarkable results, with significant
improvement in brand influence. The Company’s baijiu is increasingly known by consumers as a
national brand of strong aromatic baijiu and of authentic flavor.
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2023 Annual Report of Luzhou Laojiao Co., Ltd.
D. Quality and R&D advantage
The Company is committed to producing high-quality baijiu, advocating a healthy lifestyle and “making
the quality visible”. The first “Organic Sorghum Planting Base” was established and the six-factor
management system (including organic, quality, safety, environment, measurement and energy) was
built and improved. The research platforms are established, including National Engineering Research
Center of Solid-State Brewing, National Liquor Test Center, National Postdoctoral Workstation, etc,
which all support the innovation and upgrading of products with their strong technical force. In recent
years, the Company has put in a lot of efforts in researching Tequ production, brewing informatization &
intelligent transformation. Relying on the technological innovation platforms such as the National
Industrial Design Center, and continuously deepening the cooperation with universities and scientific
research institutes including the Chinese Academy of Sciences and the Tsinghua University, the
Company has undertaken dozens of national- or provincial-level projects and has been granted
hundreds of invention or utility model patents. And remarkable results have been achieved with respect
to improvement of the quality of base Baijiu, as well as production efficiency improvement.
E. Talent advantage
The Company has 1 inheritor of national intangible cultural heritage, 4 masters of Chinese brewing, 2
masters of Chinese baijiu, 2 Chinese liquor connoisseurs, 1 master of Chinese baijiu technique, 13
senior professor engineers, 8 experts who receive special allowances from the State Council, 4 national
technicians, 2 national model workers, 3 national Labor Day Medal winners, 3 academic and
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2023 Annual Report of Luzhou Laojiao Co., Ltd.
technologic leaders of Sichuan province, 1 expert with outstanding contribution in Sichuan province, 1
innovation leader of Tianfu, 1 excellent engineer of Tianfu, 1 skills leader of Tianfu, 3 craftsmen of
Tianfu, 2 craftsmen of Sichuan province, 1 technological elite of Tianfu, 1 young science and
technology talent of Tianfu, 4 technicians of Sichuan province, as well as hundreds of highly skilled
personnel including national baijiu judges, senior brewing technicians and brewing technicians. The
comprehensive and professional personnel system assures the sound development of the Company.
4. Analysis of main business
4.1. Overview
2023 marked the 450th anniversary of the building of the Cellars of National Treasure 1573 of Luzhou
Laojiao. The Company firmly implemented the annual development theme of "promoting reform,
enhancing collaboration, focusing on main areas and achieving leapfrog development", pursuing
innovation while maintaining integrity, and striving for progress. The Company took solid steps in
promoting the high-quality development of Luzhou Laojiao and achieved outstanding results that
reached a new historical high. For the reporting period, operating revenue amounted to CNY 30.233
billion, up 20.34% year on year; and the net profit attributable to the shareholders of the listed company
reached CNY 13.246 billion, up 27.79% year on year. The Company’s main operations and the results
in the reporting period are summarized as follows:
A. Making a breakthrough in sales with a surging business volume
The Company vigorously overcame challenges around the marketing theme of "reform deepening,
concentration on breakthroughs, digital empowerment, and going all out", with significant sales
performance and market layout results. The business volume hit a new high. The brand of National
Cellar 1573 achieved comprehensive coverage in the domestic market and was fully promoted in
overseas markets; the brand of Luzhou Laojiao gained a strong basis in the granary market, and a
stable and penetrating presence in the opportunity market. This move yielded more practical results.
The deepening of key projects such as the "Hundred Cities Programme" further activated market
consumption and increased market share. Operations led to increasing traffic. The "Lighthouse
Programme" was deeply implemented, and the application of scene scanning was deepened, leading to
geometric consumer growth. The campaigns set more benchmarks. The proactive marketing
strategy was fully implemented, and the Chunlei Action focused on "promoting five codes, expanding
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2023 Annual Report of Luzhou Laojiao Co., Ltd.
outlets, and strengthening the atmosphere", continuously consolidating the channel foundation; the
Autumn Harvest Action was conducted around "raising prices, strengthening channels, and promoting
sell-through", continuing to strengthen the market consumption basis.
B. Promoting consumption and upgrading ecosystems
The Company continued to focus on consumer promotion and ecosystem building, and fully promoted
the implementation and operation of the three-level public relations system. The quality of the
ecosystem was better. The Company fully leveraged the role of public relations departments at all
levels to carry out public relations activities in various ecosystems, building a larger ecosystem with
better quality. Public relations operations had higher efficiency. The Company integrated public
relations resources and cultivated and developed ecosystems, laying the foundation for sales
conversion; it established a marketing service centre, developed a strong product promotion system,
and fully leveraged the powerful role of sales, service sales, and promotion. The public relations team
had stronger capabilities. The incentive mechanism for public relations professionals was
continuously optimised, and the labour competition in the public relations system was successfully held,
cultivating and outputting a large number of skilled professionals in business, organisation, and
marketing.
C. Guaranteeing production and improving quality and efficiency
The Company's capabilities in capacity guarantee, quality guarantee, product guarantee, scientific
research guarantee were constantly improved. Capacity guarantee was as solid as a rock. The
Company fully leveraged the advantages of the Cellars of National Treasure and intelligent brewing,
and continuously improved the utilisation rate of brewing resources and production efficiency. Quality
guarantee was continuously perfected. The Company continuously carried out external audits on
quality, food safety and organic systems, with a 100% pass rate. It participated in drafting and revising
over 20 standards at all levels including national and industrial standards, and received national
honours such as the "National Excellent Enterprise with Quality and Credit" and "National Quality and
Integrity Benchmark Enterprise". Product guarantee was lean and efficient. The packaging material
guarantee rate, product guarantee completion rate, and on-time delivery rate were constantly
increasing; digital logistics operations achieved comprehensive coverage. The scientific research
guarantee achieved remarkable results. The Company declared more than 20 scientific research
projects for governments, associations, and other organisations at all levels; it organised 103 patent
applications and published 44 scientific research papers; it was approved to establish the National
Baijiu Industry Metrology and Testing Centre, which achieved a breakthrough from "zero" in the building
of the national industry metrology and testing centre in Sichuan Province.
D. Revitalizing brands and taking culture as the foundation
The Company focused on the theme of "the 450th anniversary of continuous brewing of the Cellars of
National Treasure 1573", and extensively carried out various cultural activities to promote the
continuous recovery of the value of Luzhou Laojiao as a famous baijiu brand. The brand profundity
was constantly enriched. The Company continuously explored and enriched the cultural connotations
of "Living Dual National Treasures", and its brand culture shaping case won the first prize of National
Outstanding Achievements in Corporate Culture; as the unique Sichuan baijiu brand, the Company was
20
2023 Annual Report of Luzhou Laojiao Co., Ltd.
successfully selected as a national-level demonstration base for the productive protection of intangible
cultural heritage from 2023 to 2025. The brand breadth was constantly expanded. The Company
prioritised the precision and coverage of brand promotion to expand brand breadth, and opened up a
new battlefield for brand building and consumer promotion through innovative marketing methods such
as "Cellar Owner Festival"; by accurately pushing brand content through new media, the Company
effectively reached and connected millions of young people. The brand height was continuously
raised. With the help of global events such as the Belt and Road Forum for International Cooperation,
the brand image was constantly enhanced. In collaboration with top competition events such as the
Australian Open and the International Table Tennis Federation, the Company continuously upgraded
crossover marketing in the cultural and sports fields; by carrying out a global cultural tour, the Company
interpreted the spiritual connotation of "letting the world taste the Chinese flavour" through practical
actions. The rankings of the Company's two brands were significantly improved in the lists such as the
annual Hurun Most Successful Chinese Heritage Brands and the Kantar BrandZ Top 100 Most
Valuable Chinese Brands.
E. Empowered by digital and intelligent technologies and driven by innovation
The Company firmly promoted the building of "digital and intelligent Luzhou Laojiao" and was awarded
the title of Digital Intelligence Pioneer Enterprise of Sichuan Province. The benefits of digital
marketing doubled. The Company continuously promoted the digitisation of channels, consumers, and
employees, and established a digital management system and labelling system for core consumption
assets. The digital and intelligent production efficiency was improved. The intelligent packaging
centre was completed and put into operation, the first phase of the intelligent production scheduling
command centre was completed, and the building of the production information system was smoothly
promoted. These showed that the level of digital production was far ahead. The efficiency of digital
management was innovated. The Company accelerated the digitisation process in supply chain
management, financial management, safety production, and knowledge management, with top-level
design blueprints and diverse management applications. The Company's production and operation
further achieved cluster-based efficiency innovation and all-round data circulation.
F. Implementing fine management and consolidating foundation
The Company's headquarters achieved significant results in capacity building. Basic management
continued to improve. The Company established a management framework based on organisation,
with finance as the core, assessment as the guarantee, and digital intelligence as the support,
integrating authorisation, systems, and processes. Risk prevention and control continued to be
strengthened. The Company continuously strengthened audit efforts, carried out inspections and
supervision on key production and operation tasks, strictly controlled legal risks, and adhered to
compliant operations. Talent selection and cultivation was constantly strengthened. The Company
further enriched the talent pool and continued to carry out the targeted training work; it led the
establishment of the Professional Committee of Baijiu Brewing and Baijiu Body Design of the Chinese
Workers' Technical Association. The employee innovation project was awarded the second prize of the
National Excellent Innovation Achievement Award for Employees, and the Company was awarded the
"National May First Labor Medal".
21
2023 Annual Report of Luzhou Laojiao Co., Ltd.
G. Assuming responsibilities and promoting a shared future with harmony
The Company actively practiced the corporate philosophy of "Baijiu for the World, a Shared Future",
reflecting the responsibilities of a state-owned enterprise, and it won the "Social Welfare Award at the
30th anniversary of the China Alcoholic Drinks Association". Assistance was provided for
underdeveloped counties to ensure their basic needs to be met. The Company actively promoted
seven types of assistance projects, including rural infrastructure building, industrial assistance,
education assistance, and condolence donations. The implementation of social charitable activities
was promoted. The Company continuously carried out donation projects for education such as "Little
Schoolbag, Big Love", " Pillars Project", "Luzhou Laojiao Scholarship", and "Luzhou Laojiao Teacher's
Pointer". Low-carbon and sustainable ecological development was practiced. The Company
promoted resource recycling and improved the level of clean production, achieving remarkable results
in green and low-carbon development, and it was included on the list of the "2023 China Industry
Carbon Peaking Leaders". Social responsibility reporting was constantly improved. The ESG
project comprehensively showcased the good image of Luzhou Laojiao that actively assumed social
responsibility, and the Company was included into the "ESG Pioneer 100 List of Listed Companies in
China".
4.2. Revenues and cost of sales
4.2.1. Breakdown of operating revenues
Unit: CNY
2023 2022
As % of As % of YoY Change
Amount operating Amount operating
revenues revenues
Total 30,233,301,388.26 100% 25,123,563,271.62 100% 20.34%
By business segment
Baijiu 30,077,278,859.58 99.48% 24,766,121,998.49 98.58% 21.45%
Other revenues 156,022,528.68 0.52% 357,441,273.13 1.42% -56.35%
By product
Mid- and high-
26,841,342,073.14 88.78% 22,132,546,058.64 88.10% 21.28%
end baijiu
Other baijiu 3,235,936,786.44 10.70% 2,633,575,939.85 10.48% 22.87%
Other revenues 156,022,528.68 0.52% 357,441,273.13 1.42% -56.35%
22
2023 Annual Report of Luzhou Laojiao Co., Ltd.
By geographical segment
Domestic 30,056,130,668.72 99.41% 24,970,484,945.58 99.39% 20.37%
Overseas 177,170,719.54 0.59% 153,078,326.04 0.61% 15.74%
By sales model
Traditional
channel 28,657,038,767.86 94.79% 23,302,396,093.43 92.75% 22.98%
operation model
Emerging
channel 1,420,240,091.72 4.70% 1,463,725,905.06 5.83% -2.97%
operation model
Other revenues 156,022,528.68 0.51% 357,441,273.13 1.42% -56.35%
4.2.2. Business segments, products, geographical segments or sales models
contributing over 10% of the operating revenues or profits
Applicable N/A
Unit: CNY
YoY
Gross YoY change YoY change
change of
Operating revenue Cost of sales profit of cost of of gross
operating
margin sales profit margin
revenue
By business segment
Baijiu 30,077,278,859.58 3,484,544,720.10 88.41% 21.45% 8.41% 1.39%
By product
Mid- and high-
26,841,342,073.14 2,076,149,454.34 92.27% 21.28% 4.80% 1.22%
end baijiu
Other baijiu 3,235,936,786.44 1,408,395,265.76 56.48% 22.87% 14.21% 3.31%
By geographical segment
Domestic 30,056,130,668.72 3,511,380,225.10 88.32% 20.37% 4.83% 1.73%
By sales model
Traditional
channel
28,657,038,767.86 3,143,781,427.06 89.03% 22.98% 6.94% 1.65%
operation
model
Under the circumstances that the statistical standards for the Company’s main business data were
adjusted in the reporting period, the Company’s main business data in the current year is calculated
based on adjusted statistical standards at the end of the reporting period
Applicable N/A
4.2.3. Whether revenue from sales of goods is higher than revenue of rendering
services
Yes No
By business
Item Unit 2023 2022 YoY Change
segment
Sales volume Ton 96,278.12 86,182.65 11.71%
Baijiu Production
Ton 83,956.49 87,902.60 -4.49%
volume
23
2023 Annual Report of Luzhou Laojiao Co., Ltd.
Inventory Ton 42,250.87 54,572.50 -22.58%
Reason for any over 30% YoY movements in the data above
Applicable N/A
4.2.4. Execution of significant sales or purchase contracts in the reporting period
Applicable N/A
4.2.5. Breakdown of cost of sales
By business segment
Unit: CNY
2023 2022
By business As % of As % of
Item YoY Change
segment Amount cost of Amount cost of
sales sales
Baijiu Raw materials 2,938,909,467.97 84.34% 2,757,973,459.70 85.80% 6.56%
Baijiu Labor costs 261,260,432.24 7.50% 208,363,976.36 6.48% 25.39%
Manufacturing
Baijiu 284,374,819.89 8.16% 247,916,280.85 7.71% 14.71%
overhead
4.2.6. Change in the scope of the consolidated financial statements for the
reporting period
Yes No
During the current period, two subsidiaries, Luzhou Baonuo Biotechnology Co., Ltd. and Luzhou
Laojiao Custom Liquor Co., Ltd., were liquidated and de-registered in October 2023 and December
2023, respectively. And they have been excluded from the consolidated financial statements since
their de-registration.
4.2.7. Major changes in the business, products or services in the reporting period
Applicable N/A
4.2.8. Main customers and suppliers
Sales to main customers of the Company
Total sales to top five customers（CNY） 18,830,449,252.26
Total sales to top five customers as % of the total
62.28%
sales
Total sales to related parties among top five
0.00%
customers as % of the total sales
Information on top five customers
As % of the total sales
No. Customer Sales amount (CNY)
for the year
24
2023 Annual Report of Luzhou Laojiao Co., Ltd.
1 Customer A 13,257,808,911.04 43.85%
2 Customer B 1,969,215,689.38 6.51%
3 Customer C 1,758,771,037.59 5.82%
4 Customer D 1,250,271,768.33 4.13%
5 Customer E 594,381,845.92 1.97%
Total -- 18,830,449,252.26 62.28%
Other information on main customers
Applicable N/A
Main suppliers of the Company
Total purchases from top five suppliers（CNY） 1,332,690,651.98
Total purchases from top five suppliers as % of
34.12%
the total purchases
Total purchases from related parties among top
4.91%
five suppliers as % of the total purchases
Information on top five suppliers
As % of the total
No. Supplier Purchases (CNY)
purchases for the year
1 Supplier A 386,156,811.99 9.89%
2 Supplier B 316,848,393.44 8.11%
3 Supplier C 237,525,381.97 6.08%
4 Supplier D 200,350,449.71 5.13%
5 Supplier E 191,809,614.87 4.91%
Total -- 1,332,690,651.98 34.12%
Other information on main suppliers
Applicable N/A
4.3. Expenses
Unit: CNY
Reason for any
2023 2022 YoY Change
significant change
Selling and
3,974,425,526.92 3,448,771,046.02 15.24%
distribution expenses
General and
administrative 1,139,480,677.23 1,162,422,257.23 -1.97%
expenses
Finance expenses -371,152,206.41 -286,376,927.48
R&D expenses 225,955,797.33 206,248,486.57 9.56%
25
2023 Annual Report of Luzhou Laojiao Co., Ltd.
The Company shall comply with the disclosure requirements for companies engaging in food & liquor
and wine production of the Guidelines No. 3 of the Shenzhen Stock Exchange on Sel f-regulation of
Listed Companies—Industry-specific Information Disclosure.
4.3.1. Breakdown of selling and distribution expenses
Unit: CNY
Selling and distribution
2023 2022 YoY Change Reason for any significant change
expenses
Advertising expenses 1,614,086,963.33 1,880,179,769.91 -14.15%
Mainly due to the increased sales
Sales promotion
1,479,620,839.26 712,641,702.96 107.62% promotion activities in the current
expenses
period
Warehousing and Mainly due to the increased sales
logistics expenses revenue from baijiu, leading to a
198,741,925.26 138,589,417.94 43.40%
corresponding increase in
warehousing and logistics expenses
Labor costs 297,757,314.24 355,699,286.88 -16.29%
Other 384,218,484.83 361,660,868.33 6.24%
4.3.2. Breakdown of advertising expenses
Unit: CNY
Advertising Expenses
Online advertising (exclusive of TV advertising) 292,940,860.00
Offline advertising 329,644,361.77
TV advertising 378,942,183.00
Other (inclusive of branding ideas, exhibitions & showcases, advertising materials, activity
612,559,558.56
planning, etc.)
4.4. R&D investments
Applicable N/A
Expected impact on
Major R&D projects Purpose Progress Specific objectives
the Company
The project is a Taking brewing To develop an
national key R&D waste as the intelligent equipment
program during the research target and system with
"13th Five-year Plan" the energy- and packaged technology
Realize a large-scale
Thermochemical period undertaken by resource-based for the resource- and
resource- and
Energy- and Luzhou Laojiao, research and energy-based
energy-based
Resource-based which aims to realize development of utilization of brewing
utilization of brewing
Coupled Utilization the energy- and thermochemical waste, successfully
waste and achieve
Technology of resource-based treatment as the build a
both ecological and
Brewing Waste utilization of brewing technical demonstration base
economic benefits.
waste with breakthrough, the for the project
thermochemical project develops and industrialization, and
technology, and completes one pilot achieve more than
develop a complete line for drying and 90% of resource-
26
2023 Annual Report of Luzhou Laojiao Co., Ltd.
set of intelligent pyrolysis of distiller's and energy-based
equipment systems grains, and realizes utilization of brewing
for the resource- and the processing waste to ensure the
energy-based capacity of five low-carbon, green
utilization of brewing tons/day for distiller's development of the
waste. grains. Currently, the Chinese baijiu
Company is building industry.
an industrial
demonstration line
with a processing
capacity of 100,000
tons/year, making a
systematic
breakthrough in the
resource-based
utilization technology
of brewing waste and
industrialization in
China.
A study on the
diversity of
The project is an
microorganisms in
international project
the incised
that the Company To develop functional
notopterygium has
jointly undertook, leaven according to
been carried out.
which studies the different quality
Study on the Multiple omics
evolution pattern and indicator
Expression analyses including
formation requirements based
Regulation of Key macro-genomic and Improve the leaven
mechanism of on functional leaven-
Genes in Leaven metabolomic and baijiu quality and
microbiomes during marking
Microorganisms in analysis of strong- enhance the
the natural leaven- microorganisms and
China and Japan flavor baijiu were Company's core
marking and key gene expression
and the Improvement completed. competitiveness.
fermentation, and regulation,
of Chinese Leaven Functional enhanced
screens for microbial systematically
Quality leaven was
strains with specific evaluate the efficacy
developed, and
functions for the of leaven and
corporate standards
production of optimize the process.
for finished strong-
functional enhanced
flavor baijiu and
leaven.
other products were
formulated.
The project is to The Company has The Company has
implement national continuously strengthened the
standards for improved the close integration of
intellectual property enterprise's intellectual property The Company has
management, and intellectual property creation and established a sound
achieve efficient management protection with the intellectual property
management of the system, and passed whole process of management
High-value Patent Company in the the annual technological system,
Incubation Center creation, application supervision and audit innovation, enhanced strengthened the
Project of Luzhou and protection of of the management the capability of the creation and
Laojiao intellectual property. system; the enterprise to create protection of
An all-round layout of Company has intellectual property intellectual property,
intellectual property passed the annual and prevent potential and enhanced the
is made around the assessment of intellectual property core competitiveness
core key national intellectual risks. The Company of the enterprise.
technologies of the property has strengthened the
industrial chain to demonstration analysis and
promote the creation enterprises; focusing application of patent
27
2023 Annual Report of Luzhou Laojiao Co., Ltd.
of high-quality on key technologies, information, laid out
patents and build a the Company has and explored
patent pool for core fully utilised patent intellectual property
technologies. analysis tools to around core key
conduct competitive technologies, and
situation analysis, formed a series of
and prepare situation high-value patents
analysis and layout with technical,
reports; the economic, and legal
Company has value.
organised high-value
patent cultivation
training and technical
discussions and
exchanges to
enhance the
awareness of
intellectual property
creation and
protection among all
staff.
The Company has
developed and
improved the policy
system for the
Innovation Center,
perfected the
infrastructure of the
Innovation Center,
and continued to
The Company took carry out solid-sate
the lead to jointly brewing technology To gathering
build the Sichuan research, industry innovative resources
Innovation Center for exchanges, result in solid-state
Solid-state Brewing transformation and brewing, create an
Technologies with talent training. innovation alliance in Successfully build a
several universities, Relying on the the solid-sate technological
Establishment of institutes and other Innovation Center as brewing sector, make innovation platform,
Sichuan Innovation enterprises, aiming the carrier, Luzhou breakthroughs in thereby improving
Center for Solid-state to overcome a batch Laojiao initiated the core key the Company's
Brewing of core technological establishment of the technologies in the scientific and
Technologies challenges in solid- "Solid-state Brewing solid-sate brewing technological
state brewing and Technology sector, and form a innovation
resolve the major Innovation Alliance in science and capabilities and level.
problem of "large the Chengdu- technology
scale but weak Chongqing Twin City innovation center
capacity" faced by Economic Circle", with national
the solid-state and served as the influence.
brewing sector. first chairman unit of
the Alliance. The
Alliance absorbed
more than 60
member units
upstream and
downstream of the
industrial chain to
serve the
development of the
28
2023 Annual Report of Luzhou Laojiao Co., Ltd.
solid-state brewing
industry.
Luzhou Laojiao
carries out industry-
university-research
cooperation with
universities and
research institutes in
the field of intelligent
brewing, deeply
analyzes traditional
production processes
By applying modern and fermentation
technologies such as principles,
intelligent sensing, innovatively applies
image recognition, simulation
spectral technology technology,
and bio-chips, the automation
project aims to technology, online
develop core testing, industrial
technologies for each robots, big data
link of brewing analysis, intelligent
production, including decision-making and
fermentation, other technologies to Level up the
A Study on the vinasse-based the brewing Company's intelligent
To build an intelligent
Optimization of Key ingredient making, engineering brewing and promote
brewing
Intelligent Equipment distillation of grains renovation project of the transformation
demonstration
and the System in retorts and baijiu Luzhou Laojiao, and upgrading of the
production line.
Control for Brewing selection, and build breaks through the traditional brewing
intelligent brewing key bottleneck of industry.
production lines with intelligent brewing
independent technology, and
optimization, forms the first
production decision- intelligent baijiu
making and brewing
execution capabilities demonstration
to comprehensively solution for the whole
upgrade the solid- brewing process in
state brewing the industry. The
technologies in the project results were
baijiu industry. appraised by an
expert committee
with Academician
Sun Baoguo as the
chairman as
"international leading
level" and won the
First Prize of Sichuan
Science and
Technology Progress
Award.
The project aims to Luzhou Laojiao To establish a Master the core
carry out collection of carries out industry- brewing microbial resources of baijiu
Construction of the
brewing microbial university-research strain bank of a brewing
Brewing Microbial
resources, rapid cooperation with certain scale, which microorganisms and
Resources and Data
isolation, universities, and has can achieve long- enhance the
Platform
authentication, screened and term safe Company's ability to
review and transfer obtained a series of preservation of protect and utilize
29
2023 Annual Report of Luzhou Laojiao Co., Ltd.
of microbial new species and key strains and is brewing microbial
resources in the functional supplemented by resources.
brewing process of microorganisms such special information
baijiu and as the "Laojiao technology to
development of Lactobacillus", manage strain
excellent strains for "Laojiao information.
industrial use, Syntrophococcus",
establish a brewing and "Laojiao
microbial strain Clostridium" in the pit
library and related mud based on the
enzymology library, analysis of the
and promote the metabolic basics of
protection, sharing the microbial flora in
and sustainable the mud of the 400-
utilization of brewing year-old national
microbial resources. treasure fermentation
pit. 20 applications
for invention patents
related to functional
strains have been
filed, of which three
have been granted.
The Company
analyzed their
brewing performance
and applied them to
brewing production,
which has strongly
improved the
sensory quality and
quality of the base
baijiu. The relevant
achievements have
won the First Prize of
Sichuan Patent
Award and the First
Prize of 2023
Science &
Technology Progress
Award of China
Alcoholic Drinks
Association.
Information about R&D personnel
2023 2022 YoY Change
Number of R&D
468 480 -2.50%
personnel
R&D personnel as % of
12.55% 13.31% -0.76%
total employees
Educational backgrounds of R&D personnel
Bachelor’s degree 307 320 -4.06%
Master’s degree 131 133 -0.01%
Doctoral degree
30 27 11.11%
(including postdoctoral
30
2023 Annual Report of Luzhou Laojiao Co., Ltd.
workstations)
Age structure of R&D personnel
Below 30 217 218 -0.46%
30~40 204 219 -6.85%
Information about R&D investments
2023 2022 YoY Change
R&D investments
267,474,647.16 206,248,486.57 29.69%
(CNY)
R&D investments as %
0.88% 0.82% 0.06%
of operating revenues
Capitalized R&D
0.00 0.00 0.00%
investments (CNY)
Capitalized R&D
investments as % of 0.00% 0.00% 0.00%
total R&D investments
Reason for any significant change in the composition of R&D personnel and the impact
Applicable N/A
Reason for any significant YoY change in the percentage of the R&D investments in the operating
revenues
Applicable N/A
Reason for any sharp variation in the percentage of the capitalized R&D investments and rationale
Applicable N/A
4.5. Cash flows
Unit: CNY
Item 2023 2022 YoY Change
Subtotal of cash
inflows from operating 32,865,186,758.61 26,877,272,861.82 22.28%
activities
Subtotal of cash
outflows from operating 22,216,821,823.15 18,614,624,592.10 19.35%
activities
Net cash flows from
10,648,364,935.46 8,262,648,269.72 28.87%
operating activities
Subtotal of cash
inflows from investing 1,933,604,489.48 2,243,596,415.18 -13.82%
activities
Subtotal of cash 3,201,722,342.48 4,117,450,731.91 -22.24%
outflows from investing
31
2023 Annual Report of Luzhou Laojiao Co., Ltd.
activities
Net cash flows from
-1,268,117,853.00 -1,873,854,316.73
investing activities
Subtotal of cash
inflows from financing 6,860,373,039.14 5,372,133,945.09 27.70%
activities
Subtotal of cash
outflows from financing 8,078,799,107.43 7,450,522,397.49 8.43%
activities
Net cash flows from
-1,218,426,068.29 -2,078,388,452.40
financing activities
Net increase in cash
8,164,022,685.99 4,326,477,650.04 88.70%
and cash equivalents
Explanation of why the data above varied significantly
Applicable N/A
Net cash flows from investing activities increased by CNY 605,736,463.73 year-on-year, mainly due
to the decreased purchase of wealth management products (collective asset management plans)
from securities firms in the current period.
Net cash flows from financing activities increased by CNY 859,962,384.11 year-on-year, mainly due
to the receipt of bank loan in the current period.
Net increase in cash and cash equivalents increased by CNY 3,837,545,035.95 year-on-year,
indicating an increase of 88.70%. It was mainly due to the increased net cash flows from operating,
investing and financing activities in the current period.
Explanation of main reasons leading to the material difference between net cash flows from operating
activities during the reporting period and net profit for the year
Applicable N/A
5. Analysis of non-core business
Applicable N/A
6. Assets and liabilities
6.1. Significant change of asset items
Unit: CNY
At the end of 2023 At the beginning of 2023 Reason for any
Change in
As % of total As % of total significant
Amount Amount percentage
assets assets change
Cash and cash
25,952,025,091.28 41.00% 17,757,528,211.25 34.56% 6.44%
equivalents
32
2023 Annual Report of Luzhou Laojiao Co., Ltd.
Accounts
17,461,378.98 0.03% 5,939,420.78 0.01% 0.02%
receivable
Inventories 11,622,043,947.46 18.36% 9,840,742,374.85 19.15% -0.79%
Investment
37,785,416.77 0.06% 39,149,454.22 0.08% -0.02%
property
Long-term equity
2,708,254,833.50 4.28% 2,667,500,553.17 5.19% -0.91%
investments
Fixed assets 8,613,223,465.46 13.61% 8,856,258,598.78 17.23% -3.62%
Construction in
1,718,468,880.53 2.72% 808,919,047.21 1.57% 1.15%
progress
Right-of-use
23,260,955.23 0.04% 39,952,525.63 0.08% -0.04%
assets
Contract
2,672,977,090.30 4.22% 2,566,374,718.76 4.99% -0.77%
liabilities
Mainly due to the
1
receipt of bank
Long-term loans 10,000,300,000.00 15.80% 3,179,600,000.00 6.19% 9.61%
loan in the
current period
Lease liabilities 22,356,404.47 0.04% 29,096,969.66 0.06% -0.02%
Note 1: The Company is currently in a period of business expansion. According to the actual
operation situation, the Company utilises low-cost borrowings and its own funds to carry out important
project construction, and carries out reasonable cash management in accordance with the progress
of the projects. Under the premise of controllable risks, the Company has moderately increased its
financial leverage and optimised its capital structure, which can help increase the return on capital
and the Company's earnings.
Whether overseas assets account for a larger proportion in total assets
Applicable N/A
6.2. Assets and liabilities measured at fair value
Applicable □ N/A
Unit: CNY
Changes in
Changes in
cumulative
Opening fair value Provision for Amount of Amount of Other Closing
Item fair value
balance through impairment purchase sale changes balance
recorded
profit or loss
into equity
Financial asset
1.Held-for-
trading
financial
assets 1,073,466,7 62,998,156. 1,700,000,0 1,409,472,8 1,426,992,0
(exclusive of 80.37 40 00.00 37.94 98.83
derivative
financial
assets)
33
2023 Annual Report of Luzhou Laojiao Co., Ltd.
4.Investmen
ts in other 1,136,736,9 146,614,564 391,086,685 402,893,468
equity 78.11 .52 .52 .80
instruments
6. Accounts
4,583,352,5 1,354,818,5 5,938,171,0
receivables
03.37 04.56 07.93
financing
Subtotal of
6,793,556,2 62,998,156. 146,614,564 1,700,000,0 1,800,559,5 1,354,818,5 7,768,056,5
financial
61.85 40 .52 00.00 23.46 04.56 75.56
assets
6,793,556,2 62,998,156. 146,614,564 1,700,000,0 1,800,559,5 1,354,818,5 7,768,056,5
Total
61.85 40 .52 00.00 23.46 04.56 75.56
Financial
0.00 9,694.10 69.77 9,763.87
liability
Whether measurement attribution of main assets changes significantly in this year
Yes No
6.3. Restricted asset rights as of the end of this reporting period
Item Closing balance Reason
Other cash and cash
10,000,000.00 Restricted bank guarantees
equivalents (CNY)
Bank deposits (CNY) 48,222,882.52 Accrued interest on term deposits
Other cash and cash
772,930.90 Restricted security deposits at e-commerce platforms
equivalents (CNY)
Total 58,995,813.42
7. Investment
7.1. Total investment
Applicable N/A
Investment made in the Investment made in the prior
YoY change
reporting period (CNY) year (CNY)
3,415,581,665.59 4,633,852,571.05 -26.29%
7.2. Significant equity investment made in the reporting period
Applicable N/A
34
2023 Annual Report of Luzhou Laojiao Co., Ltd.
7.3. Significant ongoing non-equity investment in the reporting period
Applicable □ N/A
Unit: CNY
Accum
Accum Reason
ulated
ulated s for
actual
Whethe Amount actual not
Industr input
r it is a of input income meetin Date of Disclos
Investm y of the amount Project Project
fixed in the Capital by the g the disclos ure
Item ent investm by the progres ed
asset reportin source end of schedul ure (if index
form ent end of s income
investm g the e and any) (if any)
project the
ent period reportin project
reportin
g ed
g
period income
period
Announ
cement
No.
2022-
24 on
the
Implem
entatio
Luzhou
n of
Laojiao
Luzhou
Technic
Laojiao
al
Technic
Upgrad
al
e
205,55 788,85 Self- Upgrad
Project Self- 13 July
Yes Baijiu 5,761.1 6,006.8 financin 15.00% 0.00 0.00 N/A e
of built 2022
4 1 g Project
Intellige
of
nt
Intellige
Brewin
nt
g
Brewin
(Phase
g
I)
(Phase
I) by
Subsidi
ary on
http://w
ww.cni
nfo.co
m.cn/
205,55 788,85
Total -- -- -- 5,761.1 6,006.8 -- -- 0.00 0.00 -- -- --
4 1
35
2023 Annual Report of Luzhou Laojiao Co., Ltd.
7.4. Financial assets investment
7.4.1. Securities investment
Applicable □ N/A
Unit: CNY
Chang
Chang es in Profit
es in the and
Abbre Accou Beginn
Categ Initial fair cumul Amou loss Closin
viation nting ing Amou Accou
ory of Stock invest value ative nt of during g book Capital
of measu book nt of nting
securit code ment recogn fair purcha the balanc source
securit rement balanc sale item
ies cost ized in value se reporti e
ies model e
profit record ng
or loss ed into period
equity
Invest
Dome ments
Fair
stic 12,719 160,04 162,52 175,24 in
60121 value 6,241, Own
and GTJA ,156.7 9,389. 2,558. 1,715. other
1 measu 808.41 fund
foreign 6 21 58 34 equity
rement
stock instru
ments
Invest
Dome ments
Fair
stic 14,931 11,775 12,805 in
00224 1,030, value 78,177 Own
and SNC ,950.2 ,515.4 ,515.4 other
6 000.00 measu .75 fund
foreign 4 4 4 equity
rement
stock instru
ments
Invest
Dome ments
Fair
stic 51,120 120,15 45,613 96,733 in
LZBA value 3,471, Own
and 01983 ,000.0 8,392. ,837.6 ,837.6 other
NK measu 360.00 fund
foreign 0 72 9 9 equity
rement
stock instru
ments
Invest
Dome ments
Fair -
stic CTG 542,28 807,13 391,08 84,854 in
value 66,344 977,28 Own
and 01880 Duty- 5,380. 9,120. 6,685. ,489.6 other
measu ,205.6 0.23 fund
foreign Free 80 07 52 8 equity
rement 0
stock instru
ments
607,15 1,102, 153,56 391,08 10,768 369,63
Total 4,537. -- 278,85 0.00 7,706. 0.00 6,685. ,626.3 5,558. -- --
56 2.24 11 52 9 15
7.4.2. Derivative investment
Applicable □ N/A
36
2023 Annual Report of Luzhou Laojiao Co., Ltd.
A. Derivatives investments for hedging purposes in the reporting period
Applicable □ N/A
Unit: CNY 10,000
Gain or loss Closing
Cumulative
on change Purchased amount
Initial fair value Sold in the
Type of Opening in fair value in the Closing as % of the
investment change current
derivative amount during the current amount Company’s
amount recorded in period
current period closing
equity
period equity
Forward
forex sale
and 0 0 -9.72 0 0 0 0 0.00%
settlement
contract
Total 0 0 -9.72 0 0 0 0 0.00%
Explanation
of significant
changes in
accounting
policies and
specific
In accordance with the relevant provisions and guidelines of the Accounting Standards for Business Enterprises No. 22 -
financial
Recognition and Measurement of Financial Instruments and the Accounting Standards for Business Enterprises No. 37 -
accounting
Presentation of Financial Instruments issued by the Ministry of Finance, the Company took the relevant accounting measures
principles in
for its business of derivative transactions to reflect the relevant items in the balance sheet and the income statement. The
respect of
Company did not meet the applicable conditions of the Accounting Standards for Business Enterprises No. 24 - Hedge
the
Accounting and did not yet apply hedge accounting. The hedging business during this Reporting Period was a newly added
Company's
business and was not carried out in the previous reporting period.
hedges for
the reporting
period as
compared to
the prior
period
Actual
In accordance with the Accounting Standard for Business Enterprises No. 37 - Presentation of Financial Instruments, changes
gain/loss in
in fair value were included in the profit and loss for the current period, and a loss of CNY 97.2 thousand was valued at fair
the reporting
value during the holding period.
period
The forward foreign exchange settlement and sales business engaged in by the Company was based on specific business
Results of
operations and the Company's production and operation, hedging product price and exchange fluctuation risks, achieving
hedges
expected risk management goals, and playing a positive role in stabilizing production and operation.
Source of
derivatives
Own fund
investment
funds
Risk The financial derivatives business conducted both domestically and internationally had a real business background. The
analysis of Company will strictly control the types and sizes of financial derivatives business, choose foreign exchange hedging products
positions with simple structures as much as possible, and do not engage in complex financial derivatives business beyond the actual
held in needs of operation. The purpose is only to lock in risk exposure, and match with actual foreign exchange receipts and
derivatives disbursements. The Company will not engage in any form or substance of speculative transactions. The term of the
during the purchased foreign exchange hedging products should be as close to or equal to the term of the Company's foreign exchange
reporting risk exposure as possible, and should not exceed the term of the foreign exchange risk exposure. The Company will only
period and engage in foreign exchange hedging transactions with financial institutions with corresponding business qualifications
explanation approved by the State Administration of Foreign Exchange (SAFE) and the People's Bank of China. The Company will strictly
37
2023 Annual Report of Luzhou Laojiao Co., Ltd.
of control control the size of foreign exchange forward contracts. In order to meet the needs of normal production and operation, it is
measures expected that the cumulative foreign exchange hedging business carried out by the Company and its holding subsidi aries will
(including not exceed the equivalent of CNY 500 million. The above limit can be used in a rolling and circular manner. The Company will
but not pay close attention to changes in the international and domestic market condition, strengthen its research and analysis of
limited to exchange rates, regularly review and adjust foreign exchange hedging plans in response to market and business changes,
market risk, and avoid exchange losses to the greatest extent possible. If there is a partial deviation between the actual business amount
liquidity risk, and term and the expected income and expenditure plan due to changes in the business of transaction enterprises, it will not
credit risk, pose a substantial delivery risk to the hedging transaction. Transaction enterprises will strengthen the management of
operational accounts receivable, closely track customer payments, actively collect payments, reduce risks of customer default and
risk, legal contract breaching, and control the risks that the Company may face within an acceptable range. The Company has
risk, etc.) formulated the Foreign Exchange Hedging Business Management System, which clearly stipulates the management
organisation, approval authority, operation procedures, risk control, information disclosure, information confidentiality of the
Company's foreign exchange hedging business, effectively regulating and controlling the behaviour and risks of foreign
exchange hedging business. Transaction enterprises will regularly organise professional training for personnel involved in
financial derivatives business, enable them to fully understand the characteris tics and risks of financial derivatives trading,
continuously strengthen the professional ethics education and professional literacy of relevant personnel, and improve their
business level.
Changes in
market
prices or fair
value of
derivative
products
during the
reporting
period,
specific Forward foreign exchange settlement and sales products are featured by high market transparency and active transactions,
methods and transaction prices and settlement prices of that day can fully reflect the fair value of derivatives; the losses from changes
used and in fair value during the Reporting Period was CNY 97.2 thousand, determined based on the market price of the exchange at
relevant the end of the period.
assumption
and
parameter
settings
shall be
disclosed for
analysis of
fair value of
derivatives
Litigation
involved (if N/A
applicable)
Disclosure
date of the
announcem
ent about
the board’s
13 June 2023
consent for
the
derivative
investment
(if any)
Special The Company's foreign exchange hedging business was carried out to meet the normal production and operation needs, with
opinions the aim of avoiding foreign exchange market risks, preventing adverse effects caused by significant fluctuations in exchange
expressed rates, controlling the Company's financial expenses, and reducing exchange rate risks in foreign operations. At the same time,
by non- the Company has formulated the Foreign Exchange Hedging Business Management System and improved relevant internal
38
2023 Annual Report of Luzhou Laojiao Co., Ltd.
executive control procedures. The targeted risk control measures taken by the Company were feasible and effective. The decision-
directors making procedures for the Company's foreign exchange hedging business complied with relevant national laws, regulations,
concerning and the Company's Articles of Association, without prejudice to the interests of the Company and shareholders as a whole,
the especially those of minority shareholders. Therefore, the independent directors agreed that the Company and its holding
Company's subsidiaries should carry out foreign exchange hedging business with a cumulative amount not exceeding CNY 500 million (in
derivatives a rolling and circular manner) within 12 months from the date of approval by the Company's Board of Directors.
investment
and risk
control
B. Derivatives investments for speculative purposes in the reporting period
□Applicable N/A
No such cases in the reporting period
7.5. Use of funds raised
Applicable N/A
7.5.1. General use of funds raised
Applicable □ N/A
Unit: CNY 10,000
Total Accumul
Total Total
amount ated re- Purpose Amount
amount Accumul amount Total
of re- purpose and of funds
Total of raised ated of amount
Net purpose d funds direction raised
amount funds amount accumul of
Year Method proceed d funds raised of idle for
of funds used in of raised ated re- unused
s raised in as % of unused more
raised the funds purpose funds
the total funds than two
reportin used d funds raised
reportin funds raised years
g period raised
g period raised
Deposit
Public ed in
offering special
24,931.3 111,035. 46,504.1
2020 of 150,000 149,400 0 0 0.00% account 0
2 54 2
corporat for
e bond raised
funds
Public
offering
2022 of 150,000 149,880 0 149,880 0 0 0.00% 0 N/A 0
corporat
e bond
24,931.3 260,915. 46,504.1
Total -- 300,000 299,280 0 0 0.00% -- 0
2 54 2
Notes for general use of funds raised
1. The total amount of unused funds raised of the corporate bond “20 Laojiao 01” includes interest on some funds raised.
39
2023 Annual Report of Luzhou Laojiao Co., Ltd.
2. The funds raised of the corporate bond “22 Lujiao 01” are all used for committed purposes, and the interest income of CNY 41,633.34 from
the said funds raised is used to replenish the working capital.
7.5.2. Fund raised for committed projects
Applicable □ N/A
Unit: CNY 10,000
Committe
Date of Whether
d Whether Total Investme
Accumula the Whether the
investme the amount Investme nt Realized
Adjusted ted input projects the feasibility
nt project of funds nt progress benefits
Investme by the reach the expected of the
projects has been raised for nt total amount in by the during
amount end of working benefits project
and changed committe the end of the
the condition have has
direction (including d (1) reporting reporting reporting
reporting for their been changed
of over- partial investme period period (3) period
period (2) intended achieved significan
raised change) nt ＝(2)/(1)
use tly
funds
Committed investment projects
Technical
Renovati
on 15,569.2 329,497. 30 June
No N/A Yes No
Project of 4 86 2021
Brewing
(Phase II)
Project of
Intelligent
Upgradin
g and
Building
17,595.9
of the No 9,362.08 N/A N/A No No
7
Informati
on
Manage
ment
System
Project of 398,400 398,400 91.39%
Acquiring
Sealing
Equipme
30 June
nt for the No 0 12,043.3 N/A Yes No
2021
Cellar of
Huangyi
Brewing
Base
Project of
Acquiring
Accessor
y
30 June
Equipme No 0 4,980.25 N/A Yes No
2021
nt for
Leaven
Making
for
40
2023 Annual Report of Luzhou Laojiao Co., Ltd.
Huangyi
Brewing
Base
Subtotal
of
committe
24,931.3 364,117.3
d -- 398,4001 398,400 -- -- N/A -- --
2 8
investme
nt
projects
Use of over-raised funds
None
24,931.3 364,117.3
Total -- 398,400 398,400 -- -- N/A -- --
2 8
Explain
project by
project
the
situation
and
reason
for not
reaching
plan
progress
or
expected
benefits N/A
(including
reason
for
inputting
“N/A” for
“Whether
the
expected
benefits
have
been
achieved”
)
Significan
t changes
N/A
of project
feasibility
Amount,
purpose
and
progress N/A
of over-
raised
funds
Change
of
N/A
implemen
tation site
41
2023 Annual Report of Luzhou Laojiao Co., Ltd.
of
investme
nt
projects
Adjustme
nt of the
implemen
tation
mode of
N/A
raised
funds
investme
nt
projects
Applicable
Situation On 14 May 2019, the Company held the First Extraordinary General Meeting of Shareholders of 2019, which considered and
of approved the Proposal on Requesting the Company’s General Meeting of Shareholders to Fully Authorize Chairman of the
advance Board or Other Personnel Authorized by the Board to Go Through Procedures for the Public Offering of Corporate Bond.
investme According to the Proposal, in the event of inconsistency between the payment of the raised funds and the progress of the proj ect
nt and implementation, the Company may make advance investments using other funds (including self-owned funds, bank project
replacem loans, etc.) according to the actual situation, and replace fund investment other than capital funds when the raised funds are in
ent place. As of 31 December 2023, the Company had replaced advance investments of self-pooled funds of CNY 653,444,758.68
using the raised funds.
Idle
raised
funds
used for
temporar N/A
y
suppleme
ntary
liquidity
Amount
and
reason
for N/A
surplus of
funds
raised
Purpose
and
The idle raised funds are deposited in the special account No. 9550880046723000135 for raised funds in the Chengdu Branch
whereabo
of China Guangfa Bank Co., Ltd., the special account No. 517517460013000000860 for raised funds in the Luzhou Branch of
uts of
Bank of Communications Co., Ltd., and the special account No. 631395395 for raised funds in the Chengdu Branch of China
unused
Minsheng Banking Corp., Ltd.
funds
raised
Problems
and other
situation
when
N/A
raised
funds are
used and
disclosed
42
2023 Annual Report of Luzhou Laojiao Co., Ltd.
Note 1: The subtotal of funds raised for committed projects was CNY 3,984 million, which was the
combined amount of CNY 4,000 million (CNY 2,500 million of corporate bonds issued in August 2019
plus CNY 1,500 million of corporate bonds issued in March 2020) minus the total issuance costs of
CNY 16 million.
Note 2: Because there are uncertainties in the approval and issue time for bond, in order to ensure
smooth progress of the projects and protect the interests of the Company’s shareholders, the
investment sequence and specific amounts of the corresponding raised funds should be determined
by the Chairman of the Board as authorized by the general meeting of shareholders or other persons
as authorized by the Board of Directors within the scope of the four raised funds investment projects
according to the actual needs, provided that the capital funds for each project is no less than 20% of
the total investment.
Note 3: As of 31 December 2023, the Project of Intelligent Upgrading and Building of the Information
Management System was in the process.
Note 4: These raised funds investment projects have helped further expand the Company’s
production and sales, and increase its comprehensive competitiveness. The economic benefits of
these projects cannot be measured separately.
7.5.3. Re-purposed funds raised
Applicable N/A
No such cases in the reporting period
8. Sale of major assets and equity interests
8.1. Sale of major assets
Applicable N/A
No such cases in the reporting period.
8.2. Sale of major equity interests
Applicable N/A
9. Analysis of major subsidiaries
Applicable N/A
43
2023 Annual Report of Luzhou Laojiao Co., Ltd.
Main subsidiaries and joint companies with an over 10% influence on the Company’s net profit
Unit: CNY
Company Company Business Registere Total Operating Operating
Net assets Net profit
name type scope d capital assets Revenue profit
Sales of
baijiu
series
Luzhou
such as
Laojiao 100,000,0 8,677,934, 2,486,013, 29,064,19 13,367,29 10,013,69
Subsidiary “National
Sales Co., 00.00 513.38 024.18 6,996.65 8,229.61 9,095.81
Cellar
Ltd.
1573” and
“Luzhou
Laojiao”
Acquisition and disposal of subsidiaries during the reporting period
□ Applicable N/A
Notes for major holding companies and joint stock companies
There were no major holding companies or joint stock companies during the reporting period of which
information shall be disclosed.
10. Structured entities controlled by the Company
Applicable N/A
11. Outlook for the future development of the Company
11.1. Industry landscape and trends
A. According to the data released by the China Alcoholic Drinks Association, in 2023, the national
baijiu sector produced 6.29 million kilolitres, experiencing a decline of 5.1% compared to the previous
year; however, it generated sales revenue of CNY 756.3 billion, up by 9.7%, and realised a total profit
of CNY 232.8 billion, an increase of 7.5%. The output of baijiu continued to decline, and the industry
became more and more concentrated in well-known production areas, famous brands, excellent
culture, and high quality. The competition in baijiu sector became increasingly fierce.
B. In recent years, more and more baijiu enterprises have increased their investment in technological
innovation, made significant progress in platform building, technology research and development, the
transformation of industry, university and research institutions, and software and device improvement,
and formed their own advantages and characteristics. In the face of increasingly fierce technological
competition, the technological strength of leading industries will truly become the core
competitiveness that supports the development of enterprises.
C. Enterprises accelerate the deep integration of their operations with the increasingly perfect big
data, Internet of Things and artificial intelligence technology, and Chinese baijiu is stepping into the
44
2023 Annual Report of Luzhou Laojiao Co., Ltd.
era of digital and intelligent development at a faster speed. Strengthening the concept of digital
intelligence, building a digital and intelligent system and cultivating digital and intelligent talents will
become the key work of baijiu enterprises in the future.
D. In the era of traffic, the baijiu industry is showing a trend of younger people-oriented, low-alcoholic,
fashionable and healthy development. The "people, goods, and venues" and "online and offline" are
gradually integrated, and new sales methods, new technologies and new models emerge in endlessly.
11.2. The Company’s development strategy
11.2.1. Development opportunities in the future
A. In recent years, supporting and encouraging the development of baijiu industry has become an
important part of governments at all levels and relevant competent departments to develop new
productivity and promote high-quality development. The State Council, the Ministry of Industry and
Information Technology, the Ministry of Culture and Tourism and local governments have
successively issued policies and measures to support the development of baijiu industry. As the main
representative and local pillar enterprise of Sichuan baijiu, Luzhou Laojiao has embraced a valuable
opportunity for high-quality development.
B. The baijiu industry has entered a structural adjustment cycle. The number of baijiu enterprises
above designated size and baijiu production capacity have continued to decline, and sales revenue
and total profits have increased year by year. Chinese baijiu industry is moving from an extensive
production capacity expansion stage to a profit-driven stage where high-quality production capacity
dominates. In the next few years, Chinese baijiu is still in the accelerated concentration period of the
industry. In such industry environment, Luzhou Laojiao, with well-known production areas, famous
brands, excellent culture, and excellent quality, will strive to stand out.
C. Over the past over 40 years of reform and opening up, with the rapid economic growth, cultural
prosperity and revival, and the rising international status, an increasing number of Chinese people
show their recognition of national culture, support for national industries, and recognition of national
brands, which has brought a golden opportunity for high-quality development of Chinese baijiu, an
excellent national brand. As the pioneer of strong aromatic baijiu, Luzhou Laojiao has the opportunity
to rise inevitably in market competition and seize new heights in industry development.
11.2.2. Possible challenges and risks in the future
A. Macroeconomic risk: The global economic growth momentum is insufficient, regional flashpoints
are frequent, and the complexity, severity, and uncertainty of the external environment are increasing.
The foundation for China's sustained economic recovery is not yet stable, with insufficient effective
demand, overcapacity in some industries, and gloomy social expectations. There are still many risks
and hidden dangers, bottlenecks in the domestic circulation and interference in the international
circulation, bringing more uncertainty to the domestic consumption environment.
B. Market competition risk: The baijiu industry has entered a new round of structural adjustment cycle,
and the industry development trend of "competition, differentiation and concentration" has
accelerated its evolution, requiring enterprises to constantly achieve innovation, improve brand value,
optimise product structure, strengthen channel management, improve operational efficiency, and
improve competitiveness through digital transformation and other means. At the same time, they also
need to pay attention to industry trends and flexibly adjust strategies to adapt to the changing market
environment.
45
2023 Annual Report of Luzhou Laojiao Co., Ltd.
11.2.3. The Company's "14th five-year" development strategy
No change occurred to the Company’s "14th five-year" development strategy. For details, see the
2021 Annual Report.
11.3. Completion of the business plan in 2023
For the reporting period, operating revenue amounted to CNY 30.233 billion, up 20.34% year on year;
and the net profit attributable to the shareholders of the listed company reached CNY 13.246 billion,
up 27.79% year on year. The Company has successfully completed its business target “to achieve a
year-on-year increase in operating revenue by at least 15%" as set by the Board of Directors at the
beginning of the year.
11.4. Business plan in 2024
In production and operation, the Company will implement the development theme of "proceeding with
confidence, overcoming challenges, innovating, and collaborating", adhere to the principle of pursuing
innovation while maintaining integrity, and comprehensively overcoming challenges, and strive for a
comprehensive victory in the key battle of the 14th Five-Year Plan, with a focus on the overall working
idea of "aiming at one objective, focusing on three cores, and promoting six improvements".
11.4.1. Annual objective
The Company will strive to achieve a year-on-year increase in operating revenue by at least 15% (The
annual objective for 2024 is formulated by the Company according to the 14th five-year strategic plan
and based on its business capabilities. It does not represent the Company's profit forecast for 2024,
and is not a commitment by the Company. Whether it can be achieved depends on many factors such
as changes in market conditions and efforts of the operation team. There are great uncertainties.
Investors are kindly reminded to pay special attention).
11.4.2. Focusing on three cores
The Company will focus on digital and intelligent transformation, accelerate the coverage and
drive of digitalisation in various systems, and fully leverage the effectiveness of digitalisation.
Meanwhile, it will focus on brand upgrading. Under the theme of "Chinese Strong Aromatic Baijiu for
700 years", the National Cellar brand will continue to enhance its brand reputation and height, while the
Luzhou Laojiao brand will continue to enhance its brand image and value. Also, it will focus on
collaboration, the Company will focus on collaboration, adhere to a systematic concept, fully integrate
internal and external resources, and emphasise overall design and collaborative cooperation.
11.4.3. Promoting six improvements
A. Upgrading marketing model and resolutely overcoming all challenges comprehensively
The Company will accelerate the upgrade of digital marketing models, fully promote the effective
implementation of key strategies, complete key task indicators with high quality, and ensure the
achievement of annual sales targets.
B. Accelerating breakthroughs in digital and intelligent innovation and building leading
advantages in this respect
46
2023 Annual Report of Luzhou Laojiao Co., Ltd.
The Company will promote high-quality digital building of marketing, production, supply chain, and
management systems, rapidly increase the coverage percentage of digital technology, and achieve
digitally and intelligently driven business and management.
C. Focusing on the main theme of "Chinese Strong Aromatic Baijiu for 700 years" and
continuously improving brand image
Focusing on the main theme of "Chinese Strong Aromatic Baijiu for 700 years", the Company will
classify and integrate the two brand promotion of National Cellar and Luzhou Laojiao, and make
multidimensional efforts to promote cultural stories and strengthen the recognition of the Chinese
honourable brands.
D. Strengthening production management and upholding quality advantages
The Company will strictly adhere to the lifeline of quality, firmly uphold the concept of quality first,
continuously and comprehensively promote the quality-oriented production strategy, and
comprehensively build a quality and safety management system for the entire industry chain, full
traceability, and full lifecycle, to firmly ensure that the Company's product quality is leading.
E. Strengthening the transformation of technological research achievements and enhancing the
technological image of the enterprise
The Company will strengthen the output of technological achievements, accelerate the transformation
of technological research achievements, and strengthen the empowerment of technological research
for the development of the Company. The Company will fully tap into its technology promotion
resources, and enhance the Company's powerful technological support and technological promotion for
production, quality, brand, and sales.
F. Adhering to the systematic concept and strengthening collaborative cooperation
The Company will deepen the overall design and coordination of internal decision-making mechanisms,
business systems, and internal control management systems to enhance management efficiency; it will
strengthen the cooperation with upstream and downstream partners in the industrial chain, and make
full efforts throughout the entire chain; it will actively fulfil its social responsibility as a state-owned
enterprise, supporting local economic and social development, and exerting its positive social effects.
12. Visits paid to the Company for purposes of research,
communication, interview, etc. in the reporting period
Applicable N/A
Main inquiry
Index to main
information
Date of visit Place of visit Way of visit Type of visitor Visitor inquiry
and materials
information
provided
14 February Company Institutional Company http://www.cni
Field survey Institution
2023 Headquarters investor performance nfo.com.cn/
17 February Company Institutional Company http://www.cni
Field survey Institution
2023 Headquarters investor performance nfo.com.cn/
Communicatio Industry
Company n through an trends and http://www.cni
12 May 2023 Other All investors
Headquarters online company nfo.com.cn/
platform performance
47
2023 Annual Report of Luzhou Laojiao Co., Ltd.
Institutional Industry
Company and individual trends and http://www.cni
29 June 2023 Field survey Other
Headquarters investors and company nfo.com.cn/
media performance
Communicatio Industry
12 December Company n through an Institutional trends and http://www.cni
Institution
2023 Headquarters online investor company nfo.com.cn/
platform performance
13. Implementation of the action plan for "Dual Enhancement of
Development Quality and Shareholder Returns"
Indicate whether the Company has disclosed its action plan for "Dual Enhancement of Development
Quality and Shareholder Returns".
Yes □ No
In accordance with the guiding ideology of "further invigorating the capital market and boosting investor
confidence" proposed at the Political Bureau meeting of the CPC Central Committee and "vigorously
improving the quality and investment value of listed companies, taking more powerful and effective
measures, and focusing on stabilizing the market and confidence" proposed at the State Council
Executive Meeting, in order to safeguard the interests of all shareholders, boost investor confidence,
and promote the long-term healthy and sustainable development of the Company, Luzhou Laojiao Co.,
Ltd. (hereinafter referred to as "the Company") has formulated its action plan for "Dual Enhancement of
Development Quality and Shareholder Returns" in combination with the Company's development
strategy, business picture, and financial condition. The specific measures are as follows:
A. Strengthening confidence in strategic planning and aiming at the Company's development
goals
The Company has formulated the "136" strategic plan for the 14th Five-Year Plan based on the
development idea of "giving play to advantages, tackling areas of weaknesses, improving quality,
building strength, and seeking rejuvenation". Specifically, "1" refers to one development goal, namely,
firmly insisting on the goal of regaining the "Top 3" ranking among the Chinese baijiu industry; "3" refers
to three major development principles, namely, insisting on brand leadership and fully enhancing the
value of Chinese famous baijiu brands, insisting on taking quality as foundation and sparing no efforts
to build a core production area of world famous baijiu, and insisting on take culture as the foundation
and striving to build a pilgrimage site for Chinese baijiu culture; "6" refers to "Six-in-One" Luzhou
Laojiao, namely, building a strong-brand Luzhou Laojiao, a quality Luzhou Laojiao, a cultural Luzhou
Laojiao, an innovative Luzhou Laojiao, a digital and intelligent Luzhou Laojiao, and a harmonious
Luzhou Laojiao. Since the 14th Five-Year Plan period, the Company has firmly implemented the "136"
development strategy, won key battles such as expanding production capacity, upgrading brands, and
strengthening teams, and has entered a stage of high-quality development. The National Cellar 1573
brand achieved comprehensive coverage in the domestic market and was fully expanding in overseas
markets; the Luzhou Laojiao brand built a strong basis in the granary market, and has gained a stable
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2023 Annual Report of Luzhou Laojiao Co., Ltd.
and penetrating presence in the opportunity market, with much good news of the revival of famous
baijiu; the breakthrough project of expanding key sales areas has been deeply promoted, market
consumption has been further activated, and market share has been further increased. In terms of
digital marketing and brand building, channel development and public relations empowerment, online
expansion and offline integration, and overseas layout and domestic boosting, a more clear and
effective path has been created with the characteristics of Luzhou Laojiao, which has made
contributions to the healthy and rapid development of the Company. During the 14th Five-Year Plan
period, the compound growth rate of the Company's net profit attributable to the parent company
reached 30.17%, and in 2023, operating revenue amounted to CNY 30.233 billion, up 20.34% year on
year; the net profit attributable to the parent company reached CNY 13.246 billion, up 27.79% year on
year; and various performance indicators reached a new historical high. In the future, the Company will
continue to steadfastly implement the principle of "growing as fast as possible on the basis of healthy
development", and resolutely "compete" for better performance while benchmarking against
outstanding enterprises in the industry and main competitors, and move towards the established goals
prudently and meticulously.
B. Deeply promoting technological innovation and strengthening the transformation of scientific
research achievements
In recent years, the Company has attached great importance to the development mode of innovation
leading progress, integrated innovation forces, gathered innovation resources, tackled the frontier and
common key technologies of the baijiu industry, and promoted the transfer and transformation of
achievements and industry sharing, thus promoting the transformation of the baijiu industry from
experience oriented to technological oriented. This has made important contributions to the
technological innovation, transformation and upgrading of the baijiu industry in China. First, the
Company has successfully established multiple major national-level technological innovation platforms,
including the National Engineering Research Centre of Solid-State Brewing, the National Industrial
Design Centre, and the National Postdoctoral Workstation. The Company has formed a comprehensive
technological innovation platform system with the National Engineering Research Centre of Solid-State
Brewing as the R&D core, covering basic R&D, talent cultivation, and engineering transformation in
multiple fields, and has built a highland for technological innovation in the entire industry. Second, the
Company has continuously increased investment in technological innovation, research and
development, and continuously enhanced its independent innovation capabilities. In the past five years,
the total R&D investment reached CNY 842.1 million, and the compound annual growth rate of
innovation R&D investment reached 25.67%. Third, the Company has actively carried out collaborative
innovation between the Company, universities and research institutions, establishing cooperative
relationships with more than 30 universities and institutions such as Tsinghua University and Shanghai
Jiao Tong University. Through various forms including joint laboratory building, joint undertaking of
major projects, joint training of talents, and establishment of open projects, the Company has carried
out extensive technical exchange and cooperation, forming a good pattern of diversified cooperation,
innovative development, and mutual benefit between universities and the Company. Fourth, the
Company has attached great importance to the creation and protection of intellectual property rights,
and regarded intellectual property building as an important development strategy for the Company. The
number of applications and authorisations for invention and utility model patents has maintained a rapid
growth. Up to now, the Company has been granted 527 patents, including 188 invention patents and
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2023 Annual Report of Luzhou Laojiao Co., Ltd.
339 utility models, both of which are at the forefront of the industry. In the future, the Company will
continue to leverage its advantages in scientific research platforms, talent, and publicity to
comprehensively consolidate Luzhou Laojiao's leading position in scientific research.
C. Highly valuing standardised operations and improving corporate governance level
The Company has continuously consolidated the foundation of corporate governance, improved the
corporate governance structure, actively studied laws and regulations and the latest regulatory policies,
and standardised the Company's management system. The Company has also clearly defined the
responsibilities and authorities of the Board of Directors, the Board of Supervisors, general meetings of
shareholders and the management in decision-making, execution, and supervision, and regulated the
rights and obligations of the Company and shareholders. The Company has vigorously promoted the
systematisation, standardisation, and digitalisation of corporate governance, synchronously enhanced
the information-based level in the Board of Directors, the Board of Supervisors and general meetings of
shareholders, and incorporated the building of the integrated securities business platform into the
"digital and intelligent Luzhou Laojiao" system, to continuously improve the level of corporate
governance. In order to further improve the Company's risk management system and ensure that the
directors, supervisors, and senior management of the Company fully perform their duties within their
scope of responsibilities, the Company has actively promoted the purchase of liability insurances for
directors, supervisors, and senior management. Meanwhile, the Company has become the first listed
company in the industry to sign a liability insurance agreement for directors, supervisors, and senior
management which has been approved by a general meeting of shareholders. In the future, the
Company will continue to promote information technology building to empower corporate governance,
continuously improve operational efficiency and scientific decision-making level.
D. Fulfilling the information disclosure obligation compliantly and strictly guarding the defence
line of insider trading
The Company takes standardised information disclosure as the bottom line, conducts information
disclosure with high standards, and effectively respects and safeguards the legitimate rights and
interests of investors. First, the Company has established and improved a management system centred
on major information internal reporting system, temporary and periodic report preparation procedure,
insider information management system, and other policy documents, and continuously promoted the
standardised and procedural business work, to ensure accurate and rigorous information disclosure.
Second, the Company has adhered to investor demand orientation, actively promoted voluntary
information disclosure, attached importance to the pertinence, readability, and effectiveness of
disclosure content, and continuously improved the transparency of information disclosure of the
Company. The Company has been awarded the highest A grade in the information disclosure
assessment of listed companies on the Shenzhen Stock Exchange for several consecutive years. In the
future, the Company will continuously improve the transparency of information disclosure and
continuously display information on the Company's operations at multiple levels, angles, and
dimensions.
E. Efficiently carrying out investor relations activities and conveying the Company's investment
value
The Company has actively adapted to the needs of investor research and carried out investor
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2023 Annual Report of Luzhou Laojiao Co., Ltd.
relationship management through a combination of "inviting in" and "going out" models. It has actively
communicated with investors on industry hot topics, the Company's business picture, and development
strategies through the Shenzhen Stock Exchange investor interaction platform, establishment of
investor hotlines, improvement of investor relationship websites, hosting online collective reception
days, and on-site investor surveys. In doing so, the Company has conveyed its investment value and
safeguarded investors' right to know. At the same time, the Company has adhered to investor demand
orientation. Based on the continuous growth of overseas shareholders in recent years, the Company
has innovatively used overseas accounts such as Facebook, X, and IG to simultaneously publish the
Company's performance promotion, shortened the disclosure time interval between Chinese and
English versions, and conducted overseas roadshows, to ensure the timeliness of information
acquisition for overseas investors. In the future, the Company will continue to build a two-way
communication mechanism for a deep understanding and positive interaction with the capital market to
transmit the Company's value. (The Company's investor relations website has been fully updated.
Investors are welcome to visit https://000568.ir-online.cn/).
F. Improving shareholder returns and safeguarding the legitimate rights and interests of
shareholders
The Company adheres to the implementation of an active profit distribution policy, attaches importance
to reasonable returns to investors while considering the sustainable development of the Company, and
maintains the continuity and stability of profit distribution. The Company clearly stipulates in its Articles
of Association that the Company may distribute dividend in cash or stocks and the dividend should not
be less than 50% of the distributable profit realised for that year, and the profit to be distributed in cash
should not be less than 30% of the distributable profit realised for that year. Since its listing, the
Company has paid out a cumulative cash dividend amount of CNY 35.353 billion, with a dividend
payout ratio of 61.14%, ranking among the top among more than 5,000 listed companies in the
Shanghai and Shenzhen stock markets. This has allowed all shareholders to fully share the Company's
development achievements and effectively maintained the Company's good image in the capital
market. In the future, the Company will formulate reasonable profit distribution policies while ensuring
normal operation and long-term development, and effectively allow investors to share the fruits of the
Company's growth and development.
G. Encouraging the controlling shareholder to actively increase its shareholdings to maintain
the stability of the capital market
Based on its recognition of the Company's long-term value and its firm belief in the Company's
development prospects, the controlling shareholder of the Company, Luzhou Laojiao Group Co., Ltd.,
planned to increase its holdings in the Company through call auction trading within six months from 15
December 2023, with a proposed increase amount of no less than CNY 200 million, effectively
maintaining the stability of the capital market and boosting investor confidence. As at 15 March 2024,
Luzhou Laojiao Group Co., Ltd. has accumulatively increased its holdings of 607,800 shares in the
Company through bidding trading, accounting for 0.04% of the total share capital of the Company, with
an increase of CNY 101.9956 million. The plan for this increase in holdings has not been fully
implemented yet. Luzhou Laojiao Group Co., Ltd. will continue to implement the holding increase
according to the plan, and the Company will fulfil its information disclosure obligations in a timely
manner in accordance with relevant regulations.
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2023 Annual Report of Luzhou Laojiao Co., Ltd.
In the future, the Company will focus on the development theme of "proceeding with confidence,
overcoming challenges, innovating, and collaborating", actively take responsibility, keep diligent, and
make solid progress while striving for high-quality development. The Company will also firmly establish
a sense of return to shareholders, effectively implement the "dual enhancement of development quality
and shareholder returns" action plan, significantly enhance investors' satisfaction, and actively
contribute to stabilizing the capital market and investor confidence.
52
2023 Annual Report of Luzhou Laojiao Co., Ltd.
Section IV Corporate Governance
1. Basic situation of corporate governance
Since it was listed, in accordance with the Corporate Law, the Securities Law, The Listed Company
Governance Standards and other laws, administrative regulations and departmental rules and
normative documents, the Company has constantly perfected corporate governance structure,
standardized its operation, established the rules and system on the basis of the Company's articles of
association whose main framework is the rules of procedure of the shareholders' general meeting,
rules of procedure of the board of directors and rules of procedure of the board of supervisors, which
is formed the management system whose main structure is the shareholders meeting, board of
directors, board of supervisors and management. During the reporting period, the Company won a
number of honors and awards, including “The 25th Golden Bull Awards—Best Investment Value
Award”, “The 14th Tianma Awards—Best Investor Relations Award”, “100 ESG Pioneers of Chinese
Listed Companies”, and “China Association for Public Companies—Excellent Board Practice”.
Any incompliance with the applicable laws and administrative regulations, as well as regulations
related to the governance of listed companies issued by the CSRC
Yes No
There is no incompliance with the applicable laws and administrative regulations, as well as
regulations related to the governance of listed companies issued by the CSRC.
2. Independency of assets, personnel, finance, organizations and
businesses which are separated from the controlling shareholder and
the actual controller
The Company has an independent and complete production and operation system and independent
decision-making ability. There is no horizontal competition between the Company and the controlling
shareholders and its subsidiaries. The Company has daily affiliated transactions with the controlling
shareholders and its subsidiaries. Such daily affiliated transactions belong to the need of rational
allocation of resources and do not affect the independence of the Company. For affiliated
transactions, the Company has strictly fulfilled the relevant decision-making procedures and
information disclosure obligations, and implemented the system of Non-executive directors' prior
examination and avoidance system of related directors (shareholders).
2.1 In the aspect of assets
Asset integrity. There are clear ownership and independency of the Company's assets invested by
controlling shareholders. The Company has an independent and complete production, supply, sales
system and auxiliary production system and supporting facilities. The industrial property rights,
trademarks and non-patented technology and other intangible assets are owned by the Company.
There is no situation that the controlling shareholders occupy and transfer the assets of the company.
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2023 Annual Report of Luzhou Laojiao Co., Ltd.
2.2. In the aspect of business
Business apart. The Company is totally independent in the operation, production and sales of baijiu
series of “Luzhou Laojiao” and “National Cellar 1573”. It has the ability to operate independently in the
market. The board of directors and the management can independently make production and
operation decisions within the corresponding authority.
2.3 In the aspect of personnel
The Company has built independent labor management, personnel management and salary
management. The Company has established a relatively complete labor management system and
post responsibility system. Meanwhile, the Company's senior management personnel all receive
salary in the Company, but not at the controlling shareholders.
2.4 In the aspect of organization
Organization independence. The Company has independent production management organization
and system, independent office and production management place, and independent management
organization, functional organization and branch.
2.5 In the aspect of finance
Financial independence. The Company has completed and independent financial department.
Independent accounting system and financial management are established. The Company separately
sets bank accountants, conducts external settlement and pays taxes according to law.
3. Horizontal competition
Applicable N/A
4. Annual meeting of shareholders and special meetings of
shareholders convened during the reporting period
4.1. Meetings of shareholders convened during the reporting period
Investor
Meeting Type Convened date Disclosure date Resolutions
participation ratio
Announcement
on Resolutions of
The 2022 Annual
2022 Annual General Meeting
General Meeting of Shareholders
General Meeting 63.51% 29 June 2023 30 June 2023
of Shareholders Announcement
of Shareholders
No: 2023-19
(http://www.cninf
o.com.cn/)
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2023 Annual Report of Luzhou Laojiao Co., Ltd.
4.2. Special meetings of shareholders convened at the request of preferred
shareholders with resumed voting rights
Applicable N/A
5. Directors, supervisors, and senior management
5.1 General information
Shares Shares Shares
held by increas decrea Shares
Other
the ed sed held by Reaso
increas
beginni during during the end n for
Incumbent/ Period of e/
Name Gender Age Title ng of the the of the share
Former service decrea
the reporti reportin reportin chang
se
reportin ng g g period es
(share)
g period period period (share)
(share) (share) (share)
Chairman
Liu 2015.6.30-
Male 54 of the Incumbent 288,087 288,087
Miao 2024.6.29
board
Director,
Lin 2015.6.30-
Male 50 General Incumbent 95,900 95,900
Feng 2024.6.29
manager
Director,
Xiong
Deputy 2021.6.29-
Pingtin Female 48 Incumbent 62,800 62,800
general 2024.6.29
g
manager
Non-
Liu 2018.6.27-
Male 54 executive Incumbent 0 0
Junhai 2024.6.29
director
Non-
Chen 2021.6.29-
Male 66 executive Incumbent 0 0
You’an 2024.6.29
director
Non-
Lyu 2021.6.29-
Male 60 executive Incumbent 0 0
Xianpei 2024.6.29
director
Li Non-
2022.6.29-
Guowa Male 60 executive Incumbent 0 0
2024.6.29
ng director
Qian External 2015.6.30-
Male 60 Incumbent 0 0
Xu director 2024.6.29
Ying External 2016.9.13-
Male 54 Incumbent 0 0
Hanjie director 2024.6.29
Gong
External 2022.6.29-
Zhengy Female 54 Incumbent 0 0
director 2024.6.29
ing
Chairman
of the
Yang 2021.6.29-
Male 47 Board of Incumbent 0 0
Ping 2024.6.29
Supervisor
s
Li Male 54 Supervisor Incumbent 2018.6.27- 0 0
55
2023 Annual Report of Luzhou Laojiao Co., Ltd.
Guangji 2024.6.29
e
Li 2021.6.29-
Female 37 Supervisor Incumbent 0 0
Lunyu 2024.6.29
Tang 2022.6.29-
Male 47 Supervisor Incumbent 0 0
Shijun 2024.6.29
2022.6.29-
Ou Fei Male 38 Supervisor Incumbent 0 0
2024.6.29
Shareh
olding
Shen Deputy reducti
2002.6.30-
Caihon Male 58 general Incumbent 195,575 15,094 180,481 on on
2024.6.29
g manager the
open
market
Xie 2015.3.6-
Female 54 CFO Incumbent 76,700 76,700
Hong 2024.6.29
Deputy
He 2015.6.30-
Male 57 general Incumbent 76,700 76,700
Cheng 2024.6.29
manager
Deputy
Zhang 2015.12.29-
Male 52 general Incumbent 76,700 76,700
Suyi 2024.6.29
manager
Deputy
general
manager, 2021.9.20-
Li Yong Male 47 Incumbent 62,800 62,800
Secretary 2024.6.29
of the
board
Director,
Wang Deputy 2015.3.6-
Male 60 Former1 76,700 76,700
Hongbo general 2024.2.2
manager
1,011,9
Total -- -- -- -- -- 0 15,094 0 996,868 --
62
Note 1: Due to reaching the statutory retirement age, Mr. Wang Hongbo has applied for resignation as
a director and member of the special committee of the Board of Directors and deputy general
manager of the Company on 2 February 2024, and will not hold any position in the Company or the
Company's majority-owned subsidiaries after his resignation. For details, please refer to the
''Announcement on Resignation of Director and Deputy General Manager'' (Announcement No. 2024-
7).
Whether any director, supervisor or senior management resigned before the expiry of their periods of
service during the reporting period
□ Yes No
Changes in directors, supervisors, and senior management
Applicable □ N/A
Name Title Type Date Reason
Secretary of the
Li Yong Appointed 10 March 2023 Appointed
board
Wang Hongbo Secretary of the Resignation 3 March 2023 Voluntary resignation
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2023 Annual Report of Luzhou Laojiao Co., Ltd.
board
5.2 Employment information
Professional background, work experience and major duties of current directors, supervisors and
senior management.
Mr. Liu Miao, male, born in 1969, MBA of Wright State University in the USA, Master of Chinese
Brewing, senior marketing specialist. He used to serve as planning minister, general manager of
Sales Company, general manager assistant, and deputy general manager of the Company. At
present, he is secretary of the party committee and chairman of the board in Laojiao Group, secretary
of the party committee and chairman of the board in the Company, as well as chairman of the board
in Luzhou Sanrenxuan Liquor Industry Co., Ltd.
Mr. Lin Feng, male, born in 1973, Master degree, professorate senior economist, senior marketing
specialist. He was deputy general manager and general manager of Sales Company, director of
marketing, director of human resources, chief dispatcher, deputy general manager of the Company.
At present, he is deputy secretary of the party committee, director, and general manager of the
Company.
Ms. Xiong Pingting, female, born in 1975, holds a master's degree and the titles of Human Resource
Management Professional (grade one), Economist, and Political Mentor. Positions previously held by
her include Deputy Director and Director of the Office of Luzhou Laojiao Sales Co., Ltd., Deputy
Director of the Office of Jiangyang District People's Government of Luzhou (temporary), Deputy
Director of the Human Resources Department and Corporate Management Department of Luzhou
Laojiao Co., Ltd., General Manager of the Brand Operation Department, Director of the Office
(concurrently), Secretary of the general Party branch, and Deputy General Manager of Luzhou
Laojiao Sales Co., Ltd. At present, she is member of the Party Committee, Director, Deputy Secretary
of the Discipline Inspection Committee, Deputy General Manager, and Chairman of the Labor Union
of the Company.
Mr. Liu Junhai, male, born in 1969, holds a Ph.D. degree in law and is a doctoral supervisor.
Positions previously held by him include Assistant to the Director and Researcher at the Institute of
Law of the Chinese Academy of Social Sciences ("CASS"), Professor at CASS, Vice Chairman of
China Consumers Association, and Deputy Director Researcher at the Planning Committee under the
China Securities Regulatory Commission ("CSRC"). Currently, he serves as Professor at the Law
School of Renmin University of China, Director at the Institute of Commercial Law of Renmin
University of China, Arbitrator at China International Economic and Trade Arbitration Commission and
Beijing Arbitration Commission (Beijing International Arbitration Center) (concurrently). He has served
as a non-executive director of the Company since June 2018.
Mr. Chen You'an, male, born in 1958, holds an Eng.D. degree in management science and
engineering and is a Senior Engineer. Currently, he is Independent Director of Nomura Orient
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2023 Annual Report of Luzhou Laojiao Co., Ltd.
International Securities Co., Ltd., and Hexie Health Insurance Co., Ltd. He has served as a non-
executive director of the Company since June 2021.
Mr. Lyu Xianpei, male, born in 1964, holds a Ph.D. degree in accounting. Positions previously held by
him include Vice Dean at the School of Accounting and Director at the Auditing Department of
Southwestern University of Finance and Economics. Currently, he serves as Professor and Doctoral
Supervisor at Southwestern University of Finance and Economics, Chairman of Sichuan Educational
Audit Society, as well as Independent Director of Sichuan Teway Food Group Co., Ltd., and North
Chemical Industries Co., Ltd. He has served as a non-executive director of the Company since June
2021.
Mr. Li Guowang, male, born in 1963, holds a postgraduate degree and is a senior economist. He
once served as the Deputy Director of the Information Center of the Ministry of Commerce, Deputy
General Manager of Futures Brokerage Co., Ltd. under China Banking and Insurance Information
Technology Management Co., Ltd., General Manager of the Shanghai Securities Business
Department of China Banking and Insurance Information Technology Management Co., Ltd., Director
of the Strategic Development Department of the R&D Center of China Galaxy Securities Co., Ltd.,
General Manager of the R&D Center of Shanghai Securities Co., Ltd., Marketing Director of Galaxy
Asset Management Co., Ltd., Director of the Research Institute of Hwa Bao Securities Co., Ltd., Chief
Economist and Director of the Research Institute of Zhongshan Securities Co., Ltd., and Chief
Economist of Shanghai Dalu Futures Co., Ltd. At present, he is the Deputy Director of the Green
Finance Committee of the Jiangsu Financial Association, member of the Association of Zhejiang
Talent in Shanghai, and Director of Shanghai Jiayan Supply Chain Management Co., Ltd. He has
served as a non-executive director of the Company since June 2022.
Mr. Qian Xu, Male, born in 1963, PhD. He was general manager and chairman of the board of Beijing
Enterprises Real-Estate Group Co., Ltd., chairman of the board and general manager of Beijing
Enterprises Urban Development Group Co., Ltd., chairman of the board of Beijing Properties
(Holdings) Limited (listed on the Hong Kong Stock Exchange), and non-executive director of CAQ
Holdings Limited (listed on the Australian Stock Exchange). He has served as a director of the
Company since June 2015.
Mr. Ying Hanjie, Male, born in 1969, Doctor of Biochemistry, professor, and academician of the
Chinese Academy of Engineering. He was deputy director of Pharmacy and Life Sciences School of
Nanjing University of Technology. At present, he is director of National Biochemical Engineering
Technology Research Center of Nanjing Tech University, chairman of the board of Nanjing
Biotogether Co., Ltd., director of Nanjing High Tech University Biological Technology Research
Institute Co., Ltd., and director of Jiangsu Institute of Industrial Biotechnology. He has served as a
director of the Company since September 2016.
Ms. Gong Zhengying, female, born in 1969, holds a postgraduate degree and is a senior economist.
She once served as the Deputy Head of the Open Development and Social System Section of
Luzhou Economic System Reform Commission, Deputy Head and Head of the Enterprise Property
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2023 Annual Report of Luzhou Laojiao Co., Ltd.
Rights Supervision Section of Luzhou State-owned Assets Supervision and Administration
Commission, Party Secretary and Chairman of Luzhou Xinglu Asset Management Co., Ltd.,
Chairman of Luzhou Parking Lot Infrastructure Investment Co., Ltd., and Executive Director (legal
representative) of Luzhou Qihang Parking Lot Construction Investment Co., Ltd. and Luzhou Xinglu
Lantian Market Management Co., Ltd. At present, she is a full-time external director of Luzhou
Laojiao Group Co., Ltd., Luzhou Aviation Development Investment Group Co., Ltd., Sichuan
Lutianhua Co., Ltd., Luzhou Industrial Development Investment Group Co., Ltd., Luzhou
Development Holding Group Co., Ltd., Luzhou Baijiu Industry Development Investment Group Co.,
Ltd., and Luzhou Airport (Group) Co., Ltd. She has served as a director of the Company since June
2022.
Mr. Yang Ping, male, born in 1976, Professor of Engineering, holds a doctoral degree. Positions
previously held by him include Deputy Director and Director at the National Cellar Workshop Section,
Director at the Production and Technology Department, and Deputy General Manager of Luzhou
Laojiao Brewing Co., Ltd. Currently, he is Chairman of the Board of Supervisors and member of the
Discipline Inspection Committee of the Company, as well as Secretary of the Party Committee and
General Manager of Luzhou Laojiao Brewing Co., Ltd.
Mr. Li Guangjie, male, born in 1969, Master degree, economist. He was manager of Planning
Department of the Company, deputy director of Sales Company, manager of Import and Export
company, general manager assistant of Sales Company. At present, he is supervisor and deputy
general manager of Sales Company.
Ms. Li Lunyu, female, born in 1986, holds a university degree as well as is Assistant Political Mentor
and Assistant Engineer. Positions previously held by her include Publicity Officer at the Office of the
CPC Luzhou Laojiao Committee, Deputy Head and Manager of Tianjin Division of the Business
Department for Luzhou Laojiao Tequ 60 and 80, Secretary of the CPC National Cellar Section Branch
of Luzhou Laojiao Brewing Co., Ltd., Director of the Office of the CPC Luzhou Laojiao Brewing
Committee, and Director of the Discipline Inspection Department and Vice Chairman of the Labor
Union of Luzhou Laojiao Brewing Co., Ltd. Currently, she is Supervisor, Vice Chairman of the Labor
Union, and Director of the Office of the Labor Union of the Company.
Mr. Tang Shijun, male, born in 1976, holds a bachelor's degree and is a senior accountant. He once
served as the Head of the Finance Department and Director of the Business Finance Center of
Luzhou Laojiao Lundao Liquor Sales Co., Ltd., Chief Controller of Shanghai Pharmaceutical (Luzhou)
Co., Ltd., Chief Accountant and Director of Luzhou Naxi District State-owned Assets Management
Co., Ltd., and Director of the Financing Department of Luzhou Huixing Investment Group Co., Ltd. At
present, he is a full-time external director assistant of Luzhou state-owned enterprises, as well as
Manager of the Finance and Asset Management Department of Luzhou State Owned Capital
Operation Management Co., Ltd., and General Manager of Luzhou Development Investment
Company (Sichuan Trust and Investment Company Luzhou Office). He has served as a supervisor of
the Company since June 2022.
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2023 Annual Report of Luzhou Laojiao Co., Ltd.
Mr. Ou Fei, male, born in 1985, holds a bachelor's degree. He once worked in Guizhou Renhuai
Fengzhiji Liquor Co., Ltd., Sichuan Dashan Law Firm and Jiangyang District People's Procuratorate,
Luzhou City. At present, he is a full-time external supervisor of Sichuan Lutianhua Co., Ltd., Luzhou
Industrial Development Investment Group Co., Ltd., Luzhou Development Holding Group Co., Ltd.,
Sichuan Xinhuoju Chemical Co., Ltd. and Luzhou State Owned Capital Operation Management Co.,
Ltd. He has served as a supervisor of the Company since June 2022.
Mr. Shen Caihong, Male, born in 1966, Master degree, professor-level senior engineer, one of the
first batch of representative inheritors of national intangible cultural heritage, one of the first batch of
“Master of Chinese Brewing”, and one of the first batch of "Sichuan craftsmen". He was manager of
the Company’s leaven-making branch, manager of base baijiu company, general manager assistant
and director of production department. At present, he is deputy general manager, chief engineer,
director of national solid brewing engineering technology research center and chairman of the board
of Luzhou Pinchuang Technology Co., Ltd.
Ms. Xie Hong, female, born in 1969, Master degree, senior accountant, and senior economist. She
was section chief of Treasury Section of the Finance Bureau, section chief of Non-tax Revenue
Collection Management Section, director of Luzhou Municipal Finance Treasury Payment Center,
chief accountant of Luzhou Finance Bureau. At present, she is a member of the party committee and
CFO of the Company.
Mr. He Cheng, male, born in 1966, Master of Management Economics of Nanyang Technological
University, senior engineer, expert who receives special allowances from the State Council, Master of
Chinese Baijiu, and Master of Chinese Brewing. He was chief dispatcher of the Company, general
manager of Brewing Company, as well as director of the business administration department, director
of the human resources department, director of the quality department, and director of the dispatching
center of the Company. At present, he is a member of the party committee, deputy general manager,
chief quality officer and director of food safety of the Company.
Mr. Zhang Suyi, male, born in 1971, PhD, professorate senior engineer, representative inheritor of
Sichuan Intangible Cultural Heritage. He was a worker, production team leader and assistant
superintendent at Brewing Workshop No. 6, vice director and director of Gouchu Center, and deputy
chief engineer of the Company, as well as deputy general manager, and director of the Baijiu Body
Design Centre of Brewing Company. At present, he is deputy general manager, and director of safety
and environmental protection of the Company.
Mr. Li Yong, male, born in 1977, holds a postgraduate degree and is a brewing engineer. He once
worked in the education sector at the Party and government organizations at the township level as
well as departments at the county and municipal levels. Also, he used to be Director of the Group
Office of Luzhou Laojiao Group, Director of the General Manager’s Office of the Company, as well as
Deputy Secretary of the Party Committee, Secretary of the Party Committee, and Deputy General
Manager of Sales Company. Currently, he is Deputy General Manager, Secretary of the Board, and
member of the Discipline Inspection Committee of the Company, as well as Chairman of the Board of
60
2023 Annual Report of Luzhou Laojiao Co., Ltd.
Luzhou Laojiao Technology Innovation Co., Ltd.
Position in shareholder-holding companies
Applicable N/A
Any
Name of Position in remunerations
shareholder- shareholder- Beginning date Ending date of received from
Name
holding holding of term term shareholder-
companies companies holding
companies
Secretary of the
party committee,
Liu Miao Laojiao Group 11 March 2022 No
Chairman of the
board
15 February
Gong Zhengying Laojiao Group Director No
2022
Position in other companies
Applicable N/A
Any
Name of other Position in other Beginning date Ending date of remunerations
Name
companies companies of term term received from
other companies
Institute of
Commercial Law
Liu Junhai of Renmin Director
University of
China
China
International
Economic and
Trade Arbitration
Commission,
and Beijing
Liu Junhai Arbitrator
Arbitration
Commission
(Beijing
International
Arbitration
Center)
Nomura Oriental
International
Securities Co., Non-executive
Chen You’an
Ltd., and Hexie director
Health Insurance
Co., Ltd.
Sichuan
Lyu Xianpei Education and Chairman
Audit Society
Sichuan Teway
Food Group Co., Non-executive
Lyu Xianpei
Ltd., and North director
Chemical
61
2023 Annual Report of Luzhou Laojiao Co., Ltd.
Industries Co.,
Ltd.
Green Finance
Committee of the
Li Guowang Jiangsu Vice chairman
Financial
Association
Association of
Li Guowang Zhejiang Talent Director
in Shanghai
Shanghai Jiayan
Supply Chain
Li Guowang Director
Management
Co., Ltd.
National
Biochemical
Engineering
Technology
Ying Hanjie Director
Research Center
of Nanjing
University of
Technology
Nanjing
Chairman of the
Ying Hanjie Biotogether Co.,
board
Ltd.
Nanjing High
Tech University
Biological
Technology
Research
Ying Hanjie Director
Institute Co.,
Ltd., and
Jiangsu Institute
of Industrial
Biotechnology
Luzhou Aviation
Development
Investment
Group Co., Ltd.,
Sichuan
Lutianhua Co.,
Ltd., Luzhou
Industrial
Development
Investment
Group Co., Ltd.,
Gong Zhengying Director
Luzhou
Development
Holding Group
Co., Ltd., Luzhou
Baijiu Industry
Development
Investment
Group Co., Ltd.,
and Luzhou
Airport (Group)
Co., Ltd.
62
2023 Annual Report of Luzhou Laojiao Co., Ltd.
Finance and
Asset
Management
Department of
Tang Shijun Luzhou State Manager
Owned Capital
Operation
Management
Co., Ltd.
Luzhou
Development
Investment
Company General
Tang Shijun
(Sichuan Trust Manager
and Investment
Company
Luzhou Office)
Sichuan
Lutianhua Co.,
Ltd., Luzhou
Industrial
Investment
Group Co., Ltd.,
Luzhou
Development
Holding Group
Ou Fei Co., Ltd., Supervisor
Sichuan
Xinhuoju
Chemical Co.,
Ltd., Luzhou
State Owned
Capital
Operation
Management
Co., Ltd.
Punishments imposed in the recent three years by the securities regulators on the incumbent
directors, supervisors and senior management as well as those who left in the reporting period
Applicable N/A
5.3 Remuneration of directors, supervisors and senior management
The following describes the decision-making procedures, grounds on which decisions are made and
actual remuneration payment of directors, supervisors and senior management.
Decision-making procedures for directors, supervisors and senior management: The remuneration of
non-executive directors, external directors and external supervisors shall be determined by the
general meeting of shareholders, and the remuneration of directors, supervisors and senior
management who hold positions within the Company shall be determined by relevant rules of SASAC
of Luzhou and relevant rules of the Company.
63
2023 Annual Report of Luzhou Laojiao Co., Ltd.
Grounds on which decisions are made of directors, supervisors and senior management: Calculate
according to the appraisal methods formulated at the beginning of the year.
Actual remuneration payment of directors, supervisors and senior management: Details refer to
“Remuneration of directors, supervisors and senior management during the reporting period”.
Remuneration of directors, supervisors and senior management during the reporting period
Unit: CNY 10,000
Total before-
Remuneration
tax
Incumbent/ from related
Name Gender Age Title remuneration
Former parties of the
from the
Company
Company
Chairman of the
Liu Miao Male 54 Incumbent 166.2 No
board
Director, General
Lin Feng Male 50 Incumbent 164.3 No
manager
Director, Deputy
Xiong Pingting Female 48 Incumbent 95.2 No
general manager
Non-executive
Liu Junhai Male 54 Incumbent 9.52 No
director
Non-executive
Chen You’an Male 66 Incumbent 9.52 No
director
Non-executive
Lyu Xianpei Male 60 Incumbent 9.52 No
director
Non-executive
Li Guowang Male 60 Incumbent 9.52 No
director
Qian Xu Male 60 External director Incumbent 9.52 No
Ying Hanjie Male 54 External director Incumbent 9.52 No
Gong
Female 54 External director Incumbent 0 No
Zhengying
Chairman of the
Yang Ping Male 47 Board of Incumbent 120.7 No
Supervisors
Li Guangjie Male 54 Supervisor Incumbent 106.51 No
Li Lunyu Female 37 Supervisor Incumbent 67.32 No
Tang Shijun Male 47 Supervisor Incumbent 0 No
Ou Fei Male 38 Supervisor Incumbent 0 No
Deputy general
Shen Caihong Male 58 Incumbent 114.1 No
manager
Xie Hong Female 54 CFO Incumbent 129.9 No
Deputy general
He Cheng Male 57 Incumbent 111.3 No
manager
Deputy general
Zhang Suyi Male 52 Incumbent 108.3 No
manager
Deputy general
manager,
Li Yong Male 47 Incumbent 95.2 No
Secretary of the
board
Director, Deputy
Wang Hongbo Male 60 Former 131.7 No
general manager
64
2023 Annual Report of Luzhou Laojiao Co., Ltd.
Total -- -- -- -- 1,467.85 --
Other information
Applicable N/A
6. Performance of directors during the reporting period
6.1. Board meetings convened during the reporting period
Meeting Convened date Disclosure date Resolutions
Announcement on Resolutions of the
The 27th Meeting of the 27th Meeting of the 10th Board of
9 March 2023 10 March 2023
10th Board of Directors Directors (Announcement No. 2023-5)
(http://www.cninfo.com.cn/)
Announcement on Resolutions of the
The 28th Meeting of the 28th Meeting of the 10th Board of
6 April 2023 7 April 2023
10th Board of Directors Directors (Announcement No. 2023-7)
(http://www.cninfo.com.cn/)
Announcement on Resolutions of the
The 29th Meeting of the 29th Meeting of the 10th Board of
28 April 2023 29 April 2023
10th Board of Directors Directors (Announcement No. 2023-
10) (http://www.cninfo.com.cn/)
Announcement on Resolutions of the
The 30th Meeting of the 30th Meeting of the 10th Board of
13 June 2023 14 June 2023
10th Board of Directors Directors (Announcement No. 2023-
17) (http://www.cninfo.com.cn/)
Announcement on Resolutions of the
The 31st Meeting of the 31st Meeting of the 10th Board of
11 July 2023 12 July 2023
10th Board of Directors Directors (Announcement No. 2023-
20) (http://www.cninfo.com.cn/)
Announcement on Resolutions of the
The 32nd Meeting of the 32nd Meeting of the 10th Board of
28 August 2023 29 August 2023
10th Board of Directors Directors (Announcement No. 2023-
23) (http://www.cninfo.com.cn/)
Announcement on Resolutions of the
The 33rd Meeting of the 33rd Meeting of the 10th Board of
25 September 2023 26 September 2023
10th Board of Directors Directors (Announcement No. 2023-
27) (http://www.cninfo.com.cn/)
Announcement on Resolutions of the
The 34th Meeting of the 34th Meeting of the 10th Board of
30 October 2023 31 October 2023
10th Board of Directors Directors (Announcement No. 2023-
32) (http://www.cninfo.com.cn/)
Announcement on Resolutions of the
The 35th Meeting of the 35th Meeting of the 10th Board of
15 November 2023 16 November 2023
10th Board of Directors Directors (Announcement No. 2023-
36) (http://www.cninfo.com.cn/)
Announcement on Resolutions of the
The 36th Meeting of the 36th Meeting of the 10th Board of
22 December 2023 23 December 2023
10th Board of Directors Directors (Announcement No. 2023-
41) (http://www.cninfo.com.cn/)
The 37th Meeting of the 27 December 2023 28 December 2023 Announcement on Resolutions of the
65
2023 Annual Report of Luzhou Laojiao Co., Ltd.
10th Board of Directors 37th Meeting of the 10th Board of
Directors (Announcement No. 2023-
42) (http://www.cninfo.com.cn/)
6.2. Attendance of directors in board meeting and general meeting of shareholders
Attendance of director in board meeting and general meeting of shareholders
Attendance Attendance Attendance
Attendance Absence for
due in the Attendance by at general
through a Absence two
Director reporting on site telecommun meeting of
proxy (times) consecutive
period (times) ication shareholder
(times) times
(times) (times) s (times)
Liu Miao 11 7 3 1 0 No 1
Lin Feng 11 6 3 2 0 No 1
Wang
11 5 3 3 0 No 0
Hongbo
Xiong
11 6 3 2 0 No 1
Pingting
Liu Junhai 11 6 3 2 0 No 0
Chen
11 8 3 0 0 No 1
You’an
Lyu Xianpei 11 7 3 1 0 No 0
Li Guowang 11 8 3 0 0 No 1
Qian Xu 11 6 3 2 0 No 0
Ying Hanjie 11 4 3 4 0 No 0
Gong
11 8 3 0 0 No 0
Zhengying
6.3. Objections from directors in related issues of the Company
Were there any objections on related issues of the Company from director
Yes No
Directors have no objection on related issues of the Company during the reporting period.
6.4. Other details about the performance of duties by directors
Was there any advice from directors adopted by the Company?
Yes No
Explanation about advice of directors is adopted or not adopted by the Company or not
The Company adopted the advice of non-executive directors in respect of safe production, system
improvement, and internal control construction.
66
2023 Annual Report of Luzhou Laojiao Co., Ltd.
7. Activities of special committees under the Board of Directors during
the reporting period
Number of Substantial Details of
Convened Other
Committee Members meetings Topics opinion and objections
date information
convened recommendations (if any)
Review of the following
proposals: 1. The Proposal
on the Implementation of the
Project on the Cultural
Conservation and
Restoration, the Creation of
Baijiu Culture Scenarios and
The the Improvement of the
8 June
Strategy Surrounding Environment of
2023
Committee the Baijiu Cave of Luzhou
Laojiao's Brewing Workshop
in Xiaoshi Area; 2. The
Proposal on Conducting Approved, to be
Liu Miao, Lin
Forex Hedges; and 3. The submitted to the
Feng, and
3 Proposal on the Investment Board of
Wang
and Wealth Management Directors for
Hongbo
with Own Funds further review
Review of the following
proposal: The Proposal on
The the Implementation of the
Strategy 7 July 2023 Sichuan Luzhou Baijiu
Committee Industrial Park (Huangyi)
Cogeneration Expansion
Project (Phase I) Project
Review of the following
The proposal: The Proposal on
17 August
Strategy the De-registration of
2023
Committee Luzhou Laojiao Custom
Liquor Co., Ltd.
Review of the following
proposals: 1. The 2022
Annual Financial Report; 2.
The 2022 Internal Control
Self-assessment Report; 3.
The Audit 17 April The Summary Report of the
Committee 2023 2022 Annual Audit; 4. The
Work Plan for the 2023
Internal Audit; 5. The Q1 Approved, to be
Lyu Xianpei, 2023 Report; and 6. The submitted to the
Chen You’an 4 Proposal on the Re- Board of
and Qian Xu appointment of CPA Firm Directors for
Review of the following further review
proposals: 1. The Proposal
The Audit 17 August on the 2023 Interim
Committee 2023 Financial Report; and 2. The
2023 Interim Audit Work
Report
Review of the following
The Audit 23 October
proposals: 1. The Audit
Committee 2023
Work Report for Q1-Q3
67
2023 Annual Report of Luzhou Laojiao Co., Ltd.
2023; and 2. The Q3 2023
Report
Review of the following
15 proposal: The Proposal on
The Audit
December the Formulation of the
Committee
2023 Internal Audit Charter (Trial)
of Luzhou Laojiao Co., Ltd.
Review of the following
The proposals: 1. The Proposal Approved, to be
Chen You’an,
Remunerati 11 on the Remunerations of the submitted to the
Li Guowang,
on and 1 November Management for 2022; and Board of
and Ying
Appraisal 2023 2. The Proposal on the Directors for
Hanjie
Committee Incentive Income of the further review
Management for 2020-2022
8. Performance of duties by the board of supervisors
Were there any risks to the Company identified by the board of supervisors when performing its duties
during the reporting period
Yes No
The board of supervisors has no objection during the reporting period.
9. Staff in the Company
9.1. Number, functions and educational backgrounds of the staff
Number of in-service staff of the parent company at the
1,288
end of the reporting period
Number of in-service staff of main subsidiaries at the end
2,482
of the reporting period
Total number of in-service staff at the end of the reporting
3,770
period
Total number of staff with remuneration in the period 3,770
Number of retirees to whom the Company or its main
916
subsidiaries need to pay retirement pension
Functions
Function by category Number of staff
Production staff 1,387
Sales staff 963
R&D staff 759
Financial staff 100
Administrative staff 561
Total 3,770
Educational backgrounds
Educational background by category Number of staff
Senior high school and below 450
Junior college 854
68
2023 Annual Report of Luzhou Laojiao Co., Ltd.
Bachelor 1,969
Master 485
Doctor 12
Total 3,770
9.2. Staff remuneration policy
In 2023, the Company implemented the distribution policy of "sharing benefits, paying for losses,
classification and setting, and long-term policy effects", continuously strengthened the digital
assessment, linked individual performance with organizational performance, and highlighted the
distribution according to performance. The Company implemented the post rating wage system and
strengthened the performance management of all employees. According to the following principles:
Link individual performance with organizational performance: The increase of wages is linked to the
increase of the Company's operating performance and profit growth; Under the same caliber, the
proportion of increase in salaries shall not exceed the proportion of increase in performance and profit
growth.
Salary and its changes based on position, ability and performance: The salary of employee shall be
determined by position and the depth of their expertise. The salary shall be adjusted accordingly
when the position, ability and performance change.
Performance orientation, bonus and forfeit: Performance assessment is conducted according to the
actual contributions of employees, and the salary distribution is inclined to the employees with
excellent performance.
The principle of equal wage negotiation: Abide by the principles that both sides of labor and capital
agrees in collective negotiation, so as to realize the unity of benefit and fairness.
9.3. Staff training plans
In 2023, based on the staff career development system and job qualification standards, the Company
fully optimized and upgraded the targeted training system comprising different levels to meet
demands for staff ability improvement for different positions and different levels. At the same time,
targeted at different professional lines, the Company horizontally designed "Elite Programme" training,
and strove to create a large number of elite employees who would be rooted in various fields.
Sail Programme: The "Sail Programme" training was conducted for new employees hired through
campus and social recruitment and for other grassroots employees. The implemented training
involved four aspects: General ability training, marketing practical training, business capability
enhancement training, and career planning. The purpose was to enhance new employees'
understanding and recognition of the Company's core values, familiarise them with the Company's
production and operation statuses and their work procedures, and allow them to accumulate
69
2023 Annual Report of Luzhou Laojiao Co., Ltd.
professional knowledge and skills and improve their ability to work independently.
Dive Program: The “Dive Program” training was conducted for general employees on specialized
lines. The purpose was to strengthen their specialty knowledge and ability to solve specialty problems,
enhance their basic management skills, improve their competency and raise their performance. The
training was conducted in the form of sub-programs, such as “Happy Learning Sub-program” and
“Excellent Frontline Manager Sub-program” to provide specialty knowledge and skills of different
systems.
Voyage Program: The “Voyage Program” training was conducted for key personnel with a systematic
design of three-year development plans and a focus on three themes, including “self-management”,
“work management” and “interpersonal management”. The purpose was to enrich employees’
knowledge on corporate business management, improve their knowledge structure, and enhance
their strategic understanding and abilities of work and team management.
Steering Program: The “Steering Program” training was conducted for middle management personnel
and department experts in the form of online and offline combined, “coming in” and “going out”
combined and ability enhancement and work style building combined. Through the learning of
advanced management concepts and practices, the training aimed to drive employees to broaden
their mind, expand their vision, strengthen their leadership skills and enhance their level of corporate
management.
Elite Programme: Targeting employees from different professional lines of the Company, the
Company piloted and created training programmes for digital, human resources, and other
professional lines. Model learning, external training, and introduction of teaching staff were employed
to improve the professional level of employees.
In addition, in terms of professional talents training, in combination with the strategic needs of talent
development and relevant policies of provinces and cities, the Company strengthens study on skilled
worker development policies, actively carries out the work of staff title appraisal, skill rating,
recommendation and assessment and so on. Based on its actual condition, the Company researched
and developed top-level design documents for professional talent cultivation, such as the
Implementation Plan for "Luzhou Laojiao Skilled Worker Action", to systematically guide the building
of professional talent teams.
9.4. Labor outsourcing
Applicable N/A
10. Profit distribution and converting capital reserves into share capital
Formulation, execution or adjustments of profit distribution policy, especially cash dividend policy, in
70
2023 Annual Report of Luzhou Laojiao Co., Ltd.
the reporting period.
Applicable N/A
According to the plan for profit distribution for 2022 deliberated and approved by 2022 annual meeting
of shareholders, based on its total of 1,471,987,769 shares, the Company distributed a cash dividend
of CNY 42.25 (tax inclusive) per 10 shares to all shareholders. The distribution plan was implemented
on 28 August 2023.
A special statement of the policy of cash dividends
Whether it meets the requirements of the articles
of corporation or the resolution of shareholders' Yes
meeting:
Whether the standard and proportion of dividends
Yes
are clear:
Whether the relevant decision-making process and
Yes
systems are complete:
Whether non-executive directors perform their
Yes
duties and play their due role:
If the Company has no dividend plan, it should
disclose the specific reasons and the next steps it N/A
intends to take to enhance investor returns
Whether the minority shareholders have the
opportunity to fully express their opinions and
Yes
appeals and whether their legitimate rights and
interests have been adequately protected:
Whether the conditions and procedures are
compliant and transparent and whether the cash N/A
dividend policy is adjusted or changed:
The Company made a profit in the reporting period and the profit distributable to shareholders of the
Company was positive, but it did not put forward a preliminary plan for cash dividend distribution to
shareholders.
Applicable N/A
Preliminary plan for profit distribution and converting capital reserves into share capital for the
reporting period
Applicable N/A
Bonus shares for every 10 shares (share) 0
Dividends for every 10 shares (CNY) (tax included) 54.00
Total shares as the basis for the preliminary plan for profit
1,471,987,769
distribution (share)
Total cash dividends (CNY) (tax included) 7,948,733,952.60
Cash dividends in other forms (e.g. repurchase share) 0.00
Total cash dividends (CNY) (including other forms) 7,948,733,952.60
Distributable profit (CNY) 33,815,566,574.75
71
2023 Annual Report of Luzhou Laojiao Co., Ltd.
Percentage of cash dividends in the total distributed profit
100%
(including other forms)
Information of the cash dividends
The development stage of the Company is mature and the Company has no major fund expenditure arrangement.
When the profit distribution is carried out, the proportion of cash dividends in this profit distribution should at least
reach 80%.
Details of preliminary plan for profit distribution and converting capital reserves into share capital
11. Implementation of any equity incentive plan, employee stock
ownership plan or other incentive measures for employees
Applicable N/A
11.1. Equity incentives
A. On 26 September 2021, relevant proposals such as the Proposal on the 2021 Restricted Share
Incentive Plan (Draft) and Summary of Luzhou Laojiao Co., Ltd. were approved at the Seventh Meeting
of the 10th Board of Directors and the Third Meeting of the 10th Board of Supervisors of the Company,
respectively.
B. On 2 December 2021, the Company received the Approval of Luzhou State-owned Assets
Supervision and Administration Commission on the Implementation of the Second Phase of the Equity
Incentive Plan for Listed Companies by Luzhou Laojiao Co., Ltd. (L.G.Z.K.P. [2021] No. 62) from the
Luzhou State-owned Assets Supervision and Administration Commission, which approved in principle
to the implementation of the Restricted Share Incentive Plan by the Company.
C. On 24 December 2021, the Board of Supervisors of the Company issued the review opinion, i.e.,
Explanation on the Review and Announcement of the List of Awardees of the 2021 Restricted Share
Incentive Plan.
D. On 29 December 2021, the relevant proposals such as the Proposal on the 2021 Restricted Share
Incentive Plan (Draft) and Summary of Luzhou Laojiao Co., Ltd. were approved at the First
Extraordinary General Meeting of Shareholders of 2021. Meanwhile, a self-inspection on the trading of
the Company's shares by insiders of the Incentive Plan and the proposed awardees was conducted,
and the Self-Inspection Report on the Trading of the Company's Shares by Insiders and Awardees in
the 2021 Restricted Share Incentive Plan was disclosed.
E. On 29 December 2021, the Company held the 12th Meeting of the 10th Board of Directors and the
Sixth Meeting of the 10th Board of Supervisors and reviewed and approved the Proposal on the Grant
of Restricted Shares to Awardees respectively. The independent directors consented to the relevant
matters.
F. On 21 February 2022, the Company disclosed the Announcement on the Completion of Registration
72
2023 Annual Report of Luzhou Laojiao Co., Ltd.
of Restricted Share Grant, completed the registration of the first grant of restricted shares. Upon the
registration of the grant, 6,862,600 restricted shares were granted to 437 objects, the grant price was
CNY 92.71 per share and the listing date was 22 February 2022.
G. On 25 July 2022, the Company held the 18th Meeting of the 10th Board of Directors and the Ninth
Meeting of the 10th Board of Supervisors and reviewed and approved the Proposal on the Grant of
Reserved Restricted Shares to Awardees respectively. The independent directors consented to this
matter.
H. On 5 August 2022, the Board of Supervisors of the Company issued the review opinion, i.e.,
Explanation on the Review and Announcement of the List of Awardees for the Reserved Restricted
Shares of the 2021 Restricted Share Incentive Plan.
I. On 2 September 2022, the Company held the 22nd Meeting of the 10th Board of Directors and the
13th Meeting of the 10th Board of Supervisors, at which the Proposal on the Repurchase and
Retirement of Certain Restricted Shares and the Adjustment of Repurchase Price and the Proposal on
the Adjustment of the Granted Price of Reserved Restricted Shares of 2021 Restricted Share Incentive
Plan were reviewed and approved respectively. In accordance with the relevant provisions of the
incentive plan of the Company and the authorization of the First Extraordinary General Meeting of
Shareholders of 2021, the Board of Directors of the Company agreed to adjust the grant price and
repurchase price of the reserved restricted shares under the incentive plan from CNY 92.71 per share
to CNY 89.466 per share in view of the implementation of the Company's profit distribution plan for
2021. The independent directors consented to this matter.
J. On 3 September 2022, the Company disclosed the Announcement on the Repurchase and
Cancellation of Some Restricted Shares to Reduce Registered Capital and Notice to Creditors. By the
expiration of the declaring period, the Company had not received any declaration from the relevant
creditors for early payout of debts or provision of guarantee.
K. On 26 September 2022, the Company disclosed the Announcement on the Completion of the
Registration of the Grant of the Reserved Restricted Shares under the 2021 Restricted Share Incentive
Plan. Upon the registration of the grant of the reserved restricted shares, 342,334 restricted shares
were granted to 46 objects, the grant price was CNY 89.466 per share and the listing date was 28
September 2022.
L. On 29 November 2022, the Company disclosed the Announcement on the Completion of the
Repurchase and Cancellation of Some Restricted Shares. The Company proposed to repurchase and
cancel a total of 62,310 restricted shares granted but not lifted from restricted sales. As at 29 November
2022, the Company completed the aforesaid repurchase and cancellation of restricted shares.
M. On 29 December 2022, the Company held the 26th Meeting of the 10th Board of Directors and the
15th Meeting of the 10th Board of Supervisors and reviewed and approved the Proposal on the Grant of
Reserved Restricted Shares to Awardees respectively. The independent directors consented to this
matter.
73
2023 Annual Report of Luzhou Laojiao Co., Ltd.
N. On 13 January 2023, the Board of Supervisors of the Company issued the review opinion, i.e.,
Explanation on the Review and Announcement of the List of Awardees for the Reserved Restricted
Shares of the 2021 Restricted Share Incentive Plan.
O. On 16 February 2023, the Company disclosed the Announcement on the Completion of the
Registration of the Grant of the Reserved Restricted Shares under the 2021 Restricted Share Incentive
Plan. Upon the registration of the grant of the reserved restricted shares, 92,669 restricted shares were
granted to 17 objects, the grant price was CNY 89.466 per share and the listing date was 17 February
2023.
P. On 23 January 2024, the Company held the 38th Meeting of the 10th Board of Directors and the 20th
Meeting of the 10th Board of Supervisors, at which the Proposal on the Repurchase and Retirement of
Certain Restricted Shares and the Adjustment of Repurchase Price and the Proposal on the
Satisfaction of Unlocking Conditions for the First Unlocking Period of the 2021 Restricted Share
Incentive Plan were reviewed and approved respectively. In accordance with the relevant provisions of
the incentive plan of the Company and the authorization of the First Extraordinary General Meeting of
Shareholders of 2021, the Board of Directors of the Company agreed to adjust the grant price and
repurchase price of the reserved restricted shares under the incentive plan from CNY 89.466 per share
to CNY 85.241 per share in view of the implementation of the Company's profit distribution plan for
2022. Meanwhile, as the unlocking conditions had been satisfied for the first unlocking period of the
2021 Restricted Share Incentive Plan, a total of 2,734,640 restricted shares held by 435 eligible
awardees were unlocked for public trading on 22 February 2024.
Equity incentives for directors and senior management
Applicable N/A
Unit: share
Exerci
se
price Restric
Stock Market Restric
Stock Exerci Exerci for Stock ted Restric
option price Grant ted
option sable sed exerci option shares Unlock ted
s held at the price shares
s share share sed s held held at ed shares
at the end of of the held at
grante option option share at the the shares grante
Nam Office beginn the restrict the
d in s for s in option end of beginn in the d in
e title ing of reporti ed end of
the the the s in the ing of reporti the
the ng shares the
reporti reporti reporti the reporti the ng reporti
reporti period (CNY/ reporti
ng ng ng reporti ng reporti period ng
ng (CNY / share) ng
period period period ng period ng period
period share) period
period period
(CNY /
share)
Chairma
Liu
n of the 0 0 0 0 0 0 0 95,900 0 0 92.71 95,900
Miao
board
Director,
Lin
General 0 0 0 0 0 0 0 95,900 0 0 92.71 95,900
Feng
manager
74
2023 Annual Report of Luzhou Laojiao Co., Ltd.
Wan Director,
g Deputy
0 0 0 0 0 0 0 76,700 0 0 92.71 76,700
Hon general
gbo manager
Shen Deputy
Caih general 0 0 0 0 0 0 0 76,700 0 0 92.71 76,700
ong manager
Xie
Hon CFO 0 0 0 0 0 0 0 76,700 0 0 92.71 76,700
g
He Deputy
Che general 0 0 0 0 0 0 0 76,700 0 0 92.71 76,700
ng manager
Zhan Deputy
g general 0 0 0 0 0 0 0 76,700 0 0 92.71 76,700
Suyi manager
Xion
Deputy
g
general 0 0 0 0 0 0 0 62,800 0 0 92.71 62,800
Pingt
manager
ing
Deputy
general
manager
Li
, 0 0 0 0 0 0 0 62,800 0 0 92.71 62,800
Yong
Secretar
y of the
board
700,90 700,90
Total -- 0 0 0 0 -- 0 -- 0 0 --
0 0
The first grant date for the 2021 Restricted Share Incentive Plan was 29 December 2021 and the registration date of the
Notes (if any)
grant was 21 February 2022.
Appraisal mechanism and incentives for senior management
For details, please refer to the 2021 Restricted Share Incentive Plan (Draft) and Summary of Luzhou
Laojiao Co., Ltd., the Performance Appraisal Methods for the 2021 Restricted Share Incentive Plan of
Luzhou Laojiao Co., Ltd., and the Management Methods for the 2021 Restricted Share Incentive Plan
of Luzhou Laojiao Co., Ltd., which have been disclosed by the Company on www.cninfo.com.cn on 26
September 2021.
11.2. Implementation of employee stock ownership plans
Applicable N/A
11.3. Other incentive measures for employees
Applicable N/A
75
2023 Annual Report of Luzhou Laojiao Co., Ltd.
12. Establishment and implementation of the internal control system
during the reporting period
12.1. Establishment and implementation of the internal control system
During the reporting period, in accordance with the Basic Rules for Internal Control of Enterprises, the
Guidelines of the Shenzhen Stock Exchange for the Internal Control of Listed Companies, relevant laws,
administrative regulations, normative documents, and other regulatory requirements concerning internal
control, as well as the reality of the Company, the Company consistently improved and optimized its
internal control systems and established a well-developed system that covered the corporate
governance, administrative management, operations management, financial management, human
resources, production guarantee, and safety and environmental protection. Additionally, it strengthened
the implementation, supervision, inspection, feedback, and improvement of the internal control systems
in the operations management to ensure that each internal control system is reasonable, complete, and
effective, thereby promoting the sound, sustainable development of the Company.
12.2. Material internal control deficiencies found in the reporting period
□ Yes No
13. The Company’s management and control of subsidiaries during the
reporting period
Problems Solution
Consolidation Consolidation Subsequent
Company name arising in Solutions taken implementation
plan progress solutions
consolidation progress
N/A
14. Internal control assessment report and auditor report
14.1. Internal control assessment report
Disclosure date of the internal control
27 April 2024
assessment report
Disclosure index of the internal control
2023 Internal Control Assessment Report (http://www.cninfo.com.cn/)
assessment report
Ratio of the total assets of the
appraised entitles to the consolidated 90.00%
total assets
Ratio of the operating revenues of the
appraised entitles to the consolidated 90.00%
operating revenue
Deficiencies identification standard
Type Financial report Non-financial report
76
2023 Annual Report of Luzhou Laojiao Co., Ltd.
Material deficiencies：（1）violate
Material deficiencies：（1）Correction of national regulations and laws；（2）
material errors in financial reports that The Company’s decision-making
have been announced (except procedures are unscientific；if there
retroactive adjustment of previous years is a decision-making misplay, it will
due to changes in policies or other result in significant deal failure; （3）
objective factors)；（2）Material The substantial loss of managerial or
Qualitative standard misstatement of current financial report technical staff；（4）Important
which was unrecognized but found by business lacks system control or
the auditor；（3） Corrupt transaction of system failure, important economic
senior management；（4）Audit business has internal control system
committee and internal audit department guidance, but with no effective
are not effective to the internal control operation；（5）material deficiencies
supervision . of internal control cannot be rectified
in time.
1. Material deficiencies：Misstatement ≥
5% of total profits；Misstatement ≥ 1%
of total assets；Misstatement ≥ 5% of
total operating revenue；Misstatement
≥5% of owner's equity
2. Significant deficiencies：3% of gross
profits≤Misstatement<5% of gross
profits；0.5% of total 1. Material deficiencies：loss≥5% of
assets≤Misstatement<1% of total net profits.
assets；3% of total operating 2. Significant deficiencies：3% of net
Quantitative standard
revenue≤Misstatement<5% of total profits≤ loss＜5% of net profits.
operating revenue；3% of owner's 3. General deficiencies：loss＜3% of
equity≤Misstatement<5% of owner's net profits
equity.
3. General deficiencies：
Misstatement<3% of gross profits；
Misstatement<0.5% of total assets；
Misstatement<3% of total operating
revenue；Misstatement<3% of owner's
equity.
Number of financial-report material
0
deficiencies
Number of non-financial-report material
0
deficiencies
Number of significant financial-report
0
related deficiencies
Number of significant Non-financial-
0
report related deficiencies
14.2. Internal control auditor report
Applicable N/A
Deliberation opinion section in the internal control audit report
The Company maintained, in all material respects, effective internal control over financial reporting as of 31 December
2023, based on the Basic Rules on Enterprise Internal Control and other applicable regulations.
Disclosure of internal control audit report Disclosed
Disclosure date of the internal control audit report 27 April 2024
2023 Internal Control Auditor Report
Disclosure index of the internal control audit report
(http://www.cninfo.com.cn/)
Type of the audit’s opinion Standard unqualified opinion
77
2023 Annual Report of Luzhou Laojiao Co., Ltd.
Significant deficiencies found in the non-financial report No
The accounting firm issued the internal control audit report of non-standard opinions
Yes No
Whether the internal control audit report issued by the accounting firm is consistent with the self-
assessment report issued by the board of directors.
Yes No
15. Remediation of Problems Identified by Self-inspection in the Special
Campaign on Listed Company Governance
None.
78
2023 Annual Report of Luzhou Laojiao Co., Ltd.
Section V Environmental and Social Responsibility
1. Information about environment protection
Whether the listed company and its subsidiaries belong to heavy polluting industries prescribed by
the environmental protection department
Yes □ No
Policies and industry standards on environmental protection
In the process of production and operation, the Company strictly follow the laws, regulations and
industry standards related to environmental protection, such as the Environmental Protection Law of
the People's Republic of China, Law of the People's Republic of China on Environmental Impact
Assessment, Law of the People's Republic of China on Atmospheric Pollution Prevention and Control,
Law of the People's Republic of China on Water Pollution Prevention and Control, Administrative
Measures for the Legal Disclosure of Enterprise Environmental Information, Regulations on the
Administration of Environmental Protection of Construction Projects of the People's Republic of China,
Regulations on Administration of Pollutant Discharge Permits, Policies and Industry Standards on
Environmental Protection, Standard for Pollution Control on Hazardous Waste Storage, Standards for
the Emission of Water Pollutants in the Fermented Alcohol and Baijiu Industry, Regulations on the
Prevention and Control of Environmental Pollution by Solid Waste in Sichuan Province, and
Regulations on Environmental Protection of Sichuan Province.
Environmental protection administrative permission
In 2023, the Company obtained six ecological and environmental administrative permits, including a
total of three permits for change and renewal of discharge permits and three approvals of
environmental impact assessment reports.
Review and
Name of Acquiring
Administrative permit No. issuance Valid term Permitted matter Remark
permit time
authority
Concentration limit on
Discharge
Luzhou fugitive emission of air
Permit for
Municipal pollutants: 2.0 mg/Nm3 for
Luzhou Laojiao 17 April
91510500204706718H002V Ecology and 5 years non-methane hydrocarbon Change
Co., Ltd. 2023
Environment (NMHC) and 20
(Xiaoshi
Bureau dimensionless for odor
Brewery Base)
concentration.
Discharge Permitted annual discharge
Luzhou
Permit for limits for wastewater:
Municipal
Luzhou Laojiao 6 June 440.18t/a for chemical Re-
91510500204706718H004Q Ecology and 5 years
Co., Ltd. 2023 oxygen demand (COD), application
Environment
(Huangyi 33.01t/a for ammonia
Bureau
Brewery Eco- nitrogen, 55.02t/a for total
79
2023 Annual Report of Luzhou Laojiao Co., Ltd.
Park) nitrogen (TN), and 3.3t/a for
total phosphorus (TP).
Luzhou Laojiao Permitted annual organized
Brewing Co., Luzhou emission limits for air
Ltd. (Energy Municipal pollutants: 8.64t/a for
30 March
Center of 91510500204755181G002V Ecology and 5 years particulate matters, 18.88t/a Change
2023
Sichuan Luzhou Environment for sulfur dioxide, and
Baijiu Industrial Bureau 136.08t/a for nitrogen
Park) oxides.
In the 19# and 20#
workshops in the south area
of Sichuan Luzhou Baijiu
Industrial Park, three 7,000-
Reply to the bottle/h manual filling
Report of production lines were
Luzhou Laojiao utilized and supported with
on the new equipment such as
Luzhou
Environmental code-scanning devices for
Municipal
Impact of 1 March the production of small- Newly
L.SH.H.J.H. [2023] No. 21 Ecology and Permanent
Phase I 2023 scale and customized baijiu acquired
Environment
Construction products, and one 24,000-
Bureau
Project of bottle/h filling line was newly
Flexible added for the production of
Intelligent Filling a wide range of small-
Pilot Line volume products. After the
project is completed and put
into production, a baijiu
filling capacity of 27,000
tons/year will be developed.
Reply to the A 5,000-bottle/h filling line
Report of was constructed in 18#
Luzhou Laojiao workshop in the south area
on the of Sichuan Luzhou Baijiu
Luzhou
Environmental Industrial Park for the
Municipal
Impact of 1 March automated production of Newly
L.SH.H.J.H. [2023] No. 19 Ecology and Permanent
Phase II 2023 small-scale and customized acquired
Environment
Construction gift-boxed products. After
Bureau
Project of the project is completed and
Flexible put into production, a baijiu
Intelligent Filling filling capacity of 9,600
Pilot Line tons/year will be developed.
An 8,000-bottle/h of
Reply to the
conventional production and
Report of
packaging line for custom
Luzhou Laojiao
products, a 3,000-bottle/h of
Custom Liquor
production and packaging
Co., Ltd. on the
line for shaped-bottle
Environmental Luzhou
custom products, and a box
Impact of No. Municipal
1 March packaging line for small Newly
21 Production L.SH.H.J.H. [2023] No. 20 Ecology and Permanent
2023 single personalized custom acquired
Workshop Environment
products were constructed
Renovation Bureau
in 21# workshop in the
Project in the
south area of Sichuan
South Area of
Luzhou Baijiu Industrial
Huangyi
Park. After the project is
Brewery Eco-
completed and put into
Park
production, a baijiu filling
80
2023 Annual Report of Luzhou Laojiao Co., Ltd.
capacity of 7,000 tons/year
will be developed.
Industry discharge standards and pollutants in producing and operating activities
Type of Name of
main main Number Distributi Emission
Discharg Pollution Approved Excessiv
Company pollutant pollutant of on of concentra Total
e discharge total e
name and and discharge discharge tion/inten emission
type standard emission discharge
particular particular outlet outlet sity
pollutant pollutant
Luzhou Luohan
Water Direct 20.84mg/
Laojiao COD 1 Brewery 50mg/L 7.9696t 23.183t/a No
pollutant discharge L
Co., Ltd. Eco-Park
Luzhou Luohan
Water Ammonia Direct
Laojiao 1 Brewery 0.19mg/L 5mg/L 0.0569t 2.017t/a No
pollutant nitrogen discharge
Co., Ltd. Eco-Park
Luzhou Luohan
Water Total Direct
Laojiao 1 Brewery 6.14mg/L 15mg/L 2.3424t 5.796t/a No
pollutant nitrogen discharge
Co., Ltd. Eco-Park
Luzhou Total Luohan
Water Direct
Laojiao phosphor 1 Brewery 0.06mg/L 0.5mg/L 0.0223t 0.232t/a No
pollutant discharge
Co., Ltd. us Eco-Park
Luzhou Air Organize Luohan 0.69mg/
Laojiao PM d 3 Brewery 20mg/m3 0.1635t 3.900t/a No
Co., Ltd. pollutant discharge Eco-Park m3
Luzhou Organize Luohan
Air Sulfur 0.20mg/
Laojiao d 3 Brewery 50mg/m3 0.1907t 11.500t/a No
pollutant dioxide m3
Co., Ltd. discharge Eco-Park
Luzhou Air Organize Luohan 30.08mg/ 150mg/m
Oxynitrid
Laojiao d 3 Brewery 3.9348t 45.400t/a No
pollutant e m3 3
Co., Ltd. discharge Eco-Park
Luzhou Huangyi
Water Indirect 30.68mg/ 440.180t/
Laojiao COD 1 Brewery 400mg/L 18.0878t No
pollutant discharge L a
Co., Ltd. Eco-Park
Luzhou Water Huangyi
Ammonia Indirect
Laojiao 1 Brewery 0.42mg/L 30mg/L 0.2310t 33.010t/a No
pollutant nitrogen discharge
Co., Ltd. Eco-Park
Luzhou Huangyi
Water Total Indirect 18.38mg/
Laojiao 1 Brewery 50mg/L 10.8063t 55.020t/a No
pollutant nitrogen discharge L
Co., Ltd. Eco-Park
Luzhou Water Total Huangyi
Indirect
Laojiao phosphor 1 Brewery 0.84mg/L 3.0mg/L 0.4989t 3.300t/a No
pollutant discharge
Co., Ltd. us Eco-Park
Energy
Center of
Luzhou
Organize Sichuan
Laojiao Air 0.902mg/
Dust d 2 Luzhou 5mg/m3 0.6875t No
Brewing pollutant m3
discharge Baijiu
Co., Ltd.
Industrial
Park
Energy 8.640t/a
Center of
Luzhou
Organize Sichuan
Laojiao Air 1.752mg/
PM d 1 Luzhou 20mg/m3 0.0295t No
Brewing pollutant m3
discharge Baijiu
Co., Ltd.
Industrial
Park
Energy
Center of
Luzhou
Organize Sichuan
Laojiao Air Sulfur 0.307mg/
d 2 Luzhou 35mg/m3 0.2785t No
Brewing pollutant dioxide m3
discharge Baijiu
Co., Ltd.
Industrial
Park
Energy 18.880t/a
Center of
Luzhou
Organize Sichuan
Laojiao Air Sulfur 0.233mg/
d 1 Luzhou 50mg/m3 0.0081t No
Brewing pollutant dioxide m3
discharge Baijiu
Co., Ltd.
Industrial
Park
Energy
Center of
Luzhou
Organize Sichuan
Laojiao Air Oxynitrid 34.65mg/ 100mg/m 136.080t/
d 2 Luzhou 24.7201t No
Brewing pollutant e m3 3
a
discharge Baijiu
Co., Ltd.
Industrial
Park
81
2023 Annual Report of Luzhou Laojiao Co., Ltd.
Energy
Center of
Luzhou
Organize Sichuan
Laojiao Air Oxynitrid 38.66mg/ 150mg/m
d 1 Luzhou 0.6057t No
Brewing pollutant e m3 3
discharge Baijiu
Co., Ltd.
Industrial
Park
Treatments of pollutants
A. Waste water: Areas of the Company that produce wastewater are National Cellar, Zaojiaoxiang
Brewery Base, Xiaoshi Brewery Base, Anning Technology Park, Luohan Brewery Eco-Park, and
Huangyi Brewery Eco-Park. In National Cellar, Zaojiaoxiang Brewery Base, Xiaoshi Brewery Base, and
Anning Technology Park, the high-concentration brewing wastewater is temporarily collected in pools
(or tanks), and is later transferred to the wastewater treatment station of Huangyi Brewery Eco-Park by
truck for treatment. The wastewater treatment stations of Luohan Brewery Eco-Park and Huangyi
Brewery Eco-Park are equipped with online monitors to automatically monitor COD, ammonia nitrogen,
total phosphorus, total nitrogen, pH value and flows, and transmit the monitoring data to the supervision
platform of the higher authority. The Company's facilities for prevention and control of wastewater
pollution are under normal operations, ensuring up-to-standard discharge through general discharging
outlets. Compared with last year, suspended matter discharge was reduced by 48.45%, and COD
discharge by 8.85%.
B. Waste gas: Areas of the Company that produce exhaust gas are National Cellar, Zaojiaoxiang
Brewery Base, Xiaoshi Brewery Base, Luohan Brewery Eco-Park, and Huangyi Brewery Eco-Park. In
National Cellar Brewery Base, natural gas boilers are used, while in Xiaoshi Brewery Base and
Zaojiaoxiang Brewery Base, direct-fired bottom boilers are used. The natural gas boilers of Luohan
Brewery Eco-Park (20t/h, 30t/h) and the natural gas boilers of Huangyi Brewery Eco-Park (20t/h, 75t/h,
75t/h) are equipped with online monitors to automatically monitor exhaust gas, and transmit the
monitoring data to the supervision platform of the higher authority. Low NOx combustion technology is
adopted for the natural gas boilers. The Company's facilities for prevention and control of exhaust gas
pollution are under normal operations, ensuring up-to-standard emission of exhaust gas through outlets.
Compared with last year, PM discharge was reduced by 13.04%, and Oxynitride discharge by 9.51%.
Emergency plan for environmental emergencies
In 2023, the Company organized the revision and issuance of the Contingency Plan for
Environmental Emergencies in Jiangyang District of Luzhou Laojiao Co., Ltd. (2023), the Contingency
Plan for Environmental Emergencies in Longmatan District of Luzhou Laojiao Co., Ltd. (2023), and
completed the corresponding Report on Environmental Emergency Resource Investigation,
Environmental Risk Assessment Report, Special Contingency Plan and On-site Disposal Plan.
Environmental self-monitoring plan
Monitoring
Monitoring Implementation Monitoring Monitoring compliance
Monitoring site Emission limit
indicator standard frequency form rate in H1
2023
Unorganized monitoring Odor Emission Standards 20 1 time/half-
Manual 100%
points 1#-4# for the exhaust concentration for Odor Pollutants (dimensionless) year
82
2023 Annual Report of Luzhou Laojiao Co., Ltd.
gas emission outlets of Hydrogen sulfide (GB14554- 93) 0.06 mg/m3
Luohan Brewery Eco-Park Ammonia 1.5 mg/m3
Sichuan Emission
Control Standard for
NMHC Volatile Organic 2 mg/m3
Compounds
(DB51/2377-2017)
Integrated Emission
Particulate Standards for Air
1 mg/m3
matters Pollutants
(GB16297-1996)
Ringelman
≤1 Manual
Exhaust gas emission outlets emittance Emission Standards
3
DA022, DA021 (unused) and Nitrogen oxide for Air Pollutants for 150 mg/m 1
100%
DA020 of Luohan Brewery Particulate Boiler (GB13271- time/quarter
20 mg/m3 Automatic
Eco-Park matters 2014)
Sulfur dioxide: 50 mg/m3
15,000
Hydrogen sulfide
/
Exhaust gas emission outlet Emission Standards
/ 1 time/half-
DA019 of Luohan Brewery Ammonia for Odor Pollutants Manual 100%
1.8 kg/h year
Eco-Park (GB14554- 93)
Odor /
concentration 27 kg/h
240 mg/m3
Sulfur dioxide:
Integrated Emission 0.77 kg/h
Particulate Standards for Air 120 mg/m3
matters Pollutants 3.5 kg/h
Exhaust gas emission outlet (GB16297-1996)
550 mg/m3 1
DA018 of Luohan Brewery Nitrogen oxide Manual 100%
2.6 kg/h time/quarter
Eco-Park
Sichuan Emission
Control Standard for
Volatile organic 60 mg/m3
Volatile Organic
compounds 3.4 kg/h
Compounds
(DB51/2377-2017)
Sichuan Emission
Exhaust gas emission outlet Control Standard for
60 mg/m3 1
DA017 of Luohan Brewery NMHC Volatile Organic Manual 100%
3.4 kg/h time/quarter
Eco-Park Compounds
(DB51/2377-2017)
Integrated Emission
Exhaust gas emission outlets
Particulate Standards for Air 1 time/half-
DA001-DA016 of Luohan 120 mg/m3 Manual 100%
matters Pollutants year
Brewery Eco-Park
(GB16297-1996)
Flow /
PH value 6-9
Standards for the 1
COD Emission of Water 50 mg/L Automatic
Main outlet DW001 of the time/quarter
Ammonia nitrogen Pollutants in the 5 mg/L
wastewater treatment station 100%
TP Fermented Alcohol 0.5 mg/L
of Luohan Brewery Eco-Park
TN and Baijiu Industry 15 mg/L
(GB27931-2011)
Suspended solids 20 mg/L
Five-day BOD 20mg/L 1 time/month Manual
Chroma 20
Suspended solids Standards for the 20 mg/L 1 time/month
Emission of Water (1
Rainwater outlets DW002-
Pollutants in the time/quarter
DW006 of Luohan Brewery Manual 100%
COD Fermented Alcohol 50 mg/L in case of no
Eco-Park
and Baijiu Industry abnormalities
(GB2731-2011) monitored)
Emission Standard
Noise monitoring points 1-4# for Noise of Daytime: 60 dB
1
at the boundary of Luohan Boundary noise Industrial Enterprises (A); nighttime: Manual 100%
time/quarter
Brewery Eco-Park at Boundary 50 dB (A)
(GB12348-2008)
Circulating cooling water
outlet DW002 of the Energy PH value, COD, 1
/ / Manual 100%
Center of Sichuan Luzhou TP time/quarter
Baijiu Industrial Park
PH value Integrated 6-9
Wastewater outlet DW001 of
Total dissolved Wastewater 1
the Energy Center of Sichuan / Manual 100%
solids (TDS) Discharge Standard time/quarter
Luzhou Baijiu Industrial Park
Suspended solids (GB8978-1996) 140 mg/L
83
2023 Annual Report of Luzhou Laojiao Co., Ltd.
Five-day BOD 80 mg/L
COD 400 mg/L
TN 50 mg/L
Ammonia nitrogen 30 mg/L
TP 3 mg/L
Ringelman Emission Standard
Boiler exhaust gas vents ≤1 Manual
emittance of Air Pollutants for
DA001-DA002 of the Energy 3 1
Nitrogen oxide Thermal Power 100 mg/m 100%
Center of Sichuan Luzhou time/quarter
Baijiu Industrial Park Soot Plants (GB13223- 5 mg/m3 Automatic
Sulfur dioxide: 2011) 35 mg/m3
Ringelman
≤1 Manual
Boiler exhaust gas vent emittance Emission Standards
Nitrogen oxide 150 mg/m 3 1
DA003 of the Energy Center for Air Pollutants for
time/quarter 100%
of Sichuan Luzhou Baijiu Particulate Boiler (GB13271-
20 mg/m3 Automatic
Industrial Park matters 2014)
Sulfur dioxide: 50 mg/m3
Suspended solids Standards for the 50 mg/L 1 time/month
Emission of Water (1
Rainwater outlets DW004-
Pollutants in the time/quarter
DW010 of Huangyi Brewery Manual 100%
COD Fermented Alcohol 100 mg/L in case of no
Eco-Park
and Baijiu Industry abnormalities
(GB2731-2011) monitored)
Odor 20
concentration Emission Standards (dimensionless)
for Odor Pollutants
Hydrogen sulfide 0.06 mg/m3
(GB14554-93)
Ammonia 1.5 mg/m3
Sichuan Emission
Unorganized monitoring Control Standard for 1
points 1#-4# at the boundary NMHC Volatile Organic 2 mg/m3 Manual 100%
time/quarter
of Huangyi Brewery Eco-Park Compounds
(DB51/2377-2017)
Integrated Emission
Particulate Standards for Air
1 mg/m3
matters Pollutants
(GB16297-1996)
Odor 2,000
concentration Emission Standards (dimensionless)
DA041 and DA042 of 1 time/half-
for Odor Pollutants Manual 100%
Huangyi Brewery Eco-Park Ammonia 4.9 kg/h year
(GB14554- 93)
Hydrogen sulfide 0.33 kg/h
Sichuan Emission
Control Standard for
DA096-DA097 of Huangyi 60 mg/m3 1
NMHC Volatile Organic Manual 100%
Brewery Eco-Park 4.76 kg/h time/quarter
Compounds
(DB51/2377-2017)
DA034-DA040, DA043-
Integrated Emission
DA070, DA076-DA086,
Particulate Standards for Air 1 time/half-
DA088-DA095, DA098, and 120 mg/m3 Manual 100%
matters Pollutants year
DA099 of Huangyi Brewery
(GB16297-1996)
Eco-Park
Flow /
PH value 6-9
COD Standards for the 400 mg/L 1
Automatic
Emission of Water time/quarter
Main outlet of the wastewater Ammonia nitrogen 30 mg/L
Pollutants in the
treatment station of Huangyi TP 3 mg/L 100%
Fermented Alcohol
Brewery Eco-Park TN 50 mg/L
and Baijiu Industry
Suspended solids (GB2731-2011) 140 mg/L
Five-day BOD 80 mg/L 1 time/month Manual
Chroma 80
Emission Standard
Noise monitoring points 1-4# for Noise of Daytime: 65 dB
1
at the boundary of Huangyi Boundary noise Industrial Enterprises (A); nighttime: Manual 100%
time/quarter
Brewery Eco-Park at Boundary 55 dB (A)
(GB12348-2008)
Emission Standards
Odor
for Odor Pollutants 20
concentration
(GB14554- 93)
Unorganized monitoring
Sichuan Emission 1 time/half-
points 1#-7# at Xiaoshi Manual 100%
Control Standard for year
Brewery Base 3
NMHC Volatile Organic 2.0 mg/m
Compounds
(DB51/2377-2017)
Ringelman
Emission Standards ≤1
Boiler exhaust gas vents emittance
for Air Pollutants for 1 time/year
DA001-DA010 of Xiaoshi Soot 20 mg/m3 Manual 100%
Boiler (GB13271-
Brewery Base Sulfur dioxide: 2014) 50 mg/m3
Nitrogen oxide 150 mg/m3 1 time/month
84
2023 Annual Report of Luzhou Laojiao Co., Ltd.
Emission Standard
Noise monitoring points at the for Noise of
Daytime: 60 dB 1
boundary of Xiaoshi Brewery Boundary noise Industrial Enterprises Manual 100%
(A) time/quarter
Base at Boundary
(GB12348-2008)
Emission Standards
Odor
for Odor Pollutants 20
concentration
Unorganized monitoring (GB14554- 93)
points 1#-4# at National Sichuan Emission 1 time/half-
Manual 100%
Cellar and 1#-3# Zaojiaoxiang Control Standard for year
3
Brewery Bases NMHC Volatile Organic 2.0 mg/m
Compounds
(DB51/2377-2017)
Ringelman
Boiler exhaust gas vents Emission Standards ≤1
emittance
DA001-DA003 of National for Air Pollutants for 1 time/year
Soot 20 mg/m3 Manual 100%
Cellar and Zaojiaoxiang Boiler (GB13271-
Sulfur dioxide: 50 mg/m3
Brewery Bases 2014)
Nitrogen oxide 150 mg/m3 1 time/month
Emission Standard
Noise monitoring points at the
for Noise of
boundary of National Cellar Daytime: 60 dB 1
Boundary noise Industrial Enterprises Manual 100%
and Zaojiaoxiang Brewery (A) time/quarter
at Boundary (Class 4
Bases
for street frontage)
Standards for the 1 time/month
Emission of Water (1
Rainwater outlet DW003 of
Pollutants in the time/quarter
National Cellar Brewery Suspended solids 20mg/L Manual 100%
Fermented Alcohol in case of no
Bases
and Baijiu Industry abnormalities
(GB2731-2011) monitored)
Input in environmental management and protection and the payment of environmental protection-
related taxes
During the Reporting Period, more than CNY 44.29 million was input in environmental governance
and protection, and CNY 185.3 thousand was paid in environmental protection tax as required.
Amount of tax payable (CNY Actual amount paid (CNY Tax deduction (CNY
Taxable pollutant
10,000) 10,000) 10,000)
Water pollutant and air
18.53 18.53 0.00
pollutant
Measures taken to reduce carbon emissions during the reporting period and the results
Applicable N/A
The Company reduced CO2 emissions through resource recycling. Through the pressure recovery
and utilisation of waste heat steam, during the Reporting Period, the energy-saving system saved
steam of approximately 14,100 tons and reduced carbon dioxide of approximately 3,380 tons. The
Company recycled the marsh gas generated from the wastewater treatment process as boiler fuel,
with more than 3.35 million cubic meters of marsh gas recycled during the Reporting Period, and
more than 49,260 tons of carbon dioxide emissions were reduced. The Company reduced carbon
dioxide emissions by purchasing green power.
During the Reporting Period, over 30.9 million kilowatt-hours of green power were purchased and
carbon emissions were reduced by over 17,630 tons.
Administrative penalties received in the reporting period due to environmental issues
The Company or Reason for Regulation Impact on the
Penalties Rectification
subsidiary penalties violated Company
N/A
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2023 Annual Report of Luzhou Laojiao Co., Ltd.
Other information about environmental protection that should be disclosed
N/A
Other information about environment protection
N/A
2. Social responsibility
See the 2023 Social Responsibility Report disclosed on the same day with this Annual Report.
3. Efforts in poverty alleviation and rural revitalization
3.1. Work plan for rural revitalization in 2023
In 2023, the Company will strictly implement the arrangement of the central, provincial and municipal
Party committees regarding effectively connecting consolidation and expansion of poverty alleviation
achievements with rural revitalization, coordinate various resources and strengths to improve areas of
weakness, consolidate the achievements, lay the foundation and promote the revitalization, take
multiple measures to resolutely fulfill the paired assistance responsibility, and comprehensively promote
new progress in rural revitalization and new levels in agricultural and rural modernization in assisted
villages.
A. Enhance the leadership of party building and consolidate the rural governance. The party branches
of the Company will continue to collaborate with the party branches of the assisted villages, and party
workers will be selected to guide the standard implementation of policies such as the "three meetings
and one lecture" and organizational life meetings. The Company will help villages establish and improve
a rural governance system that combines autonomy, rule of law and moral governance under the
leadership of party organizations, promote grassroots party organizations in rural areas to publicize the
Party's ideas, implement the Party's decisions, lead grassroots governance and unite and mobilize the
masses, regulate the management of village affairs and support rural revitalization.
B. Enhance the building of the assistance team to boost rural revitalization. The Company will strive to
consolidate the responsibilities of the assistance team stationed in the village, continuously improve the
comprehensive ability of the assistance cadres, and build a high-quality and responsible force for rural
revitalization with excellent work style. In addition, it will strongly cooperate with the "two committees" of
the village to consolidate and expand the results of poverty eradication, complete rural revitalization
tasks such as rural industrial development and spiritual civilization construction, and contribute to the
comprehensive rural revitalization from industry, talent, culture and ecology.
C. Enhance consumption assistance and stimulate industrial development momentum. Relying on the
resource and platform advantages, the Company will continue to integrate resources and coordinate
the integrated development of "livestock, production, promotion and sales" around special industries
such as Maiwa yak, continuously enhance product promotion and development, promote the upgrading
of industrial supporting facilities and the improvement of chains, and facilitate the effective
transformation of the "geographical card" into a "treasure for wealth". It will continue to carry out
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2023 Annual Report of Luzhou Laojiao Co., Ltd.
"purchase instead of donation" campaign, and adopt market-oriented means to sign annual targeted
purchase agreements with the assisted counties for agricultural and sideline products, and bring high-
quality agricultural products onto e-commerce platforms.
D. Deepen employment assistance and enhance blood-creation momentum. In assisted villages, the
Company will establish a ledger of employment assistance for poverty-alleviation and low-income
families, actively help them compete for public service jobs, and organize training on employment skills
such as e-commerce and farming techniques to extensively cultivate training groups of wealthy leaders.
Fully relying on the assistance projects, the Company will support unstable households in poverty
alleviation and marginal households prone to poverty to develop yard economy and work to increase
income according to local conditions. Additionally, the Company will identify, intervene and assist
farmers who are at risk of returning to poverty as early as possible to firmly guard the bottom line of
preventing large-scale return to poverty.
E. Advocate the transformation of outmoded habits and customs and promote a new style of civilization.
The Company will enhance the promotion of the socialist core values and guide party members and
cadres in assisted villages to update their ideology and form a diligent, civilized and healthy lifestyle. In
addition, the Company will cooperate with the assisted villages to continue to carry out activities rich in
rural culture, such as the Guozhuang Dance and equestrian to enrich the spiritual and cultural life of the
villagers and promote the transformation into a harmonious, aggressive and good society.
3.2. The achievements of paired assistance in 2023
The Company always upholds the important principle of "I do practical things for the public" to guide the
assistance initiative, and actively implements seven categories of assistance projects including
infrastructure construction, industrial support, self-belief and education support, and health assistance.
A total of CNY 2,922,700 has been invested to carry out paired assistance in Guntang Village,
Hongyuan County, and Xiangtian Village, Gulin County, as well as fundamental assistance in
Hongyuan County. Additionally, four Party Committee meetings were held to examine paired assistance
and fundamental assistance. Six special seminars were held and four full-time assistance cadres with
outstanding abilities were dispatched to the villages. Members of the Company's leadership team
visited the villages eight times, and the guidance group spent three days in field investigation. Two joint
meetings on paired assistance were organised. First, the standard of Party organisations was
enhanced. For six consecutive years, the Company has been engaging in paired cooperation activities
with the Maiwa Township Party Committee and its affiliated Party branches. A total of CNY 30,000 was
allocated to reward and express care for outstanding and disadvantaged Party members in 2023,
aiming to standardise and regulate Party organisations at the township and village levels, and provide
strong organisational guarantees for rural revitalisation. Second, infrastructures were improved. In
line with the actual situation of the assisted villages and the needs of the masses, a total of CNY
300,000 was invested in the construction of sanitary toilets, maintenance of public bathhouses,
improvement of road surface hardening, optimisation of drinking water quality, in order to renovate and
improve the living environment, address the urgent needs of the masses, and lay a solid foundation for
rural revitalisation. Third, full efforts were made to promote local specialties. By virtue of the
county's resource endowment and the Company's operational advantages, industrial support activities
were launched and CNY 1,057,000 was spent to assist Hongyuan County in establishing the "Yak
Grassland Enterprise Store" on Douyin platform. By creating a multi-dimensional sales assistance
system, the Company helped promote specialty products through online e-commerce platforms and
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2023 Annual Report of Luzhou Laojiao Co., Ltd.
offline exhibitions, thereby boosting the visibility and sales volume of the Maiwa Yak series products.
Aggregate sales of Hongyuan Maiwa yaks amounted to nearly CNY 1 million. Additionally, through the
"purchase instead of donation" activity, CNY 1,011,200 was spent to purchase agricultural and sideline
products from the assisted areas and additional CNY 100,000 was donated to the village collective
economy. Furthermore, over CNY 40,000 was contributed to the purchase of baby chicks for farmers in
Xiangtian Village, thereby consolidating the industrial foundation and stimulating the "engine" for rural
revitalisation. Fourth, education on gratitude and hard work was launched. The "Bridge Project"
education assistance action has been implemented for six years. In 2023, 27 graduates from Guntang
Village and Xiangtian Village were awarded a total of CNY 135,000 in scholarships to help
impoverished students realise their dream of attending university, thus injecting "endogenous power"
into rural revitalisation. Fifth, the building of rural cultural civilisation was promoted. The Company
has supported rural cultural festival activities for six years, investing CNY 30,000 annually to conduct
the 2023 Maiwa Township Cultural Festival to promote rural cultural characteristics, and enhance the
spiritual outlook of villagers. In addition, CNY 46,000 was devoted to moral evaluation activities,
contributing to the substantive development of rural revitalisation. Sixth, the difficulties of the masses
were strictly monitored. Dynamic monitoring was carried out thoroughly to prevent returning to
poverty. Members of the Company's leadership team and the rural revitalisation working group
measured the actual conditions with their footsteps, paying regular visits to express care to households
at risk of returning to poverty, households on the edge of poverty, and severely disadvantaged
households. An investment of CNY 143,500 was allocated for the household visits in 2023, covering
nearly 200 people, to enhance the foundation for rural revitalisation. Seventh, external training
opportunities were created. With an input of CNY 30,000, village cadres and forgoers in getting rich
were organised to visit and study in advanced rural revitalisation areas with similar geographical
environments. They learned from advanced experiences in animal husbandry, planting, and creating
liveable habitats, to gain insights and explore ways for rural revitalisation.
3.3. Highlights of paired assistance in 2023
A. External support-based and self-motivation-based industrial support accelerated the "speed" of rural
revitalisation. To promote the rapid development and transformation of featured industries in Guntang
Village, and to effectively increase residents' income, the Company adopts a comprehensive industrial
support approach combining external support and self-motivation. It gradually explores and forms a
sustainable support model transitioning from "external support" to "self-motivation". The Company
signed a tripartite assistance agreement with a local agricultural product processing company and the
government of Guntang Village to build an integrated production and sales chain characterised by
production by farmers in Guntang Village - processing by the agricultural product company - sales by
Luzhou Laojiao. This aims to create a collective economic income model with "guaranteed income +
profit sharing". The "purchase instead of donation" programme generated over CNY 8.76 million in
revenue for local residents, effectively solving the "last mile" problem of product sales in poverty
alleviation. In addition, the Company invested funds and created conditions to establish sales platforms
locally, while also cultivating local sales and operational talent. This effort not only assists in promoting
product branding and sales but also creates more job opportunities and provides an ample talent pool
for the local area, thereby providing the "original driving force" for rural revitalisation.
B.The "integrated" and "penetrating" ideological and ethical standards forged the "soul" of rural
revitalisation. To firmly consolidate the achievements of changing customs and promoting etiquette, and
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2023 Annual Report of Luzhou Laojiao Co., Ltd.
to establish a scientific, civilised, and healthy rural lifestyle, outdated practices have been further
eliminated in support of civilised norms. The Company solidly promotes the ideological and ethical
standards among villagers and cultivates a civilised rural atmosphere. An investment of CNY 300,000
was made to improve public facilities, including the construction of sanitary toilets and public
bathhouses, aiming to enhance the sanitation conditions for the villagers, advocate for a civilised and
healthy lifestyle, and elevate the awareness of hygiene and happiness index among the villagers. The
Company spent CNY 30,000 to support the cultural festival in Guntang Village, featuring over ten
vibrant traditional cultural activities such as Maiwa Guozhuang Dance, sandbag lifting and equestrian
performance. The Village Cultural Festival has become an annual event that the locals look forward to.
Since the cultural square of Guntang Village was put into use, it has hosted more than ten activities to
disseminate intangible cultural heritage such as Maiwa Tibetan Opera and Baiwang Playing and
Singing, successfully making it a popular destination for the locals and a must-visit spot for tourists.
Throughout the year, over ten sessions of training and lectures were organised on grassland fire
prevention, hygiene awareness, and safeguarding against online scams. Party members, cadres, and
the general public participated in five special Party lectures, including "Themed teach-ins on the 20th
National Congress of the Communist Party of China", "Celebrating the 70th Anniversary of the
Establishment of the Prefecture", and "Branch Secretaries Lecturing on Party Classes". The Company
persistently conducted household visits to promote filial piety, respect for the elderly, and civilised
customs, in efforts to change customs and promote etiquette and foster a culture of civility to support
rural revitalisation.
3.4. Work plan for assistance in 2024
A. Enhance industrial assistance and stimulate the development momentum. By virtue of the resource
endowment of the assisted areas and the operational advantages of the Company, the Company will
focus on incorporating agricultural and animal husbandry industries into modernised industrial parks.
Our goal is to promote the transformation and high-quality development of modern animal husbandry,
tap into and utilise the unique advantages of resources in the assisted villages. It plans to broaden the
sales channels of characteristic agricultural and sideline products through e-commerce platforms, bulk
purchases, and "purchase for sales" initiatives, aiming to accelerate the conversion of resource
advantages into industrial strengths.
B. Improve the infrastructure and enhance the living environment. To effectively improve the rural living
environment and enhance the happiness index of the people, one of the Company's objectives is to
build ecologically beautiful and liveable villages. In 2024, the plan is to renovate the architectural style
of the houses in the assisted villages and construct access roads, further improve the hygiene of the
village environment and beautify the village appearance, so as to continuously promote the creation of
liveable rural areas with beautiful environment, villages, and courtyards.
C. Strengthen the talent support and enhance the vitality of development. Focusing on the requirements
of the new era and based on the new stage of development, the Company will continue to stimulate
endogenous vitality and cultivate local talents as an effective path to increase the talent pool and
enhance the quality of rural revitalisation. It will continue to carry out activities such as the "Bridge
Project" - education on gratitude and hard work, and support for village cadres and residents to
participate in training in advanced areas, aiming to build a team of talents who are rooted in the rural
areas and will not easily leave.
D. Increase cultural support and enrich the cultural knowledge. To further solidify the ideological and
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2023 Annual Report of Luzhou Laojiao Co., Ltd.
ethical standards and build up moral power for rural revitalisation, the company will continue to focus on
local cultural characteristics and the spiritual needs of the masses. It will strongly support the promotion
of traditional culture such as Tibetan opera, and actively organise themed events for International
Women's Day, and other activities to enrich the cultural life of the masses. These efforts aim to broaden
the villagers' horizons, uplift their spirits, and foster a subjective willingness to alleviate poverty.
E. Enhance the building of the assistance team to boost rural revitalisation. Considering the next steps
in the assistance plan, the Company, guided by the principle of sending people who are needed and
suitable for the task, will select a group of individuals with strong execution abilities, high professional
qualities, and broad expertise to form an assistance team. The Company will ensure that the assistance
initiative is effectively implemented on the front line, and the role of assistance is well played on the
front line, so as to contribute to the comprehensive revitalisation of rural industries, talents, culture,
ecosystem, and other aspects.
In 2024, the Company will continue to strengthen communication and collaboration with leaders at all
levels of the county and township, and will promote various assistance projects with more practical
measures and better methods, injecting new vitality to the comprehensive revitalisation and
development of Guntang Village and Xiangtian Village.
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2023 Annual Report of Luzhou Laojiao Co., Ltd.
Section VI Significant Events
1. Performance of undertakings
1.1. Undertakings of the Company's actual controller, shareholders, related parties
and acquirer, as well as the Company and other commitment makers fulfilled in
the reporting period or ongoing by the end of this reporting period
Applicable N/A
Date of
Type of Details of Term of
Commitment Promisor commitment Fulfillment
commitment commitment commitment
making
Not to reduce
shares of
Luzhou
Laojiao Co.,
Ltd. held by
Other Other 25 August
Laojiao Group the Company 12 months Ongoing
commitments commitments 2023
in any way
within 12
months from
25 August
2023
Executed on
Yes
time or not
1.2. Where any earnings forecast was made for any of the Company's assets or
projects and the reporting period is still within the forecast period, the Company
shall explain whether the performance of the asset or project reaches the earnings
forecast and reasons
Applicable N/A
2. Occupation of the Company's fund by the controlling shareholder or
its related parties for non-operating purposes
Applicable N/A
No such cases in the reporting period.
3. Irregularities in the provision of guarantees
Applicable N/A
No such cases in the reporting period.
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2023 Annual Report of Luzhou Laojiao Co., Ltd.
4. Explanation of the board of directors regarding the latest "non -
standard audit opinion"
Applicable N/A
5. Explanation of the board of directors, the board of supervisors and
non-executive directors (if any) regarding the "non -standard audit
opinion" for the reporting period
Applicable N/A
6. Reason for changes in accounting policies and accounting estimates,
as well as correction of major accounting errors compared to the
financial report for the prior year
Applicable □ N/A
Unit：CNY
Content and reason for changes in accounting
Name of statement item materially affected Amount affected
policies
On 30 November 2022, the Ministry of Finance
issued the Interpretations of Accounting
Standards for Business Enterprises No. 16
(C.K. [2022] No. 31), providing that the
requirement of "accounting processing under Deferred income tax assets
initial recognition and exemption is not Deferred income tax liabilities
applicable to deferred income taxes related to
assets and liabilities incurred from a single
transaction" will enter into force as of 1 January
2023.
For this new requirement of "accounting processing under initial recognition and exemption is not
applicable to deferred income taxes related to assets and liabilities incurred from a single transaction",
Interpretation No. 16 stipulates that single transactions that are not business combinations, that affect
neither accounting profit nor taxable income (or deductible losses) at the time the transaction occurs,
and where the initial recognition of assets and liabilities results in taxable temporary differences and
deductible temporary differences of equal amounts shall not be governed by the provisions for
exemption from initial recognition of deferred tax liabilities and deferred tax assets in Accounting
Standards for Business Enterprises No. 18 - Income Taxes. At the time of the transaction, the
enterprise shall recognise the corresponding deferred income tax liabilities and deferred income tax
assets for taxable temporary differences and deductible temporary differences arising from the initial
recognition of assets and liabilities in such transaction.
The Company has adopted the provisions of Interpretation No. 16, "Accounting processing under initial
recognition and exemption is not applicable to deferred income taxes related to assets and liabilities
incurred from a single transaction" as of 1 January 2023. The implementation of this interpretation has
not had a significant impact on the Company's financial position and operating results.
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2023 Annual Report of Luzhou Laojiao Co., Ltd.
Apart from the aforementioned changes, there have been no other significant accounting policy
changes during the reporting period.
7. Reason for changes in scope of the consolidated financial statements
compared to the financial report for the prior year
Applicable □ N/A
Two subsidiaries were liquidated and cancelled during the current period: Luzhou Baonuo
Biotechnology Co., Ltd. was liquidated and cancelled in October 2023; Luzhou Laojiao Custom Liquor
Co., Ltd. was liquidated and cancelled in December 2023. Since the cancellation of these two
companies, they are no longer included in the scope of the consolidated financial statements.
8. Engagement and disengagement of CPA firm
CPA firm at present
Name of the domestic CPA firm Sichuan Huaxin (Group) CPA Firm
The Company’s payment for the domestic CPA
103
firm (CNY 10,000)
Consecutive years of the audit service provided
25
by the domestic CPA firm
Names of the certified public accountants from
Li Wulin, Tang Fangmo, Fan Bo
the domestic CPA firm
Consecutive years of the audit service provided Li Wulin 4 years, Tang Fangmo 5 years, Fan Bo 2
by the certified public accountants years
Whether the CPAs firm was changed in the current period
Yes No
Engagement of any CPAs firm for internal control audit, financial advisor or sponsor
Applicable N/A
The Company appointed Sichuan Huaxin (Group) CPA Firm as the internal control auditor for this
year. The remuneration of audit in total paid by the Company was CNY 520 thousand.
9. Possibility of delisting after disclosure of this annual report
Applicable N/A
10. Bankruptcy and reorganization
Applicable N/A
No such cases in the reporting period.
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2023 Annual Report of Luzhou Laojiao Co., Ltd.
11. Material litigation and arbitration
Applicable N/A
Amount Whether it Trial results Execution of
Profile of Progress in
involved in forms an and impacts of judgment of Date of Disclosure
litigation litigation
the case (CNY estimate litigation litigation disclosure index
(arbitration) (arbitration)
10,000) liability (arbitration) (arbitration)
The Company
applied to
The Company
Hunan
filed a lawsuit For the losses
Province
with ABC that the
Higher
Changsha Company
People's Court
Yingxin cannot
for
Branch over a recover
enforcement
deposit through
of the verdict.
dispute, and criminal
Hunan
the case has execution
Province
been The second procedures,
Higher
completed in trial has been 40% shall be See Section
People's Court
the first concluded, borne by ABC
ruled that 15 October VI “Other
instance of 14,942.5 No and the case Changsha
Hunan 2014 significant
Hunan is now at the Yingxin
Changsha events”
Province stage of Branch, 20%
Intermediate
Higher enforcement. shall be borne
People’s Court
People's Court by ABC
should see to
and the final Changsha
the execution
trial of the Hongxin
of the verdict.
Supreme Branch and
Upon the
People's the rest shall
enforcement,
Court. The be borne by
the banks
case is now at the Company
have paid part
the stage of itself.
of the
enforcement.
compensation
s.
The banks
have paid part
of the
compensation
s. As there
ICBC
was a dispute
The Company Nanyang
over the
filed a lawsuit Zhongzhou
verdict, the
with ICBC Branch, ICBC
Company
Nanyang Nanyang
applied to
Zhongzhou Branch, and
Henan
Branch over a Sanya Rural
Province
deposit Commercial
Higher
dispute, and Bank Hongsha
People's Court
the case has Branch shall
for
been The second pay
enforcement
completed in trial has been compensation
of the verdict. See Section
the first concluded, s of CNY 75
Henan 10 January VI “Other
instance of 15,000 No and the case million, CNY
Province 2015 significant
Henan is now at the 7.5 million and
Higher events”
Province stage of CNY 6.105
People's Court
Higher enforcement. million
ruled that
People's Court respectively
Nanyang
and the final with the
Intermediate
trial of the relevant
People’s Court
Supreme interest to the
should see to
People's Company, and
the execution
Court. The the rest of the
of the verdict.
case is now at loss shall be
The case is
the stage of borne by the
now at the
enforcement. Company
stage of
itself.
enforcement
by Nanyang
Intermediate
People’s
Court.
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2023 Annual Report of Luzhou Laojiao Co., Ltd.
12. Punishments and rectifications
Applicable N/A
No such cases in the reporting period.
13. Credit conditions of the Company as well as its controlling
shareholder and actual controller
Applicable N/A
14. Significant related party transactions
14.1. Related party transactions arising from routine operation
Applicable N/A
No such cases in the reporting period.
14.2. Related party transactions regarding purchase or sales of assets or equity
interests
Applicable N/A
No such cases in the reporting period.
14.3. Related party transitions arising from joint investments in external parties
Applicable N/A
No such cases in the reporting period.
14.4. Credits and liabilities with related parties
Applicable N/A
No such cases in the reporting period.
14.5. Transactions with related finance companies
Applicable N/A
The Company did not make deposits in, receive loans or credit from and was not involved in any
other finance business with any related finance company or any of its related parties.
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2023 Annual Report of Luzhou Laojiao Co., Ltd.
14.6. Transactions between finance companies controlled by the Company and
related parties
Applicable N/A
No related parties made deposits in, received loans or credit from or was involved in any other
finance business with any finance company controlled by the Company.
14.7. Other significant related party transactions
Applicable N/A
No such cases in the reporting period.
15. Significant contracts and their execution
15.1. Trusteeship, contracting and leasing
15.1.1. Trusteeship
Applicable N/A
No such cases in the reporting period.
15.1.2. Contracting
Applicable N/A
No such cases in the reporting period.
15.1.3. Leasing
Applicable N/A
No such cases in the reporting period.
15.2. Major guarantees
Applicable N/A
No such cases in the reporting period.
15.3. Entrusted cash asset management
15.3.1. Entrusted assets management
Applicable N/A
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2023 Annual Report of Luzhou Laojiao Co., Ltd.
Entrusted assets management during the reporting period
Unit: CNY 10,000
Impairment
Fund source for Amount of Overdue allowances for
Type entrusted assets entrusted assets Undue balance outstanding the overdue
management management amount outstanding
amount
Wealth
management
Own funds 120,000 120,000 0 0
product of
securities firm
Others Own funds 20,000 20,000 0 0
Total 140,000 140,000 0 0
Particulars of high risk wealth management products with a significant single amount or low security
or poor liquidity
Applicable N/A
Expected inability to recover the principal of entrusted assets management or other circumstances
that may result in impairment
Applicable N/A
15.3.2 Entrust loans
Applicable N/A
No such cases in the reporting period.
15.4. Other significant contracts
Applicable N/A
No such cases in the reporting period.
16. Other significant events
Applicable N/A
The Company disclosed in October 2014 and January 2015 respectively the contract disputes
involving three savings deposits of CNY 500 million in total with banks including ABC Changsha
Yingxin Branch and ICBC Nanyang Zhongzhou Branch. Upon criminal booty recovery, criminal and
civil enforcement, as of 31 December 2023, the Company had recovered a total amount of CNY 372
million for the three disputes.
See details in the Company’s announcements:
Date of announcement No. Catalogue Official website
Announcement of significant http://www.cninfo.com.cn/
15 October 2014 2014-35
litigation
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2023 Annual Report of Luzhou Laojiao Co., Ltd.
Announcement of significant
12 November 2014 2014-41
litigation progress
Announcement of significant
6 December 2014 2014-43
litigation progress part II
Announcement of significant
10 January 2015 2015-1
events
Announcement of significant
4 February 2015 2015-4
events progress
Announcement of significant
25 March 2015 2015-11
litigation progress part III
Announcement of significant
18 April 2015 2015-20
litigation progress part IV
Announcement of significant
22 April 2015 2015-21
events progress part II
Announcement of significant
24 April 2015 2015-25
litigation progress part V
Announcement of significant
15 July 2015 2015-44
litigation progress part VI
Announcement of significant
22 July 2015 2015-45
litigation progress part VII
Announcement of significant
6 June 2018 2018-17
litigation progress part VIII
Announcement of significant
7 May 2019 2019-11
litigation progress part IX
Announcement of significant
17 May 2019 2019-13
litigation progress part X
Announcement of significant
24 March 2020 2020-6
litigation progress part XI
Announcement of significant
6 May 2020 2020-14
litigation progress part XII
Announcement of significant
7 November 2020 2020-34
litigation progress part XIII
Announcement of significant
6 July 2021 2021-30
litigation progress part XIV
Announcement of significant
15 December 2021 2021-57
litigation progress part XV
Announcement of significant
30 December 2021 2021-64
litigation progress part XVI
17. Significant events of subsidiaries
Applicable □ N/A
The Company invested in the technical upgrade program of intelligent brewing (Phase I) with the
wholly-owned subsidiary, Brewing Company, as the implementer. The total investment amount
approximated CNY 4,782.5090 million. For further information, see Announcement No. 2022-24 on
the Implementation of Luzhou Laojiao’s Technical Upgrade Program of Intelligent Brewing (Phase I)
by Subsidiary. The program is currently under construction.
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2023 Annual Report of Luzhou Laojiao Co., Ltd.
Section VII Changes in Shares and Information about
Shareholders
1. Changes in shares
1.1 Changes in shares
Unit：Share
Before Changes in this year (＋，－) After
Issuanc Capitalizati
Proportio e of Bonus on of Subtot
Number Other Number Proportion
n new shares capital al
shares reserves
I.
Restricted 7,390,545 0.50% 92,669 -14,625 78,044 7,468,589 0.51%
shares
1. Shares
held by the
state
2. Shares
held by
state-
owned
corporatio
ns
3. Shares
held by
other 7,390,545 0.50% 92,669 -14,625 78,044 7,468,589 0.51%
domestic
investors
Of which:
shares
held by
domestic
corporatio
ns
Shares
held by
domestic 7,390,545 0.50% 92,669 -14,625 78,044 7,468,589 0.51%
individuals
4. Shares
held by
foreign
corporatio
ns
Of which:
shares
held by
foreign
corporatio
ns
Shares
held by
foreign
individuals
II. Non-
restricted 1,464,504,555 99.50% 14,625 14,625 1,464,519,180 99.49%
shares
1.CNY
common 1,464,504,555 99.50% 14,625 14,625 1,464,519,180 99.49%
shares
2.
Domestical
ly listed
foreign
shares
99
2023 Annual Report of Luzhou Laojiao Co., Ltd.
3.
Overseas
listed
foreign
shares
4. Other
III. Total
shares 1,471,895,100 100.00% 92,669 0 92,669 1,471,987,769 99.49%
Reasons for the change in shares
Applicable □ N/A
A. On 29 December 2022, the Proposal on the Grant of Reserved Restricted Shares to Awardees was
deliberated and approved at the 26th Meeting of the 10th Board of Directors and the 15th Meeting of
the 10th Board of Supervisors, respectively. As such, it was decided to grant the restricted shares to
eligible awardees and the grant was completed and registered on 16 February 2023. A total of 92,669
restricted shares were granted to 17 awardees as registered, which were listed on 17 February 2023.
B. 14,625 locked-up shares of senior management of Mr. Shen Caihong were lifted from restricted
sales on 2 January 2023.
Approval of share changes
Applicable □ N/A
On 29 December 2022, the Proposal on the Grant of Reserved Restricted Shares to Awardees was
deliberated and approved at the 26th Meeting of the 10th Board of Directors and the 15th Meeting of
the 10th Board of Supervisors, respectively. As such, it was decided to grant the restricted shares to
eligible awardees and the grant was completed and registered on 16 February 2023. A total of 92,669
restricted shares were granted to 17 awardees as registered, which were listed on 17 February 2023.
Upon the completion of this grant registration, the total share capital of the Company increased to
1,471,987,769 shares from 1,471,895,100.
Transfer of share ownership
Applicable N/A
Effects of changes in shares on the basic EPS, diluted EPS, net assets per share attributable to
common shareholders of the Company and other financial indexes over the last year and the last
reporting period
Applicable N/A
Other contents that the Company considers it necessary or required by the securities regulatory
authorities to disclose
Applicable N/A
1.2 Changes in restricted shares
Applicable □ N/A
Unit：Share
Name of Number of Increase in Decrease in Number of Reason for Date of
shareholder restricted restricted restricted restricted restriction unlocking
shares held at shares during shares during shares held at
100
2023 Annual Report of Luzhou Laojiao Co., Ltd.
the beginning the reporting the reporting the end of the
of the period period reporting
reporting period
period
In accordance
with the
relevant
provisions
governing
2021 Restricted
lifting the
Restricted shares for
7,142,624 92,669 7,235,293 restriction of
Share equity
the
Incentive Plan incentive
Company’s
2021
Restricted
Share
Incentive Plan
Locked-up
shares of
Locked-up senior
shares of management
Shen Caihong 103,781 14,625 89,156
senior were lifted
management from restricted
sales on 2
January 2023.
Total 7,246,405 92,669 14,625 7,324,449 -- --
2. Issuance and listing of securities
2.1 Securities (excluding preferred shares) issued in the reporting period
Applicable □ N/A
Name of Offering Number Date of Index to
stock and Date of price (or Number Date of approved terminatio disclosed Date of
derivative offering interest offered listing for public n of informatio disclosure
securities rate) trading trading n
Stocks
Announce
ment No.
2023-3 on
the
Grant of
Completio
reserved
n of the
restricted
Grant of
shares for 17 CNY 17 16
Reserved
2021 February 89.466/sh 92,669 February 92,669 February
Restricted
Restricted 2023 are 2023 2023
Shares for
Share
2021
Incentive
Restricted
Plan
Share
Incentive
Plan
disclosed
101
2023 Annual Report of Luzhou Laojiao Co., Ltd.
on
www.cninf
o.com.cn
Convertible corporate bonds, convertible corporate bonds with warrants, or corporate debt
Other derivative securities
Notes to the offering of securities during the reporting period
On 29 December 2022, the Proposal on the Grant of Reserved Restricted Shares to Awardees was
deliberated and approved at the 26th Meeting of the 10th Board of Directors and the 15th Meeting of
the 10th Board of Supervisors, respectively. As such, it was decided to grant the restricted shares to
eligible awardees and the grant was completed and registered. A total of 92,669 restricted shares were
granted to 17 awardees as registered, which were listed on 17 February 2023. For details, see the
Announcement No. 2023-3 on the Completion of the Grant of Reserved Restricted Shares for 2021
Restricted Share Incentive Plan disclosed on www.cninfo.com.cn
2.2 Changes in total shares of the Company and the shareholder structure, as well
as the asset and liability structure
Applicable □ N/A
During the Reporting Period, the total shares of the Company increased by 92,669 shares due to the
implementation of the 2021 Restricted Share Incentive Plan, and the shares granted were listed on 17
February 2023.
2.3 Existing staff-held shares
□Applicable N/A
3. Shareholders and actual controller
3.1 Total number of shareholders and their shareholdings
Unit：Share
Total Total
Total
number of number of
number of
common preferred Total number of preferred
common
shareholder shareholder shareholders with resumed
shareholder
124,164 s at the prior 118,425 s with 0 voting rights by the end of 0
s at the end
month-end resumed the reporting period (if
of the
before the voting rights any)(see Note 8)
reporting
disclosure by the end
period
date of the of the
102
2023 Annual Report of Luzhou Laojiao Co., Ltd.
annual reporting
report period (if
any)(see
Note 8)
Shareholdings of shareholders with a shareholding percentage over 5% or the top 10 shareholders (exclusive of shares lent in refinancing)
Total shares Increase/de Pledged, marked or frozen
Number of Number of
Shareholdin held by the crease shares
Name of Nature of holding holding non-
g end of the during the
shareholder shareholder restricted restricted Status of Number of
percentage reporting reporting
shares shares shares shares
period period
Luzhou
Laojiao State-owned
Group Co., corporation 25.89% 381,088,389 0 0 381,088,389 N/A 0
Ltd.
Luzhou
XingLu
State-owned
Investment 24.86% 365,971,142 0 0 365,971,142 N/A 0
corporation
Group Co.,
Ltd.
Hong Kong
Securities
Outbound
Clearing 3.23% 47,491,261 1,878,605 0 47,491,261 N/A 0
corporation
Company
Limited
Bank of
China Co.,
Ltd. – Baijiu
index
classification
securities Other 2.92% 43,016,979 -3,059,247 0 43,016,979 N/A 0
investment
fund by
China
Merchants
Fund
China
Securities
Finance Other 2.30% 33,842,059 0 0 33,842,059 N/A 0
Corporation
Limited
Bank of
China Co.,
Ltd.－Blue
chip
selected
Other 1.46% 21,470,000 -1,460,000 0 21,470,000 N/A 0
hybrid
securities
investment
fund by E
Fund
Industrial
and
Commercial
Bank of
China Co.,
Ltd.-Newly
growth Other 0.92% 13,598,087 -4,075,690 0 13,598,087 N/A 0
hybrid
securities
investment
fund by
Invesco
Great Wall
Central
Huijin Asset State-owned
Managemen corporation 0.92% 13,539,862 0 0 13,539,862 N/A 0
t Co., Ltd.
China Life
Insurance
Company Other
Limited- 0.65% 9,530,312 936,298 0 9,530,312 N/A 0
Tradition-
common
103
2023 Annual Report of Luzhou Laojiao Co., Ltd.
insurance
product-
005L－
CT001 Hu
Agricultural
Bank of
China Co.,
Ltd. -
Consumptio
n industry
stock - Other 0.64% 9,432,832 -1,140,461 0 9,432,832 N/A 0
based
securities
investment
fund by E
Fund
Strategic investors or
general corporations
become the top-ten
shareholders due to placing N/A
of new shares（if any）（see
note 3）
1. Luzhou Laojiao Group Co., Ltd. and Luzhou XingLu Investment Group Co., Ltd. are both holding state-
owned companies under the jurisdiction of SASAC of Luzhou. The two companies signed the agreement of
persons acting in concert on 31 December 2015. For details, please refer to the announcement of the
Company on 5 January 2016 - Announcement on the agreement of persons acting in concert signed by
Related parties or acting-in- shareholders. The announcement number is 2016-1 (http://www.cninfo.com.cn/). The two companies signed
concert the renewed agreement of persons acting in concert on 27 May 2021. For details, please refer to the
announcement of the Company on 29 May 2021 - Announcement on the renewed agreement of persons
acting in concert signed by shareholders. The announcement number is 2021-18 (http://www.cninfo.com.cn/).
2. In addition, whether there is an association between the remaining shareholders or they belong to persons
acting in concert is unknown.
Explain if any of the
shareholders above was
involved in entrusting/being
N/A
entrusted with voting rights
or waiving voting rights
Special account for
repurchased shares among
the top 10 shareholders (if N/A
any) (see note 10)
Shareholdings of the top 10 non-restricted shareholders
Type of shares
Name of shareholder Number of non-restricted shares held in by the end of the reporting period
Type Number
CNY
Luzhou Laojiao Group Co.,
381,088,389 common 381,088,389
Ltd.
shares
CNY
Luzhou XingLu Investment
365,971,142 common 365,971,142
Group Co., Ltd.
shares
CNY
Hong Kong Securities
47,491,261 common 47,491,261
Clearing Company Limited
shares
Bank of China Co., Ltd. –
CNY
Baijiu index classification
43,016,979 common 43,016,979
securities investment fund
shares
by China Merchants Fund
CNY
China Securities Finance
33,842,059 common 33,842,059
Corporation Limited
shares
Bank of China Co., Ltd.－
CNY
Blue chip selected hybrid common
securities investment fund 21,470,000 21,470,000
shares
by E Fund
Industrial and Commercial
Bank of China Co., Ltd.- CNY
Newly growth hybrid 13,598,087 common 13,598,087
securities investment fund shares
by Invesco Great Wall
CNY
Central Huijin Asset
13,539,862 common 13,539,862
Management Co., Ltd.
shares
104
2023 Annual Report of Luzhou Laojiao Co., Ltd.
China Life Insurance
Company Limited-Tradition- CNY
common insurance product- 9,530,312 common 9,530,312
shares
005L－CT001 Hu
Agricultural Bank of China
Co., Ltd. - Consumption CNY
industry stock - based 9,432,832 common 9,432,832
securities investment fund shares
by E Fund
The statement of association
or acting-in-concert between
the top 10 shareholders of
unrestricted shares and
between the top 10 See the table above
shareholders of unrestricted
shares and top 10
shareholders
Top 10 common
shareholders participating in
securities margin trading (if N/A
any) (see note 4)
Top 10 shareholders involved in refinancing shares lending:
Applicable □ N/A
Unit：Share
Top 10 shareholders involved in refinancing shares lending
Shares in the common Shares lent in Shares in the common Shares lent in
account and credit refinancing and not yet account and credit refinancing and not yet
Full name account at the period- returned at the period- account at the period- returned at the period-
of begin begin end end
sharehold As % of As % of
er As % of As % of
total Total Total total Total
Total shares total share total share
share shares shares share shares
capital capital
capital capital
Bank of
China Co.,
Ltd. –
Baijiu
index
classificati
on 46,076,226 3.13% 0 0.00% 43,016,979 2.92% 55,000 0.00%
securities
investmen
t fund by
China
Merchants
Fund
Changes in top 10 shareholders compared with the prior period:
□Applicable N/A
Did any of the top 10 common shareholders or the top non-restricted common shareholders of the
Company conduct any promissory repurchase during the reporting period.
□Yes No
105
2023 Annual Report of Luzhou Laojiao Co., Ltd.
The top 10 non-restricted common shareholders, the top10 common shareholders did not conduct any
promissory repurchase during the reporting period.
3.2 Controlling shareholder
Nature of controlling shareholder：Local state-owned
Type of controlling shareholder：Corporation
Legal
Name of controlling
representative/Company Date of establishment Credibility code Main business scope
shareholder
principal
General project: Social
economy consulting
services; business
management consulting;
financial consulting;
business headquarters
management; import and
export agency; trade
brokerage; crops planting
services; trees planting
operation; elder care
services; tourism
development project
planning and consulting;
technical agency
services; engineering and
technological research
and experimental
development; display
device manufacturing;
supply chain
management services;
Luzhou Laojiao Group
Liu Miao 21 December 2000 91510500723203346U technical services,
Co., Ltd.
technical development,
technical consulting,
technical communication,
technical transfer, and
technical promotion;
domestic freight transport
agency; equity fund-
invested asset
management services;
passenger ticket agent;
and business agency
service. It shall also
include licensed projects
(business activities can
be carried out legally and
independently with
business license in
addition to projects that
must be approved by
law): Agency
bookkeeping; career
intermediary activities;
106
2023 Annual Report of Luzhou Laojiao Co., Ltd.
food production; food
sales; and medical
services. (business
activities that require
approval in accordance
with laws can be carried
out upon approval of
relevant authorities, and
the specific business
projects shall be subject
to the approval document
or license of relevant
departments)
1. As of 30 June 2023, Laojiao Group holds 70,406,310 shares of Luzhou Xinglu Water (Group) Co., Ltd.
Shareholdings of the (02281.HK), accounting for 8.19% of the total issued shares.
controlling shareholder in 2. As of 30 September 2023, Laojiao Group holds 212,954,666 shares of Hongli Zhihui Group Co., Ltd.
other controlled or non- (300219.SZ) through its wholly-owned subsidiary, Sichuan Jinduo investment Co., Ltd., accounting for 30.08% of
controlled listed the total issued shares.
companies at home or 3. As of 30 September 2023, Laojiao Group holds 475,940,143 shares of Huaxi Securities Co., Ltd. (002926.SZ),
abroad during the accounting for 18.13% of the total issued shares.
reporting period 4. As of 30 June 2023, Laojiao Group holds 390,528,000 shares of Luzhou Bank (01983.HK), accounting for
14.37% of the total issued shares.
Change of the controlling shareholder during the reporting period
□Applicable N/A
No such cases in the reporting period
3.3 Actual controller and its persons acting in concert
Nature of actual controller：Local State-owned Assets Supervision and Administration Commission
Type of actual controller：Corporation
Legal
Name of actual controller representative/Company Date of establishment Credibility code Main business scope
principal
State-owned assets
supervision and
SASAC of Luzhou Du Lei 1 March 2005 11510400771686813T
administration
department
1. As of 30 June 2023, XingLu Group, a controlled subsidiary of SASAC of Luzhou, holds 511,654,127 shares of
Luzhou Xinglu Water (Group) Co., Ltd. (02281.HK), accounting for 59.51% of the total issued shares. Luzhou
Infrastructure Construction Investment Co., Ltd., a holding subsidiary of XingLu Group, holds 62,709,563 shares
of Luzhou Xinglu Water (Group) Co., Ltd. (02281.HK), and accounting for 7.29% of the total issued shares.
Laojiao Group, a controlled subsidiary under SASAC of Luzhou, holds 70,406,310 shares of Luzhou Xinglu
Water (Group) Co., Ltd. (02281.HK), accounting for 8.19% of the total issued shares.
2. As of 30 September 2023, Laojiao Group holds 212,954,666 shares of Hongli Zhihui Group Co., Ltd.
Share holdings of the
(300219.SZ) through its controlled subsidiary, Sichuan Jinduo investment Co., Ltd., accounting for 30.08% of the
controlling shareholder in
total shares issued.
other controlled or non-
3. As of 30 September 2023, Luzhou Industrial Investment Group Co., Ltd., a holding Company under the
controlled listed
jurisdiction of SASAC of Luzhou, holds 193,464,610 shares of Sichuan Lutianhua Company Limited
companies at home or
(000912.SZ), accounting for 12.34% of the total shares issued. Lutianhua Group Company Limited, a wholly -
abroad during the
owned subsidiary of Luzhou Industrial Investment Group Co., Ltd., holds 221,458,993 shares of Sichuan
reporting period.
Lutianhua Company Limited (000912.SZ), and accounting for 13.49% of the total issued shares.
4. As of 30 September 2023, Laojiao Group, a controlled subsidiary under SASAC of Luzhou, holds 475,940,143
shares of Huaxi Securities Co., Ltd. (002926.SZ), accounting for 18.13% of the total issued shares.
5. As of 30 June 2023, Laojiao Group, a controlled subsidiary under SASAC of Luzhou, holds 325,440,000
shares of Luzhou Bank (01983.HK), accounting for 14.37% of the total issued shares. XingLu Group, a
controlled subsidiary under SASAC of Luzhou, holds 48,659,355 shares of Luzhou Bank (01983.HK), accounting
for 1.79% of the total issued shares.
107
2023 Annual Report of Luzhou Laojiao Co., Ltd.
Change of the actual controller during the reporting period
□Applicable N/A
The actual controller of the Company has not changed during the reporting period.
Ownership and control relations between the actual controller and the Company
The actual controller control the company through a trust or other ways of assets management
□Applicable N/A
3.4 Number of accumulative pledged shares held by the company’s controlling
shareholder or the largest shareholder as well as its acting-in-concert parties
accounts for 80% of all shares of the company held by them
□Applicable N/A
3.5 Other corporate shareholders with a shareholding proportion over 10%
Applicable □ N/A
Legal
Name of corporate Date of Registered capital
representative/Comp Main business scope
shareholder establishment (CNY)
any principal
Investment and asset
Luzhou XingLu management; project
Investment Group Dai Zhiwei 28 January 2003 4,934,049,244 management
Co., Ltd. services; self-finance
real estate business
108
2023 Annual Report of Luzhou Laojiao Co., Ltd.
activities; investment
advisory services
and financial
advisory services
(excluding such
financial activities as
illegal capital raising
and collecting public
funds) (business
activities that require
approval in
accordance with laws
can be carried out
upon approval of
relevant authorities)
3.6 Limits on reduction of the Company’s shares held by its controlling shareholder,
actual controller, restructuring party and other commitment entities.
□Applicable N/A
4. Specific implementation of share repurchase during the reporting
period
Implementation progress of shares repurchases
□Applicable N/A
Implementation progress of share buyback reduction through centralized bidding
□Applicable N/A
109
2023 Annual Report of Luzhou Laojiao Co., Ltd.
Section VIII Preferred Shares
□Applicable N/A
No preferred stock in the Company during the reporting period.
110
2023 Annual Report of Luzhou Laojiao Co., Ltd.
Section IX Information about Bond
Applicable N/A
1. Enterprise bonds
Applicable N/A
No such cases in the reporting period.
2. Corporate bonds
Applicable N/A
2.1. Basic information about the corporate bond
Unit：CNY 10,000
Way of
Issue Value Bond Interest Place of
Name Abbr. Code Due date redempti
date date balance rate trading
on
In terms
of the
bonds of
this
phase,
interests
will be
paid by
year and
2020 the
Public principal
Offering will be
of repaid in
Corporat lump
e Bond sum at Shenzhe
16 17 17
of 20 Lao 149062. maturity. n Stock
March March March 150,000 3.50%
Luzhou Jiao 01 SZ The Exchang
2020 2020 2025
Laojiao interests e
Co., Ltd. will be
for paid
Qualified once
Investors every
(Phase I) year and
the
interests
for the
last
installme
nt will be
paid
together
with the
111
2023 Annual Report of Luzhou Laojiao Co., Ltd.
principal.
In terms
of the
bonds of
this
phase,
interests
will be
paid by
year and
the
principal
will be
2022
repaid in
Public
lump
Offering
sum at
of
maturity.
Corporat
The
e Bond
interests Shenzhe
of 2 2 4
22 Lao 148133. will be n Stock
Luzhou Decemb Decemb Decemb 0 2.85%
Jiao 01 SZ paid Exchang
Laojiao er 2022 er 2022 er 2023
once e
Co., Ltd.
every
for
year and
Professi
the
onal
interests
Investors
for the
(Phase I)
last
installme
nt will be
paid
together
with the
principal.
All has
been
paid on 4
Decemb
er 2023.
The bonds are applicable to eligible investors who have qualified securities
accounts with Shenzhen Branch of China Securities Depository and Clearing Co.,
Ltd., are permitted to engage in the subscription and transfer of corporate bonds
in accordance with the Management Measures for the Issue and Transaction
Appropriate arrangement of the
Management of Corporate Bonds, Management Measures for the Suitability of
investors (if any)
Securities and Futures Investors, Management Measures of Shenzhen Stock
Exchange for the Suitability of Securities Market Investors, and relevant laws and
regulations, and have the corresponding risk identification and bearing capacity
(excluding those prohibited by laws and regulations)
Trading systems applicable Tradable by way of bidding, offering, inquiry and agreement
Risk of termination of listing and
trading (if any) and N/A
countermeasures
Overdue bonds
□Applicable N/A
2.2. Triggering and execution of issuer or investor option clauses and investor
protection clauses
□Applicable N/A
112
2023 Annual Report of Luzhou Laojiao Co., Ltd.
2.3. Information about the intermediaries
Signature Contact person
Bond Intermediary Office address Contact number
accountant of intermediary
2020 Public
Offering of
Corporate Bond
of Luzhou
Laojiao Co., Ltd. 33rd Floor, China
for Qualified China World Office 2,
Investors (Phase International No. 1
I)/ 2022 Public Capital Jianguomenwai N/A Qi Qin (010)65051166
Offering of Corporation Avenue,
Corporate Bond Limited. Chaoyang
of Luzhou District, Beijing
Laojiao Co., Ltd.
for Professional
Investors (Phase
I)
2020 Public
Offering of
Corporate Bond
of Luzhou
Building 6,
Laojiao Co., Ltd.
Galaxy SOHO,
for Qualified
China Chengxin No.2 Nanzhugan
Investors (Phase
International hutong,
I) / 2022 Public N/A Sun Shu (010)66428877
Credit Rating Chaoyangmenne
Offering of
Co., Ltd. i Avenue,
Corporate Bond
Dongcheng
of Luzhou
District, Beijing
Laojiao Co., Ltd.
for Professional
Investors (Phase
I)
Indicate by tick mark whether above intermediaries changed in the reporting period
□Yes No
2.4. List of the usage of the raised funds
Unit：CNY 10,000
Whether is
consistent
Rectification
Operation of with the
of raised
special usage, using
Unused funds for
Bonds Total amount Amount spent account for plan and other
amount violation
raised funds agreements
operation (if
(if any) stipulated in
any)
the raising
specification
2020 Public The company
Offering of has set up a
Corporate 150,000 111,035.54 46,504.121 special
Bond of account to N/A Yes
Luzhou deposit the
Laojiao Co., funds raised
113
2023 Annual Report of Luzhou Laojiao Co., Ltd.
Ltd. for and has
Qualified signed a fund
Investors account
(Phase I) supervision
agreement to
clarify it. The
special
account for
fund raising
was operating
normally
during the
Reporting
Period. (1)
Account
name: Luzhou
Laojiao Co.,
Ltd.; Opening
bank:
Guangfa Bank
Co., Ltd.,
Chengdu
Branch; Bank
account:
95508800467
23000135. (2)
Account
name: Luzhou
Laojiao Co.,
Ltd.; Opening
bank: Bank of
Communicatio
ns Co., Ltd.,
Luzhou
Branch; Bank
account:
51751746001
3000000860.
(3) Account
name: Luzhou
Laojiao Co.,
Ltd.; Opening
bank: China
Minsheng
Bank Co.,
Ltd., Chengdu
Branch; Bank
account:
631395395.
Luzhou
Laojiao Co.,
2022 Public
Ltd.; Opening
Offering of
bank: China
Corporate
Merchants
Bond of
Bank Co.,
Luzhou
150,000 149,8802 0 Ltd., Chengdu N/A Yes
Laojiao Co.,
Fucheng
Ltd. for
Avenue Sub-
Professional
branch; Bank
Investors
account:
(Phase I)
02890014041
0888.
114
2023 Annual Report of Luzhou Laojiao Co., Ltd.
Note: 1. Total Unused Raised Funds include a portion of the interest on the funds raised.
2. The net amount of funds raised by the Company this time is CNY 1,498,800,000.00. As at 31
December 2023, all of it has been used for the committed purposes of the fund raising. The interest
income generated from the raised funds, amounting to CNY 41,633.34, has been utilised to
supplement working capital.
The raised funds were used for project construction
Applicable □ N/A
The Company raised a fund of CNY 4.0 billion through the issue of corporate bonds respectively on 27
August 2019 and 16 March 2020. After deduction of the issue fees, the balance amount was set to use
in the technical renovation project of brewing (Phase II), Project of Intelligent Upgrading and Building of
the Information Management System, Project of Acquiring Sealing Equipment for the Cellar of Huangyi
Brewing Base and Project of Acquiring Accessory Equipment for Leaven Making for Huangyi Brewing
Base. As of 31 December 2023, CNY 3,641,173,800 of the fund-raising through the issue of corporate
bonds had been used.
The Company changed the usage of above funds raised from bonds during the reporting period.
□Applicable N/A
2.5. Changes in credit ratings in the reporting period
□Applicable N/A
2.6. Execution and changes with respect to guarantees, repayment plans and other
repayment-ensuring measures in the reporting period, as well as the impact on the
interests of bond holders
□Applicable N/A
3. Debt instruments as a non-financial enterprise
□Applicable N/A
No such cases in the reporting period.
115
2023 Annual Report of Luzhou Laojiao Co., Ltd.
4. Convertible corporate bonds
□Applicable N/A
No such cases in the reporting period.
5. Consolidated loss of the reporting period over 10% of net assets as at
the end of last year
□Applicable N/A
6. Matured interest-bearing debt excluding bonds up the period-end
□Applicable N/A
7. Whether there was any violation of rules and regulations during the
reporting period
□Yes No
8. The major accounting data and the financial indicators of the recent
2 years of the company as of the end of the reporting period
Unit：CNY 10,000
Item 31 December 2023 31 December 2022 Change
Current ratio 4.50 3.15 42.86%
Debt/asset ratio 34.38% 33.19% 1.19%
Quick ratio 3.31 2.20 50.45%
2023 2022 Change
Net profits before non-
1,315,039.28 1,032,148.12 27.41%
recurring gains and losses
EBITDA/debt ratio 163.53% 235.37% -71.84%
Interest cover (times) 37.49 61.28 -38.82%
EBITDA-to-interest cover
38.87 64.08 -39.34%
(times)
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Section X Financial Report
1. Auditor’s report
Type of audit report Standard without reserved opinion
Signing date of auditor’s report 25 April 2024
Name of Audit Sichuan Huaxin (Group) CPA Firm
No. of auditor’s report Chuan Huaxin Audit [2024] No. 0035
Names of auditors Li Wulin, Tang Fangmo, Fan Bo
Auditor’s Report
To the shareholders of Luzhou Laojiao Co., Ltd.:
Opinion
We have audited the financial statements of Luzhou Laojiao Co., Ltd. (hereinafter referred to as the
“Company”), which comprise the consolidated balance sheet and balance sheet as at 31 December
2023, consolidated income statement and income statement, consolidated cash flow statement and
cash flow statement, consolidated statement of changes in owners' equity and statement of changes in
owners' equity for the year then ended; and notes to the financial statements.
In our opinion, the attached financial statements are prepared, in all material respects, in accordance
with Accounting Standards for Business Enterprises and present fairly the financial position of the
company as at 31 December 2023 and its operating results and cash flow for the year then ended.
Basis for opinion
We conducted our audit in accordance with China Standards on Auditing (“CSAs”) for Certified Public
Accountants. Our responsibilities under those standards are further described in the Auditor's
Responsibilities for the Audit of the Financial Statements section of our report. We are independent of
the Company in accordance with the Code of professional ethics for Certified Public Accountants in
China (“the Code”), and we have fulfilled our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the consolidated financial statements of the current period. These matters were
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addressed in the context of our audit of the consolidated financial statements as a whole and, in
forming our opinion thereon, and we do not provide a separate opinion on these matters. Key audit
matters identified in our audit are summarized as follows:
1. Key audit matters-Recognition of domestic baijiu sales revenue
Key audit matters How our audit addressed the Key Audit Matter
Our procedures in relation to recognition of domestic
baijiu sales revenue included:
1. Understood, evaluated and tested the
reasonableness and effectiveness of the internal
control design related to the Company's revenue.
Particular attention was paid to the appropriateness of
specific conditions for recognition of revenue.
2. Compared the key indicators such as sales volume,
unit price of sales and gross profit rate of the Company
in the current period with those in the previous period,
so as to identify the rationality of changes in key
indicators and reasons for changes.
3. The income of the top five customers accounted for
62.28% of the total business income. For main
customers, we carried out the following audit
procedures to verify the occurrence, completeness and
accuracy of the revenue recognized by the
management:
(1) Obtained the sales contract signed by the
Company and the customer, carefully read the key
terms of the contract, and understand the
implementation of the contract;
As shown in Note 7.38 in the Financial Statements, (2) Performed the confirmation procedure. We sent
the domestic baijiu sales revenue of the Company confirmation letters to verify the amount of sales
in 2023 is CNY 29,900,173,500, accounting for revenue in the reporting period and the closing
98.90% of the operating revenue of CNY balance of accounts receivables or contract liabilities
30,233,301,400. It is the main source of the during the reporting period. For local customers in
Company's operating profit. For the operating Luzhou, we went to their office to carry out
revenue is one of the key results indicators and the confirmation procedure and obtained the situation of
inherent risk of its misstatement is relatively high, purchase, sales and storage of Luzhou Laojiao brand
therefore, we identified the recognition of domestic baijiu during the reporting period, so as to analyze and
baijiu sales revenue as a key audit matter. judge whether there are abnormal fluctuations in its
inventory and its rationality; For customers outside
Luzhou, we mailed confirmation letters and controlled
the whole process of reply letter by ourselves.
(3) Inquired the customer's business information and
key personnel information, and checked whether they
are related party of the Company.
4. For the top 5 customers of the year and other
customers, checked sales contracts, customers'
purchase orders, shipping documents, transport
documents, accounting vouchers, payment receipts,
customer signature records and other materials to
verify the occurrence, completeness and accuracy of
the revenue recognized by the management.
5. Selected the confirmation voucher of large amount
of sales before and after the balance sheet date, paid
attention to the date of sales invoice and customer
receipt, and paid attention to whether there is a large
amount of return after the period, so as to verify
whether the corresponding revenue is included in the
appropriate accounting period.
The evidence obtained from the above audit
procedures can support the Company's management's
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recognition of domestic baijiu sales revenue.
2. Key audit matters-Existence of bank deposits
Key audit matters How our audit addressed the Key Audit Matter
Our procedures in relation to existence of bank
deposits included:
1. Understood and tested the design and
implementation of key internal controls related to the
funds management cycle to confirm the effectiveness
of relevant internal controls.
2. Accompanied by relevant personnel of the
Company, auditors went to the bank by themselves
where the Company opens a basic bank account to
print the account opening list of the Company and
check the account opening information individually.
3. Checked the carrying amount of all bank accounts
with the original amount of bank statements and
certificates of deposit, and obtained all copies.
4. Based on the results of checking the amount of
bank statements, obtained the balance reconciliation
As shown in Note 7.1 in the Financial Statements, of all bank accounts compiled by the Company, and
as of 31 December 2023, the bank balance of the check all the outstanding items, whether there are any
Company is CNY 25,916,630,900, accounting for important overdue items that are not booked in time.
40.95% of the total assets. Bank deposits are high- 5. Implemented the confirmation procedure for the
risk assets. Therefore, we identified the existence Company's bank deposits, the confirmation letters
of bank deposits as a key audit matter. were sent out by mailing after auditors checked the
address and the receiver through telephone, network
and other public information, and we controlled the
whole reply letter process by ourselves.
6. Obtained and reviewed time deposits or structured
deposit agreements, identified the types of relevant
bank deposits, analyzed the principal and interest
recovery risks, and judged the adequacy of the
disclosure.
7. Inquired the management and relevant personnel
about the purpose of all bank accounts on the
Company's books and analyzed whether there are
abnormal use or bank accounts opened for unknown
reasons.
The evidence obtained from the above audit
procedures can support the Company's management's
assertion of the existence of bank deposits.
Other information
The directors of the Company are responsible for the other information. The other information
comprises the information included in the annual report, but does not include the financial statements
and our auditor’s report thereon.
Our opinion on the financial statements does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other
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information and, in doing so, consider whether the other information is materially inconsistent with the
financial statements or our knowledge obtained in the audit or otherwise appears to be materially
misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of directors and those charged with governance for the financial statements
The directors of the Company are responsible for the preparation of the financial statements that give a
true and fair view in accordance with the disclosure requirements of Accounting Standards for Business
Enterprises, and designing, implementing and maintaining internal control that is necessary to ensure
the financial statements are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Company’s ability
to continue as a going concern, disclosing, as applicable, matters related to going concern and using
the going concern basis of accounting unless the directors either intend to liquidate the Company or to
cease operations, or have no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company’s financial reporting
process.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with CSAs will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements.
As part of an audit in accordance with CSAs, we exercise professional judgment and maintain
professional skepticism throughout the audit. We also:
(1) Identify and assess the risks of material misstatement of the financial statements, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a
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material misstatement resulting from fraud is higher than for one resulting from error, as fraud may
involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
(2) Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Company’s internal control.
(3) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
(4) Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If
we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report
to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify
our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s
report. However, future events or conditions may cause the Company to cease to continue as a going
concern.
(5) Evaluate the overall presentation, structure and content of the financial statements, and whether the
financial statements represent the underlying transactions and events in a manner that achieves fair
presentation.
(6) Obtain sufficient and appropriate audit evidence regarding the financial information of the entities or
business activities within the Company to express an opinion on the financial statements. We are
responsible for the direction, supervision and performance of the group audit. We remain solely
responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.
We also provide the governance with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
From the matters communicated with the governance, we determine those matters that were of most
significance in the audit of the consolidated financial statements of the current period and are therefore
the key audit matters. We describe these matters in our auditor’s report unless law or regulation
precludes public disclosure about the matter or when, in extremely rare circumstances, we determine
that a matter should not be communicated in our report because the adverse consequences of doing so
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would reasonably be expected to outweigh the public interest benefits of such communication.
Sichuan Huaxin (Group) CPA Firm Chinese CPA: Li Wulin
(Engagement Partner)
ChengduChina Chinese CPA: Tang Fangmo
Chinese CPA: Fan Bo
25 April 2024
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2. Financial statements
Monetary unit for the financial statements and the notes thereto: CNY
Prepared by: Luzhou Laojiao Co., Ltd.
Consolidated balance sheet
As at 31 December 2023
Unit：CNY
Item Balance as at 31 December 2023 Balance as at 1 January 2023
Current assets:
Cash and cash equivalents 25,952,025,091.28 17,757,528,211.25
Settlement reserves
Lending funds
Held-for-trading financial assets 1,426,992,098.83 1,073,466,780.37
Derivative financial assets
Notes receivables
Accounts receivables 17,461,378.98 5,939,420.78
Accounts receivables financing 5,938,171,007.93 4,583,352,503.37
Prepayment 202,309,186.70 114,257,506.26
Premiums receivable
Reinsurance accounts receivable
Reinsurance contract reserve
Other receivables 22,716,893.12 23,396,533.98
Including：Interests receivable
Dividends receivable
Buying back the sale of financial
assets
Inventories 11,622,043,947.46 9,840,742,374.85
Contract assets
Assets held for sale
Non-current assets due within one
year
Other current assets 176,684,731.97 153,035,946.94
Total current assets 45,358,404,336.27 33,551,719,277.80
Non-current assets:
Disbursement of loans and advances
Investments in debt obligations
Investments in other debt obligations
Long-term receivables
Long-term equity investments 2,708,254,833.50 2,667,500,553.17
Investments in other equity
402,893,468.80 1,136,736,978.11
instruments
Other non-current financial assets
Investment property 37,785,416.77 39,149,454.22
Fixed assets 8,613,223,465.46 8,856,258,598.78
Construction in progress 1,718,468,880.53 808,919,047.21
Productive biological assets
Oil and gas assets
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Use right assets 23,260,955.23 39,952,525.63
Intangible assets 3,397,873,791.08 3,083,271,852.79
Development expenses
Goodwill
Long-term deferred expenses 960,005.91 710,010.92
Deferred tax assets 674,429,617.92 1,005,167,353.80
Other non-current assets 358,900,430.13 196,095,702.09
Total non-current assets 17,936,050,865.33 17,833,762,076.72
Total assets 63,294,455,201.60 51,385,481,354.52
Current liabilities:
Short-term loans
Borrowings from the central bank
Loans from other banks
Held-for-trading financial liabilities 9,763.87
Derivative financial liabilities
Notes payable
Accounts payable 2,357,223,733.21 2,311,665,585.04
Advance from customer
Contract liabilities 2,672,977,090.30 2,566,374,718.76
Financial assets sold for repurchase
Deposits from customers and inter-
bank
Customer brokerage deposits
Securities underwriting brokerage
deposits
Employee benefits payable 523,866,711.41 675,034,885.31
Taxes payable 2,939,627,533.00 3,481,150,728.98
Other payable 1,150,721,162.53 1,202,409,278.49
Including：Interests payable
Dividends payable 29,684,819.82 16,594,850.58
Handling charges and commissions
payable
Reinsurance accounts payable
Liabilities held for sale
Non-current liabilities due within one
78,918,152.41 81,879,466.63
year
Other current liabilities 347,485,071.57 333,627,225.47
Total current liabilities 10,070,829,218.30 10,652,141,888.68
Non-current liabilities:
Insurance contract reserves
Long-term loans 10,000,300,000.00 3,179,600,000.00
Bonds payable 1,498,716,737.02 2,996,099,571.86
Including：Preferred shares
Perpetual bonds
Lease liabilities 22,356,404.47 29,096,969.66
Long-term payables
Long-term payroll payables
Accrued liabilities
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Deferred income 27,772,083.74 33,704,323.80
Deferred tax liabilities 142,773,028.22 166,043,663.88
Other non-current liabilities
Total non-current liabilities 11,691,918,253.45 6,404,544,529.20
Total liabilities 21,762,747,471.75 17,056,686,417.88
Owners' equity
Share capital 1,471,987,769.00 1,471,895,100.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserves 5,185,481,523.22 4,800,154,468.99
Less: treasury stock 616,743,610.59 639,021,998.78
Other comprehensive income 63,130,469.51 330,751,245.84
Special reserves
Surplus reserves 1,471,987,769.00 1,471,895,100.00
General risk reserve
Undistributed profits 33,815,566,574.75 26,772,197,213.98
Total equity attributable to owners of
41,391,410,494.89 34,207,871,130.03
the parent company
Non-controlling interests 140,297,234.96 120,923,806.61
Total owners' equity 41,531,707,729.85 34,328,794,936.64
Total liabilities and owners' equity 63,294,455,201.60 51,385,481,354.52
Legal representative：Liu Miao
Person in charge of accounting affairs：Xie Hong
Person in charge of accounting department：Song Ying
Balance sheet of parent company
As at 31 December 2022
Unit：CNY
Item Balance as at 31 December 2023 Balance as at 1 January 2023
Current assets:
Cash and cash equivalents 24,271,855,815.25 17,009,231,873.64
Held-for-trading financial assets 1,426,992,098.83 974,505,894.18
Derivative financial assets
Notes receivables
Accounts receivables 47,500.00
Accounts receivables financing
Prepayment 6,360,210.40 2,141,256.01
Other receivables 14,844,650,322.98 12,042,401,844.84
Including：Interests receivable
Dividends receivable
Inventories 1,051,717.53 2,499,333.08
Contract assets
Assets held for sale
Non-current assets due within one
year
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Other current assets 108,073,731.77 34,163.66
Total current assets 40,658,983,896.76 30,030,861,865.41
Non-current assets:
Investments in debt obligations
Investments in other debt obligations
Long-term receivables
Long-term equity investments 6,494,866,955.20 6,278,966,093.87
Investments in other equity
402,589,547.17 1,136,433,056.48
instruments
Other non-current financial assets
Investment property 37,785,416.77 39,149,454.22
Fixed assets 950,099,737.28 1,021,509,077.72
Construction in progress 57,369,565.37 49,136,390.14
Productive biological assets
Oil and gas assets
Use right assets 316,259.61 600,190.05
Intangible assets 781,194,544.01 617,211,243.56
Development expenses
Goodwill
Long-term deferred expenses 820,758.81 548,507.41
Deferred tax assets 154,645,014.28 147,351,049.81
Other non-current assets 200,783,195.94 14,808,459.12
Total non-current assets 9,080,470,994.44 9,305,713,522.38
Total assets 49,739,454,891.20 39,336,575,387.79
Current liabilities:
Short-term loans
Held-for-trading financial liabilities
Derivative financial liabilities
Notes payable
Accounts payable 19,666,554.15 51,174,790.68
Advance from customer
Contract liabilities 2,230,734.50 1,510,508.26
Employee benefits payable 163,823,844.30 241,471,148.70
Taxes payable 204,018,131.83 381,259,266.93
Other payables 1,960,371,090.55 1,730,335,596.91
Including：Interests payable
Dividends payable
Liabilities held for sale
Non-current liabilities due within one
74,018,942.63 67,673,936.27
year
Other current liabilities 289,995.48 196,366.07
Total current liabilities 2,424,419,293.44 2,473,621,613.82
Non-current liabilities:
Long-term loans 10,000,300,000.00 3,179,600,000.00
Bonds payable 1,498,716,737.02 2,996,099,571.86
Including：Preferred shares
Perpetual bonds
Lease liabilities 203,920.20
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2023 Annual Report of Luzhou Laojiao Co., Ltd.
Long-term payables
Long-term payroll payables
Accrued liabilities
Deferred income
Deferred tax liabilities 72,592,887.99 132,565,131.74
Other non-current liabilities
Total non-current liabilities 11,571,609,625.01 6,308,468,623.80
Total liabilities 13,996,028,918.45 8,782,090,237.62
Owners' equity
Share capital 1,471,987,769.00 1,471,895,100.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserves 5,179,307,881.60 4,789,603,151.65
Less: treasury stock 616,743,610.59 639,021,998.78
Other comprehensive income 60,513,567.32 328,542,995.36
Special reserves
Surplus reserves 1,471,987,769.00 1,471,895,100.00
Undistributed profits 28,176,372,596.42 23,131,570,801.94
Total owners' equity 35,743,425,972.75 30,554,485,150.17
Total liabilities and owners' equity 49,739,454,891.20 39,336,575,387.79
Consolidated income statement
Unit：CNY
Item Year 2023 Year 2022
1. Total operating revenue 30,233,301,388.26 25,123,563,271.62
Including: Operating revenue 30,233,301,388.26 25,123,563,271.62
Interest income
Earned premium
Fee and commission
income
2. Total operating costs 12,638,987,548.90 11,424,541,543.84
Including: Cost of sales 3,537,151,403.15 3,369,528,394.02
Interest expense
Handling charges and
commission expenses
Refunded premiums
Net payments for
insurance claims
Net provision for
insurance contracts
Bond insurance expense
Reinsurance Expenses
Taxes and surcharges 4,133,126,350.68 3,523,948,287.48
Selling and distribution
3,974,425,526.92 3,448,771,046.02
expenses
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2023 Annual Report of Luzhou Laojiao Co., Ltd.
General and administrative
1,139,480,677.23 1,162,422,257.23
expenses
Research and
225,955,797.33 206,248,486.57
Development expenses
Financial expenses -371,152,206.41 -286,376,927.48
Including：Interest
488,003,010.93 229,673,136.36
expenses
Interest income 864,006,165.58 505,746,664.32
Plus: Other income 54,179,605.39 36,524,317.09
Investment income ("-" for
84,724,581.98 104,715,915.31
losses)
Including: income from
investment in associates and joint 66,927,156.69 84,626,608.53
ventures
Income from the
derecognition of financial assets
measured at amortized cost (“-” for
losses)
Foreign exchange gains ("-"
for losses)
Net gain on exposure hedges
(“-” for losses)
Gains from the changes in fair
62,988,462.30 -12,023,622.50
values(“-“ for losses)
Credit impairment losses (“-”
932,241.70 -1,165,718.34
for losses)
Impairment losses(“-“ for
losses)
Gains from disposal of
44,694,238.37 19,805,093.70
assets("-" for losses)
3. Operating profits ("-" for losses) 17,841,832,969.10 13,846,877,713.04
Plus: non-operating income 36,203,863.17 27,833,420.31
Less: non-operating expenses 72,079,275.83 19,959,493.06
4. Total profits before tax ("-" for
total losses) 17,805,957,556.44 13,854,751,640.29
Less: income tax expenses 4,517,297,533.23 3,444,162,535.86
5. Net profit ("-" for net loss) 13,288,660,023.21 10,410,589,104.43
5.1 By operating continuity
5.1.1 Net profit from continuing
13,288,660,023.21 10,410,589,104.43
operation ("-" for losses)
5.1.2 Net profit from discontinued
operation ("-" for losses)
5.2 By ownership
1) Attributable to shareholders of the
13,246,394,700.59 10,365,383,281.80
parent company
2) Attributable to non-controlling
42,265,322.62 45,205,822.63
interests
6. Net of tax from other
comprehensive income -267,285,844.76 165,065,173.42
Net of tax from other comprehensive
income to the owner of the parent -267,620,776.33 163,224,093.52
company
6.1 Other comprehensive income
-270,029,977.35 173,373,357.69
cannot reclassified into the profit and
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2023 Annual Report of Luzhou Laojiao Co., Ltd.
loss:
1) Remeasure the variation of net
indebtedness or net asset of defined
benefit plans
2) Share in other comprehensive
income that cannot be classified into 106,537.86
profit and loss under equity method
3) Changes in fair value of
investments in other equity -270,136,515.21 173,373,357.69
instruments
4) Changes in fair value of the
company’s credit risks
5) Other
6.2 Other comprehensive income
that will be reclassified into the profit 2,409,201.02 -10,149,264.17
and loss
1) Share in other comprehensive
income that will be classified into 2,000,549.31 -12,402,376.19
profit and loss under equity method
2) Changes in fair value of
investments in other debt obligations
3) Other comprehensive income
arising from the reclassification of
financial assets
4) Allowance for credit impairments in
investments in other debt obligations
5) Reserve for cash-flow hedge
6) Balance arising from the
translation of foreign currency 408,651.71 2,253,112.02
financial statements
7) Others
Net of tax from other comprehensive
334,931.57 1,841,079.90
income to non-controlling interests
7. Total comprehensive income 13,021,374,178.45 10,575,654,277.85
Total comprehensive income
attributable to owners of the parent 12,978,773,924.26 10,528,607,375.32
company
Total comprehensive income
attributable to non-controlling 42,600,254.19 47,046,902.53
interests
8. Earnings per share
(1) Basic earnings per share 9.02 7.06
(2) Diluted earnings per share 9.02 7.06
Legal representative：Liu Miao
Person in charge of accounting affairs：Xie Hong
Person in charge of accounting department：Song Ying
Income statement of parent company
Unit：CNY
Item Year 2023 Year 2022
1. Operating revenue 9,145,460,581.25 8,410,433,537.26
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Less: Cost of sales 6,915,061,972.96 6,178,065,196.37
Taxes and surcharges 69,667,975.44 65,990,094.21
Selling and distribution
expenses
General and administrative
955,055,338.48 963,400,839.26
expenses
Research and Development
93,610,992.94 90,299,057.13
expenses
Financial expenses -523,148,275.90 -465,296,222.32
Including：Interest expenses 344,865,497.27 145,296,657.64
Interest income 872,919,941.62 613,452,430.61
Plus: Other income 20,117,651.96 18,824,179.28
Investment income ("-" for
9,964,009,506.49 7,842,231,445.15
losses)
Including: income from
investment in associates and joint 43,134,582.17 45,123,842.50
ventures
Income from the
derecognition of financial assets at
amortized cost (“-” for losses)
Net gain on exposure hedges
(“-” for losses)
Gains from the changes in fair
60,959,140.61 -10,984,508.69
values(“-“ for losses)
Credit impairment losses (“-” for
630,355.40 -610,527.84
losses)
Asset impairment losses (“-” for
losses)
Gains from disposal of assets("-"
44,029,637.89 19,786,813.38
for losses)
2. Operating profits ("-" for losses) 11,724,958,869.68 9,447,221,973.89
Plus: non-operating income 26,553,752.25 18,588,745.48
Less: non-operating expenses 24,214,208.31 17,852,225.18
3. Total profits before tax ("-" for
total losses) 11,727,298,413.62 9,447,958,494.19
Less: income tax expenses 479,471,279.32 408,118,536.71
4. Net profit ("-" for net loss) 11,247,827,134.30 9,039,839,957.48
4.1 Net profit from continuing
11,247,827,134.30 9,039,839,957.48
operation ("-" for losses)
4.2 Net profit from discontinued
operation ("-" for losses)
5. Net of tax from other
comprehensive income -268,029,428.04 160,970,981.50
5.1 Other comprehensive income
cannot reclassified into the profit and -270,029,977.35 173,373,357.69
loss:
1) Remeasure the variation of net
indebtedness or net asset of defined
benefit plans
2) Share in other comprehensive
income that cannot be classified into 106,537.86
profit and loss under equity method
3) Changes in fair value of
-270,136,515.21 173,373,357.69
investments in other equity
130
2023 Annual Report of Luzhou Laojiao Co., Ltd.
instruments
4) Changes in fair value of the
company’s credit risks
5) Other
5.2 Other comprehensive income
that will be reclassified into the profit 2,000,549.31 -12,402,376.19
and loss
1) Share in other comprehensive
income that will be classified into 2,000,549.31 -12,402,376.19
profit and loss under equity method
2) Changes in fair value of
investments in other debt obligations
3) Other comprehensive income
arising from the reclassification of
financial assets
4) Allowance for credit impairments in
investments in other debt obligations
5) Reserve for cash-flow hedge
6) Balance arising from the
translation of foreign currency
financial statements
7) Others
6. Total comprehensive income 10,979,797,706.26 9,200,810,938.98
7. Earnings per share
(1) Basic earnings per share
(2) Diluted earnings per share
Consolidated statement of cash flows
Unit：CNY
Item Year 2023 Year 2022
1. Cash flows from operating
activities
Cash received from sale of goods
31,589,430,458.52 25,912,851,214.24
and rendering of services
Net increase in customer bank
deposits and placement from banks
and other financial institutions
Net increase in loans from central
bank
Net increase in loans from other
financial institutions
Premiums received from original
insurance contracts
Net cash received from reinsurance
business
Net increase in deposits and
investments from policyholders
Cash received from interest, handling
charges and commissions
Net increase in placements from
other financial institutions
131
2023 Annual Report of Luzhou Laojiao Co., Ltd.
Net capital increase in repurchase
business
Net cash received from customer
brokerage deposits
Refunds of taxes and surcharges 4,311,439.27 96,229,396.25
Cash received from other operating
1,271,444,860.82 868,192,251.33
activities
Subtotal of cash inflows from
operating activities 32,865,186,758.61 26,877,272,861.82
Cash paid for goods purchased and
6,584,743,337.24 5,224,385,672.55
services received
Net increase in loans and advances
to customers
Net increase in deposits in central
bank and other banks and financial
institutions
Cash paid for original insurance
contract claims
Net increase in lending funds
Cash paid for interests, handling
charges and commissions
Cash paid for policy dividends
Cash paid to and on behalf of
1,291,700,762.53 1,159,257,102.51
employees
Cash paid for taxes and surcharges 11,873,473,704.94 9,242,016,336.48
Cash paid for other operating
2,466,904,018.44 2,988,965,480.56
activities
Subtotal of cash outflows from
operating activities 22,216,821,823.15 18,614,624,592.10
Net cash flows from operating
activities 10,648,364,935.46 8,262,648,269.72
2. Cash flows from investing
activities
Cash received from disposal of
1,806,849,496.56 2,130,340,931.54
investments
Cash received from returns on
57,070,473.44 47,015,525.79
investments
Net cash received from disposal of
fixed assets, intangible assets and 69,684,519.48 66,239,957.85
other long-term assets
Net cash received from disposal of
subsidiaries and other business units
Cash received from other investing
activities
Subtotal of cash inflows from
investing activities 1,933,604,489.48 2,243,596,415.18
Cash paid to acquire and construct
fixed assets, intangible assets and 1,501,625,135.45 1,035,165,351.11
other long-term assets
Cash paid for investments 1,700,000,000.00 3,082,285,380.80
Net increase in pledge loans
Net cash paid to acquire subsidiaries
and other business units
Cash paid for other investing
97,207.03
activities
132
2023 Annual Report of Luzhou Laojiao Co., Ltd.
Subtotal of cash outflows from
investing activities 3,201,722,342.48 4,117,450,731.91
Net cash flows from investing
activities -1,268,117,853.00 -1,873,854,316.73
3. Cash flows from financing
activities
Cash received from investors 10,373,039.14 670,224,927.99
Including: cash received by
subsidiaries from investments by 2,082,314.40 3,366,028.35
minority shareholders
Cash received from borrowings 6,850,000,000.00 4,700,000,000.00
Cash received from other financing
1,909,017.10
activities
Subtotal of cash inflows from
financing activities 6,860,373,039.14 5,372,133,945.09
Cash paid for debt repayments 1,524,700,000.00 2,500,000,000.00
Cash paid for distribution of
dividends and profits or payment of 6,546,495,859.54 4,928,927,484.50
interest
Including: dividends and profits paid
to minority shareholders by 16,594,850.59 14,784,831.00
subsidiaries
Cash paid for other financing
7,603,247.89 21,594,912.99
activities
Subtotal of cash outflows from
financing activities 8,078,799,107.43 7,450,522,397.49
Net cash flows from financing
activities -1,218,426,068.29 -2,078,388,452.40
4. Effect of fluctuation in exchange
rate on cash and cash equivalents 2,201,671.82 16,072,149.45
5. Net increase in cash and cash
equivalents 8,164,022,685.99 4,326,477,650.04
Plus: balance of cash and cash
equivalents at the beginning of the 17,729,006,591.87 13,402,528,941.83
period
6. Balance of cash and cash
equivalents at the end of the 25,893,029,277.86 17,729,006,591.87
period
Cash flow statements of parent company
Unit：CNY
Item Year 2023 Year 2022
1. Cash flows from operating
activities
Cash received from sale of goods
9,465,106,131.52 7,836,045,120.10
and rendering of services
Refunds of taxes and surcharges
Cash received from other operating
883,796,732.00 633,774,675.70
activities
Subtotal of cash inflows from
10,348,902,863.52 8,469,819,795.80
operating activities
Cash paid for goods purchased and
7,055,302,497.34 5,463,276,771.05
services received
Cash paid to and on behalf of 459,785,090.92 994,821,318.51
133
2023 Annual Report of Luzhou Laojiao Co., Ltd.
employees
Cash paid for taxes and surcharges 1,081,990,787.32 700,305,299.72
Cash paid for other operating
344,059,510.02 232,654,650.21
activities
Subtotal of cash outflows from
operating activities 8,941,137,885.60 7,391,058,039.49
Net cash flows from operating
activities 1,407,764,977.92 1,078,761,756.31
2. Cash flows from investing
activities
Cash received from disposal of
1,725,428,067.29 2,141,935,199.60
investments
Cash received from returns on
9,960,472,292.73 7,816,398,926.76
investments
Net cash received from disposal of
fixed assets, intangible assets and 57,611,113.20 50,809,694.44
other long-term assets
Net cash received from disposal of
subsidiaries and other business units
Cash received from other investing
activities
Subtotal of cash inflows from
investing activities 11,743,511,473.22 10,009,143,820.80
Cash paid to acquire and construct
fixed assets, intangible assets and 440,672,744.69 92,415,078.78
other long-term assets
Cash paid for investments 1,720,000,000.00 2,982,285,380.80
Net cash paid to acquire subsidiaries
and other business units
Cash paid for other investing
activities
Subtotal of cash outflows from
investing activities 2,160,672,744.69 3,074,700,459.58
Net cash flows from investing
activities 9,582,838,728.53 6,934,443,361.22
3. Cash flows from financing
activities
Cash received from investors 8,290,724.74 666,858,899.64
Cash received from loans 6,850,000,000.00 4,700,000,000.00
Cash received from other financing
28,533,781.29 110,999,028.72
activities
Subtotal of cash inflows from
financing activities 6,886,824,506.03 5,477,857,928.36
Cash paid for debt repayments 1,524,700,000.00 2,500,000,000.00
Cash paid for distribution of
dividends and profits or payment of 6,542,888,426.79 4,930,586,734.79
interest
Cash paid for other financing
2,576,358,468.60 2,008,038,082.56
activities
Subtotal of cash outflows from
financing activities 10,643,946,895.39 9,438,624,817.35
Net cash flows from financing
activities -3,757,122,389.36 -3,960,766,888.99
4. Effect of fluctuation in exchange
rate on cash and cash equivalents 102,691.83 469,950.14
134
2023 Annual Report of Luzhou Laojiao Co., Ltd.
5. Net increase in cash and cash
equivalents 7,233,584,008.92 4,052,908,178.68
Plus: balance of cash and cash
equivalents at the beginning of the 16,991,891,937.50 12,938,983,758.82
period
6. Balance of cash and cash
equivalents at the end of the 24,225,475,946.42 16,991,891,937.50
period
Consolidated statement of changes in owners' equity
For the year ended 31 December 2023
Unit：CNY
Year 2023
Equity attributable to owners of the parent company
Other equity Othe Non-
instruments Less r Total
Gene contr
Item Shar Capit ： Com Spec Surpl Undi owne
ral ollin
e al Trea preh ial us strib Othe Subt rs'
Prefe risk g
capit Perp reser sury ensiv reser reser uted r otal equit
rred Othe reser inter
al etual ve stoc e ve ve profit y
stoc r ve ests
bond k Inco
k
me
1.
Bala
nce
1,471 4,800 1,471 26,77 34,20 34,32
as at 639,0 330,7 120,9
31 ,895, ,154, ,895, 2,197 7,871 8,794
Dece 21,99 51,24 23,80
100.0 468.9 100.0 ,213. ,130. ,936.
mber 8.78 5.84 6.61
of 0 9 0 98 03 64
last
year
Plus:
adjus
tment
s for
chan
ges
in
acco
untin
g
polici
es
Adjus
tment
s for
corre
ction
of
acco
untin
g
error
s in
prior
year
Other
s
2.
Bala
nce 1,471 4,800 1,471 26,77 34,20 34,32
as at 639,0 330,7 120,9
,895, ,154, ,895, 2,197 7,871 8,794
1 21,99 51,24 23,80
Janu 100.0 468.9 100.0 ,213. ,130. ,936.
8.78 5.84 6.61
ary 0 9 0 98 03 64
of
the
135
2023 Annual Report of Luzhou Laojiao Co., Ltd.
curre
nt
year
3.Inc
reas
es/de
crea
ses
in - - 7,043 7,183 7,202
the 385,3 19,37
92,66 22,27 267,6 92,66 ,369, ,539, ,912,
curre 27,05 3,428
nt 9.00 8,388 20,77 9.00 360.7 364.8 793.2
4.23 .35
perio .19 6.33 7 6 1
d (“-”
for
decr
ease
s)
(1)
Total - 13,24 12,99 13,03
comp 42,60
251,4 6,394 4,989 7,589
rehen 0,254
sive 05,12 ,700. ,577. ,831.
inco .19
3.12 59 47 66
me
(2)
Capit
al
contri -
385,0 407,4 6,457 413,9
buted 92,66 22,27
or 99,22 70,28 ,993. 28,27
9.00 8,388
reduc 8.22 5.41 99 9.40
ed by .19
owne
rs
Capit
al
contri 8,198 8,290 2,082 2,082
92,66
butio ,055. ,724. ,314. ,314.
ns by 9.00
74 74 40 40
owne
rs
Capit
al
contri
butio
ns by
other
equit
y
instru
ment
s
holde
rs
Amo
unts
of
share
-
base
-
d 376,9 407,4 4,375 411,8
paym 30,56
ents 01,17 70,28 ,679. 45,96
9,112
recog 2.48 5.41 59 5.00
nized .93
in
owne
rs'
equit
y
Other
s
(3) 92,66 - - - -
Profit
distri 9.00 6,219 6,219 29,68 6,248
136
2023 Annual Report of Luzhou Laojiao Co., Ltd.
butio ,240, ,148, 4,819 ,833,
n
993.0 324.0 .83 143.8
3 3 6
Withd
rawal
of -
92,66
surpl 92,66
us 9.00
9.00
reser
ves
Withd
rawal
of
gener
al
risk
reser
ve
Profit
distri - - -
buted -
to 6,219 6,219 6,248
29,68
owne ,148, ,148, ,833,
rs (or 4,819
share 324.0 324.0 143.8
.83
holde 3 3 6
rs)
Other
s
(4)
Intern
al
carry- -
16,21
forwa 16,21
rd of 5,653
5,653
owne .21
rs' .21
equit
y
Conv
ersio
n of
capit
al
reser
ves
into
paid-
in
capit
al
Conv
ersio
n of
surpl
us
reser
ves
into
paid-
in
capit
al
Surpl
us
reser
ves
offset
ting
losse
s
Carry
-
forwa
rd of
137
2023 Annual Report of Luzhou Laojiao Co., Ltd.
retain
ed
earni
ngs
from
chan
ges
in
defin
ed
benef
it
plans
Carry
-
forwa
rd of
retain
ed -
earni 16,21
16,21
ngs 5,653
from 5,653
.21
other .21
comp
rehen
sive
inco
me
Other
s
(5)
Speci
al
reser
ves
Withd
rawal
for
the
perio
d
Use
for
the
perio
d
(6)
227,8 227,8 227,8
Other
s 26.01 26.01 26.01
4.
Bala
nce
as at
31 1,471 5,185 1,471 33,81 41,39 41,53
616,7 63,13 140,2
Dece ,987, ,481, ,987, 5,566 1,410 1,707
mber 43,61 0,469 97,23
769.0 523.2 769.0 ,574. ,494. ,729.
of 0.59 .51 4.96
the 0 2 0 75 89 85
curre
nt
year
For the year ended 31 December 2022
Unit：CNY
Year 2022
Equity attributable to owners of the parent company
Other equity Othe Non-
Less Total
instruments r Gene contr
Item Shar Capit ： Spec Surpl Undi owne
Com ral ollin
e al Trea ial us strib Othe Subt rs'
Prefe preh risk g
capit Perp reser sury reser reser uted r otal equit
rred Othe ensiv reser inter
al etual ve stoc ve ve profit y
stoc r e ve ests
bond k
k Inco
138
2023 Annual Report of Luzhou Laojiao Co., Ltd.
me
1.
Bala
nce
as at 1,464 3,755 1,464 21,18 28,04 28,13
167,5 97,01
31 ,752, ,354, ,752, 7,860 0,247 7,261
Dece 27,15 4,116
476.0 665.7 476.0 ,235. ,005. ,122.
mber 2.32 .89
of 0 3 0 89 94 83
last
year
Plus:
adjus
tment
s for
chan
ges
in
acco
untin
g
polici
es
Adjus
tment
s for
corre
ction
of
acco
untin
g
error
s in
prior
year
Other
s
2.
Bala
nce
as at
1 1,464 3,755 1,464 21,18 28,04 28,13
167,5 97,01
Janu ,752, ,354, ,752, 7,860 0,247 7,261
ary 27,15 4,116
476.0 665.7 476.0 ,235. ,005. ,122.
of 2.32 .89
the 0 3 0 89 94 83
curre
nt
year
3.Inc
reas
es/de
crea
ses
in 1,044 5,584 6,167 6,191
the 7,142 639,0 163,2 7,142 23,90
,799, ,336, ,624, ,533,
curre ,624. 21,99 24,09 ,624. 9,689
nt 803.2 978.0 124.0 813.8
perio 00 8.78 3.52 00 .72
6 9 9 1
d (“-”
for
decr
ease
s)
(1)
Total 10,36 10,52 10,57
comp 163,2 47,04
5,383 8,607 5,654
rehen 24,09 6,902
sive ,281. ,375. ,277.
inco 3.52 .53
80 32 85
me
(2) 7,142 1,044 639,0 412,9 8,242 421,1
Capit
,624. ,799, 21,99 20,42 ,468. 62,89
al
contri 00 803.2 8.78 8.48 77 7.25
139
2023 Annual Report of Luzhou Laojiao Co., Ltd.
buted 6
or
reduc
ed by
owne
rs
Capit
al
contri 7,142 654,1 661,2 3,366 3,366
butio ,624. 41,64 84,27 ,028. ,028.
ns by
00 9.18 3.18 35 35
owne
rs
Capit
al
contri
butio
ns by
other
equit
y
instru
ment
s
holde
rs
Amo
unts
of
share
-
base
-
d 390,6 412,9 4,876 417,7
paym 22,26
ents 58,15 20,42 ,440. 96,86
2,274
recog 4.08 8.48 42 8.90
nized .40
in
owne
rs'
equit
y
Other
s
- - -
(3) -
Profit 7,142 4,781 4,773 4,805
31,37
distri ,624. ,061, ,919, ,298,
butio 9,681
00 930.5 306.5 988.1
n .58
5 5 3
Withd
rawal -
of 7,142
7,142
surpl ,624.
us ,624.
00
reser 00
ves
Withd
rawal
of
gener
al
risk
reser
ve
Profit
distri - - -
buted -
to 4,773 4,773 4,805
31,37
owne ,919, ,919, ,298,
rs (or 9,681
306.5 306.5 988.1
share .58
holde 5 5 3
rs)
Other
140
2023 Annual Report of Luzhou Laojiao Co., Ltd.
s
(4)
Intern
al
carry-
forwa
rd of
owne
rs'
equit
y
Conv
ersio
n of
capit
al
reser
ves
into
paid-
in
capit
al
Conv
ersio
n of
surpl
us
reser
ves
into
paid-
in
capit
al
Surpl
us
reser
ves
offset
ting
losse
s
Carry
-
forwa
rd of
retain
ed
earni
ngs
from
chan
ges
in
defin
ed
benef
it
plans
Carry
-
forwa
rd of
retain
ed
earni
ngs
from
other
comp
rehen
sive
inco
me
Other
s
141
2023 Annual Report of Luzhou Laojiao Co., Ltd.
(5)
Speci
al
reser
ves
Withd
rawal
for
the
perio
d
Use
for
the
perio
d
(6)
15,62 15,62 15,62
Other
s 6.84 6.84 6.84
4.
Bala
nce
as at
1,471 4,800 1,471 26,77 34,20 34,32
31 639,0 330,7 120,9
Dece ,895, ,154, ,895, 2,197 7,871 8,794
mber 21,99 51,24 23,80
100.0 468.9 100.0 ,213. ,130. ,936.
of 8.78 5.84 6.61
the 0 9 0 98 03 64
curre
nt
year
Statement of changes in owners' equity of parent company
For the year ended 31 December 2023
Unit：CNY
Year 2023
Other equity instruments Other
Less： Compr Specia Surplu
Item Capital Undistr Total
Share Preferr Perpet Treasu ehensi l s
reserv ibuted Other owners
capital ed ual Other ry ve reserv reserv
e profit ' equity
stock bond stock Incom e e
e
1.
Balanc
e as at 1,471,8 4,789,6 639,02 328,54 1,471,8 23,131, 30,554,
31
Decem 95,100. 03,151. 1,998.7 2,995.3 95,100. 570,80 485,15
ber of 00 65 8 6 00 1.94 0.17
last
year
Plus:
adjust
ments
for
change
s in
accoun
ting
policies
Adjust
ments
for
correcti
on of
accoun
ting
142
2023 Annual Report of Luzhou Laojiao Co., Ltd.
errors
in prior
year
Others
2.
Balanc
e as at 1,471,8 4,789,6 639,02 328,54 1,471,8 23,131, 30,554,
Januar
y 1 of 95,100. 03,151. 1,998.7 2,995.3 95,100. 570,80 485,15
the 00 65 8 6 00 1.94 0.17
current
year
3.Incre
ases/d
ecreas
es in -
389,70 - 5,044,8 5,188,9
the 92,669. 268,02 92,669.
current 4,729.9 22,278, 01,794. 40,822.
00 9,428.0 00
period 5 388.19 48 58
(“-” for 4
decrea
ses)
(1) -
Other 11,247, 10,996,
251,81
compre 827,13 013,35
hensive 3,774.8
income 4.30 9.47
3
(2)
Capital
contrib 389,47 - 411,84
92,669.
uted or 6,903.9 22,278, 7,961.1
reduce 00
d by 4 388.19 3
owners
Capital
contrib
92,669. 8,198,0 8,290,7
utions
by 00 55.74 24.74
owners
Capital
contrib
utions
by
other
equity
instrum
ents
holders
Amount
s of
share-
based 381,27 - 411,84
payme
nts 8,848.2 30,569, 7,961.1
recogni 0 112.93 3
zed in
owners'
equity
Others
(3) - -
Profit 92,669. 6,219,2 6,219,1
distribu 00 40,993. 48,324.
tion
03 03
Withdra
wal of -
92,669.
surplus 92,669.
reserve 00
00
s
Profit - -
distribu 6,219,1 6,219,1
ted to
owners 48,324. 48,324.
(or 03 03
143
2023 Annual Report of Luzhou Laojiao Co., Ltd.
shareh
olders)
Others
(4)
Internal
carry- -
16,215,
forward 16,215,
of 653.21
653.21
owners'
equity
Conver
sion of
capital
reserve
s into
paid-in
capital
Conver
sion of
surplus
reserve
s into
paid-in
capital
Surplus
reserve
s
offsetti
ng
losses
Carry-
forward
of
retaine
d
earning
s from
change
s in
defined
benefit
plans
Carry-
forward
of
retaine
d -
16,215,
earning 16,215,
s from 653.21
other 653.21
compre
hensive
income
Others
(5)
Special
reserve
s
Withdra
wal for
the
period
Use for
the
period
(6) 227,82 227,82
Others 6.01 6.01
4.
Balanc
e as at 1,471,9 5,179,3 616,74 1,471,9 28,176, 35,743,
60,513,
31 87,769. 07,881. 3,610.5 87,769. 372,59 425,97
Decem 567.32
00 60 9 00 6.42 2.75
ber of
the
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2023 Annual Report of Luzhou Laojiao Co., Ltd.
current
year
For the year ended 31 December 2022
Unit：CNY
Year 2022
Other equity instruments Other
Less： Compr Specia Surplu
Item Capital Undistr Total
Share Preferr Perpet Treasu ehensi l s
reserv ibuted Other owners
capital ed ual Other ry ve reserv reserv
e profit ' equity
stock bond stock Incom e e
e
1.
Balanc
e as at 1,464,7 3,739,6 167,57 1,464,7 18,872, 25,709,
31
Decem 52,476. 66,108. 2,013.8 52,476. 792,77 535,84
ber of 00 27 6 00 5.01 9.14
last
year
Plus:
adjust
ments
for
change
s in
accoun
ting
policies
Adjust
ments
for
correcti
on of
accoun
ting
errors
in prior
year
Others
2.
Balanc
e as at 1,464,7 3,739,6 167,57 1,464,7 18,872, 25,709,
Januar
y 1 of 52,476. 66,108. 2,013.8 52,476. 792,77 535,84
the 00 27 6 00 5.01 9.14
current
year
3.Incre
ases/d
ecreas
es in 1,049,9 639,02 160,97 4,258,7 4,844,9
the 7,142,6 7,142,6
current 37,043. 1,998.7 0,981.5 78,026. 49,301.
24.00 24.00
period 38 8 0 93 03
(“-” for
decrea
ses)
(1)
Other 160,97 9,039,8 9,200,8
compre 0,981.5 39,957. 10,938.
hensive
income 0 48 98
(2)
Capital
contrib 1,049,9 639,02 418,05
7,142,6
uted or 37,043. 1,998.7 7,668.6
reduce 24.00
38 8 0
d by
owners
Capital
7,142,6 654,14 661,28
contrib
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2023 Annual Report of Luzhou Laojiao Co., Ltd.
utions 24.00 1,649.1 4,273.1
by
owners 8 8
Capital
contrib
utions
by
other
equity
instrum
ents
holders
Amount
s of
share-
based 395,79 - 418,05
payme
nts 5,394.2 22,262, 7,668.6
recogni 0 274.40 0
zed in
owners'
equity
Others
(3) - -
Profit 7,142,6 4,781,0 4,773,9
distribu 24.00 61,930. 19,306.
tion
55 55
Withdra
wal of -
7,142,6
surplus 7,142,6
reserve 24.00
s 24.00
Profit
distribu - -
ted to
4,773,9 4,773,9
owners
(or 19,306. 19,306.
shareh 55 55
olders)
Others
(4)
Internal
carry-
forward
of
owners'
equity
Conver
sion of
capital
reserve
s into
paid-in
capital
Conver
sion of
surplus
reserve
s into
paid-in
capital
Surplus
reserve
s
offsetti
ng
losses
Carry-
forward
of
retaine
d
earning
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2023 Annual Report of Luzhou Laojiao Co., Ltd.
s from
change
s in
defined
benefit
plans
Carry-
forward
of
retaine
d
earning
s from
other
compre
hensive
income
Others
(5)
Special
reserve
s
Withdra
wal for
the
period
Use for
the
period
(6)
Others
4.
Balanc
e as at
31 1,471,8 4,789,6 639,02 328,54 1,471,8 23,131, 30,554,
Decem 95,100. 03,151. 1,998.7 2,995.3 95,100. 570,80 485,15
ber of
00 65 8 6 00 1.94 0.17
the
current
year
3. Company Profile
3.1 Company Overview
Luzhou Laojiao Co., Ltd. (hereinafter referred to as "Company" or "the Company"), formerly known as
Luzhou City Qu Liquor Factory and Luzhou Laojiao Distillery in Sichuan Province. It was established in
March 1950 on the basis of 36 brewing workshops from the Ming and Qing dynasties. On 20
September 1993, Luzhou Laojiao brewery established a joint-stock limited company with fund-raising
exclusively from its operational assets. On 25 October 1993, the public offering of shares was approved
by Sichuan Provincial People's Government and CSRC with two documents of ChuanFuHan (1993)
No.673 and FaShenZi (1993) No.108. After the offering, the total share capital was 86,880,000 shares,
which were listed and traded in Shenzhen stock exchange on 9 May 1994.
As the end of 31 December 2004, the Company's total share capital reached 841,399,673 shares after
multiple rights issues, among which the controlling shareholder, State Assets Management Bureau of
Luzhou (later renamed as State-owned Assets Supervision and Administration Commission of Luzhou,
hereinafter referred to as "SASAC of Luzhou") held 585,280,800 shares of the Company, with a
shareholding ratio of 69.56%.
On 27 October 2005, the Company implemented the non-tradable share reform. After the
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2023 Annual Report of Luzhou Laojiao Co., Ltd.
implementation, the total share capital remained unchanged, and the shareholding ratio of SASAC of
Luzhou decreased from 69.56% to 60.43%.
In November 2006, the Company implemented private placement, and the total share capital increased
from 841,399,673 shares to 871,399,673 shares. The shareholding ratio of SASAC of Luzhou
decreased from 60.43% to 58.35%.
As the end of 27 February 2007, SASAC of Luzhou sold 42,069,983 shares of the Company, and after
the sale, it still held 466,375,156 shares of the Company, with its shareholding ratio reduced to 53.52%.
On 19 May 2008, the Company increased 522,839,803 shares of capital stock resulting from capital
reserve and undistributed profits transferred to increase capital stock. After the implementation, the total
share capital reached 1,394,239,476 shares, among which, SASAC of Luzhou held 746,200,250 shares
of the Company, and the shareholding ratio was still 53.52%.
On 3 September 2009, the 300,000,000 shares and the 280,000,000 shares held by SASAC of Luzhou
were separately transferred to Luzhou Laojiao Group Co., Ltd. (hereinafter referred to as the "Laojiao
Group") and Luzhou XingLu Investment Group Co., Ltd. (hereinafter referred to as the "Xinglu Group").
After the transfer, Laojiao Group, Xinglu Group, and SASAC of Luzhou respectively held 300,000,000
shares, 280,000,000 shares and 166,200,250 shares. So far, Laojiao Group became the first majority
shareholder and SASAC of Luzhou was the actual controller.
From 6 June 2012 to 20 November 2013, the first and second phases of the Company's equity
incentive plan were exercised. After the exercise, the total share capital of the Company was changed
to 1,402,252,476 shares.
On 10 April 2014 and 18 July 2016, SASAC of Luzhou transferred 81,088,320 shares and 84,000,000
shares to Laojiao Group and Xinglu Group respectively. In addition, Laojiao Group has increased its
equity stake through the secondary market of 13,137,100 shares. So far, Laojiao Group, Xinglu Group
and SASAC of Luzhou held 394,225,489 shares, 365,971,142 shares and 1,111,930 shares
respectively, with the shareholding ratios of 28.11%, 26.10% and 0.08% respectively.
On 23 August 2017, the Company issued CNY 62,500,000 ordinary shares (A shares) privately, raising
a total capital of CNY 3,000,000,000. After the additional issuance, the total capital stock of the
Company was changed to 1,464,752,476 shares. In addition, from 2017 to 2018, Laojiao Group
decreased 13,137,100 shares that were increased through the secondary market from April 2014 to
December 2015. After share reduction, Laojiao Group, Xinglu Group and SASAC of Luzhou held
381,088,389 shares, 365,971,142 shares and 1,111,930 shares respectively, with the shareholding
ratios of 26.02%, 24.99% and 0.08% respectively. Laojiao Group still was the first majority shareholder
and SASAC of Luzhou still was the actual controller.
In February 2022, the registration of 6,862,600 shares of the Restricted Share Incentive Plan granted
by the Company for the first time were completed; in September 2022, the Company granted 342,334
shares of the Restricted Share Incentive Plan for the second time; in September 2022, with seven
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2023 Annual Report of Luzhou Laojiao Co., Ltd.
awardees no longer eligible, the Company decided to repurchase and retire the 62,310 restricted
shares of them which had been granted but not lifted from restricted sales; in December 2022, the
Company granted 92,669 shares of the Restricted Share Incentive Plan for the third time; so far, the
above grant and repurchase of the Restricted Share Incentive Plan had all been registered and the total
shares of the Company changed to 1,471,987,769 shares. The grant and repurchase of the Restricted
Share Incentive Plan caused no changes in the controlling shareholders and the actual controller of the
Company.
3.2 Registered address of the Company, company type, and headquarter address
Registered address and headquarter address of the Company are located in Sichuan Luzhou Laojiao
Square and company type is other incorporated company (Listed).
3.3 Business nature of the Company and main business activity
Industry of the Company is the baijiu subdivision industry of the liquor and wine, beverage and refined
tea production industry.
The main activity are research and development, production and sales of “National Cellar
1573”,”Luzhou Laojiao” and other baijiu series.
The main products are: “National Cellar 1573 Series”, ”Century-old Luzhou Laojiao Jiaoling
Series” , ”Luzhou Laojiao Tequ”, ”Touqu”, ”Hey Guys” and other baijiu series.
3.4 The name of the controlling shareholder and the ultimate substantive controller
The controlling shareholder is Luzhou Laojiao Group Co., Ltd.; the ultimate substantive control is
SASAC of Luzhou.
3.5 Approval and submission of the financial report and its date
The financial report is approved and submitted by the board of directors of the Company on 25 April
2024.
4. Basis of preparation of financial statements
4.1. Basis of preparation of financial statements
The Company has prepared its financial statements on a going concern basis, and the preparation is
based on actual transactions and events in compliance with Accounting Standards for Business
Enterprises and relevant guidance and explanation (the following called the ASBE) issued by Ministry of
Finance, and Rules on Company Information Disclosure and Preparation of Publicly Issued Securities
No.15- General Rules on Financial Reporting Rules (2023 Revision) issued by CSRC.
4.2. Going concern
The Company’s business activities have adequate financial support. Based on the current information
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2023 Annual Report of Luzhou Laojiao Co., Ltd.
obtained by the Company, comprehensively considering factors such as macro-policy risk, market
operation risk, current or long-term profitability, debt repayment ability of the Company, as well as its
resource of financial support, the Company believes that it is reasonable to prepare the financial
statements on a going concern basis and there are no events or situations resulting in significant
doubts over going concern for at least 12 months.
5. Significant accounting policies and accounting estimates
The Company shall comply with the disclosure requirements for companies engaging in food & liquor
and wine production of the Guidelines No. 3 of the Shenzhen Stock Exchange on Sel f-regulation of
Listed Companies—Industry-specific Information Disclosure.
5.1 The declaration about compliance with ASBE
The financial statements of the Company have been prepared in accordance with ASBE, and present
truly and completely, the financial position and the Company’s and results of operations, changes in
shareholders’ equity and cash flows. In addition, in all material respects, the financial statements of the
Company comply with disclosure requirements of the financial statements and their notes in
accordance with Rules on Company Information Disclosure and Preparation of Publicly Issued
Securities No.15- General Rules on Financial Reporting Rules revised by CSRC in 2023.
5.2 Accounting period
The Company adopts the calendar year as its accounting year, i.e. from 1st January to 31st December.
5.3 Business Cycle
The Company’s business cycle is 12 months.
5.4 Functional currency
The Company has adopted China Yuan (CNY) as functional currency.
5.5 Methods for determining materiality standards and selection criteria
Applicable □ N/A
Item Materiality standard
Material receivables withdrawal of bad debt
provision separately accrued
Material bad debt provision recovered or
reversed in accounts receivables The carrying balance at the end of the Reporting
Significant write-off of accounts receivables Period ≥ CNY 5 million
Significant prepayments aging over one year,
accounts payable, contract liabilities and other
payables
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2023 Annual Report of Luzhou Laojiao Co., Ltd.
Single project under construction with a budget
exceeding CNY 150 million and a total amount
Material construction in progress
accounted for the current period exceeding CNY
50 million
The overseas operating entities' external revenue
accounts for ≥ 3% of the consolidated operating
Material overseas operating entity
revenue, and the total profit accounts for ≥ 0.5%
of the consolidated total profit
The revenue of non-wholly-owned subsidiaries
accounts for ≥ 3% of the consolidated operating
Material non-wholly-owned subsidiary
revenue, and the total profit accounts for ≥ 0.5%
of the consolidated total profit
The book value of long-term equity investments
in associated enterprises accounts for ≥ 3% of
Significant associated enterprise
the total assets in the consolidated financial
statements
5.6 The accounting treatment of business combinations involving enterprises under
common control and business combinations not involving enterprises under
common control
(1) Business combination under common control
Assets and liabilities obtained by the Company from the combine through business combination under
common control shall be measured at the book value as stated in the consolidated financial statements
of ultimate controlling party at the combination date. The share of the book value of the merged party’s
owner’s equity in the consolidated financial statements is taken as the initial investment cost of long-
term equity investments in individual financial statements. The capital reserve (stock premium or capital
premium) is adjusted according to the difference between the book value of net asset acquired through
combination and the book value of consideration paid for the combination (or total par value of shares
issued). If the capital reserve (stock premium or capital premium) is insufficient to offset, the retained
earnings shall be adjusted.
(2) Business combination not under common control
Assets paid, liabilities incurred or assumed and the equity securities issued as consideration for
combination shall be measured based on fair value on the acquisition date, the difference between fair
value and its book value shall be included in current profit and loss. The Company shall recognize the
difference of the combination costs in excess of the fair value of the net identifiable asset acquired from
the acquiree through combination as goodwill. After the review, if the combination costs are still in short
of the fair value of the net identifiable asset acquired from the acquiree through combination, include
the difference in the current profit and loss.
Fees, commissions, and other transaction expenses paid on issuance of equity securities as
combination consideration in the business combination shall be included in the initial measurement
amount of equity securities.
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2023 Annual Report of Luzhou Laojiao Co., Ltd.
5.7 Criteria for judging control and preparation of consolidated financial statements
(1) Consolidated Financial Statement Scope
The scope of the Company’s consolidated financial statements is based on control, and all subsidiaries
controlled are included in the consolidation scope of the consolidated financial statements.
(2) Consolidation procedures
The consolidated financial statements are based on the financial statements of the Company and its
subsidiaries, and are prepared by the parent company with other relevant information. When preparing
consolidated financial statement, the Company considers the Group as an accounting entity, adopts
unified accounting policies, and applies the requirements of ASBE related to recognition, measurement
and presentation to reflect the Group’s financial position, operating results and cash flows.
All the subsidiaries within the consolidation scope of consolidated financial statements shall adopt the
same accounting policies and accounting periods as those of the Company. If the accounting policies or
accounting periods of a subsidiary are different from those of the Company, the financial statements of
the subsidiary, upon preparation of consolidated financial statements, shall be made necessary
adjustment based on its own accounting policies and accounting periods of the Company. For
subsidiaries acquired from the business combination not under common control, the financial
statements shall be adjusted on the basis of the fair value of identifiable net assets on the date of
purchase. For the subsidiary acquired from the business combination under common control, its assets
and liabilities (including the goodwill formed by the acquisition of the subsidiary by the ultimate
controlling party) shall be adjusted on the basis of the book value in the consolidated statements of the
ultimate controlling party.
The portion of a subsidiary’s equity, the current net profit and loss of subsidiaries, and the current
comprehensive income attributable to non-controlling interests shall be separately presented as non-
controlling interests in consolidated balance sheet within owners' equity, below the net profit line item
and below the total comprehensive income line item in the consolidated income statement respectively.
When the amount of current loss attributable to non-controlling shareholders of a subsidiary exceeds
the balance of the non-controlling shareholders’ portion in the opening balance of owner's equity of the
subsidiary, the excess shall be allocated against the non-controlling interests.
Acquisition of subsidiaries or business
During the reporting period, if the Company acquires subsidiaries from the business combination under
common control, the opening balance in the consolidated balance sheet shall be adjusted. The income,
expenses and profits of the newly acquired subsidiaries from the beginning to the end of the reporting
period shall be included in the consolidated income statement. The cash flows of the newly acquired
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2023 Annual Report of Luzhou Laojiao Co., Ltd.
subsidiaries from the beginning to the end of the reporting period shall be included in the consolidated
statement of cash flows. At the same time, the relevant items of the comparative information shall be
adjusted as the combined entity existed since the control point of the ultimate controlling party.
If the Company can control the investee from the business combination under common control due to
additional investment or other reasons, the parties involved in the combine shall be deemed to adjust in
the current state when the ultimate controlling party starts to control them. For the equity investment
before obtaining control of the investee, the recognized relevant profit or loss and other comprehensive
income and other changes in net assets between the later of acquisition date of previous equity and the
date on which both the investor and the investee are under common control and the combination date
shall respectively write-down the beginning retained earnings or current profits and losses during the
period of comparative information.
During the reporting period, if the Company acquires subsidiaries from the business combination not
under common control, the opening balance in the consolidated balance sheet shall not be adjusted.
The income, expenses and profits of the newly acquired subsidiaries from the acquisition date to the
end of the reporting period shall be included in the consolidated income statement. The cash flows of
the newly acquired subsidiaries from the acquisition date to the end of the reporting period shall be
included in the consolidated statement of cash flows.
When the Company becomes capable of exercising control over an investee not under common control
due to additional investment or other reasons, the Company shall re-measure the previously held equity
interests to its fair value on the acquisition date, and the difference shall be recognized as investment
income. When the previously held equity investment is accounted for under equity method, any other
comprehensive income previously recognized and other equity changes (excluding other
comprehensive, net profit and loss and profit distribution ) in relation to the acquiree’s equity changes
shall be transferred to profit and loss for the current period when acquisition took place, except for other
comprehensive income resulting from changes in net liabilities or net assets due to re-measurement of
defined benefit plan by investee.
Disposal of subsidiaries and business
General treatments
During the reporting period, if the Company disposes subsidiaries, the income, expenses and profits of
the newly disposed subsidiaries from the beginning to the disposal date shall be included in the
consolidated income statement. The cash flows from the beginning to the disposal date shall be
included in the consolidated statement of cash flows.
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2023 Annual Report of Luzhou Laojiao Co., Ltd.
In case of loss of control over the investee due to partial disposal of the equity investment or other
reasons, the Company shall re-measure the remaining equity investment at its fair value at the date of
loss of control. The amount of the consideration obtained from the disposal of the equity and the fair
value of the remaining equity, minus the net asset shares calculated continuously from the acquisition
date based on the previous shareholding proportion and the goodwill, the difference shall be included in
the investment income of the period when the control is lost. Other comprehensive income related to
the former subsidiary’s equity investment of or other changes in owners' equity excluding net profit and
loss, other comprehensive income and profit distribution shall be transferred to investment income for
the current period when control is lost. Other comprehensive income resulting from changes in net
liabilities or net assets due to re-measurement of defined benefit plan by investee is excluded.
Disposal of subsidiaries by step
If the Company loses control of a subsidiary is through multiple transactions by steps, the terms,
conditions and economic impact of the disposal transaction shall be considered. When one or more of
the following conditions may indicate that multiple transactions should be treated as a package of
transactions for accounting treatment:
a.These arrangements were entered into at the same time or in contemplation of each other;
b.These arrangements work together to achieve an overall commercial effect;
c.The occurrence of one arrangement depends on the occurrence of at least one other arrangement;
d.One arrangement alone is not economically justified, but it is economically justified when considered
together with other arrangements
If the transactions of the disposal of the equity investment of the subsidiary until the loss of control
belong to a package transaction, the Company shall account for as a transaction; However, the
difference between each disposal consideration received and the corresponding proportion of the
subsidiary’s net assets before the loss of control shall be recognized as other comprehensive income in
the consolidated financial statements and transferred into the profit and loss of the current period when
the control is lost.
If the transactions from the disposal of the equity investment of the subsidiary to the loss of control are
not considered as a package transactions, the accounting treatment shall be conducted according to
the relevant policies on the partial disposal of the equity investment of the subsidiary where control is
retained before the loss of control. When the control is lost, the disposal shall be accounted for
according to the general treatment.
Purchase of non-controlling interests
The difference between the increase in the cost of long-term equity investment result from acquisition of
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2023 Annual Report of Luzhou Laojiao Co., Ltd.
non-controlling shareholders and the share of net assets of the subsidiary calculated continuously from
the acquisition date or combination date based on newly shareholding proportion shall be adjusted to
equity (share) premium of capital reserves in the consolidated balance sheet. If the capital reserve is
insufficient, any excess shall be adjusted against retained earnings.
Partial disposals of equity investment in subsidiaries without loss of control
When the Company disposes of a portion of a long-term equity investment in a subsidiary without loss
of control, the difference between disposal consideration and net assets of the subsidiary calculated
continuously since the acquisition date or the combination date related to the disposal of long-term
equity investment shall be adjusted to equity (share) premium of capital reserves in the consolidated
balance sheet. If the capital reserve is insufficient, any excess shall be adjusted against retained
earnings.
5.8 Classification of joint venture arrangements and the accounting treatment
method of common operation
(1) Classification of joint venture arrangements
A joint arrangement is classified as either a joint operation or a joint venture according to the structure,
legal form, agreed terms and other facts and conditions of a joint arrangement. A joint arrangement that
is structured through a separate vehicle is usually classified as a joint venture. However, when a joint
arrangement provides clear evidence that it meets any of the following requirements and complies with
applicable laws and regulations as a joint operation:
a. The legal form of the joint arrangement indicates that the parties that have joint control have rights to
the assets, and obligations for the liabilities, relating to the arrangement.
b. The terms of the joint arrangement specify that the parties that have joint control have the rights to
the assets, and the obligations for the liabilities, relating to the arrangement.
c. Other facts and circumstances indicate that the parties that have joint control have rights to the
assets, and the obligations for the liabilities, relating to the arrangement.
The parties that have joint control have rights to substantially all of the output of the arrangement, and
the arrangement depends on the parties that have joint control on a continuous basis for settling the
liabilities of the arrangement.
(2) Accounting by parties of a joint operator
A joint operator shall recognize the following items in relation to its interest in a joint operation, and
account for them in accordance with relevant accounting standards:
a. Its solely-held assets, and its share of any assets held jointly;
b. Its solely-assumed liabilities, and its share of any liabilities incurred jointly;
c. Its revenue from the sale of its share of the output arising from the joint operation;
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2023 Annual Report of Luzhou Laojiao Co., Ltd.
d. Its share of the revenue from sale of the output by the joint operation; and
e. Its solely-incurred expenses and its share of any expenses incurred jointly.
The Company shall only recognize the portion of the profit and loss attributable to other participants in
the joint venture, resulting from investment or sale of assets to the joint venture by the Company
(excluding those assets constituting the business), prior to the sale of such assets to a third party. The
Company shall fully recognize impairment loss when there is any impairment loss of invested or sold
assets occurring in accordance with the ASBE No.8-Asset Impairment. The Company shall only
recognize the part of the profit and loss attributable to other participants in the joint venture before
selling the assets and other assets purchased from the joint venture (excluding those assets
constituting the business) to a third party. When the impairment loss of the purchased assets is in
accordance with the ASBE No.8-Asset Impairment, the Company shall recognize such losses
according to its share. When the Company does not have common control over the joint venture, if the
Company enjoys the assets related to the joint venture and assumes the liabilities related to the joint
venture, the accounting treatment shall be conducted according to the above principles. Otherwise, the
accounting treatment shall be conducted in accordance with the relevant accounting standards.
5.9 Cash and cash equivalents
When preparing the cash flow statement, the Company recognizes cash on hand and deposits that can
be readily withdrawn on demand as cash. Cash equivalents are the Company’s short-term (due within 3
months from purchase date), highly liquid investments that are readily convertible to known amounts of
cash and which are subject to an insignificant risk of changes in value. Restricted bank deposits are not
recognized as cash and cash equivalents in the cash flow statement.
5.10 Foreign currency transactions and translation of foreign currency statements
(1) Foreign currency transactions
At the time of initial recognition of a foreign currency transaction of the Company, the amount in the
foreign currency shall be translated into the amount in CNY currency at the spot exchange rate of the
transaction date. For the monetary items of foreign currencies, the translation is done according to spot
rate of the balance sheet date. The exchange difference generated from the difference of spot rate of
the current balance sheet date and the time of initial recognition of a foreign currency or the previous
balance sheet date is charged to the profit or loss of the current period except that the exchange
difference generated from foreign currency borrowings relating to assets of which the acquisition or
production satisfies the capitalization conditions is capitalized.
Non-monetary items measured at fair value that is reflected in foreign currency at the end of the period,
the Company shall firstly translate the foreign currency into the amount in functional currency at the
spot exchange rate on the date when the fair value is determined, and then compare it with the original
functional currency amount. Difference between the translated functional currency amount and the
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2023 Annual Report of Luzhou Laojiao Co., Ltd.
original functional currency amount is treated as profit or loss from changes in fair value (including
changes in exchange rate) and is recognized in current profit and loss. If there is a non-monetary item
of available-for-sale financial assets, the differences are recorded into other comprehensive income.
(2) Translation of foreign currency statements
Assets and liabilities in the balance sheets shall be translated at the spot exchange rates on balance
sheet date. Shareholders’ equity items, except for the item of "undistributed profits", are translated at
the spot exchange rates on the dates when the transactions occur. Revenue and expense items in the
income statement are translated at the spot exchange rates on the dates when the transactions occur
or at the exchange rate determined in a systematical and reasonable method and similar to the spot
exchange rate on the day when the transactions occur. Differences arising from the above translations
of foreign currency financial statements are separately listed under other comprehensive income in the
consolidated balance sheet. If the overseas business is partly disposed of, the foreign currency
financial statements exchange difference shall be calculated in proportion to the percentage of disposal
and transferred to gain or loss on disposal for the current period.
Foreign currency cash flow and cash flow of foreign subsidiaries shall be translated at approximate
exchange rate of spot rate on the date of cash flow.
5.11 Financial Instruments
A financial instrument is a contract that gives rise to a financial asset of one entity and a financial
liability or equity instrument of another entity. When the Company becomes a party to a financial
instrument contract, the related financial asset or financial liability should be recognized.
(1) Classification, recognition and measurement of financial assets
Based on the business model of financial asset management and the contract cash flow characteristics
of financial assets, the Company classifies financial assets into: financial assets measured at amortized
cost; financial assets measured at fair value with their changes included into other comprehensive
income; and financial assets measured at fair value with their changes included into current
profits/losses.
At the initial recognition, financial assets are measured at fair value. For financial assets measured at
fair value with their changes included into current profits/losses, the expenses involved in the
transaction are directly recorded into current profits/losses; for other financial liabilities, the expenses
involved in the transaction are recorded into the initially recognized amount.
1) Financial assets measured at amortized cost
The business model in which the Company manages financial assets measured at amortized cost aims
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2023 Annual Report of Luzhou Laojiao Co., Ltd.
to receive contract cash flow. Furthermore, the characteristics of the contract cash flow of such financial
assets are consistent with basic borrowing and lending arrangements, which means that cash flow
generated on a specific date serves only as payment for principal and interests based on the amount of
unpaid principal. The Company adopts the effective interest method for such financial interests,
performs subsequent measurement of them at amortized cost, and includes the gains or losses from
derecognition, changes or impairment of them into current profits/losses.
2) Financial assets measured at fair value with their changes included into other comprehensive income
The business model in which the Company manages such financial assets both aims to receive
contract cash flow and for the purpose of sale. Furthermore, the characteristics of the contract cash
flow of such financial assets are consistent with basic borrowing and lending arrangements. The
Company measure such financial assets at fair value and include their changes into other
comprehensive income, but record impairment losses or gains, exchange gains or losses and interest
income calculated in the effective interest method into current profits/losses.
At the initial recognition, the Company may specify non-trading equity instrument investment as a
financial asset measured at fair value with its changes included into other comprehensive income and
should recognize the dividend income according to regulations; the specification is irrevocable once
made. When the financial asset is derecognized, the cumulative gains or losses previously included into
other comprehensive income should be transferred into retained earnings.
3) Financial assets measured at fair value with their changes included into current profits/losses
For financial assets other than the above financial assets measured at amortized cost and financial
assets measured at fair value with their changes included into other comprehensive income, the
Company classifies them as financial assets measured at fair value with their changes included into
current profits/losses. In addition, at the initial recognition, the Company specifies partial financial
assets as financial assets measured at fair value with their changes included into current profits/losses,
in order to eliminate or substantially reduce accounting mismatch. For such financial assets, the
Company performs subsequent measurement using fair value and records changes in the fair value
into current profits/losses.
(2) Classification, recognition and measurement of financial liabilities
At their initial recognition, financial liabilities are divided into financial liabilities measured at fair value
with their changes included into current profits/losses and other financial liabilities. For financial
liabilities measured at fair value with their changes included into current profits/losses, the expenses
involved in the transaction are directly recorded into the current profits/losses. For other financial
liabilities, the expenses involved in the transaction are recorded into the initially recognized value.
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1) Financial liabilities measured at fair value with their changes included into current profits/losses
Financial liabilities measured at fair value with their changes included into current profits/losses include
trading financial liabilities (including derivatives classified as financial liabilities) and the financial
liabilities specified to be measured at fair value with their changes included into current profits/losses at
the initial recognition.
Trading financial liabilities (including derivatives classified as financial liabilities) are subsequently
measured at fair value, with changes in fair value recorded into current profits/losses, except for those
related to hedge accounting.
For those specified as financial liabilities measured at fair value with their changes included into current
profits/losses, changes in the fair value of such liabilities caused by changes in the Company’s own
credit risk should be included into other comprehensive income. In derecognition of such liabilities,
cumulative changes in their value caused by the Company’s own credit risk that have been recorded
into other comprehensive income should be transferred into retained earnings. Other changes in their
fair value should be recorded into current profits/losses. If treatment of the impact of the Company’s
own credit risk changes of such financial liabilities in the above manner causes or expands accounting
mismatch in profits/losses, the Company will include all gains or losses of such financial liabilities
(including the amount of the impact of the Company’s own credit risk changes) into current
profits/losses.
2) Other financial liabilities
Financial liabilities other than those formed from the transfer of financial assets not meeting
derecognition conditions or continuous involvement into transferred financial assets and those outside
financial guarantee contracts are classified as financial liabilities measured at amortized cost. Such
financial liabilities should be subsequently measured at amortized cost and the gains or losses from
derecognition or amortization should be included into current profits/losses.
(3) Recognition basis and measurement method of transfer of financial assets
If a financial asset meets any of the following conditions, it shall be derecognized: 1)The contractual
right for collecting the cash flow of the financial asset has been terminated; 2)The financial asset has
been transferred and almost all the risks and remunerations in respect of the ownership of the financial
asset has been transferred to the transferee; 3)The financial asset has been transferred, and although
the enterprise neither transfers nor retains almost all the risks and remunerations in respect of the
ownership of the financial asset, it has abandoned its control over the asset.
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If the enterprise neither transfers nor retains almost all the risks and remunerations in respect of the
ownership of the financial asset and does not abandon its control over the asset, the involved financial
asset shall be recognized according to the level of continuous involvement of the transferred financial
asset and the relevant liabilities shall be recognized accordingly. The level of continuous involvement of
the transferred financial asset refers to the level of risk faced by the enterprise due to changes in the
value of the financial asset.
If the overall transfer of the financial asset meets the recognition conditions, the difference between the
carrying value of the transferred financial asset as well as the consideration received from the transfer
and the cumulative amount of fair value changes originally-recorded into other comprehensive incomes
shall be recorded into the current profits/losses.
If partial transfer of the financial asset meets the recognition conditions, the carrying value of the
transferred financial asset shall be apportioned at the relative fair value between the derecognition and
underecognition part. The difference between the summation of the consideration received from the
transfer and the cumulative amount of fair value changes originally-recorded into other comprehensive
incomes that should be apportioned to the derecognition part and the apportioned aforementioned
carrying value shall be recorded into the current profits/losses.
For a financial asset sold with the right of recourse or with the transfer of the financial asset
endorsement, the Company shall decide whether almost all the risks and remunerations in respect of
the ownership of the financial asset should be transferred. If they are transferred, the financial asset
shall be derecognized; if they are retained, the financial asset shall not be derecognized; if they are
neither transferred nor retained, the Company will continue to decide whether the enterprise should
retain control over the asset and perform the accounting treatment according to the principles stated in
previous paragraphs.
(4) Derecognition of financial liabilities
When the current obligation of a financial liability (or a part of it) is relieved, the Company will
derecognize the financial liability (or the part of it). When the Company (borrower) signs an agreement
with a lender to replace an original financial liability in the form of bearing a new financial liability and
the contract terms for the new financial liability differ from those for the original in substance, the
original financial liability should be derecognized and the new one should be recognized. When the
Company makes substantial changes to the contract terms of an original financial liability (or a part of it),
the original financial liability should be derecognized and a new financial liability should be recognized
according to the amended contract terms.
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When a financial liability (or a part of it) is derecognized, the Company will include the difference
between its carrying value and the consideration paid (including non-cash assets or liabilities borne that
are transferred out) into current profits/losses.
(5) Offsetting of financial assets and financial liabilities
When the Company has the legal right to offset recognized financial assets and financial liabilities and
may execute the legal right currently and simultaneously, the Company plans to settle or
simultaneously encash the financial assets in net amounts and pay off the financial liabilities, the
financial assets and the financial liabilities which are presented in the net amount after the mutual offset
in the balance sheet. Other than that, they shall be presented separately in the balance sheet without
the mutual offset.
(6) Method of determining the fair value of financial assets and financial liabilities
Fair value refers to the price that a market participant can receive for selling an asset or transferring a
liability in an orderly transaction on the measurement date. For an existing financial instrument in an
active market, the Company adopts the quotations in the active market to determine its fair value.
Quotations in the active market refer to prices that can be easily obtained from exchanges, brokers,
industrial associations and pricing service institutions and represent the actual prices in the market
transactions happening in a fair trade. For a non-existing financial instrument in an active market, the
Company adopts the valuation technique to determine its fair value. The valuation technique includes
references to familiar situations and the prices used by the parties voluntarily participating in the recent
market transactions, as well as references to the present fair value of other financial instruments of the
same nature, discounted cash flow method and options pricing model. In the valuation, the Company
uses a valuation technique that is applicable in the current situation with sufficient data available and
other information support, chooses input values that are consistent with the asset or liability
characteristics considered by market players in related asset or liability transactions, and make
maximum effort to use related observable input values on a preferential basis. When it is unable or
unfeasible to obtain related observable input values, unobservable will be used.
(7) Equity instruments
Equity instruments refer to the contracts that can prove the Company’s residual equity of assets after
the deduction of all liabilities. The Company’s issuance (including refinancing), repurchase, sale or
cancellation of equity instruments serve as the change treatment of equity. Transaction expenses
related to the equity transactions are deducted from the equity. The Company does not recognize
changes in the fair value of equity instruments.
Dividends from the Company’s equity instruments distributed during the validity (including the “interests”
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from instruments classified as equity instruments) are treated as profit distribution.
(8) Impairment of financial instruments
Based on the expected credit loss, the Company treats financial assets measured at amortized cost
and debt instrument investment measured at fair value with its changes included into other
comprehensive income by impairment and recognizes the provision for loss.
Credit loss means the difference between all contract cash flow discounted at the original effective
interest rate to be received according to contracts and all contract cash flow expected to be received,
namely, the present value of all cash shortage. For a financial asset with credit impairment purchased
by or originated from the Company, it should be discounted by the effective interest rate after credit
adjustment to the financial asset.
For accounts receivable that do not contain significant financing components, the Company adopts
simplified measurement to measure loss provisions according to the amount equivalent to the expected
credit loss for the entire duration.
For a financial asset other than those using the above simplified measurement, the Company assesses
on each balance sheet date whether its credit risk has substantially increased since the initial
recognition. If it has not and is in the first stage, the Company will measure the loss provision at the
amount equivalent to the expected credit loss for the next 12 months and calculate the interest income
according to the book balance and the effective interest rate; if it has substantially increased since the
initial recognition without credit impairment and is in the second stage, the Company will measure the
loss provision at the amount equivalent to the expected credit loss for the entire duration and calculate
the interest income according to the book balance and the effective interest rate; if credit impairment
has occurred since the initial recognition and is in the third stage, the Company will measure the loss
provision by the amount equivalent to the expected credit loss for the entire duration and calculate the
interest income according to the amortization cost and the effective interest rate. For financial
instruments with low credit risks on balance sheet dates, the Company assumes that their credit risks
have not substantially increased since the initial recognition.
The Company assesses expected credit losses of financial instruments based on individual and group
assessment. The Company considers the credit risk characteristics of different customers and
assesses the expected credit losses of accounts receivable and other receivables based on account
age portfolio. When assessing expected credit losses, the Company considers reasonable and well-
founded information on past matters, present conditions and forecast of future economic conditions.
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When it no longer reasonably expects to recover all or part of the contract cash flow of financial assets,
the Company will directly write down the book balance of such financial assets.
5.12 Notes receivable
The types of portfolios for which bad debt provisions are made according to the portfolios of credit risk
characteristics and the basis for determining them:
Divide notes receivables into various portfolios according to common risk characteristics based on the
credit risk characteristics of acceptors and determine the accounting estimate policies of expected
credit loss：
Portfolio name Provision method
Bank acceptance bill The management evaluates that this type has low credit risk and its fixed bad
portfolio debt provision ratio is 0%.
Trade acceptance The provision for impairment is made according to the expected loss rate with
portfolio the same portfolio classification of accounts receivables
5.13 Accounts receivables
The types of portfolios for which bad debt provisions are made according to the portfolios of credit risk
characteristics and the basis for determining them:
As for accounts receivables, regardless of whether there is a significant financing component, the
Company always measures the provision for loss based on the amount equivalent to the expected
credit loss over the entire life, and the resulting increase or reversal of provision for loss shall be
included in the current profit or loss as gains or losses on impairment. The accrual method is as follows:
(1) When there is objective evidence showing that an account receivable has incurred credit impairment,
the Company shall make bad debt provision for the account receivable and recognize the expected
credit loss.
(2) When the information about the expected credit loss of a single financial asset cannot be evaluated
at a reasonable cost, the Company shall divide the accounts receivables portfolio according to credit
risk characteristics and measure the expected credit loss based on portfolios:
Portfolio name Provision method
Risk portfolio Expected credit loss
Other portfolio No bad debt provision
Other portfolio refers to the normal intercourse funds among the Company and businesses under the
same control, the recovery of which are controllable with no risks. Thus, no bad debt provision was
made.
The aging calculation method of credit risk characteristic portfolio based on aging:
The Company combines the accounts receivables classified as risk portfolio in accordance with similar
credit risk characteristics (aging), and calculates the expected credit loss through the exposure at
default and expected credit loss rate over the entire life based on the current situation and prediction of
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future economic situation consulting historical credit loss experience. The comparative table of the
credit loss rate is as follows:
Aging Expected loss provision rate %
Within 1 year 5
1-2 years 10
2-3 years 20
3-4 years 40
4-5 years 80
Over 5 years 100
The ageing of accounts receivable is calculated from the month in which the amounts are actually
incurred.
5.14 Accounts receivables financing
The accounts receivables financing of the Company refer to the notes receivables measured at fair
value through other comprehensive income on the balance sheet date. For more details, see Note 5.11
Financial instruments.
5.15 Other receivables
The types of portfolios for which bad debt provisions are made according to the portfolios of credit risk
characteristics and the basis for determining them:
As for other receivables, regardless of whether there is a significant financing component, the Company
always calculates the expected credit loss through the exposure at default and expected credit loss rate
in the next 12 months or over the entire life based on the current situation and prediction of future
economic situation consulting historical credit loss experience, and the resulting increase or reversal of
provision for loss shall be included in the current profit or loss as gains or losses on impairment. The
accrual method is as follows:
(1) When there is objective evidence showing that the other receivable has incurred credit impairment,
the Company shall make bad debt provision for the other receivable and recognize the expected credit
loss.
(2) When the information about the expected credit loss of a single financial asset cannot be evaluated
at a reasonable cost, the Company shall divide the other receivables portfolio according to credit risk
characteristics and measure the expected credit loss based on portfolios.
Portfolio name Provision method
Risk portfolio Expected credit loss
Other portfolio No bad debt provision
Other portfolio refers to the normal intercourse funds among the Company and businesses under the
same control, the recovery of which are controllable with no risks. Thus, no bad debt provision was
made.
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The aging calculation method of credit risk characteristic portfolio based on aging:
The Company combines the other receivables classified as risk portfolio in accordance with similar
credit risk characteristics (aging), and calculates the expected credit loss through the exposure at
default and expected credit loss rate in the next 12 months or over the entire life based on the current
situation and prediction of future economic situation consulting historical credit loss experience. The
comparative table of the credit loss rate is as follows:
Aging Expected loss provision rate %
Within 1 year 5
1-2 years 10
2-3 years 20
3-4 years 40
4-5 years 80
Over 5 years 100
The ageing of other receivables is calculated from the month in which the amounts are actually
incurred.
5.16 Contract assets
The Company presents contract assets or contract liabilities on the balance sheet according to the
relationship between the fulfillment of its contract performance obligations and its customers’ payment.
Considerations that the Company has the right to collect for commodities transferred or services
provided to customers (and such right depends on other factors than time lapses) are presented as
contract assets. The Company presents the right possessed to collect consideration from customers
unconditionally (only depending on the passing of time) as accounts receivable. Refer to “The method
of determining the expected credit loss of accounts receivables and accounting treatment method” for
the detail on the Company’s method of determining the expected credit loss of contract assets and
accounting treatment method.
5.17 Inventory
(1) Classification of inventory
Inventories are classified as: raw materials, goods in progress (including semi-finished goods), stock
commodities, and dispatched inventories.
(2) Measurement method of acquiring and dispatching inventories
The standard cost is used for daily accounting of raw materials, and the difference of material cost
should be carried forward on a monthly basis to adjust the standard cost into the actual cost; The goods
in progress (including semi-finished goods) shall be accounted according to the actual cost, and the
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weighted average method shall be used when they are received and delivered. The actual cost of the
inventory at the end of the month above shall be taken as the standard cost, and the delivery shall be
priced according to the standard cost. At the end of the month, the standard cost of the inventory at the
end of the month shall be adjusted into the actual cost through the cost-sharing difference.
(3) Determining criteria and method of provision for stock obsolescence
At the end of the period, inventory is measured according to the lower of cost and net realizable value.
The difference between inventory cost and net realizable value is higher than the provision for stock
obsolescence, which is recorded into current profit and loss. For inventories that are related to product
ranges produced and sold in the same district or used for the same or similar ultimate purpose and are
difficult to be measured separately from other inventories, the Company provides for stock
obsolescence as a whole. For inventories that have large quantities but low value, the Company
provides for stock obsolescence on a category basis.
The materials held for production shall be measured at cost if the net realizable value of the finished
products is higher than the cost. If a decline in the value of materials shows that the net realizable value
of the finished products is lower than the cost, the materials shall be measured at the net realizable
value.
(4) Inventory system
The Company adopts perpetual inventory system.
(5) Amortization method of packing materials and low-cost consumables
It is amortized in full at once.
5.18 Assets held for sale
(1) Determining criteria for non-current assets held for sale or disposal groups
The Company shall classify the non-current assets or disposal group meeting the following conditions
into the held-for-sale category: The assets (or disposal group) must be available for immediate sale in
its present condition subject only to terms that are usual and customary for sales of such assets (or
disposal groups); Its sale must be highly probable.; The Company has already made a decision to
dispose the component and has a commitment from the purchaser, the transfer will be completed within
one year.
The non-current assets or disposal group acquired by the Company for resale shall be divided into the
held-for-sale category on the acquisition date if it meets the condition that "the sale is expected to be
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completed within one year" and if it is likely to meet other conditions for the held-for-sale category within
a short period (usually three months).
Due to one of the following reasons that the Company is unable to control, leading to the transactions
uncompleted with non-related party within one year, and the Company still commits to sale non-current
assets or disposal groups, it can continue to account for non-current assets or disposal groups as held-
for-sale: the buyer or any other party accidentally set sale extension condition. The Company has to
take action in time according to these conditions and the extension problem is expected to be solved
within one year; In rare cases, the Company has taken the necessary steps and re-satisfy the hold for
sale category condition within the first year for the new circumstances which caused it unable to
complete the sale of the non-current assets or disposal group within one year.
(2) Accounting treatment of non-current assets or disposal groups held for sale
a. Initial measurement and subsequent measurement
When the Company measure a non-current asset or disposal group held for sale initially or re-measure
at balance sheet date subsequently, the impairment loss should be recognized if the book value is
higher than fair value less costs to sell at the amount of the difference of these two in profit and loss,
the provision for assets held for sale need to be recognized at the same time.
For the non-current assets or disposal groups divided into held-for-sale category on the acquisition date,
they shall be measured as the lower of the initial measurement amount and the net amount after
deducting the selling expenses from the fair value under the assumption that it is not divided into held-
for-sale categories at the initial measurement. Except for the non-current assets or the disposal groups
obtained in the enterprise merger, the difference caused by the non-current assets or the disposal
groups taking the net amount after the fair value minus the selling expenses as the initial measurement
amount shall be recorded into the current profit and loss.
For the impairment of disposal group, it should write off goodwill if existing, and then write down the
related assets proportionally.
Depreciation or amortization should cease for the non-current asset held for sale. Interest and other
charges on liabilities in the disposal groups held for sale continue to be recognized.
b. Accounting treatment of reversal of impairment loss
If the net amount of the non-current assets held for sale on the subsequent balance sheet date
increases after the fair value minus the selling expenses, the amount previously written down shall be
reversed, and the amount of the impairment loss recognized after being classified as the held-for-sale
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shall be reversed, and the reversed amount shall be included in the current profit and loss. The
impairment loss recognized before the classification of the held-for-sale shall not be reversed.
If the net amount of the disposal groups held for sale on the subsequent balance sheet date increases
after the fair value deducting the selling expenses, the amount previously written down shall be
reversed, and the amount of the impairment loss recognized as non-current assets after being
classified as the held-for-sale shall be reversed, and the reversed amount shall be included in the
current profit and loss. The book value of the goodwill that has been written down and the impairment
losses recognized before the classification of the held-for-sale shall not be reversed.
The subsequent reversed amount of the impairment loss recognized by the disposal groups held for
sale shall be increased in proportion to the book value of non-current assets except goodwill in the
disposal groups.
c. Recognition criteria and presentation of discontinued operations
Non-current assets or disposal groups that are no longer divided into held-for-sale category or non-
current assets are removed from disposal groups held for sale because of no longer meeting the
condition of classification of held-for-sale, they are measured at lower of the following two: book value
before being classified as the held-for-sale considering depreciation, amortization or impairment that
should have been recognized under the assumption that it is not divided into held-for-sale categories;
and recoverable amount.
When terminating the recognition of the non-current assets held for sale or the disposal groups, the
unrecognized gains or losses shall be recorded into the current profit and loss.
5.19. Investments in debt obligations
N/A
5.20 Investments in other debt obligations
N/A
5.21 Long-term receivables
For more details, see Note 5.11 Financial instruments.
5.22 Long-term equity investment
(1) Judgment criteria of common control and significant influence
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Common control on an agreement with other participants refers to the Company share control with
other participants on an arrangement according to relevant conventions, which exists only when
decisions about the relevant activities require the unanimous consent of the parties sharing control.
This arrangement belongs to joint venture. Where the joint venture arrangement is made by a separate
entity and the Company is judged to have rights to the net assets of such a separate entity according to
the relevant conventions. Such a separate entity shall be regarded as a joint venture and accounted by
the equity method. If the Company is judged to be not entitled to the net assets of the separate entity
according to relevant conventions, the separate entity shall be regarded as a joint venture and the
Company shall recognize the items related to the shares of the joint venture and perform accounting
treatment in accordance with relevant accounting standards.
The term ‘significant influence’ refers to the power to participate in decision-making on the financial and
operating policies of the investee, but with no control or joint control over the formulation of these
policies. The Company judges that it has a significant impact on the invested entity through one or more
of the following situations and taking all the facts and circumstances into consideration:
a. Dispatch representatives to the board of directors or similar authorities of the investee.
b. To participate in the financial and business policy making process of the investee.
c. Significant transactions with the investee.
d. Dispatch management personnel to the investee.
e. To provide key technical data to the investee.
(2) Determination of the initial investment cost
a. Long-term equity investment resulting from combination
Business combination under common control：
For the long-term equity investments obtained by cash paid, non-monetary assets paid or assumed
liabilities and the equity securities issued by the acquirer, on the merger date, the initial investment cost
of long-term equity investment shall be taken as the share of the owner's equity of the investee in the
book value of the final control party's consolidated financial statements. If the investee under business
combination under common control can be controlled due to additional investment or other reasons, the
initial investment cost of long-term equity investment shall be determined on the merger date according
to the share of the net assets of the investee in the book value of the final control party's consolidated
financial statements. The difference between the initial investment cost of the long-term equity
investment on the merger date and sum of the book value of the long-term equity investment before the
merger and the new consideration of acquiring shares on the merger date shall be recorded to adjust
the equity premium. If the equity premium is insufficient to be written down, the retained earnings shall
be written down.
Business combination not under common control：The Company takes the initial investment cost of
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long-term equity investment as the merger cost determined on the purchase date. If the investee can be
controlled under business combination not under common control due to additional investment or other
reasons, the previous book value of the equity investment held plus the sum of the newly added
investment cost shall be taken as the initial investment cost calculated according to the cost method.
b. Long-term equity investment obtained by other means
For the long-term equity investments obtained by cash paid, the Company recognizes their fair value as
the initial investment costs.
For the long-term equity investments acquired by the issue of equity securities, the initial investment
cost shall be the fair value of the equity securities issued.
For long-term equity investments obtained by non-monetary assets exchange, under the condition that
an exchange of non-monetary assets is of commerce nature and the fair value of assets exchanged
can be reliably measured, non-monetary assets traded in is initially stated at the fair value of the assets
traded out, unless there is conclusive evidence indicating that the fair value of the assets traded in is
more reliable; if the above conditions are not satisfied, initial investment costs of long-term equity
investments traded in shall be recognized at the book value of the assets traded out and the relevant
taxes and surcharges payable.
For long-term equity investments obtained by debt restructuring, the Company recognizes the fair value
of shares of debt-for-equity swap as the initial investment costs.
(3) Subsequent measurement and recognition of profit and loss
a. Long-term equity investments measured under the cost method
Long-term equity investments that can control the investee are measured under the cost method. For
long-term equity investments accounted at the cost method, except cash dividends or profits declared
but not yet distributed which are included in the actual payments or the consideration actually paid for
the investment, the cash dividends or profits declared by the investee shall be recognized as the
investment income irrespective of net profits realized by the investee before investment or after
investment.
b. Long-term equity investments measured under the equity method
For the long-term equity investment which has joint control or significant influence over the investee, the
equity method is adopted for accounting. For long-term equity investments measured at the equity
method, if the initial investment costs are higher than the investor’s attributable share of the fair value of
the investee’s identifiable net assets, no adjustment will be made to the initial costs of the long-term
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equity investments; if the initial investment costs are lower than the investor’s attributable share of the
fair value of the investee’s identifiable net assets, the difference shall be recognized in current profit and
loss.
The Company shall, according to the shares of net profits and other comprehensive income realized by
the investee that shall be enjoyed or borne by the Company, recognize the profit and loss on the
investments and adjust the book value of the long-term equity investments. When recognizing the net
profits and losses and other comprehensive income of the investee that the Company shall enjoy or
bear, the Company shall make a recognition and calculation based on the net book profits and losses of
the investee after appropriate adjustments. However, where the Company is unable to obtain the
relevant information due to failure to reasonably determine the fair value of the investee’s identifiable
assets, minor difference between the investee’s identifiable assets and the book value thereof or other
reasons, the profits or losses on the investments shall be directly calculated and recognized based on
the net book profits and losses of the investee. The Company shall calculate the part distributed from
cash dividends or profits declared by the investee and correspondingly reduce the book value of the
long-term equity investments. When recognizing the income from investments in associates and joint
ventures, the Company shall write off the part of incomes from internal unrealized transactions between
the Company and associates and joint ventures which are attributable to the Company and recognize
the profit and loss on investments on such basis. Where the losses on internal transactions between
the Company and the investee are impairment of related assets, full amounts of such losses shall be
recognized. Profit and loss from internal unrealized transactions between the Company’s subsidiaries
included into the combination scope and associates and joint ventures shall be written off according to
the above principles and the profit and loss on investments thereafter shall be recognized on such basis.
When the share of net loss of the investee attributable to the Company is recognized, it is treated in the
following sequence: Firstly, write off the book value of the long-term equity investments; where the book
value of the long-term equity investments is insufficient to cover the loss, investment losses are
recognized to the extent that book value of long-term equity which form net investment in the investee
in other substances and the book value of long-term receivables shall be written off; after all the above
treatments, if the Company still assumes additional obligation according to investment contracts or
agreements, the obligation expected to be assumed should be recognized as provision and included
into the investment loss in the current period. If the investee is profitable in subsequent accounting
periods, the Company shall treat the loss in reverse order against that described above after deducting
unrecognized share of loss: i.e. write down the book value of the recognized provision, then restore the
book value of long-term interests which substantially form net investments in the investee, then restore
the book value of long-term investments, and recognize investment income at the same time.
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5.23 Investment property
Measurement model of investment property
Cost model
Method of depreciation or amortization
Investment property is the property that is held to earn rent or capital appreciation or both and can be
measured and sold separately. The Company’s investment property includes land use right already rent,
land use right held for appreciation and then sold, and buildings already rent.
(1) Initial Recognition
When the Company can obtain the rental income or value-added income related to the investment
property and the cost of the investment property that can be measured reliably, the Company will
initially measure it according to the actual expenditure of purchase or construction:
The cost of the purchased investment property includes the purchase price and related taxes directly
attributable to the asset;
The cost of self-built investment property consists of the necessary expenses incurred before the asset
reaches the intended use condition;
The cost of the investment property obtained by other means shall be recognized in accordance with
relevant accounting standards.
(2) Subsequent measurement
In general, the Company adopts the cost model to measure the follow-up expenditure of investment
property. The depreciation or amortization of investment property shall be carried out in accordance
with the accounting policies for the Company's fixed assets or intangible assets.
If there is solid evidence suggests that the investment property acquired can be measured at fair value
continuously and reliably, the Company can use fair value model for subsequent measurement. For the
investment property measured at fair value model, the Company does not provide depreciation or
amortization and adjusts its book value based on the fair value of investment property at the balance
sheet date. The difference between the fair value and book value is recorded into current profit or loss.
(3) When the Company changes the use of investment property, the relevant investment property will
be transferred to other assets.
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5.24. Fixed assets
(1) Recognition of fixed assets
Fixed assets refer to tangible assets held for the purpose of producing commodities, providing
services, renting or business management with useful life exceeding one accounting year. Fixed
assets are recognized when the following criteria are satisfied simultaneously: It is probable that the
economic benefits relating to the fixed assets will flow into the Company; the cost of the fixed assets
can be measured reliably.
(2) Depreciation of fixed assets
Estimated Annual
Depreciation Estimated useful
Category residual value depreciation rate
method life (Year)
rate (%) (%)
Buildings and Straight-line
10－45 5% 9.50－2.11
Constructions
method
Special Straight-line
5－35 5% 19.00－2.71
equipment
method
Universal Straight-line
equipment 4－25 5% 23.75－3.80
method
Transportation Straight-line
6 5% 15.83
equipment
method
Straight-line
Other equipment method 4－16 5% 23.75－5.94
Except for fixed assets still in use after full depreciation, the Company depreciates all fixed assets and
calculates the depreciation in the straight-line depreciation method.
Based on the nature and use of fixed assets, the Company determines their service life and
estimated net salvage value and reviews their service life, estimated net salvage value and
depreciation method at the end of the year. Changes in the service life, estimated net salvage value
and depreciation method of the same type of assets are treated as changes in accounting estimation.
(3) Impairment test method and impairment provision accrued method of fixed assets
At the end of the period, the fixed assets shall be measured at the lower of the book value and the
recoverable amount. If the recoverable amount of fixed assets is lower than the book value due to a
continuous decline in the market value, or technological obsolescence, damage, or long-term idleness,
a provision for impairment of the fixed assets shall be made for the difference between the recoverable
amount and the book value of individual fixed assets. If the recoverable amount of the individual asset
is difficult to estimate, the Company will determine the recoverable amount of the asset group based on
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the asset group to which the asset belongs. The impairment losses on fixed assets must not be
reversed in subsequent accounting periods once recognized.
For fixed assets for which depreciation provision has been made, the depreciation rate and depreciation
amount shall be remeasured according to the book value of the fixed assets (the original price of fixed
assets minus accumulated depreciation and provision for impairment), and the remaining service life.
On the balance sheet date, the fixed assets shall be measured at the lower of the book value and the
recoverable amount.
5. 25. Construction in progress
(1) Construction in progress refers to various construction and installation works carried out for the
construction or repair of fixed assets, including the actual expenditure incurred in new construction,
reconstruction and expansion, and the net value of fixed assets transferred from the reconstruction and
expansion projects.
(2) Construction in progress is accounted on an individual project basis with actual cost valuation
method. The borrowing costs incurred before the projects reach the intended use condition shall be
included in the project cost. The fixed assets shall be carried forward in the month when the project is
qualified for acceptance and delivery for use. For those that have reached the intended use condition
but have not yet completed the final account, from the date of reaching the intended use condition,
according to the project budget, construction cost or the actual cost of the project, the cost transferred
to the fixed assets shall be determined according to the estimated value, and the depreciation shall be
recognized; After the completion of the final account, the original provisional value shall be adjusted
according to the actual cost, but the amount of depreciation accrued shall not be adjusted.
(3) The loan interest and related expenses incurred during the construction period shall be capitalized
into the cost of the construction in Progress.
(4) On the balance sheet date, the construction in progress is recognized at the lower of book value and
recoverable amount.
5. 26. Borrowing costs
(1) Scope of borrowing costs and its capitalization conditions
The Company’s borrowing costs capitalized during period of capitalization are relevant loan expenses
directly attributable to the assets eligible for capitalization, including interest thereon, amortization of
discounts or premiums, ancillary expenses and exchange differences incurred from foreign currency
loan, etc.
Borrowing costs are capitalized when the following three conditions are met simultaneously: ① the
asset expenditure has occurred, ② the borrowing costs have occurred, ③ the purchase and
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construction activities necessary to make the assets reach the intended use condition have started.
(2) Recognition of capitalized amounts
The capitalized amount of borrowing expenses is calculated as follows: As for special loan borrowed for
acquiring and constructing or producing assets eligible for capitalization, borrowing costs of special loan
actually incurred in the current period less the interest income of the loans unused and deposited in
bank or return on temporary investment should be recognized as the capitalization amount of borrowing
costs. As for general loans used for acquiring and constructing or producing assets eligible for
capitalization, the interest of general loans to be capitalized should be calculated by multiplying the
weighted average of asset disbursements of the part of accumulated asset disbursements in excess of
special loans by the capitalization rate of used general loans. During the period of capitalization, the
capitalized amount of interest of each accounting period shall not exceed the current actual interest of
the relevant loans. Where there are discounts or premiums on loans, the amounts of interest for each
accounting period should be adjusted taking account of amortizable discount or premium amounts for
the period by effective interest method. Auxiliary expenses incurred from special loans before the
acquired or constructed assets eligible for capitalization reach the working condition for their intended
use or sale should be capitalized when they incur and charged to the costs of assets eligible for
capitalization; those incurred after the acquired or constructed assets eligible for capitalization reach the
working condition for their intended use or sale should be recognized as costs according to the
amounts incurred when they incur and charged to the current profit or loss.
(3) Recognition of capitalization rate
For a special loan for the purchase and construction of fixed assets, the capitalization rate is the
interest rate of the loan;
For more than one special loan for the acquisition and construction of fixed assets, the capitalization
rate is a weighted average interest rate of these loans.
(4) Capitalization suspension of borrowing costs
If the acquisition and construction or production activities of assets eligible for capitalization are
interrupted abnormally and this condition lasts for more than three months, the capitalization of
borrowing costs should be suspended. The borrowing costs incurred during interruption are charged to
profit or loss for the current period, and the capitalization of borrowing costs continues when the
acquisition and construction or production activities of the asset resume.
(5) Capitalization cessation of borrowing costs
Capitalization of borrowing costs should cease when the acquired and constructed or produced assets
eligible for capitalization have reached the working condition for their intended use or sale. Borrowing
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costs incurred after the assets eligible for capitalization have reached the working condition for their
intended use or sale should be recognized as the current profit and loss when they incur. If parts of the
acquired and constructed or produced assets are completed separately but the assets cannot be used
or sold externally until overall completion, the capitalization of borrowing costs should cease at the time
of overall completion of the said assets.
5.27. Biological assets
N/A
5.28. Oil and gas assets
N/A
5. 29. Intangible assets
(1) Useful life and the basis for its determination, estimation, amortization methodology or
review procedures
Intangible assets refer to identifiable non-monetary assets that are owned or controlled by the Company
without a physical form.
Measurement method
a. Costs of intangible assets purchased include purchase price, related tax and expenses and other
expenditure that can be distributed to the asset directly to reach its expected use.
b. Intangible assets invested by investors shall be valued at the value agreed upon in the investment
contract or agreement;
c. Expenses on the research phase of internally researched and developed intangible assets shall be
included in the current profit and loss when they incur; The expenditures incurred in the development
stage of the internal research and development projects shall be recognized as intangible assets when
the following conditions are met; otherwise, they shall be recorded into the current profit and loss when
they incur.
i. It is technically feasible to finish intangible assets for use or sale;
ii. It is intended to finish and use or sell the intangible assets;
iii. The usefulness of methods for intangible assets to generate economic benefits shall be proved,
including being able to prove that there is a potential market for the products manufactured by
applying the intangible assets or there is a potential market for the intangible assets themselves or
the intangible assets will be used internally;
iv. It is able to finish the development of the intangible assets, and able to use or sell the intangible
assets, with the support of sufficient technologies, financial resources and other resources.
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v. The expenditure attributable to the intangible asset during its development phase can be
measured reliably.
d. If payment of the purchase price of intangible assets can be deferred and exceeds normal credit
conditions, the purchase has the nature of finance in fact and cost of the intangible asset shall be
determined on the basis of present value of the purchase price. The difference between the amount
actually paid and the present value of the purchase price should be recorded into current profit or loss
other than those should be capitalized during the credit period.
Useful life and the basis for its determination, estimation, amortization methodology or review
procedures
For intangible assets with limited useful life, amortization shall be carried out according to the straight-
line method within the period that brings economic benefits to the enterprise. At the end of each period,
the useful life and amortization method of intangible assets with limited service life shall be reviewed. If
there are differences with the original estimates, corresponding adjustments shall be made.
Intangible assets whose useful life is uncertain shall be regarded as intangible assets if it is impossible
to foresee the term in which intangible assets bring economic benefits to the enterprise. Intangible
assets with uncertain useful life shall not be amortized during the holding period, and the life of
intangible assets shall be reviewed at the end of each period. If it is still uncertain after the review at the
end of the period, the impairment test shall continue during each accounting period. At the end of each
period, the useful life of intangible assets with uncertain service life shall be reviewed.
Impairment test
On the balance sheet date, intangible assets are valued at the lower of book value and recoverable
amount.
(2) The scope of research and development expenditure collection and the related accounting
treatment
The R&D expenditure of the Company mainly include the materials consumed in the implementation of
R&D activities, salaries of R&D department employees, depreciation and amortisation of assets such as
equipment and software used in research and development, R&D testing, R&D technical service fees,
and licensing fees.
The expenditures incurred in the development stage of the research and development projects shall be
recognized as intangible assets when the following conditions are met; otherwise, they shall be
recorded into the current profit and loss when they occur.
a. It is technically feasible to finish intangible assets for use or sale;
b. It is intended to finish and use or sell the intangible assets;
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c. The usefulness of methods for intangible assets to generate economic benefits shall be proved,
including being able to prove that there is a potential market for the products manufactured by applying
the intangible assets or there is a potential market for the intangible assets themselves or the intangible
assets will be used internally;
d. It is able to finish the development of the intangible assets, and able to use or sell the intangible
assets, with the support of sufficient technologies, financial resources and other resources.
e. The expenditure attributable to the intangible asset during its development phase can be measured
reliably.
Development expenditures that have been recorded into profit and loss in previous periods are not
recognized as assets in subsequent periods. The capitalized expenditure in the development stage is
listed as development expenditure in the balance sheet, and it will be recorded into intangible assets
from the date when the project reaches its intended purpose.
5. 30. Long-term assets impairment
On the balance sheet date, the Company makes a judgment on whether there are signs of possible
impairment of long-term assets. If there are impairment indicators of non-current assets, the Company
estimates the recoverable amount based on individual asset. If recoverable amount of individual asset
is difficult to be estimated, the Company should recognize the recoverable amount of the asset group
which the individual asset belongs to.
The recoverable amount is the higher of fair values less costs of disposal and the present values of the
future cash flows expected to be derived from the asset.
If the measurement result of recoverable amount shows that recoverable amount of the non-current
assets is less than its book value, the book value shall be written down to the recoverable amount, and
the amount written down shall be recognized as the impairment loss of assets, recorded into the current
profit and loss, and the corresponding impairment provision of assets shall be made at the same time.
Once impairment loss stated above is recognized, reversal is not allowed in the subsequent accounting
periods.
After the recognition of the impairment loss, the depreciation or amortization expense of the impairment
asset shall be adjusted accordingly in the future period so as to systematically apportion the adjusted
book value of the asset (deducting the expected net salvage value) within the remaining service life of
the asset.
The Company should perform impairment test for goodwill and intangible assets with indefinite life at
least at each year end, no matter whether there is impairment indicator.
Goodwill shall be combined with its related asset group or asset group portfolio so as to perform an
impairment test. When the Company performs an impairment test on relevant asset group or asset
group portfolio including goodwill, if there are signs of impairment, the Company shall firstly perform an
impairment test on asset group or asset group portfolio excluding goodwill and calculate the
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recoverable amount, and compare with the related book value, recognize the corresponding impairment
loss. Then, the Company performs an impairment test on relevant asset group or asset group portfolio
including goodwill, and compares the book value of the relevant asset groups or asset group portfolio
(including proportional book value of goodwill) with its recoverable amount. If the recoverable amount of
relevant asset group or asset group portfolio is less than its book value, the Company shall recognize
impairment loss of goodwill.
5. 31. Long-term deferred expenses
Long-term deferred expenses shall be initially measured according to the actual costs incurred. It is
amortized using the straight-line method over the beneficial period. If it cannot benefit the following
accounting period, the amortized value of the item that has not been amortized will be transferred to the
current profit and loss.
5. 32. Contract liabilities
The recognition method of contract liabilities: The Company presents contract assets or contract
liabilities on the balance sheet according to the relationship between the fulfillment of its contract
performance obligations and its customers’ payment. Obligations to be fulfilled by the Company of
transferring commodities or providing services to customers, as the Company has received or should
receive customers’ considerations, are presented as contract liabilities.
5. 33. Employee benefits
(1) Accounting treatment method of short-term benefits
Short-term benefits are the benefits that the Company expects to pay in full within 12 months after the
reporting period in which the employee provided relevant services, excluding the compensation for
employment termination. Accrued short term benefits will be recognized as liability during the
accounting period in which the employee is providing the relevant service to the Company. The liability
will be included in the current profit and loss or the relevant assets cost.
(2) Accounting treatment method of post-employment benefits
a. Defined contribution plan
The defined contribution plan of the Company includes payments of basic pension and unemployment
insurance calculated according to the local payment base and proportion. The amount shall be included
into the profit and loss or the relevant assets cost for the accounting period in which the employee
provides the service to the Company.
b. Defined benefit plan
According to the formula determined by the expected accumulative projected unit credit method, the
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Company will record the benefit obligation generated by the defined benefit plan belonging to the period
during in which the employee provides the service into the current profit and loss or the relevant assets
cost.
The deficit or surplus resulting from the present value minus the fair value of the assets of a defined
benefit plan is recognized as a net liability or net asset of a defined benefit plan. If there is surplus in the
defined benefit plan, the net assets of the defined benefit plan shall be measured at the lower of the
surplus and the upper limit of assets of the defined benefit plan.
All defined benefit plan obligations, including those expected to be paid within the twelve months
following the end of the annual reporting period in which the employee provides the service, are
discounted based on the market yield and high quality corporate bonds in an active market that match
the duration and currency of defined benefit plan obligations on the balance sheet date.
The service costs generated by the defined benefit plan and the net interest on net liabilities or net
assets of the defined benefit plan are included in the current profit and loss or relevant assets cost;
Changes in net liabilities or net assets generated by the re-measurement of the defined benefit plan are
included in other comprehensive income and are not reversed to profit and loss in subsequent
accounting periods.
At the time of settlement of the defined benefit plan, the settlement gains or losses shall be recognized
according to the difference between the present value of the obligations of the defined benefit plan and
the settlement price determined on the settlement date.
(3) Accounting treatment method of termination benefits
Employee benefits liabilities shall be recognized and included into profit or loss for the current period on
the earlier date of the two following circumstances:
a. When the Company is not able to withdraw the benefits from termination of employment or
resignation persuasion unilaterally;
b. When the Company recognizes costs and fees relevant to reforming the termination benefits
payment.
As for the termination benefits that cannot be fully paid within 12 months after the end of the annual
report period, the Company shall choose an appropriate discount rate and record it into current profit
and loss based on it.
(4) Accounting treatment method of other long-term employee benefits
Other long-term employee benefits are all employee benefits other than short-term benefits, post-
employment benefits and termination benefits.
Other long-term employee benefits provided by the Company to the employee that meet the conditions
of the defined contribution plan shall be treated in accordance with the same principles of the defined
contribution plan; If the conditions for defined benefits are met, net liabilities or net assets of other long-
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term employee benefits shall be recognized and measured in accordance with the relevant principles of
the defined benefits plan.
5. 34. Estimated liabilities
(1) Recognition criteria of estimated liabilities
If the contingent obligations meet the following conditions simultaneously, the Company shall recognize
it as an estimated liability:
This obligation is the Company's current obligation; the performance of this obligation is highly likely to
result in an outflow of economic benefits from the Company; The amount of the obligation can be
measured reliably.
(2) Measurement method of estimated liabilities
The Company's estimated liabilities are initially measured in terms of the best estimate of the
expenditure of fulfilling the relevant current obligations.
For determining the best estimate, the Company takes various factors into account such as the risk,
uncertainty and time value of money related to contingencies. If the time value of money has a
significant impact, the best estimate is determined by discounting the relevant future cash outflows.
The best estimate is processed as follows:
Where there is a continuous range (or range) of required expenditures and the probability of the
occurrence of various results within the range is same, the best estimate is determined according to the
mean of the middle value of the range, namely the mean value of the upper and lower limits.
Where there is no continuous range (or range) of required expenditures, or where there is a continuous
range but the possibility of various outcomes within the range is different, if the contingencies involve a
single item, the best estimate is determined according to the most likely amount; If the contingencies
involve more than one item, the best estimate is calculated and determined according to various
possible results and relevant probabilities.
Where all or part of the expenses required for the liquidation of the estimated liabilities of the Company
are expected to be compensated by a third party, the amount of compensation shall be recognized as
an asset when it is basically confirmed that it can be received, and the confirmed amount of
compensation shall not exceed the book value of the estimated liabilities.
5. 35. Share-based payment
(1) The type of share-based payment
Share-based payment is classified as equity-settled share-based payment and cash-settled share-
based payment.
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(2) The method of determining the fair value of equity instruments
For equity-settled share-based payment related with employees, the equity instrument is measured at
fair value. The cash-settled share-based payment shall be measured according to the fair value of the
liabilities calculated and determined on the basis of shares or other equity instruments undertaken by
the Company.
For the fair value of the stock option granted, the fair value is determined by using the stock option
pricing model, and the following factors are taken into account: the current price of the underlying
shares, the exercise price of the option, the risk-free interest rate within the period of the option, the
option life, and the expected volatility of the stock price.
(3) Recognition of the best estimate basis of instrument that can be exercised
For the equity-settled share-based payment settled immediately after the grant, the fair value of the
equity instrument shall be included in the relevant costs or expenses on the grant date, and the capital
reserve shall be increased accordingly. Grant date means the date on which the share-payment
agreement is approved.
For the equity-settled share-based payment, in which the services during waiting period are completed
and the performance conditions are met, in return for services of employees, on each balance sheet
date during waiting period, the current obtained service shall be included in the relevant costs or
expenses and the capital reserves in accordance with the fair value of the equity instruments on the
grant date, based on best estimate of the number of vested equity instruments, and the subsequent
changes in fair value shall not be recognized. On each balance sheet date during waiting period, the
Company makes the best estimate based on the latest available employee number change and other
subsequent information, and modifies the number of equity instruments for the estimated vesting. On
the vesting date, the final expected number of vesting instruments is the same as the actual number of
vesting instruments.
(4) Relevant accounting treatment of implement, modification and termination of share-based payment
plan
For equity-settled share-based payment, no adjustments will be made to the recognized costs and total
owners' equity after the vesting date. On the vesting date, the Company shall recognize the share
capital and the equity premium according to the exercise situation, and carry forward the capital reserve
recognized in the waiting period.
No matter how it modifies the terms and conditions of the granted equity instruments or it cancels the
granted equity instruments or its settlement, the equity instruments granted by the Company shall be
recognized at fair value on the grant date and it measures obtained the corresponding services, unless
it cannot be vested because it cannot meet the vesting conditions of equity instruments (except market
conditions).
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5.36. Other financial instruments such as preferred shares and perpetual bonds
N/A
5. 37. Revenue
Accounting policies for recognition and measurement of revenue disclosed by type of
business
(1) Basic principles of revenue identification
The Company recognizes revenue when it has fulfilled the performance obligations under the contract,
that is, when the customers obtain the control of relevant goods or services, at the transaction price
allocated to the performance obligations.
Performance obligations refer to the Company's promise that it will transfer clearly distinguishable
goods or services to customers under the contract.
Obtaining control of related goods refers to that customers can control the use of the goods and obtain
almost all the economic benefits from the goods.
The Company will evaluate the contract on the contract start date, identify each individual performance
obligation contained in the contract, and judge whether each individual performance obligation will be
performed within a certain period of time or at a certain point in time. If one of the following conditions is
met, and the performance obligation is performed within a certain period of time, the Company will
identify revenue within a period of time according to the performance progress: a. The customers obtain
and consume the economic profits while the Company performs the contract. b. The customers can
control the products under construction during the performance of the Company; c. The products
produced during the performance of the Company cannot be replaced, and the Company has the right
to collect payment for the completed performance accumulated during the entire contract period.
Otherwise, the Company will identify revenue when the customers obtain control rights of the relevant
goods or services.
For the performance obligations performed within a certain period of time, the Company will apply the
input-output method to identify the appropriate performance progress based on the nature of the goods
and services. The input-output method is to identify the performance progress based on the value of the
goods that have been transferred to the customers to the customers. When the performance progress
cannot be reasonably identified and the Company's incurred costs are expected to be compensated,
the Company will identify the revenue according to the amount of the incurred costs until the
performance progress can be reasonably identified.
(2) The methods of revenue identification
The Company primarily sells baijiu, which involve performance obligations fulfilled at a certain point in
time. For the recognition of the revenue of domestic products, the following conditions must be met:
The Company has delivered the products to the customer as per the contract, and the customer has
accepted the goods; payment has been received or a receipt voucher has been obtained, and the
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relevant economic benefits are likely to flow in; and control of the goods has transferred to the customer.
The following requirements must be met to recognise the revenue of export products: The Company
has declared the products according to the contract, obtained the bill of lading, received the payment or
obtained the receipt voucher, and relevant economic benefits are likely to flow in, and control of the
goods has transferred to the customer. The following requirements must be met to recognise the
revenue of sales through third-party platforms or company-owned websites: The sales platform is
responsible for delivering the goods to the customer, or the Company entrusts a logistics company to
deliver the goods to the customer, and revenue is recognised upon receipt of the platform settlement
statement or upon delivery of the goods.
Different business models for the same type of business involve different revenue recognition and
measurement methods
N/A
5.38 Contract costs
Contract costs comprise incremental costs incurred as the Company obtains a contract, and costs for
contract performance. Incremental costs incurred as the Company obtains a contract refer to those
costs which will not incur without entering into a contract (such as sales commission). If it is expected
that the costs are recoverable, the Company will recognize the costs incurred to obtain a contract as
one form of assets. In case that the term of asset amortization is shorter than one year or one normal
operating cycle, the costs will be recognized as profit and loss of the current period after occurrence.
If the costs incurred from contract performance fall outside the inventory or the scope of other
enterprise accounting standards and satisfy all of the following conditions, the Company will recognize
the costs for contract performance as assets: a) The costs are directly related to one existing contract
or contract that is expected to be obtained; b) The costs enrich the Company's resources for future
contract performance (including continual fulfillment); c) The costs are estimated to be recovered.
Assets recognized from costs incurred to obtain a contract and costs for contract performance
(hereinafter referred to as "assets related to contract costs") will be amortized based on the basis the
same with the income from commodities or services related to the assets, and will be recognized as
profit and loss of the current period. In case that the book value of assets related to contract costs is
higher than the difference of the two items below, the Company will set aside provisions for assets
impairment to deal with the extra part, and recognize that part as impairment losses: a) Estimated
residual consideration to be obtained from transfer of commodities or services related to the assets; b)
Estimated costs incurred from transfer of the relevant commodities or services.
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5. 39. Government grants
Government grants are monetary assets and non-monetary assets acquired free of charge by the
Company from the government like fiscal subsidies.
(1) Judgment basis and accounting treatment method of government grants related to assets
Government grants related to assets are government grants that are acquired by the Company and
used for forming long-term assets through purchasing and constructing or other ways. If the
government documents do not clearly specify the target of the subsidy, the Company shall separately
explain judgment basis of classifying the government grants into the government grants related to
assets or income.
Accounting method: it shall be recognized as deferred income allocated evenly over the useful lives
(the period of depreciation and amortization) of the relevant assets from the month of commence of
depreciation or amortization when the relevant assets reaching the intended use condition, and
included in the current profit or loss. However, government grants measured at the nominal amount
shall be directly included in current profit and loss.
(2) Judgment basis and accounting treatment method of government grants related to income
Government grants related to income are government grants other than government grants related to
assets;
Accounting method:
a. If it is used to compensate the Company’s relevant expenses or losses in future periods, it should be
recognized as deferred income and included into the current profit and loss or written off of the related
costs when the relevant expenses, losses are recognized.
b. If it is used to compensate the Company’s relevant expenses or losses incurred, it is directly included
into the current profit and loss on acquisition or written off of the related costs.
c. Recognition time-point of government grants
Government grants are recognized when the Company can meet the attached conditions for the
government grants and the Company can receive the grants.
d. Measurement of government grants
If a government grant is a monetary asset, it shall be measured in the light of the received or receivable
amount. If a government grant is a non-monetary asset, it shall be measured at its fair value; and if its
fair value cannot be obtained in a reliable way, it shall be measured at a nominal amount.
5. 40. Deferred tax assets or deferred tax liabilities
The Company adopts the balance sheet liability method to account for income tax.
The Company recognizes deferred tax assets when the following conditions are met simultaneously:
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i. Temporary differences are highly likely to be reversed in the foreseeable future;
ii. Taxable income that may be used to offset the deductible temporary difference is likely to be
obtained in the future and is limited to the amount of taxable income that is likely to be obtained.
On each balance sheet date, the current income tax liabilities (or assets) incurred in the current period
or prior periods shall be measured by the Company in light of the expected payable (refundable)
amount of income taxes according to the tax law; The deferred income tax assets and deferred income
tax liabilities shall be measured at the tax rate applicable to the period during which the assets are
expected to be recovered or the liabilities are expected to be settled.
The Company shall review the carrying amount of deferred income tax assets on each balance sheet
date. The current income tax and deferred income tax shall be recorded into the current profit and loss
as income tax expense or income, except for the income tax generated from the enterprise merger,
transactions or events directly recognized in the owner's equity.
Basis for deferred income tax assets and deferred income tax liabilities presented as a net amount after
offset:
When the following conditions are simultaneously met, deferred income tax assets and deferred income
tax liabilities are presented as a net amount after offset:
i. The enterprise has the legal right to settle the current income tax assets and current income tax
liabilities on a net basis;
ii. Deferred income tax assets and deferred income tax liabilities were related to the income tax
levied by the same tax administration department on the same taxpayer or different taxpayers, but
during the period when each significant deferred income tax assets and liabilities would be
reversed in the future, the involved taxpayer intended to settle the current income tax assets and
liabilities on a net basis or to acquire assets and settle liabilities at the same time.
5. 41. Lease
(1) Accounting treatment with the Company as lessee
①Judgment criteria and accounting treatment for short-term leases and leases of low-value assets as a
lessee for simplified treatment
On the beginning date of the lease term, the Company will recognise the lease with a lease term not
exceeding 12 months and exclude the purchase option as a short-term lease. Leases with a value
below CNY 40,000 when a single leased asset is a brand-new asset are identified as low-value asset
leases. If the Company sublets or expects to sublet the leased assets, the original lease shall not be
deemed as a low-value asset lease.
The Company records the payments of short-term and low-value asset leases incurred during each
period of the lease term in the relevant asset costs or the profit or loss for the current period by the
straight-line method.
186
2023 Annual Report of Luzhou Laojiao Co., Ltd.
The Company will recognise right-of-use assets and lease liabilities on the inception date of the lease
term, excluding the above short-term and low-value asset leases.
②Right-of-use assets
Right-of-use assets are initially measured at costs, including: A. The initial measurement amount of
lease liabilities; B. If there is a lease incentive for the lease payment paid on or before the start date of
the lease term, the relevant amount of the lease incentive already enjoyed shall be deducted; C. Initial
direct expenses incurred by the Company; D. The expected cost to be borne by the Company in order
to dismantle and remove the assets leased, restore original state of the place where the assets leased
are in, or restore the assets leased to the state stipulated in the lease terms.
③Lease liabilities
The Company initially measures the lease obligation at the present value of the lease payments
outstanding at the commencement date of the lease term. When calculating the present value of lease
payments, the Company uses the interest rate implicit in lease as the rate of discount. If the interest
rate implicit in lease cannot be determined, the Company’s incremental lending rate is used as the rate
of discount.
After the commencement of the lease term, the Company uses the cost model for subsequent
measurement of right-of-use assets, depreciates right-of-use assets on a straight-line basis, calculates
the interest expense on the lease liability within the lease term and includes it in the current profit or
loss, unless such interest charge is stipulated to be included in the underlying asset cost. Variable lease
payments that are not included in the measurement of the lease obligation should be included in the
current profit or loss when they are actually incurred, unless such payments are stipulated to be
included in the underlying asset cost.
After the commencement of the lease term, the Company remeasures the lease liability and adjusts the
corresponding right-of-use asset, and if the carrying value of the right-of-use asset has been reduced to
zero but the lease liability is subject to further reduction, the difference is recorded in current profit or
loss: (1) When there is a change in the valuation of the purchase option, renewal option or termination
option, or actual exercise, the Company remeasures the lease liabilities at the present value of the
lease payments after the change and the revised discount rate; (2) When there is a change in the
actual fixed payment, the estimated payable of the residual value of the guarantee, the index or rate
used to confirm the lease payment, the Company calculated the present value based on the changed
lease payment amount and the original discount rate to remeasure the lease liabilities. However, where
changes in lease payments arise from changes in floating interest rates, a revised discount rate was
used to calculate the present value.
(2) Accounting treatment with the Company as lessor
① Lease classification
187
2023 Annual Report of Luzhou Laojiao Co., Ltd.
The Company classifies leases into finance leases and operating leases at the inception of leases. A
finance lease refers to a lease where almost all the risks and rewards, related to the ownership of the
leased asset, are substantially transferred, regardless of whether the ownership is eventually
transferred or not. All leases other than finance leases are classified as operating leases.
② Operating leases
The Company recognizes the lease payments receivable of the operating lease as rental earnings in
each period within the lease term on a straight-line basis or according to other systematic and
reasonable methods. The initial direct costs related to the operating lease are capitalized, amortized
within the lease term on the same basis as the recognition of rental earnings, and included in profit or
loss for the current period. The received variable lease payments related to the operating lease that are
not included in the lease payments receivable are included in profit or loss for the current period when
they are actually incurred.
③ Finance leases
On the commencement date of the lease term, the Company recognizes the finance lease receivables
for the finance lease and derecognizes the leased asset of the finance lease. In the initial measurement
of finance lease receivables, the sum of the unsecured residual value and the present value of the
lease payments receivable not yet received on the commencement date of the lease term discounted at
the interest rate implicit in lease is the entry value of the finance lease receivables. The Company
calculates and recognizes the interest income in each period within the lease term at a fixed interest
rate implicit in the lease. The received variable lease payments that are not included in the
measurement of the net investment in the lease are included in profit or loss for the current period when
they are actually incurred.
5.42. Income tax expenses
The Company adopts the balance sheet liability method to account for income tax.
The Company recognizes deferred tax assets when the following conditions are met simultaneously:
1. Temporary differences are highly likely to be reversed in the foreseeable future;
2. Taxable income that may be used to offset the deductible temporary difference is likely to be obtained
in the future and is limited to the amount of taxable income that is likely to be obtained.
On each balance sheet date, the current income tax liabilities (or assets) incurred in the current period
or prior periods shall be measured by the Company in light of the expected payable (refundable)
amount of income taxes according to the tax law; The deferred income tax assets and deferred income
tax liabilities shall be measured at the tax rate applicable to the period during which the assets are
expected to be recovered or the liabilities are expected to be settled.
The Company shall review the carrying amount of deferred income tax assets on each balance sheet
188
2023 Annual Report of Luzhou Laojiao Co., Ltd.
date. The current income tax and deferred income tax shall be recorded into the current profit and loss
as income tax expense or income, except for the income tax generated from the enterprise merger,
transactions or events directly recognized in the owner's equity.
5. 43 Other significant accounting policies and accounting estimates
N/A
5. 44 Changes in significant accounting policies and accounting estimates
5.44.1. Changes in significant accounting policies
Applicable □ N/A
Unit：CNY
Name of statement item materially
Content and reason of changes Amount affected
affected
On 30 November 2022, the Ministry
of Finance issued the Interpretations
of Accounting Standards for Business
Enterprises No. 16 (C.K. [2022] No.
31), providing that the requirement of
"accounting processing under initial Deferred income tax assets
recognition and exemption is not Deferred income tax liabilities
applicable to deferred income taxes
related to assets and liabilities
incurred from a single transaction"
will enter into force as of 1 January
2023.
For this new requirement of "accounting processing under initial recognition and exemption is not
applicable to deferred income taxes related to assets and liabilities incurred from a single transaction",
Interpretation No. 16 stipulates that single transactions that are not business combinations, that affect
neither accounting profit nor taxable income (or deductible losses) at the time the transaction occurs,
and where the initial recognition of assets and liabilities results in taxable temporary differences and
deductible temporary differences of equal amounts shall not be governed by the provisions for
exemption from initial recognition of deferred tax liabilities and deferred tax assets in Accounting
Standards for Business Enterprises No. 18 - Income Taxes. At the time of the transaction, the
enterprise shall recognise the corresponding deferred income tax liabilities and deferred income tax
assets for taxable temporary differences and deductible temporary differences arising from the initial
recognition of assets and liabilities in such transaction.
The Company has adopted the provisions of Interpretation No. 16, "Accounting processing under initial
recognition and exemption is not applicable to deferred income taxes related to assets and liabilities
incurred from a single transaction" as of 1 January 2023. The implementation of this interpretation has
not had a significant impact on the Company's financial position and operating results.
Apart from the aforementioned changes, there have been no other significant accounting policy
changes during the Reporting Period.
5.44.2. Changes in significant accounting estimates
□Applicable N/A
189
2023 Annual Report of Luzhou Laojiao Co., Ltd.
5.44.3. Adjustments to Financial Statement Items at the Beginning of the Year of the First
Implementation of the New Accounting Standards Implemented since 2023
□Applicable N/A
6. Taxes
6.1. Major tax types and rates
Tax type Tax base Tax rate
Value-added tax Taxable sales income 13 %, 9%, 6%
Urban maintenance and construction
Taxable turnover tax 7%
tax
Corporate income tax Taxable income 25%, 15%, 16.5%, 9%, 0%
Consumption tax (based on price) Baijiu tax price or ex-factory price 20%
Consumption tax (based on quantity) Quantity of baijiu CNY 1.00/kg
Education surcharge Taxable turnover tax 3%
Local education surcharge Taxable turnover tax 2%
Original value of the property*70%;
Property tax 1.2%, 12%
house rent
Land use tax Land area CNY 5-18.00/m2
Others According to national regulation
Tax payment subject using different corporate income tax rates, the corporate income tax rates are as
follows:
Company name Corporate income tax rate
Luzhou Pinchuang Technology Co., Ltd. 15%
Luzhou Laojiao International Development (Hong Kong)
16.5%
Co., Ltd.
Luzhou Laojiao Commercial Development (North
21%-40%
America) Co., Ltd.
Mingjiang Co., Ltd. 21%-40%
Luzhou Red Sorghum Modern Agricultural Development
Exempted from corporate income tax
Co., Ltd.
Guangxi Luzhou Laojiao Imported Liquor Industry Co.,
9%
Ltd.
Luzhou Laojiao International Trade (Hainan) Co., Ltd. 15%
6.2. Tax preferences
(1) According to Announcement of the Ministry of Finance, State Taxation Administration and
National Development and Reform Commission on Continuing the Corporate Income Tax Policies
Concerning the Western Development Strategy (No. 23 in 2020, Ministry of Finance), from 1 January
2021 to 31 December 2030, companies are located in the western region whose primary business is
listed in the Catalogue of Encouraged Industries in the Western Region, and the primary business
income accounting for over 60% of the total enterprise income. These companies shall be subject to
the corporate income tax at a reduced rate of 15%. The Company's holding subsidiary, Luzhou
Pinchuang Technology Co., Ltd., whose primary business income meet the requirements of scope
190
2023 Annual Report of Luzhou Laojiao Co., Ltd.
and standard of the Catalogue of Encouraged Industries in the Western Region, is paid at the rate of
15% for corporate income tax.
(2) According to Article 27 of the Corporate Income Tax Law of the People's Republic of China and
Article 86, Item 1 of the Implementation Regulations of the Corporate Income Tax Law, companies are
exempted from enterprise income tax when they engage in agricultural, forestry, animal husbandry and
fishery industries. The holding subsidiary of the Company, Luzhou Red Sorghum Modern Agricultural
Development Co., Ltd., is engaged in the cultivation and sale of organic sorghum and enjoys the
reduction of corporate income tax preferences.
(3) According to the Article 15, Item 1 of the Provisional Regulations on Value-Added Tax, agricultural
producers sell self-produced agricultural products exempt from value-added tax. The holding subsidiary
of the Company, Luzhou Red Sorghum Modern Agricultural Development Co., Ltd., is engaged in the
cultivation and sale of organic sorghum and enjoys the value-added tax exemption.
(4) According to the Article 3, Item 7 of the Notice on Revise of Interim Measures of Accelerating the
Development in Headquarters Economy of China-Malaysia Qinzhou Industrial Park, till 31 December
2025, the enterprises in the Qinzhou Industrial Park that enjoy 15% of tax rate of Western
Development with the half reduction in the tax period of preferential policies shall enjoy the local
share of corporate income tax exemption (namely 40% of corporate income tax was exempted, and
the proportion adjusted by the state shall be executed according to new proportion); Guangxi Luzhou
Laojiao Imported Liquor Industry Co., Ltd., the wholly-owned subsidiary of the Company, pays
corporate income tax at the rate of 9% according to the tax preference policies.
(5) According to Announcement on Preferential Corporate Income Tax Policies in Hainan Free Trade
Port (Cai Shui [2020] No. 31), the Company's wholly-owned subsidiary, Luzhou Laojiao International
Trade (Hainan) Co., Ltd., whose primary business income meet the requirements of scope and
standard of the Catalogue of Encouraged Industries in Hainan Free Trade Port, is paid at the rate of
15% for corporate income tax.
7. Notes to the main items of the consolidated financial statements (All
currency unit is CNY, except other statements)
7.1. Cash and cash equivalents
Unit：CNY
Item Closing Balance Opening Balance
Cash 24,059.24 28,711.93
Bank deposit 25,916,630,894.83 17,729,643,050.90
Other cash and cash equivalents 35,370,137.21 27,856,448.42
Total 25,952,025,091.28 17,757,528,211.25
Including: Total deposit outbound 93,987,202.68 68,948,954.39
Other statements:
Note 1: The deposit outbound is the balance of cash and cash equivalents of the foreign holding
191
2023 Annual Report of Luzhou Laojiao Co., Ltd.
subsidiary of the Company.
Note 2: The closing balance of other monetary funds mainly consists of the remaining funds in
securities accounts of the Company in the amount of CNY 946,249.11, bank guarantee deposits of
CNY 10,000,000.00 for the subsidiary, Luzhou Laojiao Sales Co., Ltd., and the closing balance of
funds in self-owned accounts on third-party platforms for subsidiaries such as Luzhou Laojiao
Electronic Commerce Co., Ltd. and Luzhou Laojiao Nostalgic Liquor Marketing Co., Ltd., in the
amount of CNY 24,423,888.10.
Note 3: There is no special benefit arrangement such as establishing a fund co-management account
with related parties in the current period.
Liquor and wine manufacturing companies shall disclose in detail whether there are special interest
arrangements such as establishing co-management accounts with related parties.
□Applicable N/A
7.2. Held-for-trading financial assets
Unit：CNY
Item Closing Balance Opening Balance
Financial assets measured at fair
value with their changes included into 1,426,992,098.83 1,073,466,780.37
current profits/losses
Including:
Wealth management products 1,426,992,098.83 1,073,466,780.37
Including:
Total 1,426,992,098.83 1,073,466,780.37
Other statements:
Note 1: The closing balance is the Company’s wealth management products of the collective asset
management plan purchased from securities-type companies which are measured at fair value based
on the amount calculated on the basis of the net value of relevant asset units published on the official
website of the asset manager.
7.3. Accounts receivable
7.3.1. Disclosure by aging
Unit：CNY
Aging Closing book balance Opening book balance
Within 1 year (including 1 year) 18,489,106.271 6,002,381.01
1-2 years 263,509.80
2-3 years 263,509.80
Total 18,752,616.07 6,265,890.81
Note: 1 The closing book balance increased by CNY 12,486,725.26, up 199.28% compared with the
opening book balance, which was mainly due to the impact of credit sales in overseas baijiu sales.
2 There are no accounts receivable with significant single amount exceeding three years in age at the
end of the period.
7.3.2. Disclosure by withdrawal methods for bad debts
Unit：CNY
192
2023 Annual Report of Luzhou Laojiao Co., Ltd.
Closing Balance Opening Balance
Provision for bad Provision for bad
Book balance Book balance
Type debt Book debt Book
Proporti Proporti value Proporti Proporti value
Amount Amount Amount Amount
on on on on
Account
s
receiva
ble
tested 372,217 372,217 100.00
1.98%
for .14 .14 %
impairm
ent
individu
ally
Includin
g:
Account
s
receiva
ble that
are not
individu
ally
material
but for
372,217 372,217 100.00
which a 1.98%
.14 .14 %
separat
e
provisio
n for
bad
debts
has
been
made
Account
s
receiva
ble
tested 18,380, 919,019 17,461, 6,265,8 100.00 326,470 5,939,4
98.02% 5.00% 5.21%
for 398.93 .95 378.98 90.81 % .03 20.78
impairm
ent by
the
portfolio
Includin
g:
Account
s
receiva
ble
tested
for 18,380, 919,019 17,461, 6,265,8 100.00 326,470 5,939,4
98.02% 5.00% 5.21%
impairm 398.93 .95 378.98 90.81 % .03 20.78
ent on
the
portfolio
with
charact
193
2023 Annual Report of Luzhou Laojiao Co., Ltd.
eristics
of credit
risk
18,752, 100.00 1,291,2 17,461, 6,265,8 100.00 326,470 5,939,4
Total 6.89% 5.21%
616.07 % 37.09 378.98 90.81 % .03 20.78
Accounts receivable tested for impairment individually: CNY 372,217.14
Unit：CNY
Opening Balance Closing Balance
Name Provision for Provision for
Book balance Book balance Proportion Reason
bad debt bad debt
The amount is
Beijing Secoo
not expected
Trading 372,217.14 372,217.14 100.00%
to be
Limited
recovered
Total 372,217.14 372,217.14
Accounts receivable tested for impairment by the portfolio: CNY 919,019.95
Unit：CNY
Closing Balance
Name
Book balance Provision for bad debt Proportion
Risk portfolio 18,380,398.93 919,019.95 5.00%
Including: within 1 year 18,380,398.93 919,019.95 5.00%
Other portfolio
Total 18,380,398.93 919,019.95
Notes to the determination basis for the portfolio:
Accounts receivable of the same age have similar credit risk characteristics.
If adopting the general mode of expected credit loss to withdraw provision for bad debt of accounts
receivable
□Applicable N/A
7.3.3. Provision and recovery for bad and doubtful debt in the current period
Allowance of provision for bad debt:
Unit：CNY
Changes in current period
Opening Closing
Type Reversal or
Balance Allowance Write-off Other Balance
recovery
Provision
allowance by 372,217.14 372,217.14
individual item
Provision
allowance by 326,470.03 592,549.92 919,019.95
risk portfolio
Total 326,470.03 964,767.06 1,291,237.091
Note: There is no significant provision in accounts receivable reversed or recovered in the reporting
period.
194
2023 Annual Report of Luzhou Laojiao Co., Ltd.
7.3.4. Top five entities with the largest balances of accounts receivable and contract assets
Unit：CNY
Closing balance
of provision for
Proportion to
bad debt
Closing balance total closing
Closing balance Closing balance provision of
of accounts balance of
Company name of accounts of contract accounts
receivable receivable and accounts
assets receivable and
contract assets receivable and
impairment
contract assets
allowance of
contract assets
China Duty Free
16,952,591.49 16,952,591.49 90.40% 847,629.57
International LTD
BAIWAN WINES
795,108.57 795,108.57 4.24% 39,755.43
INC.
Beijing Secoo
372,217.14 372,217.14 1.98% 372,217.14
Trading Limited
TAI FUNG
CASTELMOR 353,820.01 353,820.01 1.89% 17,691.00
LIMITED
Park Street
197,941.00 197,941.00 1.06% 9,897.05
Imports, LLC
Total 18,671,678.21 18,671,678.21 99.57% 1,287,190.19
7.4. Accounts receivable financing
7.4.1. Accounts receivable financing listed by category
Unit：CNY
Item Closing Balance Opening Balance
Bank acceptance bill 5,938,171,007.93 4,583,352,503.37
Total 5,938,171,007.93 4,583,352,503.37
7.4.2. Disclosure by withdrawal methods for bad debts
Unit：CNY
Closing Balance Opening Balance
Provision for bad Provision for bad
Book balance Book balance
Type debt Book debt Book
Proporti Proporti value Proporti Proporti value
Amount Amount Amount Amount
on on on on
Includin
g:
Provisio
n 5,938,1 5,938,1 4,583,3 4,583,3
100.00 100.00
allowan 71,007. 71,007. 52,503. 52,503.
% %
ce by 93 931 37 37
portfolio
Includin
g:
Bank 5,938,1 100.00 5,938,1 4,583,3 100.00 4,583,3
accepta 71,007. % 71,007. 52,503. % 52,503.
195
2023 Annual Report of Luzhou Laojiao Co., Ltd.
nce bill 93 93 37 37
5,938,1 5,938,1 4,583,3 4,583,3
100.00 100.00
Total 71,007. 71,007. 52,503. 52,503.
% %
93 93 37 37
Note: 1. The notes receivable under accounts receivable financing comprise bank acceptance, and
the Company believes that the bank acceptance it holds does not pose significant credit risks. It does
not anticipate significant losses due to defaults by banks or other drawers, therefore, no provision for
credit impairment losses has been recognised.
Provision allowance by portfolio: CNY 0
Unit：CNY
Closing Balance
Name
Book balance Provision for bad debt Proportion
Risk portfolio 5,938,171,007.93
Other portfolio
Total 5,938,171,007.93
Notes to the determination basis for the portfolio:
As bank acceptance has low credit risks, no bad debt provision is made.
7.4.3. Accounts receivable financing that have been endorsed to other parties or discounted
by the Company but have not expired at the end of the period
Unit：CNY
Item Derecognition at period-end Not derecognition at period-end
Bank acceptance bill 7,153,627,657.961
Total 7,153,627,657.96
Note: 1. Due to the fact that the acceptor of bank acceptance is a commercial bank, which is of high
credit level, the likelihood of default at the maturity of bank acceptance is low. Therefore, the
Company derecognises bank acceptance that has been endorsed or discounted.
7.4.4. Changes in accounts receivable financing in the reporting period and fair value
Increase in current Decrease in current
Item Opening Balance Closing Balance
period period
Notes receivable 4,583,352,503.37 24,829,288,029.75 23,474,469,525.19 5,938,171,007.93
Total 4,583,352,503.37 24,829,288,029.75 23,474,469,525.19 5,938,171,007.93
Note: Accounts receivable financing represents bank acceptance, with a short remaining maturity.
The book value closely aligns with the fair value; hence, the book value is used as its fair value.
7.4.5. Other statements
①There was no accounts receivable financing pledge at the end of the period.
②There are no accounts receivable financing actually written off during the reporting period.
③There are no accounts receivable financing transferred to accounts receivable due to the non-
performance of the agreements by the issuers.
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2023 Annual Report of Luzhou Laojiao Co., Ltd.
7.5. Other receivables
Unit：CNY
Item Closing Balance Opening Balance
Other receivables 22,716,893.121 23,396,533.98
Total 22,716,893.12 23,396,533.98
Note: 1. Other receivables above-mentioned refer to other receivables after deducted interest
receivable and dividend receivable.
7.5.1. Other receivables
7.5.1.1. Other receivables disclosed by nature
Unit：CNY
Nature Closing book balance Opening book balance
Intercourse funds 17,537,144.37 18,516,591.35
Petty cash 214,206.23 326,785.39
Saving deposits involving contract
127,564,873.50 129,049,496.98
disputes
Total 145,316,224.10 147,892,873.72
Note 1: The saving deposits involving contract disputes are three deposits amounting to CNY
500,000,000.00 with Changsha Yingxin Sub-branch of Agricultural Bank of China and Nanyang
Zhongzhou Sub-branch of Industrial and Commercial Bank of China disclosed by the Company in the
2014 Annual Report. The deposits have lost the nature of monetary fund due to their involvement in
contract disputes and have thus been transferred into “other receivables”. The closing balance of this
account as at the date of the statement was CNY 127,564,873.50.
7.5.1.2. Disclosure by aging
Unit：CNY
Aging Closing book balance Opening book balance
Within 1 year (including 1 year) 15,696,066.07 11,192,350.26
1-2 years 38,347.61 636,514.08
2-3 years 293,480.00 3,542,500.00
Over 3 years 129,288,330.421 132,521,509.38
3-4 years 11,500.00 122,800.00
4-5 years 22,800.00 1,168,807.90
Over 5 years 129,254,030.42 131,229,901.48
Total 145,316,224.10 147,892,873.72
Note: 1 Other receivables with significant single amount exceeding three years in age relates to
savings deposit of CNY 127,564,873.50, which are yet to be recovered due to contractual disputes.
7.5.1.3. Disclosure by withdrawal methods for bad debts
Applicable □ N/A
Unit：CNY
Closing balance Opening Balance
Type Provision for bad Book Provision for bad Book
Book balance Book balance
debt value debt value
197
2023 Annual Report of Luzhou Laojiao Co., Ltd.
Proporti Proporti Proporti Proporti
Amount Amount Amount Amount
on on on on
Other
receiva
bles
tested
127,614 120,050 7,564,8 129,049 120,000 9,049,4
for 87.82% 94.07% 87.26% 92.99%
,873.50 ,000.00 73.50 ,496.98 ,000.00 96.98
impairm
ent
individu
ally
Includin
g:
Other
receiva
bles
that are
individu
ally
material
and for
which a 127,564 120,000 7,564,8 129,049 120,000 9,049,4
87.78% 94.07% 87.26% 92.99%
separat ,873.50 ,000.00 73.50 ,496.98 ,000.00 96.98
e
provisio
n for
bad
debts
has
been
made
Other
receiva
bles
that are
not
individu
ally
material
but for
50,000. 50,000. 100.00
which a 0.03%
00 00 %
separat
e
provisio
n for
bad
debts
has
been
made
Other
receiva
bles 17,701, 2,549,3 15,152, 18,843, 4,496,3 14,347,
12.18% 14.40% 12.74% 23.86%
tested 350.60 30.98 019.62 376.74 39.74 037.00
for
impairm
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2023 Annual Report of Luzhou Laojiao Co., Ltd.
ent by
the
portfolio
Includin
g:
Other
receiva
bles
tested
for
impairm
ent on 17,701, 2,549,3 15,152, 18,843, 4,496,3 14,347,
12.18% 14.40% 12.74% 23.86%
the 350.60 30.98 019.62 376.74 39.74 037.00
portfolio
with
charact
eristics
of credit
risk
145,316 100.00 122,599 22,716, 147,892 100.00 124,496 23,396,
Total 84.37% 84.18%
,224.10 % ,330.98 893.12 ,873.72 % ,339.74 533.98
Other receivables tested for impairment individually: CNY 120,050,000.00
Unit：CNY
Opening Balance Closing Balance
Name Provision for Provision for
Book balance Book balance Proportion Reason
bad debt bad debt
Saving
deposits Provision
129,049,496.9 120,000,000.0 127,564,873.5 120,000,000.0
involving 94.07% based on
8 0 0 0
contract legal opinion
disputes
The amount is
Beijing Secoo
not expected
Trading 50,000.00 50,000.00 100.00%
to be
Limited
recovered
129,049,496.9 120,000,000.0 127,614,873.5 120,050,000.0
Total
8 0 0 0
Other receivables tested for impairment by the portfolio: CNY 2,549,330.98
Unit：CNY
Closing Balance
Name
Book balance Provision for bad debt Proportion
Risk portfolio 17,701,350.60 2,549,330.98 14.40%
Including: within 1 year 15,696,066.07 784,803.30 5.00%
1-2 years 38,347.61 3,834.76 10.00%
2-3 years 243,480.00 48,696.00 20.00%
3-4 years 11,500.00 4,600.00 40.00%
4-5 years 22,800.00 18,240.00 80.00%
Over 5 years 1,689,156.92 1,689,156.92 100.00%
Other portfolio
Total 17,701,350.60 2,549,330.98
Notes to the determination basis for the portfolio:
Accounts receivable of the same age have similar credit risk characteristics.
199
2023 Annual Report of Luzhou Laojiao Co., Ltd.
Allowance of provision for bad debt adopting the general mode of expected credit loss:
Unit：CNY
First stage Second stage Third stage
Provision for bad Expected loss in the
Expected credit loss Expected loss in the Total
debt duration (credit
of the next 12 duration (credit
impairment not
months impairment occurred)
occurred)
Balance of 1 January
4,496,339.74 120,000,000.00 124,496,339.74
2023
Balance of 1 January
2023 in the current
period
——Transferred to
-5,000.00 5,000.00
the third stage
Allowance of the
-1,942,008.76 45,000.00 -1,897,008.76
current period
Balance of 31
2,549,330.98 120,050,000.00 122,599,330.98
December 2023
The basis for the division of each stage and the withdrawal proportion of bad debt provision
The basis for division is that other receivables with single bad debt provision represent credit
impairment losses incurred since initial recognition (Stage 3), while the remaining portion is
categorised based on aging portfolio. Withdrawal proportions of bad debt provision are14.40% for
Stage 1 and 94.07% for Stage 3, totaling 84.37%.
Changes of book balance with significant amount changed of loss provision in the current period
□Applicable N/A
7.5.1.4. Provision and recovery for bad and doubtful debt in the current period
Allowance of provision for bad debt:
Unit：CNY
Changes in current period
Opening Closing
Type Reversal or Write-off or
Balance Allowance Other Balance
recovery verification
Other
receivables
120,000,000.0 120,050,000.0
tested for 45,000.00 5,000.00
impairment 0 0
individually
Other
receivables
tested for 4,496,339.74 -1,942,008.76 -5,000.00 2,549,330.98
impairment by
the portfolio
124,496,339.7 122,599,330.9
Total -1,897,008.76
4 8
7.5.1.5. Top five entities with the largest balances of the other receivables
Unit：CNY
Provisioning
Proportion in
Company Name Nature Closing Balance Aging amount at period
total receivables
end
200
2023 Annual Report of Luzhou Laojiao Co., Ltd.
Agricultural Bank
of China
Changsha
Yingxin Sub-
branch, Industrial Saving deposits
and Commercial involving 127,564,873.50 Over 5 years 87.78% 120,000,000.00
Bank of China contract disputes
Nanyang
Zhongzhou Sub-
branch and
another bank
Beijing Jingdong
Century Trading Security deposit 1,000,000.00 1-5 years 0.69% 345,000.00
Co., Ltd.
Luzhou Aopulan
Security deposit 300,000.00 Over 5 years 0.21% 300,000.00
Beer Co., Ltd.
Chen Weirong Petty cash 214,206.23 Within 1 year 0.15% 10,710.31
Luzhou
Intercourse
Qianheng Labor 74,150.56 Within 1 year 0.05% 3,707.53
funds
Service Co., Ltd.
Total 129,153,230.29 88.88% 120,659,417.84
7.6. Prepayment
7.6.1. Aging analysis
Unit：CNY
Closing Balance Opening Balance
Aging
Amount Proportion Amount Proportion
Within 1 year 196,801,356.07 97.28% 108,917,843.70 95.33%
1-2 years 1,685,909.93 0.83% 3,541,174.81 3.10%
2-3 years 2,987,977.50 1.48% 1,633,422.20 1.43%
Over 3 years 833,943.20 0.41% 165,065.55 0.14%
1
Total 202,309,186.70 114,257,506.26
Note: 1. At the end of the period, there was an increase of CNY 88,051,680.44 compared to the
beginning of the period, representing a growth of 77.06%, which was mainly due to intensified
promotional activities for company products, leading to a corresponding increase in prepaid amounts
to suppliers.
Reasons for significant prepayments whose aging is longer than 1 year without timely settlement:
There is no significant prepayment whose aging is longer than 1 year.
7.6.2. Top five entities with the largest balances of prepayment
Proportion to the total closing
Company Name Closing Balance
balance of prepayment
Shanghai Merlot Advertising Co., Ltd. 78,949,725.75 39.02%
Sports Equipment Center of General
26,775,956.27 13.24%
Administration of Sport of China
China Railway Chengdu Group Co., Ltd. 13,108,333.34 6.48%
Luzhou Western Gas Co., Ltd. 12,183,456.63 6.02%
Luzhou Power Supply Company of State Grid
8,176,600.90 4.04%
Sichuan Electric Power Company
Total 139,194,072.89 68.80%
201
2023 Annual Report of Luzhou Laojiao Co., Ltd.
7.7. Inventories
Whether the Company needs to comply with the disclosure requirements of real estate industry
No
7.7.1. Categories of Inventories
Unit：CNY
Closing Balance Opening Balance
Provision for Provision for
stock stock
obsolescence obsolescence
Category or impairment or impairment
Book Balance Book Value Book Balance Book Value
provision of provision of
contract contract
performance performance
costs costs
112,835,009.7 112,835,009.7 128,252,608.9 128,252,608.9
Raw materials
7 7 5 5
Goods in 9,169,963,972 9,169,963,972 7,305,642,685 7,305,642,685
progress .73 .73 .28 .28
Finished 2,316,583,144 2,316,583,144 2,382,939,263 2,382,939,263
goods .62 .62 .97 .97
Goods in
22,661,820.34 22,661,820.34 23,907,816.65 23,907,816.65
transit
11,622,043,94 11,622,043,94 9,840,742,374 9,840,742,374
Total
7.46 7.46 .85 .85
The Company shall comply with the disclosure requirements for companies engaging in food & liquor
and wine production of the Guidelines No. 3 of the Shenzhen Stock Exchange on Sel f-regulation of
Listed Companies—Industry-specific Information Disclosure.
7.7.2. Notes to the closing balance of inventories including capitalized borrowing expense
There was no capitalized borrowing expense in the closing balance of inventories.
7.8. Other current assets
Unit：CNY
Item Closing Balance Opening Balance
Value-added tax 164,220,376.30 139,165,221.10
Corporate income tax 8,733,293.33 9,447,204.77
Other taxes 3,731,062.34 4,423,521.07
Total 176,684,731.97 153,035,946.94
Other statements:
The value-added tax expected to be deducted in the next fiscal year and corporate income tax and
other taxes are disclosed in other current assets.
7.9. Other equity instrument investment
Unit：CNY
Gains Losses Accumulat Accumulat Dividend Reason
Closing Opening
Item recorded recorded ive gains ive losses income for
Balance Balance
in other in other recorded recorded recognize assigning
202
2023 Annual Report of Luzhou Laojiao Co., Ltd.
comprehe comprehe in other in other d in to
nsive nsive comprehe comprehe current measure
income in income in nsive nsive year in fair
the the income in income in value of
current current the the which
period period current current changes
period period included
other
comprehe
nsive
income
Financial
assets
assigned
to
measure
in fair
value of
which
changes
included
other
comprehe
nsive
income:
Including:
According
China to the
Tourism mode of
Group 84,854,48 807,139,1 331,197,9 66,344,20 977,280.2
managing
Duty Free 9.681 20.07 44.87 5.60 3
Corporatio assets by
n Limited managem
ent layer
According
to the
Guotai mode of
Junan 175,241,7 160,049,3 15,192,32 162,522,5 6,241,808.
managing
Securities 15.34 89.21 6.13 58.58 41
Co., Ltd. assets by
managem
ent layer
According
to the
Luzhou mode of
96,733,83 120,158,3 23,424,55 45,613,83 3,471,360.
Bank Co., managing
Ltd. 7.69 92.72 5.03 7.69 00
assets by
managem
ent layer
Guotai According
Junan to the
Investmen mode of
22,611,83 22,611,83
t managing
Managem 4.24 4.24
assets by
ent Co., managem
Ltd.
ent layer
According
North to the
Chemical 12,805,51 14,931,95 2,126,434. 11,775,51
78,177.75 mode of
Industries 5.44 0.24 80 5.44
Co., Ltd. managing
assets by
203
2023 Annual Report of Luzhou Laojiao Co., Ltd.
managem
ent layer
According
to the
Guojiu Big mode of
8,799,784. 10,000,00 1,200,215. 1,200,215.
Data Co., managing
Ltd. 78 0.00 22 22
assets by
managem
ent layer
Sichuan
China
Baijiu
Golden
According
Triangle
Brand to the
Operation mode of
1,846,291. 1,846,291. 5,752,926. 500,000.0
Developm managing
ent Co., 63 63 37 0
assets by
Ltd. and managem
other
ent layer
equity
instrument
investmen
ts
402,893,4 1,136,736, 15,192,32 357,949,1 219,911,9 73,297,34 11,268,62
Total
68.80 978.11 6.13 49.92 11.71 7.19 6.39
Note: 1. The closing balance decreased by CNY 733,843,509.31, down 64.56% compared with the
opening balance, which was mainly due to the disposal of partial investment in China Tourism Group
Duty Free Corporation Limited in the current period.
Categories of non-trading equity instrument investment in the current period:
Unit：CNY
Reason for
Amount of assigning to Reason of
other measure at other
Recognized comprehensiv fair value and comprehensiv
Accumulative Accumulative
Item dividends e income changes e income
gains losses
income transferred to recorded into transferred to
retained other retained
earnings comprehensiv earnings
e income
According to
China Tourism the mode of
Group Duty
managing Partial
Free 977,280.23 66,344,205.60 16,215,653.21
Corporation assets by disposal
Limited management
layer
According to
the mode of
Guotai Junan
162,522,558.5 managing
Securities 6,241,808.41
Co., Ltd. 8 assets by
management
layer
According to
Luzhou Bank the mode of
3,471,360.00 45,613,837.69
Co., Ltd. managing
assets by
204
2023 Annual Report of Luzhou Laojiao Co., Ltd.
management
layer
According to
Guotai Junan the mode of
Investment managing
Management assets by
Co., Ltd. management
layer
According to
North the mode of
Chemical managing
78,177.75 11,775,515.44
Industries Co., assets by
Ltd. management
layer
According to
the mode of
Guojiu Big managing
1,200,215.22
Data Co., Ltd. assets by
management
layer
Sichuan
China Baijiu
Golden
According to
Triangle
the mode of
Brand
managing
Operation 500,000.00 5,752,926.37
assets by
Development
management
Co., Ltd. and
layer
other equity
instrument
investments
7.10. Long-term equity investments
Unit：CNY
Openi Changes in current period
Gain Adjust Closin
Openi ng Closin g
or ments
ng Balan Cash g Balan
loss of
Invest Balan ce of Other divide Provis Balan ce of
recog other
ee ce provisi Increa Decre chang d or ion for ce provisi
nized compr Other
(book se ase es in profit impair (book on for
on for under ehens
value) equity declar ment value) impair
impair equity ive
ed ment
ment metho incom
d e
1. Joint Ventures
2. Associate
Huaxi
Securi 2,497, 2,567, 44,16 2,107, 8,184, 2,535, 2,567,
ties 540,5 098.8 7,627. 087.1 934.3 630,3 098.8
Co., 92.05 0 40 7 2 72.30 0
Ltd.
Luzho
u -
Laojia 40,18 38,33
1,846,
o 5,894. 9,051.
843.2
Postd 77 51
octora 6
l
205
2023 Annual Report of Luzhou Laojiao Co., Ltd.
Works
tation
Techn
ology
Innov
ation
Co.,
Ltd.
Sichu
an
Devel
opme 5,889, 5,897,
nt 8,326.
654.2 980.8
Liquor 61
Invest 4 5
ment
Co.,
Ltd.
Sichu
an
Tongn
iang
Baijiu
Indust
ry 8,086, 8,340,
Techn 253,5
855.9 392.9
ology 36.99
Resea 1 0
rch
Institu
te
Co.,
Ltd.
Note
CTS
Luzho
u
Laojia
o
Cultur 115,7 4,021, 120,0
al 227,8
97,55 653.7 47,03
Touris 26.01
m 6.20 3 5.94
Devel
opme
nt
Co.,
Ltd.
2,667, 2,567, 46,60 2,107, 8,184, 2,708, 2,567,
Subtot 227,8
500,5 098.8 4,301. 087.1 934.3 254,8 098.8
al 26.01
53.17 0 47 7 2 33.50 0
2,667, 2,567, 46,60 2,107, 8,184, 2,708, 2,567,
227,8
Total 500,5 098.8 4,301. 087.1 934.3 254,8 098.8
26.01
53.17 0 47 7 2 33.50 0
The recoverable amount is determined based on the net amount of the fair value minus disposal
costs
□Applicable N/A
The recoverable amount is determined by the present value of the forecasted future cash flow
□Applicable N/A
206
2023 Annual Report of Luzhou Laojiao Co., Ltd.
7.11. Investment property
7.11.1. Investment property with cost measurement model
Applicable □ N/A
Unit：CNY
Buildings and Construction in
Item Land use right Total
constructions progress
I. Original cost:
1.Opening balance 47,321,613.93 9,566,480.21 56,888,094.14
2.Increase in current
period
(1) External
purchase
(2) Transfer from
inventories/fixed
assets/construction
in progress
(3) Increase from
business
combination
3.Decrease in
current period
(1) Disposal
(2) Other transfer out
4.Closing Balance 47,321,613.93 9,566,480.21 56,888,094.14
II. Accumulated
depreciation and
amortization
1.Opening Balance 15,125,126.70 2,613,513.22 17,738,639.92
2.Increase in current
662,897.92 701,139.53 1,364,037.45
period
(1) Provision or
662,897.92 701,139.53 1,364,037.45
amortization
3.Decrease in
current period
(1) Disposal
(2) Other transfer out
4.Closing Balance 15,788,024.62 3,314,652.75 19,102,677.37
III. Provision for
impairment
1.Opening Balance
2.Increase in current
period
(1) Provision
3.Decrease in
current period
(1) Disposal
(2) Other transfer out
4.Closing Balance
IV. Book Value
1.Closing Book Value 31,533,589.31 6,251,827.46 37,785,416.77
207
2023 Annual Report of Luzhou Laojiao Co., Ltd.
2.Opening Book
32,196,487.23 6,952,966.99 39,149,454.22
Value
The recoverable amount is determined based on the net amount of the fair value minus disposal
costs
□Applicable N/A
The recoverable amount is determined by the present value of the forecasted future cash flow
□Applicable N/A
7.11.2. Investment property without certification of right
Unit：CNY
Reason for not having the
Item Book value
certification of right
Buildings of the Company 31,478,347.81 In procedure
7.12. Fixed assets
Unit：CNY
Item Closing Balance Opening Balance
1
Fixed assets 8,613,187,271.67 8,853,348,204.83
Disposal of fixed assets 36,193.79 2,910,393.95
Total 8,613,223,465.46 8,856,258,598.78
Note 1: The fixed assets listed above refer to the fixed assets deducted those disposed.
7.12.1. Details of fixed assets
Unit：CNY
Buildings and Specialized General Transportation Other
Item Total
constructions equipment equipment equipment equipment
I. Original
cost:
1.Opening 7,584,141,471 1,174,111,092 1,093,021,145 1,604,593,254 11,502,231,55
46,364,595.04
balance .95 .25 .63 .93 9.80
2.Increase in 157,751,986.1 389,640,135.0
92,376,864.95 79,761,327.61 402,797.91 59,347,158.47
current period 4 8
(1) External
1,606,417.51 34,463,316.82 128,300.89 3,752,348.42 39,950,383.64
purchase
(2) Transfer
from 110,898,978.5 113,657,757.1 347,686,085.8
65,212,322.19 348,050.25 57,568,977.72
construction in 4 8 8
progress
(3) Increase
from business
combination
(4) Changes
of exchange 7,468.20 7,468.20
rates
(5) Adjustment
-
for completion 12,942,587.91 9,623,443.94 -73,553.23 -1,974,167.67 1,996,197.36
settlement 18,522,113.59
3.Decrease in 116,949,029.2
74,973,465.86 3,875,093.08 26,848,117.81 11,252,352.46
current period 1
(1) Disposal 101,042,038.3
63,512,058.18 3,875,093.08 22,402,534.58 11,252,352.46
or retirement 0
208
2023 Annual Report of Luzhou Laojiao Co., Ltd.
(2) Transfer to
intangible
assets/constru 11,461,407.68 4,445,583.23 15,906,990.91
ction in
progress
4.Closing 7,601,544,871 1,249,997,326 1,223,925,013 1,652,688,060 11,774,922,66
46,767,392.95
Balance .04 .78 .96 .94 5.67
II.
Accumulated
depreciation
1.Opening 956,719,104.1 470,768,377.6 426,894,845.3 761,612,077.9 2,648,260,414
32,266,009.80
Balance 8 5 7 0 .90
2.Increase in 249,022,880.3 138,689,344.8 128,014,893.9 586,072,678.2
2,941,188.55 67,404,370.54
current period 5 5 2 1
249,022,880.3 138,689,344.8 128,010,633.8 586,068,418.1
(1) Provision 2,941,188.55 67,404,370.54
5 5 6 5
(2) Changes
of exchange 4,260.06 4,260.06
rates
3.Decrease in
48,454,776.64 2,840,340.40 13,585,429.48 8,340,092.66 73,220,639.18
current period
(1) Disposal
48,454,776.64 2,840,340.40 13,585,429.48 8,340,092.66 73,220,639.18
or retirement
4.Closing 1,157,287,207 606,617,382.1 541,324,309.8 820,676,355.7 3,161,112,453
35,207,198.35
Balance .89 0 1 8 .93
III. Provision
for impairment
1.Opening
622,940.07 622,940.07
Balance
2.Increase in
current period
(1) Provision
3.Decrease in
current period
(1) Disposal
or retirement
4.Closing
622,940.07 622,940.07
Balance
IV. Book Value
1.Closing 6,443,634,723 643,379,944.6 682,600,704.1 832,011,705.1 8,613,187,271
11,560,194.60
Book Value .08 8 5 6 .67
2.Opening 6,626,799,427 703,342,714.6 666,126,300.2 842,981,177.0 8,853,348,204
14,098,585.24
Book Value .70 0 6 3 .83
7.12.2. Fixed assets leased out through operating lease
Unit：CNY
Item Closing book value
Buildings and constructions 22,460,128.25
Total 22,460,128.25
7.12.3. Fixed assets without certification of right
Unit：CNY
Reason for not having the
Item Book value
certification of right
The property ownership certificate
Buildings of the Company 22,410,444.43 has not been processed yet for the
historical reasons, and it plans to be
209
2023 Annual Report of Luzhou Laojiao Co., Ltd.
processed after gradually improving
procedures.
Buildings of the Company 227,087,401.40 In procedure
Buildings of the subsidiary-brewing
4,368,821,210.29 In procedure
company
Total 4,618,319,056.12
7.12.4. Disposal of fixed assets
Unit：CNY
Item Closing Balance Opening Balance
Disposal and retirement of assets 36,193.79 2,910,393.95
Total 36,193.79 2,910,393.95
7.13. Construction in progress
Unit：CNY
Item Closing Balance Opening Balance
Construction in progress 1
1,718,468,880.53 808,919,047.21
Total 1,718,468,880.53 808,919,047.21
Note: 1. The term "construction in progress" in the above table refers to construction in progress
minus construction materials.
7.13.1. Details of the construction in progress
Unit：CNY
Closing Balance Opening Balance
Item Provision for Provision for
Book balance Book value Book balance Book value
impairment impairment
Technical
renovation of
Luzhou
1,132,704,191 1,132,704,191 638,798,849.1 638,798,849.1
Laojiao
.02 .02 6 6
Intelligent
packaging
center
Technical
renovation
project of
217,839,823.4 217,839,823.4
Luzhou 12,284,062.35 12,284,062.35
9 9
Laojiao
intelligent
brewing (I)
Technical
renovation of
Luzhou
141,773,898.9 141,773,898.9
Laojiao 122,641.51 122,641.51
7 7
Intelligent
packaging
center (II)
Project of
Luzhou 92,773,969.99 92,773,969.99 17,305,831.68 17,305,831.68
Laojiao's
210
2023 Annual Report of Luzhou Laojiao Co., Ltd.
Flexible
Intelligent
Filling Pilot
Line
Construction
Project of
Luzhou
Laojiao's
Strong Aroma 1,194,002.45 1,194,002.45
Baijiu
Experience
Marketing
Centre
Technical
Reform
Project of
574,755.15 574,755.15 14,512,482.57 14,512,482.57
Luzhou
Laojiao's
Brewing Base
131,608,239.4 131,608,239.4 125,895,179.9 125,895,179.9
Other projects
6 6 4 4
1,718,468,880 1,718,468,880 808,919,047.2 808,919,047.2
Total
.531 .53 1 1
Note: 1. The closing balance increased by CNY 909,549,833.32, up 112.44% compared with the
opening balance, which was mainly due to the increase in input in the technical renovation of
Intelligent packaging center and technical renovation project of intelligent brewing in the current
period.
7.13.2. Significant changes in construction in progress
Unit：CNY
Propo
rtion
Includi
of Accu
ng: Capita
Increa accu mulati
Openi Transf Closin Capita lizatio
se in Other mulati Progr ve Sourc
Budge ng er into g lized n rate
Item curren decre ve ess capital e of
t Balan fixed Balan intere for the
t ases projec (%) ized funds
ce assets ce st for period
period t input intere
the (%)
in st
period
budge
t
Techni
cal
renov
ation
of
Luzho
1,886, 638,7 778,7 96,85 188,0 1,132,
u 81.92 80.00 185,8 35,10
176,0 98,84 90,03 6,474. 28,21 704,1 3.59% Other
Laojia % % 76.75 7.46
00.00 9.16 1.23 40 4.97 91.02
o
Intellig
ent
packa
ging
center
211
2023 Annual Report of Luzhou Laojiao Co., Ltd.
Techni
cal
renov
ation
projec
t of
4,782, 12,28 205,5 217,8
Luzho 16.62 15.00
509,0 4,062. 55,76 39,82 Other
u % %
00.00 35 1.14 3.49
Laojia
o
intellig
ent
brewi
ng (I)
Techni
cal
renov
ation
of
Luzho
u 250,0 141,6 141,7
122,6 64.08 70.00
Laojia 00,00 51,25 73,89 Other
41.51 % %
o 0.00 7.46 8.97
Intellig
ent
packa
ging
center
(II)
Projec
t of
Luzho
u
Laojia
o's 174,3 17,30 75,46 92,77
70.95 70.00
Flexibl 00,00 5,831. 8,138. 3,969. Other
% %
e 0.00 68 31 99
Intellig
ent
Filling
Pilot
Line
Const
ructio
n
Projec
t of
Luzho
u
2,604, 181,3 180,1 1,194,
Laojia
356,7 01,30 07,29 002.4 6.96% 5.00% Other
o's
00.00 1.34 8.89 5
Stron
g
Arom
a
Baijiu
Experi
ence
212
2023 Annual Report of Luzhou Laojiao Co., Ltd.
Marke
ting
Centr
e
Techni
cal
Refor
m
Projec
t of 189,7 14,51 119,5 131,4 2,063,
574,7 94.08 90.00
Luzho 32,30 2,482. 47,09 21,42 398.1 Other
55.15 % %
u 0.00 57 1.81 1.07 6
Laojia
o's
Brewi
ng
Base
9,887, 683,0 1,502, 228,2 370,1 1,586,
185,8 35,10
Total 074,0 23,86 313,5 77,89 98,91 860,6 3.59%
76.75 7.46
00.00 7.27 81.29 5.47 2.021 41.07
Note: 1. Other decreases refer to land use rights, software and low priced and easily worn articles
transferred to intangible assets.
7.13.3. Impairment test of construction in progress
□Applicable N/A
7.14. Right-of-use assets
7.14.1. Details of right-of-use assets
Unit：CNY
Item Land use right Buildings and constructions Total
I. Original cost
1. Opening Balance 32,680,786.33 24,896,637.03 57,577,423.36
2. Increase in current
519,991.71 519,991.71
period
(1) Increase in leases 319,714.42 319,714.42
(2) Changes of exchange
200,277.29 200,277.29
rates
3. Decrease in current
1,892,463.92 15,040,946.90 16,933,410.82
period
(1) Lease expiration 773,499.69 773,499.69
(2) Adjustment for change
1,892,463.92 14,267,447.21 16,159,911.13
of lease term
4. Closing Balance 30,788,322.41 10,375,681.84 41,164,004.25
II. Accumulated
amortization
1. Opening Balance 7,269,825.40 10,355,072.33 17,624,897.73
2. Increase in current
3,634,912.69 6,357,470.87 9,992,383.56
period
(1) Provision 3,634,912.69 6,216,889.84 9,851,802.53
(2) Changes of exchange 140,581.03 140,581.03
213
2023 Annual Report of Luzhou Laojiao Co., Ltd.
rates
3. Decrease in current
630,821.31 9,083,410.96 9,714,232.27
period
(1) Disposal
(2) Lease expiration 754,238.91 754,238.91
(3) Adjustment for change
630,821.31 8,329,172.05 8,959,993.36
of lease term
4. Closing Balance 10,273,916.78 7,629,132.24 17,903,049.02
III. Provision for impairment
1. Opening Balance
2. Increase in current
period
(1) Provision
3. Decrease in current
period
(1) Disposal
4. Closing Balance
IV. Book Value
1. Closing Book Value 20,514,405.63 2,746,549.60 23,260,955.23
2. Opening Book Value 25,410,960.93 14,541,564.70 39,952,525.63
7.14.2. Impairment test of right-of-use assets
□Applicable N/A
7.15. Intangible assets
7.15.1. Details of intangible assets
Unit：CNY
No-patent
Computer Trademark
Item Land use right Patent right right Total
software right
technology
I. Original cost
1. Opening 3,288,142,671 3,355,293,864
1,700,050.44 63,336,227.72 2,114,914.82
Balance .29 .27
2. Increase in 368,803,115.5 395,171,576.5
26,364,659.69 3,801.27
current period 5 1
(1) Acquired 5,882,033.16 5,882,033.16
(2) Internal
developed
(3) Business
combination
(4)
Transferred
from 368,803,115.5 391,204,637.5
22,401,522.03
construction in 5 8
progress/fixed
assets
(5) Changes
of exchange 3,801.27 3,801.27
rates
(6) Adjustment
for completion -1,918,895.50 -1,918,895.50
settlement
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2023 Annual Report of Luzhou Laojiao Co., Ltd.
3. Decrease in
1,984,960.84 1,984,960.84
current period
(1) Disposal 1,984,960.84 1,984,960.84
4. Closing 3,654,960,826 3,748,480,479
1,700,050.44 89,700,887.41 2,118,716.09
Balance .00 .94
II.
Accumulated
amortization
1. Opening 236,908,207.7 272,022,011.4
830,609.09 32,408,087.27 1,875,107.41
Balance 1 8
2. Increase in
73,369,622.06 130,005.04 6,173,764.38 20,647.04 79,694,038.52
current period
(1) Provision 73,369,622.06 130,005.04 6,173,764.38 20,647.04 79,694,038.52
3. Decrease in
1,109,361.14 1,109,361.14
current period
(1) Disposal 1,109,361.14 1,109,361.14
4. Closing 309,168,468.6 350,606,688.8
960,614.13 38,581,851.65 1,895,754.45
Balance 3 6
III. Provision
for impairment
1. Opening
Balance
2. Increase in
current period
(1) Provision
3. Decrease in
current period
(1) Disposal
4. Closing
Balance
IV. Book Value
1. Closing 3,345,792,357 3,397,873,791
739,436.31 51,119,035.76 222,961.64
Book Value .37 .08
2. Opening 3,051,234,463 3,083,271,852
869,441.35 30,928,140.45 239,807.41
Book Value .58 .79
There is no proportion of intangible assets formed by internal development to the balance of
intangible assets at the period-end.
7.15.2. Land use right without certification of right
There was no land use right without certification of right at the period-end.
7.16. Long-term deferred expense
Unit：CNY
Item Opening Balance Increase Amortization Other decrease Closing Balance
Improvement
expense of
710,010.92 747,153.53 498,487.93 -1,329.39 960,005.91
rented fixed
assets
Total 710,010.92 747,153.53 498,487.93 -1,329.391 960,005.91
Note: 1 Other decrease was generated from changes of exchange rates.
215
2023 Annual Report of Luzhou Laojiao Co., Ltd.
7.17. Deferred tax assets/ deferred tax liabilities
7.17.1. Deferred tax assets before offset
Unit：CNY
Closing Balance Opening Balance
Item Deductible temporary Deductible temporary
Deferred tax assets Deferred tax assets
differences differences
Provision for asset
127,079,101.68 31,572,482.83 128,012,783.36 31,895,371.12
impairment
Unrealized profits
from internal 1,533,438,058.70 383,359,514.67 2,839,779,249.07 709,944,812.27
transactions
Deductible losses 9,551,262.70 2,312,572.68
Impact from salary 466,715,045.27 115,258,381.83 630,936,117.63 155,191,186.34
Impact from deferred
27,772,083.74 6,943,020.94 33,704,323.80 8,426,080.95
earnings
Impact from fixed
889,943.60 233,853.09 227,859.62 37,596.84
assets depreciation
Recognition costs of
restricted shares for
460,239,659.251 112,958,934.99 367,875,588.32 89,288,197.09
equity incentive in
the vesting period
Impact from fair
value changes of
other equity 90,722,543.67 22,680,635.92 5,752,926.37 1,438,231.59
instrument
investment
Impact of income tax
from fair value
changes of held-for- 26,533,219.63 6,633,304.92
trading financial
assets
Impact of income tax
from initial
8,994,376.39 1,422,793.65
recognition of lease
liabilities
Total 2,715,850,812.30 674,429,617.92 4,042,373,330.50 1,005,167,353.80
Note: 1. Deductible temporary differences of CNY 460,239,659.25 of costs and expenses recognized
during the vesting period of restricted shares for share incentives represent the estimated future pre-
tax deductible amounts based on the Company's share price less the grant price at the end of the
period.
7.17.2. Deferred tax liabilities before offset
Unit：CNY
Closing Balance Opening Balance
Item Taxable temporary Deferred tax Taxable temporary Deferred tax
differences liabilities differences liabilities
Fair value changes
of other equity
219,911,911.71 54,977,977.92 495,124,314.68 123,781,078.67
instrument
investment
Fair value changes 26,992,098.76 6,748,024.69
216
2023 Annual Report of Luzhou Laojiao Co., Ltd.
of held-for-trading
financial assets
Impact from the
policy of one-time
330,643,563.72 80,965,673.53 172,516,000.07 42,262,585.21
pre-tax deduction of
fixed assets
Impact of income tax
from initial
345,267.49 81,352.08
recognition of right-
of-use assets
Total 577,892,841.68 142,773,028.22 667,640,314.75 166,043,663.88
7.17.3. Details of unrecognized deferred tax assets
Unit：CNY
Item Closing Balance Opening Balance
Deductible losses 253,464,624.61 72,503,754.75
Credit impairment losses and asset
1,505.26 65.28
impairment provision
Impact from employee benefits
13,557,753.92 2,369,328.86
payable
Total 267,023,883.79 74,873,148.89
7.17.4. Deductible losses from unrecognized deferred tax assets will due on the following
years
Unit：CNY
Year Closing Amount Opening Amount Notes
The 1st year 14,491,365.44 6,496,423.50
The 2nd year 15,884,395.00 14,491,365.44
The 3rd year 8,417,566.87 21,651,366.58
The 4th year 33,125,772.28 11,572,224.60
The 5th year 181,545,525.02 18,292,374.63
Total 253,464,624.61 72,503,754.75
7.18. Other non-current assets
Unit：CNY
Closing Balance Opening Balance
Item Provision for Provision for
Book balance Book value Book balance Book value
impairment impairment
Prepayment
for long-term
assets such
358,900,430.1 358,900,430.1 196,095,702.0 196,095,702.0
as
3 31 9 9
engineering
equipment
and land
358,900,430.1 358,900,430.1 196,095,702.0 196,095,702.0
Total
3 3 9 9
Note: 1. At the end of the period, there was an increase of CNY 162,804,728.04 compared to the
217
2023 Annual Report of Luzhou Laojiao Co., Ltd.
beginning of the period, representing a growth of 83.02%, which was mainly due to the ongoing
construction projects of the subsidiary brewing companies, leading to a corresponding increase in
advance payments for construction equipment.
7.19. Assets with restricted ownership or use rights
Unit：CNY
Period-end Period-beginning
Item Book Book Type of Status of Book Book Type of Status of
balance value restriction restriction balance value restriction restriction
Provision Provision
Cash and for fixed for fixed
Fixed Fixed
cash 48,222,88 48,222,88 deposit 17,339,93 17,339,93 deposit
deposit deposit
equivalent 2.52 2.52 interest on 6.14 6.14 interest on
s interest interest
an accrual an accrual
basis basis
Bank cash
deposits
Cash and for L/G Bank cash
cash 10,772,93 10,772,93 10,000,00 10,000,00
Margin and E- Margin deposits
equivalent 0.90 0.90 0.00 0.00
s commerce for L/G
platform
margin
Cash and Frozen Frozen
cash Litigation 1,181,683. 1,181,683. Litigation
fund by fund by
equivalent freeze 24 24 freeze
s the court the court
58,995,81 58,995,81 28,521,61 28,521,61
Total
3.42 3.42 9.38 9.38
7.20. Held-for-trading financial liabilities
Unit：CNY
Item Closing Balance Opening Balance
Held-for-trading financial liabilities 9,763.87
Including:
Foreign exchange forward
9,763.87
transaction
Including:
Total 9,763.87
7.21. Accounts payable
7.21.1. Presentation of accounts payable
Unit：CNY
Category Closing Balance Opening Balance
Materials and service expense 862,772,419.35 1,042,394,395.05
Engineering equipment expense 1,494,451,313.86 1,269,271,189.99
Total 2,357,223,733.21 2,311,665,585.04
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2023 Annual Report of Luzhou Laojiao Co., Ltd.
7.21.2. Significant accounts payable whose aging is longer than 1 year
Unit：CNY
Reason for not payment or carrying
Category Closing Balance
forward
China Construction First Group Project payment within the contract
428,806,448.79
Corporation Limited settlement period
Luzhou Branch of Zhongqi
Project payment within the contract
Construction Group Huamao Co., 24,762,560.05
settlement period
Ltd.
Total 453,569,008.84
7.22. Other payables
Unit：CNY
Item Closing Balance Opening Balance
Dividend payable 29,684,819.82 16,594,850.58
Other payables 1,121,036,342.711 1,185,814,427.91
Total 1,150,721,162.53 1,202,409,278.49
Note: 1. Other payables listed in the above table are other payables minus interest payable and
dividend payable.
7.22.1. Dividend payable
Unit：CNY
Item Closing Balance Opening Balance
Ordinary share dividends 1
29,684,819.82 16,594,850.58
Total 29,684,819.82 16,594,850.58
Note: 1. The closing balance refer to the dividends distributed but not yet paid to minority
shareholders of the Company’s subsidiary Boda Marketing Company.
7.22.2. Other payables
7.22.2.1. Categories by nature
Unit：CNY
Item Closing Balance Opening Balance
Security deposit 471,170,274.78 527,881,969.37
Intercourse funds 26,994,900.06 10,226,769.10
Repurchase obligations of restricted
616,743,610.59 639,021,998.78
shares
Others 6,127,557.28 8,683,690.66
Total 1,121,036,342.71 1,185,814,427.91
7.22.2.2. Significant other payables whose aging are longer than 1 year
Unit：CNY
Item Closing Balance Reason for not payment or carrying
219
2023 Annual Report of Luzhou Laojiao Co., Ltd.
forward
Within the contract performance
Security deposits from suppliers 50,159,749.00
period
Within the contract performance
Security deposits from dealers 5,300,000.00
period
Total 55,459,749.001
Note: 1. Significant other payables whose aging are longer than 1 year are mainly security deposits
collected from dealers and suppliers.
7.23. Contract liabilities
Unit：CNY
Category Closing Balance Opening Balance
Within 1 year 2,648,369,042.14 2,540,635,630.98
1-2 years 11,257,914.75 10,654,577.66
2-3 years 1,537,289.68 1,199,843.23
Over 3 years 11,812,843.73 13,884,666.89
Total 2,672,977,090.30 2,566,374,718.76
Significant contract liabilities whose aging are longer than 1 year
Unit：CNY
Reason for not payment or carrying
Item Closing Balance
forward
Advances from customers for goods 8,698,271.48 Within the contract settlement period
Total 8,698,271.48
The Company shall comply with the disclosure requirements for companies engaging in food & liquor
and wine production of the Guidelines No. 3 of the Shenzhen Stock Exchange on Sel f-regulation of
Listed Companies—Industry-specific Information Disclosure.
The total amount of the top five companies in contract liabilities was CNY 909,316,825.12, accounting
for 34.02%.
7.24. Employee benefits payable
7.24.1. Employee benefits payable shown as follows
Unit：CNY
Increase in current Decrease in current
Item Opening Balance Closing Balance
period period
1. Short-term
655,612,131.74 986,098,412.18 1,146,571,761.71 495,138,782.21
benefits
2. Post-employment
benefits- defined 19,413,782.04 152,464,396.28 143,159,220.65 28,718,957.67
contribution plans
3. Termination
8,971.53 201,782.75 201,782.75 8,971.53
benefits
Total 675,034,885.31 1,138,764,591.21 1,289,932,765.11 523,866,711.41
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2023 Annual Report of Luzhou Laojiao Co., Ltd.
7.24.2. Short-term employee benefits payable shown as follows
Unit：CNY
Increase in current Decrease in current
Item Opening Balance Closing Balance
period period
1. Wages, bonuses,
allowances and 611,845,393.45 782,949,224.85 953,572,824.59 441,221,793.71
grants
2. Employees’
21,197,780.03 21,197,780.03
welfare
3. Social insurance
2,037,299.47 83,042,051.17 74,756,274.36 10,323,076.28
premiums
Work-related injury
510,250.71 3,322,425.00 2,457,156.99 1,375,518.72
insurance
Medical and
maternity insurance 1,527,048.76 79,719,626.17 72,299,117.37 8,947,557.56
premium
4. Housing funds 2,088,245.59 69,651,313.89 66,166,907.53 5,572,651.95
5. Labor union
expenditures and
39,641,193.23 29,258,042.24 30,877,975.20 38,021,260.27
employee education
funds
Total 655,612,131.74 986,098,412.18 1,146,571,761.71 495,138,782.21
7.24.3. Defined contribution plan shown as follows
Unit：CNY
Increase in current Decrease in current
Item Opening Balance Closing Balance
period period
1. Basic endowment
18,361,778.96 93,441,846.25 89,839,533.73 21,964,091.48
insurance premium
2. Unemployment
326,819.86 3,566,554.41 3,561,574.51 331,799.76
insurance premium
3. Enterprise annuity 725,183.22 55,455,995.62 49,758,112.41 6,423,066.43
Total 19,413,782.04 152,464,396.28 143,159,220.65 28,718,957.67
7.25. Taxes payable
Unit：CNY
Item Closing Balance Opening Balance
Value-added tax 462,528,000.24 502,641,326.22
Consumption tax 1,255,405,887.03 1,386,271,621.60
Enterprise income tax 998,666,442.52 1,345,243,541.07
Individual income tax 7,810,885.88 10,295,445.63
Urban maintenance and construction
119,493,139.70 131,841,222.44
tax
Education surcharge 51,286,192.79 56,445,651.96
Local education surcharge 34,299,228.87 37,733,654.17
Stamp duty 9,347,536.01 9,937,931.91
Land use tax 437,618.74 437,618.74
Others 352,601.22 302,715.24
Total 2,939,627,533.00 3,481,150,728.98
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2023 Annual Report of Luzhou Laojiao Co., Ltd.
7.26. Non-current liabilities due within one year
Unit：CNY
Item Closing Balance Opening Balance
Long-term loans due within one year 25,000,000.00 20,400,000.00
Lease liabilities due within one year 5,114,015.89 14,530,370.36
Interest of long-term loans due within
7,379,478.99 1,984,027.78
one year
Interest of bonds payable due within
41,424,657.53 44,965,068.49
one year
Total 78,918,152.41 81,879,466.63
7.27. Other current liabilities
Unit：CNY
Item Closing Balance Opening Balance
Output VAT to be transferred 347,485,071.57 333,627,225.47
Total 347,485,071.57 333,627,225.47
7.28. Long-term loans
7.28.1. Long-term loans
Unit：CNY
Item Closing Balance Opening Balance
Credit loans 10,025,300,000.00 3,200,000,000.00
Less: Long-term loans due within one
-25,000,000.00 -20,400,000.00
year
Total 10,000,300,000.00 3,179,600,000.00
Other statements, including interest rate range:
Loan prime rate (LPR) - corresponding basic points (BP) for 1-year/5-year and above loan terms.
7.29. Bonds payable
7.29.1. Bonds payable
Unit：CNY
Item Closing Balance Opening Balance
Corporate bonds in 2020 (Phase I) 1,498,716,737.02 1,497,461,348.61
Corporate bonds in 2022 (Phase I) 1,498,638,223.25
Total 1,498,716,737.02 2,996,099,571.86
7.29.2. Increase/decrease of bonds payable (excluding other financial instrument classified as
financial liabilities such as preferred shares and perpetual bonds)
Unit：CNY
Coup Issuin Open Issue Withd Amor Repa Defa
Issuin Closi
Bond Par Durat g ing d in rawal tizatio ymen
on g ng ult or
name value ion amou Balan the of n of t in
rate date Balan not
nt ce curre intere premi the
222
2023 Annual Report of Luzhou Laojiao Co., Ltd.
nt st by um report ce
perio par and ing
d value depre perio
ciatio d
n
Corp
orate 16
1,500 1,494 1,497 1,498
bond 52,50 1,255
,000, 3.50 Marc 5 ,000, ,461, ,716,
s in 0,000 ,388. Not
2020 000.0 % years 000.0 348.6 737.0
h .00 41
(Phas 0 0 1 2
e I) 2020
Corp
orate 1,500 2 1,498 1,498 1,500
bond 42,75 1,361
,000, 2.85 Dece 3 ,800, ,638, ,000,
s in 0,000 ,776. Not
2022 000.0 % mber years 000.0 223.2 000.0
.00 75
(Phas 0 2022 0 5 0
e I)1
2,992 2,996 1,500 1,498
95,25 2,617
,800, ,099, ,000, ,716,
Total —— 0,000 ,165. ——
000.0 571.8 000.0 737.0
.00 16
0 6 0 2
Note: 1. In October 2023, the Company made a suggestive announcement. In accordance with the
provisions of the Prospectus for Luzhou Laojiao Co., Ltd.'s Corporate Bonds Publicly Offered in 2022
to Professional Investors (Tranche 1) (hereinafter referred to as the "Prospectus"), the Company, as
the issuer of the 2022 corporate bond (Tranche 1) "22 Lujiao 01" (bond code: 148133), has the right
to adjust the coupon rate for the first and second interest payment years of this bond issuance at the
end of the first year of the bond's duration. According to the current market situation, the Company
decided to reduce the coupon rate for the first and second interest payment years of this bond
issuance by 158 basis points. Therefore, the coupon rate for the first and second interest payment
years of the "22 Lujiao 01" bond issuance was adjusted from 2.85% to 1.00%. According to the
investor resale option set forth in the Prospectus, investors have the right to register during the
investor resale registration period to sell all or part of the current bonds held to the issuer at face
value, or choose to continue holding the current bonds; the resale price is CNY 100 per bond
(excluding interest); according to data provided by the Shenzhen Branch of China Securities
Depository and Clearing Corporation Limited, "22 Lujiao 01" had a valid resale declaration of
15,000,000 bonds during the two resale registration periods, with a resale amount of CNY
1,500,000,000, and the remaining unsold bonds quantity was 0. The Company has fully transferred
the principal and interest payment for the resale portion of "22 Lujiao 01" to the designated bank
account of the Shenzhen Branch of China Securities Depository and Clearing Corporation Limited.
The date of receipt of funds from the resale was 4 December 2023. This resale is for the full amount,
and after its completion, "22 Lujiao 01" will be delisted from the Shenzhen Stock Exchange, with the
delisting date set for 4 December 2023.
7.30. Lease liabilities
Unit：CNY
Item Closing Balance Opening Balance
Lease payment 32,472,149.33 48,776,000.46
Less: unrecognized financing cost -5,001,728.97 -5,148,660.44
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2023 Annual Report of Luzhou Laojiao Co., Ltd.
Lease liabilities due within one year -5,114,015.89 -14,530,370.36
Total 22,356,404.47 29,096,969.66
7.31. Deferred income
Unit：CNY
Increase in Decrease in
Item Opening Balance Closing Balance Reason
current period current period
Reception of
Government
33,704,323.80 3,364,559.08 9,296,799.14 27,772,083.74 financial
grants
allocation
Total 33,704,323.80 3,364,559.08 9,296,799.14 27,772,083.74 --
Other statements:
Details:
Non-
operatin Cost
Other Other Relate
Increase in g reductio
Opening income in Closing d to
current income n in
Item Balance current decreas Balance assets/
period in current
period income
current period
period e
New mode
application
project of
Relate
digital 1,553,495.1
d to
workshop for 4,684,300.00 364,559.08 3,495,363.94
assets
solid state 4
baijiu
production
Construction
project of
liquor room
Relate
of Luzhou 3,000,000.0 1,507,142.8
d to
Laojiao 4,550,000.00 6,042,857.20
assets
brewing 0 0
technical
renovation
Luzhou
Laojiao
automatic
Relate
baijiu
d to
production 1,135,238.10 349,304.04 785,934.06
assets
line technical
renovation
project
Boiler
reconstructio
n project of
Relate
Luohan 1,264,285.7
d to
Brewing 6,321,428.56 5,057,142.86
assets
Base of 0
Luzhou
Laojiao
Brewing Relate
wastewater 11,142,857.1 3,428,571.4 7,714,285.68 d to
224
2023 Annual Report of Luzhou Laojiao Co., Ltd.
Non-
operatin Cost
Other Other Relate
Increase in g reductio
Opening income in Closing d to
current income n in
Item Balance current decreas Balance assets/
period in current
period income
current period
period e
treatment assets
project 4 6
Improvement
and technical
renovation
Relate
project of 1,194,000.0
d to
Luzhou 5,870,500.00 4,676,500.00
assets
Laojiao 0
production
supporting
33,704,323.8 3,364,559.0 9,296,799.1 27,772,083.7
Total
0 8 4 4
7.32. Share capital
Unit：CNY
Increases/decreases in the current period (+, -)
Opening Conversion Closing
Balance Issuance of Bonds of reserves Balance
Others Subtotal
new shares share funds into
shares
Total
1,471,895,1 1,471,987,7
number of 92,669.00 92,669.001
00.00 69.00
shares
Note: 1. The Company's third grant of the restricted share incentive scheme in December 2022,
consisted of 92,669 shares. On 15 January 2023, the Company received subscription payments in
monetary assets for these restricted shares from 17 incentive recipients. These shares were listed on
17 February 2023. Thus, the total number of company shares increased from 1,471,895,100 shares
to 1,471,987,769 shares.
7.33. Capital reserves
Unit：CNY
Increase in current Decrease in current
Item Opening Balance Closing Balance
period period
Share premium
4,197,109,156.66 8,198,055.74 4,205,307,212.40
(capital premium)
Other capital
603,045,312.33 377,128,998.49 980,174,310.82
reserves
Total 4,800,154,468.99 385,327,054.23 5,185,481,523.22
Other statements, including increase/decrease and reasons thereof:
Note 1: The increase of capital premium during the current period was attributed to the share premium
payment received from the third grant of restricted shares.
225
2023 Annual Report of Luzhou Laojiao Co., Ltd.
Note 2: For the increased amount in other capital reserve for the current period, CNY 376,901,172.48
represents the costs and expenses attributable to the parent company to be recognised in the current
period for the issuance of restricted shares, and the income tax impact of the excess of the amount
deductible before tax over the costs and expenses recognised in future periods. Additionally, CNY
227,826.01 is due to the impact of other equity changes in investees accounted for using the equity
method.
7.34. Treasury shares
Unit：CNY
Increase in current Decrease in current
Item Opening Balance Closing Balance
period period
Perform the
repurchase
639,021,998.78 8,290,724.74 30,569,112.93 616,743,610.59
obligations under the
equity incentive
Total 639,021,998.78 8,290,724.74 30,569,112.93 616,743,610.59
Other statements, including notes to increase and decrease during the reporting period and the
reasons for changes:
Note: The Company recognized restricted shares repurchase obligations in the current period, raising
the treasury stock by CNY 8,290,724.74; and the treasury stock was down by CNY 30,569,112.93
due to the expected cash dividend of unlockable restricted shares.
7.35. Other comprehensive income
Unit：CNY
Current Period
Less:
Less:
Previously
Previously
recognize Amount
Amount in recognize
d in other Amount attribute to
Opening current d in other Closing
Item comprehe Less: attribute to non-
Balance period comprehe Balance
nsive Income parent controlling
before nsive
income tax company sharehold
income income
transferre after tax ers after
tax transferre
d to tax
d to profit
retained
and loss
earnings
I. Other
comprehe
nsive
income
- -
that will 366,978,5 16,215,65 96,948,56
253,814,3 270,029,9
not be 41.23 3.21 3.88
24.14 77.35
reclassifie
d into
profit and
loss
Other
comprehe
nsive 106,537.8 106,537.8 106,537.8
income 6 6 6
that will
not be
226
2023 Annual Report of Luzhou Laojiao Co., Ltd.
reclassifie
d into
profit and
loss under
equity
method
Fair value
changes
of other - -
366,978,5 16,215,65 96,842,02
equity 253,920,8 270,136,5
instrument 41.23 3.21 6.02
62.00 15.21
investmen
t
II. Other
comprehe
nsive
income - -
2,744,132. 2,409,201. 334,931.5
that will be 36,227,29 33,818,09
reclassifie 59 02 7
5.39 4.37
d into
profit and
loss
Including:
Other
comprehe
nsive
income - -
that will be 2,000,549. 2,000,549.
38,784,74 36,784,19
reclassifie 31 31
d into 0.65 1.34
profit and
loss under
equity
method
Difference
from
conversio
n of
2,557,445. 743,583.2 408,651.7 334,931.5 2,966,096.
financial
statement 26 8 1 7 97
s in
foreign
currency
- -
330,751,2 16,215,65 334,931.5 63,130,46
Total 251,070,1 267,620,7
45.84 3.21 7 9.51
91.55 76.33
7.36. Surplus reserves
Unit：CNY
Increase in current Decrease in current
Item Opening Balance Closing Balance
period period
Statutory surplus
1,471,895,100.00 92,669.00 1,471,987,769.00
reserves
Total 1,471,895,100.00 92,669.00 1,471,987,769.00
7.37. Undistributed profits
Unit：CNY
227
2023 Annual Report of Luzhou Laojiao Co., Ltd.
Item Current Period Previous Period
Undistributed profit before
26,772,197,213.98 21,187,860,235.89
adjustment at the end of the last year
Undistributed profit after adjustment
26,772,197,213.98 21,187,860,235.89
at the beginning of year
Plus: Net profit attributable to owners
of the parent company for the current 13,246,394,700.59 10,365,383,281.80
period
Less: Provision of statutory surplus
92,669.00 7,142,624.00
reserves
Ordinary share dividends payable 6,219,148,324.03 4,773,919,306.55
1
Plus: Other transfer in 16,215,653.21 15,626.84
Undistributed profits at the end of the
33,815,566,574.75 26,772,197,213.98
period
Note: 1 Other transfers represent the Company's disposal of certain other equity instrument
investments in the current period, which was due to the impact of transfer of fair value changes
previously recognised in other comprehensive income to retained earnings.
7.38. Operating revenue and cost of sales
Unit：CNY
Current Period Previous Period
Item
Revenue Cost of sales Revenue Cost of sales
Primary business 29,832,432,932.59 3,354,136,725.57 24,766,121,998.49 3,214,253,716.91
Other business 400,868,455.67 183,014,677.58 357,441,273.13 155,274,677.11
Total 30,233,301,388.26 3,537,151,403.15 25,123,563,271.62 3,369,528,394.02
Whether the lower of the net profit before and after deduction of non-recurring gains and losses through
audit is negative
□Yes No
Details:
Unit：CNY
Contract Baijiu sales Total
category Operating revenue Cost of sales Operating revenue Cost of sales
Commodit
y type
Including:
Medium
and high
26,841,342,073.14 2,076,149,454.34 26,841,342,073.14 2,076,149,454.34
grade
baijiu
Other
3,235,936,786.44 1,408,395,265.76 3,235,936,786.44 1,408,395,265.76
baijiu
By
operating
segment
Including:
Domestic 29,900,173,530.22 3,458,773,542.05 29,900,173,530.22 3,458,773,542.05
Outbound 177,105,329.36 25,771,178.05 177,105,329.36 25,771,178.05
228
2023 Annual Report of Luzhou Laojiao Co., Ltd.
Market or
customer
type
Including:
Contract
type
Including:
Commodit
y sales 30,077,278,859.58 3,484,544,720.10 30,077,278,859.58 3,484,544,720.10
contract
By
commodit
y transfer
time
Including:
By
contract
term
Including:
By sales
channel
Including:
Total 30,077,278,859.58 3,484,544,720.10 30,077,278,859.58 3,484,544,720.10
Other statements
The Company's main business is the production and sale of baijiu. Revenue is recognised at the point
when the Company transfers control of the relevant goods to the customer and fulfils its performance
obligations.
Information in relation to the transaction price apportioned to the residual contract performance
obligation:
The amount of revenue corresponding to performance obligations of contracts signed but not
performed or not fully performed yet was CNY 2,664,278,818.82 at the period-end, among which
CNY 2,664,278,818.82 was expected to be recognized in 2024.
7.39. Business taxes and surcharges
Unit：CNY
Item Current Period Previous Period
Consumption tax 3,240,865,419.12 2,753,367,764.57
Urban maintenance and construction
441,952,895.02 370,928,389.23
tax
Educational surcharge 189,596,044.62 158,966,546.28
Property tax 72,159,092.39 75,661,405.90
Land use tax 34,404,828.33 35,777,691.90
Stamp duty 27,591,982.98 23,111,385.94
Local education surcharge 126,397,571.29 105,978,159.07
Others 158,516.93 156,944.59
Total 4,133,126,350.68 3,523,948,287.48
229
2023 Annual Report of Luzhou Laojiao Co., Ltd.
7.40. General and administrative expenses
Unit：CNY
Item Current Period Previous Period
Employee compensation 438,391,560.79 467,979,805.98
Depreciation and amortization 119,690,409.04 132,084,757.27
Management fee and service
146,708,293.63 115,361,022.69
expense
Others 434,690,413.77 446,996,671.29
Total 1,139,480,677.23 1,162,422,257.23
7.41. Selling and distribution expenses
Unit：CNY
Item Current Period Previous Period
Advertising promotion expense 1,614,086,963.33 1,880,179,769.91
Promotion expense 1,479,620,839.26 712,641,702.96
Employee compensation 297,757,314.24 355,699,286.88
Storage and logistics costs 198,741,925.26 138,589,417.94
Others 384,218,484.83 361,660,868.33
Total 3,974,425,526.92 3,448,771,046.02
7.42. Research and development expenses
Unit：CNY
Item Current Period Previous Period
Comprehensive research and
225,955,797.33 206,248,486.57
development expenses
Total 225,955,797.33 206,248,486.57
7.43. Financial expenses
Unit：CNY
Item Current Period Previous Period
Interest expenses 488,003,010.93 229,673,136.36
Less: Interest income -864,006,165.58 -505,746,664.32
Losses from currency exchange -2,201,671.82 -16,072,149.45
Handling charges 6,292,845.93 4,070,627.61
Amortization of unrecognized
759,774.13 1,698,122.32
financing costs
Total -371,152,206.41 -286,376,927.48
7.44. Other income
Unit：CNY
Item Current Period Previous Period
Government grants 51,950,003.11 34,931,161.52
Other refund 2,229,602.28 1,593,155.57
Total 54,179,605.39 36,524,317.09
230
2023 Annual Report of Luzhou Laojiao Co., Ltd.
7.45. Gain on changes in fair value
Unit：CNY
Item Current Period Previous Period
Held-for-trading financial assets 62,998,156.40 -12,023,622.50
Held-for-trading financial liabilities -9,694.10
Total 62,988,462.30 -12,023,622.50
7.46. Investment income
Unit：CNY
Item Current Period Previous Period
Investment income from long-term
equity investments under the equity 66,927,156.69 84,626,608.53
method
Investment income gained during the
period of holding held-for-trading 2,391,009.80 6,813,617.83
financial assets
Investment income from disposal of
5,290,247.46 9,438,465.78
held-for-trading financial assets
Dividend income gained during the
period of holding other equity 11,268,626.39 8,078,717.93
instrument investment
Investment income from early
-1,055,251.33 -4,241,494.76
redemption of bonds
Investment losses from foreign
-97,207.03
exchange forward transaction
Total 84,724,581.98 104,715,915.31
Other statements:
Note: There is no major restriction on the repatriation of the Company's investment income.
Including: investment income from long-term equity investments under the equity method:
Item Current Period Previous Period
Huaxi Securities Co., Ltd. 44,167,627.40 43,897,917.31
Luzhou Laojiao Postdoctoral Workstation Technology
-1,846,843.26 185,894.77
Innovation Co., Ltd.
Sichuan Development Liquor Investment Co., Ltd. 8,326.61 162,805.88
Sichuan Tongniang Baijiu Industry Technology Research
253,536.99 199,394.39
Institute Co., Ltd.
CTS Luzhou Laojiao Cultural Tourism Development Co., Ltd. 24,344,508.95 40,180,596.18
Total 66,927,156.69 84,626,608.53
Including: dividend income gained during the period of holding other equity instrument investment:
Item Current Period Previous Period
North Chemical Industries Co., Ltd. 78,177.75 70,359.97
Guotai Junan Securities Co., Ltd. 6,241,808.41 8,008,357.96
Luzhou Sanrenxuan Liquor Industry Co., Ltd. 500,000.00
Luzhou Bank Co., Ltd. 3,471,360.00
China Tourism Group Duty Free Corporation Limited 977,280.23
231
2023 Annual Report of Luzhou Laojiao Co., Ltd.
Total 11,268,626.39 8,078,717.93
7.47. Credit impairment loss
Unit：CNY
Item Current Period Previous Period
Bad debt loss of accounts receivable -964,767.06 -240,771.03
Bad debt loss of other receivables 1,897,008.76 -924,947.31
Total 932,241.70 -1,165,718.34
7.48. Gains from disposal of assets
Unit：CNY
Item Current Period Previous Period
Gains from disposal of non-current
44,694,238.37 19,805,093.70
assets
Including: Gains from disposal of
35,447,138.00 24,600.37
fixed assets
Gains from disposal of intangible
8,980,400.30 19,786,813.38
assets
Gains from disposal of use right
266,700.07 -6,320.05
assets
Total 44,694,238.37 19,805,093.70
7.49. Non-operating income
Unit：CNY
The amount included in the
Item Current Period Previous Period extraordinary gains and
losses of the current period
Compensation for default 29,859,330.01 19,506,788.74 29,859,330.01
Gains from damage
retirement of non-current 3,920,498.91 3,920,498.91
assets
Others 2,424,034.25 8,326,631.57 2,424,034.25
Total 36,203,863.17 27,833,420.31 36,203,863.17
7.50. Non-operating costs
Unit：CNY
The amount included in the
Item Current Period Previous Period extraordinary gains and
losses of the current period
Donation 21,381,120.00 8,710,000.00 21,381,120.00
Losses from damage
retirement of non-current 2,570,236.31 10,778,148.07 2,570,236.31
assets
Others 48,127,919.52 471,344.99 48,127,919.52
Total 72,079,275.83 19,959,493.06 72,079,275.83
232
2023 Annual Report of Luzhou Laojiao Co., Ltd.
7.51. Income tax expense
7.51.1. Statement of income tax expense
Unit：CNY
Item Current Period Previous Period
Current period income tax 4,119,788,148.40 3,422,712,211.76
Deferred income tax 397,509,384.83 21,450,324.10
Total 4,517,297,533.23 3,444,162,535.86
7.51.2. Adjustment for accounting profit and income tax expense
Unit：CNY
Item Current Period
Total profit 17,805,957,556.44
Income tax expenses determined by statutory/applicable
4,451,489,389.11
tax rate
Impact from subsidiaries’ different tax rates -8,637,270.57
Impact from adjust for impact from income tax expense in
-14,432,781.58
previous period
Impact from non-taxable income -14,161,986.04
Impact from non-deductible costs, expenses and losses 1,143,355.57
Impact from deductible loss of unrecognized deferred
-2,031,822.20
income tax assets in prior period
Impact from deductible temporary difference or losses
44,740,360.47
due to unrecognized deferred tax asset in current period
Income tax impact of expected pre-tax deductible
amounts of restricted shares in future periods that are 69,490,160.71
less than the recognized cost and expenses
Deduction impact of research and development costs -16,556,031.98
Impact from reversal of deductible losses of deferred
6,254,159.74
income tax assets recognized in prior period
Income tax expense 4,517,297,533.23
Other statements:
Note 1: The increase compared to the previous period was CNY 1,073,134,997.37, representing a
growth of 31.16%. This increase was mainly attributed to the growth in profit for the current period,
resulting in a corresponding increase in enterprise income tax.
Note 2: The income tax rate details are provided in Note 6. Taxes.
7.52. Other comprehensive income
Details in Note 7.35. Other comprehensive income.
7.53. Notes to the statement of cash flow
7.53.1. Cash related to operating activities
Cash received from other operating activities
Unit：CNY
233
2023 Annual Report of Luzhou Laojiao Co., Ltd.
Item Current Period Previous Period
Recovery of saving deposits
1,484,623.48 3,327,415.45
involving contract disputes
Government grants 46,017,763.05 40,104,471.04
Interest income from bank deposit 831,459,358.12 582,623,274.18
Others 392,483,116.17 242,137,090.66
Total 1,271,444,860.82 868,192,251.33
Cash paid for other operating activities
Unit：CNY
Item Current Period Previous Period
Cash paid for expenses 2,466,131,087.54 2,987,783,797.32
Restricted court frozen funds paid 1,181,683.24
Cash paid to E-commerce platform
772,930.90
as security deposit
Total 2,466,904,018.44 2,988,965,480.56
7.53.2. Cash related to investing activities
Cash received from significant investing activities
Unit：CNY
Item Current Period Previous Period
Recovering the principal invested in
1,400,000,000.00 2,100,000,000.00
held-for-trading financial assets
Total 1,400,000,000.00 2,100,000,000.00
Cash paid for other investing activities
Unit：CNY
Item Current Period Previous Period
Loss on forward exchange settlement 97,207.03
Total 97,207.03
Cash paid for significant investing activities
Unit：CNY
Item Current Period Previous Period
Cash paid for purchasing long-term
1,501,625,135.45 1,035,165,351.11
assets
Cash paid for purchasing held-for-
1,700,000,000.00 2,500,000,000.00
trading financial assets
Total 3,201,625,135.45 3,535,165,351.11
7.53.3. Cash related to financing activities
Cash received from other financing activities
Unit：CNY
Item Current Period Previous Period
Cash deposits received for L/G 509,017.10
Cash deposits received for travel 1,400,000.00
Total 1,909,017.10
Cash paid for other financing activities
234
2023 Annual Report of Luzhou Laojiao Co., Ltd.
Unit：CNY
Item Current Period Previous Period
Cash paid for reducing registered
5,574,626.46
capital
Rating and registration fee for issuing
1,394,339.62
bonds
Net losses from put-back of bonds 1,055,251.33 117,924.53
Cash paid for rent of right-of-use
6,547,996.56 14,508,022.38
assets
Total 7,603,247.89 21,594,912.99
Changes in liabilities arising from financing activities
Applicable □ N/A
Unit：CNY
Increase in current period Decrease in current period
Opening Closing
Item Non-cash Non-cash
Balance Cash change Cash change Balance
change change
Long-term
loans
(including
3,201,984,027 6,850,000,000 10,032,679,47
long-term 7,379,478.99 24,700,000.00 1,984,027.78
.78 .00 8.99
loans due
within one
year)
Bonds payble
(including
bonds 3,041,064,640 1,500,000,000 1,540,141,394
923,245.80
payable due .35 .00 .55
within one
year)
Lease
liabilities
(including
43,627,340.02 224,568.66 6,547,996.56 9,833,491.76 27,470,420.36
lease liabilities
due within one
year)
Other
payables
(Repurchase 639,021,998.7 616,743,610.5
8,290,724.74 30,569,112.93
obligations of 8 9
restricted
shares)
6,925,698,006 6,858,290,724 1,531,247,996 12,217,034,90
Total 7,604,047.65 43,309,878.27
.93 .74 .56 4.49
7.54. Supplementary information to statement of cash flow
7.54.1. Supplementary information to statement of cash flow
Unit：CNY
Item Current Period Previous Period
1. Reconciliation of net profit to cash
flow from operating activities:
Net profit 13,288,660,023.21 10,410,589,104.43
235
2023 Annual Report of Luzhou Laojiao Co., Ltd.
Plus: Provision for asset impairment -932,241.70 1,165,718.34
Depreciation of fixed asset, oil and
gas assets and productive biological 587,432,455.60 547,618,213.97
assets
Depreciation of right-of-use assets 9,851,802.53 14,638,577.02
Amortization of intangible assets 79,694,038.52 80,604,041.96
Amortization of long-term deferred
498,487.93 872,334.97
expense
Losses from disposal of fixed assets,
intangible assets and other long-term -44,694,238.37 -19,805,093.70
assets (Gains use “-”)
Losses from retirement of fixed
-1,350,262.60 10,778,148.07
assets (Gains use “-”)
Losses from change in fair value
-62,988,462.30 12,023,622.50
(Gains use “-”)
Financial expenses (Gains use “-”) 323,773,618.88 114,617,073.40
Losses on investments (Gains use “-
-84,724,581.98 -104,715,915.31
”)
Decrease in deferred income tax
351,976,919.74 -19,224,200.66
assets (Increase uses “-”)
Increase in deferred income tax
45,532,465.09 40,674,524.76
liabilities (Decrease uses “-”)
Decrease in inventories (Increase
-1,781,301,572.61 -2,563,169,208.05
use “-”)
Decrease in operating receivables
-1,506,903,239.71 279,234,000.55
(Increase use “-”)
Increase in operating payables
-556,160,276.77 -543,252,672.53
(Decrease use “-”)
Others
Net cash flows from operating
10,648,364,935.46 8,262,648,269.72
activities
2. Significant investing and financing
activities not involving cash:
Conversion of debt into capital
Convertible corporate bonds due
within one year
Fixed assets under financing lease
3.Net change in cash and cash
equivalents:
Closing balance of cash 25,893,029,277.861 17,729,006,591.87
Less: Opening balance of cash 17,729,006,591.87 13,402,528,941.83
Plus: Closing balance of cash
equivalents
Less: Opening balance of cash
equivalents
Net change in cash and cash
8,164,022,685.99 4,326,477,650.04
equivalents
Note: 1. The amount of direct payment for goods and long-term assets (not involving cash flows) by the
endorsement of bank acceptances receivable in the current and previous periods was CNY
799,668,426.34 and CNY 1,074,632,849.98, respectively, which were not included in "cash received
from sales of goods or rendering of services", "cash paid for goods and services" and "cash paid for the
purchase of fixed assets, intangible assets and other long-term assets" of the cash flow budget.
236
2023 Annual Report of Luzhou Laojiao Co., Ltd.
7.54.2. Composition of cash and cash equivalent
Unit：CNY
Item Opening Balance Closing Balance
1. Cash 25,893,029,277.86 17,729,006,591.87
Including: Cash on hand 24,059.24 28,711.93
Unrestricted bank deposit 25,868,408,012.31 17,711,121,431.52
Other unrestricted cash and
24,597,206.31 17,856,448.42
cash equivalents
3. Closing balance of cash and cash
25,893,029,277.86 17,729,006,591.87
equivalents
7.54.3. Monetary funds not classified as cash and cash equivalents
Unit：CNY
Item Current Period Previous Period Reason
Other monetary funds 10,000,000.00 10,000,000.00 Bank cash deposits for L/G
Provision for fixed deposit
Bank deposit 48,222,882.52 17,339,936.14
interest on an accrual basis
Bank deposit 1,181,683.24 Frozen fund by the court
Restricted cash deposit in
Other monetary funds 772,930.90
E-commerce platforms
Total 58,995,813.42 28,521,619.38
7.55. Notes to items of the statements of changes in owners' equity
Notes to the name of “Other” of closing balance at the end of the previous year adjusted and the
amount adjusted:
N/A
7.56. Foreign currency transactions
7.56.1. Foreign currency transactions
Unit：CNY
Closing Balance in Foreign
Item Exchange Rate Closing Balance in CNY
Currency
Cash at Bank and on Hand 87,009,233.85
Including: USD 12,063,932.87 7.0827 85,445,217.34
EUR 327.95 7.8592 2,577.42
HKD 1,720,811.80 0.90622 1,559,434.07
GBP 39.91 9.0411 360.83
AUD 339.12 4.8484 1,644.19
Accounts Receivable 6,763,202.06
Including: USD 27,947.11 7.0827 197,941.00
EUR
HKD 7,244,665.82 0.90622 6,565,261.06
Long-term Loans
Including: USD
EUR
237
2023 Annual Report of Luzhou Laojiao Co., Ltd.
HKD
Other Receivables 2,185,243.73
Including: HKD 2,411,383.25 0.90622 2,185,243.73
Accounts Payable 1,052,816.48
Including: USD 78,287.39 7.0827 554,486.10
HKD 549,900.00 0.90622 498,330.38
Other Payables 22,462,946.79
Including: USD 13,520.88 7.0827 95,764.34
HKD 24,681,845.97 0.90622 22,367,182.45
Non-current liabilities due
1,148,459.41
within one year
Including: USD 68,957.37 7.0827 488,404.36
HKD 728,360.72 0.90622 660,055.05
Lease liabilities 990,456.88
Including: USD 139,841.71 7.0827 990,456.88
7.56.2. Description of the foreign business entity, including the important foreign business
entity, shall disclose its main foreign business place, bookkeeping standard currency and
selection basis, and shall also disclose the reason for the change of the bookkeeping
standard currency
Applicable □ N/A
Bookkeeping
Company Operation site Choosing Reason
currency
Luzhou Laojiao International Development Currency in the registration
Hong Kong, China HKD
(Hong Kong) Co., Ltd. place
Luzhou Laojiao Commercial Development Currency in the registration
USA USD
(North America) Co., Ltd. place
Currency in the registration
Mingjiang Co., Ltd. USA USD
place
7.57. Lease
7.57.1. The Company as lessee
Applicable □ N/A
Variable lease payments that are not covered in the measurement of the lease liabilities
□Applicable N/A
Simplified short-term lease or lease expense for low-value assets
Applicable □ N/A
The Company uses a simplified approach for short-term leases, where the right-of-use assets and
lease liabilities are not recognised. Short-term leases accounted for as expenses in the current period
are listed below:
Item 2023 2022
Short-term lease expenses recognised as current profit or loss in
9,494,225.98 8,551,460.53
the current period using the simplified approach
Total cash outflows related to leases 16,042,222.54 23,059,482.91
238
2023 Annual Report of Luzhou Laojiao Co., Ltd.
Note: The leased assets of the Company include the buildings and constructions and the land use
right involved in operation. The leasing period of land use right is normally 15-30 years and the lease
contract of land use right generally includes the renewal option clause.
Circumstances involving sale and leaseback transactions
N/A
7.57.2. The Company as lessor
Operating leases with the Company as lessor
Applicable □ N/A
Unit：CNY
Of which: income related to variable
Item Rental income lease payments not included in lease
receipts
Income from rental of buildings,
9,076,179.71
equipment, etc.
Total 9,076,179.71
Finance leases with the Company as lessor
□Applicable N/A
Undiscounted lease receipts for each of the next five years
□Applicable N/A
7.57.3. Recognition of gain or loss on sales under finance leases with the company as a
manufacturer or dealer
□Applicable N/A
7.58. Others
N/A
8. Research and Development Expenditure
Unit：CNY
Item Current Period Previous Period
Material consumption 45,375,170.08 50,065,987.39
Research and development and
69,745,731.02 58,008,882.88
technical services
Share payment expense 25,097,365.62 16,478,234.13
Other indirect costs 85,737,530.61 81,695,382.17
Total 225,955,797.33 206,248,486.57
Of which: Expensed research and
225,955,797.33 206,248,486.57
development expenditure
239
2023 Annual Report of Luzhou Laojiao Co., Ltd.
9. Changes in consolidated scope
9.1. Business combination not under common control
9.1.1. Business combination not under common control during current period
There is no business combination not under common control during current period.
9.2. Business combination under common control
9.2.1. Business combination under common control during current period
There is no business combination under common control during current period.
9.3. Reverse purchase
The basic information of the transaction, the basis of the transaction constitutes the reverse purchase,
whether the assets and liabilities retained by the listed company constitute the business and its basis,
the determination of the merger cost, and the adjustment of the equity amount and its calculation
according to the equity transaction:
There is no reverse purchase during current period.
9.4. Disposing subsidiaries
Whether there is a situation of losing control after disposing the investment in the subsidiary only
once
□ Yes No
Whether there is a situation of disposing the investment in the subsidiary through several transactions
step by step and losing control during the period
□ Yes No
9.5. Consolidated scope changes due to other reasons
Explain other reasons for changing consolidated scope (such as establishing a new subsidiary,
liquidating a subsidiary) and its related situation:
Two subsidiaries were liquidated and cancelled during the current period: Luzhou Baonuo
Biotechnology Co., Ltd. was liquidated and cancelled in October 2023; Luzhou Laojiao Custom Liquor
Co., Ltd. was liquidated and cancelled in December 2023. Since the cancellation of these two
companies, they are no longer included in the scope of the consolidated financial statements.
9.6. Other
No
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2023 Annual Report of Luzhou Laojiao Co., Ltd.
10. Interests in other entities
10.1. Interests in subsidiaries
10.1.1. Group composition
Unit：CNY
Major Shareholding Proportion
Name of Registered Place of Nature of Acquisition
business
Subsidiaries capital registration business Direct Indirect method
location
Luzhou
Baijiu
Laojiao 310,500,00
Luzhou Luzhou manufactur 100.00% Investment
Brewing 0.00 e and sales
Co., Ltd.
Luzhou Red
Business
Sorghum Agricultural
combination
Modern 10,000,000. product
Luzhou Luzhou 60.00% under
Agricultural 00 planting and
common
Developme sales
control
nt Co., Ltd.
Luzhou
Laojiao 100,000,00
Luzhou Luzhou Baijiu sales 100.00% Investment
Sales Co., 0.00
Ltd.
Luzhou
Laojiao
Nostalgic 5,000,000.0
Luzhou Luzhou Baijiu sales 100.00% Investment
Liquor 0
Marketing
Co., Ltd.
Luzhou
Laojiao
5,000,000.0
Custom Luzhou Luzhou Baijiu sales 15.00% Investment
Liquor Co., 0
Ltd. 1
Luzhou
Laojiao
Selected
10,000,000.
Supply Luzhou Luzhou Baijiu sales 100.00% Investment
Chain 00
Manageme
nt Co., Ltd.
Guangxi
Luzhou
Laojiao Red wine
10,000,000.
Imported Qinzhou Qinzhou production 100.00% Investment
Liquor 00 and sales
Industry
Co., Ltd.
Luzhou
Dingli
5,000,000.0
Liquor Luzhou Luzhou Baijiu sales 100.00% Investment
Industry 0
Co., Ltd.
Luzhou
Laojiao
5,000,000.0
Qiankun Luzhou Luzhou Baijiu sales 100.00% Investment
0
Cheteau
Custom
241
2023 Annual Report of Luzhou Laojiao Co., Ltd.
Liquor
Sales Co.,
Ltd.2
Luzhou
Laojiao
5,000,000.0
New Liquor Luzhou Luzhou Baijiu sales 100.00% Investment
Industry 0
Co., Ltd.
Luzhou Liquor
3,000,000.0
Laojiao I & Luzhou Luzhou import and 100.00% Investment
E Co., Ltd. 0 export trade
Luzhou
Laojiao
Boda Liquor 120,000,00
Luzhou Luzhou Baijiu sales 75.00% Investment
Industry 0.00
Marketing
Co., Ltd.
Luzhou
Laojiao
50,000,000. Fruit wine
Fruit Wine Luzhou Luzhou 41.00% Investment
00 sales
Industry
Co., Ltd.
Mingjiang
6,000,000.0
Co., Ltd. America America Baijiu sales 54.00% Investment
(USD) 0
Luzhou
Laojiao
Internationa 20,000,000. Food import
Hainan Hainan 100.00% Investment
l Trade 00 and export
(Hainan)
Co., Ltd.
Luzhou Technology
Pinchuang 50,000,000. developmen
Luzhou Luzhou 100.00% Investment
Technology 00 t and
Co., Ltd. service
Luzhou
Laojiao
Internationa
l
10,000.00 Hong Kong Hong Kong Liquor sales 55.00% Investment
Developme
nt (Hong
Kong) Co.,
Ltd. (HKD)
Luzhou
Laojiao
Commercial
Business
Developme
500,000.00 America America developmen 100.00% Investment
nt (North
t
America)
Co., Ltd.
(USD)
Luzhou
Laojiao
60,000,000.
Electronic Luzhou Luzhou Liquor sales 90.00% Investment
Commerce 00
Co., Ltd.
Luzhou
Laojiao
Whitail 10,000,000.
Luzhou Luzhou Liquor sales 35.00% Investment
Liquor 00
Industry
Co., Ltd.
242
2023 Annual Report of Luzhou Laojiao Co., Ltd.
Luzhou Fermented
Baonuo 20,000,000. product
Luzhou Luzhou 100.00% Investment
Biotechnolo 00 manufactur
gy Co., Ltd.3 e
Luzhou
Business
Laojiao Health care
combination
Health 10,000,000. liquor
Luzhou Luzhou 100.00% under
Liquor 00 manufactur
common
Industry e and sales
control
Co., Ltd.
Luzhou Business
Laojiao combination
5,000,000.0 Health care
Health Luzhou Luzhou 100.00% under
0 liquor sales
Sales Co., common
Ltd. control
Luzhou
Laojiao 50,000,000.
Luzhou Luzhou Baijiu sales 40.00% 100.00% Investment
New Retail 00
Co., Ltd.
Luzhou
Technology
Laojiao
500,000,00 developmen
Technology Chengdu Chengdu 40.00% 60.00% Investment
0.00 t and
Innovation
service
Co., Ltd.
Note: 1. Luzhou Laojiao Custom Liquor Co., Ltd. was liquidated and cancelled on December 2023.
2. Luzhou Dingyi Liquor Sales Co., Ltd. changed its name to Luzhou Laojiao Qiankun Cheteau Custom
Liquor Sales Co., Ltd.
3 Luzhou BaoNuo Biotechnology Co., Ltd. was liquidated and cancelled in October 2023.
Statement for that the proportion of share-holding is different from the proportion of voting rights:
Although the Company holds less than 51% of the equity in Luzhou Laojiao Custom Liquor Co., Ltd.,
Luzhou Laojiao Fruit Wine Industry Co., Ltd., and Luzhou Laojiao Whitail Liquor Industry Co., Ltd., of
the five members of the board of directors of each of these companies, three members are appointed
by the Company, which represents a majority, and the Company exercises substantive control over
these companies. Therefore, they are included in the scope of consolidation.
10.1.2. Important non-wholly-owned subsidiaries
Unit：CNY
Gains and losses
Proportion of share Dividends paid to
attributable to non- Closing balance of
holdings of non- non-controlling
Name of subsidiary Controlling non-controlling
Controlling shareholders during
shareholders during shareholders interest
shareholders current period
current period
Luzhou Laojiao Boda
Liquor Industry 25.00% 29,684,819.82 29,684,819.82 61,843,872.29
Marketing Co., Ltd.
10.1.3. Major financial information of important non-wholly-owned subsidiaries
Unit：CNY
Name Closing Balance Opening Balance
of Curre Non- Curre Non- Total Curre Non- Curre Non- Total
subsid Total Total
nt curren nt curren liabiliti nt curren nt curren liabiliti
iary assets assets
assets t liabiliti t es assets t liabiliti t es
243
2023 Annual Report of Luzhou Laojiao Co., Ltd.
assets es liabiliti assets es liabiliti
es es
Luzho
u
Laojia
o
Boda
569,3 569,3 322,0 322,0 275,4 275,4 28,04 28,04
Liquor
77,54 77,54 02,05 02,05 19,42 19,42 3,931. 3,931.
Indust
4.62 4.62 5.47 5.47 1.12 1.12 97 97
ry
Marke
ting
Co.,
Ltd.
Unit：CNY
Current Period Previous Period
Name of Total Total
subsidiary Operating comprehe Operating Operating comprehe Operating
Net profit Net profit
revenue nsive cash flow revenue nsive cash flow
income income
Luzhou
Laojiao
Boda -
1,012,725, 118,739,2 118,739,2 64,698,45 71,134,55 71,134,55 99,816,98
Liquor 54,348,21
794.94 79.29 79.29 1.93 7.89 7.89 0.78
Industry 5.68
Marketing
Co., Ltd.
10.1.4. Significant restrictions on using the assets and liquidating the liabilities of the
Company
N/A
244
2023 Annual Report of Luzhou Laojiao Co., Ltd.
10.1.5. Financial support or other supports provided to structural entities incorporated into the
scope of consolidated financial statements
N/A
10.2. The transaction of the company with its owner's equity share changing but
the company still controls the subsidiary
10.2.1. Note to the owner's equity share changed in subsidiary
N/A
10.2.2. The transaction’s influence on the equity of non-controlling interests and the owner's
equity attributable to the company as the parent
N/A
10.3. Interests in joint ventures and associates
10.3.1. Important joint ventures and associates
Name of joint Major Shareholding proportion
Place of Business Accounting
venture/associ business
registration nature Direct Indirect Method
ates location
Important joint
ventures:
none
Important
associates:
Huaxi
Chengdu, Chengdu,
Securities Securities 10.39% Equity method
Sichuan Sichuan
Co., Ltd.
Basis of holding less than 20% of the voting rights but has a significant impact or holding 20% or
more voting rights but does not have a significant impact:
The Company has the substantive decision-making power, so the Company still has significant
influence on Huaxi Securities.
10.3.2. Major financial information of important associates
Unit：CNY
Closing Balance/Amount in current Opening Balance/Amount in previous
period period
Current assets 80,257,215,749.71 89,547,378,203.44
Non-current assets 8,633,260,818.24 8,199,779,781.47
Total assets 88,890,476,567.95 97,747,157,984.91
Current liabilities 47,013,859,718.97 54,767,331,978.36
Non-current liabilities 19,074,441,893.35 20,539,402,724.68
Total liabilities 66,088,301,612.32 75,306,734,703.04
Non-controlling shareholder interest 17,277,841.64 22,000,726.84
245
2023 Annual Report of Luzhou Laojiao Co., Ltd.
Shareholder interest attributable to
22,784,897,113.99 22,418,422,555.03
parent company
Share of net assets calculated based
2,363,882,349.03 2,330,073,856.15
on shareholding proportion
Adjusted
--Goodwill
--Unrealized profits of internal
transactions
--Others 167,466,735.90 167,466,735.90
Book value of equity investments in
2,535,630,372.30 2,497,540,592.05
associate companies
Fair value of equity investments in
associate companies that have public 2,117,169,677.44 2,054,418,514.32
quote
Operating revenue 3,180,917,154.72 3,375,583,530.03
Net profit 424,951,566.18 422,356,594.84
Net profit from discontinued
operation
Other comprehensive income 20,272,992.78 -119,327,423.67
Total comprehensive income 445,224,558.96 303,029,171.17
Dividends from associate companies
8,184,934.32 27,283,114.40
this year
10.3.3. Financial information summarized of unimportant joint ventures and associate
companies
Unit：CNY
Closing Balance/Amount in current Opening Balance/Amount in previous
period period
Joint ventures:
Total following items calculated on
the basis of shareholding proportion
Associate companies:
Total book value of investments 172,624,461.20 169,959,961.12
Total following items calculated on
the basis of shareholding proportion
--Net profit 2,436,674.07 -3,456,109.80
-- Total comprehensive income 2,436,674.07 -3,456,109.80
Other statements:
Unimportant associate companies refer to Luzhou Laojiao Postdoctoral Workstation Technology
Innovation Co., Ltd., Sichuan Development Liquor Investment Co., Ltd., Sichuan Tongniang Baijiu
Industry Technology Research Institute Co., Ltd. and CTS Luzhou Laojiao Cultural Tourism
Development Co., Ltd.
10.3.4. Notes to the significant restrictions on the ability of joint ventures or associate
companies to transfer funds to the Company
None
246
2023 Annual Report of Luzhou Laojiao Co., Ltd.
10.3.5. The excess loss of joint ventures or associate companies
None
10.3.6. The unrecognized commitment related to investment to joint ventures
None
10.3.7. Contingent liabilities related to investment to joint ventures or associate companies
None
11. Government grants
11.1. Government grants recognized at the end of the reporting period at the
amount receivable
□Applicable N/A
Reasons for failing to receive government grants in the estimated amount at the estimated point in
time
□Applicable N/A
11.2. Liability items involving government grants
Applicable □ N/A
Unit：CNY
Non- Other
Increase in operating Related to
Opening income in Other Closing
Item current income in assets/
Balance current changes Balance
period current income
period period
Deferred 33,704,323. 3,364,559.0 9,296,799.1 27,772,083. Related to
income 80 8 4 74 assets
33,704,323. 3,364,559.0 9,296,799.1 27,772,083.
Total
80 8 4 74
11.3. Government grants recognized as current profit or loss
Applicable □ N/A
Unit：CNY
Item Amount in current period Amount in previous period
Other income 51,950,003.11 34,931,161.52
Non-operating revenue
Total 51,950,003.11 34,931,161.52
Other statements:
The detailed list of liability items related to government grants can be found in Note 7.31.2.
The specific details of government grants included in current profit or loss are provided in Note 7.44.
247
2023 Annual Report of Luzhou Laojiao Co., Ltd.
12. Risks related to financial instruments
12.1. Various types of risks arising from financial instruments
The Company's primary financial instruments include monetary capital, trading financial assets,
accounts receivable, receivables financing, receivables other than tax refundable, other equity
instruments, held-for-trading financial liabilities, bills payable, accounts payable, other payables, lease
liabilities, some other current liabilities and loans. A detailed description of each financial instrument is
set out in Note V and notes to the Consolidated Financial Statement.
Risks related to these financial instruments, and risk management policies the Company has adopted
to reduce these risks are described as follows. The Company management manages and monitors the
risk exposure to ensure the above risks are controlled in a limited scope.
The Company adopts sensitivity analysis technology to analyze the possible impact of reasonable and
possible changes of risk variables on current profits/losses or shareholders' equity. As any risk variable
rarely changes in isolation, and the correlation between variables will have a significant effect on the
final impact amount of the change of a risk variable, the following content is based on the assumption
that the change of each variable is independent.
Risk management objective: The Company strikes an appropriate balance between risk and return, and
strives to minimize the negative impact of risk on the Company's operating performance and maximize
the interests of shareholders and other equity investors.
Risk management policy: The Board of Directors shall be responsible for planning and establishing a
risk management framework, formulating risk management policies and related guidelines, and
supervising the implementation of risk management measures. The Risk Management Committee shall
carry out risk management through close collaboration (including the identification, evaluation and
avoidance of relevant risks) with other business units of the Company in accordance with the policies
approved by the Board of Directors. The internal audit department shall conduct regular audits on risk
management controls and procedures and report the results to the Audit Committee.
The Company has formulated risk management policies to identify and analyze the risks it faces,
clarifying specific risks and covering many aspects such as credit risk, liquidity risk and market risk
management. On a regular basis, the Company evaluates the specific marketing environment and
various changes in the Company's business operations to determine whether any risk management
policy and system should be updated. The Company diversifies the risks to financial instruments
through appropriately diversified investments and business portfolios, and reduces the risk of
concentration in any single industry, specific geographic area or specific counterparty by formulating
appropriate risk management policies.
12.1.1. Credit risk
Credit risk refers to the risk that one party to a financial instrument cannot perform its obligations,
causing financial losses to the other party. The Company only trades with recognized, reputable, and
248
2023 Annual Report of Luzhou Laojiao Co., Ltd.
large third parties. In accordance with the Company's policy, the terms of sale with customers are
based on transactions of payment before delivery, with only a small amount of credit transactions, and
credit review for all customers who require credit to trade. In addition, the Company continuously
monitors and controls the balance of the receivables to ensure that the Company does not face
significant bad debt risks. In addition, the Company makes full provision for expected credit losses at
each balance sheet date based on the collection of receivables. Therefore, the Company's
management believes that the Company's credit risk has been greatly reduced.
The Company's working capital is deposited in banks with high credit rating, so the credit risk of working
capital is low.
The Company's risk exposures are spread across multiple contract parties and customers in multiple
geographies, with customers in the commerce industry in addition to the alcohol distribution industry
(the main industry). No systemic risk has been identified in the relevant industries. Therefore, the
Company has no significant credit concentration risk. As at 31 December 2023, the balance of the top
five customers of the Company's accounts receivable amounted to CNY 18,671,700, accounting for
99.57% of the balance of the Company's accounts receivable.
12.1.2. Liquidity risk
Liquidity risk refers to the risk unable to obtain sufficient funds in time to meet business development
needs or to repay debts due and other payment obligations. The Company has sufficient working
capital. The liquidity risk is extremely small. The Company's objective is to use a variety of financing
instruments such as bank clearing, bank loans and issuing corporate bonds to maintain a balance
between financing sustainability and flexibility. As at 31 December 2023, the Company has been able to
meet its own continuing operation requirements through the use of cash flow from operations.
The analysis of the financial liabilities held by the Company based on the maturity period of the
undiscounted remaining contractual obligations is as follows:
Closing Balance
Item Contract amount
Book value Within 1 year 1-2 years 2-3 years Over 3 years
not discounted
Held-for-
trading
financial 9,763.87 9,763.87 9,763.87
liabilities
Account
2,357,223,733.21 2,357,223,733.2
s
2,357,223,733.21
payable
1
Other 1,121,036,342.7
payable 1,121,036,342.71 1,121,036,342.71
1
Non-
current
liabilities
due 78,918,152.41 78,918,152.41 78,918,152.41
within
one year
Long-
term 10,000,300,000.0 10,000,300,000.0 5,959,200,000.0 4,041,100,000.0
249
2023 Annual Report of Luzhou Laojiao Co., Ltd.
loans
0 0 0 0
Bonds 1,500,000,000.0
payable 1,498,716,737.02 1,500,000,000.00
0
Lease 18,665,883.4
liabilities 22,356,404.47 31,673,437.10 6,529,735.36 6,477,818.27
7
15,078,561,133.6 15,089,161,429.3 3,557,187,992.2 7,465,729,735.3 4,047,577,818.2 18,665,883.4
Total
9 0 0 6 7 7
12.1.3. Market risk
① Foreign exchange risk
The foreign exchange risk refers to the risk of loss due to exchange rate changes. Apart from the three
subsidiaries of the Company which make purchases and sales in USD and HKD, the other major
business activities are denominated and settled in CNY. The Company closely monitors the impact of
exchange rate fluctuations on its foreign exchange risk, and actively tracks the scale of foreign currency
transactions, as well as foreign currency assets and liabilities, to minimise exposure to exchange rate
risks. In order to hedge risks in the foreign exchange market, prevent adverse effects from significant
fluctuations in exchange rates, control financial expenses and reduce exchange rate risks in overseas
operations, the Company's subsidiary, Hong Kong Company, has engaged in forward foreign exchange
contract transactions. As at 31 December 2023, the Company's assets and liabilities are mainly in CNY
balance. At present, the Company's management considers the impact of changes in foreign exchange
risk on the Company's financial statements to be less.
② Rate risk
The Company's interest rate risk mainly arises from the long-term loans from banks. Financial liabilities
based on the floating interest rate will cause the cash flow interest rate risk to the Company, and
financial liabilities based on the fixed interest rate the fair value interest rate risk. The Company will
determine the corresponding proportion between the contracts with fixed interest rate and those with
floating interest rate in combination with current market condition.
③ Other price risks
Other price risk refers to the risk of fluctuation caused by market price changes other than foreign
exchange risk and interest rate risk, whether these changes are caused by factors related to a single
financial instrument or its issuer or all similar financial instruments traded in the market. Other price
risks faced by the Company mainly come from held-for-trading financial assets and investments in other
equity instruments measured at fair value.
12.2. Financial assets
12.2.1. Classification of transfer methods
Applicable □ N/A
Unit：CNY
Nature of transferred Amount of Basis for
Transfer method Derecognized or not
financial assets transferred financial derecognition
250
2023 Annual Report of Luzhou Laojiao Co., Ltd.
assets
Outstanding bank
Almost all its risks
Endorsement of acceptance bills in
232,918,694.19 Yes and rewards have
notes accounts receivable
been transferred
financing
Outstanding bank
Almost all its risks
acceptance bills in
Discount of notes 6,920,708,963.77 Yes and rewards have
accounts receivable
been transferred
financing
Total 7,153,627,657.96
12.2.2. Financial assets derecognized due to transfer
Applicable □ N/A
Unit：CNY
Method of financial assets Amount of derecognized Gains or losses related to
Item
transfer financial assets derecognition
Outstanding bank
acceptance bills in
Endorsement of notes 232,918,694.19
accounts receivable
financing
Outstanding bank
acceptance bills in
Discount of notes 6,920,708,963.77 -162,305,316.52
accounts receivable
financing
Total 7,153,627,657.96 -162,305,316.52
12.2.3. Continued involvement in the transfer of assets financial assets
□Applicable N/A
13. Fair value disclosure
13.1. Closing fair value of assets and liabilities measured at fair value
Unit：CNY
Closing fair value
Item
Level 1 Level 2 Level 3 Total
1. Continuous
measurement at fair -- -- -- --
value
1.1 Held-for-trading
1,426,992,098.83 1,426,992,098.83
financial assets
1.1.1 Financial
assets measured at
fair value with their
1,426,992,098.83 1,426,992,098.83
changes included
into current
profits/losses
1.1.1.4 Wealth
management 1,426,992,098.83 1,426,992,098.83
products
1.3 Investments in
369,635,558.15 33,257,910.65 402,893,468.80
other equity
251
2023 Annual Report of Luzhou Laojiao Co., Ltd.
instruments
1.6 Accounts
5,938,171,007.93 5,938,171,007.93
receivable financing
Total assets
continuously
369,635,558.15 7,398,421,017.41 7,768,056,575.56
measured at fair
value
Held-for-trading
9,763.87 9,763.87
financial liabilities
Other 9,763.87 9,763.87
Total liabilities
continuously
9,763.87 9,763.87
measured at fair
value
2. Discontinuous
measurement at fair -- -- -- --
value
13.2. Determination basis of the market value of items measured continuously and
discontinuously within Level 1 of the fair value hierarchy
The listed companies in mainland China determine the fair value of other equity instrument investment
according to the closing price on the last trading day of Shenzhen Stock Exchange or Shanghai Stock
Exchange at the period-end. The companies listed in Hong Kong determine the fair value of other
equity instrument investment according to the closing price of Hong Kong Dollar on the last trading day
of Hong Kong Stock Exchange at the period-end and the median price of CNY exchange rate disclosed
on the same day by China Foreign Exchange Trade System.
13.3. Valuation technique adopted and nature and amount determination of
important parameters for continuously and discontinuously within Level 2 of the fair
value hierarchy
None
13.4. Valuation technique adopted and nature and amount determination of
important parameters for continuously and discontinuously within Level 3 of the fair
value hierarchy
Trading financial assets are wealth management products of the collective asset management plan and
are measured at fair value based on the amount calculated on the basis of the net unit value of the
underlying assets as published on the official website of the asset manager.
Accounts receivable financing: As the timing and price of bills discounted may not be reliably estimated
due to the short maturity of the bills all being less than one year and the endorsement of the negotiable
bills being valued at book value, the Company measures the bills receivable at their book value as a
reasonable estimate of fair value.
Other equity instrument investment: Due to no significant changes in business environment, business
condition and financial situation of invested companies, the Company shall measure the fair value
252
2023 Annual Report of Luzhou Laojiao Co., Ltd.
according to the lower one between investment cost and the share of net assets enjoyed by invested
companies on the base date as the reasonable estimation.
Trading financial liabilities: The fair value is measured based on market quotations for similar types of
instruments.
13.5. Continuous fair value measurement items at level 3, adjustment between the
beginning carrying value and the ending carrying value and sensitivity analysis on
unobservable parameters
None
13.6. Explain the reason for conversion and the policy governing when the
conversion happens if conversion happens among continuous fair value
measurement items at different level
None
13.7. Changes in valuation techniques in the reporting period and reasons for the
changes
None
13.8. Fair value of financial assets and liabilities not measured at fair value
None
14. Related parties and related party transactions
14.1. The parent company of the Company
Shareholding Voting rights
Registration Registered
Parent company Business nature proportion by the proportion by the
place capital
parent company parent company
Investment and
Luzhou Laojiao 2,798,818,800.0
Luzhou, Sichuan asset 25.89% 50.75%
Group Co., Ltd. 0
management
Statements for situation of parent company:
Note: The reason for the inconsistency between the shareholding proportion and voting rights
proportion by the parent company is that on 27 May 2021, Laojiao Group and XingLu Investment
Group, the second biggest shareholder, renewed the concerted action agreement which is valid as of
1 June 2021 and ends on 31 May 2024. The agreement: when the parties in deal with the Company’s
business development and make decisions by shareholders meeting and board of directors according
to the company law and other relevant laws and regulations and the articles of association, the
parties should adopt the consistent actions. During the effective period of this agreement, before any
party submits proposals involving the major issues of the Company's business development to the
253
2023 Annual Report of Luzhou Laojiao Co., Ltd.
shareholders meeting or exercise the voting rights at the shareholders meeting and the board of
directors, the internal coordination for relevant proposals and voting events shall be conducted by
persons acting in concert. If there are different opinions, it will be subject to Laojiao Group’s opinion.
The nature of parent company: Limited liability company (state-owned); Registration place: Ai
Rentang Square, China Baijiu Golden Triangle Liquor Industry Park, Luzhou, Sichuan Province;
Business Scope: General project: Social economy consulting services; business management
consulting; financial consulting; business headquarters management; import and export agency; trade
brokerage; crops planting services; trees planting operation; elder care services; tourism
development project planning and consulting; technical agency services; engineering and
technological research and experimental development; display device manufacturing; supply chain
management services; technical services, technical development, technical consulting, technical
communication, technical transfer, and technical promotion; domestic freight transport agency; equity
fund-invested asset management services, passenger ticket agent and business agency service. It
shall also include licensed projects (business activities can be carried out legally and independently
with business license in addition to projects that must be approved by law): Agency bookkeeping;
career intermediary activities; food production; food sales; medical services. (business activities that
require approval in accordance with laws can be carried out upon approval of relevant authorities,
and the specific business projects shall be subject to the approval document or license of relevant
departments)
The final control party of the Company is SASAC of Luzhou.
14.2. Subsidiaries of the Company
For details please see Note 10.1. Interests in subsidiaries.
14.3. Joint ventures and associates of the Company
For details please see Note 10.3. Interests in joint ventures and associates.
Information on other joint ventures or associates that have related party transactions with the Company
in the current period or in the previous period and result in balance:
There are no other joint ventures or associates that have related party transactions with the Company
in the current period or in the previous period and result in balance.
14.4. Other related party of the Company
Name of Other Related Party Relationship with the Company
Luzhou Jiachuang Liquor Supply Chain Management
The same parent company
Co., Ltd.
Sichuan Lianzhong Supply Chain Service Co., Ltd. The same parent company
Guangzhou Zhongying Gongyuan Energy Saving
Sub-subsidiary of parent company
Technology Co., Ltd.
Luzhou Yuanhai Lianzhong Supply Chain Co., Ltd. Sub-subsidiary of parent company
Luzhou Sanrenxuan Liquor Industry Co., Ltd. Joint venture of parent company
CTS Luzhou Laojiao Cultural Tourism Development Co.,
Joint venture
Ltd.
254
2023 Annual Report of Luzhou Laojiao Co., Ltd.
Luzhou XingLu Water (Group) Co., Ltd. Subsidiary of the second largest shareholder
Luzhou XingLu Property Management Co., Ltd. Subsidiary of the second largest shareholder
Luzhou Public Transport Group Co., Ltd. Subsidiary of the second largest shareholder
Sichuan Meihe Winery Industry Co., Ltd. Minority shareholder of the subsidiary Fruit Wine Industry
Minority shareholder of the subsidiary Custom Liquor
Sichuan Brewing Art E-business Co., Ltd.
Company
Minority shareholder of the subsidiary Custom Liquor
Luzhou Yucheng Trading Co., Ltd.
Company
Minority shareholder of the subsidiary Custom Liquor
Luzhou 2013 Liquor Marketing Co., Ltd.
Company
Other subsidiaries of Luzhou Laojiao Group Co., Ltd. Other subsidiary of parent company
Other subsidiaries of Luzhou XingLu Investment Group
Other subsidiary of the second largest shareholder
Co., Ltd.
Other statements:
Note: As the Note 14.1, the Company will disclose the transactions with XingLu Investment Group
and its controlling enterprises as other related parties of the Company.
14.5. Related transactions
14.5.1. Related transactions of purchase and sales of goods / rendering and receipt of
services
Table of purchase of goods / receipt of services
Unit：CNY
Whether over
Name of Related Amount in Approved trading Amount in
Transaction approved trading
Party current period amount previous period
amount
Receipt of
services:
Luzhou XingLu
Investment Property service,
Group Co., Ltd. advertising 28,275,528.70 26,186,859.88
and its other service, etc.
subsidiaries
Training,
accommodation,
Laojiao Group warehousing,
and its other transportation 49,154,313.56 27,895,483.79
subsidiaries services and
property costs,
etc.
CTS Luzhou
Laojiao Cultural Conference fees,
Tourism travel service 7,840,147.72 9,296,122.35
Development fee, etc.
Co., Ltd.
Luzhou
Sanrenxuan Advertising
280,000.00
Liquor Industry service
Co., Ltd.
Purchase of
goods:
Laojiao Group Raw materials,
193,980,923.60 106,345,871.05
and its other water, power,
255
2023 Annual Report of Luzhou Laojiao Co., Ltd.
subsidiaries etc.
Luzhou XingLu
Investment
Group Co., Ltd. Gas, water 14,191,020.92 11,773,961.98
and its other
subsidiaries
Sichuan Meihe
Winery Industry Other wine 20,160.00
Co.,Ltd.
Total 293,742,094.50 181,498,299.05
Table of sales of goods and rendering of service
Unit：CNY
Name of Related Party Transaction Amount in current period Amount in previous period
Sales of goods:
Laojiao Group and its
Liquor, etc. 41,823,418.45 52,481,609.52
subsidiaries
CTS Luzhou Laojiao
Cultural Tourism Liquor 80,916,407.69 134,111,657.39
Development Co., Ltd.
Luzhou Sanrenxuan Liquor
Liquor 28,674,936.80 162,125,345.72
Industry Co., Ltd.
Sichuan Brewing Art E-
Liquor 72,355,864.08
business Co., Ltd.
Luzhou Yucheng Trading
Liquor 3,787,740.88
Co., Ltd.
Luzhou 2013 Liquor
Liquor 580.00
Marketing Co., Ltd.
Total 227,558,947.90 348,718,612.63
14.5.2. Related party leasing
The Company as lessor:
Unit：CNY
Leasing income recognized Leasing income recognized
Name of lessee Type of leased asset
during current period during previous period
Laojiao Group and its
House lease 2,140,080.00 1,681,340.00
subsidiaries
The Company as lessee:
Unit：CNY
Rental expenses Variable lease
of short-term payments not
Income expense
lease simplified included in the Increased use
Paid rent of lease liabilities
Type treated and low- measurement of right assets
undertaken
Name value asset lease lease liabilities (if
of
of (if applicable) applicable)
lessor assets Amoun Amoun Amoun Amoun Amoun
Amoun Amoun Amoun Amoun Amoun
leased t in t in t in t in t in
t in t in t in t in t in
previo previo previo previo previo
current current current current current
us us us us us
period period period period period
period period period period period
Laojiao House 2,480, 1,924,
Group lease 516.20 834.44
and its
256
2023 Annual Report of Luzhou Laojiao Co., Ltd.
subsidi
aries
14.5.3. Key management compensation
Unit：CNY
Item Amount in current period Amount in previous period
Key management compensation 14,678,785.22 14,486,473.15
14.5.4. Other related transactions
N/A
14.6. Receivables and payables of related parties
14.6.1. Receivables
Unit：CNY
Closing Balance Opening Balance
Item Related party Provision for bad Provision for bad
Book value Book value
debt debt
Sichuan Meihe
Prepayment Winery Industry 2,961,479.50 2,961,479.50
Co.,Ltd.
CTS Luzhou
Laojiao Cultural
Prepayment Tourism 518,886.00 2,379.50
Development
Co., Ltd.
Luzhou XingLu
Prepayment Water (Group) 705,446.15
Co., Ltd.
Luzhou Public
Prepayment Transport Group 126,001.64
Co., Ltd.
Luzhou Laojiao
Prepayment 3,522,751.07
Group Co., Ltd.
CTS Luzhou
Laojiao Cultural
Other
Tourism 5,111,743.43 780,587.17
receivables
Development
Co., Ltd.
14.6.2. Payables
Unit：CNY
Item Related party Closing Balance Opening Balance
Luzhou Yuanhai Lianzhong
Accounts payable 109,200.00
Supply Chain Co., Ltd.
Sichuan Lianzhong Supply
Accounts payable 10,583,919.37 6,993,503.13
Chain Service Co., Ltd.
Luzhou Public Transport
Accounts payable 469,479.45
Group Co., Ltd.
257
2023 Annual Report of Luzhou Laojiao Co., Ltd.
CTS Luzhou Laojiao
Contractual liabilities (tax
Cultural Tourism 13,933,613.22 6,070,341.82
inclusive)
Development Co., Ltd.
Luzhou Jiachuang Liquor
Contractual liabilities (tax
Supply Chain Management 2,135.99 4,525,508.00
inclusive)
Co., Ltd.
Contractual liabilities (tax Luzhou Sanrenxuan Liquor
2,553,000.00 1,621,994.29
inclusive) Industry Co., Ltd.
Contractual liabilities (tax Sichuan Lianzhong Supply
2,508.09 51,114.78
inclusive) Chain Service Co., Ltd.
Sichuan Development
Other payables 4,494,000.00
Liquor Investment Co., Ltd.
Luzhou Xinglu Property
Other payables 154,920.20
Management Co., Ltd.
Sichuan Lianzhong Supply
Other payables 37,911,448.00 17,633,148.00
Chain Service Co., Ltd.
CTS Luzhou Laojiao
Other payables Cultural Tourism 1,050,000.00 750,000.00
Development Co., Ltd.
Luzhou Jiachuang Liquor
Other payables Supply Chain Management 360,000.00
Co., Ltd.
Luzhou Sanrenxuan Liquor
Other payables 150,000.00 150,000.00
Industry Co., Ltd.
Guangzhou Zhongying
Other payables Gongyuan Energy Saving 140,444.35
Technology Co., Ltd.
Luzhou Laojiao Group Co.,
Other payables 80,000.00
Ltd.
Luzhou Yuanhai Lianzhong
Other payables 50,000.00
Supply Chain Co., Ltd.
14.7. Commitments of the related parties
None
15. Stock payment
15.1. The overall situation of share-based payments
Applicable □ N/A
Unit：CNY
Type of Granted in the Current Exercised in the Unlocked in the Current Invalid in the Current
granting Period Current Period Period Period
object Number Amount Number Amount Number Amount Number Amount
N/A
Outstanding stock options or other equity instruments at the end of the reporting period
□Applicable N/A
Other statements:
258
2023 Annual Report of Luzhou Laojiao Co., Ltd.
Note 1: The Company's share capital increased by 92,669 shares during the current period, as a result
of the third grant of restricted share incentive scheme in December 2022. On 15 January 2023, the
Company received subscription payments in monetary assets for these restricted shares from 17
incentive recipients. These shares were listed on 17 February 2023.
Note 2: There were no stock options or other equity instruments outstanding at the end of the current
period.
15.2. Equity-settled share-based payments
Applicable □ N/A
Unit：CNY
Method of determining the fair value of equity instruments The closing price of restricted stocks on the grant date
on the grant date deducted the grant price thereof
Important parameters of fair value of equity instruments
The closing price of restricted stocks on the grant date
on the grant date
The Company's management considered factors such as
Basis to determine number of equity instrument that can changes in the number of eligible employees for the latest
be exercised exercisable options and the level of performance
achievement to make the best estimate.
Reason for remarkable difference between the estimate
N/A
of the current period and that of previous period
Total amount of equity-settled share-based payments
1,462,476,634.08
included into capital reserves
Total costs of recognizing equity-settled share-based
381,280,072.52
payments in the current period
15.3. Cash-settled share-based payments
□ Applicable N/A
15.4. Share-based payment expenses in the current period
Applicable □ N/A
Unit：CNY
Expenses for equity-settled share- Expenses for cash-settled share-
Type of granting object
based payments based payments
Production staff 50,891,052.88
Sales staff 98,732,302.98
Administrative staff 206,559,351.04
R&D staff 25,097,365.62
Total 381,280,072.52
15.5. Modification and termination of share-based payments
None
259
2023 Annual Report of Luzhou Laojiao Co., Ltd.
16. Commitments and contingencies
16.1. Commitments
Significant commitments at the balance sheet date
None
16.2. Contingencies
16.2.1. Significant contingencies at the balance sheet date
On 15 October 2014 and 10 January 2015, the Company disclosed three saving deposits involving
contract disputes in Agricultural Bank of China Changsha Yingxin Sub-branch, Industrial and
Commercial Bank of China Nanyang Zhongzhou Sub-branch and another bank, with a total amount of
CNY 500 million. The public security organization has investigated, and the investigation of related
cases and the preservation of assets are under way. The Company has initiated a civil procedure to
recover the loss from the responsible unit. As of the period-end, the Company has recovered the
abovementioned saving deposits involving contract disputes with CNY 372,435,100.
Except for the above matters, the Company has no other significant contingencies that need to be
disclosed as the end of 31 December 2023.
16.2.2. Explanation shall be given even if there is no significant contingency for the Company
to disclose
There was no significant contingency in the Company to disclose.
17. Post balance sheet event
17.1. Profit distribution
Dividends to be distributed for every 10 existing shares
54.00
held (CNY)
Upon the resolution of the Board of Directors, the 2023
profit distribution plan was approved: Based on the
current 1,471,987,769 shares, a cash dividend of CNY
54.00 (tax included) will be distributed for every 10
existing shares held, representing a total cash dividend
Profit distribution plan
amount of CNY 7,948,733,952.60 (tax included). Where
any change occurs to the Company's total share capital
before the implementation of the distribution plan,
relevant adjustments shall be made with the same total
distribution amount.
17.2. Sales return
There are no important sales returning after balance sheet date.
260
2023 Annual Report of Luzhou Laojiao Co., Ltd.
17.3. Statement for other post balance sheet events
17.3.1. Repurchase and retirement of some restricted shares and adjustment of repurchase
price
According to the 38th meeting of the 10th Board of Directors held on 23 January 2024, the Proposal
on the Repurchase and Retirement of Certain Restricted Shares and the Adjustment of Repurchase
Price was deliberated and approved. With the implementation of the 2022 profit distribution plan of
the Company completed, the Company agreed to adjust the repurchase price of restricted shares
accordingly, from CNY 89.466 per share to CNY 85.241 per share based on the Company's 2021
Restricted Share Incentive Scheme (Draft). Meanwhile, as three incentive recipients no longer met
the incentive conditions, the Company decided to repurchase and cancel a total of 15,266 restricted
shares that were granted to these incentive recipients but have not been released from the restriction
period. The total repurchase funds amounted to CNY 1,301,289.11.
17.3.2. The achievement of lifting the restriction conditions in the first restriction period under
the 2021 Restricted Share Incentive Scheme
At the 38th meeting of the 10th Board of Directors held on 23 January 2024, the Proposal on the
Achievement of Lifting the Restriction Conditions in the First Restriction Period under the 2021
Restricted Share Incentive Scheme was reviewed and approved. In accordance with the relevant
provisions of the 2021 Restricted Share Incentive Scheme (Draft) and the Performance Assessment
Measures for the 2021 Restricted Share Incentive Scheme, the restriction conditions in the first
restriction period under the 2021 Restricted Share Incentive Scheme have been achieved. T he
Company agreed to proceed with the restriction lifting procedures for 435 incentive recipients who
met the conditions. Restricted shares eligible for release from restricted sale amounted to 2,734,640
shares, representing 0.19% of the current total share capital of the Company. This proposal was
considered and approved by the Remuneration and Appraisal Committee of the Board of Directors of
the Company. The date of listing for the restricted shares eligible for release from restricted sale was
22 February 2024.
Except for the above matters, the Company has no other post balance sheet events that need to be
disclosed as of 31 December 2023.
18. Other important information
18.1. Annuity plan
The Company carried out the enterprise annuity payment work normally during the reporting period.
The enterprise annuity funds are paid by both the Company and employees. The Company's
contribution shall not exceed 8% of the Company's total salary in the previous year as stipulated by the
state, and the individual contribution shall be withheld by the Company according to 1% of total salary
of the employee in the previous year.
261
2023 Annual Report of Luzhou Laojiao Co., Ltd.
18.2. Segment information
18.2.1 Recognition basis and accounting policies of reportable segment
Except for the business on baijiu sales, the Company does not operate other businesses that have a
significant impact on operation results. In addition, the Company operates mainly from China and
main assets also located in China, so the Company does not need to disclose segment data.
18.3. Other significant events that can affect investors’ decision
18.3.1 Saving deposits involving contract disputes
As stated in Note 16.2, three saving deposits involved contract disputes in Agricultural Bank of China
Changsha Yingxin Sub-branch, Industrial and Commercial Bank of China Nanyang Zhongzhou Sub-
branch and another bank, with a total amount of CNY 500 million. At present, the investigation of
related cases and the preservation of assets have been under way. The Company has initiated a civil
procedure to recover the loss from the responsible unit.
Taking into account the current amount of assets preserved by the public security authorities and the
contents of the professional legal opinion issued by Beijing Weiheng (Chengdu) Law Firm on 5 March
2023 that “given that since the issuance of the previous legal opinion, a few recovery has been
achieved through the criminal and civil execution, totalling CNY 372 million. At the same time, it is
suggested that the total amount of bad debt provision for the three aforementioned places remain CNY
120 million”, the Company has made a bad debt provision of CNY 120 million for savings deposit
involved in contractual disputes as of the end of the period, and the amount of the bad debt provision
may be adjusted in the future based on the litigation process and recovery.
18.3.2. Deliberating and approving the Proposal on the De-registration of Luzhou Laojiao
Custom Liquor Co., Ltd.
On 28 August 2023, at the 32nd meeting of the 10th Board of Directors, the Proposal on the De-
registration of Luzhou Laojiao Custom Liquor Co., Ltd. was deliberated and approved. Luzhou Laojiao
Custom Liquor Co., Ltd. ("Custom Liquor Company") is a subsidiary of Luzhou Laojiao Sales Co., Ltd.,
a wholly-owned subsidiary of the Company, and is mainly responsible for the development and sales of
customised baijiu products for Luzhou Laojiao. According to the Company's plan for the custom baijiu
business, the Company decided to transfer the custom baijiu business to Luzhou Laojiao Qiankun
Distillery Custom Liquor Sales Co., Ltd, a wholly-owned subsidiary of Luzhou Laojiao Sales Co., Ltd.
Therefore, the Custom Liquor Company was de-registered.
Except for the above matters, the Company has no other significant events that can affect investors’
decision that need to be disclosed as of 31 December 2023.
262
2023 Annual Report of Luzhou Laojiao Co., Ltd.
19. Notes to the main Items of the financial statements of parent
company (all currency unit is CNY, except other statements)
19.1. Accounts receivable
19.1.1. Disclosure by aging
Unit：CNY
Aging Closing book balance Opening book balance
Within 1 year (including 1 year) 50,000.00
Total 0.00 50,000.00
19.1.2. Disclosure by withdrawal methods for bad debts
Unit：CNY
Closing Balance Opening Balance
Provision for bad Provision for bad
Book balance Book balance
Type debt Book debt Book
Proporti Proporti value Proporti Proporti value
Amount Amount Amount Amount
on on on on
Includin
g:
Account
s
receiva
ble
tested 50,000. 100.00 2,500.0 47,500.
5.00%
for 00 % 0 00
impairm
ent by
the
portfolio
Includin
g:
Account
s
receiva
ble
tested
for
impairm
50,000. 100.00 2,500.0 47,500.
ent on 5.00%
the 00 % 0 00
portfolio
with
charact
eristics
of credit
risk
50,000. 100.00 2,500.0 47,500.
Total 0.00 0.00 5.00%
00 % 0 00
Accounts receivable tested for impairment by the portfolio: CNY 0.
If adopting the general mode of expected credit loss to withdraw provision for bad debt of accounts
receivable
263
2023 Annual Report of Luzhou Laojiao Co., Ltd.
□Applicable N/A
19.1.3. Provision and recovery for bad and doubtful debt in the current period
Allowance of provision for bad debt:
Unit：CNY
Changes in current period
Opening Closing
Type Reversal or
Balance Allowance Write-off Other Balance
recovery
Provision
allowance by
individual item
Provision
allowance by 2,500.00 -2,500.00
risk portfolio
Total 2,500.00 -2,500.00
Of which significant amount of recovered or transferred-back bad debt provision for the current period:
Note: There is no significant provision in accounts receivable reversed or recovered in the reporting
period.
19.1.4. Accounts receivable written-off in the current period
Notes to verification of accounts receivable:
There is no accounts receivable written-off in the current period.
19.2. Other receivables
Unit：CNY
Item Closing Balance Opening Balance
Other receivables 14,844,650,322.981 12,042,401,844.84
Total 14,844,650,322.98 12,042,401,844.84
Note: 1. Other receivables above-mentioned refer to other receivables after deducted interest
receivable and dividend receivable.
19.2.1. Other receivables
19.2.1.1. Other receivables disclosed by nature
Unit：CNY
Nature Closing book balance Opening book balance
Intercourse funds of subsidiaries in
14,828,601,798.89 12,023,243,459.84
the consolidation scope
Intercourse funds and others 9,004,523.78 11,257,616.61
Saving deposits involving contract
127,564,873.50 129,049,496.98
disputes 1
Total 14,965,171,196.17 12,163,550,573.43
Note: 1. The saving deposits involving contract disputes refer to three deposits amounting to CNY
500,000,000.00 with Changsha Yingxin Sub-branch of Agricultural Bank of China and Nanyang
Zhongzhou Sub-branch of Industrial and Commercial Bank of China disclosed by the Company in the
264
2023 Annual Report of Luzhou Laojiao Co., Ltd.
2014 Annual Report. The deposits have lost the nature of monetary fund due to their involvement in
contract disputes and have thus been transferred into “other receivables”. As of 31 December 2023,
the closing balance of that fund was CNY 127,564,873.50.
19.2.1.2. Disclosure by aging
Unit：CNY
Aging Closing book balance Opening book balance
Within 1 year (including 1 year) 14,837,508,542.67 12,030,843,921.37
1-2 years 72,855.08
2-3 years 13,480.00 3,511,500.00
Over 3 years 127,649,173.501 129,122,296.98
3-4 years 11,500.00 22,800.00
4-5 years 22,800.00
Over 5 years 127,614,873.50 129,099,496.98
Total 14,965,171,196.17 12,163,550,573.43
Note: 1 Other receivables with significant single amount exceeding three years in age relates to
savings deposit of CNY 127,564,873.50, which are yet to be recovered due to contractual disputes.
19.2.1.3. Disclosure by withdrawal methods for bad debts
Unit：CNY
Closing balance Opening Balance
Provision for bad Provision for bad
Book balance Book balance
Type debt Book debt Book
Proporti Proporti value Proporti Proporti value
Amount Amount Amount Amount
on on on on
Other
receiva
bles
tested
127,564 120,000 7,564,8 129,049 120,000 9,049,4
for 0.85% 94.07% 1.06% 92.99%
,873.50 ,000.00 73.50 ,496.98 ,000.00 96.98
impairm
ent
individu
ally
Includin
g:
Other
receiva
bles
that are
individu
ally
material
127,564 120,000 7,564,8 129,049 120,000 9,049,4
and for 0.85% 94.07% 1.06% 92.99%
,873.50 ,000.00 73.50 ,496.98 ,000.00 96.98
which a
separat
e
provisio
n for
bad
debts
265
2023 Annual Report of Luzhou Laojiao Co., Ltd.
has
been
made
Other
receiva
bles
tested 14,837, 14,837, 12,034, 12,033,
520,873 1,148,7
for 606,322 99.15% 0.00% 085,449 501,076 98.94% 0.01% 352,347
.19 28.59
impairm .67 .48 .45 .86
ent by
the
portfolio
Includin
g:
Other
receiva
bles
tested
for
impairm 14,837, 14,837, 12,034, 12,033,
ent on 520,873 1,148,7
606,322 99.15% 0.00% 085,449 501,076 98.94% 0.01% 352,347
the .19 28.59
portfolio .67 .48 .45 .86
with
charact
eristics
of credit
risk
14,965, 14,844, 12,163, 12,042,
100.00 120,520 100.00 121,148
Total 171,196 0.81% 650,322 550,573 1.00% 401,844
% ,873.19 % ,728.59
.17 .98 .43 .84
Other receivables tested for impairment individually: CNY 120,000,000.00
Unit：CNY
Opening Balance Closing Balance
Name Provision for Provision for
Book balance Book balance Proportion Reason
bad debt bad debt
Saving
deposits Provision
129,049,496.9 120,000,000.0 127,564,873.5 120,000,000.0
involving 94.07% based on
8 0 0 0
contract legal opinion
disputes
129,049,496.9 120,000,000.0 127,564,873.5 120,000,000.0
Total
8 0 0 0
Other receivables tested for impairment by the portfolio: CNY 520,873.19
Unit：CNY
Closing Balance
Name
Book balance Provision for bad debt Proportion
Risk portfolio 9,004,523.78 520,873.19 5.78%
Including: within 1 year 8,906,743.78 445,337.19 5.00%
1-2 years
2-3 years 13,480.00 2,696.00 20.00%
3-4 years 11,500.00 4,600.00 40.00%
4-5 years 22,800.00 18,240.00 80.00%
Over 5 years 50,000.00 50,000.00 100.00%
Other portfolio1 14,828,601,798.89
266
2023 Annual Report of Luzhou Laojiao Co., Ltd.
Total 14,837,606,322.67 520,873.19
Note: 1 Other portfolios represent inter-subsidiary funds within the scope of consolidation in respect
of receivables, which are deemed risk-free and thus no bad debt provision is made.
Notes to the determination basis for the portfolio:
Accounts receivable of the same age have similar credit risk characteristics.
Allowance of provision for bad debt adopting the general mode of expected credit loss:
Unit：CNY
First stage Second stage Third stage
Provision for bad Expected loss in the
Expected credit loss Expected loss in the Total
debt duration (credit
of the next 12 duration (credit
impairment not
months impairment occurred)
occurred)
Balance of 1 January
1,148,728.59 120,000,000.00 121,148,728.59
2023
Balance of 1 January
2023 in the current
period
Allowance of the
-627,855.40 -627,855.40
current period
Balance of 31
520,873.19 120,000,000.00 120,520,873.19
December 2023
The basis for the division of each stage and the withdrawal proportion of bad debt provision
The basis for division is that other receivables with single bad debt provision represent credit
impairment losses incurred since initial recognition (Stage 3), while the remaining portion is
categorised based on aging portfolio. Withdrawal proportions of bad debt provision are 0.004% for
Stage 1 and 94.07% for Stage 3, totalling 0.81%.
Changes of book balance with significant amount changed of loss provision in the current period
□Applicable N/A
19.2.1.4. Provision and recovery for bad and doubtful debt in the current period
Allowance of provision for bad debt:
Unit：CNY
Changes in current period
Type Opening Balance Reversal or Write-off or Closing Balance
Allowance Other
recovery verification
Other
receivables
tested for 120,000,000.00 120,000,000.00
impairment
individually
Other
receivables
tested for 1,148,728.59 -627,855.40 520,873.19
impairment by
the portfolio
Total 121,148,728.59 -627,855.40 120,520,873.19
267
2023 Annual Report of Luzhou Laojiao Co., Ltd.
Note: There is no significant provision in other receivables reversed or recovered in the reporting
period.
19.2.1.5. Other receivables written-off in the current period
Notes to verification of accounts receivable:
There is no other receivables written-off in the current period.
19.2.1.6. Top five entities with the largest balances of the other receivables
Unit：CNY
Provisioning
Proportion in
Company Name Nature Closing Balance Aging amount at period
total receivables
end
Luzhou Laojiao Internal 11,593,102,922.5
Within 1 year 77.47%
Brewing Co., Ltd. transactions 7
Luzhou Laojiao Internal
1,829,197,224.11 Within 1 year 12.22%
Sales Co., Ltd. transactions
Luzhou Laojiao
Electronic Internal
482,953,547.36 Within 1 year 3.23%
Commerce Co., transactions
Ltd.
Luzhou Dingli
Internal
Liquor Industry 406,152,952.50 Within 1 year 2.71%
transactions
Co., Ltd.
Luzhou Laojiao
Import and Internal
157,107,430.51 Within 1 year 1.05%
Export Trade transactions
Co., Ltd.
14,468,514,077.
Total 96.68%
05
19.2.1.7. Presentation in other receivables due to the centralized management of funds
Other statements:
There were no other receivables presented in due to the centralized management of funds in the
current period.
19.3. Long-term equity investments
Unit：CNY
Closing Balance Opening Balance
Item Provision for Provision for
Book balance Book value Book balance Book value
impairment impairment
Investment in 3,790,179,449 3,790,179,449 3,611,563,148 3,611,563,148
subsidiary .26 .26 .96 .96
Investment in
associates 2,707,254,604 2,704,687,505 2,669,970,043 2,667,402,944
2,567,098.80 2,567,098.80
and joint .74 .94 .71 .91
venture
6,497,434,054 6,494,866,955 6,281,533,192 6,278,966,093
Total 2,567,098.80 2,567,098.80
.00 .20 .67 .87
268
2023 Annual Report of Luzhou Laojiao Co., Ltd.
19.3.1. Investment in subsidiary
Unit：CNY
Closing Balance (book value) Closing
Opening balance of
Changes Provision
Balance provision
Investee in current for Investee
(book Increase Decrease Other for
period impairmen
value) impairmen
t t
Luzhou
Pinchuang 76,953,72 17,071,50 94,025,22
Technolog 5.32 3.83 9.15
y Co., Ltd.
Luzhou
Laojiao 205,765,0 88,022,57 293,787,6
Sales Co., 55.56 9.98 35.54
Ltd.
Luzhou
Laojiao 3,234,179, 57,597,38 3,291,776,
Brewing 228.31 8.59 616.90
Co., Ltd.
Luzhou
Laojiao
Internation
al 9,023,636. 3,707,195. 12,730,83
Developm 96 23 2.19
ent (Hong
Kong)
Co., Ltd.
Luzhou
Laojiao 59,948,38 1,023,224. 60,971,61
Electronic
Commerc 7.34 45 1.79
e Co., Ltd.
Luzhou
Baonuo
20,000,00 20,000,00
Biotechnol
0.00 0.001
ogy Co.,
Ltd.
Luzhou
Laojiao
New
20,000,00 7,115,915. 27,115,91
Retail
0.002 71 5.71
Managem
ent Co.,
Ltd.
Luzhou
Laojiao
Health 5,693,115. 4,078,492. 9,771,607.
Liquor 47 51 98
Industry
Co., Ltd.
3,611,563, 20,000,00 20,000,00 178,616,3 3,790,179,
Total
148.96 0.00 0.00 00.303 449.26
Note: 1 The decrease in investment for the current period occurred as the subsidiary Luzhou Baonuo
Biotechnology Co., Ltd. completed business and tax de-registration in October 2023 and the
Company recovered the investment amount of CNY 20,000,000.00.
2. Additional investment for the current period represents the subscribed amount of capital
269
2023 Annual Report of Luzhou Laojiao Co., Ltd.
contribution of CNY 20,000,000.00 paid by the Company for the current period in accordance with the
resolution of the general meeting of shareholders and the articles of association of the subsidiary
Luzhou Laojiao New Retail Management Co., Ltd.
3. Other increases in the current period are due to the Company's restricted share incentive business,
where the parent company (the settlement enterprise) is an investor in the recipient subsidiary (the
service enterprise) and is recognised as a long-term equity investment in the subsidiary (the recipient
service enterprise) based on the fair value of the equity instruments at the date of grant, and the
capital reserve (other capital reserves) is recognised at the same time.
19.3.2. Investment in associate and joint venture
Unit：CNY
Changes in current period
Openi
Gain Adjust Closin
Openi ng Closin g
or ments
ng Balan Cash g Balan
loss of
Invest Balan ce of Other divide Provis Balan ce of
recog other
ee ce provisi Increa Decre chang d or ion for ce provisi
nized compr Other
(book se ase es in profit impair (book on for
on for under ehens
value) equity declar ment value) impair
impair equity ive
ed ment
ment metho incom
d e
1. Joint Ventures
2. Associate
Huaxi
Securi 2,497, 2,567, 44,16 2,107, 8,184, 2,535, 2,567,
ties 540,5 098.8 7,627. 087.1 934.3 630,3 098.8
Co., 92.05 0 40 7 2 72.30 0
Ltd.
Luzho
u
Laojia
o
Postd
octora -
l 40,18 38,33
1,846,
Works 5,894. 9,051.
tation 843.2
77 51
Techn 6
ology
Innov
ation
Co.,
Ltd.
Sichu
an
Devel
opme 5,889, 5,897,
nt 8,326.
654.2 980.8
Liquor 61
Invest 4 5
ment
Co.,
Ltd.
CTS
Luzho 123,7 124,8
805,4 227,8
u 86,80 20,10
71.42 26.01
Laojia 3.85 1.28
o
270
2023 Annual Report of Luzhou Laojiao Co., Ltd.
Cultur
al
Touris
m
Devel
opme
nt
Co.,
Ltd.
2,667, 2,567, 43,13 2,107, 8,184, 2,704, 2,567,
Subtot 227,8
402,9 098.8 4,582. 087.1 934.3 687,5 098.8
al 26.01
44.91 0 17 7 2 05.94 0
2,667, 2,567, 43,13 2,107, 8,184, 2,704, 2,567,
227,8
Total 402,9 098.8 4,582. 087.1 934.3 687,5 098.8
26.01
44.91 0 17 7 2 05.94 0
The recoverable amount is determined based on the net amount of the fair value minus disposal
costs
□Applicable N/A
The recoverable amount is determined by the present value of the forecasted future cash flow
□Applicable N/A
The reason for the discrepancy between the foregoing information and the information used in the
impairment tests in prior years or external information
The reason for the discrepancy between the information used in the Company's impairment tests in
prior years and the actual situation of those years
19.4. Operating revenue and cost of sales
Unit：CNY
Current Period Previous Period
Item
Revenue Cost of sales Revenue Cost of sales
Primary business 9,122,675,610.69 6,913,171,144.79 8,390,524,714.12 6,176,755,863.73
Other business 22,784,970.56 1,890,828.17 19,908,823.14 1,309,332.64
Total 9,145,460,581.25 6,915,061,972.96 8,410,433,537.26 6,178,065,196.37
Details:
Unit：CNY
Contract Baijiu sales Total
category Operating revenue Cost of sales Operating revenue Cost of sales
Business
type
Including:
Medium
and high
9,103,912,122.73 6,903,643,069.78 9,103,912,122.73 6,903,643,069.78
grade
baijiu
Other
18,763,487.96 9,528,075.01 18,763,487.96 9,528,075.01
baijiu
By
operating
271
2023 Annual Report of Luzhou Laojiao Co., Ltd.
segment
Including:
Domestic 9,122,675,610.69 6,913,171,144.79 9,122,675,610.69 6,913,171,144.79
Outbound
Market or
customer
type
Including:
Contract
type
Including:
Commodit
y sales 9,122,675,610.69 6,913,171,144.79 9,122,675,610.69 6,913,171,144.79
contract
By
commodit
y transfer
time
Including:
By
contract
term
Including:
By sales
channel
Including:
Total 9,122,675,610.69 6,913,171,144.79 9,122,675,610.69 6,913,171,144.79
Other statements
The Company's main business is the production and sale of baijiu. Revenue is recognised at the point
when the Company transfers control of the relevant goods to the customer and fulfils its performance
obligations.
Information in relation to the transaction price apportioned to the residual contract performance
obligation:
The amount of revenue corresponding to performance obligations of contracts signed but not
performed or not fully performed yet was CNY 0.00 at the period-end.
19.5. Investment income
Unit：CNY
Item Current Period Previous Period
Investment income from long-term
equity investments under cost 9,903,401,819.29 7,777,018,295.87
method
Investment income from long-term
equity investments under equity 43,134,582.17 45,123,842.50
method
Investment income gained during the
period of holding held-for-trading 2,391,009.80 6,813,617.83
financial assets
Investment income from disposal of
4,868,720.17 9,438,465.78
held-for-trading financial assets
272
2023 Annual Report of Luzhou Laojiao Co., Ltd.
Dividends income gained during the
period of holding other equity 11,268,626.39 8,078,717.93
instrument investment
Investment income gained from put-
-1,055,251.33 -4,241,494.76
back and early redemption of bonds
Total 9,964,009,506.49 7,842,231,445.15
19.6. Other
Note: There is no major restriction on the repatriation of the Company's investment income.
Including: investment income from long-term equity investments under the cost method:
Item Current Period Previous Period
Luzhou Laojiao Sales Co., Ltd. 9,870,272,284.78 7,709,806,254.66
Luzhou Baonuo Biotechnology Co., Ltd. 11,201,166.63 10,515,293.70
Luzhou Pinchuang Technology Co., Ltd. 30,991,503.61
Luzhou Laojiao International Development（Hong Kong）Co.,
18,070,349.00
Ltd.
Luzhou Laojiao Tourism Culture Co., Ltd. 7,634,894.90
Luzhou Laojiao New Retail Management Co., Ltd. 21,928,367.88
Total 9,903,401,819.29 7,777,018,295.87
Including: investment income from long-term equity investments under the equity method:
Item Current Period Previous Period
Huaxi Securities Co.,Ltd. 44,167,627.40 43,897,917.31
Luzhou Laojiao Postdoctoral Workstation Technology
-1,846,843.26 185,894.77
Innovation Co., Ltd.
Sichuan Development Liquor Investment Co., Ltd. 8,326.61 162,805.88
CTS Luzhou Laojiao Cultural Tourism Development Co., Ltd. 805,471.42 877,224.54
Total 43,134,582.17 45,123,842.50
Including: dividend income gained during the period of holding other equity instrument investment:
Item Current Period Previous Period
North Chemical Industries Co., Ltd. 78,177.75 70,359.97
Guotai Junan Securities Co., Ltd. 6,241,808.41 8,008,357.96
Luzhou Sanrenxuan Liquor Industry Co., Ltd. 500,000.00
Luzhou Bank Co., Ltd. 3,471,360.00
China Tourism Group Duty Free Corporation Limited 977,280.23
Total 11,268,626.39 8,078,717.93
20. Supplementary information
20.1. Detailed statement of non-recurring gains and losses in the current period (+
for gain, - for loss)
Applicable □ N/A
Unit：CNY
Item Amount Note
273
2023 Annual Report of Luzhou Laojiao Co., Ltd.
Gains or losses on disposal non-
44,694,238.37 For details please see Note 7.48
current assets
Government grants recognised in
profit or loss (exclusive of those that
are closely related to the Company's
normal business operations and
given in accordance with defined 51,950,003.11 For details please see Note 7.44
criteria and in compliance with
government policies, and have a
continuing impact on the Company's
profit or loss)
Gain or loss on fair-value changes in
financial assets and liabilities held by
a non-financial enterprise, as well as
on disposal of financial assets and For details please see Note 7.45 and
68,181,502.73
liabilities (exclusive of the effective Note 7.46
portion of hedges that is related to
the Company's normal business
operations)
Other non-operating income and For details please see Note 7.49 and
expenditure except above-mentioned -35,875,412.66
items Note 7.50
Less: Corporate income tax 31,697,444.12
Minority interests (after tax) 1,250,993.49
Total 96,001,893.94 --
Other items that meet the definition of non-recurring gain/loss:
□ Applicable N/A
No such cases for the reporting period.
Explain the reasons if the Company classifies any non-recurring gain/loss item mentioned in the
Explanatory Announcement No. 1 on Information Disclosure for Companies Offering Their Securities
to the Public-Non-Recurring Gains and Losses as a recurring gain/loss item.
□ Applicable N/A
20.2. Return on equity and earnings per share
Profit during reporting EPS (CNY/Share)
Weighted average ROE
period Basic EPS Diluted EPS
Net profits attributable to
common shareholders of 35.07% 9.02 9.02
the Company
Net profits attributable to
common shareholders of
34.81% 8.96 8.96
the Company before non-
recurring gains and losses
20.3. Differences between accounting data under domestic and overseas
accounting standards
20.3.1. Differences of net profit and net assets disclosed in financial reports prepared under
international and Chinese accounting standards
□ Applicable N/A
274
2023 Annual Report of Luzhou Laojiao Co., Ltd.
20.3.2. Differences of net profit and net assets disclosed in financial reports prepared under
overseas and Chinese accounting standards
□ Applicable N/A
20.3.3. Explain reasons for the differences between accounting data under domestic and
overseas accounting standards; for any adjustment made to the difference existing in the data
audited by the foreign auditing agent, such foreign auditing agent’s name shall be clearly
stated
20.4. Other
N/A
275
