2020 Annual Report of Luzhou Laojiao Co., Ltd.
Luzhou Laojiao Co., Ltd.
2020 Annual Report
April 2021
1
2020 Annual Report of Luzhou Laojiao Co., Ltd.
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
Yan Li, 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
Wang Hongbo Director Work Lin Feng
Tan Lili Independent Director Work Xu Guoxiang
Qian Xu Director Work Liu Miao
Ying Hanjie Director Work Liu Miao
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 1,464,752,476 shares, a cash
dividend of CNY 20.51 (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.
2
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Contents
Section I Important Statements, Contents and Definitions ............................................ 2
Section II Company Profile and Key Financial Results .................................................. 5
Section III Business Profile ............................................................................................. 10
Section IV Performance Discussion and Analysis ........................................................ 13
Section V Significant Events........................................................................................... 41
Section VI Changes in Shares and Information about Shareholders .......................... 59
Section VII Preferred Shares........................................................................................... 69
Section VIII Information about Convertible Corporate Bond ....................................... 70
Section IX Profiles of Directors, Supervisors, Senior Management and Employees. 71
Section X Corporate Governance ................................................................................... 83
Section XI Information about Corporate Bond .............................................................. 89
Section XII Financial Report ........................................................................................... 95
Section XIII Documents Available for Reference ......................................................... 248
3
2020 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.
CICC Refer to China International Capital Corporation Limited
Luzhou Bank Refer to Luzhou Bank Co., Ltd.
Sales Company Refer to Sales Company of Luzhou Laojiao Co., Ltd.
Brewing Company Refer to Luzhou Laojiao Brewing Co., Ltd.
4
2020 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
Luzhou Laojiao Marketing Network Command Center, Nanguang Road,
Business address
Luzhou City, Sichuan 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 Wang Hongbo Wang Chuan
Luzhou Laojiao Marketing Network Command Center, Nanguang
Address
Road, Luzhou City, Sichuan Province, China
Tel. (0830)2398826 (0830)2398826
Fax (0830)2398864 (0830)2398864
5
2020 Annual Report of Luzhou Laojiao Co., Ltd.
E-mail dsb@lzlj.com dsb@lzlj.com
3. Information disclosure and place where the annual report is kept
Newspaper designated by the
China Securities Journal, Securities Times, Securities Daily
Company for information disclosure
Website designated by the China
Securities Regulatory Commission
http://www. cninfo.com.cn
(CSRC) for the publication of the
Annual Report
Place where the annual report of the
Board office
Company is kept
4. Company registration and alteration
Organization 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, the
of the Company (if any) 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 firm Sichuan Huaxin (Group) CPA Firm
Business address of the 28/F., South Jinmaolidu, NO.18 Ximianqiao Street, Chengdu City, Sichuan
accounting firm Province.
Name of accountants for
Li Wulin, He Shoufu, and Tang Fangmo
writing signature
Sponsors engaged by the Company to continuously perform its supervisory function during the reporting
period
□ Applicable √ N/A
6
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Financial adviser engaged by the Company to continuously perform its supervisory function during the
reporting period.
Applicable √ N/A
6. Key accounting data and financial indicators
Whether the Company performed a retroactive adjustment to or restatement of accounting data.
Yes √ No
2020 2019 YoY Change 2018
Operating revenues (CNY) 16,652,854,549.80 15,816,934,272.86 5.28% 13,055,465,761.55
Net profits attributable to
shareholders of the Company 6,005,723,069.36 4,641,988,857.03 29.38% 3,485,643,008.98
(CNY)
Net profits attributable to
shareholders of the Company
5,990,831,793.72 4,600,916,766.09 30.21% 3,483,173,302.46
before non-recurring gains and
losses (CNY)
Net cash flows from operating
4,916,102,451.30 4,841,619,203.86 1.54% 4,297,916,018.24
activities (CNY)
Basic earnings per share
4.10 3.17 29.34% 2.38
(CNY/share)
Diluted earnings per share
4.10 3.17 29.34% 2.38
(CNY/share)
Weighted average ROE 28.27% 25.50% 2.77% 21.81%
At the end of 2020 At the end of 2019 YoY Change At the end of 2018
Total assets (CNY) 35,009,203,823.45 28,919,969,078.32 21.06% 22,604,929,596.42
Net assets attributable to
shareholders of the Company 23,074,858,552.59 19,406,845,725.61 18.90% 16,964,671,475.96
(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
2020 Annual Report of Luzhou Laojiao Co., Ltd.
7. Differences in accounting data under domestic and overseas
accounting standards
7.1. Differences in the net profits and net assets disclosed in the financial reports
prepared under the international and China accounting standards
Applicable √ N/A
No such differences for the reporting period.
7.2. Differences in the net profits and net assets disclosed in the financial reports
prepared under the 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 3,552,467,494.03 4,082,015,407.84 3,964,495,377.15 5,053,876,270.78
Net profits attributable to
1,707,145,859.72 1,513,306,330.55 1,594,926,776.29 1,190,344,102.80
shareholders of the Company
Net profits attributable to
shareholders of the Company
1,713,748,254.45 1,520,203,594.60 1,580,862,798.75 1,176,017,145.92
before non-recurring gains and
losses
Net cash flows from operating
-316,284,597.30 1,045,100,019.54 2,068,649,468.56 2,118,637,560.50
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 2020 2019 2018 Note
Profit or loss from disposal of See "Section XII Note
8,123,010.18 23,211,482.49 -13,885,991.18
non-current assets (including the 5.40" for details.
8
2020 Annual Report of Luzhou Laojiao Co., Ltd.
write-off portion of the impairment
provision)
Government grants accounted for, in the
profit or loss for the current period
(except for the government grants
See "Section XII Note
closely related to the business of the 31,409,825.37 43,969,302.07 22,342,598.30
5.37" for details.
Company and given at a fixed amount or
quantity in accordance with the national
uniform standards)
Other non-operating income and
See "Section XII Note
expenditure except above-mentioned -20,289,086.46 -11,510,048.21 -4,902,369.83
5.41, 5.42" for details.
items
Less: Corporate income tax 4,512,028.92 13,076,295.35 316,133.32
Minority interests (after tax) -159,555.47 1,522,350.06 768,397.45
Total 14,891,275.64 41,072,090.94 2,469,706.52 --
Explain the reasons if the Company classifies an item as a non-recurring profit/loss according to the
definition in the Explanatory Announcement No. 1 on Information Disclosure for Companies Offering
Their Securities to the Public-Non-Recurring Profits and Losses, or classifies any non-recurring
profit/loss item mentioned in the said explanatory announcement as a recurring profit/loss item.
Applicable √ N/A
No such cases for the reporting period.
9
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Section III Business Profile
1. Business scope in the reporting period
The Company shall comply with the disclosure requirements of the Guidelines No. 14 of the Shenzhen
Stock Exchange on Industry Information Disclosure—Listed Companies Engaging in Business Related
to Food & Liquor and Wine Production.
Holding 20 food business licenses, the Company operates within the liquor subdivision industry which
belongs to liquor, beverage and refined tea manufacturing industry with specialized liquor product
design, production and sales as its main business model. The Company’s main business is the
research and development, production and sales of liquor series such as "National Cellar 1573" and
"Luzhou Laojiao", and its main comprehensive performance indicators rank high in the liquor industry.
In recent years, the liquor industry, mainly characterized by slower growth, centralized differentiation
and fiercer competition, is gradually having younger generation as its main consumer group. During the
reporting period, the Company closely followed the development theme of "Firm Determination, Strong
Confidence, Strict Management, Targeted Audit, Talent Development and All-out Efforts", and calmly
coped with major pandemic challenges. Two developments outperformed expectations. First,
development resilience outperformed expectations. Amid the severe challenges in the recovery of the
liquor market, the Company took the lead in the industry to weather the crisis, and achieved revenue
growth against liquor industry trend. The sales results hit a record high; second, development
momentum outperformed expectations. The Company not only maintained the external growth of sales,
market and volume, but also showed a high-quality and endogenous development trend of brand value
return, assurance element upgrade, quality and technology improvement, cultural strength
enhancement, and talent team enrichment.
2. Significant changes in the main assets
2.1. Significant changes in the main assets
Main assets Reasons for any significant change
Equity assets N/A
The closing balance increased by CNY 5,368,242,776.81 compared
to opening balance, indicating an increase of 353.44 percent. It was
Fixed assets
mainly due to the transfers from the technical renovation project of
brewing to fixed assets in the current period.
The closing balance increased by CNY 2,324,883,992.90 compared
Intangible assets
to opening balance, indicating an increase of 699.77 percent. It was
10
2020 Annual Report of Luzhou Laojiao Co., Ltd.
mainly due to an increase of CNY 2,339,890,616.45 in land value in
the current period.
The closing balance decreased by CNY 5,245,263,207.41 compared
to opening balance, indicating a decrease of 72.27 percent. It was
Construction in progress
mainly due to the transfers from the technical renovation project of
brewing to fixed assets in the current period.
The closing balance increased by CNY 815,574,506.55 compared to
opening balance, indicating an increase of 34.07 percent. It was
Accounts receivables financing
mainly due to an increase in bank acceptance notes received as a
result of expanding sales.
2.2. Main assets overseas
Applicable √ N/A
3. Analysis of core competitiveness
A. Geographical advantage
Luzhou City, where the Company is located, 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 liquor brewing. The glutinous red sorghum
and soft wheat grown in this area are the primary raw materials for the liquor of the Company. The
cellars in which the Company brews its liquor 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 liquor.
B. Advantage of cellars and brewing technique
Aged cellars are the most essential condition for a strong aromatic liquor maker to produce good quality
liquor. 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 23-generation inheritance and a classic brewing
technique for strong aromatic liquor. 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.
C. Brand advantage
11
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Brand is a key business resource for liquor 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 liquor, was selected in 1952
by the first national tasting competition judges as one of the four most famous liquor brands in China. It is
the only strong aromatic liquor brand that won the title of “National Famous Liquor” for five consecutive
times, as well as the pioneer with regard to the “Tequ” variety of liquor. 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 liquor is increasingly known by consumers as a
national brand of strong aromatic liquor and of authentic flavor.
D. Quality and R&D advantage
The Company is committed to producing high-quality liquor, 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 &
automation. 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 Jiangnan 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 liquor, as well as production efficiency improvement.
E. Talent advantage
The Company has built up the richness in its talent pool throughout the years. It has 1 inheritor of
national intangible cultural heritage, 2 masters of Chinese brewing, 2 masters of Chinese liquor, 3
masters of Chinese liquor technique, 2 Chinese liquor connoisseurs, 5 senior professor engineers, 7
experts who receive special allowances from the State Council, 3 national technicians, 3 academic and
technologic leaders of Sichuan province, 1 excellent expert with special contribution of Sichuan province,
1craftsman of Sichuan province, 1 technological elite of Sichuan province, as well as hundreds of highly
skilled personnel including national liquor judges, senior brewing technicians and brewing technicians.
The comprehensive and professional personnel system assures the sound development of the
Company.
12
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Section IV Performance Discussion and Analysis
1. Overview
2020 marks the final year of the Company's "13th Five-Year Plan". This year, facing the sudden
COVID-19 pandemic, the Company thoroughly implemented the development theme of "Firm
Determination, Strong Confidence, Strict Management, Targeted Audit, Talent Development and All-out
Efforts", made concerted efforts, rose to challenges, and fought courageously to promote the Company
to continue the healthy and rapid development. The Company won the victory in both fighting against the
pandemic and resuming work and production. For 2020, operating revenue amounted to CNY 16.653
billion, up 5.28% year on year; and the net profit attributable to the shareholders of the listed company
reached CNY 6.006 billion, up 29.38% year on year. Luzhou Laojiao achieved a perfect ending to the
"13th Five-Year Plan". Over the past year, the Company's main work and performance included:
A. Guidance of brand strategy and value return of famous liquor brands
The Company thoroughly implemented the brand revival project, and focused on the strategy of "dual
brands, three product series, and major single products" with great clarity. National Cellar 1573
continued to lead the brand recognition. The market share, product profit, brand image and high-end
value continued to increase; the returning trend of Luzhou Laojiao brands’ value and consumer
confidence gradually took shape. Breakthrough was continuously made in 60 Tequ. 10th Gene Tequ
was successfully launched on the market. The transformation and leapfrogging development of Jiaoling
Baijiu was comprehensively promoted. The marketing management reform of the Touqu and Erqu series
achieved remarkable results; innovative product series continued to meet the diversified and segmented
market needs; the new strategic brand "Gogoon" opened a new track of affordable Luxury. The
Company has managed to cover various product price zones. With a new pyramid of brands, the
Company will continue to rejuvenate and promote value return of the brand.
B. Expansion of sales territory and market scale
The Company resolutely promoted the implementation of the "competitive marketing" strategy. Regional
markets and the "city cluster" strategy went hand in hand. The effect of the strategy of "development
towards Eastern and Southern China and Rise in the Central Plains" emerged. The national market
presence achieved high-quality and balanced development; the "dual 124" project and the "new 124"
project centering on private domain traffic resonated together. The decisions and measures are further
implemented to reach the terminal and consumers directly; the sales team and customers realized "dual
classification and dual authorization". The sales business and resources were further decentralized to
well-performing regions and high-quality customers, which effectively released the momentum of the
distributors and sales team. The Company has made great achievements in the market and accelerated
the scale expansion.
C. Intelligent factory upgrade and quality demonstration
The Company comprehensively promoted the construction of the technical renovation project of brewing
and the technical upgrade project of the Smart Packaging Centre, which improved the efficiency of
brewing production and packaging material procurement and supply; it strengthened the use of Industrial
Internet of Things and big data, and realized the efficient integration of warehousing, distribution,
13
2020 Annual Report of Luzhou Laojiao Co., Ltd.
transportation and other sectors; it continued to carry out basic research on intelligent brewing, and
promoted scientific research and innovation to support the industrial development. During the reporting
period, the Company won major awards such as the "Special Award for Industrial Energy Conservation",
the "China Excellent Industrial Design Award", and the "Qing Zhuo Award", and was awarded the
"Provincial-Level Enterprise Technology Center". The first batch of national consumer product
standardization pilot projects undertaken by the Company passed the inspection by the State
Administration for Market Regulation with high scores. The Company was the only liquor enterprise in
the liquor industry in Sichuan Province to receive this honor.
D. Scientific and standardized management and internal efficiency improvement
The Company actively explored the hierarchical management model of performance assessment,
refined the assessment of the tracking of the entire project life cycle, strictly linked the budget execution
effect with performance, and promoted the implementation of corporate management; it gave full play to
the effectiveness of financial fund planning, developed a human resources decision-making system with
efficient linkage and rapid response, and promoted the efficient business integration management; it
comprehensively strengthened the corporate ability to manage risks in terms of improving the financial
system, expanding the scope of internal audit, strengthening efficiency supervision, and strictly
controlling legal risks. Through a series of measures, the Company achieved a more complete
management mechanism and system, more effective management methods and means, and more
stable operations management and control. A scientific and standardized corporate management
system that features complete system and efficient operation has basically been developed.
The Company shall comply with the disclosure requirements of the Guidelines No. 14 of the Shenzhen
Stock Exchange on Industry Information Disclosure—Listed Companies Engaging in Business Related
to Food & Liquor and Wine Production.
For the Company's brand operations, please refer to the previous "Overview". In order to realize the
value return of "Luzhou Laojiao" brands and promote the implementation of the "competitive marketing"
strategy, the Company implemented the operational integration of mid- and high-end products. Since the
reporting period, the Company has reclassified the products based on the sales price. The product
classification was changed to "mid- and high-end liquor" and "other liquor" from "high-, mid- and low-end
liquor" in the previous reporting period. The details are as follows:
Main product types Classification criteria Representative brand name
National Cellar 1573, Luzhou
Tax-inclusive sales price ≥ CNY
Mid- and high-end liquor Laojiao Tequ, and Century-old
150 per bottle
Luzhou Laojiao Jiaoling Baijiu
Tax-inclusive sales price < CNY Luzhou Laojiao Touqu and Luzhou
Other liquor
150 per bottle Laojiao Erqu
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
14
2020 Annual Report of Luzhou Laojiao Co., Ltd.
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
15,693,989,192.05 2,557,557,746.19 83.70% 5.47% -8.20% 2.43%
operation model
Emerging channel
753,971,377.17 153,876,260.78 79.59% 2.56% -18.37% 5.23%
operation model
2. Distributors
Unit: Number
Number of distributors Increased number Decreased number YoY change of
Reason for any
Region at the end of the during the reporting during the reporting number of
significant change
reporting period period period distributors (%)
Domestic 2047 85 341 -11.12
Overseas 174 13 0 8.07
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 IV 2.8 "Main customers and suppliers".
Store sales terminals accounted for more than 10%
□ Applicable √ N/A
Online direct sales
√ Applicable □N/A
15
2020 Annual Report of Luzhou Laojiao Co., Ltd.
For the sales of the Company's main products, please refer to Section IV 2.2 "Business segment,
products or geographical segments contributing over 10% of the operating revenues or profits". 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
Raw materials 3,050,165,302.42
grain bases; other raw grains and packaging
materials are purchased through bid invitation
Purchase based on the unified pricing of the
National Development and Reform
Fuels and energies 87,896,952.21
Commission and the price bureau, and
purchase through bid invitation
Purchase through bid invitation Low-value consumables 53,045,147.83
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
For the Company's cost of sales, please refer to Section IV 2.5. "Breakdown of cost of sales".
Production volume and inventory
1. Production volume, sales volume and inventory of main products
Production YoY change YoY change
Product Sales volume Inventory YoY change Description of major
volume of production of sales
classification (ton) (ton) of inventory changes
(ton) volume volume
16
2020 Annual Report of Luzhou Laojiao Co., Ltd.
(%) (%)
Mid- and
high-end 24,315.20 25,328.23 22,279.97 -16.55% -1.49% -4.35%
liquor
Inventory decreased
by 38.46%
year-on-year, mainly
due to the
Other liquor 87,104.53 95,586.93 13,574.84 -19.89% -18.28% -38.46%
Company's
adjustment of
production and sales
plans.
2. Inventory at the end of the reporting period
Unit: Ton
Finished liquor Semi-finished liquor (including basic liquor)
35,854.81 278,333.46
3. Capacity
Unit: Ton
Main products Design capacity Actual capacity Capacity in progress
Liquor 170,000 170,000
Note: The capacity data statistics in this table is based on the standards of basic liquor.
2. Analysis of main business
2.1. Overview
Same with the contents presented in “1.Overview” of this section.
2.2. Revenues and cost of sales
2.2.1. Breakdown of operating revenues
Unit：CNY
2020 2019
As % of operating As % of operating YoY Change
Amount Amount
revenues revenues
Total 16,652,854,549.80 100% 15,816,934,272.86 100% 5.28%
By business segment
Liquor 16,447,960,569.22 98.77% 15,615,719,102.43 98.73% 5.33%
Other revenues 204,893,980.58 1.23% 201,215,170.43 1.27% 1.83%
By product
17
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Mid- and high-end
14,236,990,348.38 85.49% 12,344,750,879.68 78.05% 15.33%
liquor
Other liquor 2,210,970,220.84 13.28% 3,270,968,222.75 20.68% -32.41%
Other revenues 204,893,980.58 1.23% 201,215,170.43 1.27% 1.83%
By geographical segment
Domestic 16,602,974,426.77 99.70% 15,674,636,458.22 99.10% 5.92%
Overseas 49,880,123.03 0.30% 142,297,814.64 0.90% -64.95%
2.2.2. Business segment, products or geographical segments contributing over 10%
of the operating revenues or profits
√ Applicable N/A
Unit：CNY
Gross YoY change of YoY change of
Operating YoY change of
Cost of sales profit operating gross profit
Revenue cost of sales
margin revenue margin
By business segment
Liquor 16,447,960,569.22 2,711,434,006.97 83.52% 5.33% -8.84% 2.57%
By product
Mid- and
14,236,990,348.38 1,388,286,747.48 90.25% 15.33% 8.02% 0.66%
high-end liquor
Other liquor 2,210,970,220.84 1,323,147,259.49 40.16% -32.41% -21.67% -8.20%
By geographical segment
Domestic 16,602,974,426.77 2,815,808,975.94 83.04% 5.92% -7.57% 2.48%
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
Unit：CNY
Gross YoY change of YoY change of
Operating YoY change of
Cost of sales profit operating gross profit
Revenue cost of sales
margin revenue margin
By business segment
Liquor 15,615,719,102.43 2,974,484,362.13 80.95% 21.43% 3.32% 3.34%
By product
Mid- and
12,344,750,879.68 1,285,251,348.41 89.59% 22.80% 1.57% 2.18%
high-end liquor
18
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Other liquor 3,270,968,222.75 1,689,233,013.72 48.36% 16.54% 4.69% 5.85%
By geographical segment
Domestic 15,674,636,458.22 3,046,516,937.67 80.56% 21.04% 5.29% 2.90%
Reasons for changing the standards
In order to realize the return of "Luzhou Laojiao" brands’ value and promote the implementation of the
"competitive marketing" strategy, the Company implemented the operational integration of mid- and
high-end products. Since the reporting period, the Company has reclassified the products based on the
sales price. The product classification was changed to "mid- and high-end liquors" and "other liquors"
from "high-, mid- and low-end liquors" in the previous reporting period. For details, please refer to
Section IV 1. "Overview".
2.2.3. Whether revenue from sales of goods is higher than revenue of rendering
services
√ Yes No
By business
Item Unit 2020 2019 YoY Change
segment
Sales volume ton 120,915.16 142,684.91 -15.26%
Production
Liquor ton 111,419.73 137,865.2 -19.18%
volume
Inventory ton 35,854.81 45,350.24 -20.94%
Reason for any over 30% YoY movements in the data above
Applicable √ N/A
2.2.4. Execution of significant sales contracts in the reporting period
Applicable √ N/A
2.2.5. Breakdown of cost of sales
By business segment
Unit：CNY
2020 2019
By business
Item As % of cost As % of cost of YoY Change
segment Amount Amount
of sales sales
Liquor Raw materials 2,363,441,505.18 87.17% 2,618,480,096.93 85.42% -9.74%
Liquor Labor costs 157,352,625.49 5.80% 170,437,243.49 5.56% -7.68%
Manufacturing
Liquor 190,639,876.30 7.03% 276,500,707.96 9.02% -31.05%
overhead
19
2020 Annual Report of Luzhou Laojiao Co., Ltd.
2.2.6. Change in the scope of the consolidated financial statements for the reporting
period
Yes √ No
2.2.7. Major changes in the business, products or services in the reporting period
Applicable √ N/A
2.2.8. Main customers and suppliers
Sales to main customers of the Company
Total sales to top five customers（CNY） 12,453,288,173.52
Total sales to top five customers as % of the
74.78%
total 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 for the
No. Customer Sales amount (CNY)
year
1 Customer A 9,633,022,654.97 57.85%
2 Customer B 1,299,206,494.90 7.80%
3 Customer C 920,518,461.73 5.53%
4 Customer D 322,923,425.84 1.94%
5 Customer E 277,617,136.08 1.67%
Total -- 12,453,288,173.52 74.78%
Other information on main customers
Applicable √ N/A
Main suppliers of the Company
Total purchases from top five suppliers
1,484,467,422.72
（CNY）
Total purchases from top five suppliers as %
46.52%
of the total purchases
Total purchases from related parties among
0.00%
top five suppliers as % of the total purchases
Information on top five suppliers
As % of the total purchases for
No. Supplier Purchases (CNY)
the year
20
2020 Annual Report of Luzhou Laojiao Co., Ltd.
1 Supplier A 553,936,146.19 17.36%
2 Supplier B 279,737,794.65 8.77%
3 Supplier C 256,713,882.01 8.04%
4 Supplier D 233,094,271.89 7.30%
5 Supplier E 160,985,327.97 5.04%
Total -- 1,484,467,422.72 46.52%
Other information on main suppliers
Applicable √ N/A
2.3. Expenses
Unit：CNY
2020 2019 YoY Change Reason for any significant change
Selling and distribution
3,090,655,832.25 4,186,102,153.59 -26.17%
expenses
General and
administrative 844,454,467.47 828,945,024.92 1.87%
expenses
Finance expenses -132,445,202.74 -205,084,493.69 Bond interest expenses
R&D expenses 85,858,119.80 71,643,099.77 19.84%
The Company shall comply with the disclosure requirements of the Guidelines No. 14 of the Shenzhen
Stock Exchange on Industry Information Disclosure—Listed Companies Engaging in Business Related
to Food & Liquor and Wine Production.
2.3.1. Breakdown of selling and distribution expenses
Unit：CNY
Selling and distribution
2020 2019 YoY Change Reason for any significant change
expenses
Advertising expenses 1,316,519,804.16 1,403,889,542.35 -6.22%
Sales promotion Decreased product promotion
1,074,611,735.49 1,859,984,308.36 -42.22%
expenses activities due to the pandemic
Classification of logistics expenses
Warehousing and
92,177,677.09 267,723,621.05 -65.57% as contract performance costs in
logistics expenses
cost of sales
Labor costs 324,598,768.07 289,156,593.78 12.26%
21
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Other 282,747,847.44 365,348,088.05 -22.61%
2.3.2. Breakdown of advertising expenses
Unit：CNY
Advertising Expenses
Online advertising (exclusive of TV advertising) 198,541,850.17
Offline advertising 432,817,581.52
TV advertising 361,328,286.31
Other (inclusive of branding ideas, exhibitions & showcases, advertising
323,832,086.16
materials, activity planning, etc.)
2.4. R&D investments
√ Applicable N/A
Currently, the Company has more than 20 national, provincial and municipal scientific and technological
innovation platforms, including the National Engineering Research Center of Solid-State Brewing, the
National Industrial Design Center, the National Postdoctoral Workstation, the Sichuan Baijiu Brewing
Institute of Technologies, and the Liquor Making Bio-Technology & Application of Key Laboratory of
Sichuan Province. It has developed a multi-field and all-round system of scientific and technological
innovation platforms with the National Engineering Research Center of Solid-State Brewing as the core
of R&D, covering basic R&D, talents cultivation, and engineering transformation. In 2020, the Company,
with the scientific and technological platforms as the support and scientific and technological projects as
the lever, promoted the R&D of common key technologies in the industry focusing on key technology
fields such as modern agriculture, circular economy, intelligent brewing, food safety, and flavor and
health. Some project technologies have been applied and transformed in production, and produced
significant economic benefits and social value, playing an important role in driving the Company's
sustainable and stable development.
Information about R&D investments
2020 2019 YoY Change
Number of R&D
474 454 4.41%
personnel
R&D personnel as % of
14.23% 14.06% 0.17%
total employees
R&D investments (CNY) 112,418,055.64 86,837,791.61 29.46%
R&D investments as %
0.68% 0.55% 0.13%
of operating revenues
Capitalized R&D 0.00 0.00 0.00%
22
2020 Annual Report of Luzhou Laojiao Co., Ltd.
investments (CNY)
Capitalized R&D
investments as % of total 0.00% 0.00% 0.00%
R&D investments
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
2.5. Cash flows
Unit：CNY
Item 2020 2019 YoY Change
Subtotal of cash inflows
17,722,942,520.06 19,116,354,312.63 -7.29%
from operating activities
Subtotal of cash outflows
12,806,840,068.76 14,274,735,108.77 -10.28%
from operating activities
Net cash flows from
4,916,102,451.30 4,841,619,203.86 1.54%
operating activities
Subtotal of cash inflows
49,450,467.66 62,529,093.56 -20.92%
from investing activities
Subtotal of cash outflows
2,223,910,509.48 4,613,226,214.50 -51.79%
from investing activities
Net cash flows from
-2,174,460,041.82 -4,550,697,120.94
investing activities
Subtotal of cash inflows
1,503,947,876.16 2,493,834,692.00 -39.69%
from financing activities
Subtotal of cash outflows
2,420,721,436.84 2,400,399,307.80 0.85%
from financing activities
Net cash flows from
-916,773,560.68 93,435,384.20 -1,081.18%
financing activities
Net increase in cash and
1,815,928,536.03 386,279,899.10 370.11%
cash equivalents
Explanation of why the data above varied significantly
√ Applicable N/A
Net cash flows from investing activities increased by CNY 2,376,237,079.12 year-on-year, mainly due to
23
2020 Annual Report of Luzhou Laojiao Co., Ltd.
the decreased investments in the technical renovation project of brewing during the reporting period.
Net cash flows from financing activities decreased by 1,081.18 percent year-on-year, mainly due to less
funds raised through the issue of corporate bonds by the Company during the reporting period compared
to last year.
Explanation of main reasons leading to the material difference between net cash flows from operating
activities during the reporting period and net profit for the year
Applicable √ N/A
3. Analysis of non-core business
Applicable √ N/A
4. Assets and liabilities
4.1 Significant change of asset items
The Company has adopted the new accounting standards governing revenue or leases since 2020 and
restated the beginning amounts of relevant financial statement line items in the year
√ Applicable □ N/A
Unit：CNY
At the end of 2020 At the beginning of 2020
Change in
As % of total As % of total Reason for any significant change
Amount Amount percentage
assets assets
Cash and cash
11,624,870,340.60 33.21% 9,753,666,526.78 33.73% -0.52%
equivalents
Accounts
1,507,852.43 0.00% 18,293,914.23 0.06% -0.06%
receivable
Inventories 4,695,663,431.25 13.41% 3,641,235,092.33 12.59% 0.82%
Long-term
equity 2,477,667,171.27 7.08% 2,230,721,725.72 7.71% -0.63%
investments
Transfers from the technical renovation
Fixed assets 6,887,108,174.72 19.67% 1,518,865,397.91 5.25% 14.42% project of brewing to fixed assets in the
current period
Transfers from the technical renovation
Construction in
2,012,129,880.15 5.75% 7,257,393,087.56 25.09% -19.34% project of brewing to fixed assets in the
progress
current period
24
2020 Annual Report of Luzhou Laojiao Co., Ltd.
4.2 Assets and liabilities measured at fair value
√ Applicable □ N/A
Unit：CNY
Changes in
Changes in fair
cumulative fair Provision for Amount of Amount of Other
Item Opening balance value through Closing balance
value recorded impairment purchase sale changes
profit or loss
into equity
Financial asset
4. Investments in
other equity 352,395,255.78 -5,234,856.36 242,597,560.42 347,160,399.42
instruments
Total 352,395,255.78 -5,234,856.36 242,597,560.42 347,160,399.42
Financial liability 0.00 0.00 0.00 0.00
Information about other changes
Whether measurement attribution of main assets changes significantly in this year
Yes √ No
4.3 Restricted asset rights as of the end of this reporting period
Unit：CNY
Item Closing Balance Reason
Bank deposits (CNY) 55,275,277.79 Accrued interest on term deposits
Other cash and cash 1,400,000.00 According to regulations of Tourism Bureau, the travel
equivalents (CNY) service deposit was deposited in a designated bank
Accounts receivables Large-denomination notes put in pledge for
147,480,000.00
financing (CNY) small-denomination notes
Total 204,155,277.79
5. Investment
5.1. Total investment
√ Applicable N/A
Investment made in the reporting Investment made in the prior year
YoY change
period (CNY) (CNY)
2,896,569,612.76 5,033,329,478.98 -42.45%1
25
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Note 1: Mainly due to the decreased investments as the technical renovation project of brewing
progressed towards completion in the current year.
5.2. Significant equity investment made in the reporting period
Applicable √ N/A
5.3. Significant ongoing non-equity investment in the reporting period
√ Applicable □ N/A
Unit: CNY
Accumula Accumula Reasons
ted actual ted for not
Whether it Amount
Industry invested realized meeting
is a fixed invested Date of Disclosure
Investme of the amount Capital Project Projected gains by project
Item asset in the disclosure index (if
nt form investme by the source progress income the end of schedule
investme reporting (if any) any)
nt project end of the the and
nt period
reporting reporting projected
period period income
Announce
ment No.
2020-17 on
Technical Increasing
renovatio Fund-raisi the
1,359,720 7,722,411 2 June
1 2
n project Self-built Yes Liquor ng+self-fi 96.00% 0.00 0.00 N/A Investment
,629.11 ,427.18 2020
of nancing in the
brewing Technical
Renovation
Project of
Brewing
1,359,720 7,722,411
Total -- -- -- -- -- 0.00 0.00 -- -- --
,629.11 ,427.18
Note 1: As of December 2020, construction was completed for the project, with the project image
progress reaching 100%. Quality inspection and acceptance of the relevant sub-projects was finished.
Other inspection and acceptance, as well as settlement were progressing in an orderly manner.
Note 2: When the project is put into operation, it will mean new production capacities of 100,000 tons of
quality solid pure-grain liquor and 100,000 tons of leaven in addition to a new storage capacity of
380,000 tons of liquor per year expectedly.
26
2020 Annual Report of Luzhou Laojiao Co., Ltd.
5.4. Financial assets investment
5.4.1. Securities investment
√ Applicable □ N/A
Unit: CNY
Changes
Changes
in the Profit
Accounti in fair
Category cumulati and loss
Abbreviat Initial ng Beginnin value Amount Closing
of Stock ve fair Amount during Accounti Capital
ion of investme measure g book recogniz of book
securitie code value of sale the ng item source
securities nt cost ment balance ed in purchase balance
s recorded reporting
model profit or
into period
loss
equity
Investme
Domesti Fair nts in
c and 12,719,1 value 217,756, -11,305,9 193,731, 4,593,02 206,450, other Own
601211 GTJA 0.00 0.00
foreign 56.76 measure 674.52 17.13 600.63 8.83 757.39 equity fund
stock ment instrume
nts
Investme
Domesti Fair nts in
c and 1,030,00 value 11,757,9 -297,075 10,430,8 85,995.5 11,460,8 other Own
002246 SNC 0.00 0.00
foreign 0.00 measure 33.60 .45 58.15 3 58.15 equity fund
stock ment instrume
nts
Investme
Domesti Fair nts in
c and 51,120,0 value 89,076,3 6,485,46 44,441,8 4,700,80 95,561,8 other Own
01983 LZBANK 0.00 0.00
foreign 00.00 measure 63.20 2.35 25.55 0.00 25.55 equity fund
stock ment instrume
nts
Other securities investments
held at the end of the 0.00 -- 0.00 0.00 0.00 0.00 0.00 0.00 0.00 -- --
reporting period
64,869,1 318,590, -5,117,53 248,604, 9,379,82 313,473,
Total -- 0.00 0.00 -- --
56.76 971.32 0.23 284.33 4.36 441.09
5.4.2. Derivative investment
□Applicable √ N/A
27
2020 Annual Report of Luzhou Laojiao Co., Ltd.
No such cases in the reporting period
5.5. Use of funds raised
√ Applicable N/A
5.5.1. General use of funds raised
√ Applicable □ N/A
Unit：CNY 10,000
Total
Total Total Accumulate
amount of Purpose Amount of
amount of Accumulate amount of d Total
Total re-purposed and funds raised
raised funds d amount of accumulate re-purposed amount of
Year Method amount of funds raised direction of idle for
used in the raised funds d funds raised unused
funds raised in the unused more than
reporting used re-purposed as % of total funds raised
reporting funds raised two years
period funds raised funds raised
period
Deposited
Non-public
in special
2017 offering of 295,273.5 51,205.75 309,433.01 0 0 0.00% 4.11 0
account for
shares
raised funds
Public Deposited
offering of in special
2019 249,000 16,924.69 217,306.18 0 0 0.00% 35,377.14 0
corporate account for
bond raised funds
Public Deposited
offering of in special
2020 149,400 13,062.12 13,062.12 0 0 0.00% 139,826.74 0
corporate account for
bond raised funds
Total -- 693,673.5 81,192.56 539,801.31 0 0 0.00% 175,207.99 -- 0
Notes for general use of funds raised
The total amounts of used and unused funds raised include interest on the funds.
5.5.2. Fund raised for committed projects
√ Applicable □ N/A
Unit：CNY 10,000
Committed investment Whether Total Adjusted Investmen Accumulated Investme Date of Realized Whether Whether
28
2020 Annual Report of Luzhou Laojiao Co., Ltd.
projects and direction of the project amount of Investmen t amount input by the nt the benefits the the
over-raised funds has been funds t total in the end of the progress projects during the expected feasibility
changed raised for amount reporting reporting by the reach the reporting benefits of the
(including committed (1) period period (2) end of working period have been project
partial investmen reporting condition achieved has
change) t period (3) for their changed
＝(2)/(1) intended significantl
use y
Committed investment projects
Technical Renovation
Project of Brewing No 295,273.5 295,273.5 51,205.75 309,433.01 104.80% — 0 N/A No
Phrase I
Technical Renovation
Project of Brewing No 11,391.26 211,772.75 — 0 N/A No
Phrase II
Project of Intelligent
Upgrading and Building of
No 2,344.62 2,344.62 — 0 N/A No
the Information
Management System
Project of Acquiring 398,400 398,400 57.82%
Sealing Equipment for the
No 12,043.3 12,043.3 — 0 N/A No
Cellar of Huangyi
Brewing Base
Project of Acquiring
Accessory Equipment for
No 4,207.62 4,207.62 — 0 N/A No
Leaven Making for
Huangyi Brewing Base
Subtotal of committed
-- 693,673.5 693,673.5 81,192.55 539,801.3 -- -- 0 -- --
investment projects
Use of over-raised funds
None
Repayment of bank loan
-- 0 0 0 0 -- -- -- --
(if any)
Supplementing working
-- 0 0 0 0 -- -- -- --
capital (if any)
Subtotal of use of
-- 0 0 0 0 -- -- -- --
over-raised funds
Total -- 693,673.5 693,673.5 81,192.55 539,801.3 -- -- 0 -- --
Situation and reason for
N/A
not reaching plan
29
2020 Annual Report of Luzhou Laojiao Co., Ltd.
progress or expected
benefits (by specific
items)
Significant changes of
N/A
project feasibility
Amount, purpose and N/A
progress of over-raised
funds
N/A
Change of
implementation site of
investment projects
Adjustment of the N/A
implementation mode of
raised funds investment
projects
Applicable
Funds raised through non-public offering of shares: On 30 November 2017, the Company held the 24th meeting of the
eighth board of directors and the 13th meeting of the eighth supervisory committee. At the meetings, the Proposal on
Using Raised Funds to Replace Advance Investments was considered and approved, which agreed to the Company’s
replacement of the advance investment of self-raised funds of CNY 581.7750 million using the raised funds.
Non-executive directors of the Company issued independent opinions of consent. Sichuan Huaxin (Group) CPA Firm
(Limited Liability Partnership) verified the matter on the advance investments in the raised funds investment projects
Situation of advance with self-pooled funds and produced the Special Report (CHXZ (2017) No. 534) on 14 November 2017.
investment and
replacement
Funds raised through public offering of corporate bond: On 14 May 2019, the Company held the 1st special meeting of
shareholders in 2019, which considered and approved the Proposal on Requesting the Company’s General Meeting
to Fully Authorize Chairman of the Board or Other Personnel Authorized by the Board to Go Through Procedures for
the Public Offering of Corporate Bond. According to the Proposal, in the event of inconsistency between the payment
of the raised funds and the progress of the project implementation, the Company may make advance investments
using other funds (including self-owned funds, bank project loans, etc.) according to the actual situation, and replace
fund investment other than capital funds when the raised funds are in place. As of 31 December 2020, the Company
had replaced advance investments of self-pooled funds of CNY 573.1785 million using the raised funds.
Idle raised funds used for N/A
temporary supplementary
liquidity
Amount and reason for N/A
surplus of funds raised
Purpose and The idle funds raised through non-public offering of shares are deposited in the special account No. 606036135 for
whereabouts of unused raised funds in the Chengdu Branch of China Minsheng Banking Corp., Ltd. and the special account No.
funds raised 028900178710606 for raised funds in the Xiti North Road Sub-branch of China Merchants Bank Co., Ltd. As
30
2020 Annual Report of Luzhou Laojiao Co., Ltd.
authorized by the Board of Directors, the Company converted some idle raised funds into term deposits for the
purpose of cash management.
The idle funds raised through public offering of corporate bond are deposited in the special account No.
9550880046723000135 for raised funds in the Chengdu Branch of China Guangfa Bank Co., Ltd., the special
account No. 517517460013000000860 for raised funds in the Luzhou Branch of Bank of Communications Co., Ltd.,
the special account No. 631395395 for raised funds in the Chengdu Branch of China Minsheng Banking Corp., Ltd.,
and the special account No. 028900140410888 for raised funds in the Fucheng Avenue Sub-branch of the Chengdu
Branch of China Merchants Bank Co., Ltd. As authorized by the Board of Directors, the Company converted some
idle raised funds into term deposits for the purpose of cash management.
Problems and other
situation when raised
None
funds are used and
disclosed
Note 1: The total amount of committed raised funds investment is CNY 6,936,735,000, including CNY
2,952,735,000 actually raised through a non-public offering of shares, as well as CNY 3,984,000,000
actually raised through the public offerings of corporate bond respectively in August 2019 and March
2020. Because there were uncertainties in the approval and issue time for public offerings of corporate
bond in the review of issue plans, 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 or other persons as authorized by the Board of Directors within the scope of the four
projects of Technical Renovation Project of Brewing Phrase 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 according to the actual needs, provided that the capital funds for each project is no less
than 20% of the total investment. Therefore, the total amount of committed raised funds investment is
not stated separately for the aforesaid four projects.
Note 2: As of December 2020, construction was completed for the Technical Renovation Project of
Brewing, with the project image progress reaching 100%. Quality inspection and acceptance of the
relevant sub-projects was finished. Other inspection and acceptance, as well as settlement were
progressing in an orderly manner. When the project is put into operation, it will mean new production
capacities of 100,000 tons of quality solid pure-grain liquor and 100,000 tons of leaven in addition to a
new storage capacity of 380,000 tons of liquor per year expectedly.
Note 3: The Project of Intelligent Upgrading and Building of the Information Management System was in
the process. It does not generate income on a separate basis because it is a management-related
project.
Note 4: Construction was completed for the Project of Acquiring Sealing Equipment for the Cellar of
Huangyi Brewing Base in December 2020. Quality inspection and acceptance of the project was finished.
Other inspection and acceptance, as well as settlement were progressing in an orderly manner. The
31
2020 Annual Report of Luzhou Laojiao Co., Ltd.
project does not generate income on a separate basis for it is a supporting project of the Technical
Renovation Project of Brewing.
Note 5: Construction was completed for the Project of Acquiring Accessory Equipment for Leaven
Making for Huangyi Brewing Base in December 2020. Quality inspection and acceptance of the project
was finished. Other inspection and acceptance, as well as settlement were progressing in an orderly
manner. The project does not generate income on a separate basis for it is a supporting project of the
Technical Renovation Project of Brewing.
5.5.3. Re-purposed funds raised
Applicable √ N/A
No such cases in the reporting period
6. Sale of major assets and equity interests
6.1. Sale of major assets
Applicable √ N/A
No such cases in the reporting period.
6.2. Sale of major equity interests
Applicable √ N/A
7. Analysis of major subsidiaries
√ Applicable N/A
Main subsidiaries and joint companies with an over 10% influence on the Company’s net profit
Unit：CNY
Company Company Business Registered Operating Operating
Total assets Net assets Net profit
name type scope capital Revenue profit
Luzhou
Sales
Laojiao
Company of
series 100,000,00 5,173,039,3 2,182,050,8 16,060,984, 5,885,730,0 4,399,701,2
Luzhou Subsidiary
unified 0.00 93.83 34.97 512.87 76.57 10.09
Laojiao Co.,
package
Ltd.
liquor sales
32
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Acquisition and disposal of subsidiaries during the reporting period
□ Applicable √N/A
Notes for major holding companies and joint stock companies
8. Structured entities controlled by the Company
Applicable √ N/A
9. Outlook for the future development of the Company
9.1 Industry landscape and trends
According to the data of National Bureau of Statistics, total production volume of brewed liquor by liquor
companies above the scale designated by the Bureau was 7.4073 million kl during January-December
2020, down by 2.46% year-on-year; total sales revenue reached CNY 583.639 billion, up by 4.6%
year-on-year; total profit of CNY 158.541 billion was realized, up by 13.35% year-on-year.
Since 2020, due to the impact of globalization, anti-globalization and the COVID-19 pandemic, the world
economy has fluctuated sharply. Meanwhile, China's labor force is at a turning point. The dividends of
the peak birth period from 1960s to 1970s will gradually disappear as the labor withdraws from the
market. The liquor industry is moving forward amid the collision and squeeze of the economic cycle,
population cycle, industry cycle, and the impact of the pandemic. On the other hand, with the starting
momentum of the "domestic economic circulation" and "dual circulation", China's economy will further
release its market potential. The formation of urban clusters will accelerate. The consumption demands
of emerging consumer groups will continue to upgrade. These will bring development room and
opportunities for China's liquor industry. In this context, the liquor industry will enter a new round of
development cycle. In the future, the total volume will shrink. Consumption will be iteratively upgraded.
The market share will be concentrated in the leaders’ hands. The interference of uncertainty factors from
time to time may become the norm in the industry. The industry competition will be the competition
between systems. The shortcomings in corporate supply chain and ecological chain must be made up
for. The era of joint operations of strategic product line mix and market has arrived.
9.2 Company’s development strategy
9.2.1. Development opportunities in the future
A. After the test of the pandemic, China's economy has fully demonstrated the vigorous vitality, strong
resilience and huge potential. With a complete science and technology industrial system, efficient social
management system and manufacturing and construction capabilities, China will continue to maintain a
momentum of high-speed and high-quality development in the future, and achieve a historic leap from
low- and middle-income country to high-income country. As an outstanding representative of the national
industries, liquor will better enjoy the spillover dividends brought about by China's economic and cultural
33
2020 Annual Report of Luzhou Laojiao Co., Ltd.
rise, while benefit from the huge potential of China's consumer market in the future.
B. As the economic driving force shifts from outside to inside, the external environment for the
development of national industries is undergoing profound changes. The deep inland location provides a
safer and more stable ecological environment and development environment. The development of
information technology and transportation has completely reversed the disadvantages of the inland
location; the brewing techniques that have been passed down for thousands of years provide valuable
dominance such as full independent intellectual property rights, independent pricing power, independent
supply chain, and independent raw materials; the relatively higher domestic market share provides a
strong market moat amid the impact of the pandemic and the economic downturn cycle of western
countries; the relatively dispersed industry concentration provides leading enterprises with vast space to
become bigger and stronger. The liquor industry will expand its advantages in the new cycle of the
restructuring of international industrial and trade relations and the adjustment of national economic
policies, creating opportunities for Luzhou Laojiao to establish and expand its advantages.
C. Since the "13th Five-Year Plan", the Company has firmly implemented the "12345" development
strategy and made a series of major breakthroughs: The sales results repeatedly hit record highs. The
value of the Company's famous liquor brands strongly returned. Leaping improvement was made in
solid-state brewing capacity. Sufficient and competent talent team was in place. Key projects were
vigorously advanced. All of these have laid a solid foundation for the Company's sound development in
the future.
9.2.2. Possible challenges and risks in the future
A. Pandemic risk: The outbreak of the COVID-19 pandemic, which started at the end of 2019, has
hugely impacted the global economy and changed people's consumption patterns and behavior habits,
thus causing a greater impact on the consumption environment and product shelf sales of the liquor
industry. Since the second half of 2020, the spread of the pandemic has never stopped. Due to the
emergence of various virus variants, the domestic prevention and control of pandemic cannot be
slackened, bringing certain uncertainty to the liquor industry.
B. Economic risk: In recent years, there are frequent frictions in international trade. The macroeconomic
environment remains difficult. If the total economic demand declines, it will affect the residents' per
capita disposable income and their willingness to consume, which will have a negative impact on the
liquor industry.
C. Policy risk: As the pandemic gradually eases, the world economy returns to normal, and mainstream
countries gradually withdraw the loose monetary policies, which may affect China's relevant policies. In
the short term, the liquor consumption market will be affected.
9.2.3. The Company's "14th five-year" development strategy
Focusing on the development concepts of "leveraging advantages, making up for shortcomings,
improving quality, enhancing strength, and seeking revitalization", the Company, after prudent research,
has formulated the "14th five-year" strategic plan: "136" strategy.
34
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Adhere to one development objective:
Adhere to the objective of returning to China's liquor industry "top three".
Adhere to three major development principles:
The first is to adhere to brand guidance and vigorously enhance the value of famous liquor brands in
China. The second is to adhere to the foundation of quality and vigorously build the core production area
of famous liquor brands in the world. The third is to adhere to culture casting and vigorously build a
pilgrimage site for Chinese liquor culture.
Construct a "six-in-one" Luzhou Laojiao
The first is to build the brand of Luzhou Laojiao. Focusing on the development arrangement of "dual
brands, three product series, and major single products", the Company shall continue to enhance the
value of the high-end brand National Cellar 1573, promote the value return of famous Luzhou Laojiao
brands, and lead the direction of appealing to more younger consumers and becoming more
international and stylish with brand innovation.
The second is to build the quality of Luzhou Laojiao. The Company shall build a reputation of quality,
adhere to brewing with organic raw grains, create new taste and flavors, increase trust in quality, and
satisfy taste preferences. It shall establish a model for quality, expand the scope of quality supervision,
and improve the innovative quality traceability system covering the entire product life cycle. It shall
strengthen standard guidance, consolidate the image of standard liquor for Chinese liquor appreciation,
and become a setter of Chinese liquor quality standards.
The third is to build the culture of Luzhou Laojiao. The Company shall consolidate its leading position in
the liquor industry, enhance cultural self-confidence, create new cultural expressions, accelerate the
integration of culture and tourism, and enhance cultural identity. It shall create a good industrial and
ecological culture on behalf of the industry elites, tell the Chinese story of liquor on behalf of the Chinese
liquor, and build the world-class clusters of cultural landscape on behalf of the national industries. It shall
create a business card of liquor culture that integrates the wharf culture of the Yangtze River, the cave
storage culture of liquor, the culture of liquor factory, the culture of folk customs and sacrifice, the local
culture of Bashu, the culture of liquor rituals, and the intangible culture of craftsmanship.
The fourth is to build an innovative Luzhou Laojiao. The Company shall strengthen scientific and
technological innovation, build a strong scientific and technological platform, focus on the transformation
of achievements, attach importance to scientific and technological promotion, and provide theoretical
and practical support for the upgrading of Chinese liquor technology. It shall strengthen management
innovation, optimize the allocation of elements, improve the policies and procedures, use innovative
means to improve the precise, systematic and professional management, and improve the modern
enterprise management system. It shall strengthen marketing innovation, keep pace with the market,
accelerate the innovation of products, strategies, organizations, channels, services and models, and
stimulate the vitality of market expansion.
The fifth is to build the digital intelligence of Luzhou Laojiao. The Company shall integrate the elements
35
2020 Annual Report of Luzhou Laojiao Co., Ltd.
of major business system by digital means, open up the value chain of management, purchase and
supply, production, quality inspection, marketing and service, comprehensively improve the business
decision-making in a forward-looking, accurate, timely and systematic manner, improve management
efficiency, prevent and control operation risks, and strengthen the linkage between production and sales.
It shall intensify the integrated application of intelligent equipment and systems in the entire industry
chain, solidify knowledge and experience with scientific and technological means, improve high-quality
production capacity, control operating costs, and become a leader in the intelligent technology revolution
and a model enterprise for innovation and upgrading of industrial models.
The sixth is to build a harmonious Luzhou Laojiao. The Company shall insist on sharing with employees,
strengthen the leadership of the Communist Party of China, enhance organizational construction,
increase incentives for talent, promote the "Three Ones" talent project, improve the efficiency of human
resources, and build the "employees paradise" and "talent paradise" of Luzhou Laojiao. It shall persist in
developing with the society, optimize the industrial ecology, build a resource platform, proactively help
the poverty stricken students and facilitate local development, and share and grow with shareholders,
investors, partners, the media and related parties. It shall adhere to the dependence on the environment,
promote the green development concept of "respect for heaven and earth, law of nature, and care for
life" in liquor brewing, build an industrial model of circular economy, create a good internal and external
environment that conforms to national strategies, responds to social expectations, and promotes the
sustainable development of the industry, and guide the green and integrated ecological development of
the liquor industry.
9.3 Completion of the business plan in 2020
In 2020, the Company achieved the operating revenue of CNY 16.653 billion, up by 5.28% year-on-year.
The net profit attributable to shareholders of the listed company reached CNY 6.006 billion, up by
29.38% year-on-year. The Company has successfully completed its business target of "maintaining the
positive momentum and industrial reputation, and taking efforts to narrow the gap between itself and
industry leaders" as set by the board of directors at the beginning of the year.
9.4 Business plan in 2021
According to the Outline of Production and Operation in 2021 reviewed and approved by the board of
directors, the Company will closely center on the development theme of "refined management to
increase benefits, and precision marketing to develop the market", and strive to achieve a year-on-year
increase in operating revenue by at least 15%. (The business plan in 2021 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 2021, 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).
The main measures are as follows:
9.4.1 Refined management to increase benefits
The first is to achieve refined development and management. It shall be ensured that the strategy is
36
2020 Annual Report of Luzhou Laojiao Co., Ltd.
implemented in a refined manner. The Company shall adhere to strategy guidance, and systematically
promote the interpretation and implementation of the strategy. Centering on the requirements of the
strategy, it shall clarify objectives, decompose tasks, take responsibilities, and enhance benefits. It shall
be ensured that decisions are made in a refined manner. It shall comprehensively strengthen the
construction of the shareholders' general meeting, the board of directors, the board of supervisors and
the management, and ensure that decisions are made in a forward-looking, practical, precise, efficient
and targeted manner. It shall be ensured that the plan is executed in a refined manner. It shall
strengthen the authority, guidance and systematicity of the production and operation plan, ensure that
the plan is executed in a precise, comprehensive and systematic manner, and make management more
stable, balanced, rigorous and efficient.
The second is to achieve refined basic management. Organization construction shall be
strengthened. Grass-roots units and Party organizations shall focus on ideological and business
guidance, and make a good advance, open up test fields, and set a new model for improving
management benefits. System construction shall be strengthened. Taking the digital management tools,
systematic management systems, and standard management procedures as the lever, the Company
shall improve the refined management, and develop benefit-oriented closed-loop management. Risk
prevention and control shall be strengthened. It shall comprehensively implement the requirements of
the Party style and clean government construction, and enhance all employees' awareness and ability to
resist corruption risks; it shall improve the refined financial management, and make good management
of personnel, things and money, and prevent risks with the goal of increasing benefits; it shall safeguard
the three lines of defense for comprehensive management and stability maintenance, safe production,
and environmental protection in an all-around manner.
The third is to achieve refined talent management. Refined incentive assessment shall be carried
out. The Company shall implement promotion assessment, salary adjustment and special incentives by
step according to different levels and classifications, create a good environment that encourages
innovation, gives rewards for increasing benefits, and takes the initiative to make suggestions, and give
full play to the role of incentive assessment. Refined echelon training shall be carried out. It shall steadily
promote the younger and professional talent team, optimize the talent structure, and improve the
personnel efficiency ratio. Talent shall be selected and trained in a refined manner. In the introduction
and utilization of talent, it shall control the number of talent, improve the quality of talent, and make full
use of the existing talent. It shall allocate key talent centering on key projects, innovation work and weak
processes.
The fourth is to achieve refined quality management. The chain of refined supervision shall be
expanded. The Company shall make every effort to enhance the role of regulation and guidance of
quality supervision, and guide the layout and development of the industrial chain with quality supervision
traceability. Refined support of science and technology shall be strengthened. It shall give full play to the
advantages of the scientific and technological innovation platform, carry out joint development and
transformation of technological achievements centering on key fields, and inject scientific and
technological power into quality upgrades. Attention shall be paid to the refined presentation of process.
It shall improve the brewing process, expand organic production, and improve technical standards. It
shall present the scarcity and safety of resources, and transform quality and technical advantages into
37
2020 Annual Report of Luzhou Laojiao Co., Ltd.
market benefits.
The fifth is to achieve refined management of resources. Culture shall be inherited and promoted.
The Company shall focus on and publicize the advantages of cultural resources. It shall improve cultural
positions, enrich cultural connotations, and enhance cultural style. It shall establish cultural images such
as the "700-year-old enterprise" and the "23-generation brewing company". Brewing resources shall be
properly managed and used. It shall protect and inherit the traditional brewing resources of the "Dual
National Treasures", conduct a comprehensive inventory, unified planning and refined use of featured
brewing resources, and provide sufficient resources for brewing production, brand building, product
development, and talent cultivation. Industrial resources shall be expanded and used. It shall leverage
the platform advantages of Luzhou Laojiao as a national enterprise, a veteran liquor enterprise, and a
local leading enterprise. It shall rely on high-end resources to widen the image window, expand business
fields, gather development elements, and build a global resource platform.
9.4.2 Precision marketing to develop the market
The first is to achieve precise positioning. Market changes shall be grasped precisely. Centering on
the strategic marketing objectives, the Company shall strengthen market analysis and strategy research,
accurately grasp the trend of economic policies, and provide a forward-looking, reliable, systematic and
detailed basis for marketing decisions. It shall fully respect the market, follow the trend, and take prudent
actions. It shall strive for progress while ensuring stability, and firmly grasp the historic opportunity of
catching up and surpassing. Marketing strategy shall be implemented precisely. Centering on the
Company's strategy and long-term objectives, it shall formulate and refine the marketing and brand
strategies, and improve the commensurate management system, product system, security system,
advertising strategy and resource planning. Brand and product positioning shall be strengthened
precisely. Adhering to "brand focus", it shall drive the overall return of the value of Luzhou Laojiao
brands guided by the promotion and activation of National Cellar 1573. On the basis of consolidating the
positions of existing brands and product, it shall precisely seize the development space of the middle
price zone, and expand the three-dimensional competitive advantages of the brand pyramid.
The second is to achieve precise communication. New methods of communication shall be created.
The Company shall leverage new media and new channels to carry out accurate communication,
achieve precise reach and efficient interaction with target groups, and improve consumer conversion
efficiency. Attention shall be focused on resource allocation. Adhering to the "resources focus", it shall
plan the launch of advertisements from a strategic and overall perspective, highlight the core brands and
key tasks, and give play to the advantages of integrated marketing. Integration and linkage shall be
strengthened. It shall strengthen online and offline synergy, organize various brands, product series and
teams to carry out joint actions in China, and maximize the pull of brand upgrading and the launch
benefits of advertisements.
The third is to achieve precise layout. Scale effect shall be expanded precisely. The Company shall
fully grasp the favorable situation of the liquor market, and focus on expanding the scale and increasing
the volume. It shall strengthen the sharing of benefits, and expand the market space. Precise attention
shall be focused on the model market. It shall focus on the layout of city clusters, economic circles and
central cities, create a core model market with national influence, and develop a national layout that
38
2020 Annual Report of Luzhou Laojiao Co., Ltd.
generates development momentum for surrounding areas. Core customers shall be developed
precisely. It shall continue to expand and optimize the core customer alliance, make high-quality
customers with strength, pursuit and principle continue to gather in Luzhou Laojiao, and develop joint
market forces with different priorities, equality and complementarity, and co-building and sharing.
The fourth is to achieve precise empowerment. Audit supervision shall be strengthened. The
Company shall improve the early warning mechanism for audit supervision, and develop an audit
supervision mechanism that runs through the business value chain. It shall expand the Company's
supervision channels for distributors, consumers and other related parties in the market, and secure the
marketing strategies and expenses precisely. Direct marketing channels shall be deepened. With the
help of technologies such as big data, blockchain, and Internet of Things, it shall create and implement
precise, diversified and normalized marketing campaigns. Organizational effectiveness shall be
improved. It shall promote the evolution of the sales business system and model, and develop a chain of
marketing management organizations that is synergistic, professional, efficient, standard, rigorous, and
excellent in style.
The fifth is to achieve precise services. Greater value shall be create for customers. Adhering to
the "customer-centric theory", the Company shall promote a marketing culture centered on "value
creation", and work with customers to create a high-quality platform for building wealth, acquiring
feelings, enhancing capabilities, expanding social circle, and sharing resources. Better products shall be
presented to customers. It shall formulate and implement a mid- and long-term product innovation plan,
and make good arrangements for product appearance, alcohol content, taste and selling point. It shall
shorten the R&D cycle, expand customized production, and create new product categories to satisfy
consumer needs with standards that exceed expectations. Growth space shall be expanded for the front
line. With the goal of optimizing the team structure, selecting outstanding talent, and improving
organizational effectiveness, it shall promote the management of the front-line sales team and upgrade
the incentive model.
10. Visits paid to the Company for purposes of research, communication,
interview, etc.
10.1 In the reporting period
√ Applicable N/A
Main inquiry
information and Index to main inquiry
Date of visit Place of visit Way of visit Type of visitor Visitor
materials information
provided
Company Industry Trends http://www.cninfo.co
14 May 2020 Other Other All investors
Headquarters and Company m.cn/
39
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Performance
Company Institutional Company http://www.cninfo.co
30 June 2020 Field survey Institution
Headquarters investor Performance m.cn/
Company Company http://www.cninfo.co
30 June 2020 Field survey Other Media
Headquarters Performance m.cn/
Company Individual Company http://www.cninfo.co
30 June 2020 Field survey Individual
Headquarters investor Performance m.cn/
29 August Company Institutional Company http://www.cninfo.co
Field survey Institution
2020 Headquarters investor Performance m.cn/
Industry Trends
17 September Company Institutional http://www.cninfo.co
Field survey Institution and Company
2020 Headquarters investor m.cn/
Performance
Number of reception 4
Number of reception of institutions 50
Number of reception of individuals 121
Number of reception of others 9
Whether to disclose or divulge material
No
information that has not been made public
40
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Section V Significant Events
1. Profit distribution and converting capital reserves into share capital
for common shareholders
Formulation, execution or adjustments of profit distribution policy, especially cash dividend policy, for
common shareholders in the reporting period.
√ Applicable N/A
According to the plan for profit distribution for 2019 deliberated and approved by 2019 annual
shareholders' meeting, based on its total of 1,464,752,476 shares, the Company distributed a cash
dividend of CNY 15.90 (tax inclusive) per 10 shares to all shareholders. The distribution plan was
implemented on 24 August 2020.
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:
Whether the minority shareholders have the
opportunity to fully express their opinions and
Yes
appeals and whether their legitimate rights and
interests have been adequately protected:
Whether the conditions and procedures are
The Company's cash dividend policy has not been
compliant and transparent and whether the cash
adjusted or changed in the reporting period
dividend policy is adjusted or changed:
Plans (or preliminary plans) for profit distribution and converting capital reserves into share capital for
common shareholders for the recent three years (including the reporting period) are as following:
Preliminary plan for profit distribution for 2020: Based on its total shares, the Company is to distribute a
cash dividend of CNY 20.51 (tax inclusive) per 10 shares to all shareholders.
Preliminary plan for profit distribution for 2019: Based on its total shares, the Company distributed a cash
dividend of CNY 15.90 (tax inclusive) per 10 shares to all shareholders.
41
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Preliminary plan for profit distribution for 2018: Based on its total shares, the Company distributed a cash
dividend of CNY 15.50 (tax inclusive) per 10 shares to all shareholders.
Cash dividend distribution over the recent three years (including the reporting period)
Unit: CNY
Ratio to net
Net profit profit
attributable to attributable to
Total cash Ratio of cash
common common Ratio of cash
Cash dividends Cash dividends dividends dividends
Year shareholders in shareholders in dividends in
(tax included) in other forms (including other (including other
the consolidated the other forms
forms) forms)
statement in the consolidated
year statement in
the year
2020 3,004,207,328.28 6,005,723,069.36 50.02% 0.00 0.00% 3,004,207,328.28 50.02%
2019 2,328,956,436.84 4,641,988,857.03 50.17% 0.00 0.00% 2,328,956,436.84 50.17%
2018 2,270,366,337.80 3,485,643,008.98 65.13% 0.00 0.00% 2,270,366,337.80 65.13%
The Company made a profit in the reporting period and the profit distributed to common shareholders of
the Company was positive, but it did not put forward a preliminary plan for cash dividend distribution to
common shareholders.
Applicable √ N/A
2. Preliminary plan for profit distribution and converting capital reserves
into share capital for the reporting period
√ Applicable N/A
Bonus shares for every 10 shares (share) 0
Dividends for every 10 shares (CNY) (tax
20.51
included)
Total shares as the basis for the preliminary
1,464,752,476
plan for profit distribution (share)
Total cash dividends (CNY) (tax included) 3,004,207,328.28
Cash dividends in other forms (e.g. repurchase
0.00
share)
Total cash dividends (CNY) (including other
3,004,207,328.28
forms)
Distributable profit (CNY) 16,236,513,212.43
42
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Percentage of cash dividends in the total
50.02%
distributed profit (including other forms)
Information of the cash dividends
The development stage of the Company is mature and the Company has major fund expenditure arrangement. When
the profit distribution is carried out, the proportion of cash dividends in this profit distribution should at least reach 40%.
Details of preliminary plan for profit distribution and converting capital reserves into share capital
After taking minority shareholders’ advice, the board of directors plans to distribute a cash dividend of CNY 20.51 (tax
inclusive) per 10 shares to all shareholders based on its total of 1,464,752,476 shares, according to the Company's
actual conditions. The remaining undistributed profit shall be carried forward for future distribution.
3. Performance of undertakings
3.1. Undertakings of the Company's actual controller, shareholders, related parties
and acquirer, as well as the Company and other commitment makers fulfilled in the
reporting period or ongoing by the end of this reporting period
√ Applicable N/A
Particulars on
Undertaking Type of Details of Undertaking
Undertaking reasons Term the
giver undertakings undertakings date
performance
Stock reform undertaking
Undertaking made in the report of
acquisition or change of interest
Undertaking made in the reorganization of
assets
For the shares
of Luzhou
Laojiao by
non-public
offering
purchased,
Luzhou Liquor
Restricted I/The unit
Undertakings given in time of IPO or Industry 14 September
shares undertakes that 36 months Fulfilled
refinancing Investment Co., 2017
the shares will
Ltd.
be not
transferred
within 36
months from
new shares
offering,
43
2020 Annual Report of Luzhou Laojiao Co., Ltd.
including but
not limited to
public transfer
and negotiating
transfer. If laws
and regulations
have other rules
on restricted
period, it follows
the rules.
Equity incentive commitment
Other undertakings to non-controlling
shareholders
Whether the undertaking is fulfilled on
Yes
time
Specific reasons for failing to fulfill any
None
undertakings and plan for the next step
3.2. Where any earnings forecast was made for any of the Company's assets or
projects and the reporting period is still within the forecast period, the Company
shall explain whether the performance of the asset or project reaches the earnings
forecast and reasons
Applicable √ N/A
4. 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.
5. Explanation of the board of directors, the supervisory committee and
non-executive directors (If Any) regarding the "Non-standard audit
opinion" for the reporting period
Applicable √ N/A
44
2020 Annual Report of Luzhou Laojiao Co., Ltd.
6. Reason for changes in accounting policies, accounting estimates and
accounting methods compared to the financial report for the prior year
√ Applicable □ N/A
The Company held the 16th meeting of the ninth board of directors on 10 January 2020, reviewed and
approved the Proposal on Changes in Accounting Policies and decided to prepared the Company’s
financial statements as required by the Accounting Standards for Business Enterprises No.14-Revenue
(CK[2017]No.22) revised and issued by the Ministry of Finance since 1 January 2020. Please refer to
“Note 3.44 Changes in significant accounting policies and accounting estimates” for the corresponding
adjustments to the financial statements.
7. Reason for retrospective restatement of major accounting errors
during the reporting period
Applicable √ N/A
No such cases in the reporting period.
8. Reason for changes in scope of the consolidated financial statements
compared to the financial report for the prior year
Applicable √ N/A
No such cases in the reporting period.
9. Engagement and disengagement of CPAs firm
CPAs firm at present
Name of the domestic CPAs firm Sichuan Huaxin (Group) CPA Firm
The Company’s payment for the domestic CPAs
90
firm (CNY’0,000)
Consecutive years of the audit service provided by
22
the domestic CPAs firm
Names of the certified public accountants from the
Li Wulin, He Shoufu, Tang Fangmo
domestic CPAs firm
Consecutive years of the audit service provided by Li Wulin 1 year, He Shoufu 1 year, Tang Fangmo 2
the certified public accountants years
Whether the CPAs firm was changed in the current period
Yes √ No
45
2020 Annual Report of Luzhou Laojiao Co., Ltd.
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 450 thousand.
10. Possibility of delisting after disclosure of this annual report
Applicable √ N/A
11. Bankruptcy and reorganization
Applicable √ N/A
No such cases in the reporting period.
12. Material litigation and arbitration
√ Applicable N/A
Amount Execution of
Whether it forms Progress in Trial results and
Profile of litigation involved in judgment of Date of Disclosure
an estimate litigation impacts of litigation
(arbitration) the case (CNY’ litigation disclosure index
liability (arbitration) (arbitration)
0,000) (arbitration)
The Company
For the losses that applied to Hunan
the Company Province Higher
The Company filed a
cannot recover People's Court for
lawsuit with ABC
through criminal enforcement of
Changsha Yingxin
execution the verdict.
Branch over a deposit
procedures, 40% Hunan Province
dispute, and the case The second See Section V
shall be borne by Higher People's
has been completed in trial has 15 October “Other
14,942.5 No ABC Changsha Court has filed
the first instance of been 2014 significant
Yingxin Branch, the case and
Hunan Province concluded events”
20% shall be borne ruled that Hunan
Higher People's Court
by ABC Changsha Changsha
and the final trial of the
Hongxin Branch Intermediate
Supreme People's
and the rest shall People’s Court
Court
be borne by the should see to the
Company itself. execution of the
verdict.
The Company filed a The first trial The second trial is The second trial See Section V
15,000 No 10 January
lawsuit with ICBC has been in process and the is in process and “Other
46
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Nanyang Zhongzhou concluded, case is still the case is still 2015 significant
Branch over a deposit and the pending. pending. events”
dispute, and the case second trial
has been transferred is in process
to Henan Province
Higher People’s Court.
13. Punishments and rectifications
Applicable √ N/A
No such cases in the reporting period.
14. Credit conditions of the Company as well as its controlling
shareholder and actual controller
Applicable √ N/A
15. Implementation of any equity incentive plan, employee stock
ownership plan or other incentive measures for employees
Applicable √ N/A
No such cases in the reporting period.
16. Significant related party transactions
16.1. Related party transactions arising from routine operation
Applicable √ N/A
No such cases in the reporting period.
16.2. Related party transactions regarding purchase or sales of assets or equity
interests
Applicable √ N/A
No such cases in the reporting period.
16.3. Related party transitions arising from joint investments in external parties
Applicable √ N/A
47
2020 Annual Report of Luzhou Laojiao Co., Ltd.
No such cases in the reporting period.
16.4. Credits and liabilities with related parties
Applicable √ N/A
No such cases in the reporting period.
16.5. Other significant related party transactions
Applicable √ N/A
No such cases in the reporting period.
17. Significant contracts and their execution
17.1. Trusteeship, contracting and leasing
17.1.1. Trusteeship
Applicable √ N/A
No such cases in the reporting period.
17.1.2. Contracting
Applicable √ N/A
No such cases in the reporting period.
17.1.3. Leasing
Applicable √ N/A
No such cases in the reporting period.
17.2. Major guarantees
Applicable √ N/A
No such cases in the reporting period.
48
2020 Annual Report of Luzhou Laojiao Co., Ltd.
17.3. Entrusted cash asset management
17.3.1. Entrust assets management
Applicable √ N/A
No such cases in the reporting period.
17.3.2 Entrust loans
Applicable √ N/A
No such cases in the reporting period.
17.4 Significant contracts in the ordinary course of business
Applicable √ N/A
17.5 Other significant contracts
Applicable √ N/A
No such cases in the reporting period.
18. Social Responsibilities
18.1 Information about taking social responsibilities
See details in 2020 Annual Social Responsibilities Report on the same date of the announcement.
18.2 Information about targeted poverty alleviation
18.2.1 Targeted poverty alleviation plan
A. Basic Strategy
In 2020, the Company resolutely implements the spirit of the important speech made by General
Secretary Xi Jinping at the symposium on decisive victory in poverty alleviation, and makes every effort
to promote the poverty alleviation in Guntang Village, Maiwa Township, Hongyuan County and Xiangtian
Village, Longshan Town, Gulin County, Wumeng Mountain. The Company closely centers on targeted
poverty alleviation, provides strong human, material and financial resources, and makes efforts to
achieve the final victory in poverty alleviation.
B. Overall Objective
The Company puts full effect into the requirements of party committees and governments at all levels for
poverty alleviation, as well as consolidates and enhances the achievements on all fronts based on
successful poverty alleviation of two target villages (Guntang Village and Xiangtian Village). Anchored by
49
2020 Annual Report of Luzhou Laojiao Co., Ltd.
the "rural revitalization strategy", and aimed at building "new villages of civilization" & "new villages of
four goodness", the Company consolidates infrastructure, makes up for deficiencies in public services,
stabilizes farmers' income increase, further improves rural governance, enhances quality of villagers,
strengthens their competitiveness to shake off poverty and become prosperous, and facilitate the
high-quality and leaping development of the two villages to fulfill the promise that "efforts will not be
retrieved until a complete victory is won".
C. Key tasks
The Company persists in the support principle of placing equal importance on "blood transfusion,
production and activation" and follows the concepts of providing support based on actual needs and
sustainable development. Led by Party building, anchored by industrial poverty alleviation, and based on
educational poverty alleviation, the Company tangibly promotes poverty alleviation and regulation of
environment, and ultimately makes strong improvements in healthcare, cultural education, economic
development, cultural poverty alleviation and Party building.
D. Guarantee measures
The Company develops an integrated work pattern in which the Company's Party committee secretary
and chairman take the lead in the primary responsibilities, the leaders are in charge of assistance in
implementation, the management team makes joint participation, the Party committee work departments
are in charge of special implementation, grass-roots Party organizations collaborate on poverty
alleviation, and institutions and departments give full play to their advantages and divide their
responsibilities. The Company insists on the joint research, arrangement and implementation of poverty
alleviation of two target villages, and production and operation. The Company fulfills its assistance
responsibilities of "five ones", gives full play to the guiding advantages of Party building, carries out Party
branch co-building and pairing assistance activities, makes full participation in "one-for-one" pairing
assistance, and develops a good situation in the Company in which the Party committee secretary leads
the team, Party members charge down, and employees make participation, so as to ensure the
fulfillment of assistance responsibilities and the orderly progress in the Company's poverty alleviation.
18.2.2 Outline of annual targeted poverty alleviation
The first is to donate medical supplies to overcome the difficulties together. After the outbreak of the
COVID-19 pandemic, the Company quickly provided human, material and financial resources to ensure
that both pandemic prevention and control and poverty alleviation of the assistance regions are not
neglected. The Company donated mobile DR equipment, ventilators and other medical facilities and
equipment to the People's Hospital of Hongyuan County to improve the inspection and diagnosis
capabilities of the hospital; the cadre in the village immediately returned to work, actively participated in
the publicity and mobilization of pandemic prevention and control and the distribution of materials, and
fought against the pandemic jointly with the cadres and masses of Hongyuan County.
The second is to strengthen infrastructure construction to increase the momentum for poverty alleviation.
The Company built new lane rings covering 100,000 mu of pasture, benefiting more than 60 herders; it
repaired the pasture lanes to facilitate herders' travel, fresh milk transportation and yak transfer; it built
the Banhan Bridge to ensure the safe discharge of pasture lanes during the flood period and the
50
2020 Annual Report of Luzhou Laojiao Co., Ltd.
personal and property safety of herders; it implemented the winter heating project to further improve the
working, studying and living conditions of teachers and students in Maiwa Township Primary School.
The third is to build featured industries and carry out poverty alleviation through consumption. Adhering
to the industrial poverty alleviation road of "Luzhou Laojiao e-commerce + enterprises in Hongyuan
County + collective economy + poverty-stricken herdsmen", the Company continued to carry out the
project of "making a fortune from sales", and leveraged the brand advantage of Luzhou Laojiao and the
e-commerce platform to help Hongyuan County sell processed yak products and unblock sales channels
to drive poverty-stricken households to increase their incomes.
The fourth is to deepen the intelligence and ambition enhancement to stimulate endogenous motivation.
The Company set up scholarships to help poverty-stricken college students continue their studies; it
assisted in the reelection of the village Party branch and village committee, and strengthened the core
leadership position of the village Party branch of Xiangtian Village; it insisted on carrying out the "Three
Drives Project", and united the whole village to unswervingly pursue the goal of poverty alleviation and
rural revitalization; in accordance with the "ambition enhancement" model of "guidance by village Party
branch and village committee - demonstration of non-poor households - conversation with the
Company's volunteer team", it regularly preached policies and held conversations with all
poverty-stricken households, to continuously strengthen the villagers' spirit of self-reliance; through the
"Farmers' Night School" platform, it regularly carried out training activities for farmers to improve their
ability and level of alleviating poverty; it launched activities such as the "selection of moral models", "light
brigade's poetry towards a well-off society", and villagers' dialogue forums, to strengthen impoverished
people's sense of gain in poverty alleviation.
18.2.3 Poverty alleviation achievement
Indicator Unit Amount/Implementation situation
A. Overall situation —— ——
Including：1. Fund CNY 10,000 215.81
B. Input by project —— ——
1. Industrial development —— ——
Including：1.1 Type of poverty alleviation Poverty alleviation through agriculture and forestry,
——
projects for industrial development poverty alleviation through electronic commerce, others
1.2 Number of poverty alleviation
Item 6
projects for industrial development
1.3 Amount invested in poverty
alleviation projects for industrial CNY 10,000 83.42
development
2. Transfer and employment —— ——
2.2 Number of persons engaging Person 45
51
2020 Annual Report of Luzhou Laojiao Co., Ltd.
in vocational training
3. Removal and relocation —— ——
4. Educational poverty alleviation —— ——
Including：4.1 Input of aiding poor students CNY 10,000 9
4.2 Number of aiding poor
Person 18
students
4.3 Amount invested in improving
CNY 10,000 74.1
the educational resources in poor areas
5. Health poverty alleviation —— ——
6. Ecological protection —— ——
6.2 Input amount CNY 10,000 36
7. Basic guarantee —— ——
8. Social poverty alleviation —— ——
9. Other project —— ——
Including：9.1. Item Item 3
9.2 .Input amount CNY 10,000 13.29
C. Awards（content and level） —— ——
National level China Red Cross Medal in 2020
National Charity Association Benevolent Enterprise in
National level
2020
Excellent Case of Targeted Poverty Alleviation in 2020
National level Recommended by People's Daily on Targeted Poverty
Alleviation Forum
“Advanced Enterprise for 100 Enterprises-100 Villages”
Municipal level
of Luzhou for the Company in 2020
Advanced Collective for Assistance in Luzhou City's
Municipal level
poverty alleviation in 2020
Special Contribution Award for Luzhou City's charity
Municipal level
donation activity in 2020
Peng Yi, a cadre dispatched by the Company to
Xiangtian Village, Longshan Town, Gulin County, was
Municipal level
awarded the "Good Person for Poverty Alleviation in
Luzhou City" in 2020
18.2.4 Follow-up poverty alleviation plan
2021 is the first year of the "14th Five-Year Plan", and also the year when comprehensive poverty
52
2020 Annual Report of Luzhou Laojiao Co., Ltd.
alleviation and rural revitalization are connected. The Company will assume the social responsibilities of
state-owned enterprises, provide assistance and fulfill its responsibilities in poverty alleviation, and insist
on taking targeted poverty alleviation as one of the Company's important tasks. By taking more effective
measures and gathering more powerful forces, the Company will accelerate the pace of modernization
of the assistance villages and promote the sustainable development of the assistance villages. It will
comprehensively improve the long-term mechanism for poverty alleviation, ensure the maximum effect
of poverty alleviation, give full play to the Company's resource and platform advantages, and cultivate
more technical, sales and management talent for the assistance villages; it will further explore the path
for shaping the brand image of Gulin agricultural products and Hongyuan yak products, raise awareness
and reputation, and establish a mechanism for the sustainable development of featured poverty
alleviation industries; it will plan in advance the organic connection between poverty alleviation and rural
revitalization, transform existing experience into long-term measures for consolidating the effectiveness
of assistance, and strive to build a model area and demonstration area for rural revitalization.
18.3 Information about environment protection
Whether the listed company and its subsidiaries belong to heavy polluting industries prescribed by the
environmental protection department
√ Yes □ No
Name of
main Number Distributi
Pollution Approved
Company pollutant Discharge of on of Emission Total Excessive
discharge total
name and type discharg discharge concentration emission discharge
standard emission
particular e outlet outlet
pollutant
Luzhou Luohan
Direct
Laojiao COD DW001 Brewery 23.713mg/L 50mg/L 8.003t 25 t/a No
discharge
Co.,Ltd. Eco-Park
Luzhou Luohan
Ammonia Direct
Laojiao DW001 Brewery 0.777mg/L 5mg/L 0.262 t 2.5 t/a No
nitrogen discharge
Co.,Ltd. Eco-Park
Luzhou Luohan
Total Direct
Laojiao DW001 Brewery 5.844mg/L 15mg/L 1.972 t 7.5 t/a No
nitrogen discharge
Co.,Ltd. Eco-Park
Luzhou Total Luohan
Direct
Laojiao phosphoru DW001 Brewery 0.184mg/L 0.5mg/L 0.062 t 0.25 t/a No
discharge
Co.,Ltd. s Eco-Park
Luzhou Luohan
Organized
Laojiao PM DA009 Brewery 6.549mg/m 20mg/m 0.325 t No
discharge 3.9 t/a
Co.,Ltd. Eco-Park
Luzhou PM Organized DA010 Luohan 6.529mg/m 20mg/m 0.277 t No
53
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Laojiao discharge Brewery
Co.,Ltd. Eco-Park
Luzhou Luohan
Sulfur Organized
Laojiao DA009 Brewery 0.196mg/m 50mg/m 0.008 t No
dioxide discharge
Co.,Ltd. Eco-Park
11.5 t/a
Luzhou Luohan
Sulfur Organized
Laojiao DA010 Brewery 0.715mg/m 50mg/m 0.022 t No
dioxide discharge
Co.,Ltd. Eco-Park
Luzhou Luohan
Organized
Laojiao Oxynitride DA009 Brewery 20.901mg/m 200mg/m 1.041 t No
discharge
Co.,Ltd. Eco-Park
45.4 t/a
Luzhou Luohan
Organized
Laojiao Oxynitride DA010 Brewery 17.042mg/m 200mg/m 0.955 t No
discharge
Co.,Ltd. Eco-Park
Luzhou Huangyi
Indirect
Laojiao COD DW001 Brewery 41.091mg/L 400mg/L 12.839 t 400 t/a No
discharge
Co.,Ltd. Eco-Park
Luzhou Huangyi
Ammonia Indirect
Laojiao DW001 Brewery 1.119mg/L 30mg/L 0.350 t 30 t/a No
nitrogen discharge
Co.,Ltd. Eco-Park
Luzhou Huangyi
Total Indirect
Laojiao DW001 Brewery 6.617mg/L 50mg/L 2.068 t 50 t/a No
nitrogen discharge
Co.,Ltd. Eco-Park
Luzhou Total Huangyi
Indirect
Laojiao phosphoru DW001 Brewery 0.866mg/L 3mg/L 0.271 t 3 t/a No
discharge
Co.,Ltd. s Eco-Park
Luzhou Huangyi
Organized
Laojiao PM DA002 Brewery 0.538mg/m 5mg/m 1.158 t No
discharge
Co.,Ltd. Eco-Park
Luzhou Huangyi
Organized
Laojiao PM DA003 Brewery 0.924mg/m 5mg/m 1.554 t 4.43 t/a No
discharge
Co.,Ltd. Eco-Park
Luzhou Huangyi
Organized
Laojiao PM DA001 Brewery 0.956mg/m 5mg/m 0.076 t No
discharge
Co.,Ltd. Eco-Park
Luzhou Huangyi
Sulfur Organized
Laojiao DA002 Brewery 0.564mg/m 35mg/m 0.244 t No
dioxide discharge
Co.,Ltd. Eco-Park 30.96 t/a
Luzhou Sulfur Organized Huangyi
DA003 0.344mg/m 35mg/m 0.269 t No
Laojiao dioxide discharge Brewery
54
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Co.,Ltd. Eco-Park
Luzhou Huangyi
Sulfur Organized
Laojiao DA001 Brewery 0.202mg/m 35mg/m 0.014 t No
dioxide discharge
Co.,Ltd. Eco-Park
Luzhou Huangyi
Organized
Laojiao Oxynitride DA002 Brewery 24.837mg/m 100mg/m 11.302 t No
discharge
Co.,Ltd. Eco-Park
Luzhou Huangyi
Organized
Laojiao Oxynitride DA003 Brewery 25.966mg/m 100mg/m 13.045 t 88.47 t/a No
discharge
Co.,Ltd. Eco-Park
Luzhou Huangyi
Organized
Laojiao Oxynitride DA001 Brewery 22.150mg/m 100mg/m 1.086 t No
discharge
Co.,Ltd. Eco-Park
Information about construction and operation of anti-pollution installations
A. Waste water: The Company has a wastewater treatment station in Huangyi Brewery Eco-Park and
Luohan Brewery Eco-Park. The general discharging outlets are equipped with an automatic online
monitoring instrument for COD, ammonia nitrogen, total phosphorus, total nitrogen, pH and flow. The
real-time monitoring data is connected with the Information Center of the Bureau of Ecology and
Environment of Luzhou for operation. The wastewater treatment stations are in normal operation. The
waste water is discharged directly after indexes are up to the standard or discharged indirectly to the
wastewater treatment plant. All production areas of the Company have implemented the rainwater and
sewage diversion. The high-concentration wastewater from the old brewery workshops is transferred to
the wastewater treatment station in Luohan Brewery Eco-Park by trucks. The discharge of all production
and domestic wastewater of the Company is up to the standard.
B. Waste gas: The Company uses natural gas boiler and clean fuels in Huangyi Brewery Eco-Park,
Luohan Brewery Eco-Park and old brewery workshops. The boilers are installed with an online
automatic monitoring instrument for waste gas, which is connected to the Information Center of the
Bureau of Ecology and Environment of Luzhou for operation. The waste gas treatment facilities are in
normal operation. The waste gas discharge is up to the standard.
Environmental impact assessment for construction project and other environmental protection
administrative permission
For all construction projects, the Company carries out environmental impact assessment, obtains the
environmental protection administrative permission, and carries out acceptance of completed
environmental protection projects in accordance with the requirements of China's environmental
protection laws and regulations. For example, the Company carries out environmental impact
assessment and obtained the environmental protection administrative permission for the technical
upgrade project of Luzhou Laojiao Smart Packaging Centre. It carried out independent acceptance of
completed environmental protection projects for the boiler upgrading project of Luzhou Laojiao Luohan
Brewing Base and the technical upgrading project of sewage station of Luzhou Laojiao Brewing Co., Ltd.
55
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Emergency plan for environmental emergencies
The Company has prepared the Contingency Plan for Environmental Emergencies and the Risk
Assessment Report on Environmental Emergencies for all regions of the Company, and reported them
to the Emergency Service Center of the Bureau of Ecology and Environment of Luzhou for record. The
Company organizes all departments (units) to study the emergency plan, improves the special
contingency plan and on-site disposal plan, and carries out comprehensive emergency plan drills to
improve the emergency handling capacity of all staff for environmental emergencies.
Environmental self-monitoring program
The Company developed the environmental self-monitoring plan in accordance with the requirements of
the pollution discharge permit, and reported it to the Bureau of Ecology and Environment of Luzhou for
record. It carried out the monitoring of indicators such as waste water, waste gas and noise in strict
accordance with the monitoring plan. The automatic monitoring system is under networking operation
with the Information Center of the Bureau of Ecology and Environment of Luzhou. Relevant
self-monitoring information will be disclosed on the "pollution source monitoring information
management and sharing platform of Sichuan province" as required to receive social supervision.
Other information about environmental protection that should be disclosed:
N/A
Other information about environment protection
N/A
19. Other significant events
√ Applicable N/A
A. The Company’s three savings deposits of CNY 500 million, including ABC Changsha Yingxin Branch
and ICBC Nanyang Zhongzhou Branch are involved in contract disputes. The Company has reported to
the public security authorities for intervention with the assets preservation measure and filed civil claims
for two contract disputes among the three cases. Combined with the assets preservation situation of the
public security authorities and professional legal advice issued by lawyers, the Company has made a
provision of CNY 200 million for bad debts for the deposit of CNY 500 million for contract disputes. The
Supreme People’s Court made a final judgment on the dispute arising out of the deposit contract
between the Company and ABC Changsha Yingxin Branch. In respect of the losses that couldn’t be
recovered through criminal procedures, ABC Changsha Yingxin Branch should bear 40% of the
compensation liability, ABC Changsha Hongxing Branch 20%, and the remaining losses should be
borne by the Company. The Company applied to Hunan Province Higher People's Court for enforcement
of the verdict. Hunan Province Higher People's Court has filed the case and ruled that Hunan Changsha
Intermediate People’s Court should see to the execution of the verdict. Henan Province Higher People’s
Court had made the judgment of the first trial on the lawsuit of the Company with ICBC Nanyang
Zhongzhou Branch over a deposit dispute: for the losses that the Company cannot recover through
56
2020 Annual Report of Luzhou Laojiao Co., Ltd.
criminal execution procedures, 50% shall be borne by ICBC Nanyang Zhongzhou Branch; for the losses
that the Company cannot recover through criminal execution procedures concerning CNY 122.1 million
of principal in the case, 10% shall be borne by Sanya Rural Commercial Bank Hongsha Branch, and the
rest shall be borne by the Company itself. As of 31 December 2020, the Company had recovered an
amount of CNY 214,955,100 for three of the disputes.
See details in the Company’s announcements:
Date of announcement No. Catalogue Official website
15 October 2014 2014-35 Announcement of significant litigation http://www.cninfo.com.cn/
12 November 2014 2014-41 Announcement of significant
litigation progress
6 December 2014 2014-43 Announcement of significant
litigation progress part II
10 January 2015 2015-1 Announcement of significant events
4 February 2015 2015-4 Announcement of significant events
progress
25 March 2015 2015-11 Announcement of significant
litigation progress part III
18 April 2015 2015-20 Announcement of significant
litigation progress part IV
22 April 2015 2015-21 Announcement of significant events
progress part II
24 April 2015 2015-25 Announcement of significant
litigation progress part V
15 July 2015 2015-44 Announcement of significant
litigation progress part VI
22 July 2015 2015-45 Announcement of significant
litigation progress part VII
6 June 2018 2018-17 Announcement of significant
litigation progress part VIII
7 May 2019 2019-11 Announcement of significant
litigation progress part IX
17 May 2019 2019-13 Announcement of significant
litigation progress part X
24 March 2020 2020-6 Announcement of significant
litigation progress part XI
6 May 2020 2020-14 Announcement of significant
litigation progress part XII
57
2020 Annual Report of Luzhou Laojiao Co., Ltd.
7 November 2020 2020-34 Announcement of significant
litigation progress part XIII
B. The Company held the 7th meeting of the ninth board of directors on 25 April 2019 and the 1st special
meeting of shareholders in 2019 on 14 May 2019, reviewed and approved the Proposal on the
Company’s Eligibility for Public Offering of Corporate Bond for Qualified Investors and Proposal on Plan
of Public Offering of Corporate Bond and agreed the Company’s application of public offering of
corporate bond for qualified investors. On 26 July 2019, the Company received the Reply on Approval of
Luzhou Laojiao Co., Ltd. Public Offering of Corporate Bond for Qualified Investors (ZJXK(2019)No. 1312)
issued by China Securities Regulatory Commission. On 28 August 2019, the 2019 public offering of
corporate bond for qualified investors (Phase I) finished. The issue scale is CNY 2.5 billion and the
coupon rate is 3.58%. The said bonds were traded in Shenzhen Stock Exchange on 4 September 2019.
On 17 March 2020, the 2020 public offering of corporate bond for qualified investors (Phase I) finished.
The issue scale is CNY 1.5 billion and the coupon rate is 3.50%. The said bonds were traded in
Shenzhen Stock Exchange on 25 March 2020.
20. Significant events of subsidiaries
√ Applicable □ N/A
The Company disclosed the technical renovation project of brewing invested by Brewing Company, a
subsidiary of the Company. The total investment amount is CNY 7,414,280,000. See details in the
announcement About subsidiary technical renovation project of brewing , No ： 2016-12
(http://www.cninfo.com.cn/). Based on actual needs arising from the construction of the project, the
Company convened a general meeting on 30 June 2020, at which the Proposal on Increasing
Investment in the Technical Renovation Project of Brewing was approved. As such, the total project
investment was increased to CNY 8,877,276,500. For more information, please refer to the following
announcements: Announcement No. 2020-17 on Increasing Investment in the Technical Renovation
Project of Brewing disclosed on 2 June 2020; and Announcement No. 2020-20 on the Resolutions of the
2019 Annual General Meeting disclosed on 1 July 2020 (both disclosed on http://www.cninfo.com.cn/).
As of the end of the reporting period, construction was completed for the project, with the project image
progress reaching 100%. Quality inspection and acceptance of the relevant sub-projects was finished.
Other inspection and acceptance, as well as settlement were progressing in an orderly manner.
58
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Section VI Changes in Shares and Information about
Shareholders
1. Changes in shares
1.1 Changes in shares
Unit：Share
Before Changes in this year (＋，－) After
Issuan Capitaliz
ce of Bonus ation of
Number Proportion Other Subtotal Number Proportion
new shares capital
shares reserves
I. Restricted shares 4,647,181 0.32% -4,201,260 -4,201,260 445,921 0.03%
1. Shares held by the state
2. Shares held by state-owned
4,166,666 0.28% -4,166,666 -4,166,666 0 0.00%
corporations
3. Shares held by other
480,515 0.03% -34,594 -34,594 445,921 0.03%
domestic investors
Of which: shares held by
domestic corporations
Shares held by domestic
480,515 0.03% -34,594 -34,594 445,921 0.03%
individuals
4. Shares held by outbound
corporations
Of which: shares held by
outbound corporations
Shares held by outbound
individuals
II. Non-restricted shares 1,460,105,295 99.68% 4,201,260 4,201,260 1,464,306,555 99.97%
1.CNY common shares 1,460,105,295 99.68% 4,201,260 4,201,260 1,464,306,555 99.97%
2. Domestically listed foreign
shares
3. Overseas listed foreign
shares
4. Other
III. Total shares 1,464,752,476 100.00% 0 0 1,464,752,476 100.00%
Reasons for the change in shares
59
2020 Annual Report of Luzhou Laojiao Co., Ltd.
√ Applicable □ N/A
The 4,166,666 shares held by Luzhou Liquor Industry Investment Co., Ltd. in the Company, which were
derived in a non-public offering of shares in 2016, were unlocked on 17 September 2020.
34,594 shares held by senior management Shen Caihong were unlocked on 2 January 2020.
Approval of share changes
Applicable √ N/A
Transfer of share ownership
Applicable √ N/A
Implementation progress of shares repurchases
□ Applicable √ N/A
Implementation progress of share buyback reduction through centralized bidding
□ Applicable √ N/A
Effects of changes in shares on the basic EPS, diluted EPS, net assets per share attributable to common
shareholders of the Company and other financial indexes over the last year and the last reporting period
Applicable √ N/A
Other contents that the Company considers 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
Number of
Increase in Decrease in Number of
restricted
restricted restricted restricted
Name of shares held at Reason for Date of
shares during shares during shares held at
shareholder the beginning of restriction unlocking
the reporting the reporting the end of the
the reporting
period period reporting period
period
Luzhou Liquor
Shares derived
Industry 17 September
4,166,666 0 4,166,666 0 in a non-public
Investment Co., 2020
offering
Ltd.
Locked-up
Shen Caihong 138,375 0 34,594 103,781 2 January 2020
shares of senior
60
2020 Annual Report of Luzhou Laojiao Co., Ltd.
management
Total 4,305,041 0 4,201,260 103,781 -- --
2. Issuance and listing of securities
2.1 Securities（excluding preferred shares） issued in the reporting period
√ Applicable □ N/A
Name of
Issuance Approved Expiry date
stock and its Issuance Disclosure Disclosure
price (or Numbers Listing date numbers for of the
derivative date index date
interest rate) trading trading
securities
Stock
Convertible corporate bonds, separate bargaining convertible corporate bonds and corporate bonds
Announcem
ent on the
Listing on
the
2020 Public
Shenzhen
Offering of
Stock
Corporate
Exchange of
Bond of
2020 Public
Luzhou 17 March 25 March 17 March
3.5% 15,000,000 15,000,000 Offering of
Laojiao Co., 2020 2020 2020
Corporate
Ltd. for
Bond for
Qualified
Qualified
Investors
Investors
(Phase I)
(Phase I)
(http://www.
cninfo.com.
cn/)
Other derivative securities
Information about securities (excluding preferred shares) issued in the reporting period
On 17 March 2020, the Company completed the issuance of 2020 Public Offering of Corporate Bond of
Luzhou Laojiao Co., Ltd. for Qualified Investors (Phase I). The issue scale was CNY 1.5 billion and the
coupon rate was 3.50%. The said bonds were traded on Shenzhen Stock Exchange on 25 March 2020.
61
2020 Annual Report of Luzhou Laojiao Co., Ltd.
2.2 Changes in total shares of the Company and the shareholder structure, as well as
the asset and liability structure
√ Applicable □ N/A
In accordance with the document of ZJXK(2019)No. 1312 issued by China Securities Regulatory
Commission, the Company is allowed to publicly offer corporate bonds with face value not exceeding
CNY 4 billion for qualified investors. During the reporting period, the Company accomplished the
issuance of corporate bonds of CNY 1.5 billion bringing about the increase in total assets and total
liabilities of the Company. For more details about changes in structure of the Company’s assets and
liabilities, please refer to “Section IV Performance Discussion and Analysis” and “Section XI Information
about Corporate Bond”.
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 number of Total number of
Total number of
common preferred
Total number of preferred
shareholders at shareholders with
common shareholders with
the prior resumed voting
shareholders at 133,242 156,207 resumed voting 0 0
month-end before rights by the end of
the end of the rights by the end of
the disclosure date the reporting
reporting period the reporting period
of the annual period (if any)(see
(if any)(see Note 8)
report Note 8)
Shareholdings of shareholders with a shareholding percentage over 5% or the top 10 shareholders
Total shares Number Pledged or frozen shares
Increase/dec Number of
held by the of
Nature of Shareholding rease during holding
Name of shareholder end of the holding
shareholder percentage the reporting non-restricted Status of shares Number of shares
reporting restricte
period shares
period d shares
Luzhou Laojiao State-owned
26.02% 381,088,389 0 0 381,088,389
Group Co., Ltd. corporation
Luzhou XingLu
State-owned
Investment Group 24.99% 365,971,142 0 0 365,971,142 Pledged 101,980,000
corporation
Co., Ltd.
China Securities Other 2.31% 33,842,059 0 0 33,842,059
62
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Finance Corporation
limited
Hong Kong
Outbound
Securities Clearing 2.25% 32,901,662 -7,408,613 0 32,901,662
corporation
Company Limited
Bank of China
Co.,Ltd. – Liquor
index classification
Other 2.04% 29,836,985 18,105,061 0 29,836,985
securities investment
fund by China
Merchants Fund
Bank of China Co.,
Ltd- Blue Chip
Selected hybrid Other 1.89% 27,700,000 — 0 27,700,000
securities investment
fund by E fund
Central Huijin Asset
State-owned
Management 1.43% 20,937,500 0 0 20,937,500
corporation
Co.,Ltd.
Bank of China
Co.,Ltd. – Middle and
small capital stock s
Other 1.18% 17,300,000 -4,079,566 0 17,300,000
hybrid securities
investment fund by E
fund
Industrial and
Commercial Bank of
China Co.,
Ltd.-Newly growth Other 1.03% 15,077,911 -834,247 0 15,077,911
hybrid securities
investment fund by
Invesco Great Wall
Agricultural Bank of
China Co.,Ltd. -
Consumption
industry stock - Other 0.95% 13,986,827 20,829,830 0 13,986,827
based securities
investment fund by E
fund
Strategic investors or general
corporations become the top-ten N/A
shareholders due to placing of new
63
2020 Annual Report of Luzhou Laojiao Co., Ltd.
shares（if any）（see note 3）
1. Laojiao Group and Xinglu Group are both wholly 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 -
Related parties or acting-in-concert Announcement on the agreement of persons acting in concert signed by shareholders. The
announcement number is 2016-1 (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.
Shareholdings of the top 10 non-restricted shareholders
Number of non-restricted shares held in by the end of the Type of shares
Name of shareholder
reporting period Type Number
CNY common
Luzhou Laojiao Group Co., Ltd. 381,088,389 381,088,389
shares
CNY common
Luzhou XingLu Investment Group Co., Ltd. 365,971,142 365,971,142
shares
China Securities Finance Corporation CNY common
33,842,059 33,842,059
limited shares
Hong Kong Securities Clearing Company CNY common
32,901,662 32,901,662
Limited shares
Bank of China Co.,Ltd. – Liquor index
CNY common
classification securities investment fund by 29,836,985 29,836,985
shares
China Merchants Fund
Bank of China Co., Ltd- Blue Chip
CNY common
Selected hybrid securities investment fund 27,700,000 27,700,000
shares
by E fund
CNY common
Central Huijin Asset Management Co.,Ltd. 20,937,500 20,937,500
shares
Bank of China Co.,Ltd. – Middle and small
CNY common
capital stock s hybrid securities investment 17,300,000 17,300,000
shares
fund by E fund
Industrial and Commercial Bank of China
CNY common
Co., Ltd.-Newly growth hybrid securities 15,077,911 15,077,911
shares
investment fund by Invesco Great Wall
Agricultural Bank of China Co.,Ltd. -
CNY common
Consumption industry stock - based 13,986,827 13,986,827
shares
securities investment fund by E fund
The statement of association or
acting-in-concert between the top 10
See the table above
shareholders of unrestricted shares and
between the top 10 shareholders of
64
2020 Annual Report of Luzhou Laojiao Co., Ltd.
unrestricted shares and top 10
shareholders
Did any of the top 10 common shareholders or the top non-restricted common shareholders of the
Company conduct any promissory repurchase during the reporting period.
Yes √ No
The top 10 non-restricted common shareholders, the top10 common shareholders did not conduct any
promissory repurchase during the reporting period.
3.2 Controlling shareholder
Nature of controlling shareholder：Local state-owned
Type of controlling shareholder：Corporation
Legal
Name of controlling shareholder representative/Compan Date of establishment Credibility code Main business scope
y principal
Investment and asset
management; Investment in
wine, food, finance, trade,
logistics, education, medical
and health care, cultural
tourism and Internet
industries; Holding company
services; Social and economic
consulting, enterprise
Luzhou Laojiao Group Co.,Ltd. Zhang Liang 21 December 2000 91510500723203346U
management consulting,
enterprise management
services; Supply chain
management services; Import
and export business and trade
agents; Food production and
sales (including online); Crop
cultivation and marketing
services (including online).
1. As of 30 June 2020, Laojiao Group holds 70,406,310 shares of Luzhou Xinglu Water (Group) Co., Ltd.
Shareholdings of the controlling (02281.HK), accounting for 8.19% of the total issued shares.
shareholder in other controlled or 2. As of 31 December 2020, Laojiao Group holds 212,954,666 shares of Hongli Zhihui Group Co., Ltd.
non-controlled listed companies (300219.SZ) through its wholly-owned subsidiary, Sichuan Jinduo investment Co., Ltd., accounting for 30.08%
at home or abroad during the of the total issued shares.
reporting period 3. As of 31 December 2020, Laojiao Group holds 475,940,143 shares of Huaxi Securities Co., Ltd.
(002926.SZ), accounting for 18.13% of the total issued shares.
65
2020 Annual Report of Luzhou Laojiao Co., Ltd.
4. As of 30 June 2020, Laojiao Group holds 325,440,000 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/Com Date of establishment Credibility code Main business scope
pany principal
State-owned assets supervision
SASAC of Luzhou Du Lei 1 March 2005 11510400771686813T
and administration department
1. As of 30 June 2020, XingLu Group, a wholly-owned 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 wholly-owned 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 31 December 2020, Laojiao Group holds 212,954,666 shares of Hongli Zhihui Group Co., Ltd.
(300219.SZ) through its controlled subsidiary, Sichuan Jinduo investment Co., Ltd., accounting for 30.08%
Share holdings of the controlling
of the total shares issued.
shareholder in other controlled or
3. As of 31 December 2020, Luzhou Industrial Investment Group Co., Ltd., a holding Company under the
non-controlled listed companies at
jurisdiction of SASAC of Luzhou, holds 193,464,610 shares of Sichuan Lutianhua Company Limited
home or abroad during the
(000912.SZ), accounting for 12.34% of the total shares issued. Lutianhua Group Company Limited, a
reporting period.
wholly-owned subsidiary of Luzhou Industrial Investment Group Co., Ltd., holds 211,458,993 shares of
Sichuan Lutianhua Company Limited (000912.SZ), and accounting for 13.49% of the total issued shares.
4. As of 31 December 2020, 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 2020, 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
wholly-owned subsidiary under SASAC of Luzhou, holds 40,549,462 shares of Luzhou Bank (01983.HK),
accounting for 1.79% of the total issued shares.
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.
66
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Ownership and control relations between the actual controller and the Company
The Company disclosed the Reminder (Announcement No. 2020-33) on Some State-Owned Equity
Interests in the Company and Its Controlling Shareholders Being Transferred without Consideration to
Replenish the Social Security Fund on 30 October 2020, the Announcement No. 2020-35 on the
Progress on the Transfer without Consideration of Some State-Owned Equity Interests in the Company
and Its Controlling Shareholders to Replenish the Social Security Fund on 26 November 2020, and the
Announcement No. 2021-1 on the Progress on the Transfer without Consideration of Some
State-Owned Equity Interests in the Company and Its Controlling Shareholders to Replenish the Social
Security Fund on 6 January 2021. As such, SASAC of Luzhou intended to transfer, without consideration,
111,193 state-owned shares in the Company (accounting for 10% of the shares held by SASAC of
Luzhou in the Company, and 0.008% of the Company’s total shares), 10% equity interests in the
Company’s controlling shareholder Laojiao Group, and 10% equity interests in Laojiao Group’s
acting-in-concert party XingLu Group to Sichuan Provincial Finance Department, which would hold these
shares on behalf of the Social Security Fund.
As of the disclosure date of this Report, the aforesaid equity interests in Laojiao Group and XingLu
Group have been transferred, while the aforesaid direct shareholdings of SASAC of Luzhou in the
Company are still in the transfer process.
Upon the above-mentioned transfers, shares held by Laojiao Group and XingLu Group in the Company
will remain unchanged, and so will their shareholding percentages. Therefore, Laojiao Group will remain
the controlling shareholder of the Company, while SASAC of Luzhou will remain the actual controller of
the Company.
Ownership Structure of the Company (as of the End of the Reporting Period)
67
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Ownership Structure of the Company (as of the Disclosure Date of this Report)
The actual controller control the company through a trust or other ways of assets management
Applicable √ N/A
3.4 Other corporate shareholders with a shareholding proportion over 10%
√Applicable N/A
Legal
Date of Registered capital
Name of corporate shareholder representative/Comp Main business scope
establishment (CNY)
any principal
Investment and asset
management; Project
management services;
Luzhou XingLu Investment Self-finance real estate
Dai Zhiwei 28 January 2003 4,934,049,244
Group Co., Ltd. business activities;
Investment advisory
services, financial
advisory services
3.5 Limits on reduction of the Company’s shares held by its controlling shareholder,
actual controller, restructuring party and other commitment entities.
Applicable √ N/A
68
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Section VII Preferred Shares
Applicable √ N/A
No preferred stock in the Company during the reporting period.
69
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Section VIII Information about Convertible Corporate Bond
Applicable √ N/A
No convertible corporate bond in the Company during the reporting period.
70
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Section IX Profiles of Directors, Supervisors, Senior
Management and Employees
1. Changes in shares held by directors, supervisors, and senior
management
Shares
Shares Shares Shares
held by the
increased decreased Other held by the
beginning
Incumbent during the during the increase/ end of the
Name Title Gender Age Period of service of the
/ Former reporting reporting decrease reporting
reporting
period period (share) period
period
(share) (share) (share)
(share)
Chairman
of the
board,
Liu Miao Incumbent Male 51 2015.6.30-2021.6.27 192,187 0 0 0 192,187
Secretary
of the party
committee
Director,
general
manager,
Lin Feng Deputy Incumbent Male 47 2015.6.30-2021.6.27 0 0 0 0 0
secretary
of the party
committee
Director,
Deputy
general
manager,
Wang member of
Incumbent Male 57 2015.3.06-2021.6.27 0 0 0 0 0
Hongbo the party
committee,
Secretary
of the
board
Director,
Deputy
Jiang general
Incumbent Female 58 2009.5.20-2021.6.27 254,000 0 0 0 254,000
Yuhui manager,
member of
the party
71
2020 Annual Report of Luzhou Laojiao Co., Ltd.
committee,
chairman
of the
labor union
Director,
Shen Deputy
Incumbent Male 55 2002.6.30-2021.6.27 138,375 0 0 0 138,375
Caihong general
manager
Non-execu
Du Kunlun tive Incumbent Male 52 2015.6.30-2021.6.27 0 0 0 0 0
director
Non-execu
Xu
tive Incumbent Male 61 2015.6.30-2021.6.27 0 0 0 0 0
Guoxiang
director
Non-execu
Tan Lili tive Incumbent Female 66 2015.6.30-2021.6.27 0 0 0 0 0
director
Non-execu
Liu Junhai tive Incumbent Male 51 2018.6.27-2021.6.27 0 0 0 0 0
director
External
Qian Xu Incumbent Male 57 2015.6.30-2021.6.27 0 0 0 0 0
director
Ying External
Incumbent Male 51 2016.9.13-2021.6.27 0 0 0 0 0
Hanjie director
Lian Jing Supervisor Incumbent Male 51 2012.6.27-2021.6.27 0 0 0 0 0
Yang
Supervisor Incumbent Female 54 2009.5.20-2021.6.27 10,000 0 0 0 10,000
Benhong
Cao Cong Supervisor Incumbent Male 36 2015.6.30-2021.6.27 0 0 0 0 0
Li
Supervisor Incumbent Male 51 2018.6.27-2021.6.27 0 0 0 0 0
Guangjie
Deputy
Wu Qin general Incumbent Male 59 2020.1.10-2021.6.27 0 0 0 0 0
manager
Xie Hong CFO Incumbent Female 51 2015.3.06-2021.6.27 0 0 0 0 0
Deputy
He Cheng general Incumbent Male 54 2015.6.30-2021.6.27 0 0 0 0 0
manager
Deputy
Zhang
general Incumbent Male 49 2015.12.29-2021.6.27 0 0 0 0 0
Suyi
manager
72
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Total -- -- -- -- -- 594,562 0 0 0 594,562
2. Changes in directors, supervisors, and senior management
√ Applicable □ N/A
Name Title Type Date Reason
Deputy general
Jiang Yuhui Appoint 2020.1.10 Appointed
manager
Deputy general
Wu Qin Appoint 2020.1.10 Appointed
manager
3. 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, Craft Master of Chinese
liquor, 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
chairman of the board and secretary of the party committee in the Company.
Mr. Lin Feng, Male, born in 1973, Master degree, 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 director, deputy secretary of
the party committee, general manager of the Company and general manager of Sales Company.
Mr. Wang Hongbo, Male, born in 1964, Master degree. He was director and secretary of party committee
of Luzhou Commerce Bureau, director of Luzhou Liquor Industry Development Bureau, director of
Luzhou branch of China council for the promotion of international trade, deputy secretary general, office
director of Luzhou Municipal Party Committee and deputy secretary of the party committee of the
Company. At present, he is director, deputy general manager, secretary of the board, and member of the
party committee of the Company and chairman of the board of Luzhou Laojiao International
Development（Hong Kong）Co.,Ltd.
Ms. Jiang Yuhui, Female, born in 1962, Master degree, senior political engineer. She used to serve as
head of personnel education management section of the Company, deputy director and director of party
committee office, deputy secretary of commission for discipline inspection, chairman of the supervisory
committee, deputy secretary of the party committee, secretary of committee for discipline inspection of
the Company. At present, she is director, deputy general manager, chairman of the labor union and
member of the party committee of the Company.
73
2020 Annual Report of Luzhou Laojiao Co., Ltd.
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
"Sichuan craftsmen". He was manager of the Company’s leaven-making branch, manager of base liquor
company, general manager assistant and director of production department. At present, he is director,
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..
Mr. Du Kunlun, Male, born in 1969, Doctor of Economic, researcher, CPA, CPV. He was a member of
the 12th and 13th mainboard committee of CSRC. At present, he is Master supervisor of Finance and
Trade Economics Institute of Social Sciences Academy in Sichuan Province, non-executive director of
Tongwei Co., Ltd, and SCIMEE Tech.&Sci.Co.,Ltd. He has served as a non-executive director of the
Company since June 2015.
Mr. Xu Guoxiang, Male, born in 1960, Doctor of Economic, National Second-level Professor, Doctoral
supervisor. He used to be the director of statistics department of Shanghai University of Finance and
Economics. At present, he is the director of Shanghai University of Finance and Economics Applied
Statistics Research Center, professor of Statistics and Management College of Shanghai University of
Finance and Economics and deputy director of the teaching steering committee for statistics majors in
institutions of higher learning of Ministry of Education, expert of the discipline planning evaluation group
of national social science fund, executive director of China Statistical Society, member of Shanghai
Stock Exchange Index Expert Committee, member of Index Expert Committee of China Securities Index
Co. Ltd, director of the Branch Center of Shanghai University of Finance and Economics, supervisor of
Shanghai Xintonglian Packaging Co.,Ltd. and Dazhong Transportation（Group）Co.,Ltd., non-executive
director of Ziquan Energy Technology Co., Ltd. and Zhejiang Emergen ROBOT Technology Co., Ltd..
He has served as a non-executive director of the Company since June 2015.
Ms. Tan Lili, Female, born in 1954, Bachelor degree, professor-level senior accountant, professor-level
senior engineer, senior auditor. She was director of audit department and financial department, leader of
enterprise management consulting and guidance group of Wuhan Iron and Steel Co., Ltd.; deputy
general manager, deputy chairman of the board of supervisors of Sany Heavy Industry Co., Ltd.,
non-executive director of Zhejiang Tiantie Industry Co.,Ltd.. At present, she is vice chairman of China
Commercial Accounting Institute, deputy director of Business School of Enterprise Financial
Management Association of China and non-executive director of Guangzhou Metro Design Institute. She
has served as a non-executive director of the Company since June 2015.
Mr. Liu Junhai, Male, born in 1969, PhD, Doctoral supervisor. He was director assistant, office director
and researcher of Law School of Chinese Academy of Social Sciences. At present, he is professor of
Renmin University of China, director of the institute of commercial law, and non-executive director of
Tus-Sound Environmental Resources Co., Ltd., and China Resources Double-Crane Pharmaceutical
Co., Ltd.. He has served as a non-executive director of the Company since June 2018.
Mr. Qian Xu, Male, born in 1963, EMBA. He was general manager and chairman of the board of Beijing
74
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Enterprises Real-Estate Group Co.,Ltd.. At present, he is 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), non-executive director of CAQ
Holdings Limited (Listed on the Australian Stock Exchange). He has served as a non-executive director
of the Company since June 2015.
Mr. Ying Hanjie, Male, born in 1969, Doctor of Biochemistry, and professor. 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.
Mr. Lian Jing, Male, born in 1969, Bachelor degree. He was director of Economic Information Publicity
Department of Luzhou Economic and Trade Commission; director of Fixed Assets Investment
Department of Luzhou Development Planning Committee; director of Fixed Assets Investment
Department of Luzhou Development and Reform Committee; chairman of the board and general
manager of Luzhou State-owned Gongfang Operation Management Co., Ltd.; chairman of the board and
general manager of Luzhou State-Owned Assets Management Co.,Ltd.; director, deputy general
manager, general manager of Luzhou Hongyang State-Owned Assets Management Co.,Ltd; deputy
secretary of the party committee, director, general manager of Luzhou Industrial Investment Group
Co.,Ltd. At present, he is chairman of the supervisory committee of Luzhou State-Owned Capital
operation and management Co. Ltd; executive director and general manager of Luzhou Guoxin Asset
Management Co. Ltd; external director of Luzhou XingLu Investment Group Co., Ltd., Luzhou Liquor
Industrial Park Development and Investment Co. Ltd., Luzhou Public Transportation Group Co. Ltd.,
Luzhou Culture Tourism Development Investment Group Co. Ltd. and Sichuan Rongtong Security
Investment Group Co. Ltd. He has served as a supervisor of the Company since June 2012.
Ms. Yang Benhong, Female, born in 1966, Bachelor degree, senior political engineer. She was head of
publicity section, director of education department and deputy director, director of human resources
department of the Company. At present, she is supervisor and deputy chairman of labour union in the
Company.
Mr. Cao Cong, Male, born in 1984, Bachelor degree. He was deputy manager of accounting department
of Luzhou Winery Industry Jizhong Development District Co., Ltd., financial executive of Luzhou Red
Sorghum Modern Agricultural Development Co., Ltd., and deputy director of audit department of the
Company. At present, he is supervisor and director of audit department of the Company.
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.
Mr. Wu Qin, Male, born in 1962, Bachelor degree. He was deputy director of Luzhou Economic
75
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Commission, deputy director of Luzhou Economic and Information Technology Commission, deputy
director of Luzhou Development and Reform Commission, director of Luzhou Railway Construction
Office and the chairman of the Company’s supervisory committee. At present, he is the deputy general
manager of the Company.
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 CFO of the Company.
Mr. He Cheng, Male, born in 1966, Master of Management Economics of Nanyang Technological
University, senior engineer. He was director of business administration department, director of human
resources department, general manager of Brewing Company, chief dispatcher and director of quality
department of the Company. At present, he is deputy general manager and chief quality officer.
Mr. Zhang Suyi, Male, born in 1971, PhD, professor-level senior engineer, representative inheritor of
Sichuan Intangible Cultural Heritage. He was director of Gouchu Center, deputy chief engineer, deputy
general manager of Brewing Company and director of Liquor Body Design Center. At present, he is
deputy general manager and director of safety and environmental protection of the Company.
Position in shareholder-holding companies
√ Applicable N/A
Any
Name of Position in remunerations
Beginning Ending date of
Name shareholder-holding shareholder-holding received from
date of term term
companies companies shareholder-holdi
ng companies
Chairman of the
Lian Jing Laojiao Group No
supervisory committee
Lian Jing Xinglu Group Outsider director No
Position in other companies
√ Applicable N/A
Any
Position in remunerations
Beginning Ending date of
Name Name of other companies other received from
date of term term
companies other
companies
Tongwei Co., Ltd, and SCIMEE Non-executi
Du Kunlun
Tech.&Sci.Co.,Ltd., ve director
Du Kunlun Sichuan Province Institute of Finance Deputy
76
2020 Annual Report of Luzhou Laojiao Co., Ltd.
and Trade Economics of Social director
Sciences Academy
Shanghai University of Finance and
Xu Guoxiang Economics Applied Statistics Research Director
Center
Shanghai Xintonglian Packaging
Xu Guoxiang Co.,Ltd. and Dazhong Transportation Supervisor
（Group）Co.,Ltd.
Ziquan Energy Technology Co., Ltd. and
Non-executi
Xu Guoxiang Zhejiang Emergen ROBOT Technology
ve director
Co., Ltd.
Vice
Tan Lili China Commercial Accounting Institute
chairman
Business School of Enterprise Financial Deputy
Tan Lili
Management Association of China director
Non-executi
Tan Lili Guangzhou Metro Design Institute
ve director
Institute of Commercial Law of Renmin
Liu Junhai Director
University of China
Tus-Sound Environmental Resources
Non-executi
Liu Junhai Co., Ltd., China Resources
ve director
Double-Crane Pharmaceutical Co., Ltd.
Chairman of
Beijing Enterprises Urban Development the board,
Qian Xu
Group Co.,Ltd. general
manager
Chairman of
Qian Xu Beijing Properties （Holdings） Limited
the board
Non-executi
Qian Xu CAQ Holdings Limited.
ve director
National Biochemical Engineering
Ying Hanjie Technology Research Center of Nanjing Director
University of Technology
Chairman of
Ying Hanjie Nanjing Biotogether Co., Ltd.
the board
Nanjing High Tech University Biological
Technology Research Institute Co., Ltd.,
Ying Hanjie Director
and Jiangsu Institute of Industrial
Biotechnology
Lian Jing Luzhou State-Owned Capital Operation Chairman of
77
2020 Annual Report of Luzhou Laojiao Co., Ltd.
and Management Co. Ltd the
supervisory
committee
Executive
Luzhou Guoxin Asset Management Co. director,
Lian Jing
Ltd. general
manager
Luzhou Liquor Industrial Park
Development and Investment Co. Ltd.,
Luzhou Public Transportation Group Co.
External
Lian Jing Ltd., Luzhou Culture Tourism
director
Development Investment Group Co.
Ltd., Sichuan Rongtong Security
Investment Group 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
4. 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.
Grounds on which decisions are made of directors, supervisors and senior management: Calculate
according to the assessment index and weight established 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-tax Remuneration
Incumbent/
Name Position Gender Age remuneration from related
Former
from the parties of the
78
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Company Company
Chairman of the
board,
Liu Miao Male 51 Incumbent 77.6 No
Secretary of the
party committee
Director,
general
manager,
Lin Feng Male 47 Incumbent 77.6 No
Deputy
secretary of the
party committee
Director, Deputy
general
manager,
member of the
Wang Hongbo Male 57 Incumbent 62.08 No
party
committee,
Secretary of the
board
Director, Deputy
general
manager,
member of the
Jiang Yuhui Female 58 Incumbent 62.08 No
party
committee,
chairman of the
labor union
Director, Deputy
Shen Caihong general Male 55 Incumbent 62.08 No
manager
Non-executive
Du Kunlun Male 52 Incumbent 9.52 No
director
Non-executive
Xu Guoxiang Male 61 Incumbent 9.52 No
director
Non-executive
Tan Lili Female 66 Incumbent 9.52 No
director
Non-executive
Liu Junhai Male 51 Incumbent 9.52 No
director
Qian Xu External director Male 57 Incumbent 9.52 No
Ying Hanjie External director Male 51 Incumbent 9.52 No
Lian Jing Supervisor Male 51 Incumbent 0 No
79
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Yang Benhong Supervisor Female 54 Incumbent 59.63 No
Cao Cong Supervisor Male 36 Incumbent 38.81 No
Li Guangjie Supervisor Male 51 Incumbent 90.26 No
Deputy general
Wu Qin Male 59 Incumbent 62.08 No
manager
Xie Hong CFO Female 51 Incumbent 62.08 No
Deputy general
He Cheng Male 54 Incumbent 62.08 No
manager
Deputy general
Zhang Suyi Male 49 Incumbent 62.08 No
manager
Total -- -- -- -- 835.58 --
Share incentives for directors, supervisors and senior executives in the reporting period
Applicable √ N/A
5. Staff in the Company
5.1 Number, functions and educational backgrounds of the staff
Number of in-service staff of the parent company 914
Number of in-service staff of main subsidiaries 2,416
Total number of in-service staff 3,330
Total number of staff with remuneration in the period 3,330
Number of retirees to whom the Company or its main
870
subsidiaries need to pay retirement pension
Functions
Function by category Number of staff
Production staff 1,296
Sales staff 877
R&D staff 570
Financial staff 100
Administrative staff 487
Total 3,330
Educational backgrounds
Educational background by category Number of staff
Senior high school and below 584
80
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Junior college 1,019
Bachelor 1,424
Master 297
Doctor 6
Total 3,330
5.2 Staff remuneration policy
In 2020, the Company established 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.
5.3 Staff training plans
In 2020, based on the staff career development system and job qualification standards, the Company
implemented a targeted training system comprising different levels to meet demands for staff ability
improvement for different positions and different career development stages.
Sail Program: The “Sail Program” training was conducted for new employees hired through campus and
social recruitment and for other grassroots employees. The purpose was to enhance new employees’
understanding and recognition of the Company’s core values, familiarize them with the Company’s
production and operation statuses and their work procedures, and allow them to accumulate
professional knowledge and skills and improve their ability to work independently.
81
2020 Annual Report of Luzhou Laojiao Co., Ltd.
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. Due to
the huge coverage of trainees across different business segments, the training was conducted in the
form of sub-programs, such as “Happy Learning Sub-program” and “Craftsman 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.
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 actively carries out the work of
staff title appraisal, skill appraisal, recommendation and assessment and so on.
5.4 Labor outsourcing
Applicable √ N/A
82
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Section X 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 11th China Listed Companies Investors Tianma Awards—Best Investor Relations Management,
Best Board Secretary, and Best New Media Operation”, “Taurus Prize—Best Investment Value”, and
“The 16th New Fortune Top Board Secretary”.
Any incompliance with the regulatory documents related to the governance of listed companies issued
by the CSRC
Yes√ No
There is no incompliance with the regulatory documents related to the governance of listed companies
issued by the CSRC.
2. Independency of businesses, personnel, assets, organizations and
finance which are separated from the controlling shareholder
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.
83
2020 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 liquor
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 Disclosure index
participation ratio
“Luzhou Lao Jiao
Co.,Ltd. 2019
2019 Annual
General Meeting of Annual General
General Meeting of 61.57% 30 June 2020 1 July 2020
Shareholders Meeting Resolution
Shareholders
Announcement”
Announcement
84
2020 Annual Report of Luzhou Laojiao Co., Ltd.
No:2020-20,
(http://www.cninfo.
com.cn/)
4.2. Special meetings of shareholders convened at the request of preferred
shareholders with resumed voting rights
Applicable √ N/A
5. Performance of non-executive directors during the reporting period
5.1. Attendance of non-executive directors in board meeting and meeting of
shareholders
Attendance of non-executive director in board meeting
Attendance Attendance Absence for Attendance at
Attendance Attendance
Non-executive due in the by Absence two general
on site through a
director reporting telecommuni (times) consecutive meeting
(times) proxy (times)
period (times) cation (times) times (times)
Du Kunlun 8 3 5 0 0 No 1
Xu Guoxiang 8 3 5 0 0 No 1
Tan Lili 8 3 5 0 0 No 1
Liu Junhai 8 2 5 1 0 No 0
5.2. Objections from non-executive in related issues of the Company
Were there any objections on related issues of the Company from non-executive director
Yes √ No
Non-executive director has no objection on related issues of the Company during the reporting period.
5.3. Other details about the performance of duties by non-executive directors
Was there any advice from non-executive directors adopted by the Company?
√ Yes No
Explanation about advice of non-executive 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.
85
2020 Annual Report of Luzhou Laojiao Co., Ltd.
6. Performance of duties by special committees under the broad during
the reporting period
The board of directors of the Company has four special committees including the Strategic Committee,
the Remuneration and Appraisal Committee, the Nominations Committee and the Audit Committee.
Each committee has a clear division of labor, clear responsibilities and effective operation. During the
reporting period, the Strategic Committee, the Nominations Committee and the Audit Committee held
one, one and three meetings, respectively, to review outbound investment, senior management
appointment, audit, internal control and other matters. They provided scientific and professional opinions
for significant decision-making of the board.
7. Performance of duties by the supervisory committee
Were there any risks to the Company identified by supervisory committee when performing its duties
during the reporting period
Yes √ No
The supervisory committee has no objection during the reporting period.
8. Evaluation and motivation mechanism for the senior management
Remuneration and evaluation for the senior management can be found in section IX: Profiles of
Directors, Members of Supervisory Committee, Senior Management and Employees.
9. Internal control
9.1. Significant internal control deficiencies found in the reporting period
Yes √ No
9.2. Internal control self-assessment report
Disclosure date of the internal control
30 April 2021
self-assessment report
Disclosure index of the internal control
2020 Internal Control Self-assessment Report （http://www.cninfo.com.cn/）
self-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
86
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Type Financial report Non-financial report
Significant deficiencies：（1）violate
Significant deficiencies：（1）Correction of
national regulations and laws；2）The
material errors in financial reports that
Company’s decision-making
have been announced (except
procedures are unscientific；if there is
retroactive adjustment of previous years
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 business
which was unrecognized but found by
lacks system control or system
the auditor；（3） Corrupt transaction of
failure, important economic business
senior management； 4）Audit committee
has internal control system guidance,
and internal audit department are not
but with no effective operation；（5）
effective to the internal control
significant deficiencies of internal
supervision .
control cannot be rectified in time.
1. Significant deficiencies：Misstatement
≥ 5% of total profits；Misstatement ≥ 1%
of total assets；Misstatement ≥ 5% of
total operating revenue；Misstatement
≥5% of owner's equity
2. Material deficiencies：3% of gross
profits≤Misstatement<5% of gross
profits；0.5% of total 1. Significant deficiencies：ratio of
assets≤Misstatement<1% of total loss of net profits≥5%.
assets；3% of total operating 2. Material deficiencies：3%≤ratio of
Quantitative standard
revenue≤Misstatement<5% of total loss of net profits＜5%.
operating revenue；3% of owner's 3. General deficiencies：ratio of loss
equity≤Misstatement<5% of owner's of net profits＜3%
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 significant
0
deficiencies
Number of non-financial-report
0
significant deficiencies
Number of important financial-report
0
related deficiencies
Number of important
0
Non-financial-report related
87
2020 Annual Report of Luzhou Laojiao Co., Ltd.
deficiencies
10. Internal control auditor report
√ Applicable N/A
Deliberation opinion section in the internal control audit report
The Company has maintained effective internal control of financial reports in accordance with the Basic Rules for
Internal Control of Enterprises and relevant regulations.
Disclosure of internal control
Disclosed
audit report
Disclosure date of the internal
30 April 2021
control audit report
Disclosure index of the internal
2020 Internal Control Auditor Report （http://www.cninfo.com.cn/）
control audit report
Type of the audit’s opinion Standard unqualified opinion
Significant deficiencies found in
No
the non-financial report
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
88
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Section XI Information about Corporate Bond
Whether there exists a public issue and listing of corporate bond that is not yet due or failed to be
redeemed at the date of the financial report authorized.
Yes
1. Basic information about the corporate bond
Bond balance Way of
Name Abbr. Code Issue date Due date Interest rate
(CNY 10,000) redemption
In terms of the
bonds of this
phase,
interests will
be paid by
2019 Public year and the
Offering of principal will
Corporate be repaid in
Bond of lump sum at
Luzhou 19 Lao Jiao 27 August 28 August maturity. The
112959.SZ 250,000 3.58%
Laojiao Co., 01 2019 2024 interests will
Ltd. for be paid once
Qualified every year
Investors and the
(Phase I) interests for
the last
installment
will be paid
together with
the principal.
2020 Public In terms of the
Offering of bonds of this
Corporate phase,
Bond of interests will
20 Lao Jiao 17 March 17 March
Luzhou 149062.SZ 150,000 3.50% be paid by
01 2020 2025
Laojiao Co., year and the
Ltd. for principal will
Qualified be repaid in
Investors lump sum at
89
2020 Annual Report of Luzhou Laojiao Co., Ltd.
(Phase I) maturity. The
interests will
be paid once
every year
and the
interests for
the last
installment
will be paid
together with
the principal.
Listed or transferred trading
Shenzhen Stock Exchange
place of corporate bond
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
Appropriate arrangement of Management Measures for the Issue and Transaction Management of Corporate Bonds,
the investors Management Measures for the Suitability of 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)
1. The interest payment from 28 August 2019 to 27 August 2020 for “19 Lao Jiao 01” has
Interest payment during the been completed by the Company on 28 August 2020.
reporting period 2. The interest payment from 17 March 2020 to 16 March 2021 for “20 Lao Jiao 01” has
been completed by the Company on 17 March 2021.
Execution of the relevant
regulations during the
reporting period such as the
affiliated option clause of the The term of “19 Lao Jiao 01” is five years with the issuer’s option for adjustment to the
rd
issuers or investors, special stated interest rate and the investor’s option for sell back at the end of the 3 year.
clauses such as the
exchangeable regulations of
corporate bond (if applicable)
2. List of the bond trustee and the rating organization
Bond trustee:
th th
China 27 and 28
Office Contact Contact （010）
Name International Floor, China Qi Qin
address person number 65051166
Capital World Office
90
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Corporation 2, No. 1
Limited. Jianguomenw
ai Avenue,
Chaoyang
District,
Beijing
Rating organization executed the tracking rating of the corporate bonds of the reporting period:
Building 6, Galaxy SOHO, No.2 Nanzhugan
China Chengxin International Credit Rating Office
Name hutong,Chaoyangmennei Avenue,
Co., Ltd. address
Dongcheng District, Beijing
Alternation reasons, execution process
and influences on the investors’
interests etc. if there was alternation of
the bond trustees and the credit rating N/A
agencies engaged by the Company
during the reporting period (if
applicable)
3. Information about usage of fund-raising of the corporate bond
The Company raised a fund of CNY 4.0 billion through the issue of corporate
bonds respectively on 27 August 2019 and 17 March 2020. After deduction of
the issue fees, the balance amount was set to use in the technical renovation
Information about usage of fund-raising project of brewing (Phase II), Project of Intelligent Upgrading and Building of the
and the execution process of corporate Information Management System, Project of Acquiring Sealing Equipment for
bond the Cellar of Huangyi Brewing Base and Project of Acquiring Accessory
Equipment for Leaven Making for Huangyi Brewing Base. As of 31 December
2020, CNY 2,303,683,000 of the fund-raising through the issue of corporate
bonds had been used.
Closing balance (CNY 10,000) 175,203.88
In accordance with related laws and regulations, the Company has designated
several accounts specifically for fundraising to receive, deposit and transfer
funds raised through the issue of corporate bonds and pay interests and
principals.
Operating situation of the fund-raising Details of these bank accounts are as follows:
special account (1) account name: Luzhou Laojiao Co., Ltd.
bank: CGB Chengdu Branch
account number: 9550880046723000135
(2) account name: Luzhou Laojiao Co., Ltd.
bank: Bank of Communications Luzhou Branch
91
2020 Annual Report of Luzhou Laojiao Co., Ltd.
account number: 517517460013000000860
(3) account name: Luzhou Laojiao Co., Ltd.
bank: CMBC Chengdu Fucheng Avenue Branch
account number: 028900140410888
(4) account name: Luzhou Laojiao Co., Ltd.
bank: China Minsheng Bank Chengdu Branch
account number: 631395395
The Company has signed a third-party regulation agreement with each bank
and the trustee.
Whether the usage of the fund-raising
met with the usage, using plan and
The usage of the fund-raising met with the usage committed on the prospectus
other agreements committed on the
prospectus
4. Rating situation of corporate bond information
On 15 August 2019, China Chengxin Securities Rating Co., Ltd. issued a credit rating report for “19 Lao
Jiao 01”. The Company’s main body has a credit rating of AAA and a stable rating outlook; the bond’s
credit rating is AAA.
On 2 March 2020, China Chengxin International Credit Rating Co., Ltd. issued a credit rating report for
“20 Lao Jiao 01”. The Company’s main body has a credit rating of AAA and a stable rating outlook; the
bond’s credit rating is AAA.
5. Credit-adding mechanism, repayment plan and other repayment
guarantee measures of the corporate bond
Not applicable
6. Information about convening of the bondholders meeting during the
reporting period
The Company did not convene bondholders meeting during the reporting period.
7. Information about duty execution of bond trustee during the reporting
period
During the validity of the corporate bond, the trustee performed continuous tracking of the Company’s
credit information and management and utilization of the fund-raising strictly in accordance with the
Bonds Trusteeship Agreement, urged the Company to fulfill its obligations agreed in the prospectus of
the corporate bond, proactively exercised its duties as a bonds trustee and safeguarded the legitimate
92
2020 Annual Report of Luzhou Laojiao Co., Ltd.
rights and interests of the bondholders.
CICC produced an interim report on the trusteeship affairs for the Company’s involvement of significant
litigation respectively on 17 April 2020, 12 May 2020 and 18 November 2020, produced the 2019 report
on the trusteeship affairs on 30 June 2020 and disclosed it synchronously on cninfo
(www.cninfo.com.cn).
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 2020 2019 YoY change
EBITDA 851,360.72 641,080.79 32.80%
Current ratio 256.72% 240.36% 16.36%
Asset-liability ratio 33.78% 32.38% 1.40%
Quick ratio 195.15% 184.48% 10.67%
Total debt ratio of
203.61% 257.85% -54.24%
EBITDA
Times interest earned 30.88 41.31 -25.25%
Times interest earned of
32.05 42.42 -24.45%
EBITDA
Main reason of the above accounting data and the financial indicators with the YoY change exceeded
30%
√ Applicable □ N/A
1. EBITDA increased 32.80% year-on-year, total debt ratio of EBITDA decreased 54.24%, mainly due to
increase in sales revenue and net profit for the reporting period.
9. Information about interest payment of other bonds and debt financing
instruments during the reporting period
Not applicable
10. Information about acquired bank credit lines, usage and repayment
of the bank loans during the reporting period
In 2020, the Brewing Company obtained credit lines of CNY 1 billion from CIB, CNY 600 million from
BOC, and CNY 1.7 billion from ICBC. In 2020, the Brewing Company issued notes with a total value of
CNY 128,111,023.58 (including CNY 99,111,023.58 to CIB, CNY 26,600,000.00 to BOC, and CNY
93
2020 Annual Report of Luzhou Laojiao Co., Ltd.
2,400,000.00 to ICBC). As of 31 December 2020, the Brewing Company had covered position with CNY
6,825,905.98 in CIB.
11. Information about the execution of the agreements or the
commitments related to the corporate bond fund-raising specification
during the reporting period
During the reporting period, the Company used the raised funds strictly according to the agreement s
related to the corporate bond fund-raising specification.
12. Significant events occurring during the reporting period
No significant events during the reporting period.
13. Whether there was guarantor of the corporate bond
□ Yes √ No
94
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Section XII Financial Report
1. Auditor’s report
Type of audit report Standard without reserved opinion
Signing date of auditor’s report 29 April 2021
Name of Audit Sichuan Huaxin (Group) CPA Firm
No. of auditor’s report Chuan Huaxin Audit [2021] No.0036
Names of auditors Li Wulin, Tang Fangmo, He Shoufu
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
2020, 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 2020 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
95
2020 Annual Report of Luzhou Laojiao Co., Ltd.
audit of the consolidated financial statements of the current period. These matters were addressed in the
context of our audit of the consolidated financial statements as a whole and, in forming our opinion
thereon, and we do not provide a separate opinion on these matters. Key audit matters identified in our
audit are summarized as follows:
1. Key audit matters-Recognition of domestic liquor sales revenue
Key audit matters How our audit addressed the Key Audit Matter
As shown in Note 5.31 in the Financial Statements, Our procedures in relation to recognition of domestic
the domestic liquor sales revenue in the Company is liquor sales revenue included:
CNY 16,399,797,600, accounting for 99.71% of the 1. Understood, evaluated and tested the reasonableness
primary business revenue of CNY 16,447,960,600. It and effectiveness of the internal control design related to
is the main source of the Company's operating profit. the Company's revenue. Particular attention was paid to
For the operating revenue is one of the key results the appropriateness of specific conditions for recognition
indicators and the inherent risk of its misstatement is of revenue.
relatively high, therefore, we identified the recognition 2. Compared the key indicators such as sales volume,
of domestic liquor sales revenue as a key audit unit price of sales and gross profit rate of the Company in
matter. 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
74% of the total business income. For the top five
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;
(2) Performed the confirmation procedure. We sent
confirmation letters to verify the amount of sales revenue
in the reporting period and the closing balance of
accounts receivables or advance from customer during
the reporting period. For local customers in Luzhou, we
went to their office to carry out confirmation procedure
and obtained the situation of purchase, sales and storage
of Luzhou Laojiao brand liquor during the reporting
period, so as to analyze and 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.
96
2020 Annual Report of Luzhou Laojiao Co., Ltd.
4. For other customers, randomly 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 recognition of
domestic liquor sales revenue.
2. Key audit matters-Existence of bank deposits
Key audit matters How our audit addressed the Key Audit Matter
As of 31 December 2020, the bank balance of the Our procedures in relation to existence of bank deposits
Company is CNY 11.617 billion, accounting for 33% included:
of the total assets. Bank deposits are high-risk assets. 1. Understood and tested the design and implementation
Therefore, we identified the existence of bank of key internal controls related to the funds management
deposits as a key audit matter. 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 of all
bank accounts compiled by the Company, and check all
the outstanding items, whether there are any important
overdue items that are not booked in time.
5. Implemented the confirmation procedure for the
Company's bank deposits, in which the local deposit
accounts in Luzhou were confirmed by auditors and the
Company's cashier in the bank; The confirmation letters
of deposit accounts outside Luzhou were sent out by
mailing after auditors checked the address and the
97
2020 Annual Report of Luzhou Laojiao Co., Ltd.
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.
3. Key audit matters- Recognition of the book value, the time and amount of pre-transfers into fixed
assets of the technical renovation project of brewing
Key audit matters How our audit addressed the Key Audit Matter
As shown in Note 5.11 of the financial statements, the Our procedures in relation to the recognition of the book
Company's budgeted investment in the technical value, the time and amount of pre-transfers into fixed
renovation project of brewing is CNY 8,877,276,500. assets of the technical renovation project of brewing
The Company intends to increase fixed assets and included:
intangible assets of CNY 6,463,488,800 from transfer 1. Understood and tested the design and implementation
in 2020, and the balance of the construction in of key internal controls related to the assets management
progress will be CNY 968,634,800 at the end of the cycle to confirm the effectiveness of relevant internal
construction. Because the amount spent on the controls.
technical renovation project of brewing is significant, 2. Check on project investment: we selected samples for
the recognition of the time and amount of transfer new important amounts occurred in the current period
from construction in progress to fixed assets involves with regard to the technical renovation project of brewing,
the estimation and judgment of the management, and reviewed the ledger of the project contracts, and
the withdrawal of depreciation and amortization has a examined supporting documents related to it, including
direct impact on the current profit, we identified the tender and bidding documents, project establishment or
recognition of the book value, the time and amount of budget documents, project contracts and invoices, final
pre-transfers into fixed assets of the technical statement of the project, procurement contracts and
renovation project of brewing as a key audit matter. invoices, and payment approvals.
3. Check the time and recheck the amount of
pre-transfers into fixed assets:
The Company selected for new important amounts
transferred into fixed assets in the current period with
regard to the technical renovation project of brewing, and
checked the inspection reports jointly confirmed by the
five ownership including supervisors, constructors,
designers, inspectors and Project Responsible Unit. The
Company also checked the Notice on Project Transfer
98
2020 Annual Report of Luzhou Laojiao Co., Ltd.
into Fixed Assets compiled by the Project Responsible
Unit and related approval procedures, and made a
comparative analysis between production materials input
and semi-finished products output. At the same time, the
Company confirmed the accuracy of the time point of
transfers from projects in progress to fixed assets through
the survey at project construction sites and interviews
with project management personnel.
The Company collected and checked the information on
pre-transfers into fixed assets such as the temporary
assessment schedule of the project. Based on the project
budget and the settlement expenditure that has incurred,
the Company analyzed and judged the rationality of the
amount of pre-transfers into fixed assets.
4. Based on our understanding and comparison, we
assessed the reasonableness of the management’s
estimation on the service life and net salvage value of the
part transferred into fixed assets.
5. Check on construction in progress: we checked the
status of the technical renovation project of brewing
through site survey, observed, understood and inquired
about the project progress and construction statuses, and
compared the project progress report and the actual
progress.
The evidence obtained from the above audit procedures
can support the Company's management's assertion of
the recognition of the book value, the time and amount of
pre-transfers into fixed assets of the technical renovation
project of brewing.
Other information
The directors of the Company are responsible for the other information. The other information comprises
the information included in the annual report, but does not include the financial statements and our
auditor’s report thereon.
Our opinion on the financial statements does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
99
2020 Annual Report of Luzhou Laojiao Co., Ltd.
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 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
100
2020 Annual Report of Luzhou Laojiao Co., Ltd.
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
would reasonably be expected to outweigh the public interest benefits of such communication.
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 2020
Monetary Unit: CNY
Item Balance as at 31 December 2020 Balance as at 31 December 2019
Current assets:
Cash and cash equivalents 11,624,870,340.60 9,753,666,526.78
Settlement reserves
Lending funds
Held-for-trading financial assets
101
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Derivative financial assets
Notes receivables
Accounts receivables 1,507,852.43 18,293,914.23
Accounts receivables financing 3,209,371,766.35 2,393,797,259.80
Prepayment 74,685,537.38 151,818,448.48
Premiums receivable
Reinsurance accounts receivable
Reinsurance contract reserve
Other receivables 127,032,931.42 159,753,421.64
Including：Interests receivable 45,636,744.44
Dividends receivable 1,407,900.00
Buying back the sale of financial
assets
Inventories 4,695,663,431.25 3,641,235,092.33
Contract assets
Assets held for sale
Non-current assets due within one
year
Other current assets 156,565,424.18 195,174,048.57
Total current assets 19,889,697,283.61 16,313,738,711.83
Non-current assets:
Disbursement of loans and
advances
Investments in debt obligations
Investments in other debt obligations
Long-term receivables
Long-term equity investments 2,477,667,171.27 2,230,721,725.72
Investments in other equity
347,160,399.42 352,395,255.78
instruments
Other non-current financial assets
Investment property
Fixed assets 6,887,108,174.72 1,518,865,397.91
Construction in progress 2,012,129,880.15 7,257,393,087.56
Productive biological assets
Oil and gas assets
102
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Use right assets
Intangible assets 2,657,118,025.37 332,234,032.47
Development expenses
Goodwill
Long-term deferred expenses 2,305,902.21 928,805.23
Deferred tax assets 725,210,660.84 676,152,614.07
Other non-current assets 10,806,325.86 237,539,447.75
Total non-current assets 15,119,506,539.84 12,606,230,366.49
Total assets 35,009,203,823.45 28,919,969,078.32
Current liabilities:
Short-term loans
Borrowings from the central bank
Loans from other banks
Held-for-trading financial liabilities
Derivative financial liabilities
Notes payable 121,285,117.60
Accounts payable 2,604,289,199.77 1,868,623,958.02
Advance from customer 2,244,442,643.64
Contract liabilities 1,678,837,166.94
Financial assets sold for repurchase
Deposits from customers and
inter-bank
Customer brokerage deposits
Securities underwriting brokerage
deposits
Employee benefits payable 505,022,627.19 342,025,687.49
Taxes payable 2,046,027,211.13 1,633,044,231.67
Other payable 501,623,924.54 698,942,399.37
Including：Interests payable 30,650,684.93
Dividends payable
Handling charges and commissions
payable
Reinsurance accounts payable
Liabilities held for sale
Non-current liabilities due within one 72,219,178.08
103
2020 Annual Report of Luzhou Laojiao Co., Ltd.
year
Other current liabilities 218,267,353.36
Total current liabilities 7,747,571,778.61 6,787,078,920.19
Non-current liabilities:
Insurance contract reserves
Long-term loans
Bonds payable 3,987,872,100.02 2,490,883,676.39
Including：Preferred shares
Perpetual bonds
Lease liabilities
Long-term payables
Long-term payroll payables
Accrued liabilities
Deferred income 29,739,000.00 23,845,000.00
Deferred tax liabilities 62,151,071.11 63,430,453.64
Other non-current liabilities
Total non-current liabilities 4,079,762,171.13 2,578,159,130.03
Total liabilities 11,827,333,949.74 9,365,238,050.22
Owners' equity
Share capital 1,464,752,476.00 1,464,752,476.00
Other equity instruments
Including: preferred shares
Perpetual bonds
Capital reserves 3,722,777,063.13 3,722,777,063.13
Less: treasury stock
Other comprehensive income 186,063,325.03 194,817,130.57
Special reserves
Surplus reserves 1,464,752,476.00 1,464,752,476.00
General risk reserve
Undistributed profits 16,236,513,212.43 12,559,746,579.91
Total equity attributable to owners of
23,074,858,552.59 19,406,845,725.61
the parent company
Non-controlling interests 107,011,321.12 147,885,302.49
Total owners' equity 23,181,869,873.71 19,554,731,028.10
Total liabilities and owners' equity 35,009,203,823.45 28,919,969,078.32
104
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Legal representative：Liu Miao
Person in charge of accounting affairs：Xie Hong
Person in charge of accounting department：Yan Li
Balance sheet of parent company
As at 31 December 2020
Monetary Unit: CNY
Item Balance as at 31 December 2020 Balance as at 31 December 2019
Current assets:
Cash and cash equivalents 11,100,327,211.33 8,872,692,385.79
Held-for-trading financial assets
Derivative financial assets
Notes receivables
Accounts receivables 3,927.50 21,562.85
Accounts receivables financing
Prepayment 1,431,698.57 11,682,593.27
Other receivables 7,052,749,694.83 5,850,481,480.50
Including：Interests receivable 40,570,144.44
Dividends receivable 1,407,900.00
Inventories 850,076.30 1,049,384.24
Contract assets
Assets held for sale
Non-current assets due within one
year
Other current assets 78,509.44 5,562,360.72
Total current assets 18,155,441,117.97 14,741,489,767.37
Non-current assets:
Investments in debt obligations
Investments in other debt obligations
Long-term receivables
Long-term equity investments 5,884,091,712.47 5,636,681,853.83
Investments in other equity
346,831,477.79 352,066,334.15
instruments
Other non-current financial assets
Investment property
Fixed assets 640,254,574.76 601,481,983.81
105
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Construction in progress 550,932,404.00 967,953,263.55
Productive biological assets
Oil and gas assets
Use right assets
Intangible assets 684,010,106.13 297,830,285.02
Development expenses
Goodwill
Long-term deferred expenses 2,180,811.89 777,834.15
Deferred tax assets 89,484,552.65 75,249,717.72
Other non-current assets 1,526,325.86
Total non-current assets 8,199,311,965.55 7,932,041,272.23
Total assets 26,354,753,083.52 22,673,531,039.60
Current liabilities:
Short-term loans
Held-for-trading financial liabilities
Derivative financial liabilities
Notes payable
Accounts payable 80,663,835.54 87,652,671.29
Advance from customer 9,712,630.35
Contract liabilities 753,349.81
Employee benefits payable 168,254,646.38 116,124,722.19
Taxes payable 153,437,992.21 82,399,599.18
Other payables 699,733,563.56 1,099,598,588.83
Including：Interests payable 30,650,684.93
Dividends payable
Liabilities held for sale
Non-current liabilities due within one
72,219,178.08
year
Other current liabilities 116,457.13
Total current liabilities 1,175,179,022.71 1,395,488,211.84
Non-current liabilities:
Long-term loans
Bonds payable 3,987,872,100.02 2,490,883,676.39
Including：Preferred shares
106
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Perpetual bonds
Lease liabilities
Long-term payables
Long-term payroll payables
Accrued liabilities
Deferred income 1,904,000.00 2,380,000.00
Deferred tax liabilities 62,151,071.11 63,430,453.64
Other non-current liabilities
Total non-current liabilities 4,051,927,171.13 2,556,694,130.03
Total liabilities 5,227,106,193.84 3,952,182,341.87
Owners' equity
Share capital 1,464,752,476.00 1,464,752,476.00
Other equity instruments
Including: preferred shares
Perpetual bonds
Capital reserves 3,706,816,950.12 3,706,816,950.12
Less: treasury stock
Other comprehensive income 185,441,302.55 192,332,738.05
Special reserves
Surplus reserves 1,464,752,476.00 1,464,752,476.00
Undistributed profits 14,305,883,685.01 11,892,694,057.56
Total owners' equity 21,127,646,889.68 18,721,348,697.73
Total liabilities and owners' equity 26,354,753,083.52 22,673,531,039.60
Consolidated income statement
Monetary Unit: CNY
Item Year 2020 Year 2019
1. Total operating revenue 16,652,854,549.80 15,816,934,272.86
Including: Operating revenue 16,652,854,549.80 15,816,934,272.86
Interest income
Earned premium
Fee and commission
income
2. Total operating costs 8,935,579,731.67 9,922,882,478.20
107
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Including: Cost of sales 2,823,484,558.06 3,065,418,048.38
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 2,223,571,956.83 1,975,858,645.23
Selling and distribution
3,090,655,832.25 4,186,102,153.59
expenses
General and administrative
844,454,467.47 828,945,024.92
expenses
Research and
85,858,119.80 71,643,099.77
Development expenses
Financial expenses -132,445,202.74 -205,084,493.69
Including：Interest
190,368,213.56 139,603,113.82
expenses
Interest income 333,430,076.04 344,656,931.22
Plus: Other income 32,045,453.48 43,969,302.07
Investment income ("-" for
201,498,918.28 154,711,995.41
losses)
Including: income from
investment in associates and joint 192,119,093.92 145,963,325.70
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
values(“-“ for losses)
108
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Credit impairment losses (“-”
373,734.80 -618,334.74
for losses)
Impairment losses(“-“ for
losses)
Gains from disposal of
8,123,010.18 27,180,182.25
assets("-" for losses)
3. Operating profits ("-" for losses) 7,959,315,934.87 6,119,294,939.65
Plus: non-operating income 32,645,773.17 44,307,757.49
Less: non-operating expenses 52,934,859.63 59,786,505.46
4. Total profits before tax ("-" for
7,939,026,848.41 6,103,816,191.68
total losses)
Less: income tax expenses 1,980,512,205.93 1,461,580,689.27
5. Net profit ("-" for net loss) 5,958,514,642.48 4,642,235,502.41
5.1 By operating continuity
5.1.1 Net profit from continuing
5,958,514,642.48 4,642,235,502.41
operation ("-" for losses)
5.1.2 Net profit from discontinued
operation ("-" for losses)
5.2 By ownership
1) Attributable to shareholders of the
6,005,723,069.36 4,641,988,857.03
parent company
2) Attributable to non-controlling
-47,208,426.88 246,645.38
interests
6. Net of tax from other
-10,282,236.19 25,099,247.90
comprehensive income
Net of tax from other comprehensive
income to the owner of the parent -8,753,805.54 24,585,285.17
company
6.1 Other comprehensive income
cannot reclassified into the profit and -3,926,142.29 19,018,838.37
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
profit and loss under equity method
3) Changes in fair value of -3,926,142.29 19,018,838.37
109
2020 Annual Report of Luzhou Laojiao Co., Ltd.
investments in other equity
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 and -4,827,663.25 5,566,446.80
loss
1) Share in other comprehensive
income that will be classified into -2,965,293.21 4,938,830.88
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 -1,862,370.04 627,615.92
statements
7) Others
Net of tax from other comprehensive
-1,528,430.65 513,962.73
income to non-controlling interests
7. Total comprehensive income 5,948,232,406.29 4,667,334,750.31
Total comprehensive income
attributable to owners of the parent 5,996,969,263.82 4,666,574,142.20
company
Total comprehensive income
attributable to non-controlling -48,736,857.53 760,608.11
interests
8. Earnings per share
(1) Basic earnings per share 4.10 3.17
(2) Diluted earnings per share 4.10 3.17
Legal representative：Liu Miao
Person in charge of accounting affairs：Xie Hong
Person in charge of accounting department：Yan Li
110
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Income statement of parent company
Monetary Unit: CNY
Item Year 2020 Year 2019
1. Operating revenue 5,498,845,453.48 4,886,810,422.27
Less: Cost of sales 4,185,130,000.53 3,494,194,921.16
Taxes and surcharges 39,668,792.03 35,721,430.12
Selling and distribution
expenses
General and administrative
639,110,100.69 667,996,227.68
expenses
Research and Development
31,103,513.75 29,631,770.27
expenses
Financial expenses -212,027,662.64 -234,014,687.01
Including：Interest expenses 108,660,100.27 40,008,978.03
Interest income 321,948,107.20 275,281,390.78
Plus: Other income 23,441,901.80 21,882,835.13
Investment income ("-" for
4,129,509,837.47 4,196,863,510.68
losses)
Including: income from
investment in associates and joint 191,110,318.79 145,963,325.70
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 values(“-“ for losses)
Credit impairment losses (“-”
1,373,316.74 -58,058.02
for losses)
Asset impairment losses (“-”
for losses)
Gains from disposal of
8,127,635.68 27,050,240.74
assets("-" for losses)
2. Operating profits ("-" for
4,978,313,400.81 5,139,019,288.58
losses)
Plus: non-operating income 13,505,161.25 24,397,783.88
111
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Less: non-operating expenses 33,646,104.00 56,307,795.01
3. Total profits before tax ("-" for
4,958,172,458.06 5,107,109,277.45
total losses)
Less: income tax expenses 216,026,393.77 235,868,705.50
4. Net profit ("-" for net loss) 4,742,146,064.29 4,871,240,571.95
4.1 Net profit from continuing
4,742,146,064.29 4,871,240,571.95
operation ("-" for losses)
4.2 Net profit from discontinued
operation ("-" for losses)
5. Net of tax from other
-6,891,435.50 23,957,669.25
comprehensive income
5.1 Other comprehensive income
cannot reclassified into the profit and -3,926,142.29 19,018,838.37
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
profit and loss under equity method
3) Changes in fair value of
investments in other equity -3,926,142.29 19,018,838.37
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 -2,965,293.21 4,938,830.88
and loss
1) Share in other comprehensive
income that will be classified into -2,965,293.21 4,938,830.88
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
112
2020 Annual Report of Luzhou Laojiao Co., Ltd.
obligations
5) Reserve for cash-flow hedge
6) Balance arising from the
translation of foreign currency
financial statements
7) Others
6. Total comprehensive income 4,735,254,628.79 4,895,198,241.20
7. Earnings per share
(1) Basic earnings per share
(2) Diluted earnings per share
Consolidated statement of cash flows
Monetary Unit: CNY
Item Year 2020 Year 2019
1. Cash flows from operating
activities
Cash received from sale of goods
17,181,826,402.36 18,483,174,163.09
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
Net capital increase in repurchase
business
113
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Net cash received from customer
brokerage deposits
Refunds of taxes and surcharges 4,409,523.82 5,043,369.84
Cash received from other operating
536,706,593.88 628,136,779.70
activities
Subtotal of cash inflows from
17,722,942,520.06 19,116,354,312.63
operating activities
Cash paid for goods purchased and
3,935,832,838.54 5,306,328,780.97
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
798,605,373.41 765,303,405.29
employees
Cash paid for taxes and surcharges 5,241,424,782.99 4,932,650,062.18
Cash paid for other operating
2,830,977,073.82 3,270,452,860.33
activities
Subtotal of cash outflows from
12,806,840,068.76 14,274,735,108.77
operating activities
Net cash flows from operating
4,916,102,451.30 4,841,619,203.86
activities
2. Cash flows from investing
activities
Cash received from disposal of
investments
Cash received from returns on
28,707,091.30 29,483,836.65
investments
Net cash received from disposal of
fixed assets, intangible assets and 20,743,376.36 33,045,256.91
other long-term assets
114
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Net cash received from disposal of
subsidiaries and other business
units
Cash received from other investing
activities
Subtotal of cash inflows from
49,450,467.66 62,529,093.56
investing activities
Cash paid to acquire and construct
fixed assets, intangible assets and 2,143,910,509.48 4,605,226,214.50
other long-term assets
Cash paid for investments 80,000,000.00 8,000,000.00
Net increase in pledge loans
Net cash paid to acquire
subsidiaries and other business
units
Cash paid for other investing
activities
Subtotal of cash outflows from
2,223,910,509.48 4,613,226,214.50
investing activities
Net cash flows from investing
-2,174,460,041.82 -4,550,697,120.94
activities
3. Cash flows from financing
activities
Cash received from investors 9,947,876.16 3,834,692.00
Including: cash received by
subsidiaries from investments by 9,947,876.16 3,834,692.00
minority shareholders
Cash received from borrowings 1,494,000,000.00 2,490,000,000.00
Cash received from other financing
activities
Subtotal of cash inflows from
1,503,947,876.16 2,493,834,692.00
financing activities
Cash paid for debt repayments
Cash paid for distribution of
dividends and profits or payment of 2,420,541,436.84 2,390,250,207.80
interest
Including: dividends and profits paid
to minority shareholders by 2,085,000.00
subsidiaries
115
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Cash paid for other financing
180,000.00 10,149,100.00
activities
Subtotal of cash outflows from
2,420,721,436.84 2,400,399,307.80
financing activities
Net cash flows from financing
-916,773,560.68 93,435,384.20
activities
4. Effect of fluctuation in
exchange rate on cash and cash -8,940,312.77 1,922,431.98
equivalents
5. Net increase in cash and cash
1,815,928,536.03 386,279,899.10
equivalents
Plus: balance of cash and cash
equivalents at the beginning of the 9,752,266,526.78 9,365,986,627.68
period
6. Balance of cash and cash
equivalents at the end of the 11,568,195,062.81 9,752,266,526.78
period
Cash flow statements of parent company
Monetary Unit: CNY
Item Year 2020 Year 2019
1. Cash flows from operating
activities
Cash received from sale of goods
6,027,493,323.47 5,524,665,200.15
and rendering of services
Refunds of taxes and surcharges
Cash received from other operating
383,743,781.07 336,073,969.61
activities
Subtotal of cash inflows from
6,411,237,104.54 5,860,739,169.76
operating activities
Cash paid for goods purchased and
4,712,837,125.15 4,128,632,128.61
services received
Cash paid to and on behalf of
292,139,082.61 277,720,935.68
employees
Cash paid for taxes and surcharges 321,193,312.05 458,233,955.78
Cash paid for other operating
245,064,341.42 209,925,720.97
activities
Subtotal of cash outflows from 5,571,233,861.23 5,074,512,741.04
116
2020 Annual Report of Luzhou Laojiao Co., Ltd.
operating activities
Net cash flows from operating
840,003,243.31 786,226,428.72
activities
2. Cash flows from investing
activities
Cash received from disposal of
investments
Cash received from returns on
3,957,726,785.62 4,071,635,351.92
investments
Net cash received from disposal of
fixed assets, intangible assets and 20,105,415.90 32,304,306.23
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
3,977,832,201.52 4,103,939,658.15
investing activities
Cash paid to acquire and construct
fixed assets, intangible assets and 223,191,670.76 497,241,658.62
other long-term assets
Cash paid for investments 80,000,000.00 10,149,100.00
Net cash paid to acquire
subsidiaries and other business
units
Cash paid for other investing
activities
Subtotal of cash outflows from
303,191,670.76 507,390,758.62
investing activities
Net cash flows from investing
3,674,640,530.76 3,596,548,899.53
activities
3. Cash flows from financing
activities
Cash received from investors
Cash received from loans 1,494,000,000.00 2,490,000,000.00
Cash received from other financing
activities
Subtotal of cash inflows from 1,494,000,000.00 2,490,000,000.00
117
2020 Annual Report of Luzhou Laojiao Co., Ltd.
financing activities
Cash paid for debt repayments
Cash paid for distribution of
dividends and profits or payment of 2,343,157,574.72 2,278,840,954.51
interest
Cash paid for other financing
1,493,126,651.60 1,910,715,145.78
activities
Subtotal of cash outflows from
3,836,284,226.32 4,189,556,100.29
financing activities
Net cash flows from financing
-2,342,284,226.32 -1,699,556,100.29
activities
4. Effect of fluctuation in
exchange rate on cash and cash
equivalents
5. Net increase in cash and cash
2,172,359,547.75 2,683,219,227.96
equivalents
Plus: balance of cash and cash
equivalents at the beginning of the 8,872,692,385.79 6,189,473,157.83
period
6. Balance of cash and cash
equivalents at the end of the 11,045,051,933.54 8,872,692,385.79
period
Consolidated statement of changes in owners' equity
For the year ended 31 December 2020
Monetary Unit: CNY
Year 2020
Equity attributable to owners of the parent company
Non-co
Other equity Other Total
Less： Surplu Genera ntrollin
Item instruments owner
Share Capital Compr Special Undistr
Treasu s l risk Subtot g
capita Prefe Perp reserv ehensi reserv ibuted Other s'
ry reserv reserv al interes
l e ve e profit equity
rred etual Other ts
stock e e
stock bond Income
1. Balance as at 1,464, 3,722,7 194,81 1,464,7 12,559, 19,406, 147,88 19,554,
31 December of 752,4 77,063. 7,130.5 52,476. 746,57 845,72 5,302.4 731,02
last year 76.00 13 7 00 9.91 5.61 9 8.10
Plus: adjustments
for changes in
accounting
118
2020 Annual Report of Luzhou Laojiao Co., Ltd.
policies
Adjustments for
correction of
accounting errors
in prior year
Business
combinations
under common
control
Others
2. Balance as at 1,464, 3,722,7 194,81 1,464,7 12,559, 19,406, 147,88 19,554,
1 January of the 752,4 77,063. 7,130.5 52,476. 746,57 845,72 5,302.4 731,02
current year 76.00 13 7 00 9.91 5.61 9 8.10
3.Increases/decr
eases in the 3,676,7 3,668,0 3,627,1
-8,753, -40,873
current period 66,632. 12,826. 38,845.
805.54 ,981.37
(“-” for 52 98 61
decreases)
(1) Total 6,005,7 5,996,9 5,948,2
-8,753, -48,736
comprehensive 23,069. 69,263. 32,406.
805.54 ,857.53
income 36 82 29
(2) Capital
contributed or 9,947,8 9,947,8
reduced by 76.16 76.16
owners
Capital
9,947,8 9,947,8
contributions by
76.16 76.16
owners
Capital
contributions by
other equity
instruments
holders
Amounts of
share-based
payments
recognized in
owners' equity
Others
(3) Profit -2,328, -2,328, -2,085, -2,331,
distribution 956,43 956,43 000.00 041,43
119
2020 Annual Report of Luzhou Laojiao Co., Ltd.
6.84 6.84 6.84
Withdrawal of
surplus reserves
Withdrawal of
general risk
reserve
Profit distributed -2,328, -2,328, -2,331,
-2,085,
to owners (or 956,43 956,43 041,43
000.00
shareholders) 6.84 6.84 6.84
Others
(4) Internal
carry-forward of
owners' equity
Conversion of
capital reserves
into paid-in
capital
Conversion of
surplus reserves
into paid-in
capital
Surplus reserves
offsetting losses
Carry-forward of
retained earnings
from changes in
defined benefit
plans
Carry-forward of
retained earnings
from other
comprehensive
income
Others
(5) Special
reserves
Withdrawal for
the period
Use for the period
(6) Others
120
2020 Annual Report of Luzhou Laojiao Co., Ltd.
4. Balance as at 1,464, 3,722,7 186,06 1,464,7 16,236, 23,074, 107,01 23,181,
31 December of 752,4 77,063. 3,325.0 52,476. 513,21 858,55 1,321.1 869,87
the current year 76.00 13 3 00 2.43 2.59 2 3.71
For the year ended 31 December 2019
Monetary Unit: CNY
Year 2019
Equity attributable to owners of the parent company
Other equity Other Non-co
instruments Less： Compr Specia Surplu Genera ntrollin Total
Item
Share Capital Undistr
Treasu ehensi l s l risk Subtot g owners'
capita Prefe Perp reserv ibuted Other
ry ve reserv reserv reserv al interest equity
l rred etual Other e profit
stock Incom e e e s
stock bond
e
1. Balance as at 1,464, 3,716,6 136,59 1,464,7 10,181, 16,964, 17,124,2
159,541,
31 December of 752,4 75,022. 2,276.6 52,476. 899,22 671,47 12,618.9
143.03
last year 76.00 48 4 00 4.84 5.96 9
Plus:
adjustments for
33,639, 6,224,8 39,864, 39,864,4
changes in
568.76 35.84 404.60 04.60
accounting
policies
Adjustments for
correction of
accounting errors
in prior year
Business
combinations
under common
control
Others
2. Balance as at 1,464, 3,716,6 170,23 1,464,7 10,188, 17,004, 17,164,0
159,541,
1 January of the 752,4 75,022. 1,845.4 52,476. 124,06 535,88 77,023.5
143.03
current year 76.00 48 0 00 0.68 0.56 9
3.Increases/dec
reases in the 2,371,6 2,402,3
6,102,0 24,585, -11,655, 2,390,65
current period 22,519. 09,845.
40.65 285.17 840.54 4,004.51
(“-” for 23 05
decreases)
(1) Total 24,585, 4,641,9 4,666,5 760,608. 4,667,33
121
2020 Annual Report of Luzhou Laojiao Co., Ltd.
comprehensive 285.17 88,857. 74,142. 11 4,750.31
income 03 20
(2) Capital
contributed or 1,334,69 1,334,69
reduced by 2.00 2.00
owners
Capital
1,334,69 1,334,69
contributions by
2.00 2.00
owners
Capital
contributions by
other equity
instruments
holders
Amounts of
share-based
payments
recognized in
owners' equity
Others
-2,270, -2,270, -2,270,3
(3) Profit
366,33 366,33 66,337.8
distribution
7.80 7.80 0
Withdrawal of
surplus reserves
Withdrawal of
general risk
reserve
Profit distributed -2,270, -2,270, -2,270,3
to owners (or 366,33 366,33 66,337.8
shareholders) 7.80 7.80 0
Others
(4) Internal
carry-forward of
owners' equity
Conversion of
capital reserves
into paid-in
capital
Conversion of
122
2020 Annual Report of Luzhou Laojiao Co., Ltd.
surplus reserves
into paid-in
capital
Surplus reserves
offsetting losses
Carry-forward of
retained earnings
from changes in
defined benefit
plans
Carry-forward of
retained earnings
from other
comprehensive
income
Others
(5) Special
reserves
Withdrawal for
the period
Use for the
period
6,102,0 6,102,0 -13,751, -7,649,1
(6) Others
40.65 40.65 140.65 00.00
4. Balance as at 1,464, 3,722,7 194,81 1,464,7 12,559, 19,406, 19,554,7
147,885,
31 December of 752,4 77,063. 7,130.5 52,476. 746,57 845,72 31,028.1
302.49
the current year 76.00 13 7 00 9.91 5.61 0
Statement of changes in owners' equity of parent company
For the year ended 31 December 2020
Monetary Unit: CNY
Year 2020
Other equity
Other
instruments Less： Undistr Total
Item Share Capital Compreh Special Surplus
Preferr Perpet Treasury ibuted Other owners'
capital reserve ensive reserve reserve
ed ual Other stock profit equity
Income
stock bond
1. Balance as at 1,464,7 3,706,816 192,332,7 1,464,752 11,892, 18,721,348,
31 December of 52,476. ,950.12 38.05 ,476.00 694,057 697.73
123
2020 Annual Report of Luzhou Laojiao Co., Ltd.
last year 00 .56
Plus: adjustments
for changes in
accounting
policies
Adjustments for
correction of
accounting errors
in prior year
Others
2. Balance as at 1,464,7 11,892,
3,706,816 192,332,7 1,464,752 18,721,348,
January 1 of the 52,476. 694,057
,950.12 38.05 ,476.00 697.73
current year 00 .56
3.Increases/decr
eases in the 2,413,1
-6,891,43 2,406,298,1
current period 89,627.
5.50 91.95
(“-” for 45
decreases)
(1) Other 4,742,1
-6,891,43 4,735,254,6
comprehensive 46,064.
5.50 28.79
income 29
(2) Capital
contributed or
reduced by
owners
Capital
contributions by
owners
Capital
contributions by
other equity
instruments
holders
Amounts of
share-based
payments
recognized in
owners' equity
Others
(3) Profit -2,328,9 -2,328,956,
distribution 56,436. 436.84
124
2020 Annual Report of Luzhou Laojiao Co., Ltd.
84
Withdrawal of
surplus reserves
Profit distributed to -2,328,9
-2,328,956,
owners (or 56,436.
436.84
shareholders) 84
Others
(4) Internal
carry-forward of
owners' equity
Conversion of
capital reserves
into paid-in capital
Conversion of
surplus reserves
into paid-in capital
Surplus reserves
offsetting losses
Carry-forward of
retained earnings
from changes in
defined benefit
plans
Carry-forward of
retained earnings
from other
comprehensive
income
Others
(5) Special
reserves
Withdrawal for the
period
Use for the period
(6) Others
4. Balance as at 1,464,7 14,305,
3,706,816 185,441,3 1,464,752 21,127,646,
31 December of 52,476. 883,685
,950.12 02.55 ,476.00 889.68
the current year 00 .01
For the year ended 31 December 2019
125
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Monetary Unit: CNY
Year 2019
Other equity
Other
instruments Less： Total
Item Share Capital Compre Special Surplus Undistrib
Preferr Perpet Treasury Other owners'
capital reserve hensive reserve reserve uted profit
ed ual Other stock equity
Income
stock bond
1. Balance as at 1,464,7
3,706,81 134,386, 1,464,75 9,285,944, 16,056,652,
31 December of 52,476.
6,950.12 305.26 2,476.00 182.35 389.73
last year 00
Plus:
adjustments for
33,988,7 5,875,641. 39,864,404.
changes in
63.54 06 60
accounting
policies
Adjustments for
correction of
accounting errors
in prior year
Others
2. Balance as at 1,464,7
3,706,81 168,375, 1,464,75 9,291,819, 16,096,516,
January 1 of the 52,476.
6,950.12 068.80 2,476.00 823.41 794.33
current year 00
3.Increases/dec
reases in the
23,957,6 2,600,874, 2,624,831,9
current period
69.25 234.15 03.40
(“-” for
decreases)
(1) Other
23,957,6 4,871,240, 4,895,198,2
comprehensive
69.25 571.95 41.20
income
(2) Capital
contributed or
reduced by
owners
Capital
contributions by
owners
Capital
contributions by
126
2020 Annual Report of Luzhou Laojiao Co., Ltd.
other equity
instruments
holders
Amounts of
share-based
payments
recognized in
owners' equity
Others
(3) Profit -2,270,366 -2,270,366,3
distribution ,337.80 37.80
Withdrawal of
surplus reserves
Profit distributed
-2,270,366 -2,270,366,3
to owners (or
,337.80 37.80
shareholders)
Others
(4) Internal
carry-forward of
owners' equity
Conversion of
capital reserves
into paid-in
capital
Conversion of
surplus reserves
into paid-in
capital
Surplus reserves
offsetting losses
Carry-forward of
retained earnings
from changes in
defined benefit
plans
Carry-forward of
retained earnings
from other
comprehensive
income
127
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Others
(5) Special
reserves
Withdrawal for
the period
Use for the
period
(6) Others
4. Balance as at 1,464,7
3,706,81 192,332, 1,464,75 11,892,694 18,721,348,
31 December of 52,476.
6,950.12 738.05 2,476.00 ,057.56 697.73
the current year 00
3. Company Profile
3.1 Company Overview
Luzhou Laojiao Co., Ltd. (hereinafter referred to as "Company" or "the Company"), formerly known as
Luzhou Laojiao Brewery, was established in March 1950. 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
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%.
128
2020 Annual Report of Luzhou Laojiao Co., Ltd.
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 81,088,300 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.
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 liquor subdivision industry of liquor and wine, beverage and refined tea
manufacturing industry.
The main activity are research and development, production and sales of “National Cellar 1573”,”Luzhou
Laojiao” and other liquor series.
The main products are: “National Cellar 1573 Series”,”Century-old Luzhou Laojiao Jiaoling
Series” ,”Luzhou Laojiao Tequ”,”Touqu”,”Erqu” and other liquor series.
3.4 The name of the controlling shareholder and the ultimate substantive controller
129
2020 Annual Report of Luzhou Laojiao Co., Ltd.
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 29 April
2021.
3.6 Consolidated financial statement scope and their changes
(1) The 28 subsidiaries included in the consolidated financial statements for the current period are listed
as follows:
Name of subsidiary Abbreviation Shareholding proportion(%) Voting rights (%)
Direct Indirect
Luzhou Laojiao Brewing Co., Ltd. Brewing company 100.00 100.00
Luzhou Red Sorghum Modern Agricultural Development Co., 60.00 60.00
Red sorghum company
Ltd.
Sales Company of Luzhou Laojiao Co., Ltd. Sales company 100.00 100.00
Luzhou Laojiao Nostalgic Liquor Marketing Co., Ltd. Nostalgic company 100.00 100.00
Luzhou Laojiao Custom Liquor Co., Ltd. Note 1 Custom liquor company 15.00 60.00
Luzhou Laojiao Selected Supply Chain Management Co., Ltd. Selected company 100.00 100.00
Guangxi Luzhou Laojiao Imported Liquor Industry Co., Ltd. Guangxi Imported Liquor 100.00 100.00
Industry
Luzhou Dingli Liquor Industry Co., Ltd. Dingli company 100.00 100.00
Luzhou Dingyi Liquor Industry Sales Co., Ltd. Dingyi company 100.00 100.00
Luzhou Dinghao Liquor Industry Sales Co., Ltd. Dinghao company 100.00 100.00
Luzhou Laojiao Import and Export trade Co., Ltd. Import and export 100.00 100.00
company
Luzhou Laojiao Boda Liquor Industry Marketing Co., Ltd. Boda marketing 75.00 75.00
Luzhou Laojiao Bosheng Hengxiang Liquor Sales Co., Ltd. Bosheng Hengxiang 100.00 100.00
Luzhou Laojiao Fruit Wine industry Co., Ltd. Note 2 Fruit wine industry 41.00 60.00
Mingjiang Co., Ltd. Mingjiang company 54.00 54.00
Luzhou Pinchuang Technology Co., Ltd. Pinchuang company 100.00 100.00
Luzhou Laojiao Tourism Culture Co., Ltd. Tourism culture 100.00 100.00
Luzhou Laojiao International Development（Hong Kong）Co., Hong Kong company 55.00 55.00
Ltd.
Luzhou Laojiao Commercial Development (North America) North America company 100.00 100.00
Co., Ltd.
130
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Luzhou Laojiao Electronic Commerce Co., Ltd. Electronic Commerce 90.00 90.00
Luzhou Laojiao Whitail Innovative Electronic Commerce Co., Whitail Electronic 100.00 100.00
Ltd. Commerce
Luzhou Laojiao Selected Electronic Commerce Co., Ltd. Selected Electronic 100.00 100.00
Commerce
Luzhou Laojiao Whitail Liquor Industry Co., Ltd. Note 3 Whitail liquor industry 35.00 60.00
Chengdu Tianfu Panda Whitail Liquor Industry Co., Ltd. Note Panda Whitail 60.00 60.00
3
Luzhou Whitail Tongdao Uncle Constellation Wine Sales Co., Whitail Tongdao Uncle 70.00 70.00
Ltd. Note 3
Luzhou Baonuo Biotechnology Co., Ltd. Baonuo biotechnology 100.00 100.00
Luzhou Laojiao Health Liquor Industry Co.,Ltd. Health Liquor Industry 100.00 100.00
Luzhou Laojiao Health Sales Co., Ltd. Health sales 100.00 100.00
Note 1: Although the Company holds less than 51% of the equity of Custom liquor company, among the five members of
the board of directors, the Company has sent three people, and the chairman of the board (legal representative) is the
director sent by the Company. The Company has actual control over Custom liquor company, so it is included in the scope
of consolidation.
Note 2: Although the Company holds less than 51% of the equity of Fruit wine industry, among the five members of the
board of directors, the Company has sent three people, and the chairman of the board (legal representative) is the director
sent by the Company. The Company has actual control over Fruit wine industry, so it is included in the scope of
consolidation.
Note 3: Although the Company holds less than 51% of the equity of Whitail liquor industry and its subsidiaries, among the
five members of the board of directors, the Company has sent three people. The Company has actual control over Whitail
liquor industry and its subsidiaries, so it is included in the scope of consolidation.
Details of the subsidiaries incorporated into the consolidated financial statements show on “9.1. Interests
in subsidiaries”
(2) Subsidiaries that are newly incorporated into the scope of consolidation in this period
N/A
(3) Liquidation and cancellation for subsidiaries in this period
N/A
Details of changes in the scope of consolidation show on “8. Changes in consolidated scope”.
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
131
2020 Annual Report of Luzhou Laojiao Co., Ltd.
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 (2014 Revision) issued by CSRC.
4.2. Going concern
The Company’s business activities have adequate financial support. Based on the current information
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
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 2014.
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 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
132
2020 Annual Report of Luzhou Laojiao Co., Ltd.
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.
5.6 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
133
2020 Annual Report of Luzhou Laojiao Co., Ltd.
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
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
134
2020 Annual Report of Luzhou Laojiao Co., Ltd.
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.
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
135
2020 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.
5.7 Classification of joint venture arrangements and the accounting treatment
method of common operation
(1) Classification of joint venture arrangements
A joint arrangement is classified as either a joint operation or a joint venture 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;
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
136
2020 Annual Report of Luzhou Laojiao Co., Ltd.
(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 are 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.
5.8 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.
5.9 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
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
137
2020 Annual Report of Luzhou Laojiao Co., Ltd.
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.
5.10 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
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
138
2020 Annual Report of Luzhou Laojiao Co., Ltd.
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.
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.
139
2020 Annual Report of Luzhou Laojiao Co., Ltd.
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.
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
140
2020 Annual Report of Luzhou Laojiao Co., Ltd.
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.
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.
141
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Dividends from the Company’s equity instruments distributed during the validity (including the “interests”
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.
142
2020 Annual Report of Luzhou Laojiao Co., Ltd.
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.
5.11 Notes receivable
The method of determining the expected credit loss of notes receivables and accounting treatment
method:
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
5.12 Accounts receivables
The method of determining the expected credit loss of accounts receivables and accounting treatment
method:
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 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 future
economic situation consulting historical credit loss experience. The comparative table of the credit loss
rate is as follows:
Aging Expected loss provision rate %
143
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Within 1 year 5
1-2 years 10
2-3 years 20
3-4 years 40
4-5 years 80
Over 5 years 100
5.13 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 5.10
Financial instruments.
5.14 Other receivables
The method of determining the expected credit loss of other receivables and accounting treatment
method:
As for other 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 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.
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 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
144
2020 Annual Report of Luzhou Laojiao Co., Ltd.
2-3 years 20
3-4 years 40
4-5 years 80
Over 5 years 100
5.15 Inventory
(1) Classification of inventory
Inventories are classified as: raw materials, goods in progress, semi-finished goods, stock commodities,
dispatched inventories, revolving materials (including packing materials and low-cost consumables).
(2) Measurement method of dispatched 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 and semi-finished goods shall be accounted according to the actual cost, and the 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) Basis to determine net realizable values of inventories 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.
145
2020 Annual Report of Luzhou Laojiao Co., Ltd.
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 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.
5.18 Assets held for sale
(1) Classification of 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.
146
2020 Annual Report of Luzhou Laojiao Co., Ltd.
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
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) Measurement 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 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.
147
2020 Annual Report of Luzhou Laojiao Co., Ltd.
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. The accounting treatment that does not continue to be classified as held-for-sale and the termination
of recognition
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 Long-term equity investment
(1) Judgment criteria of common control and significant influence
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.
148
2020 Annual Report of Luzhou Laojiao Co., Ltd.
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
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.
149
2020 Annual Report of Luzhou Laojiao Co., Ltd.
(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
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.
150
2020 Annual Report of Luzhou Laojiao Co., Ltd.
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.
5.20 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.
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.
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.
151
2020 Annual Report of Luzhou Laojiao Co., Ltd.
(3) When the Company changes the use of investment property, the relevant investment property will be
transferred to other assets.
5.21. 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
Depreciation Estimated useful Estimated residual Annual depreciation
Category
method life (Year) value rate (%) rate (%)
Buildings and Straight-line
Constructions 10－45 5 9.50－2.11
method
Straight-line
Special equipment 5－35 5 19.00－2.71
method
Universal Straight-line
equipment 4－25 5 23.75－3.80
method
Transportation Straight-line
equipment 6 5 15.83
method
Straight-line
Other equipment 4－16 5 23.75－5.94
method
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.
The Company’s newly-built brewing production lines, packaging production lines and warehousing
assets, and the houses and buildings, special and general equipment formed thereof are obviously
different from the existing same types of assets and have obviously longer estimated service life than the
same types of fixed assets. The maximum years of depreciation for different types of the newly-built
fixed assets are as follows: 45 years for houses and buildings; 35 years for special equipment and 25
years for general equipment.
During the year, some of the Company’s projects in progress reached the expected usable state and
were transferred into fixed assets.
152
2020 Annual Report of Luzhou Laojiao Co., Ltd.
(3) Recognition standard, valuation method and depreciation method for fixed assets acquired
under financing lease
If the purchase price of a fixed asset exceeds the normal credit conditions and the payment is delayed,
which has a financing nature, the cost of the fixed asset shall be determined on the basis of the present
value of the purchase price. The difference between the actual price paid and the present value of the
purchase price, unless it should be capitalized, shall be recorded into the current profit and loss in the
credit period.
For fixed assets acquired under financing lease, at the inception of the lease, the Company shall
recognizes it at the lower of the fair value of the leased assets or the present value of the minimum lease
payments.
Fixed assets acquired under financing lease is adapted the same depreciation method as the one used
on other fixed assets owned by the Company. If there is reasonable assurance that the Company will
obtain the ownership of the leased assets when the lease term expires, the leased assets should be
depreciated over its useful life; if there is no reasonable assurance that the Company will obtain the
ownership of the leased assets when the lease term expires, the leased assets should be depreciated
over the shorter of the lease term or the useful life of the leased assets.
5. 22. 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. 23. 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
153
2020 Annual Report of Luzhou Laojiao Co., Ltd.
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 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
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
154
2020 Annual Report of Luzhou Laojiao Co., Ltd.
sold externally until overall completion, the capitalization of borrowing costs should cease at the time of
overall completion of the said assets.
5. 24. Intangible assets
(1) Measurement method, useful life, impairment test
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.
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 amortization method
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.
155
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Impairment test
On the balance sheet date, intangible assets are valued at the lower of book value and recoverable
amount.
(2) Internal research and development expenditure accounting policy
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 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;
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. 25. 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.
156
2020 Annual Report of Luzhou Laojiao Co., Ltd.
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 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. 26. 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. 27 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. 28. 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.
157
2020 Annual Report of Luzhou Laojiao Co., Ltd.
b. Defined benefit plan
According to the formula determined by the expected accumulative projected unit credit method, the
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
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.
158
2020 Annual Report of Luzhou Laojiao Co., Ltd.
5. 29. 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. 30. 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.
(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,
159
2020 Annual Report of Luzhou Laojiao Co., Ltd.
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).
5. 31. Revenue
Accounting policies for recognition and measurement of revenue
The Company starts to implement the new revenue standards.
(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
160
2020 Annual Report of Luzhou Laojiao Co., Ltd.
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 are 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 mainly sells alcoholic products, which is a performance obligation performed at a certain
point in time. The revenue identification of domestic products must meet the following requirements: a.
The Company has delivered the products to the purchasers according to the contract and the
purchasers have signed and confirmed the receipts. b. The amount of sales revenue has been identified.
c. The payment has been received; the receipt of the document of title has been obtained and the
relevant economic benefits are likely to flow in. d. The product-related costs can be reliably calculated.
The following requirements must be met to confirm the revenue of export products: a. The Company has
declared the products in accordance with the contract, obtained the bills of lading, received the payment
or obtained the receipt of payment and related economic benefits that are likely to flow in. b. The main
risks and rewards of the product ownership have been transferred. c. The legal ownership of the goods
has been transferred.
Differences in accounting policies for the recognition of revenue caused by different business models for
the same type of business
5. 32. 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
161
2020 Annual Report of Luzhou Laojiao Co., Ltd.
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. 33. 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:
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.
162
2020 Annual Report of Luzhou Laojiao Co., Ltd.
5. 34. Lease
(1) Accounting treatment of operating lease
a. The Company records rents of leased assets into current expense using straight line method in each
period of the lease term including rent-free period. Initial direct expenses incurred are recorded into
current expense. Contingent rents are recorded into current profit or loss when occur. When the lessor
bears the leasehold expenses which shall be borne by the Company, the expenses shall be deducted
from total rents and the residual rent is recognized into current profit or loss in each period of the lease
term.
b. The rents arising from leasing assets shall be recorded into rent revenue using straight line method in
each period of the lease term including rent-free period. Initial direct expenses incurred are recorded into
current expense. If the amount is large, it shall be capitalized and recorded into current income in
installment in the period of lease term according to the same recognition base of rent revenue. When the
lessee bears the leasehold expenses which shall be borne by the Company, the expenses shall be
deducted from total rents and the residual rent is amortized in each period of the lease term.
(2) Accounting treatment of finance lease
a. As the lessee, it recognizes the lower of fair value of lease asset and minimum lease payment at the
beginning day of the lease as the initial value of the asset leased in and the minimum lease payment as
long-term payable, the difference as unrealized finance expense. Unrealized finance expense is
amortized in the period during the lease term and recognized as current finance expenses using actual
effective rate method.
b. As the lessor, it recognizes the difference between the total of minimum lease amount received and
residual amount not guaranteed and the present value of that as unrealized finance income. It
recognizes unrealized finance income as rent revenue in the period of lease term when the Company
receives rent. The initial direct expense related to the lease transaction shall be recorded in the initial
recognition of finance lease receivable and be deducted from recognized income in the period of lease
term.
5. 35 Income tax expense
The Company’s income tax is calculated in the balance sheet liability method.
The Company recognized deferred tax assets when both of the following conditions are met:
(1) Temporary differences are very likely to reverse in foreseeable future;
(2) It is very likely in the future that the taxable income amount can be obtained and used to offset the
deductible temporary differences, which is capped at the taxable income amount that is very likely to
obtain.
On the balance sheet date, the current income tax liabilities (or assets) formed in the current period and
previous periods are measured at the expected income tax amount payable (or returnable) calculated
according to tax laws. For deferred tax assets and deferred tax liabilities, in accordance with tax law, they
shall be measured at the applicable tax rate during the period of expected recovery of such assets or
satisfaction of such liabilities.
163
2020 Annual Report of Luzhou Laojiao Co., Ltd.
On the balance sheet date, the Company reviews the carrying values of deferred tax assets and
deferred tax liabilities. The Company’s current income tax and deferred tax will be treated as income tax
expenses or income, except for income tax from business combinations or transactions or matters
recognized directly in owners’ equity.
5. 36 Changes in significant accounting policies and accounting estimates
5.36.1. Changes in significant accounting policies
√Applicable N/A
Content and reason of changes Approval procedures Note
On 5 July 2017, the Ministry of
Finance issued the Notice on
Revising and Issuing Accounting
Standards for Business
Enterprises No.14-Revenue
In the balance sheet, the tax-free
(CK[2017]No.22), and required
" Advance from customer " was
those enterprises both listed in
changed to "contractual
domestic and aboard and those
liabilities"; the value-added tax
enterprises overseas listed with
and output tax included in the "
International Financial Reporting
Approved on the 16th Meeting of Advance from customer " were
Standards or Accounting
the 9th Board of Directors changed to "Other current
Standards for Business
liabilities"; the change merely
Enterprises for preparation of
influenced the financial
financial statements to implement
statements, without impact on
it since 1 January 2018, required
total assets, net assets and net
other domestically listed
profit.
enterprises to implement it since
1 January 2020. The Company
starts to implement it since 1
January 2020 as required by
relevant laws and regulations.
Note 1: Pursuant to the connection regulation for old and new standards, the Company starts to disclose
financial statements as required by the new standards governing revenue since 2020 without retroactive
adjustment for comparative data of 2019. The changes in accounting policies caused no influence on
related financial indicators of 2019.
Note 2: According to the sales contract with the customers, if the Company is responsible for the
transportation, the Company will deliver the products to the location designated by the customers and
pays the related transportation expenses; the product sales belong to the performance obligation
performed at a certain point in time and the Company will transfer the control rights to the customers
when the products are delivered to the location designated by them. Before 1 January 2020, the
Company reported the transportation expenses as sales costs. From 1 January 2020, the Company
reported expenses as operating costs for transportation is a necessary activity for the company to
perform the contract.
164
2020 Annual Report of Luzhou Laojiao Co., Ltd.
There was no other change in significant accounting policies in the Reporting Period other than the
above changes.
5.36.2. Changes in significant accounting estimates
Applicable √ N/A
5.36.3. Adjustments to the financial statements at the beginning of the execution year of any new
standard governing revenue or leases from 2020
√Applicable N/A
Whether items of balance sheets at the beginning of the year need to be adjusted
√ Yes □ No
Consolidated balance sheet
Monetary Unit: CNY
Item 31 December 2019 1 January 2020 Adjusted
Current assets:
Cash and cash equivalents 9,753,666,526.78 9,753,666,526.78
Settlement reserves
Lending funds
Trading financial assets
Derivative financial assets
Notes receivables
Accounts receivables 18,293,914.23 18,293,914.23
Accounts receivables
2,393,797,259.80 2,393,797,259.80
financing
Prepayment 151,818,448.48 151,818,448.48
Premiums receivable
Reinsurance accounts
receivable
Reinsurance contract
reserve
Other receivables 159,753,421.64 159,753,421.64
Including：Interests
45,636,744.44 45,636,744.44
receivable
Dividends
receivable
Buying back the sale of
financial assets
165
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Inventories 3,641,235,092.33 3,641,235,092.33
Contract assets
Assets held for sale
Non-current assets due
within one year
Other current assets 195,174,048.57 195,174,048.57
Total current assets 16,313,738,711.83 16,313,738,711.83
Non-current assets:
Disbursement of loans and
advances
Investment in debt
obligations
Investment in other debt
obligations
Long-term receivables
Long-term equity
2,230,721,725.72 2,230,721,725.72
investments
Other equity instrument
352,395,255.78 352,395,255.78
investment
Other non-current financial
assets
Investment property
Fixed assets 1,518,865,397.91 1,518,865,397.91
Construction in progress 7,257,393,087.56 7,257,393,087.56
Productive biological
assets
Oil and gas assets
Right-to-use assets
Intangible assets 332,234,032.47 332,234,032.47
Development expenses
Goodwill
Long-term deferred
928,805.23 928,805.23
expenses
Deferred tax assets 676,152,614.07 676,152,614.07
Other non-current assets 237,539,447.75 237,539,447.75
Total non-current assets 12,606,230,366.49 12,606,230,366.49
Total assets 28,919,969,078.32 28,919,969,078.32
166
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Current liabilities:
Short-term loans
Borrowings from the
central bank
Loans from other banks
Trading financial liabilities
Derivative financial
liabilities
Notes payable
Accounts payable 1,868,623,958.02 1,868,623,958.02
Advance from customer 2,244,442,643.64 -2,244,442,643.64
Contract liabilities 1,986,232,428.00 1,986,232,428.00
Financial assets sold for
repurchase
Customers deposits and
deposits from banks and
other financial institutions
Customer brokerage
deposits
Securities underwriting
brokerage deposits
Employee benefits payable 342,025,687.49 342,025,687.49
Taxes payable 1,633,044,231.67 1,633,044,231.67
Other payable 698,942,399.37 698,942,399.37
Including：Interests
30,650,684.93 30,650,684.93
payable
Dividends
payable
Handling charges and
commissions payable
Reinsurance accounts
payable
Liabilities held for sale
Non-current liabilities due
within one year
Other current liabilities 258,210,215.64 258,210,215.64
Total current liabilities 6,787,078,920.19 6,787,078,920.19
167
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Non-current liabilities:
Insurance contract
reserves
Long-term loans
Bonds payable 2,490,883,676.39 2,490,883,676.39
Including: Preferred
shares
Perpetual bonds
Lease liabilities
Long-term payables
Long-term payroll
payables
Accrued liabilities
Deferred income 23,845,000.00 23,845,000.00
Deferred tax liabilities 63,430,453.64 63,430,453.64
Other non-current liabilities
Total non-current liabilities 2,578,159,130.03 2,578,159,130.03
Total liabilities 9,365,238,050.22 9,365,238,050.22
Owners' equity:
Share capital 1,464,752,476.00 1,464,752,476.00
Other equity instruments
Including: Preferred
shares
Perpetual bonds
Capital reserves 3,722,777,063.13 3,722,777,063.13
Less: Treasury stock
Other comprehensive
194,817,130.57 194,817,130.57
income
Special reserves
Surplus reserves 1,464,752,476.00 1,464,752,476.00
General risk reserve
Undistributed profits 12,559,746,579.91 12,559,746,579.91
Total equity attributable to
owners of the parent 19,406,845,725.61
company
Non-controlling interests 147,885,302.49 147,885,302.49
Total owners' equity 19,554,731,028.10 19,554,731,028.10
168
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Total liabilities and owners'
28,919,969,078.32 28,919,969,078.32
equity
Statement for adjustment
In accordance with the requirements of the new revenue standards, the Company's consolidated and
parent company's balance sheet adjusted the eligible tax-free advance from customer on 31 December
2019 to contractual liabilities on 1 January 2020, and adjusted the value-added tax and output tax
included to other current liabilities on 1 January 2020. Apart from this, there are no other adjustments,
which have no impact on the total assets, total liabilities and total net assets of the Company's
consolidated and the parent company's balance sheet at the beginning of the year.
Balance sheet of parent company
Monetary Unit: CNY
Item 31 December 2019 1 January 2020 Adjusted
Current assets:
Cash and cash equivalents 8,872,692,385.79 8,872,692,385.79
Trading financial assets
Derivative financial assets
Notes receivables
Accounts receivables 21,562.85 21,562.85
Accounts receivables
financing
Prepayment 11,682,593.27 11,682,593.27
Other receivables 5,850,481,480.50 5,850,481,480.50
Including: Interests
40,570,144.44 40,570,144.44
receivable
Dividends
receivable
Inventories 1,049,384.24 1,049,384.24
Contract assets
Assets held for sale
Non-current assets due
within one year
Other current assets 5,562,360.72 5,562,360.72
Total current assets 14,741,489,767.37
Non-current assets:
Investment in debt
obligations
169
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Investment in other debt
obligations
Long-term receivables
Long-term equity
5,636,681,853.83 5,636,681,853.83
investments
Other equity instrument
352,066,334.15 352,066,334.15
investment
Other non-current financial
assets
Investment property
Fixed assets 601,481,983.81 601,481,983.81
Construction in progress 967,953,263.55 967,953,263.55
Productive biological
assets
Oil and gas assets
Right-to-use assets
Intangible assets 297,830,285.02 297,830,285.02
Development expenses
Goodwill
Long-term deferred
777,834.15 777,834.15
expenses
Deferred tax assets 75,249,717.72 75,249,717.72
Other non-current assets
Total non-current assets 7,932,041,272.23 7,932,041,272.23
Total assets 22,673,531,039.60 22,673,531,039.60
Current liabilities:
Short-term loans
Trading financial liabilities
Derivative financial
liabilities
Notes payables
Accounts payable 87,652,671.29 87,652,671.29
Advance from customer 9,712,630.35 -9,712,630.35
Contract liabilities 8,595,248.10 8,595,248.10
Employee benefits payable 116,124,722.19 116,124,722.19
Taxes payable 82,399,599.18 82,399,599.18
170
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Other payables 1,099,598,588.83 1,099,598,588.83
Including：Interests
30,650,684.93 30,650,684.93
payable
Dividends
payable
Liabilities held for sale
Non-current liabilities due
within one year
Other current liabilities 1,117,382.25 1,117,382.25
Total current liabilities 1,395,488,211.84 1,395,488,211.84
Non-current liabilities:
Long-term loans
Bonds payable 2,490,883,676.39 2,490,883,676.39
Including: Preferred
shares
Perpetual
bonds
Lease liabilities
Long-term payables
Long-term payroll
payables
Accrued liabilities
Deferred income 2,380,000.00 2,380,000.00
Deferred tax liabilities 63,430,453.64 63,430,453.64
Other non-current liabilities
Total non-current liabilities 2,556,694,130.03 2,556,694,130.03
Total liabilities 3,952,182,341.87 3,952,182,341.87
Owners' equity
Share capital 1,464,752,476.00 1,464,752,476.00
Other equity instruments
Including: Preferred
shares
Perpetual bonds
Capital reserves 3,706,816,950.12 3,706,816,950.12
Less: Treasury stock
Other comprehensive 192,332,738.05 192,332,738.05
171
2020 Annual Report of Luzhou Laojiao Co., Ltd.
income
Special reserves
Surplus reserves 1,464,752,476.00 1,464,752,476.00
Undistributed profits 11,892,694,057.56 11,892,694,057.56
Total owners' equity 18,721,348,697.73 18,721,348,697.73
Total liabilities and owners'
22,673,531,039.60 22,673,531,039.60
equity
Statement for adjustment
In accordance with the requirements of the new revenue standards, the Company's consolidated and
parent company's balance sheet adjusted the eligible tax-free advance from customer on 31 December
2019 to contractual liabilities on 1 January 2020, and adjusted the value-added tax and output tax
included to other current liabilities on 1 January 2020. Apart from this, there are no other adjustments,
which have no impact on the total assets, total liabilities and total net assets of the Company's
consolidated and the parent company's balance sheet at the beginning of the year.
5.36.4. Retrospective restatement of previous comparative data due to the execution of any new
standard governing revenue or lease from 2020
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) Liquor tax price or ex-factory price 20%
Consumption tax (based on quantity) Quantity of liquor 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
2
Land use tax Land area CNY 5-18.00/m
Others According to national regulation
172
2020 Annual Report of Luzhou Laojiao Co., Ltd.
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 America)
21%-40%
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., Ltd. 9%
6.2. Tax preferences
(1) According to Announcement of the State Administration of Taxation on Corporate Income Tax
Questions Concerning the Further Implementation of the Western Development Strategy (State
Administration of Taxation Announcement No.12 of 2012), companies are located in the western region
whose primary business is listed in the Catalogue of Encouraged Industries in the Western Region, and
the annual primary business income accounting for over 70% of the total enterprise income. These
companies can 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 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
2020, 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
173
2020 Annual Report of Luzhou Laojiao Co., Ltd.
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.
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
Monetary Unit: CNY
Item Closing Balance Opening Balance
Cash 26,978.10 28,776.67
Bank deposit 11,616,532,676.06 9,744,243,225.66
Other cash and cash equivalents 8,310,686.44 9,394,524.45
Total 11,624,870,340.60 9,753,666,526.78
Including: Total deposit outbound 68,247,418.50 61,031,136.88
Total amount with restriction to
56,675,277.79 1,400,000.00
use due to mortgage, pledge or freeze
Other statements:
Note1: The deposit outbound is the balance of cash and cash equivalents of the outbound holding
subsidiary of the Company.
Note 2: The closing balance of other cash and cash equivalents is the travel service deposit of CNY
1,400,000.00 deposited by the Company's wholly-owned subsidiary, Luzhou Laojiao Tourism Culture
Co., Ltd., in the designated bank according to the regulations of the tourism bureau, and balance of CNY
6,910,686.44 deposited by the Company's holding subsidiary, Luzhou Laojiao Electronic Commerce Co.,
Ltd. on the third-party e-commerce platform.
Note 3: CNY 1,400,000.00 of the total amount of funds with limited use rights due to mortgage, pledge or
freezing is the travel service deposit with limited use rights in other cash and cash equivalents; CNY
55,275,277.79 is the fixed deposit interest accrued on the accrual basis.
Note 4: 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. Accounts receivable
7.2.1. Classification of accounts receivable
Monetary Unit: CNY
174
2020 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 Proportio Proportio value
Amount Amount Amount Amount
on on n n
Including:
Accounts
receivable tested 1,587,22 100.00 79,372.6 1,507,85 19,266,7 972,883. 18,293,91
5.00% 100.00% 5.05%
for impairment by 5.12 % 9 2.43 97.97 74 4.23
the portfolio
Including:
Accounts
receivable tested
for impairment on 1,587,22 100.00 79,372.6 1,507,85 19,266,7 972,883. 18,293,91
5.00% 100.00% 5.05%
the portfolio with 5.12 % 9 2.43 97.97 74 4.23
characteristics of
credit risk
1,587,22 100.00 79,372.6 1,507,85 19,266,7 972,883. 18,293,91
Total 1
5.00% 100.00% 5.05%
5.12 % 9 2.43 97.97 74 4.23
Note: 1. The closing book balance at the period-end decreased CNY 17,679,572.85 compared with the
period-begin, with a decrease by 91.76%, primarily driven by the influence of collection of (outbound)
payments for goods.
Accounts receivable tested for impairment on the portfolio:
Monetary Unit: CNY
Closing Balance
Name
Book balance Provision for bad debt Proportion
Risk portfolio 1,587,225.12 79,372.69 5.00%
Other portfolio
Total 1,587,225.12 79,372.69 --
Please refer to the relevant information of disclosure of provision for bad debt of other accounts
receivable if adopting the general mode of expected credit loss to withdraw provision for bad debt of
accounts receivable
□ Applicable √ N/A
Disclosure by aging
Monetary Unit: CNY
Aging Closing balance
175
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Within 1 year (including 1 year) 1,586,996.53
1-2 years 228.59
Total 1,587,225.12
The Company shall comply with the disclosure requirements of the Guidelines No. 14 of the Shenzhen
Stock Exchange on Industry Information Disclosure—Listed Companies Engaging in Business Related
to Food & Liquor and Wine Production.
7.2.2. Provision and recovery for bad and doubtful debt in the current period
Allowance of provision for bad debt:
Monetary Unit: CNY
Current Period
Opening
Type Reversal or Closing Balance
Balance Allowance Write-off Other
recovery
Provision
allowance by 972,883.74 893,511.05 79,372.69
risk portfolio
Total 972,883.74 893,511.05 79,372.69
Note: There is no significant provision in accounts receivable reversed or recovered in the reporting
period.
7.2.3. Top five entities with the largest balances of accounts receivable
Monetary Unit: CNY
Proportion to total closing Closing balance of provision
Company name Closing Balance
balance of accounts receivable for bad debt
BAIWAN WINES INC. 463,471.11 29.20% 23,173.56
PARK STREET
392,207.17 24.71% 19,610.36
IMPORTS, LLC
JIUXIAN NETWORK
TECHNOLOGY CO., 263,871.15 16.62% 13,193.56
LTD.
CHENGDU KUAIGOU
TECHNOLOGY CO., 168,365.90 10.61% 8,418.30
LTD.
TAI FUNG
154,903.45 9.76% 7,745.17
CASTELMOR LIMITED
Total 1,442,818.78 90.90%
176
2020 Annual Report of Luzhou Laojiao Co., Ltd.
7.3. Accounts receivable financing
Monetary Unit: CNY
Item Closing Balance Opening Balance
Bank acceptance bill 3,209,371,766.35 2,393,797,259.80
1
Total 3,209,371,766.35 2,393,797,259.80
Note: 1. The closing balance increased CNY 815,574,506.55 compared with opening balance, with an
increase by 34.07%, mainly due to the increase of bank acceptance bill collected with the expansion of
sales scale. 2. The business mode to manage notes receivable aims to collect contract cash flow as well
as to sell the financial assets, and thus the notes receivable is presented as accounts receivable
financing; due to the short term of notes receivable less than 1 year, and the sales time, sales price and
sale proportion cannot be estimated reliably, the face value is regarded as the fair value of accounts
receivable financing by the Company. 3. There was no allowance of provision for bad debt at the end of
the reporting period.
Changes in accounts receivable financing in the reporting period and fair value:
Applicable √ N/A
Please refer to the relevant information of disclosure of impairment provision of other accounts
receivable if adopting the general mode of expected credit loss to withdraw impairment provision of
accounts receivable financing.
Applicable √ N/A
Other statements:
(1) Account receivable financing pledge at the end of the year
Monetary Unit: CNY
Item Amount pledged at period-end
Bank acceptance bill 147,480,000.00
Subtotal 147,480,000.00
Note: The pledged bills at the end of the period are used to exchange large-value bills for small-value
bills in order to facilitate the payment to suppliers.
(2) There is CNY 7,799,019,751.90 as follows of accounts receivable financing that have been endorsed
to other parties by the Company but have not expired at the end of year:
Monetary Unit: CNY
Item Derecognition at period-end Not derecognition at period-end
Bank acceptance bill 7,799,019,751.90
Subtotal 7,799,019,751.90
Note: The acceptor of the bank acceptance bill is a commercial bank. The probability of not being paid
due is very low, and the possibility of being recourse is very low, so the confirmation has been
terminated.
177
2020 Annual Report of Luzhou Laojiao Co., Ltd.
(3) There are no accounts receivable financing transferred to accounts receivable due to the
non-performance of the agreements by the issuers.
(4) There are no accounts receivable financing actually written off during the reporting period.
7.4. Prepayment
7.4.1. Aging analysis
Monetary Unit: CNY
Closing Balance Opening Balance
Aging
Amount Proportion Amount Proportion
Within 1 year 72,436,550.81 96.99% 150,806,477.44 99.33%
1-2 years 2,042,638.57 2.73% 861,490.00 0.57%
2-3 years 206,348.00 0.28% 150,481.04 0.10%
1
Total 74,685,537.38 -- 151,818,448.48 --
Note: 1. The closing balance decreased by CNY 77,132,911.10 compared with opening balance, with a
decrease by 50.81%, mainly due to the decrease of prepayments with the decline of product promotion
activities affected by the COVID-19. 2. There is no significant prepayment whose aging is longer than 1
year.
7.4.2. Top five entities with the largest balances of prepayment
Monetary Unit: CNY
Company Name Closing Balance Proportion to the total closing
balance of prepayment
Shanghai Merlot Advertising Co., Ltd. 44,617,600.00 59.74%
Luzhou Power Supply Company of State Grid 8,810,160.95 11.80%
Sichuan Electric Power Company
Luzhou Western Gas Co., Ltd. 8,050,769.30 10.78%
Shanghai Endeavor Culture Development Co., 2,140,903.20 2.87%
Ltd.
GAOSHENG WINERY CO.,LTD.YANTAI 1,088,160.64 1.46%
Subtotal 64,707,594.09 86.64%
7.5 Other receivables
Monetary Unit: CNY
Item Closing Balance Opening Balance
Interest receivable 45,636,744.44
178
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Dividend receivable 1,407,900.00
Other receivables 125,625,031.42 114,116,677.20
Total 127,032,931.42 159,753,421.64
7.5.1. Interest receivable
7.5.1.1. Classification of interest receivable
Monetary Unit: CNY
Item Closing Balance Opening Balance
Fixed deposits 45,636,744.44
Total 45,636,744.44
7.5.2. Dividend receivable
7.5.2.1. Classification of dividend receivable
Monetary Unit: CNY
Item (investee) Closing Balance Opening Balance
Guotai Junan Securities Co., Ltd. 1,407,900.00
Total 1,407,900.00
7.5.3. Other receivables
7.5.3.1. Other receivables disclosed by nature
Monetary Unit: CNY
Nature Closing book balance Opening book balance
Intercourse funds 44,472,270.26 28,928,320.63
Petty cash 1,023,683.10 2,184,482.07
Saving deposits involving contract
285,044,911.68 287,400,297.52
disputes
Total 330,540,865.04 318,513,100.22
7.5.3.2. Allowance of provision for bad debt
Monetary Unit: CNY
First stage Second stage Third stage
Provision for bad debt Total
Expected credit Expected loss in the Expected loss in the
179
2020 Annual Report of Luzhou Laojiao Co., Ltd.
loss of the next 12 duration (credit duration (credit
months impairment not occurred) impairment occurred)
Balance of 1 January
4,396,423.02 200,000,000.00 204,396,423.02
2020
Balance of 1 January
2020 in the current —— —— —— ——
period
Allowance of the
519,776.25 519,776.25
current period
Verification of the
365.65 365.65
current period
Balance of 31
4,915,833.62 200,000,000.00 204,915,833.62
December 2020
Changes of book balance with significant amount changed of loss provision in the current period
Applicable √ N/A
Disclosure by aging
Monetary Unit: CNY
Aging Book balance
Within 1 year (including 1 year) 35,484,670.99
1-2 years 6,428,287.87
2-3 years 656,740.54
Over 3 years 287,971,165.64
3-4 years 344,000.00
4-5 years 1,759,653.96
Over 5 years 285,867,511.68
Total 330,540,865.04
7.5.2.3. Provision and recovery for bad and doubtful other receivables in the current period
Allowance of provision for bad debt:
Monetary Unit: CNY
Current Period
Opening
Type Reversal or Closing Balance
Balance Allowance Write-off Other
recovery
Other
200,000,000
receivables 200,000,000.00
.00
tested for
180
2020 Annual Report of Luzhou Laojiao Co., Ltd.
impairment
individually
Note1
Other
receivables
4,396,423.0
tested for 519,776.25 365.65 4,915,833.62
2
impairment by
the portfolio
204,396,423
Total 519,776.25 365.65 204,915,833.62
.02
Note 1: In the 2014 Annual Report, the Company disclosed the information about 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. 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 2020, of the deposits involved in contract disputes, the
amount that was not recovered was CNY 285,044,911.68. Related attorneys of W&H Law Firm Chengdu
produced the Legal Opinions on the Allowance of Provision for Bad Debt of Luzhou Laojiao Co., Ltd. for
Abnormal Deposits in Three Places Including Changsha and Nanyang on 10 March 2021. According to
the opinions, “Whereas during the period from the issue of previous legal opinions till this production of
legal opinions on the allowance proportion of provision for bad debt, there is no matter that occurred and
affected or changed the provision for bad debt, and thus the judgment on the allowance of provision for
bad debt at CNY 200 million shall remain”. Refer to Note 12.2. for details.
Note 2: There is no provision for bad debt with significant amount in other receivables reversed or
recovered.
7.5.2.4. Other receivables actually written off during the reporting period
Monetary Unit: CNY
Item Written off amount
Other receivables actually written off 365.65
Statements for other receivables written off:
There is no other receivables written off with significant amount.
7.5.2.5. Top five entities with the largest balances of the other receivables
Monetary Unit: CNY
Provisioning
Proportion in total
Company Name Nature Closing Balance Aging amount at period
receivables
end
Agricultural Bank Saving deposits
285,044,911.68 Over 5 years 86.24% 200,000,000.00
of China Changsha involving contract
181
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Yingxin disputes
Sub-branch,
Industrial and
Commercial Bank
of China Nanyang
Zhongzhou
Sub-branch and
another bank
Beijing Jingdong
Century
Security deposit,
Information 8,266,786.75 Within 1 year 2.50% 413,339.34
etc.
Technology Co.,
Ltd.
Zhejiang Tmall
Security deposit,
Technology 5,292,406.71 Within 1 year 1.60% 264,620.34
etc.
Co.,Ltd.
Housing and
Urban-Rural
Development Within 1 year, 1-2
Security deposit 3,959,601.23 1.20% 350,626.57
Bureau of years
Longmatan
District, Luzhou
CTS Luzhou
Laojiao Cultural
Tourism Security deposit 3,268,472.46 Within 1 year 0.99% 163,423.62
Development Co.,
Ltd.
Total -- 305,832,178.83 -- 92.52% 201,192,009.87
7.6 Inventories
Whether the Company needs to comply with the disclosure requirements of real estate industry
No
7.6.1. Categories of Inventories
Monetary Unit: CNY
Closing Balance Opening Balance
Provision for Provision for
Category stock stock
Book Balance Book Value Book Balance Book Value
obsolescence or obsolescence or
impairment impairment
182
2020 Annual Report of Luzhou Laojiao Co., Ltd.
provision of provision of
contract contract
performance performance
costs costs
Raw materials 92,033,654.20 92,033,654.20 59,935,022.20 59,935,022.20
Goods in
454,404,230.07 454,404,230.07 201,122,739.38 201,122,739.38
progress
1,136,393,394.7 1,136,393,394.7
Finished goods 997,109,606.41 997,109,606.41
3 3
Revolving
79,396.01 79,396.01 18,778,952.72 18,778,952.72
materials
Goods in transit 27,887,027.65 27,887,027.65 110,174,419.64 110,174,419.64
Self-made
3,124,149,516.9 3,124,149,516.9 2,114,830,563.6 2,114,830,563.6
semi-finished
1 1 6 6
goods
4,695,663,431.2 4,695,663,431.2 3,641,235,092.3 3,641,235,092.3
Total 1
5 5 3 3
Note: 1. The closing balance increased CNY 1,054,428,338.92 compared with opening balance, with an
increase by 28.96%, mainly due to the remarkable increase in the output of raw liquor in the self-made
semi-finished goods because some constructions of the technical renovation project of brewing were put
into production successively in the current period.
The Company shall comply with the disclosure requirements of the Guidelines No. 14 of the Shenzhen
Stock Exchange on Industry Information Disclosure—Listed Companies Engaging in Business Related
to Food & Liquor and Wine Production.
7.7. Other current assets
Monetary Unit: CNY
Item Closing Balance Opening Balance
Value-added tax 67,752,538.61 112,912,411.46
Corporate income tax 83,493,943.79 78,049,453.69
Other taxes 5,318,941.78 4,212,183.42
Total 156,565,424.18 195,174,048.57
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.
7.8. Long-term equity investments
Monetary Unit: CNY
183
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Changes in current period Closing
Gain or Adjustm Balance
Opening Closing
loss ents of Cash Provision of
Balance Other Balance
Investee Decreas recogniz other divided for provision
(book Increase changes Other (book
e ed under compreh or profit impairme for
value) in equity value)
equity ensive declared nt impairme
method income nt
1. Joint Ventures
2. Associate
Huaxi
Securitie 2,209,73 197,511, -2,965,2 20,735,1 2,383,55 2,567,09
s Co., 8,981.55 851.10 93.21 66.94 0,372.50 8.80
Ltd.
Sichuan
Develop
ment
12,982,7 -6,128,2 6,854,47
Wine
44.17 72.50 1.67
Investme
nt Co.,
Ltd.
Sichuan
Tongnian
g Liquor
Industry
Technolo
8,000,00 8,009,89
gy 9,898.80
0.00 8.80
Researc
h
Institute
Co., Ltd.
Note
CTS
Luzhou
Laojiao
Cultural 80,000,0 -747,571 79,252,4
Tourism 00.00 .70 28.30
Develop
ment
Co., Ltd.
2,230,72 80,000,0 190,645, -2,965,2 20,735,1 2,477,66 2,567,09
Subtotal
1,725.72 00.00 905.70 93.21 66.94 7,171.27 8.80
184
2020 Annual Report of Luzhou Laojiao Co., Ltd.
2,230,72 80,000,0 190,645, -2,965,2 20,735,1 2,477,66 2,567,09
Total
1,725.72 00.00 905.70 93.21 66.94 7,171.27 8.80
Other statements
Note: On 7 August 2020, the 21st Meeting of the ninth Board of Directors of the Company reviewed and
approved the Proposal on Participating in the Investment in the Establishment of CTS Luzhou Laojiao
Cultural Tourism Development Co., Ltd., agreeing to the Company's cooperation with Hong Kong China
Travel International Investment Co., Ltd. (hereinafter referred to as "Hong Kong China Travel") to fund
the establishment of CTS Luzhou Laojiao Cultural Tourism Development Co., Ltd. Specifically, Hong
Kong China Travel will hold 60% of the shares and the Company will hold 40%, which has a significant
impact and is calculated according to the equity method.
7.9. Other equity instrument investment
Monetary Unit: CNY
Item Closing Balance Opening Balance
North Chemical Industries Co.,Ltd. 11,460,858.15 11,757,933.60
Luzhou Bank Co., Ltd. 95,561,825.55 89,076,363.20
Guotai Junan Securities Co., Ltd. 206,450,757.39 217,756,674.52
Guotai Junan Investment Management
22,611,834.24 22,611,834.24
Co., Ltd.
Guojiu Big Data Co., Ltd. 10,000,000.00 10,000,000.00
Sichuan China Liquor Golden Triangle
Brand Operation Development Co.,
1,075,124.09 1,192,450.22
Ltd. and other equity instrument
investments
Total 347,160,399.42 352,395,255.78
Categories of non-trading equity instrument investment in the current period:
Monetary Unit: CNY
Reason for
assigning to
Amount of other Reason of other
measure at fair
comprehensive comprehensive
Recognized value and
Accumulative Accumulative income income
Item dividends changes
gains losses transferred to transferred to
income recorded into
retained retained
other
earnings earnings
comprehensive
income
North Chemical According to the
Industries 85,995.53 10,430,858.15 mode of
Co.,Ltd. managing
185
2020 Annual Report of Luzhou Laojiao Co., Ltd.
assets by
management
layer
According to the
mode of
Luzhou Bank managing
4,700,800.00 44,441,825.55
Co., Ltd. assets by
management
layer
According to the
mode of
Guotai Junan
managing
Securities Co., 4,593,028.83 193,731,600.63
assets by
Ltd.
management
layer
According to the
Guotai Junan mode of
Investment managing
Management assets by
Co., Ltd. management
layer
According to the
mode of
Guojiu Big Data managing
Co., Ltd. assets by
management
layer
According to the
Shenzhen mode of
Xingangfeng managing
2,354,000.00
Development assets by
Co., Ltd. management
layer
According to the
mode of
Sichuan
managing
Deyang Jintai 2,000,000.00
assets by
Hotel
management
layer
Hainan Huitong According to the
International 1,000,000.00 mode of
Trust Company managing
186
2020 Annual Report of Luzhou Laojiao Co., Ltd.
assets by
management
layer
Sichuan China
Liquor Golden
According to the
Triangle Brand
mode of
Operation
managing
Development 652,723.91
assets by
Co., Ltd. and
management
other equity
layer
instrument
investments
Other statements:
On 19 June 2020, the former invested unit “Sichuan Nitrocell Co., Ltd.” was renamed “North Chemical
Industries Co.,Ltd.”.
7.10. Fixed assets
Monetary Unit: CNY
Item Closing Balance Opening Balance
Fixed assets 6,885,609,781.96 1,516,871,720.00
Disposal of fixed assets 1,498,392.76 1,993,677.91
Total 6,887,108,174.72 1,518,865,397.91
7.10.1. Details of fixed assets
Monetary Unit: CNY
Buildings and Specialized General Transportation Other
Item Total
constructions equipment equipment equipment equipment
I. Original cost:
1.Opening 1,268,681,845.3 3,113,936,136.2
717,723,621.29 367,265,484.93 37,843,023.14 722,422,161.53
balance 9 8
2.Increase in 4,461,793,414.1 5,700,560,596.6
220,061,030.95 343,383,646.68 6,776,836.99 668,545,667.84
current period 4 0
(1) External
94,031,422.50 304,042,676.64 14,209,734.34 6,184,778.76 36,220,971.47 454,689,583.71
purchase
(2) Transfer
from 4,380,287,925.3 5,245,957,173.0
248,940,402.68 340,510,489.54 592,058.23 275,626,297.25
construction in 0 0
progress
187
2020 Annual Report of Luzhou Laojiao Co., Ltd.
(3) Increase
from business
combination
(4) Transfer
from intangible 141,509.44 141,509.44
assets
(5) Adjustment -332,922,048.3
-12,525,933.66 -11,108,907.65 356,556,889.68
to categories 7
(6) Changes of
-227,669.55 -227,669.55
exchange rates
3.Decrease in
102,294,373.69 8,248,720.40 4,265,130.24 3,164,862.89 20,522,612.47 138,495,699.69
current period
(1) Disposal or
21,167,964.79 6,529,381.44 2,981,599.96 3,164,862.89 16,347,605.06 50,191,414.14
retirement
(2) Transfer of
reconstruction
and extension to 81,126,408.90 1,719,338.96 1,283,530.28 3,023,999.00 87,153,277.14
construction in
progress
(3) Transfer to
intangible 1,151,008.41 1,151,008.41
assets
4.Closing 5,628,180,885.8 1,370,445,216.9 8,676,001,033.1
929,535,931.84 706,384,001.37 41,454,997.24
Balance 4 0 9
II. Accumulated
depreciation
1.Opening 1,596,441,476.2
595,935,621.65 500,627,398.98 198,415,362.10 28,328,811.20 273,134,282.28
Balance 1
2.Increase in -236,073,741.6
78,958,983.61 54,823,716.31 2,217,288.33 386,639,791.09 286,566,037.74
current period 0
(1) Provision 88,019,782.94 75,120,266.37 65,426,474.41 2,217,288.33 55,901,875.52 286,685,687.57
(2) Transfer
from intangible 45,990.56 45,990.56
assets
(3) Adjustment
-9,060,799.33 -311,194,007.97 -10,437,117.71 330,691,925.01
to categories
(4) Changes of
-165,640.39 -165,640.39
exchange rates
3.Decrease in 67,382,121.87 7,734,960.18 3,711,484.51 2,888,739.46 11,521,896.77 93,239,202.79
188
2020 Annual Report of Luzhou Laojiao Co., Ltd.
current period
(1) Disposal or
10,599,620.37 6,101,588.17 2,634,388.70 2,888,739.46 7,741,924.69 29,966,261.39
retirement
(2) Transfer of
reconstruction
and extension to 56,782,501.50 1,633,372.01 1,077,095.81 2,872,799.04 62,365,768.36
construction in
progress
(3) Transfer to
intangible 907,173.04 907,173.04
assets
4.Closing 1,789,768,311.1
607,512,483.39 256,818,697.20 249,527,593.90 27,657,360.07 648,252,176.60
Balance 6
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 Book 5,020,045,462.3 6,885,609,781.9
672,717,234.64 456,856,407.47 13,797,637.17 722,193,040.30 1
Value 8 6
2.Opening Book 1,516,871,720.0
672,123,283.67 217,096,222.31 168,850,122.83 9,514,211.94 449,287,879.25
Value 0
Note: 1. The closing book value increased CNY 5,368,738,061.96 compared with the opening book
value, with an increase by 353.93%, primarily driven by the influence of successive transfer of the
technical renovation project of brewing into fixed assets in the current period. 2 The adjustment to the
category means that the Company cleaned up and split all fixed assets during the current period, and
adjusted the major categories of fixed assets.
189
2020 Annual Report of Luzhou Laojiao Co., Ltd.
7.10.2. Fixed assets leased out through operating lease
Monetary Unit: CNY
Item Closing book value
Buildings and constructions 61,679,338.66
Subtotal 61,679,338.66
7.10.3. Fixed assets without certification of right
Monetary Unit: CNY
Reason for not having the certification
Item Book value
of right
The property ownership certificate has
not been processed yet for the
Buildings of parent company 26,587,034.54 historical reasons, and it plans to be
processed after gradually improving
procedures.
Buildings of brewing company 3,829,667,345.79 In procedure
Subtotal 3,856,254,380.33
7.10.4. Disposal of fixed assets
Monetary Unit: CNY
Item Closing Balance Opening Balance
Disposal and retirement of assets 1,498,392.76 1,993,677.91
Total 1,498,392.76 1,993,677.91
7.11. Construction in progress
Monetary Unit: CNY
Item Closing Balance Opening Balance
Construction in progress 2,012,129,880.15 7,257,393,087.56
Total 2,012,129,880.15 7,257,393,087.56
7.11.1. Details of the construction in progress
Monetary Unit: CNY
Closing Balance Opening Balance
Item
Book balance Provision for Book value Book balance Provision for Book value
190
2020 Annual Report of Luzhou Laojiao Co., Ltd.
impairment impairment
Technical
renovation
6,072,403,009.7 6,072,403,009.7
project of 968,634,809.01 968,634,809.01
1 1
brewing of
Luzhou Laojiao
Improvement
and technical
renovation
project of 242,719,982.63 242,719,982.63 11,346,483.95 11,346,483.95
Luzhou Laojiao
production
supporting
Marketing
network
command
center office
5,473,631.57 5,473,631.57 220,539,935.89 220,539,935.89
area
reconstruction
and expansion
project
New model
application
project of
intelligent 16,862,599.30 16,862,599.30 189,417,456.65 189,417,456.65
production
workshop of
solid state liquor
Technical
renovation of
Luzhou Laojiao
206,167,904.88 206,167,904.88 8,079,135.92 8,079,135.92
Intelligent
packaging
center
Guojiao Culture
Park Qiankun
Wine Castle 305,548,667.25 305,548,667.25 229,262,370.65 229,262,370.65
Cultural Tourism
project
Other projects 266,722,285.51 266,722,285.51 526,344,694.79 526,344,694.79
2,012,129,880.1 2,012,129,880.1 7,257,393,087.5 7,257,393,087.5
Total 1
5 5 6 6
191
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Note: 1.The closing balance decreased CNY 5,245,263,207.41 compared with the opening balance, with
a decrease by 72.27%, because of the gradual transfer of the technical renovation project of brewing to
fixed assets.
7.11.2. Significant changes in construction in progress
Monetary Unit: CNY
Proporti Includin
Capitali
on of Accumu g:
Increas Transfer zation
Openin Other accumul lative Capitali
e in into Closing Progres rate for Source
Item Budget g decreas ative capitaliz zed
current fixed Balance s (%) the of funds
Balance es project ed interest
period assets period
input in interest for the
(%)
budget period
Technic
al
renovati
Capital
on
8,877,2 6,072,4 1,359,7 4,629,0 1,834,4 raised
project 968,634 87,113, 75,298,
76,500. 03,009. 20,629. 60,206. 28,623. 86.99% 96.00% 3.67% and
of ,809.01 979.62 862.12
00 71 11 07 74 self-rais
brewing
ed
of
Luzhou
Laojiao
Improve
ment
and
technica
l
renovati
on
888,544 11,346, 231,373 242,719
project 27.32% 35.00% Other
,100.00 483.95 ,498.68 ,982.63
of
Luzhou
Laojiao
producti
on
supporti
ng
Marketi
ng 271,500 220,539 21,800, 235,057 1,808,4 5,473,6
89.26% 99.00% Other
network ,000.00 ,935.89 049.75 ,951.29 02.78 31.57
comma
192
2020 Annual Report of Luzhou Laojiao Co., Ltd.
nd
center
office
area
reconstr
uction
and
expansi
on
project
New
model
applicati
on
project
of
intellige
245,100 189,417 45,833, 218,175 212,512 16,862,
nt 95.98% 95.00% Other
,000.00 ,456.65 548.29 ,892.97 .67 599.30
producti
on
worksho
p of
solid
state
liquor
Technic
al
renovati
on of
Luzhou 1,577,9
8,079,1 198,088 206,167
Laojiao 13,400. 13.07% 25.00% Other
35.92 ,768.96 ,904.88
Intellige 00
nt
packagi
ng
center
Guojiao
Culture
Park
337,885 229,262 76,286, 305,548
Qiankun 90.43% 83.00% Other
,813.44 ,370.65 296.60 ,667.25
Wine
Castle
Cultural
193
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Tourism
project
12,198, 6,731,0 1,933,1 5,082,2 1,836,4 1,745,4
87,113, 75,298,
Total 219,813 48,392. 02,791. 94,050. 49,539. 07,594. -- -- 3.67% --
1
979.62 862.12
.44 77 39 33 19 64
Note: 1. Other decreases refer to land use rights and low priced and easily worn articles transferred to
intangible assets.
7.12. Intangible assets
7.12.1. Details of intangible assets
Monetary Unit: CNY
No-patent right Computer
Item Land use right Patent right Trademark right Total
technology software
I. Original cost
1. Opening
403,541,637.89 1,700,050.44 40,655,564.69 1,890,746.08 447,787,999.10
Balance
2. Increase in 2,339,890,616.4 2,347,442,976.3
7,552,359.89
current period 5 4
(1) Acquired 111,912,710.15 786,123.87 112,698,834.02
(2) Internal
developed
(3) Business
combination
(4) Transferred
from 2,227,977,906.3 2,233,593,133.9
5,615,227.61
construction in 0 1
progress
(5) Transferred
from fixed 1,151,008.41 1,151,008.41
assets
3. Decrease in
141,509.44 141,509.44
current period
(1) Disposal
(2) Transferred
141,509.44 141,509.44
to fixed assets
4. Closing 2,743,432,254.3 2,795,089,466.0
1,700,050.44 48,066,415.14 1,890,746.08
Balance 4 0
II. Accumulated
194
2020 Annual Report of Luzhou Laojiao Co., Ltd.
amortization
1. Opening
92,646,292.87 440,593.96 20,838,355.97 1,628,723.83 115,553,966.63
Balance
2. Increase in
18,062,126.91 130,005.04 4,184,654.05 86,678.56 22,463,464.56
current period
(1) Provision 18,062,126.91 130,005.04 3,277,481.01 86,678.56 21,556,291.52
(2) Transferred
from fixed 907,173.04 907,173.04
assets
3. Decrease in
45,990.56 45,990.56
current period
(1) Disposal
(2) Transferred
45,990.56 45,990.56
to fixed assets
4. Closing
110,708,419.78 570,599.00 24,977,019.46 1,715,402.39 137,971,440.63
Balance
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 2,632,723,834.5 2,657,118,025.3
1,129,451.44 23,089,395.68 175,343.69 1
Value 6 7
2. Opening
310,895,345.02 1,259,456.48 19,817,208.72 262,022.25 332,234,032.47
Book Value
Note: 1. The closing balance increased CNY 2,324,883,992.90 compared with the opening balance, with
an increase by 699.77%, primarily driven by the impact of increase in land value with CNY
2,339,890,616.45 in the current period.
195
2020 Annual Report of Luzhou Laojiao Co., Ltd.
There is no proportion of intangible assets formed by internal development to the balance of intangible
assets at the period-end.
7.13. Long-term deferred expense
Monetary Unit: CNY
Item Opening Balance Increase Amortization Other decrease Closing Balance
Improvement
expense of rented 928,805.23 2,048,427.67 671,330.69 2,305,902.21
fixed assets
Total 928,805.23 2,048,427.67 671,330.69 2,305,902.21
7.14. Deferred tax assets/ deferred tax liabilities
7.14.1. Deferred tax assets before offset
Monetary Unit: CNY
Closing Balance Opening Balance
Item Deductible temporary Deductible temporary
Deferred tax assets Deferred tax assets
differences differences
Provision for asset
208,184,340.96 52,032,763.16 208,551,338.49 52,073,505.61
impairment
Unrealized profits from
2,210,592,352.66 552,648,088.16 2,194,391,801.31 548,597,950.33
internal transactions
Deductible losses 11,342,715.00 2,835,678.76 4,745,206.42 1,186,301.61
Impact from salary 441,020,431.90 108,714,676.83 269,597,906.46 66,865,466.60
Impact from deferred
29,739,000.00 7,434,750.00 23,845,000.00 5,961,250.00
earnings
Impact from fixed
260,745.17 43,022.95 277,518.07 45,790.48
assets depreciation
Impact from fair value
changes of other
6,006,723.91 1,501,680.98 5,689,397.78 1,422,349.44
equity instrument
investment
Total 2,907,146,309.60 725,210,660.84 2,707,098,168.53 676,152,614.07
7.14.2. Deferred tax liabilities before offset
Monetary Unit: CNY
Item Closing Balance Opening Balance
196
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Taxable temporary Taxable temporary
Deferred tax liabilities Deferred tax liabilities
differences differences
Fair value changes of
other equity instrument 248,604,284.33 62,151,071.11 253,721,814.56 63,430,453.64
investment
Total 248,604,284.33 62,151,071.11 253,721,814.56 63,430,453.64
7.14.3. Details of unrecognized deferred tax assets
Monetary Unit: CNY
Item Closing Balance Opening Balance
Deductible losses 123,969,302.33 16,684,718.93
Impact from employee benefits payable 74,816.40 3,997,637.66
Impact from provision for impairment of
8,007.14
assets
Impact from fair value changes of other
200,000.00
equity instrument investment
Total 124,044,118.73 20,890,363.73
7.14.4. Deductible losses from unrecognized deferred tax assets will due on the following years
Monetary Unit: CNY
Year Closing Amount Opening Amount Notes
2020 1,320,354.35
2021 2,942,475.67
2022 668,388.33
2023 535,737.90 760,000.23
2024 11,691,604.41 10,993,500.35
2025 111,741,960.02
Total 123,969,302.33 16,684,718.93 --
7.15. Other non-current assets
Monetary Unit: CNY
Closing Balance Opening Balance
Item Book Provision for Book Provision for
Book value Book value
balance impairment balance impairment
Prepaid equipment and land expense 10,806,325. 10,806,325. 237,539,447 237,539,447
197
2020 Annual Report of Luzhou Laojiao Co., Ltd.
86 86 .75 .75
10,806,325. 10,806,325. 237,539,447 237,539,447
Total
86 86 .75 .75
Other statements:
The closing balance decreased CNY 226,733,121.89 compared with the opening balance, with a
decrease by 95.45%, mainly due to the impact of decrease in the new prepayment on construction and
payment on land in the current period in the Brewing Company, a Company's subsidiary.
7.16. Notes payable
Monetary Unit: CNY
Category Closing Balance Opening Balance
Bank acceptance bill 121,285,117.60
Total 121,285,117.60
The total amount of notes payable due but unpaid was CNY 0.00.
7.17. Accounts payable
7.17.1. Presentation of accounts payable
Monetary Unit: CNY
Category Closing Balance Opening Balance
Materials and service expense 845,025,160.84 656,206,916.53
Engineering equipment expense 1,759,264,038.93 1,212,417,041.49
1
Total 2,604,289,199.77 1,868,623,958.02
Note: 1. The closing balance increased CNY 735,665,241.75 compared with the opening balance, with
an increase by 39.37%, mainly due to the successive investment in brewing technical renovation project
and the increase in engineering equipment expense payable.
7.18. Contract liabilities
Monetary Unit: CNY
Category Closing Balance Opening Balance
Within 1 year 1,637,685,488.79 1,937,676,495.80
1-2 years 15,504,524.56 18,409,619.38
2-3 years 14,385,601.53 12,527,258.74
Over 3 years 11,261,552.06 17,619,054.08
1
Total 1,678,837,166.94 1,986,232,428.00
Note: 1. In accordance with the requirements of the new revenue standards, the tax-free “Advance from
198
2020 Annual Report of Luzhou Laojiao Co., Ltd.
customer " was changed to "contractual liabilities"; the value-added tax and output tax included in the
"Advance from customer" were changed to "other current liabilities". 2. There is no change in the book
value of contract liabilities during the current period.
7.19. Employee benefits payable
7.19.1. Employee benefits payable shown as follows
Monetary Unit: CNY
Increase in current Decrease in current
Item Opening Balance Closing Balance
period period
1. Short-term benefits 287,224,789.36 862,764,220.20 710,732,075.20 439,256,934.36
2. Post-employment
benefits- defined 54,791,926.60 81,938,387.10 70,973,592.40 65,756,721.30
contribution plans
3. Termination benefits 8,971.53 8,971.53
1
Total 342,025,687.49 944,702,607.30 781,705,667.60 505,022,627.19
Note: 1. The closing balance increased CNY 162,996,939.70 compared with the opening balance, with
an increase by 47.66%, mainly due to the performance growth, increase in employee benefits and the
impact of unpaid performance salary including year-end bonus.
7.19.2. Short-term employee benefits payable shown as follows
Monetary Unit: CNY
Increase in current Decrease in current
Item Opening Balance Closing Balance
period period
1. Wages, bonuses,
199,313,121.72 729,453,573.08 566,476,766.62 362,289,928.18
allowances and grants
2. Employees’ welfare 28,526,744.21 28,526,744.21
3. Social insurance
19,481,524.27 25,107,629.83 29,338,817.87 15,250,336.23
premiums
Including: Medical
14,322,591.60 22,324,674.65 25,218,437.76 11,428,828.49
insurance premium
Work-related injury
2,307,307.70 897,677.15 1,169,114.55 2,035,870.30
insurance
Maternity insurance
2,851,624.97 1,863,358.03 2,930,025.56 1,784,957.44
premium
Other insurance
21,920.00 21,240.00 680.00
premium
4. Housing funds 7,643,514.06 59,235,793.41 62,374,658.88 4,504,648.59
199
2020 Annual Report of Luzhou Laojiao Co., Ltd.
5. Labor union
expenditures and
60,786,629.31 20,440,479.67 24,015,087.62 57,212,021.36
employee education
funds
Total 287,224,789.36 862,764,220.20 710,732,075.20 439,256,934.36
7.19.3. Defined contribution plan shown as follows
Monetary Unit: CNY
Increase in current Decrease in current
Item Opening Balance Closing Balance
period period
1. Basic endowment
40,648,126.70 42,120,374.45 37,903,552.94 44,864,948.21
insurance premium
2. Unemployment
7,696,125.09 958,664.44 1,266,687.27 7,388,102.26
insurance premium
3. Enterprise annuity 6,447,674.81 38,859,348.21 31,803,352.19 13,503,670.83
Total 54,791,926.60 81,938,387.10 70,973,592.40 65,756,721.30
7.20. Taxes payable
Monetary Unit: CNY
Item Closing Balance Opening Balance
Value-added tax 244,763,614.30 130,301,346.24
Consumption tax 1,059,445,349.23 706,805,251.73
Enterprise income tax 606,140,406.79 663,458,294.52
Individual income tax 5,265,751.31 24,337,261.47
Urban maintenance and construction
72,389,068.64 56,353,741.57
tax
Education surcharge 31,023,067.68 24,151,666.39
Local education surcharge 20,682,045.08 16,101,110.87
Property tax 337,763.14 1,017,585.02
Stamp duty 5,351,912.65 438,646.53
Land use tax 616,030.55 9,891,132.70
Others 12,201.76 188,194.63
Total 2,046,027,211.13 1,633,044,231.67
7.21. Other payables
Monetary Unit: CNY
200
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Item Closing Balance Opening Balance
Interest payable 30,650,684.93
Other payables 501,623,924.54 668,291,714.44
Total 501,623,924.54 698,942,399.37
7.21.1. Interest payable
Monetary Unit: CNY
Item Closing Balance Opening Balance
Interest of corporate bonds 30,650,684.93
Total 30,650,684.93
7.21.2. Other payables
7.21.2.1. Categories by nature
Monetary Unit: CNY
Item Closing Balance Opening Balance
Security deposit 485,228,527.19 637,133,029.48
Intercourse funds 8,599,977.98 5,009,860.11
Others 7,795,419.37 26,148,824.85
Total 501,623,924.54 668,291,714.44
7.22. Non-current liabilities due within one year
Monetary Unit: CNY
Item Closing Balance Opening Balance
Bonds payable due within one year 72,219,178.08
Total 72,219,178.08
7.23. Other current liabilities
Monetary Unit: CNY
Item Closing Balance Opening Balance
Output VAT to be transferred 218,267,353.36 258,210,215.64
Total 218,267,353.36 258,210,215.64
201
2020 Annual Report of Luzhou Laojiao Co., Ltd.
7.24. Bonds payable
7.24.1. Bonds payable
Monetary Unit: CNY
Item Closing Balance Opening Balance
Corporate bonds in 2019 (Phase I) 2,492,799,107.31 2,490,883,676.39
Corporate bonds in 2020 (Phase I) 1,495,072,992.71
Total 3,987,872,100.02 2,490,883,676.39
7.24.2. Increase/decrease of bonds payable (excluding other financial instrument classified as
financial liabilities such as preferred shares and perpetual bonds)
Monetary Unit: CNY
Amortiza
Withdra
Issued in tion of Repaym
wal of
Bond Par Issuing Issuing Opening the premium ent in the Closing
Duration interest
name value date amount Balance current and reporting Balance
by par
period depreciat period
value
ion
Corporat
27
e bonds 2,500,00 2,490,00 2,490,88 89,500,0 1,915,43 2,492,79
August 3+2
in 2019 0,000.00 0,000.00 3,676.39 00.00 0.92 9,107.31
2019
(Phase I)
Corporat
16
e bonds 1,500,00 1,494,00 1,494,00 41,568,4 1,072,99 1,495,07
March 5
in 2020 0,000.00 0,000.00 0,000.00 93.15 2.71 2,992.71
2020
(Phase I)
3,987,87
3,984,00 2,490,88 1,494,00 131,068, 2,988,42
Total -- -- -- 2,100.02
0,000.00 3,676.39 0,000.00 493.15 3.63 1
Note: 1. On 18 July 2019, the Company obtained approval from CSRC with the document “ZJXK [2019]
No. 1312” for public issue of corporate bonds capped at CNY 4 billion (inclusive of CNY 4 billion) to
eligible investors (hereinafter referred to as “the bonds”). The bonds would be issued in phases without
guarantee. The Company’s public issue of corporate bonds (Phase I) to eligible investors in 2019 (Short
name was “19 Laojiao 01” and the code was “112959”) started on 27 August 2019 and ended on 28
August 2019; the final amount actually issued was CNY 2.5 billion and the final stated interest rate was
3.58%. The term of the bonds is five years. Meanwhile, the Company’s public issue of corporate bonds
to eligible investor in 2020 (Phase I) (short name was “20 Laojiao 01” and the code was “149062”)
started on 16 March 2020 and ended on 17 March 2020, of which the final amount actually issued was
CNY 1.5 billion and the final stated interest rate was 3.50% with the term of five years.
202
2020 Annual Report of Luzhou Laojiao Co., Ltd.
7.25. Deferred income
Monetary Unit: CNY
Increase in current Decrease in
Item Opening Balance Closing Balance Reason
period current period
Reception of
Government grants 23,845,000.00 6,870,000.00 976,000.00 29,739,000.00
financial allocation
Total 23,845,000.00 6,870,000.00 976,000.00 29,739,000.00 --
Details:
Monetary Unit: CNY
Non-operati Other Cost
Increase in Related to
Liability Opening ng income income in reduction in Other Closing
current assets/
Item Balance in current current current changes Balance
period income
period period period
Demonstrat
ion and
application
project of
intelligent
Related to
production 2,380,000.00 476,000.00 1,904,000.00
assets
line for
liquor
brewing
and
qu-making
New mode
application
project of
digital Related to
3,465,000.00 3,465,000.00
workshop assets
for solid
state liquor
production
Constructio
n project of
spirit room
of Luzhou Related to
7,000,000.00 7,000,000.00
Laojiao assets
brewing
technical
renovation
203
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Luzhou
Laojiao
automatic
wine
Related to
production 500,000.00 500,000.00
assets
line
technical
renovation
project
Cooling
water
circulation
and waste
heat Related to
500,000.00 500,000.00
recovery of assets
steamed
bran in
brewing
workshop
Constructio
n project of
pottery jars
room of
3,870,000.0 Related to
Luzhou 3,870,000.00
0 assets
Laojiao
brewing
technical
renovation
Boiler
reconstructi
on project
of Luohan 3,000,000.0 Related to
3,000,000.00
Brewing 0 assets
Base of
Luzhou
Laojiao
Brewing
wastewater Related to
10,000,000.00 10,000,000.00
treatment assets
project
204
2020 Annual Report of Luzhou Laojiao Co., Ltd.
7.26. Share capital
Monetary Unit: CNY
Increases/decreases in the current period (+, -)
Conversion of
Opening Closing
Issuance of reserves
Balance Bonds share Others Subtotal Balance
new shares funds into
shares
Total number 1,464,752,47 1,464,752,47
of shares 6.00 6.00
7.27. Capital reserves
Monetary Unit: CNY
Increase in current Decrease in current
Item Opening Balance Closing Balance
period period
Share premium (capital
3,542,967,507.48 3,542,967,507.48
premium)
Other capital reserves 179,809,555.65 179,809,555.65
Total 3,722,777,063.13 3,722,777,063.13
7.28. Other comprehensive income
Monetary Unit: CNY
Current Period
Less:
Previousl
Less:
y Amount
Previously
Amount recognize attribute
recognized Amount
in current d in other to
Opening in other Less: attribute Closing
Item period compreh non-contr
Balance comprehens Income to parent Balance
before ensive olling
ive income tax company
income income sharehold
transferred after tax
tax transferre ers after
to profit and
d to tax
loss
retained
earnings
I. Other comprehensive income
185,824,31 -3,926,14 -3,926,14 181,898
that will not be reclassified into
2.58 2.29 2.29 ,170.29
profit and loss
Fair value changes of other 185,824,31 -3,926,14 -3,926,14 181,898
205
2020 Annual Report of Luzhou Laojiao Co., Ltd.
equity instrument investment 2.58 2.29 2.29 ,170.29
II. Other comprehensive
8,992,817. -6,356,09 -4,827,66 -1,528,43 4,165,1
income that will be reclassified
99 3.90 3.25 0.65 54.74
into profit and loss
Including: Other
comprehensive income that will 6,159,230. -2,965,29 -2,965,29 3,193,9
be reclassified into profit and 69 3.21 3.21 37.48
loss under equity method
Difference from conversion of
2,833,587. -3,390,80 -1,862,37 -1,528,43 971,217
financial statements in foreign
30 0.69 0.04 0.65 .26
currency
194,817,13 -10,282,2 -8,753,80 -1,528,43 186,063
Total
0.57 36.19 5.54 0.65 ,325.03
7.29. Surplus reserves
Monetary Unit: CNY
Increase in current Decrease in current
Item Opening Balance Closing Balance
period period
Statutory surplus
1,464,752,476.00 1,464,752,476.00
reserves
Total 1,464,752,476.00 1,464,752,476.00
7.30. Undistributed profits
Monetary Unit: CNY
Item Current Period Previous Period
Undistributed profit before adjustment at the
12,559,746,579.91 10,181,899,224.84
end of the last year
Total adjustment for undistributed profit at the
beginning of year (+ for increase, - for 6,224,835.84
decrease)
Undistributed profit after adjustment at the
12,559,746,579.91 10,188,124,060.68
beginning of year
Plus: Net profit attributable to owners of the
6,005,723,069.36 4,641,988,857.03
parent company for the current period
Ordinary share dividends payable 2,328,956,436.84 2,270,366,337.80
Undistributed profits at the end of the period 16,236,513,212.43 12,559,746,579.91
206
2020 Annual Report of Luzhou Laojiao Co., Ltd.
7.31. Operating revenue and cost of sales
Monetary Unit: CNY
Current Period Previous Period
Item
Revenue Cost of sales Revenue Cost of sales
Primary business 16,447,960,569.22 2,711,434,006.97 15,615,719,102.43 2,974,484,362.13
Other business 204,893,980.58 112,050,551.09 201,215,170.43 90,933,686.25
Total 16,652,854,549.80 2,823,484,558.06 15,816,934,272.86 3,065,418,048.38
Whether the lower of the net profit before and after deduction of non-recurring gains and losses through
audit is negative
Yes √ No
Details:
Monetary Unit: CNY
Contract category Liquor sales Total
Commodity type 16,447,960,569.22 16,447,960,569.22
Including:
Medium and high
14,236,990,348.38 14,236,990,348.38
grade liquor
Other liquor 2,210,970,220.84 2,210,970,220.84
By operating segment 16,447,960,569.22 16,447,960,569.22
Including:
Domestic 16,399,797,552.19 16,399,797,552.19
Outbound 48,163,017.03 48,163,017.03
Including:
Contract type 16,447,960,569.22 16,447,960,569.22
Including:
Commodity sales
16,447,960,569.22 16,447,960,569.22
contract
Including:
Including:
Including:
Details about performance obligations:
N/A
207
2020 Annual Report of Luzhou Laojiao Co., Ltd.
7.32. Business taxes and surcharges
Monetary Unit: CNY
Item Current Period Previous Period
Consumption tax 1,789,225,806.16 1,614,253,353.53
Urban maintenance and construction
219,027,065.80 194,163,333.35
tax
Educational surcharge 93,865,221.95 83,212,857.10
Property tax 12,002,201.20 10,863,342.07
Land use tax 29,309,222.09 8,802,817.64
Stamp duty 17,510,277.63 7,717,838.58
Local education surcharge 62,576,814.64 55,475,238.14
Others 55,347.36 1,369,864.82
Total 2,223,571,956.83 1,975,858,645.23
7.33. Selling and distribution expenses
Monetary Unit: CNY
Item Current Period Previous Period
Advertising promotion expense 1,316,519,804.16 1,403,889,542.35
Promotion expense 1,074,611,735.49 1,859,984,308.36
Employee compensation 324,598,768.07 289,156,593.78
Storage and logistics costs 92,177,677.09 267,723,621.05
Others 282,747,847.44 365,348,088.05
Total 3,090,655,832.25 4,186,102,153.59
7.34. General and administrative expenses
Monetary Unit: CNY
Item Current Period Previous Period
Employee compensation 407,645,132.83 416,563,694.87
Depreciation and amortization 106,498,999.53 123,738,753.48
Management fee and service expense 68,388,629.63 70,060,721.26
Others 261,921,705.48 218,581,855.31
Total 844,454,467.47 828,945,024.92
208
2020 Annual Report of Luzhou Laojiao Co., Ltd.
7.35. Research and development expenses
Monetary Unit: CNY
Item Current Period Previous Period
Comprehensive research and
85,858,119.80 71,643,099.77
development expenses
Total 85,858,119.80 71,643,099.77
7.36. Financial expenses
Monetary Unit: CNY
Item Current Period Previous Period
Interest expenses 190,368,213.56 139,603,113.82
Less: Interest income 333,430,076.04 344,656,931.22
Losses from currency exchange 8,940,312.77 -1,922,431.98
Handling charges 1,676,346.97 1,891,755.69
Total -132,445,202.74 -205,084,493.69
Other statements:
Note: The current period increased CNY 72,639,290.95 compared with previous period with an increase
by 35.42%, mainly due to increase in interest expenses of bonds.
7.37. Other income
Monetary Unit: CNY
Item Current Period Previous Period
Government grants 31,409,825.37 43,319,756.65
Individual income tax commission
635,628.11 649,545.42
refund
Total 32,045,453.48 43,969,302.07
Including: details of government grants
Projects
Transfer from deferred income-related
976,000.00 13,536,155.00
to assets
Transfer from deferred income-related
620,000.00
to income
Special subsidy project of the liquor
2,550,000.00
industry
Subsidy project of liquor industry 13,967,500.00 2,354,700.00
209
2020 Annual Report of Luzhou Laojiao Co., Ltd.
development
Fund project of supporting industry
1,591,974.15
development
Subsidy fund project of changing power
2,400,000.00
grids for coal-to-electricity
Special fund for central foreign
2,000,000.00 1,833,500.00
economic and trade development
Demonstration project of brewing
waste and thermochemical soil
800,100.00 1,211,000.00
improvement materials coupled with
green planting
Demonstration project for the reduction
of hazardous substances in the
production process of
2,143,000.00
"multi-microorganism-co-fermentation"
of solid-state fermentation alcoholic
beverages and its application
Provincial industrial development fund 790,000.00 1,000,000.00
Development project of the key
technology and equipment of liquor 1,000,000.00
intelligent packaging line
Fund project of supporting liquor
876,000.00
industry market expansion
Project of a complete set of intelligent
equipment system for energy and 848,200.00
resource utilization of brewing waste
Special fund project of Luzhou
600,000.00
Environmental Protection Agency
2017 Fund project of central foreign
500,000.00
economic and trade development
Project of key technology research and
integration based on the transformation 500,000.00
and upgrading of the liquor industry
Project of analysis of characteristic
flavor conductors of Luzhou-flavor
500,000.00
liquor cellar pool and construction of
raw liquor grade confirmation system
Other projects-related to income 12,876,225.37 9,255,227.50
Subtotal 31,409,825.37 43,319,756.65
210
2020 Annual Report of Luzhou Laojiao Co., Ltd.
7.38. Investment income
Monetary Unit: CNY
Item Current Period Previous Period
Investment income from long-term equity
192,119,093.92 145,963,325.70
investments under the equity method
Dividend income gained during the period
of holding other equity instrument 9,379,824.36 8,748,669.71
investment
1
Total 201,498,918.28 154,711,995.41
Note: 1. The current period increased CNY 46,786,922.87 compared with previous period with an
increase by 30.24%, mainly due to the impact of performance growth of the invested unit Huaxi
Securities in the current period.
Other statements:
Note 2: 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. 197,511,851.10 148,787,121.31
Sichuan Development Wine Investment Co., Ltd. -6,128,272.50 -2,823,795.61
Sichuan Tongniang Liquor Industry Technology Research Institute 9,898.80
Co., Ltd.
CTS Luzhou Laojiao Cultural Tourism Development Co., Ltd. 725,616.52
Subtotal 192,119,093.92 145,963,325.70
Including: dividend income gained during the period of holding other equity instrument investment:
Item Current Period Previous Period
North Chemical Industries Co.,Ltd. 85,995.53 85,995.53
Luzhou Bank Co., Ltd. 4,700,800.00 5,424,000.00
Guotai Junan Securities Co.,Ltd. 4,593,028.83 3,238,674.18
Subtotal 9,379,824.36 8,748,669.71
7.39. Credit impairment loss
Monetary Unit: CNY
Item Current Period Previous Period
Bad debt loss of other receivables -519,776.25 -234,313.59
Bad debt loss of accounts receivable 893,511.05 -384,021.15
211
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Total 373,734.80 -618,334.74
7.40. Gains from disposal of assets
Monetary Unit: CNY
Item Current Period Previous Period
Gains from disposal of non-current
8,123,010.18 27,180,182.25
assets
Including: Gains from disposal of fixed
8,123,010.18 14,030,349.78
assets
Gains from disposal of
13,149,832.47
intangible assets
Total 8,123,010.18 27,180,182.25
7.41. Non-operating income
Monetary Unit: CNY
The amount included in the
Item Current Period Previous Period extraordinary gains and
losses of the current period
Compensation for default 10,199,933.23 29,331,754.71 10,199,933.23
Gains from damage
retirement of non-current 1,537.72 84,375.58 1,537.72
assets
Others 22,444,302.22 14,891,627.20 22,444,302.22
Total 32,645,773.17 44,307,757.49 32,645,773.17
7.42. Non-operating costs
Monetary Unit: CNY
The amount included in the
Item Current Period Previous Period extraordinary gains and
losses of the current period
Donation 34,512,439.19 55,224,710.00 34,512,439.19
Losses from damage
retirement of non-current 4,038,052.47 4,053,075.34 4,038,052.47
assets
Others 14,384,367.97 508,720.12 14,384,367.97
Total 52,934,859.63 59,786,505.46 52,934,859.63
212
2020 Annual Report of Luzhou Laojiao Co., Ltd.
7.43. Income tax expense
7.43.1. Statement of income tax expense
Monetary Unit: CNY
Item Current Period Previous Period
Current period income tax 2,029,490,921.16 1,701,264,224.25
Deferred income tax -48,978,715.23 -239,683,534.98
1
Total 1,980,512,205.93 1,461,580,689.27
Note: 1. The current period increased CNY 518,931,516.66 compared with previous period with an
increase by 35.50%, mainly due to the increase in profits with the increase in sales revenue of high-end
liquor. Details of income tax rates were shown on “6. Taxes”.
7.43.2. Adjustment for accounting profit and income tax expense
Monetary Unit: CNY
Item Current Period
Total profit 7,939,026,848.41
Income tax expenses determined by statutory/applicable
1,984,756,712.10
tax rate
Impact from subsidiaries’ different tax rates 839,465.76
Impact from adjust for impact from income tax expense in
17,715,208.15
previous period
Impact from non-taxable income -50,374,729.57
Impact from non-deductible costs, expenses and losses 4,296,972.14
Impact from deductable losses of unrecognized deferred
-4,043,136.15
income tax at the beginning of the reporting period
Impact from deductible temporary difference or losses due
31,011,029.68
to unrecognized deferred tax asset in current period
Impact from research and development expense deduction -3,689,316.18
Income tax expense 1,980,512,205.93
7.44. Other comprehensive income
Details in Note 5.28. Other comprehensive income.
213
2020 Annual Report of Luzhou Laojiao Co., Ltd.
7.45. Notes to the statement of cash flow
7.45.1. Cash received from other operation activities
Monetary Unit: CNY
Item Current Period Previous Period
Government grants 37,303,825.37 46,183,601.65
Interest income from bank deposit 323,791,542.69 328,991,131.22
Others 175,611,225.82 252,962,046.83
Total 536,706,593.88 628,136,779.70
7.45.2. Cash paid for other operating activities
Monetary Unit: CNY
Item Current Period Previous Period
Cash paid for expenses 2,830,977,073.82 3,270,452,860.33
Total 2,830,977,073.82 3,270,452,860.33
7.46. Supplementary information to statement of cash flow
7.46.1. Supplementary information to statement of cash flow
Monetary Unit: CNY
Item Current Period Previous Period
1. Reconciliation of net profit to cash flow
-- --
from operating activities:
Net profit 5,958,514,642.48 4,642,235,502.41
Plus: Provision for asset impairment -373,734.80 618,334.74
Depreciation of fixed asset, oil and gas
286,685,687.57 156,086,942.79
assets and productive biological assets
Depreciation of right-of-use assets
Amortization of intangible assets 21,556,291.52 11,275,163.47
Amortization of long-term deferred
671,330.69 26,537.29
expense
Losses from disposal of fixed assets,
intangible assets and other long-term -8,123,010.18 -27,180,182.25
assets (Gains use “-”)
Losses from retirement of fixed assets
4,036,514.75 3,968,699.76
(Gains use “-”)
214
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Losses from change in fair value (Gains
use “-”)
Financial expenses (Gains use “-”) 67,528,556.11 137,680,681.84
Losses on investments (Gains use “-”) -201,498,918.28 -154,711,995.41
Decrease in deferred income tax assets
-48,978,715.23 -239,717,652.83
(Increase uses “-”)
Increase in deferred income tax liabilities
(Decrease uses “-”)
Decrease in inventories (Increase use
-1,054,428,338.92 -410,819,342.38
“-”)
Decrease in operating receivables
-742,428,686.42 -21,852,590.05
(Increase use “-”)
Increase in operating payables
632,940,832.01 744,009,104.48
(Decrease use “-”)
Others
Net cash flows from operating activities 4,916,102,451.30 4,841,619,203.86
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 11,568,195,062.81 9,752,266,526.78
Less: Opening balance of cash 9,752,266,526.78 9,365,986,627.68
Plus: Closing balance of cash
equivalents
Less: Opening balance of cash
equivalents
Net change in cash and cash equivalents 1,815,928,536.03 386,279,899.10
7.46.2. Composition of cash and cash equivalent
Monetary Unit: CNY
Item Opening Balance Closing Balance
1. Cash 11,568,195,062.81 9,752,266,526.78
215
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Including: Cash on hand 26,978.10 28,776.67
Unrestricted bank deposit 11,561,257,398.27 9,744,243,225.66
Other unrestricted cash and
6,910,686.44 7,994,524.45
cash equivalents
3. Closing balance of cash and cash
11,568,195,062.81 9,752,266,526.78
equivalents
Including: Cash and cash equivalent with
1
restriction to use of parent company and 56,675,277.79 1,400,000.00
subsidiaries
Note: 1. The difference between the closing balance of cash and cash equivalents and cash at bank and
on hand is CNY 56,675,277.79, of which, CNY 1,400,000.00 is a travel service deposit with limited use
rights in other cash and cash equivalents and CNY 55,275,277.79 is provision for fixed deposit interest
on an accrual basis.
7.47. Assets with restricted ownership or use rights
Monetary Unit: CNY
Item Closing book balance Reason for restriction
provision for fixed deposit interest on
Bank deposits 55,275,277.79
an accrual basis
According to the regulations of tourism
Other cash and cash equivalents 1,400,000.00 bureau, travel service deposit is
deposited in a designated bank.
Bills pledged used for exchanging large
Accounts receivable financing 147,480,000.00
denominations for small denominations
Total 204,155,277.79 --
7.48. Foreign currency transactions
7.48.1. Foreign currency transactions
Monetary Unit: CNY
Closing Balance in Foreign
Item Exchange Rate Closing Balance in CNY
Currency
Cash at Bank and on Hand -- --
Including: USD 31,612,207.96 6.5249 206,266,495.72
EUR 29,833.08 8.0250 239,410.47
HKD 2,089,147.98 0.84164 1,758,310.51
GBP 117,108.11 8.8903 1,041,126.23
216
2020 Annual Report of Luzhou Laojiao Co., Ltd.
AUD 264.94 5.0163 1,329.02
CAD 657.71 5.1161 3,364.91
Accounts Receivable -- --
Including: USD 60,109.30 6.5249 392,207.17
EUR
HKD 734,725.71 0.84164 618,374.55
Long-term Loans -- --
Including: USD
EUR
HKD
Other Receivables
Including: USD 2,781.17 6.5249 18,146.86
HKD 2,184,260.22 0.84164 1,838,360.77
Accounts Payable
Including: USD 133,062.47 6.5249 868,219.31
HKD 3,112,507.56 0.84164 2,619,610.86
Other Payables
Including: USD 125,200.00 6.5249 816,917.48
HKD 23,825,459.17 0.84164 20,052,459.46
7.48.2. 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 (North Currency in the registration
USA USD
America) Co., Ltd. place
Mingjiang Co., Ltd. Currency in the registration
USA USD
place
217
2020 Annual Report of Luzhou Laojiao Co., Ltd.
7.49. Government grants
7.49.1. Details of government grants
Monetary Unit: CNY
Amount included in profit or
Item Amount Presentation
loss of the current period
Related to assets 29,739,000.00 Deferred income 976,000.00
Related to income 30,433,825.37 Other income 30,433,825.37
Total 60,172,825.37 31,409,825.37
7.49.2. Return of government grants
Applicable √ N/A
8. Changes in consolidated scope
8.1. Business combination not under common control
8.1.1. Business combination not under common control during current period
There is no business combination not under common control during current period.
8.2. Business combination under common control
8.2.1. Business combination under common control during current period
There is no business combination under common control during current period.
8.3. 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.
8.4. Disposing subsidiaries
Whether there is a situation of losing control after disposing the investment in the subsidiary only once
Yes √ No
218
2020 Annual Report of Luzhou Laojiao Co., Ltd.
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
8.5. 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.
There is no consolidated scope changes due to other reasons during current period.
9. Interests in other entities
9.1. Interests in subsidiaries
9.1.1. Group composition
Name of Major business Place of Nature of Shareholding Proportion Acquisition
Subsidiaries location registration business Direct Indirect method
Luzhou Laojiao Liquor
Brewing Co., Luzhou Luzhou manufacture 100.00% Investment
Ltd. and sales
Luzhou Red
Sorghum Business
Agricultural
Modern combination
Luzhou Luzhou product planting 60.00%
Agricultural under common
and sales
Development control
Co., Ltd.
Sales Company
of Luzhou Luzhou Luzhou Liquor sales 100.00% Investment
Laojiao Co., Ltd.
Luzhou Laojiao
Nostalgic Liquor
Luzhou Luzhou Liquor sales 100.00% Investment
Marketing Co.,
Ltd.
Luzhou Laojiao
Custom Liquor Luzhou Luzhou Liquor sales 15.00% Investment
Co., Ltd. Note
Luzhou Laojiao
Selected Supply
Luzhou Luzhou Liquor sales 100.00% Investment
Chain
Management
219
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Co., Ltd.
Guangxi Luzhou
Laojiao Red wine
Imported Liquor Qinzhou Qinzhou production and 100.00% Investment
Industry Co., sales
Ltd.
Luzhou Dingli
Liquor Industry Luzhou Luzhou Liquor sales 100.00% Investment
Co., Ltd.
Luzhou Dingyi
Liquor Industry Luzhou Luzhou Liquor sales 100.00% Investment
Sales Co., Ltd.
Luzhou Dinghao
Liquor Industry Luzhou Luzhou Liquor sales 100.00% Investment
Sales Co., Ltd.
Luzhou Laojiao
Import and Wine import and
Luzhou Luzhou 100.00% Investment
Export Trade export trade
Co., Ltd.
Luzhou Laojiao
Boda Liquor
Industry Luzhou Luzhou Liquor sales 75.00% Investment
Marketing Co.,
Ltd.
Luzhou Laojiao
Bosheng
Hengxiang Luzhou Luzhou Liquor sales 100.00% Investment
Liquor Sales
Co., Ltd.
Luzhou Laojiao
Fruit Wine
Luzhou Luzhou Fruit wine sales 41.00% Investment
Industry Co.,
Ltd. Note
Mingjiang Co.,
America America Liquor sales 54.00% Investment
Ltd.
Luzhou
Technology
Pinchuang
Luzhou Luzhou development 100.00% Investment
Technology Co.,
and service
Ltd.
Luzhou Laojiao Liquor sales,
Luzhou Luzhou 100.00% Investment
Tourism Culture tourism
220
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Co., Ltd.
Luzhou Laojiao
International
Development Hong Kong Hong Kong Wine sales 55.00% Investment
(Hong Kong)
Co., Ltd.
Luzhou Laojiao
Commercial
Business
Development America America 100.00% Investment
development
(North America)
Co., Ltd.
Luzhou Laojiao
Electronic
Luzhou Luzhou Wine sales 90.00% Investment
Commerce Co.,
Ltd.
Luzhou Laojiao
Whitail
Innovated
Luzhou Luzhou Wine sales 100.00% Investment
Electronic
Commerce Co.,
Ltd.
Luzhou Laojiao
Selected
Electronic Luzhou Luzhou Wine sales 100.00% Investment
Commerce Co.,
Ltd.
Luzhou Laojiao
Whitail Liquor
Luzhou Luzhou Wine sales 35.00% Investment
Industry Co.,
Ltd. Note
Chengdu Tianfu
Panda Whitail
Chengdu Chengdu Wine sales 60.00% Investment
Liquor Industry
Co., Ltd. Note
Luzhou Whitail
Tongdao Uncle
Constellation Luzhou Luzhou Wine sales 70.00% Investment
Wine Sales Co.,
Ltd. Note
Luzhou Baonuo Fermented
Luzhou Luzhou 100.00% Investment
Biotechnology product
221
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Co., Ltd. manufacture
Luzhou Laojiao Health care Business
Health Liquor wine combination
Luzhou Luzhou 100.00%
Industry manufacture under common
Co.,Ltd. and sales control
Luzhou Laojiao Business
Health Sales Health care combination
Luzhou Luzhou 100.00%
Co., Ltd. wine sales under common
control
Statement for that the proportion of share-holding is different from the proportion of voting rights:
As the Note 3.6, the Company holds less than 51% shares of Luzhou Laojiao Custom Liquor Co., Ltd.,
Luzhou Laojiao fruit wine industry Co., Ltd., and Luzhou Laojiao Whitail Liquor Industry Co., Ltd. but in
these companies’ board, among the five members, the Company has sent three persons, which is in the
majority. The Company has substantial control over these companies, so they are included in the
consolidation scope.
9.1.2. Important non-wholly-owned subsidiaries
Monetary Unit: CNY
Gains and losses
Proportion of share Dividends paid to
attributable to Closing balance of
holdings of non-controlling
Name of subsidiary non-Controlling non-controlling
non-Controlling shareholders during
shareholders during shareholders interest
shareholders current period
current period
Luzhou Laojiao Boda
Liquor Industry 25.00% -18,711,825.67 69,632,350.85
Marketing Co., Ltd.
Total -18,711,825.67 69,632,350.85
9.1.3. Major financial information of important non-wholly-owned subsidiaries
Monetary Unit: CNY
Closing Balance Opening Balance
Name of Non-cur Non-cur
Non-cur Current Total Non-cur Total
subsidia Current Total rent Current Total Current rent
rent liabilitie liabilitie rent liabilitie
ry assets assets liabilitie assets assets liabilities liabilitie
assets s s assets s
s s
Luzhou
Laojiao 1,314,5 1,317,4
767,387 3,501,1 770,888 492,359 492,359 2,881,5 964,059 964,059
Boda 54,833. 36,429.
,583.35 99.33 ,782.68 ,379.30 ,379.30 95.65 ,722.96 ,722.96
Liquor 37 02
Industry
222
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Marketi
ng Co.,
Ltd.
Monetary Unit: CNY
Current Period Previous Period
Name of Total Total
Operating Operating Operating Operating
subsidiary Net profit comprehens Net profit comprehens
revenue cash flow revenue cash flow
ive income ive income
Luzhou
Laojiao
Boda Liquor 1,724,399,6 -74,847,302 -74,847,302 118,338,721 2,787,789,6 20,226,221. 20,226,221. -335,380,17
Industry 47.44 .68 .68 .44 90.74 05 05 0.98
Marketing
Co., Ltd.
9.1.4. Significant limitations for using group assets and paying off group liabilities
There are no significant limitations for using group assets and paying off group liabilities.
9.1.5. Financial support and other support provided to the structure subjects that are
incorporated into the scope of consolidated financial statements
There are no structure subjects that are incorporated into the scope of consolidated financial statements.
Other statements:
9.2. Transactions that change owners’ equity share of the subsidiary and still control
the subsidiary
9.2.1. Statements for the changes of owners’ equity share of the subsidiary
N/A
9.2.2. Impact of the transactions on non-controlling interests and equity attributable to owners’
of the parent company
N/A
9.3. Interests in joint ventures and associates
9.3.1. Important joint ventures and associates
Name of joint Major business Place of Shareholding proportion Accounting
Business nature
venture/associat location registration Direct Indirect Method
223
2020 Annual Report of Luzhou Laojiao Co., Ltd.
es
Important joint
ventures: none
Important
associates:
Huaxi Securities Chengdu, Chengdu,
Securities 10.39% Equity method
Co., Ltd. Sichuan Sichuan
Statement for that the proportion of shareholdings in joint ventures or associates is different from the
proportion of voting rights:
The basis of holding less than 20% of the voting rights in other entities but having significant influence or
holding 20% or more than 20% of the voting rights in other entities but having insignificant influence:
The Company has sent directors to the board of Huaxi Securities and has the corresponding substantive
decision-making power, so the Company still has significant influence on Huaxi Securities.
9.3.2. Major financial information of important associates
Monetary Unit: CNY
Closing Balance/Amount in current Opening Balance/Amount in previous
period period
Current assets 68,518,467,092.86 57,134,274,353.71
Non-current assets 8,710,176,937.94 10,693,128,565.71
Total assets 77,228,644,030.80 67,827,402,919.42
Current liabilities 42,599,988,723.12 39,721,993,771.95
Non-current liabilities 13,261,547,139.00 8,411,797,290.51
Total liabilities 55,861,535,862.12 48,133,791,062.46
Non-controlling shareholder interest 45,423,771.61 44,225,184.16
Shareholder interest attributable to
21,321,684,397.07 19,649,386,672.80
parent company
Share of net assets calculated based
2,216,083,636.60 2,042,272,245.65
on shareholding proportion
--Others 167,466,735.90 167,466,735.90
Book value of equity investments in
2,383,550,372.50 2,209,738,981.55
associate companies
Fair value of equity investments in
associate companies that have public 3,404,932,677.12 3,003,870,895.44
quote
Operating revenue 4,682,755,761.60 3,937,424,572.74
224
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Net profit 1,900,327,802.56 1,431,540,167.66
Other comprehensive income -28,530,081.19 47,518,149.37
Total comprehensive income 1,871,797,721.37 1,479,058,317.03
Dividends from associate companies
20,735,166.94 20,735,166.94
this year
9.3.3. Financial information summarized of unimportant joint ventures and associate companies
Monetary 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 94,116,798.77 20,982,744.17
Total following items calculated on the
-- --
basis of shareholding proportion
--Net profit -16,435,307.24 -2,823,795.61
-- Total comprehensive income -16,435,307.24 -2,823,795.61
Other statements
As the Note 7.8, the Company invested in CTS Luzhou Laojiao Cultural Tourism Development Co., Ltd.
in 2020. The Company has 40% of shareholding proportion and voting rights proportion to it with
significant influence on it and regards it as an associate company adopting equity method for
accounting.
10. Risks related to financial instruments
Business activities of a company usually face various financial risks, mainly credit risk, liquidity risk and
market risk. The Company's overall risk management plan addresses the unpredictability of financial
markets and seeks to reduce potential adverse effects on the Company's financial performance.
10.1. 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
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.
225
2020 Annual Report of Luzhou Laojiao Co., Ltd.
10.2. 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,
and in recent years there has been no external borrowing to supplement the working capital of daily
operating activities. The liquidity risk is extremely small.
10.3. Market risk
Market risk refers to the risk that the fair value or future cash flow of financial instruments will fluctuate
due to changes in market prices, including foreign exchange risk, interest rate risk and other price risks.
10.3.1. Foreign exchange risk
The Company's main business is located in the mainland of China, and main business is settled in CNY.
Only three subsidiaries, Hong Kong company, North America Company and Mingjiang company, settle
in HKD in Hong Kong and USD in the United States respectively. The proportion and impact of their
income and profit scale are negligible, and the foreign exchange risk is minimal.
10.3.2. Rate risk
The Company's operating capital is sufficient and in recent years there has been no external borrowing,
so interest rate risk is minimal.
10.3.3. 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 available-for-sale financial assets measured at fair value.
11. Fair value disclosure
11.1. Closing fair value of assets and liabilities measured at fair value
Monetary Unit: CNY
Closing fair value
Item
Level 1 Level 2 Level 3 Total
1. Continuous
measurement at fair -- -- -- --
value
1.3 Other equity
313,473,441.09 33,686,958.33 347,160,399.42
instrument investment
Accounts receivable
3,209,371,766.35 3,209,371,766.35
financing
2. Discontinuous
measurement at fair -- -- -- --
value
226
2020 Annual Report of Luzhou Laojiao Co., Ltd.
11.2. 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 RMB exchange rate disclosed on the
same day by China Foreign Exchange Trade System.
11.3. Valuation technique adopted and nature and amount determination of
important parameters for continuously and discontinuously within Level 3 of the fair
value hierarchy
Accounts receivable financing: Due to the short term of notes receivable less than 1 year, and the sales
time, sales price and sale proportion cannot be estimated reliably, the Company shall measure the fair
value by regarding the face value as the reasonable estimation.
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
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.
12. Related parties and related party transactions
12.1. The parent company of the Company
Shareholding Voting rights
Parent company Registration place Business nature Registered capital proportion by the proportion by the
parent company parent company
Luzhou Laojiao Investment and
Luzhou, Sichuan 2,798,818,800.00 26.02% 51.01%
Group Co., Ltd. asset management
Statements for situation of parent company:
The nature of parent company: Limited liability company (wholly state-owned);
Registration place: Ai Rentang Square, China Liquor Golden Triangle Wine Industry Park, Luzhou,
Sichuan Province; Business Scope: Investment and asset management; investment in liquor, food,
finance, trade, logistics, education, medical and health, cultural tourism, Internet industry; holding
company services; social economic consulting, business management consulting; enterprise
management services; supply chain management services; import and export business and trade
agency; food production, sales (including online); planting and sales of crops (including online). (The
Company cannot start business activities until projects subject to approval according to law are
approved by relevant departments.)
227
2020 Annual Report of Luzhou Laojiao Co., Ltd.
The final control party of the Company is SASAC of Luzhou.
12.2. Subsidiaries of the Company
For details please see Note 9.1. Interests in subsidiaries
12.3. Joint ventures and associates of the Company
For details please see Note 9.3. Interests in joint ventures and associates.
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.
12.4. Other related party of the Company
Name of Other Related Party Relationship with the Company
Sichuan Development Wine Investment Co., Ltd. Joint venture
CTS Luzhou Laojiao Cultural Tourism Development Co.,
Joint venture
Ltd.
Luzhou Jiachuang Wine Supply Chain Management Co.,
The same parent company
Ltd.
Luzhou Jiaxin Holding Group Co., Ltd. The same parent company
Sichuan Kangrun Group Construction and Installation
The same parent company
Engineering Co., Ltd.
Luzhou Laojiao Zhitong Trading Co., Ltd. The same parent company
Luzhou Lianzhong Logistics Co. Ltd. The same parent company
Luzhou Laojiao Commercial College of Luzhou The same parent company
Luzhou COSCO Lianzhong Logistics Co., Ltd. The same parent company
Sichuan Kangrun Group Real Estate Development Co., Ltd. The same parent company
Sichuan Kangrun Investment Group Co., Ltd. The same parent company
Sichuan Lianzhong Supply Chain Service Co., Ltd. The same parent company
New Shottes Brook Private Company The same parent company
Luzhou Communication Investment Group Auto Service
Subsidiary of the second largest shareholder
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
Sichuan Meiheshan Village Winery Industry Co.,Ltd. Minority shareholder of the subsidiary Fruit Wine Industry
Other subsidiaries of Luzhou XingLu Investment Group
Other subsidiary of the second largest shareholder
Co., Ltd.
Other subsidiaries of Luzhou Laojiao Group Co., Ltd. Other subsidiary of parent company
228
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Other statements:
Note: On 31 December 2015, Laojiao Group and XingLu Investment Group, the second biggest
shareholder, signed a concerted action agreement that 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. The agreement is valid as of 13 December 2015 and ends on 1
June 2021. During the effective period of this agreement, before any party submits proposals involving
the major issues of the Company's business development to the 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. In view of this, the Company will disclose the
transactions with XingLu Investment Group and its controlling enterprises as other related parties of the
Company.
12.5. Related transactions
12.5.1. Related transactions of purchase and sales of goods / rendering and receipt of services
Table of purchase of goods / receipt of services
Monetary Unit: CNY
Whether over
Name of Related Amount in Approved trading Amount in previous
Transaction approved trading
Party current period amount period
amount
Receipt of
services:
Luzhou XingLu
Property
Investment Group
management 4,351,746.11 3,909,858.41
Co., Ltd. and its
fee ,etc.
other subsidiaries
Training,
accommodation,
storage,
Laojiao Group and
transportation
its other 45,395,748.17 46,058,991.08
services,
subsidiaries
property
management fee,
etc.
CTS Luzhou
Laojiao Cultural
Travel agency
Tourism 1,041,370.00
service fee, etc.
Development Co.,
Ltd.
229
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Purchase of
goods:
Housing
Laojiao Group and
construction fee ,
its other 328,967,000.00 287,389,843.00
land expense,
subsidiaries
etc.
Laojiao Group and
Red wine, water,
its other 27,682,924.62 41,924,295.93
power, etc.
subsidiaries
Luzhou XingLu
Investment Group
Gas 6,957,769.40 7,153,652.03
Co., Ltd. and its
other subsidiaries
Sichuan
Meiheshan Village
Wine 225,374.00
Winery Industry
Co.,Ltd.
Total 414,621,932.30 386,436,640.45
Table of sales of goods and rendering of service
Monetary Unit: CNY
Name of Related Party Transaction Amount in current period Amount in previous period
Sales of goods:
Laojiao Group and its
Wine, water, power, etc. 11,692,235.06 3,985,144.32
subsidiaries
XingLu Investment Group
Wine 156,000.00
and its subsidiaries
CTS Luzhou Laojiao Cultural
Tourism Development Co., Wine 4,716,024.00
Ltd.
Rendering of service:
Laojiao Group and its
Rendering of service 2,786,320.00
subsidiaries
Sichuan Development Wine
Rendering of service 254,402.30
Investment Co., Ltd.
Total 19,448,981.36 4,141,144.32
12.5.2. Related party leasing
The Company as lessee:
230
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Monetary Unit: CNY
Leasing fee recognized Leasing fee recognized
Name of lessor Type of leased asset
during current period during previous period
Laojiao Group and its
House lease 2,771,944.90 1,551,064.09
subsidiaries
Total 2,771,944.90 1,551,064.09
12.5.3. Key management compensation
Monetary Unit: CNY
Item Amount in current period Amount in previous period
Key management 8,356,121.42 7,467,800.00
12.6. Receivables and payables of related parties
12.6.1. Receivables
Monetary Unit: CNY
Closing Balance Opening Balance
Item Related party Provision for bad Provision for bad
Book value Book value
debt debt
Other non-current
Luzhou Jiaxin
assets (transfer
Holding Group Co., 70,994,300.00
prepayment of
Ltd.
land use right)
New Shottes Brook
Prepayment 32,149,113.33
private company
Luzhou XingLu
Prepayment Water (Group) Co., 42,883.70 3,145.70
Ltd.
Sichuan
Meiheshan Village
Prepayment 885,834.00
Winery Industry
Co.,Ltd.
Sichuan Kangrun
Other receivables Investment Group 10,000.00 10,000.00
Co., Ltd.
CTS Luzhou
Other receivables Laojiao Cultural 3,268,472.46 163,423.62
Tourism
231
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Development Co.,
Ltd.
Sichuan
Development Wine
Other receivables 102,670.32 5,133.52
Investment Co.,
Ltd.
12.6.2. Payables
Monetary Unit: CNY
Item Related party Closing Balance Opening Balance
Sichuan Kangrun Group Real
Accounts payable 372,467.29
Estate Development Co., Ltd.
Luzhou XingLu Water
Accounts payable 297,019.53
(Group) Co., Ltd.
Sichuan Lianzhong Supply
Accounts payable 135,824.73
Chain Service Co., Ltd.
Luzhou Communication
Accounts payable Investment Group Auto 13,950.00
Service Co., Ltd.
Luzhou Jiaxin Holding Group
Accounts payable 178,170.40
Co., Ltd.
Contractual liabilities (tax Sichuan Lianzhong Supply 1
35,798.45 2,628.03
inclusive) Chain Service Co., Ltd.
Contractual liabilities (tax Luzhou Laojiao Group Co.,
1,680.00
inclusive) Ltd.
Contractual liabilities (tax Luzhou Laojiao Commercial
840.00
inclusive) College
CTS Luzhou Laojiao Cultural
Contractual liabilities (tax
Tourism Development Co., 4,704,408.00
inclusive)
Ltd.
Luzhou Jiachuang Wine
Contractual liabilities (tax
Supply Chain Management 4,065,243.22
inclusive)
Co., Ltd.
Luzhou Jiachuang Wine
Other payables Supply Chain Management 1,500,000.00
Co., Ltd.
Sichuan Lianzhong Supply
Other payables 2,384,148.00 750,000.00
Chain Service Co., Ltd.
Other payables Luzhou XingLu Property 100,000.00 100,000.00
232
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Management Co., Ltd.
Sichuan Kangrun Group
Other payables Construction and Installation 34,175.78
Engineering Co., Ltd.
Luzhou COSCO Lianzhong
Other payables 200,200.00 200,000.00
Logistics Co., Ltd.
Note: 1. The former Luzhou Lianzhong Logistics Co., Ltd. was renamed Sichuan Lianzhong Supply
Chain Service Co., Ltd. in 2020.
13. Commitments and contingencies
13.1. Contingencies
13.1.1. 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, among them:
The criminal case with saving deposits involving contract disputes in Agricultural Bank of China
Changsha Yingxin Sub-branch with amount of CNY 150 million was concluded, and the amount involved
in the case was ultimately determined to be CNY 149.425 million, which was executed by criminal case.
The Company applied to Hunan Province Higher People's Court for enforcement of the verdict. Hunan
Province Higher People's Court has filed the case and ruled that Hunan Changsha Intermediate
People’s Court should see to the execution of the verdict. As of 31 December 2020, CNY 20.3353 million
was recovered.
The Company has filed a lawsuit with Sichuan Higher People's Court about the saving deposits involving
contract disputes in Industrial and Commercial Bank of China Ltd. Nanyang Zhongzhou Sub-branch with
amount of 150 million. Sichuan Higher People's Court ruled that the case should be transferred to the
Henan Higher People's Court. Henan Higher People's Court considered that due to the involvement of
criminal cases, its trial should be based on the results of criminal case, and judged to suspend in 2015.
Now the case has been settled, and the case of civil action is reopened, which is under trial of Henan
Higher People's Court.
Another deposit in the Notice of Significant Events No. 2015-1 has been recovered a total of CNY
194.6198 million as of the period-end, and the residual amount is recovering actively.
The Company has recovered the abovementioned saving deposits involving contract disputes with CNY
214.9551 million, and the relevant progress will be announced subsequently.
233
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Except for the above matters, the Company has no other significant contingencies that need to be
disclosed as the end of 31 December 2020.
14. Post balance sheet event
14.1. Profit distribution
Monetary Unit: CNY
Profits or dividends planned to distribute 3,004,207,328.28
Reviewed and approved profits or dividends declared to
3,004,207,328.28
distribute
14.2. Sales return
There are no important sales returning after balance sheet date.
14.3. Statement for other post balance sheet events
(1) Part of state-owned equity of the Company and its controlling shareholders was transferred
for free to enrich the social security fund
SASAC of Luzhou transferred for free to the Sichuan Provincial Department of Finance 111,193
state-owned shares of "Luzhou Laojiao" (accounting for 10% of the Company's shares held by SASAC
of Luzhou, and 0.008% of the Company's total shares), the 10% equity of Laojiao Group, the Company's
controlling shareholder, and the 10% equity of Xinglu Group, a person acting in concert with Laojiao
Group. These will be held by the Sichuan Provincial Finance Department on behalf of the Social Security
Fund.
As of the reporting date, the procedures for the transfer of shares of the Company directly held by
SASAC of Luzhou have not been completed. The transfer of state-owned equity does not involve the
Company's equity held by Laojiao Group and Xinglu Group. The number and proportion of shares held
by Laojiao Group and Xinglu Group remain unchanged, and Laojiao Group remains the Company's
controlling shareholder. The shareholder, SASAC of Luzhou is still the actual controller of the Company.
(2) Cancellation of Subsidiaries
On 29 January 2021, the 24th Meeting of the Ninth Board of Directors of the Company reviewed and
approved the proposal on the cancellation of subsidiaries Chengdu Tianfu Panda Whitail Liquor Industry
Co., Ltd. and Luzhou Whitail Tongdao Uncle Constellation Wine Sales Co., Ltd. According to business
development circumstances, the Company decided to cancel the above two subsidiaries, which will not
have a significant impact on the Company's financial status and operating results.
(3) Investment in the establishment of New Retail Management Company of Luzhou Laojiao Co.,
Ltd.
On 29 January 2021, the 24th Meeting of the Ninth Board of Directors of the Company reviewed and
234
2020 Annual Report of Luzhou Laojiao Co., Ltd.
approved the Proposal on Investing in the Establishment of New Retail Management Company of
Luzhou Laojiao Co., Ltd., and agreed that the Company and its wholly-owned subsidiary Sales
Company of Luzhou Laojiao Co., Ltd. would jointly invest in the establishment of New Retail
Management Company of Luzhou Laojiao Co., Ltd. (subject to the actual industrial and commercial
registration, hereinafter referred to as "New Retail Company"). Specifically, the Company will invest CNY
20 million in cash with its own funds, accounting for 40% of the total share capital; the sales company will
invest CNY 30 million in cash with its own funds, accounting for 60% of the total share capital. After the
establishment of the New Retail Company, it will integrate and utilize Luzhou Laojiao's online and offline
resources to further promote the company's "Wine + Internet" business.
(4) Participation in the investment and establishment of Chengyin Financial Leasing Co., Ltd.
On 29 January 2021, the 24th Meeting of the Ninth Board of Directors of the Company reviewed and
approved the Proposal on Participating in Investment in the Establishment of Chengyin Financial
Leasing Co., Ltd. In order to make business synergetic and complementary and obtain investment
profits, the Company agreed that it would cooperate with Chengdu Bank Co., Ltd. (hereinafter referred to
as "Chengdu Bank") and Chengdu Jiaozi Financial Holding Group Co., Ltd. (hereinafter referred to as
"Jiaozi Financial Holding") to jointly invest in and establish Chengyin Financial Leasing Co., Ltd. (subject
to actual industrial and commercial registration). The Company will invest CNY 300 million in cash with
its own funds, accounting for 15% of the total equity; Chengdu Bank will invest CNY 1.4 billion in cash
with its own funds, accounting for 70% of the total equity; Jiaozi Financial Holding will invest CNY 300
million with its own funds, accounting for 15% of the total share capital.
Except for the above matters, the Company has no other post balance sheet events that need to be
disclosed as of 31 December 2020.
15. Other important information
15.1. Annuity plan
The Company carried out the enterprise annuity payment work normally in 2020. 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.
15.2. Segment information
15.2.1. If the Company has no reporting segment or cannot disclose total assets and total
liabilities of reporting segments, the reason should be disclosed.
Except for the business on wine sales, the Company does not operate other businesses that have a
significant impact on operation results. In addition, the Company operates mainly in one area, revenue
mainly from China and main assets also located in China, so the Company does not need to disclose
segment data.
235
2020 Annual Report of Luzhou Laojiao Co., Ltd.
15.3. Other significant events that can affect investors’ decision
(1) Saving deposits involving contract disputes
As stated in Note 12.2, 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.
Based on the amount of assets preserved by the public security organization at present and professional
legal opinions issued by Beijing Weiheng (Chengdu) Law Firm on 10 March 2021, the Company has
made provision for bad debts on savings deposits involving contract disputes of CNY 200 million. In the
future, the amount of bad debts may be adjusted along with the process and recovery of cases.
(2) Progress of technical renovation project of brewing investment
Based on the Company ‘s development strategy, the "13th Five-Year Plan" and deep analysis of the
liquor industry and the actual situation of the Company itself, the Company invested in the
implementation of technical renovation project of brewing with Brewing Company, the wholly-owned
subsidiary, as the main body. The total investment of the project is CNY 8,877.2765 million, and the
required funds are solved by the Company with self-owned funds and other financing methods. At
present, the project has been completed and invested a total of CNY 7,722.4114 million, and the
completion ratio has been 100%. Besides, the quality acceptance of relevant subprojects has been
accomplished and other acceptance and settlement are in an orderly way.
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 2020.
16. Notes to the main Items of the financial statements of parent
company (all currency unit is CNY, except other statements)
16.1. Accounts receivable
16.1.1. Analysis by categories
Monetary Unit: CNY
Closing Balance Opening Balance
Provision for bad Provision for bad
Book balance Book balance
Type debt Book debt Book
Proporti Proporti value Proportio Proportio value
Amount Amount Amount Amount
on on n n
Including:
Accounts 100.00 21,759.0
3,927.50 3,927.50 100.00% 196.21 0.90% 21,562.85
receivables tested % 6
236
2020 Annual Report of Luzhou Laojiao Co., Ltd.
for impairment by
the portfolio
Including:
Accounts
receivables tested
for impairment on 100.00 21,759.0
3,927.50 3,927.50 100.00% 196.21 0.90% 21,562.85
the portfolio with % 6
characteristics of
credit risk
100.00 21,759.0
Total 3,927.50 3,927.50 100.00% 196.21 0.90% 21,562.85
% 6
Accounts receivables tested for impairment by the portfolio:
Monetary Unit: CNY
Closing Balance
Item
Book balance Provision for bad debt Proportion
Risk portfolio
Other portfolios 3,927.50
Total 3,927.50 --
Statements for determining the portfolio:
Note: Other portfolios refer to the receivable payment for goods from the subsidiary Sales Company of
Luzhou Laojiao Co., Ltd. with no risks and provision for bad and doubtful debt.
Please refer to the relevant information of disclosure of provision for bad debt of other accounts
receivable if adopting the general mode of expected credit loss to withdraw provision for bad debt of
accounts receivable.
Applicable √ N/A
Disclosure by aging
Monetary Unit: CNY
Aging Book balance
Within 1 year (including 1 year) 3,927.50
Total 3,927.50
16.1.2. Provision and recovery for bad and doubtful debt in the current period
Allowance of provision for bad debt:
Monetary Unit: CNY
Type Opening Current Period Closing Balance
237
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Balance Reversal or
Allowance Write-off Other
recovery
Accounts
receivables
tested for 196.21 196.21
impairment by
the portfolio
Total 196.21 196.21
There is no accounts receivable reversed or recovered with significant amount during the reporting
period.
16.1. 3. Top five entities with the largest balances of accounts receivable
Monetary Unit: CNY
Proportion to total closing
Closing Balance of provision
Company Name Closing Balance balance of accounts
for bad debt
receivable
Sales Company of Luzhou
3,927.50 100.00%
Laojiao Co., Ltd.
Total 3,927.50 100.00%
16.2. Other receivables
Monetary Unit: CNY
Item Closing Balance Opening Balance
Interest receivable 40,570,144.44
Dividends receivable 1,407,900.00
Other receivables 7,051,341,794.83 5,809,911,336.06
Total 7,052,749,694.83 5,850,481,480.50
16.2.1. Interest receivable
16.2.1.1. Classification of interest receivable
Monetary Unit: CNY
Item Closing Balance Opening Balance
Fixed deposits 40,570,144.44
Total 40,570,144.44
238
2020 Annual Report of Luzhou Laojiao Co., Ltd.
16.2.1.2. Significant interest receivable overdue
There is no significant interest receivable overdue at the period-end.
16.2.1.3. Provision for bad and doubtful debt
Applicable √ N/A
16.2.2. Dividend receivable
16.2.2.1. Classification of dividend receivable
Monetary Unit: CNY
Item Closing Balance Opening Balance
Guotai Junan Securities Co., Ltd. 1,407,900.00
Total 1,407,900.00
16.2.2.2. Provision for bad and doubtful dividend receivable in the current period
Applicable √ N/A
Other statements:
There is no provision for bad debt at the period-end.
16.2.3. Other receivables
16.2.3.1. Other receivables disclosed by nature
Monetary Unit: CNY
Nature Closing book balance Opening book balance
Intercourse funds of subsidiaries
6,957,047,554.34 5,709,914,323.15
receivable
Intercourse funds and others 9,599,994.92 14,258,750.49
Petty cash 393,142.93 454,894.47
Saving deposits involving contract
285,044,911.68 287,400,297.52
disputes
Total 7,252,085,603.87 6,012,028,265.63
16.2.3.2. Provision for bad and doubtful other receivables in the current period
Monetary Unit: CNY
Provision for bad debt First stage Second stage Third stage Total
239
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Expected credit Expected loss in the Expected loss in the
loss of the next 12 duration (credit duration (credit
months impairment not occurred) impairment occurred)
Balance of 1 January
2,116,929.57 200,000,000.00 202,116,929.57
2020
Balance of 1 January
2020 in the current —— —— —— ——
period
Reversal of the current
1,373,120.53 1,373,120.53
period
Balance of 31
743,809.04 200,000,000.00 200,743,809.04
December 2020
Changes of carrying amount with significant amount changed of loss provision in the current period
Applicable √ N/A
Disclosure by aging
Monetary Unit: CNY
Aging Book balance
Within 1 year (including 1 year) 6,963,615,200.49
1-2 years 3,268,477.64
2-3 years 78,387.13
Over 3 years 285,123,538.61
4-5 years 28,626.93
Over 5 years 285,094,911.68
Total 7,252,085,603.87
16.2.3.3. Provision and recovery for bad and doubtful other receivables in the current period
Allowance of provision for bad debt:
Monetary Unit: CNY
Current Period
Opening
Type Reversal or Closing Balance
Balance Allowance Write-off Other
recovery
Other receivables
tested for
200,000,000
impairment 200,000,000.00
.00
individually
Note 1
240
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Other receivables
tested for 2,116,929.5
1,373,120.53 743,809.04
impairment by the 7
portfolio
202,116,929
Total 1,373,120.53 200,743,809.04
.57
Note 1: Refer to Note 5.5, 12.2 for details.
Note 2: There is no provision for bad debt reversed or recovered of other receivables with significant
amount in the reporting period.
16.2.3.4. Top five entities with the largest balances of the other receivables
Monetary Unit: CNY
Provisioning
Proportion in total
Company Name Nature Closing Balance Aging amount at period
receivables
end
Luzhou Laojiao Internal
5,848,582,256.10 Within 1 year 80.65%
Brewing Co., Ltd. transactions
Luzhou Laojiao
Internal
Electronic 434,982,161.25 Within 1 year 6.00%
transactions
Commerce Co., Ltd.
Agricultural Bank of
China Changsha
Yingxin Sub-branch,
Industrial and Saving deposits
Commercial Bank of involving contract 285,044,911.68 Over 5 years 3.93% 200,000,000.00
China Nanyang disputes
Zhongzhou
Sub-branch and
another bank.
Luzhou Laojiao
Bosheng Hengxiang Internal
232,502,159.89 Within 1 year 3.21%
Liquor Sales Co., transactions
Ltd.
Luzhou Laojiao
Internal
Import and Export 140,498,343.05 Within 1 year 1.94%
transactions
Trade Co., Ltd.
Total -- 6,941,609,831.97 -- 95.72% 200,000,000.00
16.3. Long-term equity investments
Monetary Unit: CNY
241
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Closing Balance Opening Balance
Item Provision for Provision for
Book balance Book value Book balance Book value
impairment impairment
Investment in 3,413,960,128.1 3,413,960,128.1 3,413,960,128.1 3,413,960,128.1
subsidiary 1 1 1 1
Investment in
2,472,698,683.1 2,470,131,584.3 2,225,288,824.5 2,222,721,725.7
associates and 2,567,098.80 2,567,098.80
6 6 2 2
joint venture
5,886,658,811.2 5,884,091,712.4 5,639,248,952.6 5,636,681,853.8
Total 2,567,098.80 2,567,098.80
7 7 3 3
16.3.1. Investment in subsidiary
Monetary Unit: CNY
Changes in current period Closing
Opening Closing
balance of
Investee Balance Provision for Balance
Increase Decrease Other provision for
(book value) impairment (book value)
impairment
Luzhou
Pinchuang 57,649,100.0
57,649,100.00
Technology 0
Co., Ltd.
Sales
Company of
103,162,447. 103,162,447.0
Luzhou
09 9
Laojiao Co.,
Ltd.
Luzhou
Laojiao 3,172,109,99 3,172,109,991
Brewing Co., 1.25 .25
Ltd.
Luzhou
Laojiao
International
5,433,789.77 5,433,789.77
Development
(Hong Kong)
Co., Ltd.
Luzhou
Laojiao 51,604,800.0
51,604,800.00
Electronic 0
Commerce
242
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Co., Ltd.
Luzhou
Baonuo 20,000,000.0
20,000,000.00
Biotechnology 0
Co., Ltd.
Luzhou
Laojiao
Tourism 4,000,000.00 4,000,000.00
Culture Co.,
Ltd.
Luzhou
Laojiao Health 1
0.00 0.00
Liquor Industry
Co., Ltd. Note
3,413,960,12 3,413,960,128
Total
8.11 .11
Note: 1. The Company obtained 100% of equity in Health Liquor Industry by the business combination
under the same control. The net assets of Health Liquor Industry were negative on the M&A date, and
the book cost of long-term equity investment was limited to 0 by the Company.
16.3.2. Investment in associate and joint venture
Monetary Unit: CNY
Changes in current period Closing
Gain or Adjustm Balance
Opening Closing
loss ents of Cash Provision of
Balance Changes Balance
Investee Decreas recogniz other divided for provision
(book Increase in other Other (book
e ed under compreh or profit impairme for
value) equity value)
equity ensive declared nt impairme
method income nt
1. Joint Venture
2. Associate
Huaxi
Securitie 2,209,73 197,511, -2,965,2 20,735,1 2,383,55 2,567,09
s Co., 8,981.55 851.10 93.21 66.94 0,372.50 8.80
Ltd.
Sichuan
Develop
12,982,7 -6,128,2 6,854,47
ment
44.17 72.50 1.67
Wine
Investme
243
2020 Annual Report of Luzhou Laojiao Co., Ltd.
nt Co.,
Ltd.
CTS
Luzhou
Laojiao
Cultural 80,000,0 -273,259 79,726,7
1
Tourism 00.00 .81 40.19
Develop
ment
Co., Ltd.
2,222,72 80,000,0 191,110, -2,965,2 20,735,1 2,470,13 2,567,09
Subtotal
1,725.72 00.00 318.79 93.21 66.94 1,584.36 8.80
2,222,72 80,000,0 191,110, -2,965,2 20,735,1 2,470,13 2,567,09
Total
1,725.72 00.00 318.79 93.21 66.94 1,584.36 8.80
Note: 1. On 7 August 2020, the 21st Meeting of the ninth Board of Directors of the Company reviewed
and approved the Proposal on Participating in the Investment in the Establishment of CTS Luzhou
Laojiao Cultural Tourism Development Co., Ltd., agreeing to the Company's cooperation with Hong
Kong China Travel International Investment Co., Ltd. (hereinafter referred to as "Hong Kong China
Travel") to fund the establishment of CTS Luzhou Laojiao Cultural Tourism Development Co., Ltd.
Specifically, Hong Kong China Travel will hold 60% of the shares and the Company will hold 40%, which
has a significant impact and is calculated according to the equity method.
16.4. Operating revenue and cost of sales
Monetary Unit: CNY
Current Period Previous Period
Item
Revenue Cost of sales Revenue Cost of sales
Primary business 5,455,096,585.89 4,185,106,836.28 4,860,840,693.18 3,494,170,203.81
Other business 43,748,867.59 23,164.25 25,969,729.09 24,717.35
Total 5,498,845,453.48 4,185,130,000.53 4,886,810,422.27 3,494,194,921.16
Details:
Monetary Unit: CNY
Contract category Liquor sales Total
Commodity type 5,455,096,585.89 5,455,096,585.89
Including:
Medium and high
5,444,771,238.63 5,444,771,238.63
grade liquor
Other liquor 10,325,347.26 10,325,347.26
244
2020 Annual Report of Luzhou Laojiao Co., Ltd.
By operating segment 5,455,096,585.89 5,455,096,585.89
Including:
Domestic 5,455,096,585.89 5,455,096,585.89
Including:
Contract type 5,455,096,585.89 5,455,096,585.89
Including:
Commodity sales
5,455,096,585.89 5,455,096,585.89
contract
Including:
Including:
Including:
Details about performance obligations:
N/A
16.5. Investment income
Monetary Unit: CNY
Item Current Period Previous Period
Investment income from long-term equity
3,929,019,694.32 4,042,151,515.27
investments under cost method
Investment income from long-term equity
191,110,318.79 145,963,325.70
investments under equity method
Dividends income gained during the
period of holding other equity instrument 9,379,824.36 8,748,669.71
investment
Total 4,129,509,837.47 4,196,863,510.68
16.6. 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
Sales Company of Luzhou Laojiao Co., Ltd. 3,875,865,582.42 3,839,476,695.00
Luzhou Baonuo Biotechnology Co., Ltd. 9,897,435.68 1,020,509.10
Luzhou Pinchuang Technology Co., Ltd. 43,256,676.22 187,948,211.21
Luzhou Laojiao Tourism Culture Co., Ltd. 13,706,099.96
Subtotal 3,929,019,694.32 4,042,151,515.27
245
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Including: investment income from long-term equity investments under the equity method:
Item Current Period Previous Period
Huaxi Securities Co.,Ltd. 197,511,851.10 148,787,121.31
Sichuan Development Wine Investment Co., Ltd. -6,128,272.50 -2,823,795.61
CTS Luzhou Laojiao Cultural Tourism Development Co., Ltd. -273,259.81
Subtotal 191,110,318.79 145,963,325.70
Including: dividend income gained during the period of holding other equity instrument investment:
Item Current Period Previous Period
North Chemical Industries Co.,Ltd. 85,995.53 85,995.53
Luzhou Bank Co., Ltd. 4,700,800.00 5,424,000.00
Guotai Junan Securities Co.,Ltd. 4,593,028.83 3,238,674.18
Subtotal 9,379,824.36 8,748,669.71
17. Supplementary information
17.1. Detailed statement of extraordinary gain and loss in the current period (+ for
gain, - for loss)
√ Applicable N/A
Monetary Unit: CNY
Item Amount Remark
Gains or losses on disposal non-current
8,123,010.18 For details please see Note 5.40
assets
Government grants included into current
profits and losses (other than
government grants closely related to
31,409,825.37 For details please see Note 5.37
enterprise business and granted by
quota or quantity according to national
unified standard)
Other non-operating income and costs
-20,289,086.46 For details please see Note 5.41, 5.42.
other than above items
Less: Impact from income tax 4,512,028.92
Impact from non-controlling
-159,555.47
shareholders’ equity
Total 14,891,275.64 --
Statement for extraordinary gain and loss items that the Company defines according to the definition in
246
2020 Annual Report of Luzhou Laojiao Co., Ltd.
“Explanatory Announcement of Information Disclosure of Company that Issues Securities publicly NO.1-
Extraordinary Gain and Loss” and definition of recurrent gain and loss items that are listed as
extraordinary gain and loss in the “Explanatory Announcement of Information Disclosure of Company
that Issues Securities publicly NO.1- Extraordinary Gain and Loss”:
Applicable √ N/A
17.2. Return on equity and earnings per share
EPS(CNY/Share)
Profit during reporting period Weighted average ROE
Basic EPS Diluted EPS
Net profits attributable to
ordinary shareholders of the 28.27% 4.10 4.10
Company
Net profits attributable to
ordinary shareholders of the
28.20% 4.09 4.09
Company after deduction of
extraordinary gain and loss
247
2020 Annual Report of Luzhou Laojiao Co., Ltd.
Section XIII Documents Available for Reference
1. Financial statements signed and stamped by the legal representative, person in charge of accounting
affairs and person in charge of accounting department;
2. The original of the auditor’s report with the seal of the accounting firm, and signed and stamped by
CPAs;
3. The originals of all company documents and announcements that are disclosed on the public website
designated by CSRC during the reporting period.
248
