2021 Annual Report of Luzhou Laojiao Co., Ltd.
Luzhou Laojiao Co., Ltd.
2021 Annual Report
April 2022
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2021 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
Qian Xu Director Work Wang Hongbo
Affected by risks, uncertainties and assumptions, the forward-looking statements concerning business
objectives and future plans made in this report based on the subjective assumptions and judgments of
the future policies and economic conditions may be significantly different from the actual results. Such
statements shall not be considered as virtual promises of the Company to investors, and the investors
and relevant persons shall maintain adequate risk awareness and shall understand the differences
between plans, forecasts and commitments.
In the annual report, the potential risks in the operation of the Company have been disclosed. Investors
are kindly reminded to pay attention to possible investment risks.
The profit distribution plan approved by the board of directors: based on 1,471,615,076 shares, a cash
dividend of CNY 32.44 (tax inclusive) will be distributed for every 10 existing shares held, 0 shares of
bonus shares (tax inclusive), and reserves would not be converted into share capital.
This Report has been prepared in both Chinese and English. Should there be any discrepancies or
misunderstandings between the two versions, the Chinese version shall prevail.
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
Contents
Section I Important Statements, Contents and Definitions ......................................... 2
Section II Company Profile and Key Financial Results ............................................... 6
Section III Management Discussion and Analysis .................................................... 11
Section IV Corporate Governance ............................................................................ 43
Section V Environmental and Social Responsibility ................................................ 72
Section VI Significant Events ................................................................................... 80
Section VII Changes in Shares and Information about Shareholders....................... 89
Section VIII Preferred Shares ................................................................................... 98
Section IX Information about Bond .......................................................................... 99
Section X Financial Report ..................................................................................... 108
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
Documents Available for Reference
1. Financial statements signed and stamped by the responsible person for the Company, the responsible
person for accounting work and the responsible person for the Company’s financial affairs (Accounting
Supervisor);
2. The original of the auditor’s report with the seal of the accounting firm, and signed and stamped by
CPAs;
3. The originals of all company documents and announcements that are disclosed to the public during
the reporting period.
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2021 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 Luzhou Laojiao Sales Co., Ltd.
Brewing Company Refer to Luzhou Laojiao Brewing Co., Ltd.
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2021 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
Changed stock N/A
abbreviation (if any)
Stock exchange where
the shares of the Shenzhen Stock Exchange
Company are listed
Name of the Company
泸州老窖股份有限公司
in Chinese
Abbr. of the Company
泸州老窖
name in Chinese
Name of the Company
Luzhou Laojiao Co., Ltd.
in English (if any)
Abbr. of the Company
LZLJ
name in English (if any)
Legal representative Liu Miao
Registered address Guojiao Square, Luzhou City, Sichuan Province, China
Postal code 646000
The Company’s registered address has changed from 46 Guihua Street,
Past changes of
Luzhou City, Sichuan Province, China to Guojiao Square, Luzhou City,
registered address
Sichuan Province, China in 2000.
Luzhou Laojiao 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
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
Luzhou Laojiao Marketing Network Command Center, Nanguang
Address
Road, Luzhou City, Sichuan Province, China
Tel. (0830)2398826 (0830)2398826
Fax (0830)2398864 (0830)2398864
E-mail dsb@lzlj.com dsb@lzlj.com
3. Information disclosure and place where the annual report is kept
Stock exchange website where this
China Securities Journal, Securities Times, Securities Daily
Report is disclosed
Media and website where this Report is
http://www. cninfo.com.cn
disclosed
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
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
Sponsors engaged by the Company to continuously perform its supervisory function during the reporting
period
□ Applicable √ N/A
Financial adviser engaged by the Company to continuously perform its supervisory function during the
reporting period.
Applicable √ N/A
6. Key accounting data and financial indicators
Whether the Company performed a retroactive adjustment to or restatement of accounting data.
Yes √ No
2021 2020 YoY Change 2019
Operating revenues (CNY) 20,642,261,724.37 16,652,854,549.80 23.96% 15,816,934,272.86
Net profits attributable to
shareholders of the Company 7,955,554,351.73 6,005,723,069.36 32.47% 4,641,988,857.03
(CNY)
Net profits attributable to
shareholders of the Company
7,884,384,055.60 5,990,831,793.72 31.61% 4,600,916,766.09
before non-recurring gains and
losses (CNY)
Net cash flows from operating
7,698,648,104.51 4,916,102,451.30 56.60% 4,841,619,203.86
activities (CNY)
Basic earnings per share
5.43 4.10 32.44% 3.17
(CNY/share)
Diluted earnings per share
5.43 4.10 32.44% 3.17
(CNY/share)
Weighted average ROE 31.15% 28.27% 2.88% 25.50%
At the end of 2021 At the end of 2020 YoY Change At the end of 2019
Total assets (CNY) 43,211,782,005.68 35,009,203,823.45 23.43% 28,919,969,078.32
Net assets attributable to
shareholders of the Company 28,040,247,005.94 23,074,858,552.59 21.52% 19,406,845,725.61
(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
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
non-recurring gains and losses was negative
Yes √ No
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 5,003,680,377.12 4,313,416,649.93 4,792,727,587.31 6,532,437,110.01
Net profits attributable to
2,166,766,179.07 2,059,550,543.18 2,049,184,699.30 1,680,052,930.18
shareholders of the Company
Net profits attributable to
shareholders of the Company
2,158,046,960.66 2,050,603,172.22 2,068,265,688.40 1,607,468,234.32
before non-recurring gains and
losses
Net cash flows from operating
1,310,035,683.78 1,428,201,356.12 1,217,815,864.27 3,742,595,200.34
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
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
Unit: CNY
Item 2021 2020 2019 Note
Profit or loss from disposal of
non-current assets (including the See "Section X Note
-347,429.88 8,123,010.18 23,211,482.49
write-off portion of the impairment 5.44" for details.
provision)
Government grants accounted for, in the
profit or loss for the current period
(except for the government grants See "Section X Note
closely related to the business of the 51,756,953.15 31,409,825.37 43,969,302.07 5.40 and 5.45" for
Company and consistently given at a details.
fixed amount or quantity in accordance
with the national policies or standards)
Gain or loss on fair-value changes on
held-for-trading financial assets and
liabilities & income from disposal of
held-for-trading financial assets and See "Section X Note
6,352,241.79
liabilities and available-for-sale financial 5.42" for details.
assets (exclusive of the effective portion
of hedges that arise in the Company’s
ordinary course of business)
Reversed portions of impairment
See "Section X Note
allowances for receivables which are 80,000,000.00
5.43" for details.
tested individually for impairment
Other non-operating income and See "Section X Note
expenditure except above-mentioned -40,241,672.68 -20,289,086.46 -11,510,048.21 5.45 and 5.46" for
items details.
Less: Corporate income tax 24,082,098.59 4,512,028.92 13,076,295.35
Minority interests (after tax) 2,267,697.66 -159,555.47 1,522,350.06
Total 71,170,296.13 14,891,275.64 41,072,090.94 --
Other items that meet the definition of non-recurring gain/loss:
Applicable √ N/A
No such cases for the reporting period.
Explain the reasons if the Company classifies any non-recurring gain/loss item mentioned in the
Explanatory Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to
the Public-Non-Recurring Gains and Losses as a recurring gain/loss item.
Applicable √ N/A
No such cases for the reporting period.
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
Section III Management Discussion and Analysis
1. Industry overview for the reporting period
Amid the unpromising macro status at home and abroad since 2021, the Chinese baijiu industry has
been undergoing multiple pressures arising from economic adjustments, spending shrinks, industry-
wide competition, and the recurrent COVID-19 pandemic, which drives the whole baijiu industry to
speed up its concentration on brands, quality, and leading enterprises. Facing numerous pressures and
challenges, the Company actively built a scientific and sound strategic system, brand system, capacity
system, talent system, and management system to prepare for faster growth.
2. Business scope in the reporting period
The Company shall comply with the disclosure requirements for companies engaging in food & liquor
and wine production of the Guidelines No. 3 of the Shenzhen Stock Exchange on Self-regulation of
Listed Companies—Industry-specific Information Disclosure.
Holding 10 food business licenses, the Company operates within the baijiu subdivision industry which
belongs to the liquor & wine, beverage and refined tea production industry with specialized baijiu
product design, production and sales as its main business model. The Company’s main business is the
research and development, production and sales of baijiu series such as "National Cellar 1573" and
"Luzhou Laojiao", and its main comprehensive performance indicators rank high in the baijiu industry.
For 2021, operating revenue amounted to CNY 20.642 billion, up 23.96% year on year; and the net
profit attributable to the shareholders of the listed company reached CNY 7.956 billion, up 32.47% year
on year.
For the Company's brand operations, please refer to "4.1 Overview" under “4. Analysis of main
business” in this section. The Company’s main products are classified as follows:
Main product types Classification criteria Representative brand name
National Cellar 1573, Luzhou
Tax-inclusive sales price ≥ CNY
Mid- and high-end Baijiu Laojiao Tequ, and Century-old
150 per bottle
Luzhou Laojiao Jiaoling Baijiu
Tax-inclusive sales price < CNY Luzhou Laojiao Touqu and Luzhou
Other Baijiu
150 per bottle Laojiao 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
Company directly supplies goods to the distributors, and then distributors sell them to consumers and
terminal outlets.
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
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
19,523,560,616.72 2,691,947,704.54 86.21% 24.40% 5.25% 2.51%
operation model
Emerging channel
891,609,852.37 193,737,447.09 78.27% 18.26% 25.90% -1.32%
operation model
2. Distributors
Unit: Number
Increased
Number of Decreased
number YoY change of
distributors at number during
Region during the number of Reason for any significant change
the end of the the reporting
reporting distributors (%)
reporting period period
period
Domestic 1783 407 671 -12.90
Overseas 148 8 34 -14.94
3. Main settlement method for distributors and distribution method
The Company's main settlement method for distributors is payment before delivery. The distribution
method is authorized distribution.
4. Top five distributors
The Company had no accounts receivable from the top five distributors at the end of the period. For
details, please refer to Section III 4.2.8. "Main customers and suppliers".
Store sales terminals accounted for more than 10%
□ Applicable √ N/A
Online direct sales
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
√ Applicable □N/A
For the sales of the Company's main products, please refer to Section III 4.2.1. "Breakdown of operating
revenues". The Company's complete series of products are sold online. Its main cooperation platforms
included JD.com and Tmall.
Sales price of main products contributing over 10% of the total operating revenues for the current period
changed by more than 30% from the previous reporting period
□ Applicable √ N/A
Purchase model and purchase content
Unit: CNY
Purchase model Purchase content Amount of main purchase content
Organic raw grains are purchased through
cooperative model and supplied by organic raw
Raw materials 4,540,737,351.28
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 131,839,617.88
Commission and the price bureau, and
purchase through bid invitation
Purchase through bid invitation Low-value consumables 67,031,892.39
The purchase of raw materials from cooperatives or farmers accounted for more than 30% of the total
purchase amount
□ Applicable √ N/A
The price of main raw materials purchased externally changed by more than 30% year-on-year
□ Applicable √ N/A
Main production model:
The Company's main production model is self-production.
Commissioned processing and production
□ Applicable √ N/A
Main breakdown items of cost of sales
Unit: CNY
2021 2020
By business
Item As % of cost of As % of cost of YoY Change
segment Amount Amount
sales sales
Baijiu Raw materials 2,502,121,435.16 86.71% 2,363,441,505.18 87.17% 5.87%
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
Baijiu Labor costs 160,836,008.91 5.57% 157,352,625.49 5.80% 2.21%
Manufacturing
Baijiu 222,727,707.56 7.72% 190,639,876.30 7.03% 16.83%
overhead
Production volume and inventory
1. Production volume, sales volume and inventory of main products
YoY change YoY change
Production
Product Sales volume Inventory of production of sales YoY change Description of
volume
classification (ton) (ton) volume volume of inventory major changes
(ton)
(%) (%)
Production volume
and inventory
increased
Mid- and
year-on-year
high-end 48,662.90 31,765.82 39,177.05 100.13 25.42 75.84
mainly due to the
baijiu
Company's
adjustment of
production plans.
Production volume
and sales volume
decreased
year-on-year
Other baijiu 46,155.34 46,054.68 13,675.50 -47.01 -51.82 0.74
mainly due to the
decreased sales
volume of Erqu
products.
2. Inventory at the end of the reporting period
Unit: Ton
Finished baijiu Semi-finished baijiu (including base baijiu)
52,852.55 385,727.12
3. Capacity
Unit: Ton
Main products Design capacity Actual capacity Capacity in progress
Baijiu 170,000 170,000 0
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
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
Sichuan Basin and the Yunnan-Guizhou Plateau, featuring a warmer and more humid sub-tropical
climate compared to other areas at the same latitude, with a temperature above 0℃ throughout the year.
The unique climate and soil are agreeable to grow grains for baijiu brewing. The glutinous red sorghum
and soft wheat grown in this area are the primary raw materials for the baijiu of the Company. The cellars
in which the Company brews its baijiu are made of the local loessal clay characterized by strong
viscosity, rich minerals and excellent moisture retention. In addition, the abundant and quality water in
the region creates a unique geographical advantage for the production of the Company’s baijiu.
B. Advantage of cellars and brewing technique
Aged cellars are the most essential condition for a strong aromatic baijiu maker to produce good quality
baijiu. The Cellars of National Treasure 1573, founded in 1573, was granted by the State Council as the
first Cultural Relic of National Importance in the industry under the Protection of the State in December
1996. 1,619 cellars of Luzhou Laojiao which have been continuously used for over 100 years, together
with its 16 ancient brewing workshops and three natural cellar holes, were all selected as the fourth
batch of Cultural Relics of National Importance under the Protection of the State in 2013. They are
unique resources that cannot be replicated. In both 2006 and 2012, Luzhou Laojiao Daqu Cellars were
twice selected into the preliminary list of China for World Heritage. In November 2018, Luzhou Laojiao
Cellars and Brewing Workshops were selected into China’s Industrial Heritage List. The time-honored
Traditional Brewing Technique of Luzhou Laojiao is a 24-generation inheritance and a classic brewing
technique for strong aromatic baijiu. This technique was selected as the first batch of National Intangible
Cultural Heritage in May 2006. The Cellars of National Treasure 1573 and the Traditional Brewing
Technique of Luzhou Laojiao together provide the most essential basis and assurance for the quality of
the product series of National Cellar 1573 and Luzhou Laojiao. Additionally, Huangyi Brewery Eco-Park
has moved into full production in late 2020. Upholding the cultural connotations of “inheritance of ancient
ways, pure-grain brewing, traditional techniques, and intelligent technologies”, the Company carried out
brewing technical renovation featuring automatic, intelligent and information technology-based
transformation. As such, it has established a baijiu brewery eco-park comprising brewing workshops,
leaven making workshops, and base baijiu storage cellars, along with energy and sewage treatment
facilities. This brewery eco-park brings with it new production capacities of 100,000 tons of quality
pure-grain solid baijiu and 100,000 tons of leaven in addition to a new storage capacity of 380,000 tons
of baijiu per year, marking a substantial increase in the Company’s production capacity.
C. Brand advantage
Brand is a key business resource for baijiu producers. The Company’s reputation is greatly built on its
superiority in brand. National Cellar 1573, which is of a connoisseurship level, is a world-famous
high-end brand. Luzhou Laojiao Tequ, a classic brand for strong aromatic baijiu, was selected in 1952 by
the first national tasting competition judges as one of the four most famous baijiu brands in China. It is
the only strong aromatic baijiu brand that won the title of “National Famous Liquor” for five consecutive
times, as well as the pioneer with regard to the “Tequ” variety of baijiu. In recent years, the Company has
successfully put in place a brand system of “dual brands, three product series, and major single
products” with great clarity and focus. The programs carried out to promote the brand of National Cellar
1573 and revive the brand of Luzhou Laojiao have produced remarkable results, with significant
improvement in brand influence. The Company’s baijiu is increasingly known by consumers as a
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
national brand of strong aromatic baijiu and of authentic flavor.
D. Quality and R&D advantage
The Company is committed to producing high-quality baijiu, advocating a healthy lifestyle and “making
the quality visible”. The first “Organic Sorghum Planting Base” was established and the six-factor
management system (including organic, quality, safety, environment, measurement and energy) was
built and improved. The research platforms are established, including National Engineering Research
Center of Solid-State Brewing, National Liquor Test Center, National Postdoctoral Workstation, etc,
which all support the innovation and upgrading of products with their strong technical force. In recent
years, the Company has put in a lot of efforts in researching Tequ production, brewing informatization &
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 Baijiu, as well as production efficiency improvement.
E. Talent advantage
The Company has 1 inheritor of national intangible cultural heritage, 4 masters of Chinese brewing, 2
masters of Chinese baijiu, 1 master of Chinese baijiu technique, 2 Chinese liquor connoisseurs, 11
senior professor engineers, 7 experts who receive special allowances from the State Council, 4 national
technicians, 3 academic and technologic leaders of Sichuan province, 2 craftsmen of Sichuan province,
1 technological elite of Sichuan province, as well as hundreds of highly skilled personnel including
national baijiu judges, senior brewing technicians and brewing technicians. The comprehensive and
professional personnel system assures the sound development of the Company.
4. Analysis of main business
4.1. Overview
In 2021, the Company successfully accomplished multiple tasks and targets, including the sales
expansion, brand culture empowerment, capacity upgrade, digital and intelligent innovation, and
management efficiency improvement, getting off to a good start in the "14th Five-year Plan" period. For
the reporting period, operating revenue amounted to CNY 20.642 billion, up 23.96% year on year; and
the net profit attributable to the shareholders of the listed company reached CNY 7.956 billion, up
32.47% year on year. Major business actions taken by the Company in the year are summarized as
follows:
A. Precision marketing to expand its market
In 2021, the Company resolutely implemented the development requirement of "precision marketing to
develop the market", made comprehensive efforts to promote its national market presence and base
market development, and saw significant progress in implementing the strategy of "development
towards Eastern and Southern China". In addition, breakthroughs were constantly recorded in the
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
overseas market, e-commerce channel, and innovation segments, which contributed to a sharp fall in
the marketing expense, a consistent increase in the profit, and a constant expansion of the customer
base. With years of efforts, the Company has developed into a top producer of new baijiu that is
"comprehensively customer-centric".
B. Brand building and polishing
Firmly focusing on the strategy of "dual brands, three product series, and major single products" in 2021,
the Company gradually perfected its brand matrix. Specifically, the "bottled vintage baijiu" it rolled out
was the first in the industry to reveal the true vintage of baijiu. Additionally, the Company quickly
introduced its "Chinese Flavor" product in core cities in China, and the National Cellar 1573 series has
been one of the three high-end baijiu products in China. New strategic products were also launched,
such as Luzhou Laojiao 1952 and Luzhou Laojiao Hey Guys. All these measures contributed to the
breakthroughs in its "dual brands" strategy. Furthermore, work concerning the marketing of various
brands and the fostering of the core consumer circle was underway smoothly, with the frequency of
events and the number of VIP registrations rising sharply year on year as well as the brand influence
being extended significantly. In doing so, the young, fashionable, and healthy elements of the brand of
Luzhou Laojiao were constantly highlighted, and the brand heritage was richer.
C. Capacity upgrade for a better supply guarantee
In 2021, after Huangyi Brewery Eco-Park came on stream, the Company completed its layouts of the
capacity to produce quality solid pure-grain base baijiu, the storage capacity, and the packaging capacity.
Thus, its supply guarantee capabilities were greatly improved. As such, a new capacity pattern of "1 + 2
+ N" was formed to support the Company's sales expansion during the "14th Five-year Plan" period with
high-quality capacity. Specifically, "1" refers to "one center", namely the Cellars of National Treasure
1573; "2" refers to "two parks", namely Luohan Brewery Eco-Park and Huangyi Brewery Eco-Park; "N"
refers to "n bases", including An'ning Science and Technology Park, three natural cellar holes, Luzhou
Baijiu Industry Development Zone, and other production bases. Concerning important awards and
honors, the Company was honored with the "China National Light Industry Council Technology Progress
Award (First Prize)" as well as the titles of "National Green Manufacturing Demonstration Unit (the
Ministry of Industry and Information Technology)" and "Advanced Collective in Light Industry
Innovation".
D. Digital and intelligent empowerment for transformation and upgrading
In 2021, the Company consistently promoted the building of a ''digital and intelligent Luzhou Laojiao".
Gaining a leading position in the world in terms of digital and intelligent brewing and production, the
Company was honored with the title of "China Light Industry Demonstration Case Enterprise in
Intelligent Manufacturing". In addition, comprehensive efforts were made to promote the "Three-network
Integration, Five-flow Interconnection, and Multi-code Interrelation" project; it proactively explored the
O2O new retail model, built online cloud stores, and launched activities to develop digital consumers,
which led to a consistent increase in the return of core consumers. Moreover, several digital and
intelligent management innovation projects undertaken by the Company were selected as the scientific
and technological programs, pilot projects, and special research projects at the ministerial or provincial
level.
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
E. Refined management for efficiency improvement
In 2021, based on the development requirement for "refined management to increase benefits", the
Company comprehensively improved its basic management, established several important systems,
and optimized project management procedures and key nodes so that the resource factors can highly
match the business actions. Besides, it made comprehensive efforts to solidify its line of defense against
business risks and carried out the supervision of major projects and special supervision and inspection
of high-risk operations to create a security cordon for preserving and increasing the value of state assets.
It fully promoted the selection and cultivation of scientific talent and successfully implemented the
restricted share incentive plan, thereby further establishing and improving its long-term incentive
mechanism and unlocking the creativity of talent, organization, and management. With these efforts, the
Company was honored with the title of "China Top 100 Employers in 2021".
In 2021, remarkable achievements were achieved in the Company's comprehensive governance,
security and ecological protection, and fulfillment of social responsibility. Specifically, it consistently
promoted the comprehensive governance project of "consolidating foundation, strengthening
management, building image, and maintaining security" to ensure that it realized sound, steady, and
high-quality development; it fully implemented the "Nine Security Regulations", passed the accreditation
for the rating of "tier-one enterprise with standard safety production", and was listed as "National Green
Plants" and "China Top 100 Light Industry Enterprises in 2021". Furthermore, it consistently launched
major assistance projects in regions that had been lifted out of poverty, such as building cultural plazas,
donating sanitation, and renovating the workshops of rice mill plants, proactively assisted Zhengzhou in
flood relief and Lu County in earthquake relief, and normally carried out long-term public welfare projects,
including "Southwest Medical UniversityLuzhou Laojiao Scholarship" and "Sichuan Police
CollegeLuzhou Laojiao Golden Shield Prize". Additionally, it set up "Sichuan Province Luzhou Middle
SchoolLuzhou Laojiao Fund for Teaching Prize and Scholarship", becoming a model state-owned
enterprise in the fulfillment of social responsibility. In 2021, the Company was honored with the title of
"National Advanced Collective in Poverty Alleviation" and was listed as "Top 100 Enterprises in
Corporate Social Responsibility in Chengdu-Chongqing Economic Circle".
4.2. Revenues and cost of sales
4.2.1. Breakdown of operating revenues
Unit：CNY
2021 2020
As % of operating As % of operating YoY Change
Amount Amount
revenues revenues
Total 20,642,261,724.37 100% 16,652,854,549.80 100% 23.96%
By business segment
Baijiu 20,415,170,469.09 98.90% 16,447,960,569.22 98.77% 24.12%
Other revenues 227,091,255.28 1.10% 204,893,980.58 1.23% 10.83%
By product
18
2021 Annual Report of Luzhou Laojiao Co., Ltd.
Mid- and high-end
18,397,360,159.99 89.12% 14,236,990,348.38 85.49% 29.22%
baijiu
Other baijiu 2,017,810,309.10 9.78% 2,210,970,220.84 13.28% -8.74%
Other revenues 227,091,255.28 1.10% 204,893,980.58 1.23% 10.83%
By geographical segment
Domestic 20,558,860,984.10 99.60% 16,602,974,426.77 99.70% 23.83%
Overseas 83,400,740.27 0.40% 49,880,123.03 0.30% 67.20%
By sales model
Traditional channel
19,523,560,616.72 94.58% 15,693,989,192.05 94.24% 24.40%
operation model
Emerging channel
891,609,852.37 4.32% 753,971,377.17 4.53% 18.26%
operation model
Other revenues 227,091,255.28 1.10% 204,893,980.58 1.23% 10.83%
4.2.2. Business segments, products, geographical segments or sales models
contributing over 10% of the operating revenues or profits
√ Applicable N/A
Unit：CNY
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 business segment
Baijiu 20,415,170,469.09 2,885,685,151.63 85.86% 24.12% 6.43% 2.34%
By product
Mid- and
18,397,360,159.99 1,777,774,059.98 90.34% 29.22% 28.06% 0.09%
high-end baijiu
Other baijiu 2,017,810,309.10 1,107,911,091.65 45.09% -8.74% -16.27% 4.93%
By geographical segment
Domestic 20,558,860,984.10 2,939,761,934.57 85.70% 23.83% 4.40% 2.66%
By sales model
Traditional
channel 19,523,560,616.72 2,691,947,704.54 86.21% 24.40% 5.25% 2.51%
operation model
Under the circumstances that the statistical standards for the Company’s main business data were
adjusted in the reporting period, the Company’s main business data in the current year is calculated
based on adjusted statistical standards at the end of the reporting period
Applicable √ N/A
19
2021 Annual Report of Luzhou Laojiao Co., Ltd.
4.2.3. Whether revenue from sales of goods is higher than revenue of rendering
services
√ Yes No
By business
Item Unit 2021 2020 YoY Change
segment
Sales volume ton 77,820.5 120,915.16 -35.64%
Production
Baijiu ton 94,818.24 111,419.73 -14.90%
volume
Inventory ton 52,852.55 35,854.81 47.41%
Reason for any over 30% YoY movements in the data above
√ Applicable N/A
Sales volume decreased 35.64% year-on-year mainly due to the decreased sales volume of Erqu
products.
Inventory increased 47.41% year-on-year mainly due to the Company's adjustment of production plans.
4.2.4. Execution of significant sales or purchase contracts in the reporting period
Applicable √ N/A
4.2.5. Breakdown of cost of sales
By business segment
Unit：CNY
2021 2020
By business
Item As % of cost As % of cost of YoY Change
segment Amount Amount
of sales sales
Baijiu Raw materials 2,502,121,435.16 86.71% 2,363,441,505.18 87.17% 5.87%
Baijiu Labor costs 160,836,008.91 5.57% 157,352,625.49 5.80% 2.21%
Manufacturing
Baijiu 222,727,707.56 7.72% 190,639,876.30 7.03% 16.83%
overhead
4.2.6. Change in the scope of the consolidated financial statements for the reporting
period
√ Yes No
Subsidiaries that are newly incorporated into the scope of consolidation in this period
Name of subsidiary Reason
Luzhou Laojiao New Retail Co., Ltd. Incorporated through investment
Liquidation and cancellation for subsidiaries in this period
Name of subsidiary Reason
20
2021 Annual Report of Luzhou Laojiao Co., Ltd.
Luzhou Laojiao Whitail Innovative Electronic Commerce Co., Ltd. Liquidation and cancellation
Luzhou Laojiao Selected Electronic Commerce Co., Ltd. Liquidation and cancellation
Chengdu Tianfu Panda Whitail Liquor Industry Co., Ltd. Liquidation and cancellation
Luzhou Whitail Tongdao Uncle Constellation Baijiu Sales Co., Ltd. Liquidation and cancellation
4.2.7. Major changes in the business, products or services in the reporting period
Applicable √ N/A
4.2.8. Main customers and suppliers
Sales to main customers of the Company
Total sales to top five customers（CNY） 14,131,318,165.57
Total sales to top five customers as % of the
68.46%
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 10,176,701,612.84 49.31%
2 Customer B 1,911,034,739.30 9.26%
3 Customer C 1,362,875,680.76 6.60%
4 Customer D 394,842,717.85 1.91%
5 Customer E 285,863,414.82 1.38%
Total -- 14,131,318,165.57 68.46%
Other information on main customers
Applicable √ N/A
Main suppliers of the Company
Total purchases from top five suppliers
1,979,375,304.80
（CNY）
Total purchases from top five suppliers as %
41.76%
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
21
2021 Annual Report of Luzhou Laojiao Co., Ltd.
As % of the total purchases for
No. Supplier Purchases (CNY)
the year
1 Supplier A 693,363,225.88 14.63%
2 Supplier B 461,883,429.11 9.75%
3 Supplier C 369,396,963.49 7.79%
4 Supplier D 238,529,587.31 5.03%
5 Supplier E 216,202,099.01 4.56%
Total -- 1,979,375,304.80 41.76%
Other information on main suppliers
Applicable √ N/A
4.3. Expenses
Unit：CNY
2021 2020 YoY Change Reason for any significant change
Selling and distribution
3,599,211,604.56 3,090,655,832.25 16.45%
expenses
General and
administrative 1,056,116,367.85 844,454,467.47 25.06%
expenses
The YoY decrease of CNY
84,440,796.47 was mainly due to
Finance expenses -216,885,999.21 -132,445,202.74
the increased interest income from
funds.
The YoY increase of CNY
51,854,209.98 (or 60.40%) was
R&D expenses 137,712,329.78 85,858,119.80 60.40%
mainly due to the increased R&D
investments in the current period.
The Company shall comply with the disclosure requirements for companies engaging in food & liquor
and wine production of the Guidelines No. 3 of the Shenzhen Stock Exchange on Self-regulation of
Listed Companies—Industry-specific Information Disclosure.
4.3.1. Breakdown of selling and distribution expenses
Unit：CNY
Selling and distribution
2021 2020 YoY Change Reason for any significant change
expenses
22
2021 Annual Report of Luzhou Laojiao Co., Ltd.
Advertising expenses 1,769,053,962.56 1,316,519,804.16 34.37% Increased advertising activities
Sales promotion
1,139,273,684.38 1,074,611,735.49 6.02%
expenses
Warehousing and
100,059,219.52 92,177,677.09 8.55%
logistics expenses
Labor costs 357,659,249.63 324,598,768.07 10.19%
Other 233,165,488.47 282,747,847.44 -17.54%
4.3.2. Breakdown of advertising expenses
Unit：CNY
Advertising Expenses
Online advertising (exclusive of TV advertising) 364,133,344.81
Offline advertising 461,146,398.77
TV advertising 627,635,674.24
Other (inclusive of branding ideas, exhibitions & showcases, advertising
316,138,544.74
materials, activity planning, etc.)
4.4. R&D investments
√ Applicable N/A
Major R&D Expected impact on the
Purpose Progress Specific objectives
projects Company
The project is a
To develop an intelligent
national key R&D
equipment system with
program during the
packaged technology for
Thermochemical "13th Five-year Plan" Key equipment for
the resource- and Realize a large-scale
Energy- and period undertaken by the resource- and
energy-based utilization of resource- and
Resource-based the Company, which energy-based
brewing waste and energy-based utilization of
Coupled aims to realize the utilization of
successfully build a brewing waste and achieve
Utilization energy- and brewing waste has
demonstration base for the both ecological and
Technology of resource-based been developed
project industrialization to economic benefits.
Brewing Waste utilization of brewing and built.
ensure the low-carbon,
waste with
green development of the
thermochemical
Chinese baijiu industry.
technology.
A Study on the The project is an A study on the To study the correlation Improve the leaven and
Expression international project diversity of between the leaven baijiu quality and enhance
Regulation of Key that the Company microorganisms in microorganisms and the Company's core
Genes in Leaven jointly undertook, the incised metabolites and develop competitiveness.
23
2021 Annual Report of Luzhou Laojiao Co., Ltd.
Microorganisms which studies the notopterygium has high-quality, functional
and the evolution pattern and been carried out. leaven.
Improvement of formation mechanism
Chinese Leaven of microbiomes during
Quality the natural
leaven-marking and
fermentation.
The project aims to The building of a
overcome a batch of technological To carry out multiple Successfully build a
Establishment of
core technological innovation platform studies on the core technological innovation
Sichuan
challenges in is underway to technologies concerning platform, thereby improving
Innovation Center
solid-state brewing and consistently resolve solid-state brewing and the Company's scientific
for Solid-state
resolve major major problems build an influential scientific and technological
Brewing
problems faced by the faced by the and technological innovation capabilities and
Technologies
solid-state brewing solid-state brewing innovation center. level.
sector. sector.
The project aims to
develop core
A Study on the technologies for each
The creation of the
Optimization of link of brewing Level up the Company's
key brewing
Key Intelligent production and build To build an intelligent intelligent brewing and
equipment and
Equipment and intelligent brewing brewing demonstration promote the transformation
supporting control
the System production lines to production line. and upgrading of the
system is
Control for comprehensively traditional brewing industry.
underway.
Brewing upgrade the solid-state
brewing technologies
in the baijiu industry.
Information about R&D personnel
2021 2020 YoY Change
Number of R&D
494 474 4.22%
personnel
R&D personnel as % of
14.39% 14.23% 0.16%
total employees
Educational
backgrounds of R&D —— —— ——
personnel
Bachelor’s degree 326 313 4.15%
Master’s degree 120 115 4.35%
Doctoral degree
23 16 43.75%
(including postdoctoral
24
2021 Annual Report of Luzhou Laojiao Co., Ltd.
workstations)
Age structure of R&D
—— —— ——
personnel
Below 30 220 223 -1.35%
30~40 210 204 2.94%
Information about R&D investments
2021 2020 YoY Change
R&D investments (CNY) 169,125,528.48 112,418,055.64 50.44%
R&D investments as %
0.82% 0.68% 0.14%
of operating revenues
Capitalized R&D
0.00 0.00 0.00%
investments (CNY)
Capitalized R&D
investments as % of total 0.00% 0.00% 0.00%
R&D investments
Reason for any significant change in the composition of R&D personnel and the impact
Applicable √ N/A
Reason for any significant YoY change in the percentage of the R&D investments in the operating
revenues
Applicable √ N/A
Reason for any sharp variation in the percentage of the capitalized R&D investments and rationale
Applicable √ N/A
4.5. Cash flows
Unit：CNY
Item 2021 2020 YoY Change
Subtotal of cash inflows
23,520,677,136.09 17,722,942,520.06 32.71%
from operating activities
Subtotal of cash outflows
15,822,029,031.58 12,806,840,068.76 23.54%
from operating activities
Net cash flows from
7,698,648,104.51 4,916,102,451.30 56.60%
operating activities
Subtotal of cash inflows
41,893,415.77 49,450,467.66 -15.28%
from investing activities
25
2021 Annual Report of Luzhou Laojiao Co., Ltd.
Subtotal of cash outflows
2,719,942,312.51 2,223,910,509.48 22.30%
from investing activities
Net cash flows from
-2,678,048,896.74 -2,174,460,041.82
investing activities
Subtotal of cash inflows
8,305,794.84 1,503,947,876.16 -99.45%
from financing activities
Subtotal of cash outflows
3,190,924,317.15 2,420,721,436.84 31.82%
from financing activities
Net cash flows from
-3,182,618,522.31 -916,773,560.68
financing activities
Net increase in cash and
1,834,333,879.02 1,815,928,536.03 1.01%
cash equivalents
Explanation of why the data above varied significantly
√ Applicable N/A
Net cash flows from operating activities increased by CNY 2,782,545,653.21 (or 56.60%) year-on-year,
mainly due to the increased cash received from sale of goods in the current period.
Net cash flows from financing activities decreased by CNY 2,265,844,961.63 year-on-year, mainly due
to the issue of corporate bonds 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
5. Analysis of non-core business
Applicable √ N/A
6. Assets and liabilities
6.1. Significant change of asset items
Unit：CNY
At the end of 2021 At the beginning of 2021
Change in
As % of total As % of total Reason for any significant change
Amount Amount percentage
assets assets
Cash and cash
13,513,494,580.56 31.27% 11,624,870,340.60 33.16% -1.89%
equivalents
Accounts 1,628,248.55 0.00% 1,507,852.43 0.00% 0.00%
26
2021 Annual Report of Luzhou Laojiao Co., Ltd.
receivable
Inventories 7,277,573,166.80 16.84% 4,695,663,431.25 13.39% 3.45%
Long-term equity
2,626,744,236.25 6.08% 2,477,667,171.27 7.07% -0.99%
investments
Fixed assets 8,089,487,274.39 18.72% 6,887,108,174.72 19.64% -0.92%
Construction in
1,259,845,487.50 2.92% 2,012,129,880.15 5.74% -2.82%
progress
Right-of-use assets 52,714,810.04 0.12% 50,201,409.36 0.14% -0.02%
Contract liabilities 3,510,110,701.25 8.12% 1,678,837,166.94 4.79% 3.33%
Lease liabilities 40,667,668.08 0.09% 40,213,454.28 0.11% -0.02%
Whether overseas assets account for a larger proportion in total assets
Applicable √ N/A
6.2. Assets and liabilities measured at fair value
√ Applicable □ N/A
Unit：CNY
Changes in Provision
Changes in fair Amoun
cumulative fair for Amount of
Item Opening balance value through t of Other changes Closing balance
value recorded impairme purchase
profit or loss sale
into equity nt
Financial
asset
1.Held-for-tra
ding financial
assets
(exclusive of 6,352,241.79 6,352,241.79 700,000,000.00 706,352,241.79
derivative
financial
assets)
4.Investments
in other equity 347,160,399.42 15,609,351.01 258,206,911.43 542,370.00 363,312,120.43
instruments
Accounts
receivables 3,209,371,766.35 1,548,260,012.29 4,757,631,778.64
financing
Subtotal of
3,556,532,165.77 21,961,592.80 264,559,153.22 700,542,370.00 1,548,260,012.29 5,827,296,140.86
financial
27
2021 Annual Report of Luzhou Laojiao Co., Ltd.
assets
Total 3,556,532,165.77 21,961,592.80 264,559,153.22 700,542,370.00 1,548,260,012.29 5,827,296,140.86
Financial
0.00 0.00
liability
Information about other changes
N/A
Whether measurement attribution of main assets changes significantly in this year
Yes √ No
6.3. Restricted asset rights as of the end of this reporting period
Item Closing Balance Reason
Bank deposits (CNY) 99,056,621.63 Accrued interest on term deposits
Other cash and cash Restricted security deposits for travel service and bank
11,909,017.10
equivalents (CNY) guarantees
Total 110,965,638.73
7. Investment
7.1. Total investment
√ Applicable N/A
Investment made in the reporting Investment made in the prior year
YoY change
period (CNY) (CNY)
1,781,224,057.98 2,896,569,612.76 -38.51%1
Note 1: The total investment decreased by CNY 1,115,345,554.78 (or 38.51%) year-on-year, mainly due
to the completion of the technical renovation project of brewing.
7.2. Significant equity investment made in the reporting period
Applicable √ N/A
7.3. Significant ongoing non-equity investment in the reporting period
√ Applicable □ N/A
28
2021 Annual Report of Luzhou Laojiao Co., Ltd.
Unit: CNY
Accumula Reasons
Accumula
ted actual for not
Whether it Amount of ted actual
Industry input meeting
is a fixed input in income by Date of Disclosur
Investme of the amount Capital Project Projected the
Item asset the the end of disclosure e index (if
nt form investme by the source progress income schedule
investme reporting the (if any) any)
nt project end of the and
nt period reporting
reporting projected
period
period income
Announce
ment No.
2020-17
on
Technical Increasin
renovatio Fund-raisi g the
124,187,5 7,846,598 2 June
1
n project Self-built Yes Baijiu ng+self-fi 100.00% 0.00 0.00 N/A Investme
67.03 ,994.21 2020
of nancing nt in the
brewing Technical
Renovatio
n Project
of
Brewing
124,187,5 7,846,598
Total -- -- -- -- -- 0.00 0.00 -- -- --
67.03 ,994.21
Note 1: When the project is put into operation, it brings new production capacities of 100,000 tons of
quality pure-grain solid baijiu and 100,000 tons of leaven in addition to a new storage capacity of
380,000 tons of baijiu per year.
7.4. Financial assets investment
7.4.1. Securities investment
√ Applicable □ N/A
Unit: CNY
Changes Changes
Profit
Accounti in fair in the
Category and loss
Abbreviat Initial ng Beginnin value cumulati Amount Closing
of Stock Amount during Accounti Capital
ion of investme measure g book recogniz ve fair of book
securitie code of sale the ng item source
securities nt cost ment balance ed in value purchase balance
s reporting
model profit or recorded
period
loss into
29
2021 Annual Report of Luzhou Laojiao Co., Ltd.
equity
Investme
Domesti Fair nts in
c and 12,719,1 value 206,450, 4,239,71 197,971, 6,595,11 210,690, other Own
601211 GTJA 0.00 0.00
foreign 56.76 measure 757.39 8.92 319.55 8.32 476.31 equity fund
stock ment instrume
nts
Investme
Domesti Fair nts in
c and 1,030,00 value 11,460,8 4,503,03 14,933,8 62,542.2 15,963,8 other Own
002246 SNC 0.00 0.00
foreign 0.00 measure 58.15 8.39 96.54 0 96.54 equity fund
stock ment instrume
nts
Investme
Domesti Fair nts in
c and 51,120,0 value 95,561,8 6,612,79 51,054,6 102,174, other Own
01983 LZBANK 0.00 0.00 0.00
foreign 00.00 measure 25.55 6.16 21.71 621.71 equity fund
stock ment instrume
nts
64,869,1 313,473, 15,355,5 263,959, 6,657,66 328,828,
Total -- 0.00 0.00 -- --
56.76 441.09 53.47 837.80 0.52 994.56
7.4.2. Derivative investment
□Applicable √ N/A
No such cases in the reporting period
7.5. Use of funds raised
√ Applicable N/A
7.5.1. General use of funds raised
√ Applicable □ N/A
Unit：CNY 10,000
Total Accumulate Total Total Accumulate Total Purpose Amount of
Total
amount of d amount of amount of amount of d amount of and funds raised
Year Method amount of
raised funds raised funds re-purposed accumulate re-purposed unused direction of idle for
funds raised
used in the used funds raised d funds raised funds raised unused more than
30
2021 Annual Report of Luzhou Laojiao Co., Ltd.
reporting in the re-purposed as % of total funds raised two years
period reporting funds raised funds raised
period
Supplement
Non-public ing working
1
2017 offering of 295,273.5 25.28 309,458.29 0 0 0.00% 0 capital 0
shares permanentl
y
Public
offering of
2019 249,000 35,775.66 253,081.84 0 0 0.00% 0 N/A 0
corporate
bond
Public Deposited
offering of in special
2020 149,400 22,598.34 35,660.46 0 0 0.00% 121,879.75 0
corporate account for
bond raised funds
Total -- 693,673.5 58,399.28 598,200.59 0 0 0.00% 121,879.75 -- 0
Notes for general use of funds raised
The total amounts of used and unused funds raised include interest on the funds.
Note 1: The balance of raised funds was CNY 4.19.
7.5.2. Fund raised for committed projects
√ Applicable □ N/A
Unit：CNY 10,000
Date of Whether
Investme
Whether Total the the
nt Whether
the project amount of Adjusted Investmen Accumulated projects Realized feasibility
progress the
Committed investment has been funds Investmen t amount input by the reach the benefits of the
by the expected
projects and direction of changed raised for t total in the end of the working during the project
end of benefits
over-raised funds (including committed amount reporting reporting condition reporting has
reporting have been
partial investmen (1) period period (2) for their period changed
period (3) achieved
change) t intended significantl
＝(2)/(1)
use y
Committed investment projects
Technical Renovation 31
Project of Brewing No 295,273.5 295,273.5 25.28 309,458.29 104.80% Decembe N/A N/A No
(Phrase I) r 2020
Technical Renovation
No 398,400 398,400 56,447.45 268,220.21 72.48% — N/A N/A No
Project of Brewing
31
2021 Annual Report of Luzhou Laojiao Co., Ltd.
(Phrase II)
Project of Intelligent
Upgrading and Building of
No 1,153.93 3,498.55 — N/A N/A No
the Information
Management System
Project of Acquiring
Sealing Equipment for the
No 0 12,043.3 — N/A N/A No
Cellar of Huangyi
Brewing Base
Project of Acquiring
Accessory Equipment for
No 772.62 4,980.25 — N/A N/A No
Leaven Making for
Huangyi Brewing Base
Subtotal of committed
-- 693,673.5 693,673.5 58,399.28 598,200.6 -- -- -- --
investment projects
Use of over-raised funds
None
Total -- 693,673.5 693,673.5 58,399.28 598,200.6 -- -- N/A1 -- --
Situation and reason for
not reaching plan
progress or expected N/A
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
Situation of advance Funds raised through non-public offering of shares: On 30 November 2017, the Company held the 24th meeting of the
investment and eighth board of directors and the 13th meeting of the eighth board of supervisors. At the meetings, the Proposal on
replacement 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 581,774,996.30 using the raised funds.
32
2021 Annual Report of Luzhou Laojiao Co., Ltd.
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
with self-pooled funds and produced the Special Report (CHXZ (2017) No. 534) on 14 November 2017.
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
of Shareholders 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
2021, the Company had replaced advance investments of self-pooled funds of CNY 573,178,496.64 using the raised
funds.
Idle raised funds used for N/A
temporary supplementary
liquidity
Applicable
Amount and reason for There is a surplus (including interest income) of CNY 4.19 upon the completion of the committed investment
surplus of funds raised project—Technical Renovation Project of Brewing (Phrase I)—in which the funds raised in the non-public offering of
shares were used.
The surplus of CNY 4.19 of the funds raised in the non-public offering of shares has been transferred on 22 July 2021
to the general settlement account for supplementing the working capital permanently.
Purpose and
The idle funds raised through public offering of corporate bond are deposited in the special account No.
whereabouts of unused
9550880046723000135 for raised funds in the Chengdu Branch of China Guangfa Bank Co., Ltd., the special
funds raised
account No. 517517460013000000860 for raised funds in the Luzhou Branch of Bank of Communications Co., Ltd.,
and the special account No. 631395395 for raised funds in the Chengdu Branch of China Minsheng Banking Corp.,
Ltd.
Problems and other
situation when raised
N/A
funds are used and
disclosed
Note 1: The raised funds investment project—Technical Renovation Project of Brewing (Phrase I)—has
been completed. As of the end of the reporting period, the difference between the cumulative input and
the committed input of raised funds was the net amount of the interest income from bank deposits minus
the bank charges.
Note 2: The subtotal of funds raised through corporate bonds for committed projects was CNY 3,984
million, which was the combined amount of CNY 4,000 million (CNY 2,500 million of corporate bonds
issued in August 2019 plus CNY 1,500 million of corporate bonds issued in March 2020) minus the total
issuance costs of CNY 16 million. 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
33
2021 Annual Report of Luzhou Laojiao Co., Ltd.
projects and protect the interests of the Company’s shareholders, the investment sequence and specific
amounts of the corresponding raised funds should be determined by the Chairman of the Board as
authorized by the general meeting of shareholders or other persons as authorized by the Board of
Directors within the scope of the four 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 3: As of December 2020, construction was completed for the Technical Renovation Project of
Brewing. Quality inspection and acceptance of the relevant sub-projects was finished. Other inspection
and acceptance, as well as advance transfer to fixed assets based on estimated value were finished in
June 2021. When the project is put into operation, it brings new production capacities of 100,000 tons of
quality pure-grain solid baijiu and 100,000 tons of leaven in addition to a new storage capacity of
380,000 tons of baijiu per year.
Note 4: 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 5: 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 finished in June 2021. The project does not
generate income on a separate basis for it is a supporting project of the Technical Renovation Project of
Brewing.
Note 6: 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 finished in June 2021. The
project does not generate income on a separate basis for it is a supporting project of the Technical
Renovation Project of Brewing.
7.5.3. Re-purposed funds raised
Applicable √ N/A
No such cases in the reporting period
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
8. Sale of major assets and equity interests
8.1. Sale of major assets
Applicable √ N/A
No such cases in the reporting period.
8.2. Sale of major equity interests
Applicable √ N/A
9. Analysis of major subsidiaries
√ Applicable N/A
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
Luzhou Laojiao
Laojiao series 100,000,00 7,766,741,4 2,006,079,8 20,126,182, 8,103,239,9 6,077,048,3
Subsidiary
Sales Co., unified 0.00 89.31 91.62 533.58 27.36 65.84
Ltd. package
Baijiu sales
Acquisition and disposal of subsidiaries during the reporting period
□ Applicable √N/A
Notes for major holding companies and joint stock companies
The total assets of Sales Company increased 51.14% mainly due to the increased current assets such
as accounts receivables financing. Its operating profit and net profit increased 37.68% and 38.12%
respectively, mainly due to the increased sales of mid- and high-end products.
10. Structured entities controlled by the Company
Applicable √ N/A
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
11. Outlook for the future development of the Company
11.1. Industry landscape and trends
A. According to the data released by the National Bureau of Statistics, total production of brewed baijiu
by baijiu producers above the designated size was 7.1563 million kl between January and December
2021, down 0.59% year on year; total sales revenues reached CNY 603.348 billion, up 18.60% year on
year; total profits of CNY 170.194 billion were realized, up 32.95% year on year. Though the total
consumption in the baijiu industry has been shrinking in recent years, the consumption upgrade is
obvious, and the market share is showing a trend toward the brand, quality, and leading enterprise
concentration.
B. As the young consumer groups rise, with the post-80s and post-90s generations gradually becoming
the main force of baijiu consumption, their young, fashionable, and personalized diverse demands will
exert a significant influence on the industry and new product development.
C. Digital, information-based, and intelligent development will be the mainstream of China and a major
measure taken by traditional baijiu producers to gain a competitive edge and respond to the
disappearance of demographic dividends. Additionally, it is expected to become the main direction for
future industrial capacity expansion and development.
11.2. Company’s development strategy
11.2.1. Development opportunities in the future
A. More and more favorable domestic policies are introduced to maintain steady growth and boost
consumption, which will play a key role in enhancing socio-economic vitality and restoring consumer
confidence, as well as promote the sound development of the whole baijiu market.
B. Constant development of city clusters in China and consistent inflow and concentration of population
and funds bring about scale effects and growing new and high-quality consumption demands. In this
circumstance, high-quality, innovative baijiu products with cultural connotations will be increasingly
popular in the market and stand out among the rest in the competition.
C. In 2021, the Company resolutely implemented the "136" development strategy and finally achieved a
series of major breakthroughs, including a record high in sales performance again, the gradually perfect
brand matrix, the completed quality capacity layout, the internationally advanced level of intelligence,
increasingly optimized talent building mechanism, and major projects consistently underway. All these
achievements laid a solid foundation for the Company's strategic expansion.
11.2.2. Possible challenges and risks in the future
A. Pandemic risks: The rampant pandemic overseas, cluster infections in several regions in China, and
the emergence of various variants have posed severe challenges to pandemic prevention and control
and resulted in great uncertainties in the baijiu and other consumption sectors.
B. Economic risks: In recent years, the exacerbated global inflation and partial trade sanctions have
36
2021 Annual Report of Luzhou Laojiao Co., Ltd.
impacted the global economy; in addition, the Russia-Ukraine conflict has led to a change in the pattern
of globalization, which may cause the restructuring of supply chains and the split of industrial chains
across the world, a slowdown in the economic growth, and even financial crisis, thereby impacting the
consumption market.
C. Policy risks: The baijiu industry has been undergoing great pressures arising from public opinions and
is susceptible to policy factors, including industry policies, consumption tax, and consumption scenario
restrictions. Therefore, baijiu producers shall proactively assume the corresponding social responsibility,
advocate and disseminate the idea of healthy drinking, and carry forward the cultural connotations of
baijiu to build a positive social image for the baijiu industry.
11.2.3. 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 has formulated the
"14th five-year" strategic plan: "136" strategy.
Adhere to one development objective:
Adhere to the objective of returning to China's baijiu industry "top three".
Adhere to three major development principles:
The first is to adhere to brand guidance and vigorously enhance the value of famous baijiu brands in
China. The second is to adhere to the foundation of quality and vigorously build the core production area
of famous baijiu brands in the world. The third is to adhere to culture casting and vigorously build a
pilgrimage site for Chinese baijiu 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 baijiu for Chinese baijiu appreciation,
and become a setter of Chinese baijiu quality standards.
The third is to build the culture of Luzhou Laojiao. The Company shall consolidate its leading position in
the baijiu 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 baijiu on behalf of the Chinese
baijiu, and build the world-class clusters of cultural landscape on behalf of the national industries. It shall
37
2021 Annual Report of Luzhou Laojiao Co., Ltd.
create a business card of baijiu culture that integrates the wharf culture of the Yangtze River, the cave
storage culture of baijiu, the culture of baijiu factory, the culture of folk customs and sacrifice, the local
culture of Bashu, the culture of baijiu 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 baijiu 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
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 baijiu 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 baijiu industry.
11.3. Completion of the business plan in 2021
In the reporting period, the Company achieved the operating revenue of CNY 20.642 billion, up by
23.96% year-on-year. The net profit attributable to shareholders of the listed company reached CNY
7.956 billion, up by 32.47% year-on-year. The Company has successfully completed its business target
“to achieve a year-on-year increase in operating revenue by at least 15%" as set by the Board of
Directors at the beginning of the year.
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
11.4. Business plan in 2022
According to the Outline of Production and Operation in 2022 reviewed and approved by the Board of
Directors, the Company will closely center on the development theme of "improving development quality,
strengthening cultural empowerment, and accelerating breakthroughs", and strive to achieve a
year-on-year increase in operating revenue by at least 15% (The business plan in 2022 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 2022, 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:
A. Improve development quality
In 2022, the Company will adhere to the three principles of "concentration, capacity gathering, and talent
gathering" to comprehensively optimize and improve market, capacity, and talent layouts.
a. Promote "seven concentrations" to ensure a sound market. The Company will implement the
market development philosophy of "seven concentrations", namely the concentrations on the
high-end-driven development, the brand rejuvenation, the creation, the consumption innovation,
the key markets, the collaborative marketing, and the price and logistics.
b. Promote "three capacity gatherings" to give full play to the advantages of the capacity
guarantee. Luzhou Laojiao has basically formed an advanced production guarantee pattern of
"intelligent manufacturing, technology-driven development, and project support", which provides
great capacity support for the Company to make breakthroughs during the "14th Five-year Plan" period.
Digital, information-based, and intelligent development will be the mainstream of China and a major
measure taken by traditional baijiu producers to gain a competitive edge and respond to the
disappearance of demographic dividends. Therefore, the Company shall complete its digital and
intelligent transformation during the "14th Five-year Plan" period to form comparative advantages to
respond to fierce peer competition.
c. Promote "three talent gatherings" to create a talent hub. On the one hand, the Company will
gather talent via material incentives. Specifically, it will focus on the timely implementation of the
share incentive mechanism and the medium- and long-term incentive mechanism to improve the
remuneration packages for employees and its material incentives. On the other, it will gather talent via
growth incentives. A scientific talent selection and employment mechanism will be established and
improved to create an environment that emphasizes that "talent is capital, and there must be places for
excellent talent" for excellent talent to realize individual development. Additionally, it will gather talent
via spirit incentives. Efforts will be made to optimize the working environment for employees, organize
and carry out assistance activities, and create a corporate cultural IP that displays the Company's style
and features, elevates its image, and shows employees' talents, thereby enhancing the sense of
happiness and gain of employees.
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
B. Enhance cultural empowerment
In 2022, based on the three goals of "level, friendliness, and popularity", the Company will produce
quality fruits, create effective platforms, and provide sufficient support for its business expansion, brand
upgrading, market expansion, and team growth.
a. Improve the level of the brand culture. The Company will adhere to its high-end brand cultural
image and seize various scarce resources to raise the added value of the brand culture from the global,
national, and leading perspectives. Besides, it will constantly elevate the style of the brand culture, refine
the value by discovering and making use of the advantages of others, and then integrate them into the
corporate brand cultural events, thereby building a unique corporate brand cultural system that matches
the spirit of the age and meets the expectations of all walks of life.
b. Improve the friendliness of the brand culture. The Company will fully uphold the
"consumer-centric" philosophy to enrich the cultural connotations of various brand IP activities to
familiarize consumers with the "people-friendly, fashionable, and healthy" brand of Luzhou Laojiao.
Additionally, it will hold fast to the value idea that "customers mean teams", maintain and consolidate its
partnership with dealers from multiple perspectives, and ensure that excellent customers will feel the
honor of being a member of Luzhou Laojiao comprehensively.
c. Improve the popularity of the brand culture. The Company will establish a public relations system
by hierarchy and rank, strengthen its communication and exchanges with other enterprises, and
constantly expand its cooperation with associations. By holding high-level exchange events and carrying
out cross-industry collaboration, the Company will interest more people and attract them to purchase its
products. Besides, online and offline media communication matrixes that echo each other will be formed
to realize the fission effect of brand communication. Furthermore, it will stay true to its aspiration that "let
the world taste Chinese flavor" and prepare to introduce Chinese culture, Chinese manufacturing, and
Chinese lifestyle to the world in the post-pandemic era, thereby steadily expanding its overseas
channels and better telling the stories of the national nongxiangxing baijiu.
C. Accelerate breakthroughs
Solid progress made in the "13th Five-year Plan" period and 2021 has laid a foundation for Luzhou
Laojiao to make breakthroughs in its development. In 2022, the Company will follow the "three
acceleration" principle to gather strong momentum to compete with the top three brands.
a. Accelerate breakthroughs in the sales scale. The Company will set a higher goal and maintain
high-speed growth momentum in sales to sprint bravely and reach a higher level. Besides, accelerated
growth will be realized, with the National Cellar series products playing the leading role, Luzhou Laojiao
series products firmly forming new growth poles, and Luzhou Laojiao Health Care and Xinjiuye series
products accelerating innovation. The Company will intensify its efforts in developing markets in a
targeted manner. Specifically, it will promote the fission, thorough development of the base market,
consolidate its foundation for the key market, expand the strategic market and make breakthroughs, and
accelerate the layout of the blank market, thereby displaying a trend that features the nationwide
development and the parallel progress in the development of various markets.
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
b. Accelerate breakthroughs in management efficiency. The Company will promote the
implementation of the "136" strategy by comprehensively exploring an effective mechanism that ensures
that "departments and employees must be responsible for practicing the '136' strategy in each project". It
will improve the capabilities of the headquarters, strengthen the big-picture awareness, service
awareness, and efficiency awareness in terms of the integrated management system, and develop the
integrated management capability that will "empower the sales, production, and front line". It will
strengthen the comprehensive collaboration. Specifically, it will fully promote a system-based,
standard, digital, and intelligent Luzhou Laojiao and build a mechanism to facilitate cross-system,
cross-department, and cross-unit communication and collaboration.
c. Accelerate breakthroughs in contributions. The Company shall make greater contributions to
the country. For example, it shall proactively assume the responsibility of serving the country through
industry and play the exemplary role of a state-owned enterprise. It will make greater contributions to
society. Specifically, it will make use of its development achievements and actively promote rural
revitalization, help students in need continue their studies via fund donation, and assist people in need to
build an exemplary image. It will make greater contributions to its partners. By creating value for
shareholders, investors, customers of dealers, and partners along the upstream and downstream
industrial chains, the Company will realize wealth growth, business development, and common
prosperity. It will make greater contributions to employees. With more material, growth, and spirit
incentives, and respect for talent, knowledge, and creation, the Company will enhance employees'
loyalty, confidence, and sense of belonging and share its development achievements with its employees
in an observable, touchable, and hopeful manner.
In 2021, Luzhou Laojiao got off to a good start in the "14th Five-year Plan" period. It realized the
strategic goal of the Company and accomplished various tasks and indicators and finally achieved
outstanding development performance. In 2022, we will be more confident and resolute in launching a
battle of "improving quality, enhancing culture, and accelerating breakthroughs" comprehensively,
embarking on a new journey of development, accomplishing the mission entrusted by the history, and
winning greater victories and honors.
12. Visits paid to the Company for purposes of research, communication,
interview, etc. 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
Industry Trends
Company http://www.cninfo.co
19 May 2021 Other Other All investors and Company
Headquarters m.cn/
Performance
41
2021 Annual Report of Luzhou Laojiao Co., Ltd.
Company Institutional Company http://www.cninfo.co
10 June 2021 Field survey Institution
Headquarters investor Performance m.cn/
Institutional
Company and individual Company http://www.cninfo.co
29 June 2021 Field survey Other
Headquarters investors and Performance m.cn/
media
Institutional
29 December Company Company http://www.cninfo.co
Field survey Other and individual
2021 Headquarters Performance m.cn/
investors
42
2021 Annual Report of Luzhou Laojiao Co., Ltd.
Section IV Corporate Governance
1. Basic situation of corporate governance
Since it was listed, in accordance with the Corporate Law, the Securities Law, The Listed Company
Governance Standards and other laws, administrative regulations and departmental rules and normative
documents, the Company has constantly perfected corporate governance structure, standardized its
operation, established the rules and system on the basis of the Company's articles of association whose
main framework is the rules of procedure of the shareholders' general meeting, rules of procedure of the
board of directors and rules of procedure of the board of supervisors, which is formed the management
system whose main structure is the shareholders meeting, board of directors, board of supervisors and
management. During the reporting period, the Company won a number of honors and awards, including
“The 12th Tianma Awards—Best Board of Directors, and Best Investor Relations”, and “Jinglun
Awards—Outstanding Company with Investor Relations Value of the Year”.
Any incompliance with the applicable laws and administrative regulations, as well as regulations related
to the governance of listed companies issued by the CSRC
Yes√ No
There is no incompliance with the applicable laws and administrative regulations, as well as regulations
related to the governance of listed companies issued by the CSRC.
2. Independency of assets, personnel, finance, organizations and
businesses which are separated from the controlling shareholder and
the actual controller
The Company has an independent and complete production and operation system and independent
decision-making ability. There is no horizontal competition between the Company and the controlling
shareholders and its subsidiaries. The Company has daily affiliated transactions with the controlling
shareholders and its subsidiaries. Such daily affiliated transactions belong to the need of rational
allocation of resources and do not affect the independence of the Company. For affiliated transactions,
the Company has strictly fulfilled the relevant decision-making procedures and information disclosure
obligations, and implemented the system of Non-executive directors' prior examination and avoidance
system of related directors (shareholders).
2.1 In the aspect of assets
Asset integrity. There are clear ownership and independency of the Company's assets invested by
controlling shareholders. The Company has an independent and complete production, supply, sales
system and auxiliary production system and supporting facilities. The industrial property rights,
trademarks and non-patented technology and other intangible assets are owned by the Company. There
is no situation that the controlling shareholders occupy and transfer the assets of the company.
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
2.2. In the aspect of business
Business apart. The Company is totally independent in the operation, production and sales of baijiu
series of “Luzhou Laojiao” and “National Cellar 1573”. It has the ability to operate independently in the
market. The board of directors and the management can independently make production and operation
decisions within the corresponding authority.
2.3 In the aspect of personnel
The Company has built independent labor management, personnel management and salary
management. The Company has established a relatively complete labor management system and post
responsibility system. Meanwhile, the Company's senior management personnel all receive salary in the
Company, but not at the controlling shareholders.
2.4 In the aspect of organization
Organization independence. The Company has independent production management organization and
system, independent office and production management place, and independent management
organization, functional organization and branch.
2.5 In the aspect of finance
Financial independence. The Company has completed and independent financial department.
Independent accounting system and financial management are established. The Company separately
sets bank accountants, conducts external settlement and pays taxes according to law.
3. Horizontal competition
Applicable √ N/A
4. Annual meeting of shareholders and special meetings of shareholders
convened during the reporting period
4.1. Meetings of shareholders convened during the reporting period
Investor
Meeting Type Convened date Disclosure date Resolutions
participation ratio
2020 Annual
General Meeting
2020 Annual
General Meeting of Resolution
General Meeting of 61.16% 29 June 2021 30 June 2021
Shareholders Announcement”
Shareholders
Announcement
No:2021-27
44
2021 Annual Report of Luzhou Laojiao Co., Ltd.
(http://www.cninfo.
com.cn/)
Announcement on
Resolutions of The
First Special
The First Special Meeting of
Meeting of Special Meeting of Shareholders of
63.63% 29 December 2021 30 December 2021
Shareholders of Shareholders 2021
2021 Announcement
No:2021-60
(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. Directors, supervisors, and senior management
5.1 General information
Shares
Shares Shares
held by Shares
decrease held by
the increased Other
d during the end of Reason
Incumbent/ beginning during the increase/
Name Title Gender Age Period of service the the for share
Former of the reporting decrease
reporting reporting changes
reporting period (share)
period period
period (share)
(share) (share)
(share)
Chairman
Liu Miao of the Incumbent Male 52 2015.6.30-2024.6.29 192,187 0 0 0 192,187
board
Director,
Lin Feng General Incumbent Male 48 2015.6.30-2024.6.29 0 0 0 0 0
manager
Director,
Wang Deputy
Incumbent Male 58 2015.3.6-2024.6.29 0 0 0 0 0
Hongbo general
manager,
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
Secretary
of the
board
Director,
Shen Deputy
Incumbent Male 56 2002.6.30-2024.6.29 138,375 0 0 0 138,375
Caihong general
manager
Director,
Xiong Deputy
Incumbent Female 46 2021.6.29-2024.6.29 0 0 01 0 0
Pingting general
manager
Non-exec
Liu
utive Incumbent Male 52 2018.6.27-2024.6.29 0 0 0 0 0
Junhai
director
Non-exec
Chen
utive Incumbent Male 64 2021.6.29-2024.6.29 0 0 0 0 0
You’an
director
Sun Non-exec
Dongshe utive Incumbent Male 63 2021.6.29-2024.6.29 0 0 0 0 0
ng director
Non-exec
Lyu
utive Incumbent Male 58 2021.6.29-2024.6.29 0 0 0 0 0
Xianpei
director
External
Qian Xu Incumbent Male 58 2015.6.30-2024.6.29 0 0 0 0 0
director
Ying External
Incumbent Male 52 2016.9.13-2024.6.29 0 0 0 0 0
Hanjie director
Chairman
of the
Yang
Board of Incumbent Male 45 2021.6.29-2024.6.29 0 0 0 0 0
Ping
Superviso
rs
Superviso
Lian Jing Incumbent Male 52 2012.6.27-2024.6.29 0 0 0 0 0
r
Li Superviso
Incumbent Male 52 2018.6.27-2024.6.29 0 0 0 0 0
Guangjie r
Guo Superviso
Incumbent Female 43 2021.6.29-2024.6.29 0 0 0 0 0
Shihua r
Superviso
Li Lunyu Incumbent Female 35 2021.6.29-2024.6.29 0 0 0 0 0
r
46
2021 Annual Report of Luzhou Laojiao Co., Ltd.
Xie Hong CFO Incumbent Female 52 2015.3.6-2024.6.29 0 0 0 0 0
Deputy
He Cheng general Incumbent Male 55 2015.6.30-2024.6.29 0 0 0 0
manager
Deputy
Zhang 2015.12.29-2024.6.2
general Incumbent Male 50 0 0 0 0 0
Suyi 9
manager
Deputy
Li Yong general Incumbent Male 45 2021.9.20-2024.6.29 0 0 0 0 0
manager
Director,
Jiang Deputy
Former Female 59 2009.5.20-2021.6.29 254,000 0 0 0 254,000
Yuhui general
manager
Non-exec
Du
utive Former Male 53 2015.6.30-2021.6.29 0 0 0 0 0
Kunlun
director
Non-exec
Xu
utive Former Male 62 2015.6.30-2021.6.29 0 0 0 0 0
Guoxiang
director
Non-exec
Tan Lili utive Former Female 67 2015.6.30-2021.6.29 0 0 0 0 0
director
Yang Superviso
Former Female 55 2009.5.20-2021.6.29 10,000 0 0 0 10,000
Benhong r
Superviso
Cao Cong Former Male 37 2015.6.30-2021.6.29 0 0 0 0 0
r
Deputy
Wu Qin general Former Male 60 2020.1.10-2021.6.29 0 0 0 0 0
manager
Total -- -- -- -- -- -- 594,562 0 0 0 594,562 --
Note 1: During the reporting period, before Ms. Xiong Pingting took office as director and deputy general
manager and had access to insider information, she sold 100 shares in the Company.
Whether any director, supervisor or senior management resigned before the expiry of their periods of
service during the reporting period
□ Yes √ No
Changes in directors, supervisors, and senior management
√ Applicable □ N/A
47
2021 Annual Report of Luzhou Laojiao Co., Ltd.
Name Title Type Date Reason
Resigned upon the expiry Resigned upon the expiry
Jiang Yuhui Director, Deputy general manager 2021.6.29
of the period of service of the period of service
Resigned upon the expiry Resigned upon the expiry
Du Kunlun Non-executive director 2021.6.29
of the period of service of the period of service
Resigned upon the expiry Resigned upon the expiry
Xu Guoxiang Non-executive director 2021.6.29
of the period of service of the period of service
Resigned upon the expiry Resigned upon the expiry
Tan Lili Non-executive director 2021.6.29
of the period of service of the period of service
Resigned upon the expiry Resigned upon the expiry
Yang Benhong Supervisor 2021.6.29
of the period of service of the period of service
Resigned upon the expiry Resigned upon the expiry
Cao Cong Supervisor 2021.6.29
of the period of service of the period of service
Resigned upon the expiry Resigned upon the expiry
Wu Qin Deputy general manager 2021.6.29
of the period of service of the period of service
5.2 Employment information
Professional background, work experience and major duties of current directors, supervisors and senior
management.
Mr. Liu Miao, Male, born in 1969, MBA of Wright State University in the USA, Master of Chinese Brewing,
senior marketing specialist. He used to serve as planning minister, general manager of Sales Company,
general manager assistant, and deputy general manager of the Company. At present, he is secretary of
the party committee and chairman of the board in the Company, as well as secretary of the party
committee and chairman of the board in Laojiao Group.
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 deputy secretary of the
party committee, director, and general manager of the 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 member of the party committee, director, deputy general manager, secretary
of the board of the Company and chairman of the board of Luzhou Laojiao International Development
（Hong Kong）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 “Master
48
2021 Annual Report of Luzhou Laojiao Co., Ltd.
of Chinese Brewing”, and one of the first batch of "Sichuan craftsmen". He was manager of the
Company’s leaven-making branch, manager of base baijiu company, general manager assistant and
director of production department. At present, he is 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.
Xiong Pingting, female, born in 1975, holds a master's degree and the titles of Human Resource
Management Professional (grade one), Economist, and Assistant Political Mentor. Positions previously
held by her include Deputy Director and Director of the Office of Luzhou Laojiao Sales Co., Ltd., Deputy
Director of the Office of Jiangyang District People's Government of Luzhou (temporary), Deputy Director
of the Human Resources Department and Corporate Management Department of Luzhou Laojiao Co.,
Ltd., General Manager of the Brand Operation Department, Director of the Office (concurrently),
Secretary of the general Party branch, and Deputy General Manager of Luzhou Laojiao Sales Co., Ltd.
Currently, she serves as Member of the Party Committee Committee, Director, Deputy General Manager,
and Chairman of the Labor Union of the Company.
Liu Junhai, male, born in 1969, holds a Ph.D. degree in law and is a doctoral supervisor. Positions
previously held by him include Assistant to the Director and Researcher at the Institute of Law of the
Chinese Academy of Social Sciences ("CASS"), Professor at CASS, Vice Chairman of China
Consumers Association, and Deputy Director Researcher at the Planning Committee under the China
Securities Regulatory Commission ("CSRC"). Currently, he serves as Professor at the Law School of
Renmin University of China, Director at the Institute of Commercial Law of Renmin University of China,
Arbitrator at China International Economic and Trade Arbitration Commission and Beijing Arbitration
Commission (Beijing International Arbitration Center) (concurrently), and Independent Director of China
Three Gorges Renewables (Group) Co., Ltd. (concurrently). He has served as a non-executive director
of the Company since June 2018.
Chen You'an, male, born in 1958, holds an Eng.D. degree in management science and engineering and
is a Senior Engineer. He once took a job at government macro regulation agencies, development
financing agencies, and local and national sovereign wealth fund agencies. Besides, he served as
Deputy General Manager of Central Huijin Investment Ltd. and Chairman of China Galaxy Financial
Holdings Co., Ltd. and China Galaxy Securities Co., Ltd. (concurrently). Currently, he is Independent
Director of CPIC Fund Management Co., Ltd., Nomura Orient International Securities Co., Ltd., and
Hexie Health Insurance Co., Ltd. He has served as a non-executive director of the Company since June
2021.
Sun Dongsheng, male, born in 1958, holds an Eng.D. degree. Positions previously held by him include
Professor at Shandong University, Doctoral Supervisor, Researcher at the Institute of Industrial
Technology under the Ministry of International Trade and Industry, Director, Vice President, and
President of Shenzhen Capital Group Co., Ltd., and Director of Beijing Easpring Material Technology
Co., Ltd. and Shenzhen Kaizhong Precision Technology Co., Ltd. Currently, he is Independent Director
of Shenzhen Dawei Innovation Technology Co., Ltd. He has served as a non-executive director of the
Company since June 2021.
49
2021 Annual Report of Luzhou Laojiao Co., Ltd.
Lyu Xianpei, male, born in 1964, holds a Ph.D. degree in accounting. Positions previously held by him
include Vice Dean at the School of Accounting and Director at the Auditing Department of Southwestern
University of Finance and Economics, as well as Independent Director of Tibet Rhodiola Pharmaceutical
Holding Co., Ltd., Sichuan Chuantou Energy Co., Ltd., and Sichuan Swellfun Co., Ltd. Currently, he
serves as Professor and Doctoral Supervisor at Southwestern University of Finance and Economics and
Chairman of Sichuan Educational Audit Society. He has served as a non-executive director of the
Company since June 2021.
Mr. Qian Xu, Male, born in 1963, PhD. He was general manager and chairman of the board of Beijing
Enterprises Real-Estate Group Co.,Ltd.. 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 director of the
Company since June 2015.
Mr. Ying Hanjie, Male, born in 1969, Doctor of Biochemistry, professor, and academician of the Chinese
Academy of Engineering. He was deputy director of Pharmacy and Life Sciences School of Nanjing
University of Technology. At present, he is director of National Biochemical Engineering Technology
Research Center of Nanjing Tech University, chairman of the board of Nanjing Biotogether Co., Ltd.,
director of Nanjing High Tech University Biological Technology Research Institute Co., Ltd., and director
of Jiangsu Institute of Industrial Biotechnology. He has served as a director of the Company since
September 2016.
Yang Ping, male, born in 1976, holds a doctoral degree. Positions previously held by him include Deputy
Director and Director at the National Cellar Workshop Section, Director at the Production and
Technology Department, and Deputy General Manager of Luzhou Laojiao Brewing Co., Ltd. Currently,
he is Chairman of the Board of Supervisors of the Company, as well as Secretary of the Party
Committee and General Manager of Luzhou Laojiao Brewing Co., Ltd.
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.; chairman of the board and
general manager of Luzhou State-owned Gongfang Economic 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.; external director of Luzhou Culture Tourism Development Investment Group Co. Ltd.;
and chairman of the Board of Supervisors of Laojiao Group. At present, he is chairman of the Board of
Supervisors 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 XingLu Group,
50
2021 Annual Report of Luzhou Laojiao Co., Ltd.
Luzhou Liquor Industrial Park Development and Investment Co. Ltd., Luzhou Public Transportation
Group Co. Ltd., Sichuan Rongtong Security Investment Group Co. Ltd., Luzhou Aviation Development
Investment Group Co., Ltd., and Sichuan Guxu Coal Field Development Co., Ltd. He has served as a
supervisor of the Company since June 2012.
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.
Guo Shihua, female, born in 1978, holds a university degree and is Senior Engineer. She worked at the
Engineering Management Department, Department of Design, and Audit Department of Luzhou North
Chemical Industries Co., Ltd. Currently, she is Supervisor and Vice Director of the Audit Department of
the Company.
Li Lunyu, female, born in 1986, holds a university degree as well as is Assistant Political Mentor and
Assistant Engineer. Positions previously held by her include Publicity Officer at the Office of the CPC
Luzhou Laojiao Committee, Deputy Head and Manager of Tianjin Division of the Business Department
for Luzhou Laojiao Tequ 60 and 80, Secretary of the CPC National Cellar Section Branch of Luzhou
Laojiao Brewing Co., Ltd., Director of the Office of the CPC Luzhou Laojiao Brewing Committee, and
Director of the Discipline Inspection Department and Vice Chairman of the Labor Union of Luzhou
Laojiao Brewing Co., Ltd. Currently, she is Supervisor, Vice Chairman of the Labor Union, and Director
of the Office of the Labor Union of the Company.
Ms. Xie Hong, Female, born in 1969, Master degree, senior accountant, and senior economist. She was
section chief of Treasury Section of the Finance Bureau, section chief of Non-tax Revenue Collection
Management Section, director of Luzhou Municipal Finance Treasury Payment Center, chief accountant
of Luzhou Finance Bureau. At present, she is a member of the party committee and CFO of the
Company.
Mr. He Cheng, Male, born in 1966, Master of Management Economics of Nanyang Technological
University, senior engineer, expert who receives special allowances from the State Council, Master of
Chinese Baijiu, and Master of Chinese Brewing. He was chief dispatcher of the Company, general
manager of Brewing Company, as well as director of the business administration department, director of
the human resources department, director of the quality department, and director of the dispatching
center of the Company. At present, he is a member of the party committee, deputy general manager and
chief quality officer of the Company.
Mr. Zhang Suyi, Male, born in 1971, PhD, professor-level senior engineer, representative inheritor of
Sichuan Intangible Cultural Heritage. He was a worker, production team leader and assistant
superintendent at Brewing Workshop No. 6, vice director and director of Gouchu Center, and deputy
chief engineer of the Company, as well as deputy general manager, director of the Baijiu Body Design
Center, and chief engineer of baijiu body design of Brewing Company. At present, he is deputy general
51
2021 Annual Report of Luzhou Laojiao Co., Ltd.
manager and director of safety and environmental protection of the Company.
Li Yong, male, born in 1977, holds a postgraduate degree and is a brewing engineer. He once worked at
the Party and government organizations at the township level as well as agencies at the county and
municipal levels. Besides, positions previously held by him include Director of the Office of Luzhou
Laojiao Group Co., Ltd., Director of the General Manager Office of Luzhou Laojiao Co., Ltd., Deputy
Party Secretary of the CPC Sales Company Committee, Secretary of Commission of Discipline
Inspection Sales Company Branch, and Deputy General Manager of Luzhou Laojiao Sales Co., Ltd.
Currently, he is Deputy General Manager of the Company.
Position in shareholder-holding companies
√ Applicable N/A
Any
Name of remunerations
Position in shareholder-holding Beginning date Ending date
Name shareholder-holding received from
companies of term of term
companies shareholder-holdi
ng companies
Secretary of the party committee,
Liu Miao Laojiao Group 11 March 2022 No
Chairman of the board
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
China International Economic and Trade
Arbitration Commission, and Beijing
Liu Junhai Arbitrator
Arbitration Commission (Beijing
International Arbitration Center)
Institute of Commercial Law of Renmin
Liu Junhai Director
University of China
China Three Gorges Renewables Non-executi
Liu Junhai
(Group) Co., Ltd. ve director
CPIC Fund, Nomura Oriental
Non-executi
Chen You’an International Securities Co., Ltd., and
ve director
Hexie Health Insurance Co., Ltd.
Sun Shenzhen Dawei Innovation Technology Non-executi
52
2021 Annual Report of Luzhou Laojiao Co., Ltd.
Dongsheng Co., Ltd. ve director
Lyu Xianpei Sichuan Education and Audit Society Chairman
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
Chairman of
Luzhou State-Owned Capital Operation
Lian Jing the board of
and Management Co. Ltd
supervisors
Executive
Luzhou Guoxin Asset Management Co. director,
Lian Jing
Ltd. general
manager
XingLu Group, Luzhou Liquor Industrial
Park Development and Investment Co.
Ltd., Luzhou Public Transportation
Group Co. Ltd., Sichuan Rongtong
External
Lian Jing Security Investment Group Co. Ltd.,
director
Luzhou Aviation Development
Investment Group Co., Ltd., and
Sichuan Guxu Coal Field Development
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
53
2021 Annual Report of Luzhou Laojiao Co., Ltd.
5.3 Remuneration of directors, supervisors and senior management
The following describes the decision-making procedures, grounds on which decisions are made and
actual remuneration payment of directors, supervisors and senior management.
Decision-making procedures for directors, supervisors and senior management: The remuneration of
non-executive directors, external directors and external supervisors shall be determined by the general
meeting of shareholders, and the remuneration of directors, supervisors and senior management who
hold positions within the Company shall be determined by relevant rules of SASAC of Luzhou and
relevant rules of the Company.
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/ remuneration from related
Name Position Gender Age
Former from the parties of the
Company Company
Chairman of the
Liu Miao Male 52 Incumbent 149.66 No
board
Director,
Lin Feng General Male 48 Incumbent 147.9 No
manager
Director, Deputy
general
Wang Hongbo manager, Male 58 Incumbent 118.63 No
Secretary of the
board
Director, Deputy
Shen Caihong general Male 56 Incumbent 102.76 No
manager
Director, Deputy
Xiong Pingting general Female 46 Incumbent 34.82 No
manager
Non-executive
Liu Junhai Male 52 Incumbent 9.52 No
director
54
2021 Annual Report of Luzhou Laojiao Co., Ltd.
Non-executive
Chen You’an Male 64 Incumbent 4.76 No
director
Non-executive
Sun Dongsheng Male 63 Incumbent 4.76 No
director
Non-executive
Lyu Xianpei Male 58 Incumbent 4.76 No
director
Qian Xu External director Male 58 Incumbent 9.52 No
Ying Hanjie External director Male 52 Incumbent 9.52 No
Chairman of the
Yang Ping Board of Male 45 Incumbent 54.34 No
Supervisors
Lian Jing Supervisor Male 52 Incumbent 0 No
Li Guangjie Supervisor Male 52 Incumbent 100.53 No
Guo Shihua Supervisor Female 43 Incumbent 22.37 No
Li Lunyu Supervisor Female 35 Incumbent 24.81 No
Xie Hong CFO Female 52 Incumbent 116.93 No
Deputy general
He Cheng Male 55 Incumbent 100.18 No
manager
Deputy general
Zhang Suyi Male 50 Incumbent 97.53 No
manager
Deputy general
Li Yong Male 45 Incumbent 15 No
manager
Director, Deputy
Jiang Yuhui general Female 59 Former 86.91 No
manager
Non-executive
Du Kunlun Male 53 Former 4.76 No
director
Non-executive
Xu Guoxiang Male 62 Former 4.76 No
director
Non-executive
Tan Lili Female 67 Former 4.76 No
director
Yang Benhong Supervisor Female 55 Former 36.74 No
Cao Cong Supervisor Male 37 Former 22.38 No
Deputy general
Wu Qin Male 60 Former 91.25 No
manager
1
Total -- -- -- -- 1,379.86 --
Note 1: The table above shows the remunerations of directors, supervisors and senior management for
their periods of service in 2021.
55
2021 Annual Report of Luzhou Laojiao Co., Ltd.
6. Performance of directors during the reporting period
6.1. Board meetings convened during the reporting period
Meeting Convened date Disclosure date Resolutions
th th
The 24 Meeting of Announcement on Resolutions of the 24 Meeting of
the Ninth Board of 28 January 2021 29 January 2021 the Ninth Board of Directors (Announcement No.
Directors 2021-4) (http://www.cninfo.com.cn/)
th th
The 25 Meeting of Announcement on Resolutions of the 25 Meeting of
the Ninth Board of 22 March 2021 23 March 2021 the Ninth Board of Directors (Announcement No.
Directors 2021-7) (http://www.cninfo.com.cn/)
th th
The 26 Meeting of Announcement on Resolutions of the 26 Meeting of
the Ninth Board of 13 April 2021 15 April 2021 the Ninth Board of Directors (Announcement No.
Directors 2021-9) (http://www.cninfo.com.cn/)
th th
The 27 Meeting of Announcement on Resolutions of the 27 Meeting of
the Ninth Board of 29 April 2021 30 April 2021 the Ninth Board of Directors (Announcement No.
Directors 2021-11) (http://www.cninfo.com.cn/)
th th
The 28 Meeting of Announcement on Resolutions of the 28 Meeting of
the Ninth Board of 4 June 2021 5 June 2021 the Ninth Board of Directors (Announcement No.
Directors 2021-19) (http://www.cninfo.com.cn/)
th th
The 29 Meeting of Announcement on Resolutions of the 29 Meeting of
the Ninth Board of 18 June 2021 19 June 2021 the Ninth Board of Directors (Announcement No.
Directors 2021-25) (http://www.cninfo.com.cn/)
The First Meeting of Announcement on Resolutions of the First Meeting of
th th
the 10 Board of 29 June 2021 30 June 2021 the 10 Board of Directors (Announcement No.
Directors 2021-28) (http://www.cninfo.com.cn/)
The Second Meeting Announcement on Resolutions of the Second Meeting
th th
of the 10 Board of 2 August 2021 3 August 2021 of the 10 Board of Directors (Announcement No.
Directors 2021-32) (http://www.cninfo.com.cn/)
The Third Meeting of Announcement on Resolutions of the Third Meeting of
th th
the 10 Board of 12 August 2021 14 August 2021 the 10 Board of Directors (Announcement No.
Directors 2021-34) (http://www.cninfo.com.cn/)
The Fourth Meeting of Announcement on Resolutions of the Fourth Meeting of
th th
the 10 Board of 26 August 2021 28 August 2021 the 10 Board of Directors (Announcement No.
Directors 2021-36) (http://www.cninfo.com.cn/)
The Fifth Meeting of Announcement on Resolutions of the Fifth Meeting of
th 16 September th
the 10 Board of 17 September 2021 the 10 Board of Directors (Announcement No.
2021
Directors 2021-42) (http://www.cninfo.com.cn/)
56
2021 Annual Report of Luzhou Laojiao Co., Ltd.
The Sixth Meeting of Announcement on Resolutions of the Sixth Meeting of
th 20 September th
the 10 Board of 22 September 2021 the 10 Board of Directors (Announcement No.
2021
Directors 2021-43) (http://www.cninfo.com.cn/)
The Seventh Meeting Announcement on Resolutions of the Seventh Meeting
th 26 September th
of the 10 Board of 27 September 2021 of the 10 Board of Directors (Announcement No.
2021
Directors 2021-44) (http://www.cninfo.com.cn/)
The Eighth Meeting of Announcement on Resolutions of the Eighth Meeting of
th th
the 10 Board of 27 October 2021 29 October 2021 the 10 Board of Directors (Announcement No.
Directors 2021-48) (http://www.cninfo.com.cn/)
The Ninth Meeting of Announcement on Resolutions of the Ninth Meeting of
th th
the 10 Board of 6 December 2021 7 December 2021 the 10 Board of Directors (Announcement No.
Directors 2021-53) (http://www.cninfo.com.cn/)
th th
The 10 Meeting of Announcement on Resolutions of the 10 Meeting of
th 13 December th
the 10 Board of 14 December 2021 the 10 Board of Directors (Announcement No.
2021
Directors 2021-54) (http://www.cninfo.com.cn/)
th th
The 11 Meeting of Announcement on Resolutions of the 11 Meeting of
th 19 December th
the 10 Board of 20 December 2021 the 10 Board of Directors (Announcement No.
2021
Directors 2021-58) (http://www.cninfo.com.cn/)
th th
The 12 Meeting of Announcement on Resolutions of the 12 Meeting of
th 29 December th
the 10 Board of 30 December 2021 the 10 Board of Directors (Announcement No.
2021
Directors 2021-61) (http://www.cninfo.com.cn/)
6.2. Attendance of directors in board meeting and general meeting of shareholders
Attendance of director in board meeting and general meeting of shareholders
Attendance at
Attendance Attendance Absence for
Attendance Attendance general
due in the by Absence two
Director on site through a meeting of
reporting telecommuni (times) consecutive
(times) proxy (times) shareholders
period (times) cation (times) times
(times)
Liu Miao 18 4 14 0 0 No 2
Lin Feng 18 4 14 0 0 No 2
Wang Hongbo 18 3 14 1 0 No 1
Shen Caihong 18 3 14 1 0 No 2
Xiong Pingting 12 3 9 0 0 No 2
Liu Junhai 18 3 14 1 0 No 0
Chen You’an 12 3 9 0 0 No 1
Sun Dongsheng 12 3 9 0 0 No 0
57
2021 Annual Report of Luzhou Laojiao Co., Ltd.
Lyu Xianpei 12 3 9 0 0 No 1
Qian Xu 18 3 14 1 0 No 0
Ying Hanjie 18 3 14 1 0 No 1
Jiang Yuhui 6 1 5 0 0 No 1
Du Kunlun 6 1 5 0 0 No 0
Xu Guoxiang 6 1 5 0 0 No 1
Tan Lili 6 0 5 1 0 No 1
6.3. Objections from directors in related issues of the Company
Were there any objections on related issues of the Company from director
Yes √ No
Directors have no objection on related issues of the Company during the reporting period.
6.4. Other details about the performance of duties by directors
Was there any advice from directors adopted by the Company?
√ Yes No
Explanation about advice of directors is adopted or not adopted by the Company or not
The Company adopted the advice of non-executive directors in respect of safe production, system
improvement, and internal control construction.
7. Activities of special committees under the Board of Directors during
the reporting period
Number Substantial
Other Details of
of Convened opinion and
Committee Members Topics inform objections
meetings date recommen
ation (if any)
convened dations
Liu Miao, Review of the following proposals: Approved,
Wang 1. The Proposal on the to be
Hongbo and De-registration of Chengdu Tianfu submitted
The Strategy 25 January
Sun 5 Panda Whitail Liquor Industry Co., to the
Committee 2021
Dongsheng Ltd.; 2. The Proposal on the Board of
(Xu Guoxiang De-registration of Luzhou Whitail Directors
and Liu Tongdao Uncle Constellation Wine for further
58
2021 Annual Report of Luzhou Laojiao Co., Ltd.
Junhai have Sales Co., Ltd.; and 3. The review
ceased to be Proposal on the Incorporation of
a member of Luzhou Laojiao New Retail
the Strategy Management Co., Ltd.
Committee
Approved,
since 29 June to be
Review of the following proposal:
2021) The Proposal on the Acquisition of submitted
7 April a 5% Interest in Luzhou to the
2021 Sanrenxuan Liquor Industry Co., Board of
Ltd. & the Related-party Directors
Transaction for further
review
Approved,
to be
Review of the following proposal: submitted
15 June The Proposal on the Investment to the
2021 and Wealth Management with Own Board of
Funds Directors
for further
review
Approved,
to be
Review of the following proposal: submitted
17 August The Proposal on the to the
2021 De-registration of Luzhou Laojiao Board of
Tourism Culture Co., Ltd. Directors
for further
review
Review of the following proposals:
Approved,
1. The Proposal on the Investment
to be
and Participation in the H-stock
submitted
8 Offering of China Tourism Group
to the
November Duty Free Corporation Limited;
Board of
2021 and 2. The Proposal on the
Directors
De-registration of Luzhou Laojiao
for further
Whitail Innovative Electronic
review
Commerce Co., Ltd.
Liu Junhai, Approved,
Review of the following proposal:
Lyu Xianpei to be
The The Proposal on the Review of the
and Shen 1 June submitted
Nomination 3 Qualifications of Non-employee
Caihong (Xu 2021 th to the
Committee Director Candidates for the 10
Guoxiang has Board of
Board of Directors
ceased to be Directors
59
2021 Annual Report of Luzhou Laojiao Co., Ltd.
a member of for further
the review
Nomination
Approved,
Committee to be
since 29 June Review of the following proposal:
submitted
2021) The Proposal on the Formulation
15 June to the
of the Plan of Luzhou Laojiao Co.,
2021 Board of
Ltd. for Market-based Employment
Directors
of Deputy General Managers.
for further
review
Approved,
to be
submitted
10 Review of the following proposal:
to the
September The Proposal on the Nomination
Board of
2021 for Senior Management
Directors
for further
review
Review of the following proposals: Approved,
1. The 2020 Annual Financial to be
Report; 2. The 2020 Internal submitted
19 April Control Self-assessment Report; to the
2021 3. The Summary Report of the Board of
2020 Annual Audit; 4. The Work Directors
Plan for the 2021 Internal Audit; for further
Lyu Xianpei,
Chen You’an and 5. The Q1 2021 Report review
and Qian Xu Approved,
(Tan Lili and to be
Du Kunlun submitted
Review of the following proposal:
The Audit have ceased 1 June to the
4 The Proposal on the
Committee to be a 2021 Board of
Re-appointment of CPA Firm
member of Directors
the Audit for further
Committee review
since 29 June
Approved,
2021) to be
submitted
19 August Review of the following proposal: to the
2021 The 2021 Interim Financial Report Board of
Directors
for further
review
60
2021 Annual Report of Luzhou Laojiao Co., Ltd.
Approved,
to be
submitted
Review of the following proposal:
22 October to the
The Proposal on the Q3 2021
2021 Board of
Report
Directors
for further
review
Review of the following proposals:
1. The Proposal on the
Formulation of the Management
Methods of Luzhou Laojiao Co.,
Ltd. for Remunerations and
Appraisal of Senior Management;
2. The Proposal on the Approved,
Formulation of the Specific to be
Management Rules of Luzhou submitted
19 April Laojiao Co., Ltd. for to the
Chen You’an, Remunerations of Senior Board of
2021
Sun
Management; 3. The Proposal on Directors
Dongsheng
the Formulation of the Specific for further
and Ying
Management Rules of Luzhou review
Hanjie (Du
Laojiao Co., Ltd. for Performance
Kunlun and
Appraisal of Senior Management;
The Xu Guoxiang
and 4. The Proposal on
Remuneration have ceased
4 Performance Appraisals of Senior
and Appraisal to be a
Management for the Year and
Committee member of
Their Periods of Service
the
Review of the following proposals:
Remuneration
1. The Proposal on the 2021
and Appraisal Approved,
Restricted Share Incentive Plan
Committee to be
(Draft) and Summary; 2. The
since 29 June submitted
23 Proposal on the Performance
2021) to the
September Appraisal Methods for the 2021
Board of
2021 Restricted Share Incentive Plan;
Directors
and 3. The Proposal on the
for further
Management Methods for the
review
2021 Restricted Share Incentive
Plan
Review of the following proposal: Approved,
10
The Proposal on the Management to be
December
Methods of Luzhou Laojiao Co., submitted
2021
Ltd. for Remunerations and to the
61
2021 Annual Report of Luzhou Laojiao Co., Ltd.
Appraisal of Management Team Board of
Members Directors
for further
review
Approved,
Review of the following proposal: to be
The Proposal on the Formulation submitted
19
of The Company and Individual to the
December
Appraisal Indicators for Board of
2021
Management Team Members of Directors
Luzhou Laojiao Co., Ltd. for 2021 for further
review
8. Performance of duties by the board of supervisors
Were there any risks to the Company identified by the board of supervisors when performing its duties
during the reporting period
Yes √ No
The board of supervisors has no objection during the reporting period.
9. Staff in the Company
9.1. Number, functions and educational backgrounds of the staff
Number of in-service staff of the parent company at the end
1,198
of the reporting period
Number of in-service staff of main subsidiaries at the end of
2,236
the reporting period
Total number of in-service staff at the end of the reporting
3,434
period
Total number of staff with remuneration in the period 3,434
Number of retirees to whom the Company or its main
913
subsidiaries need to pay retirement pension
Functions
Function by category Number of staff
Production staff 1,264
Sales staff 879
R&D staff 700
Financial staff 99
62
2021 Annual Report of Luzhou Laojiao Co., Ltd.
Administrative staff 492
Total 3,434
Educational backgrounds
Educational background by category Number of staff
Senior high school and below 573
Junior college 1,044
Bachelor 1,489
Master 319
Doctor 9
Total 3,434
9.2. Staff remuneration policy
In 2021, the Company implemented the distribution policy of "sharing benefits, paying for losses,
classification and setting, and long-term policy effects", continuously strengthened the digital
assessment, linked individual performance with organizational performance, and highlighted the
distribution according to performance. The Company implemented the post rating wage system and
strengthened the performance management of all employees. According to the following principles:
A. 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.
B. 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.
C. 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.
D. The principle of equal wage negotiation: Abide by the principles that both sides of labor and capital
agrees in collective negotiation, so as to realize the unity of benefit and fairness.
9.3. Staff training plans
In 2021, 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 levels.
63
2021 Annual Report of Luzhou Laojiao Co., Ltd.
A. 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.
B. 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 “Excellent Frontline Manager
Sub-program” to provide specialty knowledge and skills of different systems.
C. 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.
D. 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.
9.4. Labor outsourcing
Applicable √ N/A
10. Profit distribution and converting capital reserves into share capital
Formulation, execution or adjustments of profit distribution policy, especially cash dividend policy, in the
reporting period.
√ Applicable N/A
According to the plan for profit distribution for 2020 deliberated and approved by 2020 annual meeting of
shareholders, based on its total of 1,464,752,476 shares, the Company distributed a cash dividend of
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
CNY 20.51 (tax inclusive) per 10 shares to all shareholders. The distribution plan was implemented on
20 August 2021.
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:
The Company made a profit in the reporting period and the profit distributable to shareholders of the
Company was positive, but it did not put forward a preliminary plan for cash dividend distribution to
shareholders.
Applicable √ N/A
Preliminary plan for profit distribution and converting capital reserves into share capital for the reporting
period
√ Applicable N/A
Bonus shares for every 10 shares (share) 0
Dividends for every 10 shares (CNY) (tax
32.44
included)
Total shares as the basis for the preliminary
1,471,615,076
plan for profit distribution (share)
Total cash dividends (CNY) (tax included) 4,773,919,306.54
Cash dividends in other forms (e.g. repurchase
0.00
share)
Total cash dividends (CNY) (including other
4,773,919,306.54
forms)
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
Distributable profit (CNY) 21,187,860,235.89
Percentage of cash dividends in the total
60.01%
distributed profit (including other forms)
Information of the cash dividends
The development stage of the Company is mature and the Company has no major fund expenditure arrangement. When
the profit distribution is carried out, the proportion of cash dividends in this profit distribution should at least reach 80%.
Details of preliminary plan for profit distribution and converting capital reserves in to share capital
After taking minority shareholders’ advice, the board of directors plans to distribute a cash dividend of CNY 32.44 (tax
inclusive) per 10 shares to all shareholders based on its total of 1,471,615,076 shares, representing a total cash
dividend amount of CNY 4,773,919,306.54, according to the Company's actual conditions. Where any change occurs to
the Company’s total share capital before the implementation of the distribution plan, relevant adjustments shall be made
with the same total distribution amount. The Company will not carry out any bonus issue or convert capital reserves into
share capital for 2021.
11. Implementation of any equity incentive plan, employee stock
ownership plan or other incentive measures for employees
√ Applicable N/A
11.1. Equity incentives
On 26 September 2021, the Proposal on the 2021 Restricted Share Incentive Plan (Draft) and Summary
of Luzhou Laojiao Co., Ltd., the Proposal on the Performance Appraisal Methods for the 2021 Restricted
Share Incentive Plan of Luzhou Laojiao Co., Ltd., and the Proposal on the Management Methods for the
2021 Restricted Share Incentive Plan of Luzhou Laojiao Co., Ltd. were approved at the Seventh Meeting
of the 10th Board of Directors. On 29 December 2021, the aforesaid proposals were approved at the First
Extraordinary General Meeting of Shareholders of 2021. On the same day, the Proposal on the Grant of
Restricted Shares to Awardees was approved at the 12th Meeting of the 10th Board of Directors. As such,
it was decided to grant a total of 6.9286 million restricted shares to 444 eligible awardees at CNY
92.71/share in the first grant on 29 December 2021. During the payment process after the grant date
was determined, four awardees chose to waive a total of 66 thousand restricted shares that the
Company had intended to grant to them due to personal reasons. Therefore, in fact, 6.8626 million
restricted shares were granted to 437 awardees as registered. On 21 February 2022, the Company
completed the registration of the grant under the restricted share incentive plan. Upon the registration of
the grant, the total shares of the Company increased from 1,464,752,476 shares to 1,471,615,076
shares.
Equity incentives for directors and senior management
√ Applicable N/A
Unit: share
66
2021 Annual Report of Luzhou Laojiao Co., Ltd.
Exercise
Stock price for Market Restricte
Stock Grant Restricte
options Stock Exercisa Exercise exercise price at d shares Restricte
options Unlocked price of d shares
held at options ble share d share d share the end held at d shares
held at shares in the held at
Office the granted options options options of the the granted
Name the end the restricted the end
title beginnin in the for the in the in the reporting beginnin in the
of the reporting shares of the
g of the reporting reporting reporting reporting period g of the reporting
reporting period (CNY/ reporting
reporting period period period period (CNY / reporting period
period share) period
period (CNY / share) period
share)
Chairma
Liu Miao n of the 0 0 0 0 0 0 0 0 0 95,900 92.71 0
board
Director,
Lin Feng General 0 0 0 0 0 0 0 0 0 95,900 92.71 0
manager
Director,
Deputy
general
Wang
manager, 0 0 0 0 0 0 0 0 0 76,700 92.71 0
Hongbo
Secretar
y of the
board
Director,
Shen Deputy
0 0 0 0 0 0 0 0 0 76,700 92.71 0
Caihong general
manager
Xie Hong CFO 0 0 0 0 0 0 0 76,700 92.71 0
Deputy
He
general 0 0 0 0 0 0 0 0 0 76,700 92.71 0
Cheng
manager
Deputy
Zhang
general 0 0 0 0 0 0 0 0 0 76,700 92.71 0
Suyi
manager
Director,
Xiong Deputy
0 0 0 0 0 0 0 0 0 62,800 92.71 0
Pingting general
manager
Deputy
Li Yong general 0 0 0 0 0 0 0 0 0 62,800 92.71 0
manager
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
Total -- 0 0 0 0 -- 0 -- 0 0 700,900 -- 0
The grant date for the restricted share incentive plan was 29 December 2021 and the registration date of the grant was 21
Notes (if any)
February 2022.
Appraisal mechanism and incentives for senior management
For details, please refer to the 2021 Restricted Share Incentive Plan (Draft) and Summary of Luzhou
Laojiao Co., Ltd., the Performance Appraisal Methods for the 2021 Restricted Share Incentive Plan of
Luzhou Laojiao Co., Ltd., and the Management Methods for the 2021 Restricted Share Incentive Plan of
Luzhou Laojiao Co., Ltd., which have been disclosed by the Company on www.cninfo.com.cn on 26
September 2021.
11.2. Implementation of employee stock ownership plans
Applicable √ N/A
11.3. Other incentive measures for employees
Applicable √ N/A
12. Establishment and implementation of the internal control system
during the reporting period
12.1. Establishment and implementation of the internal control system
During the reporting period, in accordance with the Basic Rules for Internal Control of Enterprises, the
Guidelines of the Shenzhen Stock Exchange for the Internal Control of Listed Companies, relevant laws,
administrative regulations, normative documents, and other regulatory requirements concerning internal
control, as well as the reality of the Company, the Company consistently improved and optimized its
internal control systems and established a well-developed system that covered the corporate
governance, administrative management, operations management, financial management, human
resources, production guarantee, and safety and environmental protection. Additionally, it strengthened
the implementation, supervision, inspection, feedback, and improvement of the internal control systems
in the operations management to ensure that each internal control system is reasonable, complete, and
effective, thereby promoting the sound, sustainable development of the Company.
12.2. Material internal control deficiencies found in the reporting period
□ Yes √ No
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
13. The Company’s management and control of subsidiaries during the
reporting period
Problems Solution
Consolidation Consolidation Subsequent
Company name arising in Solutions taken implementation
plan progress solutions
consolidation progress
N/A
14. Internal control self-assessment report and auditor report
14.1. Internal control self-assessment report
Disclosure date of the internal control
29 April 2022
self-assessment report
Disclosure index of the internal control
2021 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
Type Financial report Non-financial report
Material deficiencies：（1）violate
Material 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
material deficiencies of internal
supervision .
control cannot be rectified in time.
1. Material deficiencies：Misstatement ≥ 1. Material deficiencies：loss≥5% of
Quantitative standard
5% of total profits；Misstatement ≥ 1% of net profits.
69
2021 Annual Report of Luzhou Laojiao Co., Ltd.
total assets；Misstatement ≥ 5% of total 2. Significant deficiencies：3% of net
operating revenue；Misstatement ≥5% of profits≤ loss＜5% of net profits.
owner's equity 3. General deficiencies：loss＜3% of
2. Significant deficiencies：3% of gross net profits
profits≤Misstatement<5% of gross
profits；0.5% of total
assets≤Misstatement<1% of total
assets；3% of total operating
revenue≤Misstatement<5% of total
operating revenue；3% of owner's
equity≤Misstatement<5% of owner's
equity.
3. General deficiencies：
Misstatement<3% of gross profits；
Misstatement<0.5% of total assets；
Misstatement<3% of total operating
revenue；Misstatement<3% of owner's
equity.
Number of financial-report material
0
deficiencies
Number of non-financial-report material
0
deficiencies
Number of significant financial-report
0
related deficiencies
Number of significant
Non-financial-report related 0
deficiencies
14.2. Internal control auditor report
√ Applicable N/A
Deliberation opinion section in the internal control audit report
In accordance with the Basic Rules for Internal Control of Enterprises, the guidelines for assessment, and the other
applicable laws and regulations, the Company has assessed the effectiveness of the design and operation of internal
control as of 31 December 2021. During the reporting period, the Company has established internal control over
businesses and matters within the assessment scope, which were effectively executed. The internal control objectives
have been met, with no material deficiencies. No significant change occurred to the Company’s internal control during
the period from the base day of the internal control assessment report to the issue day of the report that had a
substantial impact on the conclusion of the assessment report.
Disclosure of internal control
Disclosed
audit report
70
2021 Annual Report of Luzhou Laojiao Co., Ltd.
Disclosure date of the internal
29 April 2022
control audit report
Disclosure index of the internal
2021 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
15. Remediation of Problems Identified by Self-inspection in the Special
Campaign on Listed Company Governance
During the reporting period, the Company carried out a special self-inspection of the governance, during
which it comprehensively reviewed its governance and identified and fixed deficiencies in accordance
with regulatory rules, the Articles of Association, and other normative documents. Through the
self-inspection, it was found that due to the pandemic in 2020, the Board of Directors and its special
committees mainly voted via communication. Besides, non-executive directors seldom attended on-site
events with a total of working days of less than ten, which violated the related rule that non-executive
directors shall work on site for no less than ten workdays. Later, the Company remedied the problem. In
2021, the non-executive directors of the Company carried out on-site work by attending the General
Meeting of Shareholders and meetings of the Board of Directors and special committees, listening to the
reporting by the management of the Company of the production and operation on site, and inspecting
the construction of major projects of the Company.
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
Section V Environmental and Social Responsibility
1. Information about environment protection
Whether the listed company and its subsidiaries belong to heavy polluting industries prescribed by the
environmental protection department
√ Yes □ No
Name of
main Distributio
Number of Emission Pollution Approved
Company pollutant Discharge n of Total Excessive
discharge concentrati discharge total
name and type discharge emission discharge
outlet on standard emission
particular outlet
pollutant
Luzhou Luohan
Direct 22.858
Laojiao COD 1 Brewery 50 mg/L 10.1639 t/a 25 t/a No
discharge mg/L
Co., Ltd. Eco-Park
Luzhou Luohan
Ammonia Direct
Laojiao 1 Brewery 0.470 mg/L 5 mg/L 0.1973 t/a 2.5 t/a No
nitrogen discharge
Co., Ltd. Eco-Park
Luzhou Luohan
Total Direct
Laojiao 1 Brewery 6.781 mg/L 15 mg/L 3.0287 t/a 7.5 t/a No
nitrogen discharge
Co., Ltd. Eco-Park
Luzhou Total Luohan
Direct
Laojiao phosphoru 1 Brewery 0.171 mg/L 0.5 mg/L 0.0777 t/a 0.25 t/a No
discharge
Co., Ltd. s Eco-Park
Luzhou Luohan
Organized 7.425
Laojiao PM 2 Brewery 20 mg/m3 0.7955 t/a 3.9 t/a No
discharge mg/m3
Co., Ltd. Eco-Park
Luzhou Luohan
Sulfur Organized 0.079
Laojiao 2 Brewery 50 mg/m3 0.0087 t/a 11.5 t/a No
dioxide discharge mg/m3
Co., Ltd. Eco-Park
Luzhou Luohan
Organized 30.710
Laojiao Oxynitride 2 Brewery 150 mg/m3 3.3129 t/a 45.4 t/a No
discharge mg/m3
Co., Ltd. Eco-Park
Luzhou Huangyi
Indirect 34.931
Laojiao COD 1 Brewery 400 mg/L 16.8328 t/a 400 t/a No
discharge mg/L
Co., Ltd. Eco-Park
Luzhou Ammonia Indirect 1 Huangyi 0.777 mg/L 30 mg/L 0.2508 t/a 30 t/a No
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
Laojiao nitrogen discharge Brewery
Co., Ltd. Eco-Park
Luzhou Huangyi
Total Indirect 11.682
Laojiao 1 Brewery 50 mg/L 6.3003 t/a 50 t/a No
nitrogen discharge mg/L
Co., Ltd. Eco-Park
Luzhou Total Huangyi
Indirect
Laojiao phosphoru 1 Brewery 0.624 mg/L 3 mg/L 0.3068 t/a 3 t/a No
discharge
Co., Ltd. s Eco-Park
Energy
Center of
Luzhou
Sichuan
Laojiao Organized 1.026mg/m
PM 2 Luzhou 5 mg/m3 0.5248 t/a No
Brewing discharge 3
Baijiu
Co., Ltd.
Industrial
Park
8.64 t/a
Energy
Center of
Luzhou
Sichuan
Laojiao Organized 1.065
PM 1 Luzhou 20 mg/m3 0.0804 t/a No
Brewing discharge mg/m3
Baijiu
Co., Ltd.
Industrial
Park
Energy
Center of
Luzhou
Sichuan
Laojiao Sulfur Organized 0.602
2 Luzhou 35 mg/m3 0.3027 t/a No
Brewing dioxide discharge mg/m3
Baijiu
Co., Ltd.
Industrial
Park
18.88 t/a
Energy
Center of
Luzhou
Sichuan
Laojiao Sulfur Organized 0.423
1 Luzhou 50 mg/m3 0.0314 t/a No
Brewing dioxide discharge mg/m3
Baijiu
Co., Ltd.
Industrial
Park
Energy
Luzhou Center of
Laojiao Organized Sichuan 32.315
Oxynitride 2 100 mg/m3 16.5729 t/a 136.08 t/a
Brewing discharge Luzhou mg/m3
Co., Ltd. Baijiu
Industrial
73
2021 Annual Report of Luzhou Laojiao Co., Ltd.
Park
Energy
Center of
Luzhou
Sichuan
Laojiao Organized 42.007
Oxynitride 1 Luzhou 150 mg/m3 3.2266 t/a
Brewing discharge mg/m3
Baijiu
Co., Ltd.
Industrial
Park
Information about construction and operation of anti-pollution installations
A. Waste water: Areas of the Company that produce wastewater are National Cellar Base, Xiaoshi
Base, Zaojiaoxiang Base, Anning Park, Luohan Brewery Eco-Park, and Huangyi Brewery Eco-Park. In
National Cellar Base, Xiaoshi Base, Zaojiaoxiang Base, and Anning Park, the high-concentration
brewing wastewater is temporarily collected in pools (or tanks), and is later transferred to the wastewater
treatment station of Huangyi Brewery Eco-Park by truck for treatment. The wastewater treatment
stations of Luohan Brewery Eco-Park and Huangyi Brewery Eco-Park are equipped with online monitors
to automatically monitor COD, ammonia nitrogen, total phosphorus, total nitrogen, pH value and flows,
and transmit the monitoring data to the supervision platform of the higher authority. The Company's
facilities for prevention and control of wastewater pollution are under normal operations, ensuring
up-to-standard discharge through general discharging outlets.
B. Waste gas: Areas of the Company that produce exhaust gas are National Cellar Base, Xiaoshi Base,
Zaojiaoxiang Base, Luohan Brewery Eco-Park, and Huangyi Brewery Eco-Park. In National Cellar Base,
Xiaoshi Base and Zaojiaoxiang Base, small natural gas boilers and direct-fired bottom boilers are used.
The boilers of Luohan Brewery Eco-Park (20t/h, 30t/h) and the boilers of Huangyi Brewery Eco-Park
(20t/h, 75t/h, 75t/h) are equipped with online monitors to automatically monitor exhaust gas, and transmit
the monitoring data to the supervision platform of the higher authority. Low NOx combustion technology
is adopted for the natural gas boilers. The Company's facilities for prevention and control of exhaust gas
pollution are under normal operations, ensuring up-to-standard emission of exhaust gas through outlets.
Environmental impact assessment for construction project and other environmental protection
administrative permission
The Company’s new reconstruction and expansion projects are carried out in accordance with the
applicable laws and regulations. The environmental assessment and approval procedures shall be
completed before commencement of the projects. After the projects are completed, the environmental
protection inspection and acceptance shall be carried out in accordance with the requirements of the
environmental assessment. Construction projects started in 2021 have gone through the approval
procedures in accordance with the relevant requirements.
Emergency plan for environmental emergencies
The Company developed the Contingency Plan for Environmental Emergencies (Revision 2020), the
Environmental Risk Assessment Report and the Emergency Resources Survey Report, and reported to
74
2021 Annual Report of Luzhou Laojiao Co., Ltd.
the Environmental Emergency Service Center of Luzhou for filing. Institutions of the Company organized
training programs on the contingency plan for employees, and carried out drills of contingency plans,
which improved employees' capability to respond to environmental emergencies.
Environmental self-monitoring program
The Company developed the environmental self-monitoring plan and entrusted third-party agencies to
conduct environmental self-monitoring. Self-monitoring information is released on "Environmental Credit
China" and the "Platform of Sichuan Province for Management and Sharing of Information about
Pollution Source Monitoring" to facilitate social supervision.
Administrative penalties received in the reporting period due to environmental issues
The Company or Reason for Impact on the
Regulation violated Penalties Rectification
subsidiary penalties Company
N/A
Other information about environmental protection that should be disclosed
N/A
Measures taken to reduce carbon emissions during the reporting period and the results
√ Applicable N/A
In 2021, the Company reduced its carbon dioxide emissions by more than 10,000 tons through
innovative electricity consumption models, electricity alternative trading programs, purchase of green
electricity, etc.
Other information about environment protection
N/A
2. Social responsibility
See the 2021 Social Responsibility Report disclosed on the same day with this Annual Report.
3. Efforts in poverty alleviation and rural revitalization
3.1. Work Plan for Rural Revitalization in 2021
In 2021, the Company consistently implemented the arrangements for rural revitalization made by the
CPC Central Committee, the CPC Provincial Committee, and the CPC Municipal Committee, and carried
out the duties of assisting Xiangtian Village of Longshan Town, Gulin County, and Guntang Village of
Maiwa Township, Hongyuan County. Following the working idea of "shoring up weak spots, consolidating
75
2021 Annual Report of Luzhou Laojiao Co., Ltd.
achievements, and consolidating the foundation to promote rural revitalization" and based on the reality
of the designated assisted villages, the Company consolidated resources and increased inputs,
improved the construction of infrastructure, promoted the development of characteristic industries, and
deepened the transformation of the conception of education, to fully promote the revitalization of the
designated assisted villages.
A. Intensify the leadership of the Party organizations and enrich the assistance teams. The Company
proactively paired up its Party organizations at the grass-roots level and the Party branches of Xiangtian
Village and Guntang Village for co-development, helped the Party branches implement the "three
meetings and one lecture", Party branch meeting, and other systems, and collaborated with the local
Party organizations to build a strong village Party branch. Besides, it also encouraged its Party
organizations at the grass-roots level to guide the assisted villages to establish and improve rural
governance system that is led by the Party organization and combines autonomy, rule of law, and rule of
morality; selected and trained excellent cadres to be stationed in the villages and helped them improve
their working capabilities via guidance from experienced staff and project practice.
B. Deepen industrial assistance and expand advantages. The Company held firm to the idea of "one
specialty for one village" and deepened the "self-motivation-based" assistance model. It consistently
promoted the "rice-fish farming" project and assisted farmers with construction, production, and selling
by considering local characteristics to increase their income. Additionally, lectures by experts and special
meetings were held to improve farmers' job skills and cultivate forgoers in getting rich.
C. Consistently assist farmers in building up self-belief and provide them with necessary education to
boost their confidence in development. The Company consistently carried out in-depth education on
gratitude and forging ahead through special meetings and farmers' night schools to reinforce the belief of
listening to the Party, remembering the Party's favor, and following the Party. In addition, moral exemplar
selection activities were held to cultivate new etiquette and civility that feature respect for the elderly,
care for the young, harmony between couples, friendliness between neighbors, pleasure to offer help,
and integrity. Also, the Company provided consistent educational assistance to prevent poverty from
passing down from generation to generation.
D. Carry out "three projects" and develop infrastructure. In 2021, adhering to the principle of
"implementing policies comprehensively and highlighting advantages", the Company pushed ahead with
the project of "A Civilized Village for Work, A Beautiful Village for Living, and A Salubrious Village" to
build a high-quality, beautiful village.
3.2. Summary of the 2021 Rural Revitalization
In 2021, based on the "precise policy implementation" principle and capitalizing on its advantages, the
Company invested CNY 1.135 million and conducted five high-quality assistance projects. It upgraded
the assistance team, featured characteristic industries, practiced the guiding principles, and enhanced
the infrastructure with various steps.
A. Enhance organizational guarantees to steer the big picture of the work. In 2021, the CPC Luzhou
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
Laojiao Committee established a steering group for rural revitalization work. Members of the group
carried out field research four times, held two CPC committee meetings to discuss the targeted
assistance work, held three symposiums to discuss work, and formulated an assistance plan for the
following five years by focusing on the "five revitalization", namely the industrial, talent, cultural,
ecological, and organizational revitalization. In addition, a targeted assistance team was set up to be
stationed in the village, with three new staff and one liaison selected to be stationed in the village, which
further enriched the assistance force. On the centennial anniversary of the Communist Party of China,
cadres stationed in the village collaborated with the Party branches of Xiangtian Village and Guntang
Village to launch a campaign on studying the Party's history. Through "three meetings and one lecture"
and "themed Party lessons", 80-odd Party members were called together to learn the important
instructions of General Secretary Xi Jinping on rural revitalization, the guiding principle of the Sixth
Plenary Session of the 19th CPC Central Committee, and policies on rural governance and serving the
people. The Company's campaign team for Party's history learning held four micro Party lessons by
providing access to Party's history learning for village Party members. A total of 35 Party branches at the
grassroots level were paired up with Party members in poverty to guide them to learn Party's history.
Furthermore, cadres stationed in the village and of the Party branches of the two villages did practical
things for the people by carrying out publicity for pandemic prevention and control and career guidance,
as well as providing 100-odd public welfare jobs. The Company collaborated with health centers at the
township level to deliver medical care and vaccination services to people in need in the villages, thereby
ensuring that all eligible people were vaccinated.
B. Upgrade industrial assistance and expand advantages. The "self-motivation-based" assistance model
and "courtyard economy" were deepened and vigorously supported. By encouraging farmers to raise
chickens, ducks, pigs, and other animals under existing conditions, the per capita annual income of
farmers increased by CNY 2,000. With its advantages in nationwide sales channels and e-commerce
platforms with high traffic, the Company launched a campaign of "Creating Wealth through Sales" to
assist farmers via e-commerce platforms, which realized a total income of more than CNY 5 million and a
6.6-fold increase in annual sales compared with that without the assistance of e-commerce platforms.
Meanwhile, the Party branches at the grassroots level of the Company were encouraged to purchase the
agricultural produce instead of donations, contributing CNY 104,800 to the increase of the income of
farmers and the collective income of villages. The Company also upgraded the rice processing
workshops to lay a solid foundation for the professional, scale-based, and market-based development of
characteristic industries. Through these measures, the industries got on track comprehensively, the
sales were significantly improved, and the "independent development" capabilities of the assisted
villages were consistently enhanced.
C. Consistently assist farmers in building up self-belief and provide them with necessary education to
stimulate their self-motivation. The Company launched a village-level exemplar assessment and set
scientific assessment standards that cover five perspectives, including "etiquette and civility and
becoming better off through diligence". In 2021, a total of 50 people were assessed as moral and
self-made exemplars, which promoted material and spirit poverty alleviation. Themed teach-ins were
held via farmers' night schools, special meetings, and interviews. For example, a total of 32 teach-ins
about agronomic knowledge and forest fire prevention were organized. Additionally, cadres stationed in
the villages took the lead in giving themed Party lessons on Party's history learning. Meanwhile, they
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
collected urgent, obstinate issues of great concern to the villagers and finally resolved ten-odd issues.
For example, they provided access to the medical services in the town for households enjoying five
guarantees and low-income families, shuttle bus services for people to go to fairs, and vaccination
vehicles. The Company consistently assisted students by setting assistance funds to help high school
graduates go to university. The "Voluntary Education" campaign had been launched for six consecutive
years to encourage students in rural areas to pursue their studies and prevent poverty from passing
down from generation to generation. Also, the Company organized warmth-sending and Spring Festival
care-extension activities, through which it sent warmth and care to 151 assisted households and
300-odd common farming households and further aroused their enthusiasm and initiative in getting rich.
D. Take various steps in terms of infrastructure guarantees to build a beautiful village. The Company
assisted Guntang Village in building a village cultural plaza and supported Guntang Village in holding
villagers' cultural events to provide a stage for both masses' cultural events and Tibetan cultural festivals
and carry forward the traditional cultures of ethnic minorities. Besides, it assisted the villages in setting
up sanitary facilities such as waste transfer stations to optimize the image of the villages. Fully
leveraging its own resources and advantages, the Company collaborated with medical facilities such as
Southwest Medical University and Aier Eye Hospital twice to deliver medical services to villagers.
Through publicity for pandemic prevention and eye protection and volunteer dental clinics, the lives and
health of villagers were protected.
During the reporting period, the Company was honored with the awards such as "National Advanced
Collective in Poverty Alleviation", "Outstanding Contribution Award for Social Poverty Alleviation", "The
Third Sichuan Charity Award", and "The Most Charitable Model". Additionally, Zhang Wenping, a cadre
of the Company stationed in Guntang Village, was honored with the title of "Top Ten Poverty Alleviation
Figures in Sichuan State-owned Enterprises".
3.3. Subsequent Plans for Rural Revitalization
In 2022, based on the general requirement for "prosperous industry, livable ecology, civilized rural style,
effective governance, and well-off life", the Company will deepen the implementation of arrangements
made by the CPC Central Committee, the State Council, the CPC Sichuan Provincial Committee, the
People's Government of Sichuan Province for effectively linking up the achievements of poverty
alleviation with rural revitalization, and continue to provide assistance for Xiangtian Village and Guntang
Village. Besides, with advantages in funds, technologies, talent, and management, the Company will
take more vigorous steps and gather more powerful momentum to promote the modernization cause and
sustainable development of the designated assisted villages and strive to build a model and
demonstration village for rural revitalization.
First, intensify the leadership of Party organizations and fulfill the assistance responsibility. The
Company will further improve its political stance, assume the social responsibility of a state-owned
enterprise, and provide assistance and fulfill its responsibilities in poverty alleviation. Additionally, to fulfill
its assistance responsibility, the Company will promote the cooperation between its Party branches and
assisted villages as well as the training of cadres of the two village Party branches and of the Company
stationed in the two villages.
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
Second, consistently promote the upgrading of industries and income increase through poverty
alleviation. Giving full play to its advantages in resources and platforms, the Company will train more
technological, sales, and management talent in Hongyuan County to enlarge the group of "forgoers in
getting rich", thereby encouraging the developed groups to assist backward ones. Besides, it will build a
brand image for yak products in Hongyuan County and increase the inputs in the development of
derivatives, so as to enhance the visibility and reputation and lend constant impetus to the development
of the assisted villages.
Third, establish a long-term mechanism to facilitate rural revitalization. The Company will focus on the
standard that rural poor people are free from worries over food and clothing and have access to
compulsory education, basic medical services, and safe housing, strengthen dynamic monitoring of any
trends indicating a return to poverty, and consistently promote the development of the assisted villages
to share the fruits of poverty alleviation with villagers. Meanwhile, measures including "external support
and self-motivation" and "building up self-belief and providing access to education" will be incorporated
into the long-term mechanism for rural revitalization.
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
Section VI Significant Events
1. Performance of undertakings
1.1. Undertakings of the Company's actual controller, shareholders, related parties
and acquirer, as well as the Company and other commitment makers fulfilled in the
reporting period or ongoing by the end of this reporting period
Applicable √ N/A
No such cases in the reporting period.
1.2. Where any earnings forecast was made for any of the Company's assets or
projects and the reporting period is still within the forecast period, the Company
shall explain whether the performance of the asset or project reaches the earnings
forecast and reasons
Applicable √ N/A
2. Occupation of the Company's fund by the controlling shareholder or
its related parties for non-operating purposes
Applicable √ N/A
No such cases in the reporting period.
3. Irregularities in the provision of guarantees
Applicable √ N/A
No such cases in the reporting period.
4. Explanation of the board of directors regarding the latest
"non-standard audit opinion"
Applicable √ N/A
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
5. Explanation of the board of directors, the board of supervisors and
non-executive directors (if any) regarding the "non-standard audit
opinion" for the reporting period
Applicable √ N/A
6. Reason for changes in accounting policies and accounting estimates,
as well as correction of major accounting errors compared to the
financial report for the prior year
√ Applicable □ N/A
The Company has disclosed the Announcement on Changes to Accounting Policies on 16 January 2021,
deciding to adopt the new accounting standard for leases from 1 January 2021. On 7 December 2018,
the Ministry of Finance issued the revised Accounting Standards for Business Enterprises
No.21—Leases (CK [2018] No. 35). As required by the Ministry of Finance, enterprises that are listed
both domestically and overseas and those that are listed overseas but adopt China’s Accounting
Standards for Business Enterprises in the preparation of financial statements shall adopt the new
accounting standards from 1 January 2019; while other enterprises that adopt the Accounting Standards
for Business Enterprises shall adopt the new accounting standards from 1 January 2021. Due to the
aforesaid revised accounting standards, the Company has adjusted its accounting policies with respect
to leases accordingly.
7. Reason for changes in scope of the consolidated financial statements
compared to the financial report for the prior year
√ Applicable □ N/A
Subsidiaries that are newly incorporated into the scope of consolidation in this period
Name of subsidiary Reason
Luzhou Laojiao New Retail Co., Ltd. Incorporated through investment
Liquidation and cancellation for subsidiaries in this period
Name of subsidiary Reason
Luzhou Laojiao Whitail Innovative Electronic Commerce Co., Ltd. Liquidation and cancellation
Luzhou Laojiao Selected Electronic Commerce Co., Ltd. Liquidation and cancellation
Chengdu Tianfu Panda Whitail Liquor Industry Co., Ltd. Liquidation and cancellation
Luzhou Whitail Tongdao Uncle Constellation Baijiu Sales Co., Ltd. Liquidation and cancellation
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
8. Engagement and disengagement of CPA firm
CPA firm at present
Name of the domestic CPA firm Sichuan Huaxin (Group) CPA Firm
The Company’s payment for the domestic CPA
98
firm (CNY’0,000)
Consecutive years of the audit service provided by
23
the domestic CPA firm
Names of the certified public accountants from the
Li Wulin, Tang Fangmo, He Shoufu
domestic CPA firm
Consecutive years of the audit service provided by Li Wulin 2 years, Tang Fangmo 3 years, He Shoufu
the certified public accountants 2 years
Whether the CPAs firm was changed in the current period
Yes √ No
Engagement of any CPAs firm for internal control audit, financial advisor or sponsor
√ Applicable N/A
The Company appointed Sichuan Huaxin (Group) CPA Firm as the internal control auditor for this year.
The remuneration of audit in total paid by the Company was CNY 500 thousand.
9. Possibility of delisting after disclosure of this annual report
Applicable √ N/A
10. Bankruptcy and reorganization
Applicable √ N/A
No such cases in the reporting period.
11. 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 filed a The second For the losses that The Company 15 October See Section VI
14,942.5 No
lawsuit with ABC trial has the Company applied to Hunan 2014 “Other
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
Changsha Yingxin been cannot recover Province Higher significant
Branch over a deposit concluded, through criminal People's Court for events”
dispute, and the case and the case execution enforcement of
has been completed in is now at the procedures, 40% the verdict.
the first instance of stage of shall be borne by Hunan Province
Hunan Province enforcement. ABC Changsha Higher People's
Higher People's Court Yingxin Branch, Court ruled that
and the final trial of the 20% shall be borne Hunan Changsha
Supreme People's by ABC Changsha Intermediate
Court. The case is Hongxin Branch People’s Court
now at the stage of and the rest shall should see to the
enforcement. be borne by the execution of the
Company itself. verdict. Upon the
enforcement, the
banks have paid
part of the
compensations.
The banks have
paid part of the
compensations.
As there was a
dispute over the
ICBC Nanyang
verdict, the
Zhongzhou Branch,
Company applied
The Company filed a ICBC Nanyang
to Henan
lawsuit with ICBC Branch, and Sanya
Province Higher
Nanyang Zhongzhou Rural Commercial
People's Court for
Branch over a deposit The second Bank Hongsha
enforcement of
dispute, and the case trial has Branch shall pay
the verdict.
has been completed in been compensations of See Section VI
Henan Province
the first instance of concluded, CNY 75 million, 10 January “Other
15,000 No Higher People's
Henan Province and the case CNY 7.5 million and 2015 significant
Court ruled that
Higher People's Court is now at the CNY 6.105 million events”
Nanyang
and the final trial of the stage of respectively with
Intermediate
Supreme People's enforcement. the relevant interest
People’s Court
Court. The case is to the Company,
should see to the
now at the stage of and the rest of the
execution of the
enforcement. loss shall be borne
verdict. The case
by the Company
is now at the
itself.
stage of
enforcement by
Nanyang
Intermediate
People’s Court.
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
12. Punishments and rectifications
Applicable √ N/A
No such cases in the reporting period.
13. Credit conditions of the Company as well as its controlling
shareholder and actual controller
Applicable √ N/A
14. Significant related party transactions
14.1. Related party transactions arising from routine operation
Applicable √ N/A
No such cases in the reporting period.
14.2. Related party transactions regarding purchase or sales of assets or equity
interests
Applicable √ N/A
No such cases in the reporting period.
14.3. Related party transitions arising from joint investments in external parties
Applicable √ N/A
No such cases in the reporting period.
14.4. Credits and liabilities with related parties
Applicable √ N/A
No such cases in the reporting period.
14.5. Transactions with related finance companies
Applicable √ N/A
The Company did not make deposits in, receive loans or credit from and was not involved in any other
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
finance business with any related finance company or any of its related parties.
14.6. Transactions between finance companies controlled by the Company and
related parties
Applicable √ N/A
No related parties made deposits in, received loans or credit from or was involved in any other finance
business with any finance company controlled by the Company.
14.7. Other significant related party transactions
Applicable √ N/A
No such cases in the reporting period.
15. Significant contracts and their execution
15.1. Trusteeship, contracting and leasing
15.1.1. Trusteeship
Applicable √ N/A
No such cases in the reporting period.
15.1.2. Contracting
Applicable √ N/A
No such cases in the reporting period.
15.1.3. Leasing
Applicable √ N/A
No such cases in the reporting period.
15.2. Major guarantees
Applicable √ N/A
No such cases in the reporting period.
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
15.3. Entrusted cash asset management
15.3.1. Entrusted assets management
√ Applicable N/A
Entrusted assets management during the reporting period
Unit: CNY 10,000
Impairment
Fund source for Amount of Overdue allowances for the
Type entrusted assets entrusted assets Undue balance outstanding overdue
management management amount outstanding
amount
Wealth
management Own funds 50,000 50,000 0 0
product of bank
Wealth
management
Own funds 20,000 20,000 0 0
product of trust
company
Total 70,000 70,000 0 0
Particulars of high risk wealth management products with a significant single amount or low security or
poor liquidity
Applicable √ N/A
Expected inability to recover the principal of entrusted assets management or other circumstances that
may result in impairment
Applicable √ N/A
15.3.2 Entrust loans
Applicable √ N/A
No such cases in the reporting period.
15.4. Other significant contracts
Applicable √ N/A
No such cases in the reporting period.
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
16. Other significant events
√ Applicable N/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. 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. As of the end of the reporting period, a cumulative amount of CNY 368 million had
been recovered with respect to the three disputed contracts. In view of the value of assets preserved by
the public security authorities and the professional legal advice issued by Beijing Weiheng (Chengdu)
Law Firm, the Company adjusted the provision for bad debts by reversing an amount of CNY 80 million.
Therefore, the cumulative provision for bad debts for the aforesaid contract disputes was CNY 120
million as at the end of the reporting period.
See details in the Company’s announcements:
Date of announcement No. Catalogue Official website
15 October 2014 2014-35 Announcement of significant http://www.cninfo.com.cn/
litigation
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
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
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
7 November 2020 2020-34 Announcement of significant
litigation progress part XIII
6 July 2021 2021-30 Announcement of significant
litigation progress part XIV
15 December 2021 2021-57 Announcement of significant
litigation progress part XV
30 December 2021 2021-64 Announcement of significant
litigation progress part XVI
17. Significant events of subsidiaries
√ Applicable □ N/A
The Company invested in the technical upgrade program of brewing and implemented the program with
the wholly-owned subsidiary, Brewing Company, as the entity. On 30 June 2020, the Proposal on
Increasing Investment in the Technical Upgrade Program of Brewing was approved by the 2019 Annual
General Meeting of Shareholders upon deliberation. According to the proposal, extra CNY
1,462,996,500 of funds would be invested in the technical upgrade program of brewing. Upon this
increase of funds, the total investment in the technical upgrade program of brewing would reach CNY
8,877,276,500. For more information, please refer to the following announcements: Announcement on
Investing in the Technical Upgrade Program of Brewing by the Subsidiary disclosed on 28 April 2016
with an Announcement No. of 2016-12; Announcement on Increasing Investment in the Technical
Upgrade Program of Brewing disclosed on 2 June 2020 with an Announcement No. of 2020-17
(http://www.cninfo.com.cn/). As of December 2020, construction was completed for the project. Quality
inspection and acceptance of the relevant sub-projects was finished. Other inspection and acceptance,
as well as advance transfer to fixed assets based on estimated value were finished in June 2021.
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
Section VII Changes in Shares and Information about
Shareholders
1. Changes in shares
1.1 Changes in shares
Unit：Share
Before Changes in this year (＋，－) After
Issuan Capitalizati
Proportio ce of Bonus on of
Number Other Subtotal Number Proportion
n new shares capital
shares reserves
I. Restricted shares 445,921 0.03% -198,000 -198,000 247,921 0.02%
1. Shares held by the state
2. Shares held by state-owned
corporations
3. Shares held by other
445,921 0.03% -198,000 -198,000 247,921 0.02%
domestic investors
Of which: shares held by
domestic corporations
Shares held by domestic
445,921 0.03% -198,000 -198,000 247,921 0.02%
individuals
4. Shares held by foreign
corporations
Of which: shares held by foreign
corporations
Shares held by foreign
individuals
II. Non-restricted shares 1,464,306,555 99.97% 198,000 198,000 1,464,504,555 99.98%
1.CNY common shares 1,464,306,555 99.97% 198,000 198,000 1,464,504,555 99.98%
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%
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
Reasons for the change in shares
Applicable √ N/A
Approval of share changes
Applicable √ N/A
Transfer of share ownership
Applicable √ N/A
Effects of changes in shares on the basic EPS, diluted EPS, net assets per share attributable to common
shareholders of the Company and other financial indexes over the last year and the last reporting period
Applicable √ N/A
Other contents that the Company considers it necessary or required by the securities regulatory
authorities to disclose
Applicable √ N/A
1.2 Changes in restricted shares
√ Applicable □ N/A
Unit：Share
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
Locked-up
29 December
Jiang Yuhui 190,500 0 190,500 0 shares of senior
2021
management
Locked-up
29 December
Yang Benhong 7,500 0 7,500 0 shares of senior
2021
management
Total 198,000 0 198,000 0 -- --
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
2. Issuance and listing of securities
2.1 Securities (excluding preferred shares) issued in the reporting period
Applicable √ N/A
2.2 Changes in total shares of the Company and the shareholder structure, as well as
the asset and liability structure
Applicable √ N/A
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 142,588 140,711 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, marked or frozen shares
Increase/dec Number of
Shareholdi held by the of
Nature of rease during holding
Name of shareholder ng end of the holding
shareholder the reporting non-restricte Status of shares Number of shares
percentage reporting restricte
period d 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
corporation
Co., Ltd.
Bank of China Co.,
Other 3.22% 47,095,334 17,258,349 0 47,095,334
Ltd. – Baijiu index
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
classification
securities investment
fund by China
Merchants Fund
Hong Kong
Outbound
Securities Clearing 2.42% 35,440,088 2,538,426 0 35,440,088
corporation
Company Limited
China Securities
Finance Corporation Other 2.31% 33,842,059 0 0 33,842,059
Limited
Bank of China Co.,
Ltd.－Blue chip
selected hybrid Other 1.78% 26,000,000 -1,700,000 0 26,000,000
securities investment
fund by E Fund
Industrial and
Commercial Bank of
China Co.,
Ltd.-Newly growth Other 1.31% 19,200,000 4,122,089 0 19,200,000
hybrid securities
investment fund by
Invesco Great Wall
Central Huijin Asset
State-owned
Management Co., 0.92% 13,539,862 -7,397,638 0 13,539,862
corporation
Ltd.
Agricultural Bank of
China Co., Ltd. -
Consumption
industry stock - Other 0.72% 10,573,293 -3,413,534 0 10,573,293
based securities
investment fund by E
Fund
Bank of China Co.,
Ltd.－Dingyi hybrid
securities investment Other 0.55% 8,000,000 - 0 8,000,000
fund by Invesco
Great Wall (LOF)
Strategic investors or general
corporations become the top-ten
N/A
shareholders due to placing of new
shares（if any）（see note 3）
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
1. Luzhou Laojiao Group Co., Ltd. and Luzhou XingLu Investment Group Co., Ltd. are both holding
state-owned companies under the jurisdiction of SASAC of Luzhou. The two companies signed the
agreement of persons acting in concert on 31 December 2015. For details, please refer to the
announcement of the Company on 5 January 2016 - Announcement on the agreement of persons
acting in concert signed by shareholders. The announcement number is 2016-1
Related parties or acting-in-concert (http://www.cninfo.com.cn/). The two companies signed the renewed agreement of persons acting in
concert on 27 May 2021. For details, please refer to the announcement of the Company on 29 May
2021 - Announcement on the renewed agreement of persons acting in concert signed by shareholders.
The announcement number is 2021-18 (http://www.cninfo.com.cn/).
2. In addition, whether there is an association between the remaining shareholders or they belong to
persons acting in concert is unknown.
Explain if any of the shareholders
above was involved in entrusting/being
N/A
entrusted with voting rights or waiving
voting rights
Special account for repurchased shares
among the top 10 shareholders (if any) N/A
(see note 10)
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
Bank of China Co., Ltd. – Baijiu index
CNY common
classification securities investment fund by 47,095,334 47,095,334
shares
China Merchants Fund
Hong Kong Securities Clearing Company CNY common
35,440,088 35,440,088
Limited shares
China Securities Finance Corporation CNY common
33,842,059 33,842,059
Limited shares
Bank of China Co., Ltd.－Blue chip
CNY common
selected hybrid securities investment fund 26,000,000 26,000,000
shares
by E Fund
Industrial and Commercial Bank of China
CNY common
Co., Ltd.-Newly growth hybrid securities 19,200,000 19,200,000
shares
investment fund by Invesco Great Wall
CNY common
Central Huijin Asset Management Co., Ltd. 13,539,862 13,539,862
shares
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
Agricultural Bank of China Co., Ltd. -
CNY common
Consumption industry stock - based 10,573,293 10,573,293
shares
securities investment fund by E Fund
Bank of China Co., Ltd.－Dingyi hybrid
CNY common
securities investment fund by Invesco 8,000,000 8,000,000
shares
Great Wall (LOF)
The statement of association or
acting-in-concert between the top 10
shareholders of unrestricted shares and
See the table above
between the top 10 shareholders of
unrestricted shares and top 10
shareholders
Top 10 common shareholders participating
in securities margin trading (if any) (see N/A
note 4)
Did any of the top 10 common shareholders or the top non-restricted common shareholders of the
Company conduct any promissory repurchase during the reporting period.
Yes √ No
The top 10 non-restricted common shareholders, the top10 common shareholders did not conduct any
promissory repurchase during the reporting period.
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
Luzhou Laojiao Group Co.,Ltd. Liu Miao 21 December 2000 91510500723203346U
services; Social and economic
consulting, enterprise
management consulting,
enterprise management
services; Supply chain
management services; Import
and export business and trade
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
agents; Food production and
sales (including online); Crop
cultivation and marketing
services (including online).
(The Company cannot start
business activities until
projects subject to approval
according to law are approved
by relevant departments.)
1. As of 30 June 2021, Laojiao Group holds 70,406,310 shares of Luzhou Xinglu Water (Group) Co., Ltd.
(02281.HK), accounting for 8.19% of the total issued shares.
Shareholdings of the controlling 2. As of 30 September 2021, Laojiao Group holds 212,954,666 shares of Hongli Zhihui Group Co., Ltd.
shareholder in other controlled or (300219.SZ) through its wholly-owned subsidiary, Sichuan Jinduo investment Co., Ltd., accounting for 30.08%
non-controlled listed companies of the total issued shares.
at home or abroad during the 3. As of 30 September 2021, Laojiao Group holds 475,940,143 shares of Huaxi Securities Co., Ltd.
reporting period (002926.SZ), accounting for 18.13% of the total issued shares.
4. As of 31 December 2021, Laojiao Group holds 390,528,000 shares of Luzhou Bank (01983.HK),
accounting for 14.37% of the total issued shares.
Change of the controlling shareholder during the reporting period
Applicable √N/A
No such cases in the reporting period
3.3 Actual controller and its persons acting in concert
Nature of actual controller：Local State-owned Assets Supervision and Administration Commission
Type of actual controller：Corporation
Legal
Name of actual controller representative/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 2021, XingLu Group, a controlled subsidiary of SASAC of Luzhou, holds 511,654,127
shares of Luzhou Xinglu Water (Group) Co., Ltd. (02281.HK), accounting for 59.51% of the total issued
shares. Luzhou Infrastructure Construction Investment Co., Ltd., a holding subsidiary of XingLu Group,
Share holdings of the controlling
holds 62,709,563 shares of Luzhou Xinglu Water (Group) Co., Ltd. (02281.HK), and accounting for 7.29% of
shareholder in other controlled or
the total issued shares. Laojiao Group, a controlled subsidiary under SASAC of Luzhou, holds 70,406,310
non-controlled listed companies at
shares of Luzhou Xinglu Water (Group) Co., Ltd. (02281.HK), accounting for 8.19% of the total issued
home or abroad during the
shares.
reporting period.
2. As of 30 September 2021, 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%
of the total shares issued.
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
3. As of 30 September 2021, Luzhou Industrial Investment Group Co., Ltd., a holding Company under the
jurisdiction of SASAC of Luzhou, holds 193,464,610 shares of Sichuan Lutianhua Company Limited
(000912.SZ), accounting for 12.34% of the total shares issued. Lutianhua Group Company Limited, a
wholly-owned subsidiary of Luzhou Industrial Investment Group Co., Ltd., holds 221,458,993 shares of
Sichuan Lutianhua Company Limited (000912.SZ), and accounting for 13.49% of the total issued shares.
4. As of 30 September 2021, 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 31 December 2021, Laojiao Group, a controlled subsidiary under SASAC of Luzhou, holds
325,440,000 shares of Luzhou Bank (01983.HK), accounting for 14.37% of the total issued shares. XingLu
Group, a controlled subsidiary under SASAC of Luzhou, holds 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.
Ownership and control relations between the actual controller and the Company
The actual controller control the company through a trust or other ways of assets management
Applicable √ N/A
3.4 Number of accumulative pledged shares held by the company’s controlling
shareholder or the largest shareholder as well as its acting-in-concert parties
accounts for 80% of all shares of the company held by them
Applicable √ N/A
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3.5 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
3.6 Limits on reduction of the Company’s shares held by its controlling shareholder,
actual controller, restructuring party and other commitment entities.
Applicable √ N/A
4. Specific implementation of share repurchase during the reporting
period
Implementation progress of shares repurchases
□ Applicable √ N/A
Implementation progress of share buyback reduction through centralized bidding
□ Applicable √ N/A
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Section VIII Preferred Shares
Applicable √ N/A
No preferred stock in the Company during the reporting period.
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
Section IX Information about Bond
√ Applicable N/A
1. Enterprise bonds
Applicable √ N/A
No such cases in the reporting period.
2. Corporate bonds
√ Applicable N/A
2.1. Basic information about the corporate bond
Unit: CNY
Way of
Bond Interest Place of
Name Abbr. Code Issue date Value date Due date redemptio
balance rate trading
n
In terms of
the bonds
of this
phase,
2019 interests
Public will be paid
Offering of by year
Corporate and the
Bond of principal
Shenzhen
Luzhou 19 Lao 27 August 28 August 28 August 2,500,000, will be
112959.SZ 3.58% Stock
Laojiao Jiao 01 2019 2019 2024 000.00 repaid in
Exchange
Co., Ltd. lump sum
for at maturity.
Qualified The
Investors interests
(Phase I) will be paid
once every
year and
the
interests
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
for the last
installment
will be paid
together
with the
principal.
In terms of
the bonds
of this
phase,
interests
will be paid
by year
2020 and the
Public principal
Offering of will be
Corporate repaid in
Bond of lump sum
Shenzhen
Luzhou 20 Lao 16 March 17 March 17 March 1,500,000, at maturity.
149062.SZ 3.50% Stock
Laojiao Jiao 01 2020 2020 2025 000.00 The
Exchange
Co., Ltd. interests
for will be paid
Qualified once every
Investors year and
(Phase I) the
interests
for the last
installment
will be paid
together
with the
principal.
The bonds are applicable to eligible investors who have qualified securities
accounts with Shenzhen Branch of China Securities Depository and Clearing Co.,
Ltd., are permitted to engage in the subscription and transfer of corporate bonds in
accordance with the Management Measures for the Issue and Transaction
Appropriate arrangement of the
Management of Corporate Bonds, Management Measures for the Suitability of
investors (if any)
Securities and Futures Investors, Management Measures of Shenzhen Stock
Exchange for the Suitability of Securities Market Investors, and relevant laws and
regulations, and have the corresponding risk identification and bearing capacity
(excluding those prohibited by laws and regulations)
Trading systems applicable Tradable by way of bidding, offering, inquiry and agreement
Risk of termination of listing and N/A
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
trading (if any) and
countermeasures
Overdue bonds
Applicable √ N/A
2.2. Triggering and execution of issuer or investor option clauses and investor
protection clauses
Applicable √ N/A
2.3. Information about the intermediaries
Signature Contact person of
Bond Intermediary Office address Contact number
accountant intermediary
2019 Public
Offering of
Corporate Bond of
Luzhou Laojiao
rd
Co., Ltd. for 33 Floor, China
China International
Qualified Investors World Office 2, No.
Capital
(Phase I)/ 2020 1 Jianguomenwai N/A Qi Qin (010)65051166
Corporation
Public Offering of Avenue, Chaoyang
Limited.
Corporate Bond of District, Beijing
Luzhou Laojiao
Co., Ltd. for
Qualified Investors
(Phase I)
2019 Public
Offering of
Corporate Bond of
Luzhou Laojiao Building 6, Galaxy
Co., Ltd. for SOHO, No.2
Qualified Investors China Chengxin Nanzhugan
(Phase I)/ 2020 International Credit hutong,Chaoyang N/A Sun Shu (010)66428877
Public Offering of Rating Co., Ltd. mennei Avenue,
Corporate Bond of Dongcheng
Luzhou Laojiao District, Beijing
Co., Ltd. for
Qualified Investors
(Phase I)
th
2019 Public Sichuan Huaxin 28 Floor, No.18 Li Wulin, Tang
He Shoufu （028）85560449
Offering of (Group) CPA Firm Jinmaolidu South, Fangmo, He
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
Corporate Bond of Ximianqiao Street, Shoufu
Luzhou Laojiao Chengdu
Co., Ltd. for
Qualified Investors
(Phase I)/ 2020
Public Offering of
Corporate Bond of
Luzhou Laojiao
Co., Ltd. for
Qualified Investors
(Phase I)
Indicate by tick mark whether above intermediaries changed in the reporting period
□ Yes √ No
2.4. List of the usage of the raised funds
Unit: CNY
Whether is
consistent
with the
Operation of
Rectification of usage,
special
raised funds for using plan
Bonds Total amount Amount spent Unused amount account for
violation and other
raised funds
operation (if any) agreements
(if any)
stipulated in
the raising
specification
The
company has
set up a
special
2019 Public
account to
Offering of
deposit the
Corporate Bond
funds raised
of Luzhou 1
2,500,000,000.00 2,530,818,423.11 0.00 and has N/A Yes
Laojiao Co., Ltd.
signed a fund
for Qualified
account
Investors
supervision
(Phase I)
agreement to
clarify it. The
special
account for
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
fund raising
was
operating
normally
during the
Reporting
Period. (1)
Account
name:
Luzhou
Laojiao Co.,
Ltd.; Opening
bank:
Guangfa
Bank Co.,
Ltd.,
Chengdu
Branch; Bank
account:
9550880046
723000135.
(2) Account
name:
Luzhou
Laojiao Co.,
Ltd.; Opening
bank: Bank
of
Communicati
ons Co., Ltd.,
Luzhou
Branch; Bank
account:
5175174600
1300000086
0. (3)
Account
name:
Luzhou
Laojiao Co.,
Ltd.; Opening
bank: China
Merchants
Bank Co.,
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
Ltd.,
Chengdu
Fucheng
Avenue
Sub-branch;
Bank
account:
0289001404
10888.
The
company has
set up a
special
account to
deposit the
funds raised
and has
signed a fund
account
supervision
agreement to
clarify it. The
special
2020 Public
account for
Offering of
fund raising
Corporate Bond
was
of Luzhou
1,500,000,000.00 356,604,601.62 1,218,797,527.44 operating N/A Yes
Laojiao Co., Ltd.
normally
for Qualified
during the
Investors
Reporting
(Phase I)
Period. (1)
Account
name:
Luzhou
Laojiao Co.,
Ltd.; Opening
bank:
Guangfa
Bank Co.,
Ltd.,
Chengdu
Branch; Bank
account:
9550880046
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
723000135.
(2) Account
name:
Luzhou
Laojiao Co.,
Ltd.; Opening
bank: Bank
of
Communicati
ons Co., Ltd.,
Luzhou
Branch; Bank
account:
5175174600
1300000086
0. (3)
Account
name:
Luzhou
Laojiao Co.,
Ltd.; Opening
bank: China
Minsheng
Bank Co.,
Ltd.,
Chengdu
Branch; Bank
account:
631395395.
Note: 1. Including accumulated interest income of CNY 40,825,632.44, net of issue costs of CNY
10,000,000 and accumulated handling expenses of CNY 7,209.33
The raised funds were used for project construction
√ Applicable N/A
The Company raised a fund of CNY 4.0 billion through the issue of corporate bonds respectively on 27
August 2019 and 16 March 2020. After deduction of the issue fees, the balance amount was set to use in
the technical renovation project of brewing (Phase II), Project of Intelligent Upgrading and Building of the
Information Management System, Project of Acquiring Sealing Equipment for the Cellar of Huangyi
Brewing Base and Project of Acquiring Accessory Equipment for Leaven Making for Huangyi Brewing
Base. As of 31 December 2021, CNY 2,887,423,000 of the fund-raising through the issue of corporate
bonds had been used.
The Company changed the usage of above funds raised from bonds during the reporting period.
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
□ Applicable √ Not applicable
2.5. Changes in credit ratings in the reporting period
□ Applicable √ Not applicable
2.6. Execution and changes with respect to guarantees, repayment plans and other
repayment-ensuring measures in the reporting period, as well as the impact on the
interests of bond holders
□ Applicable √ Not applicable
3. Debt instruments as a non-financial enterprise
Applicable √ N/A
No such cases in the reporting period.
4. Convertible corporate bonds
Applicable √ N/A
No such cases in the reporting period.
5. Consolidated loss of the reporting period over 10% of net assets as at
the end of last year
Applicable √ N/A
6. Matured interest-bearing debt excluding bonds up the period-end
Applicable √ N/A
7. Whether there was any violation of rules and regulations during the
reporting period
□ Yes √ No
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
8. The major accounting data and the financial indicators of the recent 2
years of the company as of the end of the reporting period
Unit：CNY 10,000
Item 31 December 2021 31 December 2020 Change
Current ratio 2.43 2.57 -5.45%
Debt/asset ratio 34.89% 33.78% 1.11%
Quick ratio 1.74 1.95 -10.77%
2021 2020 Change
Net profits before
non-recurring gains and 788,438.41 599,083.18 31.61%
losses
EBITDA/debt ratio 277.43% 203.61% 73.82%
Interest cover (times) 49.41 30.88 60.01%
EBITDA-to-interest cover
52.01 32.05 62.28%
(times)
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
Section X Financial Report
1. Auditor’s report
Type of audit report Standard without reserved opinion
Signing date of auditor’s report 27 April 2022
Name of Audit Sichuan Huaxin (Group) CPA Firm
No. of auditor’s report Chuan Huaxin Audit [2022] No. 0041
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
2021, 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 2021 and its operating results and cash flow for the year then ended.
Basis for opinion
We conducted our audit in accordance with China Standards on Auditing (“CSAs”) for Certified Public
Accountants. Our responsibilities under those standards are further described in the Auditor's
Responsibilities for the Audit of the Financial Statements section of our report. We are independent of
the Company in accordance with the Code of professional ethics for Certified Public Accountants in
China (“the Code”), and we have fulfilled our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the consolidated financial statements of the current period. These matters were addressed in the
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
context of our audit of the consolidated financial statements as a whole and, in forming our opinion
thereon, and we do not provide a separate opinion on these matters. Key audit matters identified in our
audit are summarized as follows:
1. Key audit matters-Recognition of domestic baijiu sales revenue
Key audit matters How our audit addressed the Key Audit Matter
As shown in Note 5.34 in the Financial Statements, Our procedures in relation to recognition of domestic
the domestic baijiu sales revenue in the Company is baijiu sales revenue included:
CNY 20,331,834,100, accounting for 99.59% of the 1. Understood, evaluated and tested the reasonableness
primary business revenue of CNY 20,415,170,500. 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 baijiu 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
68.46% 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 contract liabilities 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 baijiu 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.
4. For other customers, randomly checked sales
contracts, customers' purchase orders, shipping
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
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 baijiu 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 2021, the bank balance of the Our procedures in relation to existence of bank deposits
Company is CNY 13.491 billion, accounting for included:
31.22% of the total assets. Bank deposits are 1. Understood and tested the design and implementation
high-risk assets. Therefore, we identified the of key internal controls related to the funds management
existence of bank 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
receiver through telephone, network and other public
information, and we controlled the whole reply letter
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
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 5.12 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 1,087,245,000 from transfer 1. Understood and tested the design and implementation
in 2021, and the balance of the construction in of key internal controls related to the assets management
progress will be CNY 0 at the end of the construction. cycle to confirm the effectiveness of relevant internal
Because the amount spent on the technical controls.
renovation project of brewing is significant, the 2. Check on project investment: we selected samples for
recognition of the time and amount of transfer from new important amounts occurred in the current period
construction in progress to fixed assets involves the with regard to the technical renovation project of brewing,
estimation and judgment of the management, and the reviewed the ledger of the project contracts, and
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
into Fixed Assets compiled by the Project Responsible
Unit and related approval procedures, and made a
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
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.
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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
related disclosures in the financial statements or, if such disclosures are inadequate, to modify our
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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.
Sichuan Huaxin (Group) CPA Firm Chinese CPA: Li Wulin
(Engagement Partner):
ChengduChina Chinese CPA: Tang Fangmo
Chinese CPA: He Shoufu
27 April 2022
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
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 2021
Monetary Unit: CNY
Item Balance as at 31 December 2021 Balance as at 31 December 2020
Current assets:
Cash and cash equivalents 13,513,494,580.56 11,624,870,340.60
Settlement reserves
Lending funds
Held-for-trading financial assets 706,352,241.79
Derivative financial assets
Notes receivables
Accounts receivables 1,628,248.55 1,507,852.43
Accounts receivables financing 4,757,631,778.64 3,209,371,766.35
Prepayment 178,087,688.81 74,685,537.38
Premiums receivable
Reinsurance accounts receivable
Reinsurance contract reserve
Other receivables 28,615,361.96 127,032,931.42
Including：Interests receivable
Dividends receivable 1,407,900.00
Buying back the sale of financial
assets
Inventories 7,277,573,166.80 4,695,663,431.25
Contract assets
Assets held for sale
Non-current assets due within one
year
Other current assets 111,974,532.91 156,565,424.18
Total current assets 26,575,357,600.02 19,889,697,283.61
Non-current assets:
Disbursement of loans and
advances
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Investments in debt obligations
Investments in other debt obligations
Long-term receivables
Long-term equity investments 2,626,744,236.25 2,477,667,171.27
Investments in other equity
363,312,120.43 347,160,399.42
instruments
Other non-current financial assets
Investment property
Fixed assets 8,089,487,274.39 6,887,108,174.72
Construction in progress 1,259,845,487.50 2,012,129,880.15
Productive biological assets
Oil and gas assets
Use right assets 52,714,810.04
Intangible assets 2,606,359,188.72 2,657,118,025.37
Development expenses
Goodwill
Long-term deferred expenses 1,463,869.21 2,305,902.21
Deferred tax assets 986,112,983.42 725,210,660.84
Other non-current assets 650,384,435.70 10,806,325.86
Total non-current assets 16,636,424,405.66 15,119,506,539.84
Total assets 43,211,782,005.68 35,009,203,823.45
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 2,420,354,469.53 2,604,289,199.77
Advance from customer
Contract liabilities 3,510,110,701.25 1,678,837,166.94
Financial assets sold for repurchase
Deposits from customers and
inter-bank
Customer brokerage deposits
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Securities underwriting brokerage
deposits
Employee benefits payable 648,103,740.96 505,022,627.19
Taxes payable 3,173,479,627.79 2,046,027,211.13
Other payable 652,393,292.60 501,623,924.54
Including：Interests payable
Dividends payable
Handling charges and commissions
payable
Reinsurance accounts payable
Liabilities held for sale
Non-current liabilities due within one
86,202,215.03 72,219,178.08
year
Other current liabilities 456,314,391.17 218,267,353.36
Total current liabilities 10,946,958,438.33 7,747,571,778.61
Non-current liabilities:
Insurance contract reserves
Long-term loans
Bonds payable 3,990,785,742.23 3,987,872,100.02
Including：Preferred shares
Perpetual bonds
Lease liabilities 40,667,668.08
Long-term payables
Long-term payroll payables
Accrued liabilities
Deferred income 28,531,014.28 29,739,000.00
Deferred tax liabilities 67,578,019.93 62,151,071.11
Other non-current liabilities
Total non-current liabilities 4,127,562,444.52 4,079,762,171.13
Total liabilities 15,074,520,882.85 11,827,333,949.74
Owners' equity
Share capital 1,464,752,476.00 1,464,752,476.00
Other equity instruments
Including: preferred shares
Perpetual bonds
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Capital reserves 3,755,354,665.73 3,722,777,063.13
Less: treasury stock
Other comprehensive income 167,527,152.32 186,063,325.03
Special reserves
Surplus reserves 1,464,752,476.00 1,464,752,476.00
General risk reserve
Undistributed profits 21,187,860,235.89 16,236,513,212.43
Total equity attributable to owners of
28,040,247,005.94 23,074,858,552.59
the parent company
Non-controlling interests 97,014,116.89 107,011,321.12
Total owners' equity 28,137,261,122.83 23,181,869,873.71
Total liabilities and owners' equity 43,211,782,005.68 35,009,203,823.45
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 2021
Monetary Unit: CNY
Item Balance as at 31 December 2021 Balance as at 31 December 2020
Current assets:
Cash and cash equivalents 13,038,549,397.55 11,100,327,211.33
Held-for-trading financial assets 706,352,241.79
Derivative financial assets
Notes receivables
Accounts receivables 1,207,477.63 3,927.50
Accounts receivables financing
Prepayment 1,464,893.09 1,431,698.57
Other receivables 10,033,554,898.57 7,052,749,694.83
Including：Interests receivable
Dividends receivable 1,407,900.00
Inventories 3,918,211.13 850,076.30
Contract assets
Assets held for sale
Non-current assets due within one
year
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Other current assets 78,509.44
Total current assets 23,785,047,119.76 18,155,441,117.97
Non-current assets:
Investments in debt obligations
Investments in other debt obligations
Long-term receivables
Long-term equity investments 6,051,400,833.91 5,884,091,712.47
Investments in other equity
362,983,198.80 346,831,477.79
instruments
Other non-current financial assets
Investment property
Fixed assets 1,087,640,695.62 640,254,574.76
Construction in progress 53,881,812.48 550,932,404.00
Productive biological assets
Oil and gas assets
Use right assets 573,800.02
Intangible assets 671,147,243.40 684,010,106.13
Development expenses
Goodwill
Long-term deferred expenses 1,364,659.65 2,180,811.89
Deferred tax assets 91,734,925.57 89,484,552.65
Other non-current assets 500,600.00 1,526,325.86
Total non-current assets 8,321,227,769.45 8,199,311,965.55
Total assets 32,106,274,889.21 26,354,753,083.52
Current liabilities:
Short-term loans
Held-for-trading financial liabilities
Derivative financial liabilities
Notes payable
Accounts payable 83,724,151.54 80,663,835.54
Advance from customer
Contract liabilities 2,523,947.74 753,349.81
Employee benefits payable 234,008,858.96 168,254,646.38
Taxes payable 285,894,625.64 153,437,992.21
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
Other payables 1,659,106,919.10 699,733,563.56
Including：Interests payable
Dividends payable
Liabilities held for sale
Non-current liabilities due within one
72,625,138.08 72,219,178.08
year
Other current liabilities 328,113.21 116,457.13
Total current liabilities 2,338,211,754.27 1,175,179,022.71
Non-current liabilities:
Long-term loans
Bonds payable 3,990,785,742.23 3,987,872,100.02
Including：Preferred shares
Perpetual bonds
Lease liabilities 163,523.64
Long-term payables
Long-term payroll payables
Accrued liabilities
Deferred income 1,904,000.00
Deferred tax liabilities 67,578,019.93 62,151,071.11
Other non-current liabilities
Total non-current liabilities 4,058,527,285.80 4,051,927,171.13
Total liabilities 6,396,739,040.07 5,227,106,193.84
Owners' equity
Share capital 1,464,752,476.00 1,464,752,476.00
Other equity instruments
Including: preferred shares
Perpetual bonds
Capital reserves 3,739,666,108.27 3,706,816,950.12
Less: treasury stock
Other comprehensive income 167,572,013.86 185,441,302.55
Special reserves
Surplus reserves 1,464,752,476.00 1,464,752,476.00
Undistributed profits 18,872,792,775.01 14,305,883,685.01
Total owners' equity 25,709,535,849.14 21,127,646,889.68
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Total liabilities and owners' equity 32,106,274,889.21 26,354,753,083.52
Consolidated income statement
Monetary Unit: CNY
Item Year 2021 Year 2020
1. Total operating revenue 20,642,261,724.37 16,652,854,549.80
Including: Operating revenue 20,642,261,724.37 16,652,854,549.80
Interest income
Earned premium
Fee and commission
income
2. Total operating costs 10,393,487,334.14 8,935,579,731.67
Including: Cost of sales 2,952,431,488.31 2,823,484,558.06
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 2,864,901,542.85 2,223,571,956.83
Selling and distribution
3,599,211,604.56 3,090,655,832.25
expenses
General and administrative
1,056,116,367.85 844,454,467.47
expenses
Research and
137,712,329.78 85,858,119.80
Development expenses
Financial expenses -216,885,999.21 -132,445,202.74
Including：Interest
195,125,786.35 190,368,213.56
expenses
Interest income 419,897,541.04 333,430,076.04
Plus: Other income 52,319,231.39 32,045,453.48
Investment income ("-" for 202,205,718.92 201,498,918.28
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
losses)
Including: income from
investment in associates and joint 195,543,058.40 192,119,093.92
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
6,352,241.79
values(“-“ for losses)
Credit impairment losses (“-”
81,126,114.88 373,734.80
for losses)
Impairment losses(“-“ for
losses)
Gains from disposal of
-347,429.88 8,123,010.18
assets("-" for losses)
3. Operating profits ("-" for losses) 10,590,430,267.33 7,959,315,934.87
Plus: non-operating income 27,246,707.88 32,645,773.17
Less: non-operating expenses 66,717,487.09 52,934,859.63
4. Total profits before tax ("-" for
10,550,959,488.12 7,939,026,848.41
total losses)
Less: income tax expenses 2,613,697,101.19 1,980,512,205.93
5. Net profit ("-" for net loss) 7,937,262,386.93 5,958,514,642.48
5.1 By operating continuity
5.1.1 Net profit from continuing
7,937,262,386.93 5,958,514,642.48
operation ("-" for losses)
5.1.2 Net profit from discontinued
operation ("-" for losses)
5.2 By ownership
1) Attributable to shareholders of the
7,955,554,351.73 6,005,723,069.36
parent company
2) Attributable to non-controlling
-18,291,964.80 -47,208,426.88
interests
6. Net of tax from other -19,081,558.37 -10,282,236.19
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
comprehensive income
Net of tax from other comprehensive
income to the owner of the parent -18,536,172.71 -8,753,805.54
company
6.1 Other comprehensive income
cannot reclassified into the profit and 11,707,013.25 -3,926,142.29
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 11,707,013.25 -3,926,142.29
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 -30,243,185.96 -4,827,663.25
loss
1) Share in other comprehensive
income that will be classified into -29,576,301.94 -2,965,293.21
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 -666,884.02 -1,862,370.04
statements
7) Others
Net of tax from other comprehensive
-545,385.66 -1,528,430.65
income to non-controlling interests
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7. Total comprehensive income 7,918,180,828.56 5,948,232,406.29
Total comprehensive income
attributable to owners of the parent 7,937,018,179.02 5,996,969,263.82
company
Total comprehensive income
attributable to non-controlling -18,837,350.46 -48,736,857.53
interests
8. Earnings per share
(1) Basic earnings per share 5.43 4.10
(2) Diluted earnings per share 5.43 4.10
Legal representative：Liu Miao
Person in charge of accounting affairs：Xie Hong
Person in charge of accounting department：Yan Li
Income statement of parent company
Monetary Unit: CNY
Item Year 2021 Year 2020
1. Operating revenue 7,602,627,780.05 5,498,845,453.48
Less: Cost of sales 5,665,157,031.44 4,185,130,000.53
Taxes and surcharges 48,515,753.23 39,668,792.03
Selling and distribution
expenses
General and administrative
771,788,593.30 639,110,100.69
expenses
Research and Development
56,568,184.04 31,103,513.75
expenses
Financial expenses -353,442,195.81 -212,027,662.64
Including：Interest expenses 156,432,933.96 108,660,100.27
Interest income 511,551,991.26 321,948,107.20
Plus: Other income 32,634,508.70 23,441,901.80
Investment income ("-" for
6,474,502,865.88 4,129,509,837.47
losses)
Including: income from
investment in associates and joint 171,693,567.56 191,110,318.79
ventures
Income from the
derecognition of financial assets at
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
amortized cost (“-” for losses)
Net gain on exposure hedges
(“-” for losses)
Gains from the changes in
6,352,241.79
fair values(“-“ for losses)
Credit impairment losses (“-”
80,203,108.29 1,373,316.74
for losses)
Asset impairment losses (“-”
for losses)
Gains from disposal of
546,546.66 8,127,635.68
assets("-" for losses)
2. Operating profits ("-" for
8,008,279,685.17 4,978,313,400.81
losses)
Plus: non-operating income 15,646,393.45 13,505,161.25
Less: non-operating expenses 61,173,017.79 33,646,104.00
3. Total profits before tax ("-" for
7,962,753,060.83 4,958,172,458.06
total losses)
Less: income tax expenses 391,636,642.56 216,026,393.77
4. Net profit ("-" for net loss) 7,571,116,418.27 4,742,146,064.29
4.1 Net profit from continuing
7,571,116,418.27 4,742,146,064.29
operation ("-" for losses)
4.2 Net profit from discontinued
operation ("-" for losses)
5. Net of tax from other
-17,869,288.69 -6,891,435.50
comprehensive income
5.1 Other comprehensive income
cannot reclassified into the profit and 11,707,013.25 -3,926,142.29
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 11,707,013.25 -3,926,142.29
instruments
4) Changes in fair value of the
company’s credit risks
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
5) Other
5.2 Other comprehensive income
that will be reclassified into the profit -29,576,301.94 -2,965,293.21
and loss
1) Share in other comprehensive
income that will be classified into -29,576,301.94 -2,965,293.21
profit and loss under equity method
2) Changes in fair value of
investments in other debt obligations
3) Other comprehensive income
arising from the reclassification of
financial assets
4) Allowance for credit impairments
in investments in other debt
obligations
5) Reserve for cash-flow hedge
6) Balance arising from the
translation of foreign currency
financial statements
7) Others
6. Total comprehensive income 7,553,247,129.58 4,735,254,628.79
7. Earnings per share
(1) Basic earnings per share
(2) Diluted earnings per share
Consolidated statement of cash flows
Monetary Unit: CNY
Item Year 2021 Year 2020
1. Cash flows from operating
activities
Cash received from sale of goods
22,547,242,658.59 17,181,826,402.36
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
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
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
Net cash received from customer
brokerage deposits
Refunds of taxes and surcharges 3,431,889.01 4,409,523.82
Cash received from other operating
970,002,588.49 536,706,593.88
activities
Subtotal of cash inflows from
23,520,677,136.09 17,722,942,520.06
operating activities
Cash paid for goods purchased and
5,071,928,013.73 3,935,832,838.54
services received
Net increase in loans and advances
to customers
Net increase in deposits in central
bank and other banks and financial
institutions
Cash paid for original insurance
contract claims
Net increase in lending funds
Cash paid for interests, handling
charges and commissions
Cash paid for policy dividends
Cash paid to and on behalf of
1,016,371,335.03 798,605,373.41
employees
Cash paid for taxes and surcharges 6,428,760,153.55 5,241,424,782.99
Cash paid for other operating
3,304,969,529.27 2,830,977,073.82
activities
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
Subtotal of cash outflows from
15,822,029,031.58 12,806,840,068.76
operating activities
Net cash flows from operating
7,698,648,104.51 4,916,102,451.30
activities
2. Cash flows from investing
activities
Cash received from disposal of
investments
Cash received from returns on
38,354,817.50 28,707,091.30
investments
Net cash received from disposal of
fixed assets, intangible assets and 3,538,598.27 20,743,376.36
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
41,893,415.77 49,450,467.66
investing activities
Cash paid to acquire and construct
fixed assets, intangible assets and 1,979,399,942.51 2,143,910,509.48
other long-term assets
Cash paid for investments 740,542,370.00 80,000,000.00
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
2,719,942,312.51 2,223,910,509.48
investing activities
Net cash flows from investing
-2,678,048,896.74 -2,174,460,041.82
activities
3. Cash flows from financing
activities
Cash received from investors 8,305,794.84 9,947,876.16
Including: cash received by
8,305,794.84 9,947,876.16
subsidiaries from investments by
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
minority shareholders
Cash received from borrowings 1,494,000,000.00
Cash received from other financing
activities
Subtotal of cash inflows from
8,305,794.84 1,503,947,876.16
financing activities
Cash paid for debt repayments
Cash paid for distribution of
dividends and profits or payment of 3,168,553,209.93 2,420,541,436.84
interest
Including: dividends and profits paid
to minority shareholders by 2,085,000.00
subsidiaries
Cash paid for other financing
22,371,107.22 180,000.00
activities
Subtotal of cash outflows from
3,190,924,317.15 2,420,721,436.84
financing activities
Net cash flows from financing
-3,182,618,522.31 -916,773,560.68
activities
4. Effect of fluctuation in
exchange rate on cash and cash -3,646,806.44 -8,940,312.77
equivalents
5. Net increase in cash and cash
1,834,333,879.02 1,815,928,536.03
equivalents
Plus: balance of cash and cash
equivalents at the beginning of the 11,568,195,062.81 9,752,266,526.78
period
6. Balance of cash and cash
equivalents at the end of the 13,402,528,941.83 11,568,195,062.81
period
Cash flow statements of parent company
Monetary Unit: CNY
Item Year 2021 Year 2020
1. Cash flows from operating
activities
Cash received from sale of goods
6,550,150,291.27 6,027,493,323.47
and rendering of services
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
Refunds of taxes and surcharges
Cash received from other operating
625,297,165.56 383,743,781.07
activities
Subtotal of cash inflows from
7,175,447,456.83 6,411,237,104.54
operating activities
Cash paid for goods purchased and
4,522,910,945.39 4,712,837,125.15
services received
Cash paid to and on behalf of
357,239,225.81 292,139,082.61
employees
Cash paid for taxes and surcharges 540,331,615.01 321,193,312.05
Cash paid for other operating
280,329,112.79 245,064,341.42
activities
Subtotal of cash outflows from
5,700,810,899.00 5,571,233,861.23
operating activities
Net cash flows from operating
1,474,636,557.83 840,003,243.31
activities
2. Cash flows from investing
activities
Cash received from disposal of
investments
Cash received from returns on
6,334,501,455.30 3,957,726,785.62
investments
Net cash received from disposal of
fixed assets, intangible assets and 1,087,162.03 20,105,415.90
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
6,335,588,617.33 3,977,832,201.52
investing activities
Cash paid to acquire and construct
fixed assets, intangible assets and 19,211,172.69 223,191,670.76
other long-term assets
Cash paid for investments 740,542,370.00 80,000,000.00
Net cash paid to acquire
subsidiaries and other business
units
130
2021 Annual Report of Luzhou Laojiao Co., Ltd.
Cash paid for other investing
activities
Subtotal of cash outflows from
759,753,542.69 303,191,670.76
investing activities
Net cash flows from investing
5,575,835,074.64 3,674,640,530.76
activities
3. Cash flows from financing
activities
Cash received from investors
Cash received from loans 1,494,000,000.00
Cash received from other financing
activities
Subtotal of cash inflows from
1,494,000,000.00
financing activities
Cash paid for debt repayments
Cash paid for distribution of
dividends and profits or payment of 3,146,207,328.27 2,343,157,574.72
interest
Cash paid for other financing
2,010,331,534.97 1,493,126,651.60
activities
Subtotal of cash outflows from
5,156,538,863.24 3,836,284,226.32
financing activities
Net cash flows from financing
-5,156,538,863.24 -2,342,284,226.32
activities
4. Effect of fluctuation in
exchange rate on cash and cash -943.95
equivalents
5. Net increase in cash and cash
1,893,931,825.28 2,172,359,547.75
equivalents
Plus: balance of cash and cash
equivalents at the beginning of the 11,045,051,933.54 8,872,692,385.79
period
6. Balance of cash and cash
equivalents at the end of the 12,938,983,758.82 11,045,051,933.54
period
Consolidated statement of changes in owners' equity
For the year ended 31 December 2021
Monetary Unit: CNY
131
2021 Annual Report of Luzhou Laojiao Co., Ltd.
Year 2021
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, 3,722,7 186,06 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
last year 76.00 13 3 00 2.43 2.59 2 3.71
Plus: adjustments
for changes in
accounting
policies
Adjustments for
correction of
accounting errors
in prior year
Business
combinations
under common
control
Others
2. Balance as at 1,464, 3,722,7 186,06 1,464,7 16,236, 23,074, 107,01 23,181,
1 January of the 752,4 77,063. 3,325.0 52,476. 513,21 858,55 1,321.1 869,87
current year 76.00 13 3 00 2.43 2.59 2 3.71
3.Increases/decr
eases in the 4,951,3 4,965,3 4,955,3
32,577, -18,536 -9,997,
current period 47,023. 88,453. 91,249.
602.60 ,172.71 204.23
(“-” for 46 35 12
decreases)
(1) Total 7,955,5 7,937,0 7,918,1
-18,536 -18,837
comprehensive 54,351. 18,179. 80,828.
,172.71 ,350.46
income 73 02 56
(2) Capital
contributed or 32,577, 32,577, 8,840,1 41,417,
reduced by 602.60 602.60 46.23 748.83
owners
Capital 8,305,7 8,305,7
contributions by 94.84 94.84
132
2021 Annual Report of Luzhou Laojiao Co., Ltd.
owners
Capital
contributions by
other equity
instruments
holders
Amounts of
share-based
32,577, 32,577, 534,35 33,111,
payments
602.60 602.60 1.39 953.99
recognized in
owners' equity
Others
-3,004, -3,004, -3,004,
(3) Profit
207,32 207,32 207,32
distribution
8.27 8.27 8.27
Withdrawal of
surplus reserves
Withdrawal of
general risk
reserve
Profit distributed -3,004, -3,004, -3,004,
to owners (or 207,32 207,32 207,32
shareholders) 8.27 8.27 8.27
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
133
2021 Annual Report of Luzhou Laojiao Co., Ltd.
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, 3,755,3 167,52 1,464,7 21,187, 28,040, 28,137,
97,014,
31 December of 752,4 54,665. 7,152.3 52,476. 860,23 247,00 261,12
116.89
the current year 76.00 73 2 00 5.89 5.94 2.83
For the year ended 31 December 2020
Monetary Unit: CNY
Year 2020
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, 3,722,7 194,81 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
last year 76.00 13 7 00 9.91 5.61 0
Plus:
adjustments for
changes in
accounting
policies
Adjustments for
correction of
accounting errors
in prior year
134
2021 Annual Report of Luzhou Laojiao Co., Ltd.
Business
combinations
under common
control
Others
2. Balance as at 1,464, 3,722,7 194,81 1,464,7 12,559, 19,406, 19,554,7
147,885,
1 January of the 752,4 77,063. 7,130.5 52,476. 746,57 845,72 31,028.1
302.49
current year 76.00 13 7 00 9.91 5.61 0
3.Increases/dec
reases in the 3,676,7 3,668,0
-8,753, -40,873, 3,627,13
current period 66,632. 12,826.
805.54 981.37 8,845.61
(“-” for 52 98
decreases)
(1) Total 6,005,7 5,996,9
-8,753, -48,736, 5,948,23
comprehensive 23,069. 69,263.
805.54 857.53 2,406.29
income 36 82
(2) Capital
contributed or 9,947,87 9,947,87
reduced by 6.16 6.16
owners
Capital
9,947,87 9,947,87
contributions by
6.16 6.16
owners
Capital
contributions by
other equity
instruments
holders
Amounts of
share-based
payments
recognized in
owners' equity
Others
-2,328, -2,328, -2,331,0
(3) Profit -2,085,0
956,43 956,43 41,436.8
distribution 00.00
6.84 6.84 4
Withdrawal of
surplus reserves
Withdrawal of
general risk
135
2021 Annual Report of Luzhou Laojiao Co., Ltd.
reserve
Profit distributed -2,328, -2,328, -2,331,0
-2,085,0
to owners (or 956,43 956,43 41,436.8
00.00
shareholders) 6.84 6.84 4
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, 3,722,7 186,06 1,464,7 16,236, 23,074, 23,181,8
107,011,
31 December of 752,4 77,063. 3,325.0 52,476. 513,21 858,55 69,873.7
321.12
the current year 76.00 13 3 00 2.43 2.59 1
136
2021 Annual Report of Luzhou Laojiao Co., Ltd.
Statement of changes in owners' equity of parent company
For the year ended 31 December 2021
Monetary Unit: CNY
Year 2021
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 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
last year 00 .01
Plus: adjustments
for changes in
accounting
policies
Adjustments for
correction of
accounting errors
in prior year
Others
2. Balance as at 1,464,7 14,305,
3,706,816 185,441,3 1,464,752 21,127,646,
January 1 of the 52,476. 883,685
,950.12 02.55 ,476.00 889.68
current year 00 .01
3.Increases/decr
eases in the 4,566,9
32,849,15 -17,869,2 4,581,888,9
current period 09,090.
8.15 88.69 59.46
(“-” for 00
decreases)
(1) Other 7,571,1
-17,869,2 7,553,247,1
comprehensive 16,418.
88.69 29.58
income 27
(2) Capital
contributed or 32,849,15 32,849,158.
reduced by 8.15 15
owners
Capital
contributions by
owners
137
2021 Annual Report of Luzhou Laojiao Co., Ltd.
Capital
contributions by
other equity
instruments
holders
Amounts of
share-based
32,849,15 32,849,158.
payments
8.15 15
recognized in
owners' equity
Others
-3,004,2
(3) Profit -3,004,207,
07,328.
distribution 328.27
27
Withdrawal of
surplus reserves
Profit distributed to -3,004,2
-3,004,207,
owners (or 07,328.
328.27
shareholders) 27
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
138
2021 Annual Report of Luzhou Laojiao Co., Ltd.
income
Others
(5) Special
reserves
Withdrawal for the
period
Use for the period
(6) Others
4. Balance as at 1,464,7 18,872,
3,739,666 167,572,0 1,464,752 25,709,535,
31 December of 52,476. 792,775
,108.27 13.86 ,476.00 849.14
the current year 00 .01
For the year ended 31 December 2020
Monetary Unit: CNY
Year 2020
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
3,706,81 192,332, 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
last year 00
Plus:
adjustments for
changes in
accounting
policies
Adjustments for
correction of
accounting errors
in prior year
Others
2. Balance as at 1,464,7
3,706,81 192,332, 1,464,75 11,892,694 18,721,348,
January 1 of the 52,476.
6,950.12 738.05 2,476.00 ,057.56 697.73
current year 00
3.Increases/dec
-6,891,4 2,413,189, 2,406,298,1
reases in the
35.50 627.45 91.95
current period
139
2021 Annual Report of Luzhou Laojiao Co., Ltd.
(“-” for
decreases)
(1) Other
-6,891,4 4,742,146, 4,735,254,6
comprehensive
35.50 064.29 28.79
income
(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 -2,328,956 -2,328,956,4
distribution ,436.84 36.84
Withdrawal of
surplus reserves
Profit distributed
-2,328,956 -2,328,956,4
to owners (or
,436.84 36.84
shareholders)
Others
(4) Internal
carry-forward of
owners' equity
Conversion of
capital reserves
into paid-in
capital
Conversion of
surplus reserves
140
2021 Annual Report of Luzhou Laojiao Co., Ltd.
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
3,706,81 185,441, 1,464,75 14,305,88 21,127,646,
31 December of 52,476.
6,950.12 302.55 2,476.00 3,685.01 889.68
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
141
2021 Annual Report of Luzhou Laojiao Co., Ltd.
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%.
On 19 May 2008, the Company increased 522,839,803 shares of capital stock resulting from capital
reserve and undistributed profits transferred to increase capital stock. After the implementation, the total
share capital reached 1,394,239,476 shares, among which, SASAC of Luzhou held 746,200,250 shares
of the Company, and the shareholding ratio was still 53.52%.
On 3 September 2009, the 300,000,000 shares and the 280,000,000 shares held by SASAC of Luzhou
were separately transferred to Luzhou Laojiao Group Co., Ltd. (hereinafter referred to as the "Laojiao
Group") and Luzhou XingLu Investment Group Co., Ltd. (hereinafter referred to as the "Xinglu Group").
After the transfer, Laojiao Group, Xinglu Group, and SASAC of Luzhou respectively held 300,000,000
shares, 280,000,000 shares and 166,200,250 shares. So far, Laojiao Group became the first majority
shareholder and SASAC of Luzhou was the actual controller.
From 6 June 2012 to 20 November 2013, the first and second phases of the Company's equity incentive
plan were exercised. After the exercise, the total share capital of the Company was changed to
1,402,252,476 shares.
On 10 April 2014 and 18 July 2016, SASAC of Luzhou transferred 81,088,320 shares and 84,000,000
shares to Laojiao Group and Xinglu Group respectively. In addition, Laojiao Group has increased its
equity stake through the secondary market of 13,137,100 shares. So far, Laojiao Group, Xinglu Group
and SASAC of Luzhou held 394,225,489 shares, 365,971,142 shares and 1,111,930 shares respectively,
with the shareholding ratios of 28.11%, 26.10% and 0.08% respectively.
On 23 August 2017, the Company issued CNY 62,500,000 ordinary shares (A shares) privately, raising
a total capital of CNY 3,000,000,000. After the additional issuance, the total capital stock of the
Company was changed to 1,464,752,476 shares. In addition, from 2017 to 2018, Laojiao Group
decreased 13,137,100 shares that were increased through the secondary market from April 2014 to
December 2015. After share reduction, Laojiao Group, Xinglu Group and SASAC of Luzhou held
381,088,389 shares, 365,971,142 shares and 1,111,930 shares respectively, with the shareholding
ratios of 26.02%, 24.99% and 0.08% respectively. Laojiao Group still was the first majority shareholder
and SASAC of Luzhou still was the actual controller.
142
2021 Annual Report of Luzhou Laojiao Co., Ltd.
3.2 Registered address of the Company, company type, and headquarter address
Registered address and headquarter address of the Company are located in Sichuan Luzhou Laojiao
Square and company type is other incorporated company (Listed).
3.3 Business nature of the Company and main business activity
Industry of the Company is the baijiu subdivision industry of the liquor and wine, beverage and refined
tea production industry.
The main activity are research and development, production and sales of “National Cellar 1573”,”Luzhou
Laojiao” and other baijiu series.
The main products are: “National Cellar 1573 Series”,”Century-old Luzhou Laojiao Jiaoling
Series” ,”Luzhou Laojiao Tequ”,”Touqu”,”Erqu” and other baijiu series.
3.4 The name of the controlling shareholder and the ultimate substantive controller
The controlling shareholder is Luzhou Laojiao Group Co., Ltd.; the ultimate substantive control is
SASAC of Luzhou.
3.5 Approval and submission of the financial report and its date
The financial report is approved and submitted by the board of directors of the Company on 27 April
2022.
3.6 Consolidated financial statement scope and their changes
(1) The 25 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.
Luzhou Laojiao Sales Co., Ltd. Note 4 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 Laojiao New Liquor Industry Co., Ltd. Note 4 New Liquor Industry 100.00 100.00
company
Luzhou Laojiao Import and Export trade Co., Ltd. Import and export 100.00 100.00
company
143
2021 Annual Report of Luzhou Laojiao Co., Ltd.
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 Laojiao New Retail Co., Ltd. New retail company 40.00 100.00 100.00
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.
Luzhou Laojiao Electronic Commerce Co., Ltd. Electronic Commerce 90.00 90.00
company
Luzhou Laojiao Whitail Liquor Industry Co., Ltd. Note 3 Whitail liquor industry 35.00 60.00
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. 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, 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.
Note 4: On 28 October 2021, the subsidiary Sales Company of Luzhou Laojiao Co., Ltd. was renamed Luzhou Laojiao
Sales Co., Ltd. And on 14 October 2021, the subsidiary Luzhou Dinghao Liquor Industry Sales Co., Ltd. was renamed
Luzhou Laojiao New Liquor Industry Co., Ltd.
Details of the subsidiaries incorporated into the consolidated financial statements show on “7.1. Interests
in subsidiaries”
(2) Subsidiaries that are newly incorporated into the scope of consolidation in this period
Name of subsidiary Reason
Luzhou Laojiao New Retail Co., Ltd. Incorporated through investment
(3) Liquidation and cancellation for subsidiaries in this period
144
2021 Annual Report of Luzhou Laojiao Co., Ltd.
Name of subsidiary Reason
Luzhou Laojiao Whitail Innovative Electronic Commerce Co., Ltd. Liquidation cancellation
Luzhou Laojiao Selected Electronic Commerce Co., Ltd. Liquidation cancellation
Chengdu Tianfu Panda Whitail Liquor Industry Co., Ltd. Liquidation cancellation
Luzhou Whitail Tongdao Uncle Constellation Wine Sales Co., Ltd. Liquidation cancellation
Details of changes in the scope of consolidation show on “6.5. Changes in consolidated scope for other
reasons”.
4. Basis of preparation of financial statements
4.1. Basis of preparation of financial statements
The Company has prepared its financial statements on a going concern basis, and the preparation is
based on actual transactions and events in compliance with Accounting Standards for Business
Enterprises and relevant guidance and explanation (the following called the ASBE) issued by Ministry of
Finance, and Rules on Company Information Disclosure and Preparation of Publicly Issued Securities
No.15- General Rules on Financial Reporting Rules (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
The disclosure requirements for related food and wine manufacturing business in the Self-regulatory
Guidelines No. 3 for Companies Listed on Shenzhen Stock Exchange - Industry Information Disclosure
shall be observed.
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.
145
2021 Annual Report of Luzhou Laojiao Co., Ltd.
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
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
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consolidated financial statement, the Company considers the Group as an accounting entity, adopts
unified accounting policies, and applies the requirements of ASBE related to recognition, measurement
and presentation to reflect the Group’s financial position, operating results and cash flows.
All the subsidiaries within the consolidation scope of consolidated financial statements shall adopt the
same accounting policies and accounting periods as those of the Company. If the accounting policies or
accounting periods of a subsidiary are different from those of the Company, the financial statements of
the subsidiary, upon preparation of consolidated financial statements, shall be made necessary
adjustment based on its own accounting policies and accounting periods of the Company. For
subsidiaries acquired from the business combination not under common control, the financial statements
shall be adjusted on the basis of the fair value of identifiable net assets on the date of purchase. For the
subsidiary acquired from the business combination under common control, its assets and liabilities
(including the goodwill formed by the acquisition of the subsidiary by the ultimate controlling party) shall
be adjusted on the basis of the book value in the consolidated statements of the ultimate controlling
party.
The portion of a subsidiary’s equity, the current net profit and loss of subsidiaries, and the current
comprehensive income attributable to non-controlling interests shall be separately presented as
non-controlling interests in consolidated balance sheet within owners' equity, below the net profit line
item and below the total comprehensive income line item in the consolidated income statement
respectively. When the amount of current loss attributable to non-controlling shareholders of a subsidiary
exceeds the balance of the non-controlling shareholders’ portion in the opening balance of owner's
equity of the subsidiary, the excess shall be allocated against the non-controlling interests.
Acquisition of subsidiaries or business
During the reporting period, if the Company acquires subsidiaries from the business combination under
common control, the opening balance in the consolidated balance sheet shall be adjusted. The income,
expenses and profits of the newly acquired subsidiaries from the beginning to the end of the reporting
period shall be included in the consolidated income statement. The cash flows of the newly acquired
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
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under common control, the opening balance in the consolidated balance sheet shall not be adjusted.
The income, expenses and profits of the newly acquired subsidiaries from the acquisition date to the end
of the reporting period shall be included in the consolidated income statement. The cash flows of the
newly acquired subsidiaries from the acquisition date to the end of the reporting period shall be included
in the consolidated statement of cash flows.
When the Company becomes capable of exercising control over an investee not under common control
due to additional investment or other reasons, the Company shall re-measure the previously held equity
interests to its fair value on the acquisition date, and the difference shall be recognized as investment
income. When the previously held equity investment is accounted for under equity method, any other
comprehensive income previously recognized and other equity changes (excluding other
comprehensive, net profit and loss and profit distribution ) in relation to the acquiree’s equity changes
shall be transferred to profit and loss for the current period when acquisition took place, except for other
comprehensive income resulting from changes in net liabilities or net assets due to re-measurement of
defined benefit plan by investee.
Disposal of subsidiaries and business
General treatments
During the reporting period, if the Company disposes subsidiaries, the income, expenses and profits of
the newly disposed subsidiaries from the beginning to the disposal date shall be included in the
consolidated income statement. The cash flows from the beginning to the disposal date shall be included
in the consolidated statement of cash flows.
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;
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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
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.
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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
(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
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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
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
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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
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
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the initial recognition.
Trading financial liabilities (including derivatives classified as financial liabilities) are subsequently
measured at fair value, with changes in fair value recorded into current profits/losses, except for those
related to hedge accounting.
For those specified as financial liabilities measured at fair value with their changes included into current
profits/losses, changes in the fair value of such liabilities caused by changes in the Company’s own
credit risk should be included into other comprehensive income. In derecognition of such liabilities,
cumulative changes in their value caused by the Company’s own credit risk that have been recorded into
other comprehensive income should be transferred into retained earnings. Other changes in their fair
value should be recorded into current profits/losses. If treatment of the impact of the Company’s own
credit risk changes of such financial liabilities in the above manner causes or expands accounting
mismatch in profits/losses, the Company will include all gains or losses of such financial liabilities
(including the amount of the impact of the Company’s own credit risk changes) into current
profits/losses.
2) Other financial liabilities
Financial liabilities other than those formed from the transfer of financial assets not meeting
derecognition conditions or continuous involvement into transferred financial assets and those outside
financial guarantee contracts are classified as financial liabilities measured at amortized cost. Such
financial liabilities should be subsequently measured at amortized cost and the gains or losses from
derecognition or amortization should be included into current profits/losses.
(3) Recognition basis and measurement method of transfer of financial assets
If a financial asset meets any of the following conditions, it shall be derecognized: 1)The contractual right
for collecting the cash flow of the financial asset has been terminated; 2)The financial asset has been
transferred and almost all the risks and remunerations in respect of the ownership of the financial asset
has been transferred to the transferee; 3)The financial asset has been transferred, and although the
enterprise neither transfers nor retains almost all the risks and remunerations in respect of the ownership
of the financial asset, it has abandoned its control over the asset.
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.
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If partial transfer of the financial asset meets the recognition conditions, the carrying value of the
transferred financial asset shall be apportioned at the relative fair value between the derecognition and
underecognition part. The difference between the summation of the consideration received from the
transfer and the cumulative amount of fair value changes originally-recorded into other comprehensive
incomes that should be apportioned to the derecognition part and the apportioned aforementioned
carrying value shall be recorded into the current profits/losses.
For a financial asset sold with the right of recourse or with the transfer of the financial asset endorsement,
the Company shall decide whether almost all the risks and remunerations in respect of the ownership of
the financial asset should be transferred. If they are transferred, the financial asset shall be
derecognized; if they are retained, the financial asset shall not be derecognized; if they are neither
transferred nor retained, the Company will continue to decide whether the enterprise should retain
control over the asset and perform the accounting treatment according to the principles stated in
previous paragraphs.
(4) Derecognition of financial liabilities
When the current obligation of a financial liability (or a part of it) is relieved, the Company will
derecognize the financial liability (or the part of it). When the Company (borrower) signs an agreement
with a lender to replace an original financial liability in the form of bearing a new financial liability and the
contract terms for the new financial liability differ from those for the original in substance, the original
financial liability should be derecognized and the new one should be recognized. When the Company
makes substantial changes to the contract terms of an original financial liability (or a part of it), the
original financial liability should be derecognized and a new financial liability should be recognized
according to the amended contract terms.
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
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transactions happening in a fair trade. For a non-existing financial instrument in an active market, the
Company adopts the valuation technique to determine its fair value. The valuation technique includes
references to familiar situations and the prices used by the parties voluntarily participating in the recent
market transactions, as well as references to the present fair value of other financial instruments of the
same nature, discounted cash flow method and options pricing model. In the valuation, the Company
uses a valuation technique that is applicable in the current situation with sufficient data available and
other information support, chooses input values that are consistent with the asset or liability
characteristics considered by market players in related asset or liability transactions, and make
maximum effort to use related observable input values on a preferential basis. When it is unable or
unfeasible to obtain related observable input values, unobservable will be used.
(7) Equity instruments
Equity instruments refer to the contracts that can prove the Company’s residual equity of assets after the
deduction of all liabilities. The Company’s issuance (including refinancing), repurchase, sale or
cancellation of equity instruments serve as the change treatment of equity. Transaction expenses
related to the equity transactions are deducted from the equity. The Company does not recognize
changes in the fair value of equity instruments.
Dividends from the Company’s equity instruments distributed during the validity (including the “interests”
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
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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.
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.
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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 %
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 calculates the expected credit loss through the exposure at default and expected credit loss rate
in the next 12 months or over the entire life based on the current situation and prediction of future
economic situation consulting historical credit loss experience, and the resulting increase or reversal of
provision for loss shall be included in the current profit or loss as gains or losses on impairment. The
accrual method is as follows:
(1) When there is objective evidence showing that the other receivable has incurred credit impairment,
the Company shall make bad debt provision for the other receivable and recognize the expected credit
loss.
(2) When the information about the expected credit loss of a single financial asset cannot be evaluated
at a reasonable cost, the Company shall divide the other receivables portfolio according to credit risk
characteristics and measure the expected credit loss based on portfolios.
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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 in the next 12 months or over the entire life based on the current situation and
prediction of future economic situation consulting historical credit loss experience. The comparative
table of the credit loss rate is as follows:
Aging Expected loss provision rate %
Within 1 year 5
1-2 years 10
2-3 years 20
3-4 years 40
4-5 years 80
Over 5 years 100
5.15 Inventory
(1) Classification of inventory
Inventories are classified as: raw materials, goods in progress (including 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 (including 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
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ranges produced and sold in the same district or used for the same or similar ultimate purpose and are
difficult to be measured separately from other inventories, the Company provides for stock obsolescence
as a whole. For inventories that have large quantities but low value, the Company provides for stock
obsolescence on a category basis.
The materials held for production shall be measured at cost if the net realizable value of the finished
products is higher than the cost. If a decline in the value of materials shows that the net realizable value
of the finished products is lower than the cost, the materials shall be measured at the net realizable
value.
(4) Inventory system
The Company adopts perpetual inventory system.
(5) Amortization method of packing materials and low-cost consumables
It is amortized in full at once.
5.16 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
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(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.
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
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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.
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.
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5.19 Long-term receivables
For more details, see Note 5.10 Financial instruments.
5.20 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.
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.
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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.
(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.
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The Company shall, according to the shares of net profits and other comprehensive income realized by
the investee that shall be enjoyed or borne by the Company, recognize the profit and loss on the
investments and adjust the book value of the long-term equity investments. When recognizing the net
profits and losses and other comprehensive income of the investee that the Company shall enjoy or bear,
the Company shall make a recognition and calculation based on the net book profits and losses of the
investee after appropriate adjustments. However, where the Company is unable to obtain the relevant
information due to failure to reasonably determine the fair value of the investee’s identifiable assets,
minor difference between the investee’s identifiable assets and the book value thereof or other reasons,
the profits or losses on the investments shall be directly calculated and recognized based on the net
book profits and losses of the investee. The Company shall calculate the part distributed from cash
dividends or profits declared by the investee and correspondingly reduce the book value of the long-term
equity investments. When recognizing the income from investments in associates and joint ventures, the
Company shall write off the part of incomes from internal unrealized transactions between the Company
and associates and joint ventures which are attributable to the Company and recognize the profit and
loss on investments on such basis. Where the losses on internal transactions between the Company and
the investee are impairment of related assets, full amounts of such losses shall be recognized. Profit and
loss from internal unrealized transactions between the Company’s subsidiaries included into the
combination scope and associates and joint ventures shall be written off according to the above
principles and the profit and loss on investments thereafter shall be recognized on such basis.
When the share of net loss of the investee attributable to the Company is recognized, it is treated in the
following sequence: Firstly, write off the book value of the long-term equity investments; where the book
value of the long-term equity investments is insufficient to cover the loss, investment losses are
recognized to the extent that book value of long-term equity which form net investment in the investee in
other substances and the book value of long-term receivables shall be written off; after all the above
treatments, if the Company still assumes additional obligation according to investment contracts or
agreements, the obligation expected to be assumed should be recognized as provision and included into
the investment loss in the current period. If the investee is profitable in subsequent accounting periods,
the Company shall treat the loss in reverse order against that described above after deducting
unrecognized share of loss: i.e. write down the book value of the recognized provision, then restore the
book value of long-term interests which substantially form net investments in the investee, then restore
the book value of long-term investments, and recognize investment income at the same time.
5.21 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
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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.
(3) When the Company changes the use of investment property, the relevant investment property will be
transferred to other assets.
5.22. 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
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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.
(3) Recognition standard, valuation method and depreciation method for fixed assets acquired
under financing lease
A finance lease refers to a lease where almost all the risks and rewards, related to the ownership of the
leased asset, are substantially transferred, regardless of whether the ownership is eventually transferred
or not. The policy for the accrual of the depreciation of the leasehold property for the fixed assets
acquired under the finance lease was consistent with that adopted for the Company's fixed assets. 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. 23. 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
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recoverable amount.
5. 24. Borrowing costs
(1) Scope of borrowing costs and its capitalization conditions
The Company’s borrowing costs capitalized during period of capitalization are relevant loan expenses
directly attributable to the assets eligible for capitalization, including interest thereon, amortization of
discounts or premiums, ancillary expenses and exchange differences incurred from foreign currency
loan, etc.
Borrowing costs are capitalized when the following three conditions are met simultaneously: ① the asset
expenditure has occurred, ② the borrowing costs have occurred, ③ the purchase and 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
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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
sold externally until overall completion, the capitalization of borrowing costs should cease at the time of
overall completion of the said assets.
5. 25. Right-of-use assets
Refer to Note 5.42 Lease for the detail.
5. 26. 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
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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.
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. 27. 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.
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The recoverable amount is the higher of fair values less costs of disposal and the present values of the
future cash flows expected to be derived from the asset.
If the measurement result of recoverable amount shows that recoverable amount of the non-current
assets is less than its book value, the book value shall be written down to the recoverable amount, and
the amount written down shall be recognized as the impairment loss of assets, recorded into the current
profit and loss, and the corresponding impairment provision of assets shall be made at the same time.
Once impairment loss stated above is recognized, reversal is not allowed in the subsequent accounting
periods.
After the recognition of the impairment loss, the depreciation or amortization expense of the impairment
asset shall be adjusted accordingly in the future period so as to systematically apportion the adjusted
book value of the asset (deducting the expected net salvage value) within the remaining service life of
the asset.
The Company should perform impairment test for goodwill and intangible assets with indefinite life at
least at each year end, no matter whether there is impairment indicator.
Goodwill shall be combined with its related asset group or asset group portfolio so as to perform an
impairment test. When the Company performs an impairment test on relevant asset group or asset group
portfolio including goodwill, if there are signs of impairment, the Company shall firstly perform an
impairment test on asset group or asset group portfolio excluding goodwill and calculate the 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. 28. 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. 29. 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.
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5. 30. Employee benefits
(1) Accounting treatment method of short-term benefits
Short-term benefits are the benefits that the Company expects to pay in full within 12 months after the
reporting period in which the employee provided relevant services, excluding the compensation for
employment termination. Accrued short term benefits will be recognized as liability during the accounting
period in which the employee is providing the relevant service to the Company. The liability will be
included in the current profit and loss or the relevant assets cost.
(2) Accounting treatment method of post-employment benefits
a. Defined contribution plan
The defined contribution plan of the Company includes payments of basic pension and unemployment
insurance calculated according to the local payment base and proportion. The amount shall be included
into the profit and loss or the relevant assets cost for the accounting period in which the employee
provides the service to the Company.
b. Defined benefit plan
According to the formula determined by the expected accumulative projected unit credit method, the
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
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persuasion unilaterally;
b. When the Company recognizes costs and fees relevant to reforming the termination benefits payment.
As for the termination benefits that cannot be fully paid within 12 months after the end of the annual
report period, the Company shall choose an appropriate discount rate and record it into current profit and
loss based on it.
(4) Accounting treatment method of other long-term employee benefits
Other long-term employee benefits are all employee benefits other than short-term benefits,
post-employment benefits and termination benefits.
Other long-term employee benefits provided by the Company to the employee that meet the conditions
of the defined contribution plan shall be treated in accordance with the same principles of the defined
contribution plan; If the conditions for defined benefits are met, net liabilities or net assets of other
long-term employee benefits shall be recognized and measured in accordance with the relevant
principles of the defined benefits plan.
5. 31. Lease liabilities
Refer to the Note 5.42 Lease for details.
5. 32. 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
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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. 33. 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,
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.
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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. 34. Revenue
Accounting policies for recognition and measurement of revenue
(1) Basic principles of revenue identification
The Company recognizes revenue when it has fulfilled the performance obligations under the contract,
that is, when the customers obtain the control of relevant goods or services, at the transaction price
allocated to the performance obligations.
Performance obligations refer to the Company's promise that it will transfer clearly distinguishable goods
or services to customers under the contract.
Obtaining control of related goods refers to that customers can control the use of the goods and obtain
almost all the economic benefits from the goods.
The Company will evaluate the contract on the contract start date, identify each individual performance
obligation contained in the contract, and judge whether each individual performance obligation will be
performed within a certain period of time or at a certain point in time. If one of the following conditions is
met, and the performance obligation 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
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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. 35. Government grants
Government grants are monetary assets and non-monetary assets acquired free of charge by the
Company from the government like fiscal subsidies.
(1) Judgment basis and accounting treatment method of government grants related to assets
Government grants related to assets are government grants that are acquired by the Company and used
for forming long-term assets through purchasing and constructing or other ways. If the government
documents do not clearly specify the target of the subsidy, the Company shall separately explain
judgment basis of classifying the government grants into the government grants related to assets or
income.
Accounting method: it shall be recognized as deferred income allocated evenly over the useful lives (the
period of depreciation and amortization) of the relevant assets from the month of commence of
depreciation or amortization when the relevant assets reaching the intended use condition, and included
in the current profit or loss. However, government grants measured at the nominal amount shall be
directly included in current profit and loss.
(2) Judgment basis and accounting treatment method of government grants related to income
Government grants related to income are government grants other than government grants related to
assets;
Accounting method:
a. If it is used to compensate the Company’s relevant expenses or losses in future periods, it should be
recognized as deferred income and included into the current profit and loss or written off of the related
costs when the relevant expenses, losses are recognized.
b. If it is used to compensate the Company’s relevant expenses or losses incurred, it is directly included
into the current profit and loss on acquisition or written off of the related costs.
c. Recognition time-point of government grants
Government grants are recognized when the Company can meet the attached conditions for the
government grants and the Company can receive the grants.
d. Measurement of government grants
If a government grant is a monetary asset, it shall be measured in the light of the received or receivable
amount. If a government grant is a non-monetary asset, it shall be measured at its fair value; and if its
fair value cannot be obtained in a reliable way, it shall be measured at a nominal amount.
5. 36. Deferred tax assets or deferred tax liabilities
The Company adopts the balance sheet liability method to account for income tax.
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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.
5. 37. Lease
(1) Accounting treatment of operating lease
The Company implemented the New Lease Standards from 1 January 2021.
From the effectiveness date of a contract, the Company assessed whether the contract was a lease or
includes any lease. If a party to the contract transferred the right allowing the control over the use of one
or more assets that had been identified within a certain period, in exchange for a consideration, such
contract was a lease or includes a lease.
① Accounting treatment with the Company as lessee
On the commencement date of the lease term, the Company recognizes the right-of-use assets and
lease liabilities for the lease, unless it is a simplified short-term lease or a low-value asset lease.
Right-of-use assets are initially measured at costs, including: A. The initial measurement amount of
lease liabilities; B. If there is a lease incentive for the lease payment paid on or before the start date of
the lease term, the relevant amount of the lease incentive already enjoyed shall be deducted; C. Initial
direct expenses incurred by the Company; D. The expected cost to be borne by the Company in order to
dismantle and remove the assets leased, restore original state of the place where the assets leased are
in, or restore the assets leased to the state stipulated in the lease terms.
The Company initially measures the lease obligation at the present value of the lease payments
outstanding at the commencement date of the lease term. When calculating the present value of lease
payments, the Company uses the interest rate implicit in lease as the rate of discount. If the interest rate
implicit in lease cannot be determined, the Company’s incremental lending rate is used as the rate of
discount.
After the commencement of the lease term, the Company uses the cost model for subsequent
measurement of right-of-use assets, depreciates right-of-use assets on a straight-line basis, calculates
the interest expense on the lease liability within the lease term and includes it in the current profit or loss,
unless such interest charge is stipulated to be included in the underlying asset cost. Variable lease
payments that are not included in the measurement of the lease obligation should be included in the
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current profit or loss when they are actually incurred, unless such payments are stipulated to be included
in the underlying asset cost.
After the commencement of the lease term, the Company remeasures the lease liability and adjusts the
corresponding right-of-use asset, and if the carrying value of the right-of-use asset has been reduced to
zero but the lease liability is subject to further reduction, the difference is recorded in current profit or loss:
(1) When there is a change in the valuation of the purchase option, renewal option or termination option,
or actual exercise, the Company remeasures the lease liabilities at the present value of the lease
payments after the change and the revised discount rate; (2) When there is a change in the actual fixed
payment, the estimated payable of the residual value of the guarantee, the index or rate used to confirm
the lease payment, the Company calculated the present value based on the changed lease payment
amount and the original discount rate to remeasure the lease liabilities. However, where changes in
lease payments arise from changes in floating interest rates, a revised discount rate was used to
calculate the present value.
The Company does not recognize the right-of-use assets and lease liabilities for short-term leases and
leases of low-value assets, which are included in the profit or loss for the current period or the cost of
relevant assets on a straight-line basis during each period of the lease term.
② Accounting treatment with the Company as lessor
The Company recognizes the lease payments receivable of the operating lease as rental earnings in
each period within the lease term on a straight-line basis or according to other systematic and
reasonable methods. The initial direct costs related to the operating lease are capitalized, amortized
within the lease term on the same basis as the recognition of rental earnings, and included in profit or
loss for the current period. The received variable lease payments related to the operating lease that are
not included in the lease payments receivable are included in profit or loss for the current period when
they are actually incurred.
(2) Accounting treatment of finance lease
① Lease classification
The Company classifies leases into finance leases and operating leases at the inception of leases. A
finance lease refers to a lease where almost all the risks and rewards, related to the ownership of the
leased asset, are substantially transferred, regardless of whether the ownership is eventually transferred
or not. All leases other than finance leases are classified as operating leases.
② Accounting treatment of finance leases
Accounting treatment with the Company as lessor
On the commencement date of the lease term, the Company recognizes the finance lease receivables
for the finance lease and derecognizes the leased asset of the finance lease. In the initial measurement
of finance lease receivables, the sum of the unsecured residual value and the present value of the lease
payments receivable not yet received on the commencement date of the lease term discounted at the
interest rate implicit in lease is the entry value of the finance lease receivables. The Company calculates
and recognizes the interest income in each period within the lease term at a fixed interest rate implicit in
the lease. The received variable lease payments that are not included in the measurement of the net
investment in the lease are included in profit or loss for the current period when they are actually
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incurred.
5. 38 Changes in significant accounting policies and accounting estimates
5.38.1. Changes in significant accounting policies
√Applicable N/A
Content and reason of changes Approval procedures Note
On 7 December 2018, the
Ministry of Finance issued the
revised Accounting Standards for
Business Enterprises No. 21 -- According to the Company's
Leases" (CK[2018]No.35) existing leased assets, if a lease
(hereinafter referred to as the meets the criteria for short-term
"New Lease Standards"). leases, the lease payment shall
According to the requirements of continue to be included in the
the Ministry of Finance, expenses according to the
companies that are listed both current model; for a lease with a
domestically and abroad and lease term of more than one year,
companies that are listed abroad it is required to recognize the
and prepare financial statements right-of-use assets and lease
under the Accounting Standards liabilities and accrue
N/A
for Business Enterprises shall depreciation. At the same time, in
implement the New Lease accordance with the regulations
Standards from 1 January 2019; on the transition from old to new
other companies that implement standards, the Company does not
the Accounting Standards for have any lease that needs to be
Business Enterprises shall adjusted retrospectively. This
implement the New Lease change in accounting policies
Standards from 1 January 2021. does not affect the Company's
Due to the above-mentioned shareholders' equity, net profit
revision of accounting standards, and other related financial
the Company has made indicators in 2020.
corresponding adjustments to the
lease accounting policy
previously adopted.
For the date of initial adoption, the Company made the following adjustments as a result of
implementing the New Lease Standards: For operational leasing prior to the date of initial adoption, the
Company will measure the lease liabilities according to the present value discounted at the incremental
borrowing rate of 3.85% on the date of initial adoption based on the remaining lease payments, and
measure the right-of-use asset at an amount equal to the lease liability based on each lease option, and
make necessary adjustments based on the advance rental.
There was no other change in significant accounting policies in the reporting period other than the above
changes.
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5.38.2. Changes in significant accounting estimates
Applicable √ N/A
5.38.3. Adjustments to the financial statements at the beginning of the execution year of any new
standard governing leases from 2021
√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 2020 1 January 2021 Adjusted
Current assets:
Cash and cash equivalents 11,624,870,340.60 11,624,870,340.60
Settlement reserves
Lending funds
Trading financial assets
Derivative financial assets
Notes receivables
Accounts receivables 1,507,852.43 1,507,852.43
Accounts receivables
3,209,371,766.35 3,209,371,766.35
financing
Prepayment 74,685,537.38 74,685,537.38
Premiums receivable
Reinsurance accounts
receivable
Reinsurance contract
reserve
Other receivables 127,032,931.42 127,032,931.42
Including：Interests
receivable
Dividends
1,407,900.00 1,407,900.00
receivable
Buying back the sale of
financial assets
Inventories 4,695,663,431.25 4,695,663,431.25
Contract assets
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Assets held for sale
Non-current assets due
within one year
Other current assets 156,565,424.18 156,565,424.18
Total current assets 19,889,697,283.61 19,889,697,283.61
Non-current assets:
Disbursement of loans and
advances
Investment in debt
obligations
Investment in other debt
obligations
Long-term receivables
Long-term equity
2,477,667,171.27 2,477,667,171.27
investments
Other equity instrument
347,160,399.42 347,160,399.42
investment
Other non-current financial
assets
Investment property
Fixed assets 6,887,108,174.72 6,887,108,174.72
Construction in progress 2,012,129,880.15 2,012,129,880.15
Productive biological
assets
Oil and gas assets
Right-to-use assets 50,201,409.36 50,201,409.36
Intangible assets 2,657,118,025.37 2,657,118,025.37
Development expenses
Goodwill
Long-term deferred
2,305,902.21 2,305,902.21
expenses
Deferred tax assets 725,210,660.84
Other non-current assets 10,806,325.86 10,806,325.86
Total non-current assets 15,119,506,539.84 15,169,707,949.20 50,201,409.36
Total assets 35,009,203,823.45 35,059,405,232.81 50,201,409.36
Current liabilities:
Short-term loans
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
Borrowings from the
central bank
Loans from other banks
Trading financial liabilities
Derivative financial
liabilities
Notes payable 121,285,117.60 121,285,117.60
Accounts payable 2,604,289,199.77 2,604,289,199.77
Advance from customer
Contract liabilities 1,678,837,166.94 1,678,837,166.94
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 505,022,627.19 505,022,627.19
Taxes payable 2,046,027,211.13 2,046,027,211.13
Other payable 501,623,924.54 501,623,924.54
Including：Interests
payable
Dividends
payable
Handling charges and
commissions payable
Reinsurance accounts
payable
Liabilities held for sale
Non-current liabilities due
72,219,178.08 82,207,133.16 9,987,955.08
within one year
Other current liabilities 218,267,353.36 218,267,353.36
Total current liabilities 7,747,571,778.61 7,757,559,733.69 9,987,955.08
Non-current liabilities:
Insurance contract
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
reserves
Long-term loans
Bonds payable 3,987,872,100.02 3,987,872,100.02
Including: Preferred
shares
Perpetual bonds
Lease liabilities 40,213,454.28 40,213,454.28
Long-term payables
Long-term payroll
payables
Accrued liabilities
Deferred income 29,739,000.00 29,739,000.00
Deferred tax liabilities 62,151,071.11
Other non-current liabilities
Total non-current liabilities 4,079,762,171.13 4,119,975,625.41 40,213,454.28
Total liabilities 11,827,333,949.74 11,877,535,359.10 50,201,409.36
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
186,063,325.03 186,063,325.03
income
Special reserves
Surplus reserves 1,464,752,476.00 1,464,752,476.00
General risk reserve
Undistributed profits 16,236,513,212.43 16,236,513,212.43
Total equity attributable to
owners of the parent 23,074,858,552.59
company
Non-controlling interests 107,011,321.12 107,011,321.12
Total owners' equity 23,181,869,873.71 23,181,869,873.71
Total liabilities and owners'
35,009,203,823.45 35,059,405,232.81 50,201,409.36
equity
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
Statement for adjustment
In accordance with the requirements of Accounting Standards for Business Enterprises No.21-Lease
issued by the Ministry of Finance, the Company starts to implement it since 1 January 2021. For details
on specific items and amounts affected, please refer to above statement.
Balance sheet of parent company
Monetary Unit: CNY
Item 31 December 2020 1 January 2021 Adjusted
Current assets:
Cash and cash equivalents 11,100,327,211.33 11,100,327,211.33
Trading financial assets
Derivative financial assets
Notes receivables
Accounts receivables 3,927.50 3,927.50
Accounts receivables
financing
Prepayment 1,431,698.57 1,431,698.57
Other receivables 7,052,749,694.83 7,052,749,694.83
Including: Interests
receivable
Dividends
1,407,900.00 1,407,900.00
receivable
Inventories 850,076.30 850,076.30
Contract assets
Assets held for sale
Non-current assets due
within one year
Other current assets 78,509.44 78,509.44
Total current assets 18,155,441,117.97 18,155,441,117.97
Non-current assets:
Investment in debt
obligations
Investment in other debt
obligations
Long-term receivables
Long-term equity
5,884,091,712.47 5,884,091,712.47
investments
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
Other equity instrument
346,831,477.79 346,831,477.79
investment
Other non-current financial
assets
Investment property
Fixed assets 640,254,574.76 640,254,574.76
Construction in progress 550,932,404.00 550,932,404.00
Productive biological
assets
Oil and gas assets
Right-to-use assets 730,727.38 730,727.38
Intangible assets 684,010,106.13 684,010,106.13
Development expenses
Goodwill
Long-term deferred
2,180,811.89 2,180,811.89
expenses
Deferred tax assets 89,484,552.65 89,484,552.65
Other non-current assets 1,526,325.86 1,526,325.86
Total non-current assets 8,199,311,965.55 8,200,042,692.93 730,727.38
Total assets 26,354,753,083.52 26,355,483,810.90 730,727.38
Current liabilities:
Short-term loans
Trading financial liabilities
Derivative financial
liabilities
Notes payables
Accounts payable 80,663,835.54 80,663,835.54
Advance from customer
Contract liabilities 753,349.81 753,349.81
Employee benefits payable 168,254,646.38 168,254,646.38
Taxes payable 153,437,992.21 153,437,992.21
Other payables 699,733,563.56 699,733,563.56
Including：Interests
payable
Dividends
payable
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
Liabilities held for sale
Non-current liabilities due
72,219,178.08 72,613,678.08 394,500.00
within one year
Other current liabilities 116,457.13 116,457.13
Total current liabilities 1,175,179,022.71 1,175,573,522.71 394,500.00
Non-current liabilities:
Long-term loans
Bonds payable 3,987,872,100.02 3,987,872,100.02
Including: Preferred
shares
Perpetual
bonds
Lease liabilities 336,227.38 336,227.38
Long-term payables
Long-term payroll
payables
Accrued liabilities
Deferred income 1,904,000.00 1,904,000.00
Deferred tax liabilities 62,151,071.11 62,151,071.11
Other non-current liabilities
Total non-current liabilities 4,051,927,171.13 4,052,263,398.51 336,227.38
Total liabilities 5,227,106,193.84 5,227,836,921.22 730,727.38
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
185,441,302.55 185,441,302.55
income
Special reserves
Surplus reserves 1,464,752,476.00 1,464,752,476.00
Undistributed profits 14,305,883,685.01 14,305,883,685.01
Total owners' equity 21,127,646,889.68 21,127,646,889.68
185
2021 Annual Report of Luzhou Laojiao Co., Ltd.
Total liabilities and owners'
26,354,753,083.52 26,355,483,810.90 730,727.38
equity
Statement for adjustment
In accordance with the requirements of Accounting Standards for Business Enterprises No.21-Lease
issued by the Ministry of Finance, the Company starts to implement it since 1 January 2021. For details
on specific items and amounts affected, please refer to above statement.
5.38.4. Retrospective restatement of previous comparative data due to the execution of any new
standard governing lease from 2021
Applicable √ N/A
6. Taxes
6.1. Major tax types and rates
Tax type Tax base Tax rate
Value-added tax Taxable sales income 13 %, 9%, 6%
Urban maintenance and construction
Taxable turnover tax 7%
tax
Corporate income tax Taxable income 25%, 15%, 16.5%, 9%, 0%
Consumption tax (based on price) Baijiu tax price or ex-factory price 20%
Consumption tax (based on quantity) Quantity of baijiu CNY 1.00/kg
Education surcharge Taxable turnover tax 3%
Local education surcharge Taxable turnover tax 2%
Original value of the property*70%;
Property tax 1.2%, 12%
house rent
2
Land use tax Land area CNY 5-18.00/m
Others According to national regulation
Tax payment subject using different corporate income tax rates, the corporate income tax rates are as
follows:
Company name Corporate income tax rate
Luzhou Pinchuang Technology Co., Ltd. 15%
Luzhou Laojiao International Development (Hong Kong)
16.5%
Co., Ltd.
Luzhou Laojiao Commercial Development (North America)
21%-40%
Co., Ltd.
186
2021 Annual Report of Luzhou Laojiao 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 Ministry of Finance, State Taxation Administration and National
Development and Reform Commission on Continuing the Corporate Income Tax Policies Concerning
the Western Development Strategy (No. 23 in 2020, Ministry of Finance), from 1 January 2021 to 31
December 2030, companies are located in the western region whose primary business is listed in the
Catalogue of Encouraged Industries in the Western Region, and the primary business income
accounting for over 60% of the total enterprise income. These companies shall be subject to the
corporate income tax at a reduced rate of 15%. The Company's holding subsidiary, Luzhou Pinchuang
Technology Co., Ltd., whose primary business income meet the requirements of scope and standard of
the Catalogue of Encouraged Industries in the Western Region, is paid at the rate of 15% for corporate
income tax.
(2) According to Article 27 of the Corporate Income Tax Law of the People's Republic of China and
Article 86, Item 1 of the Implementation Regulations of the Corporate Income Tax Law, companies are
exempted from enterprise income tax when they engage in agricultural, forestry, animal husbandry and
fishery industries. The holding subsidiary of the Company, Luzhou Red Sorghum Modern Agricultural
Development Co., Ltd., is engaged in the cultivation and sale of organic sorghum and enjoys the
reduction of corporate income tax preferences.
(3) According to the Article 15, Item 1 of the Provisional Regulations on Value-Added Tax, agricultural
producers sell self-produced agricultural products exempt from value-added tax. The holding subsidiary
of the Company, Luzhou Red Sorghum Modern Agricultural Development Co., Ltd., is engaged in the
cultivation and sale of organic sorghum and enjoys the value-added tax exemption.
(4) According to the Article 3, Item 7 of the Notice on Revise of Interim Measures of Accelerating the
Development in Headquarters Economy of China-Malaysia Qinzhou Industrial Park, till 31 December
2025, the enterprises in the Qinzhou Industrial Park that enjoy 15% of tax rate of Western Development
with the half reduction in the tax period of preferential policies shall enjoy the local share of corporate
income tax exemption (namely 40% of corporate income tax was exempted, and the proportion adjusted
by the state shall be executed according to new proportion); Guangxi Luzhou Laojiao Imported Liquor
Industry Co., Ltd., the wholly-owned subsidiary of the Company, pays corporate income tax at the rate of
9% according to the tax preference policies.
187
2021 Annual Report of Luzhou Laojiao Co., Ltd.
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 26,281.86 26,978.10
Bank deposit 13,490,769,725.71 11,616,532,676.06
Other cash and cash equivalents 22,698,572.99 8,310,686.44
Total 13,513,494,580.56 11,624,870,340.60
Including: Total deposit outbound 63,993,390.31 68,247,418.50
Total amount with restriction to
110,965,638.73 56,675,277.79
use due to mortgage, pledge or freeze
Other statements:
Note 1: The deposit outbound is the balance of cash and cash equivalents of the foreign 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 subsidiary, Luzhou Laojiao Tourism Culture Co., Ltd., in the designated
bank according to the regulations of the tourism bureau, the balance of CNY 10,774,833.68 deposited by
the subsidiary, Luzhou Laojiao Electronic Commerce Co., Ltd. on the third-party e-commerce platform,
and guaranty letter deposit of CNY 10, 509,017.10 by the Company and the subsidiary, Luzhou Laojiao
Sales Co., Ltd., in the bank.
Note 3: There is no special benefit arrangement such as establishing a fund co-management account
with related parties in the current period.
Liquor and wine manufacturing companies shall disclose in detail whether there are special interest
arrangements such as establishing co-management accounts with related parties.
□ Applicable √ N/A
7.2. Held-for-trading financial assets
Monetary Unit: CNY
Item Closing Balance Opening Balance
Financial assets measured at fair value
with their changes included into current 706,352,241.79
profits/losses
Including:
Financial products at fair value through 706,352,241.79
188
2021 Annual Report of Luzhou Laojiao Co., Ltd.
profit or loss
Including:
Total 706,352,241.79
Other statements:
The closing balance represents the wealth management products of the collective asset management
plan purchased by the Company from securities-type companies and is measured at fair value based on
the amount calculated on the basis of the net unit value of the underlying assets as published on the
official website of the asset manager.
7.3. Accounts receivable
7.3.1. Classification of accounts receivable
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
receivable tested 1,713,94 100.00 85,699.0 1,628,24 1,587,22 79,372.6 1,507,852.
5.00% 100.00% 5.00%
for impairment by 7.55 % 0 8.55 5.12 9 43
the portfolio
Including:
Accounts
receivable tested
for impairment on 1,713,94 100.00 85,699.0 1,628,24 1,587,22 79,372.6 1,507,852.
5.00% 100.00% 5.00%
the portfolio with 7.55 % 0 8.55 5.12 9 43
characteristics of
credit risk
1,713,94 100.00 85,699.0 1,628,24 1,587,22 79,372.6 1,507,852.
Total 5.00% 100.00% 5.00%
7.55 % 0 8.55 5.12 9 43
Accounts receivable tested for impairment on the portfolio:
Monetary Unit: CNY
Closing Balance
Name
Book balance Provision for bad debt Proportion
Risk portfolio 1,713,947.55 85,699.00 5.00%
189
2021 Annual Report of Luzhou Laojiao Co., Ltd.
Other portfolio
Total 1,713,947.55 85,699.00 --
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
Within 1 year (including 1 year) 1,713,947.55
Total 1,713,947.55
The Company shall observe the disclosure requirements for related food and wine manufacturing
business in the Self-regulatory Guidelines No. 3 for Companies Listed on Shenzhen Stock Exchange -
Industry Information Disclosure
7.3.2. 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 79,372.69 6,326.31 85,699.00
risk portfolio
Total 79,372.69 6,326.31 85,699.00
Note: There is no significant provision in accounts receivable reversed or recovered in the reporting
period.
7.3.3. 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
Sazerac Distiller LLC 927,137.53 54.09% 46,356.88
Beijing Secoo Trading
263,509.80 15.37% 13,175.49
Limited
Park Street Imports, 170,916.07 9.97% 8,545.80
190
2021 Annual Report of Luzhou Laojiao Co., Ltd.
LLC
Dongguan Good View
129,062.76 7.53% 6,453.14
Industrial Ltd.
Shanghai Shengdayuan
Information Technology 61,934.07 3.61% 3,096.70
Co., Ltd.
Total 1,552,560.23 90.57%
7.4. Accounts receivable financing
Monetary Unit: CNY
Item Closing Balance Opening Balance
Bank acceptance bill 4,757,631,778.64 3,209,371,766.35
1
Total 4,757,631,778.64 3,209,371,766.35
Note: 1. At the end of the period, the revenue increased by CNY 1,548,260,012.29, up 48.24%
compared with the beginning of the period, which was mainly due to the impact of the corresponding
increase in bank acceptances received as the scale of sales expanded. 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; since the timing and price of
bills discounted may not be reliably estimated due to the short maturity of the bills all being less than one
year and the endorsement of the negotiable bills being valued at book value, the 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) There was no accounts receivable financing pledge at the end of year.
(2) There is CNY 8,545,542,606.78 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:
Item Derecognition at period-end Not derecognition at period-end
Bank acceptance bill 8,545,542,606.78
Subtotal 8,545,542,606.78
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
191
2021 Annual Report of Luzhou Laojiao Co., Ltd.
terminated.
(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.
7.5. Prepayment
7.5.1. Aging analysis
Monetary Unit: CNY
Closing Balance Opening Balance
Aging
Amount Proportion Amount Proportion
Within 1 year 174,252,091.59 97.85% 72,436,550.81 96.99%
1-2 years 3,411,121.11 1.92% 2,042,638.57 2.73%
2-3 years 424,476.11 0.24% 206,348.00 0.28%
1
Total 178,087,688.81 -- 74,685,537.38 --
Note: 1. The closing balance increased by CNY 103,402,151.43 compared with opening balance, with
an increase by 138.45%, mainly due to the increase of prepayments with the rise of product promotion
activities.
Reasons for significant prepayments whose aging is longer than 1 year without timely settlement:
There is no significant prepayment whose aging is longer than 1 year.
7.5.2. Top five entities with the largest balances of prepayment
Company Name Closing Balance Proportion to the total closing
balance of prepayment
Shanghai Merlot Advertising Co., Ltd. 111,519,937.93 62.62%
Luzhou Western Gas Co., Ltd. 8,050,769.30 4.52%
Luzhou Power Supply Company of State Grid 6,984,742.47 3.92%
Sichuan Electric Power Company
Sichuan Jiacheng Jingwei Culture 4,150,312.50 2.33%
Communication Co., Ltd.
Guangzhou Degao Airport Advertising Co., Ltd. 3,091,566.00 1.74%
Subtotal 133,797,328.20 75.13%
7.6. Other receivables
Monetary Unit: CNY
192
2021 Annual Report of Luzhou Laojiao Co., Ltd.
Item Closing Balance Opening Balance
Dividend receivable 1,407,900.00
Other receivables 28,615,361.96 125,625,031.42
Total 28,615,361.96 127,032,931.42
7.6.1. Dividend receivable
7.6.1.1. 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
7.6.2. Other receivables
7.6.2.1. Other receivables disclosed by nature
Monetary Unit: CNY
Nature Closing book balance Opening book balance
Intercourse funds 19,729,613.70 44,472,270.26
Petty cash 292,228.26 1,023,683.10
Saving deposits involving contract
132,376,912.43 285,044,911.68
disputes
1
Total 152,398,754.39 330,540,865.04
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”. 2. The closing book balance decreased by CNY 178,142,110.65 compared with
opening book balance, with a decrease by 53.89%, mainly due to the recovery of saving deposits
involving contract disputes of CNY 152,667,999.25 in the reporting period.
7.6.2.2. Allowance of provision for bad debt
Monetary Unit: CNY
First stage Second stage Third stage
Expected credit Expected loss in the Expected loss in the
Provision for bad debt Total
loss of the next 12 duration (credit duration (credit
months impairment not occurred) impairment occurred)
193
2021 Annual Report of Luzhou Laojiao Co., Ltd.
Balance of 1 January
4,915,833.62 200,000,000.00 204,915,833.62
2021
Balance of 1 January
2021 in the current —— —— —— ——
period
Reversal of the current
1,132,441.19 80,000,000.00 81,132,441.19
period
Balance of 31
3,783,392.43 120,000,000.00 123,783,392.43
December 2021
Changes of book balance with significant amount changed of loss provision in the current period
√ Applicable N/A
Company Name Closing book balance Provision for bad debt Aging Proportion
Agricultural Bank of China Changsha 132,376,912.43 120,000,000.00 Over 5 years 90.65%
Yingxin Sub-branch, Industrial and
Commercial Bank of China Nanyang
Zhongzhou Sub-branch and another bank
Subtotal 132,376,912.43 120,000,000.00 90.65%
Note: see Note 12.2 and 14.7.1 for information about the deposits with involvement in contract disputes.
Disclosure by aging
Monetary Unit: CNY
Aging Book balance
Within 1 year (including 1 year) 10,275,684.35
1-2 years 4,277,630.18
2-3 years 3,153,352.80
Over 3 years 134,692,087.06
3-4 years 120,000.00
4-5 years 160,000.00
Over 5 years 134,412,087.06
Total 152,398,754.39
7.6.2.3. Provision and recovery for bad and doubtful other receivables in the current period
Allowance of provision for bad debt:
Monetary Unit: CNY
Opening Current Period
Type Closing Balance
Balance Allowanc Reversal or Write-off Other
194
2021 Annual Report of Luzhou Laojiao Co., Ltd.
e recovery
Other
receivables
tested for 200,000,000.00 80,000,000.00 120,000,000.00
impairment
individually
Other
receivables
tested for 4,915,833.62 1,132,441.19 3,783,392.43
impairment by
the portfolio
Total 204,915,833.62 81,132,441.19 123,783,392.43
Recovery for bad debt and doubtful other receivables with significant amount in the current period:
Monetary Unit: CNY
Company name Amount Recovery way
Agricultural Bank of China Changsha
Yingxin Sub-branch, Industrial and
Commercial Bank of China Nanyang 80,000,000.00 By litigation
Zhongzhou Sub-branch and another
bank
Total 80,000,000.00 --
7.6.2.4. 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
Agricultural Bank
of China Changsha
Yingxin
Sub-branch,
Saving deposits
Industrial and
involving contract 132,376,912.43 Over 5 years 86.86% 120,000,000.00
Commercial Bank
disputes
of China Nanyang
Zhongzhou
Sub-branch and
another bank
CTS Luzhou
Within 1 year, 1-2
Laojiao Cultural Security deposit 3,590,790.65 2.36% 354,539.53
years
Tourism
195
2021 Annual Report of Luzhou Laojiao Co., Ltd.
Development Co.,
Ltd.
Zhejiang Tmall
Security deposit,
Technology 2,359,905.42 Within 1 year 1.55% 117,995.27
etc.
Co.,Ltd.
Longmatan Power
Supply Bureau of
Security deposit 1,520,000.00 Over 5 years 1.00% 1,520,000.00
Luzhou Power
Bureau
Housing and
Urban-Rural
Development
Security deposit 1,069,800.00 2-3 years 0.70% 213,960.00
Bureau of
Longmatan
District, Luzhou
Total -- 140,917,408.50 -- 92.47% 122,206,494.80
7.7. Inventories
Whether the Company needs to comply with the disclosure requirements of real estate industry
No
7.7.1. Categories of Inventories
Monetary Unit: CNY
Closing Balance Opening Balance
Provision
for stock
Provision for
obsolesc
stock
ence or
obsolescence
impairme
Category or impairment
Book Balance Book Value Book Balance nt Book Value
provision of
provision
contract
of
performance
contract
costs
performa
nce costs
Raw materials 123,986,924.38 123,986,924.38 92,033,654.20 92,033,654.20
Goods in
5,255,917,501.41 5,255,917,501.41 3,578,553,746.98 3,578,553,746.98
progress
Finished goods 1,855,731,688.91 1,855,731,688.91 997,109,606.41 997,109,606.41
196
2021 Annual Report of Luzhou Laojiao Co., Ltd.
Revolving
79,396.01 79,396.01
materials
Goods in transit 41,937,052.10 41,937,052.10 27,887,027.65 27,887,027.65
1
Total 7,277,573,166.80 7,277,573,166.80 4,695,663,431.25 4,695,663,431.25
Note: 1. The closing balance increased CNY 2,581,909,735.55 compared with opening balance, with an
increase by 54.98%, mainly due to the remarkable increase in the output of products because some
constructions of the technical renovation project of brewing were put into production successively and
management requirements for shelf life of products.
The Company shall observe the disclosure requirements for related food and wine manufacturing
business in the Self-regulatory Guidelines No. 3 for Companies Listed on Shenzhen Stock Exchange -
Industry Information Disclosure
7.8. Other current assets
Monetary Unit: CNY
Item Closing Balance Opening Balance
Value-added tax 82,734,324.31 67,752,538.61
Corporate income tax 24,638,887.44 83,493,943.79
Other taxes 4,601,321.16 5,318,941.78
Total 111,974,532.91 156,565,424.18
Other statements:
The value-added tax expected to be deducted in the next fiscal year and corporate income tax and other
taxes are disclosed in other current assets.
7.9. Long-term equity investments
Monetary Unit: CNY
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
2,383,55 169,638, -29,576, 30,284,2 2,493,32 2,567,09
Securitie
0,372.50 351.75 301.94 56.98 8,165.33 8.80
s Co.,
197
2021 Annual Report of Luzhou Laojiao Co., Ltd.
Ltd.
Sichuan
Develop
ment
6,854,47 -1,127,6 5,726,84
Wine
1.67 23.31 8.36
Investme
nt Co.,
Ltd.
Sichuan
Tongnian
g Liquor
Industry
Technolo
8,009,89 -122,437 7,887,46
gy
8.80 .28 1.52
Researc
h
Institute
Co., Ltd.
Note
CTS
Luzhou
Laojiao
Cultural 79,252,4 40,000,0 549,332. 119,801,
Tourism 28.30 00.00 74 761.04
Develop
ment
Co., Ltd.
2,477,66 40,000,0 168,937, -29,576, 30,284,2 2,626,74 2,567,09
Subtotal
7,171.27 00.00 623.90 301.94 56.98 4,236.25 8.80
2,477,66 40,000,0 168,937, -29,576, 30,284,2 2,626,74 2,567,09
Total
7,171.27 00.00 623.90 301.94 56.98 4,236.25 8.80
7.10. Other equity instrument investment
Monetary Unit: CNY
Item Closing Balance Opening Balance
Financial assets designated to be
measured at fair value through other
comprehensive income
Including:
North Chemical Industries Co.,Ltd. 15,963,896.54 11,460,858.15
198
2021 Annual Report of Luzhou Laojiao Co., Ltd.
Luzhou Bank Co., Ltd. 102,174,621.71 95,561,825.55
Guotai Junan Securities Co., Ltd. 210,690,476.31 206,450,757.39
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.,
1,871,291.63 1,075,124.09
Ltd. and other equity instrument
investments
Total 363,312,120.43 347,160,399.42
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
According to the
mode of
North Chemical
managing
Industries 62,542.20 14,933,896.54
assets by
Co.,Ltd.
management
layer
According to the
mode of
Luzhou Bank managing
51,054,621.71
Co., Ltd. assets by
management
layer
According to the
mode of
Guotai Junan
managing
Securities Co., 6,595,118.32 197,971,319.55
assets by
Ltd.
management
layer
Guotai Junan According to the
Investment mode of
199
2021 Annual Report of Luzhou Laojiao Co., Ltd.
Management managing
Co., Ltd. assets by
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
According to the
mode of
Hainan Huitong
managing
International 1,000,000.00
assets by
Trust Company
management
layer
Sichuan China
Liquor Golden
According to the
Triangle Brand
mode of
Operation
managing
Development 5,000.00 398,926.37
assets by
Co., Ltd. and
management
other equity
layer
instrument
investments
Subtotal 6,662,660.52 263,959,837.80 5,752,926.37
7.11. Fixed assets
Monetary Unit: CNY
200
2021 Annual Report of Luzhou Laojiao Co., Ltd.
Item Closing Balance Opening Balance
Fixed assets 8,088,216,508.58 6,885,609,781.96
Disposal of fixed assets 1,270,765.81 1,498,392.76
Total 8,089,487,274.39 6,887,108,174.72
7.11.1. 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 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
2.Increase in 1,182,622,846.5 1,693,724,384.5
189,006,339.97 189,949,820.23 3,734,406.38 128,410,971.39
current period 6 3
(1) External
238,643.82 19,889,476.69 45,980,570.95 352,429.56 1,720,007.50 68,181,128.52
purchase
(2) Transfer
from 1,162,844,723.9 1,625,636,508.6
138,434,675.85 128,105,504.39 39,691.73 196,211,912.67
construction in 8 2
progress
(3) Increase
from business
combination
(4) Transfer
from intangible -93,252.61 -93,252.61
assets
(5) Adjustment 1
19,539,478.76 30,682,187.43 15,956,997.50 3,342,285.09 -69,520,948.78
to categories
3.Decrease in
739,893.02 1,716,534.78 2,152,545.79 117,948.16 7,394,125.85 12,121,047.60
current period
(1) Disposal or
739,893.02 1,716,534.78 2,152,545.79 117,948.16 7,394,125.85 12,121,047.60
retirement
4.Closing 6,810,063,839.3 1,116,825,737.0 1,491,462,062.4 10,357,604,370.
894,181,275.81 45,071,455.46
Balance 8 3 4 12
II. Accumulated
depreciation
201
2021 Annual Report of Luzhou Laojiao Co., Ltd.
1.Opening 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
2.Increase in
212,242,179.55 127,448,829.02 79,021,036.74 3,067,893.43 65,003,240.34 486,783,179.08
current period
(1) Provision 212,119,210.65 127,325,431.99 78,988,781.66 3,045,843.67 65,376,928.16 486,856,196.13
(2) Changes of
-73,017.05 -73,017.05
exchange rates
(3) Adjustment
122,968.90 123,397.03 105,272.13 22,049.76 -373,687.82
to categories
3.Decrease in
526,453.31 1,147,011.66 1,127,479.89 101,348.60 4,884,275.31 7,786,568.77
current period
(1) Disposal or
526,453.31 1,147,011.66 1,127,479.89 101,348.60 4,884,275.31 7,786,568.77
retirement
4.Closing 2,268,764,921.4
819,228,209.63 383,120,514.56 327,421,150.75 30,623,904.90 708,371,141.63
Balance 7
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 5,990,212,689.6 8,088,216,508.5
733,705,222.47 566,760,125.06 14,447,550.56 783,090,920.81
Value 8 8
2.Opening 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
Value 8 6
Note: 1. 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.
202
2021 Annual Report of Luzhou Laojiao Co., Ltd.
7.11.2. Fixed assets leased out through operating lease
Monetary Unit: CNY
Item Closing book value
Buildings and constructions 183,093,952.28
Subtotal 183,093,952.28
7.11.3. 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 25,791,127.68 historical reasons, and it plans to be
processed after gradually improving
procedures.
Buildings of brewing company 303,282,510.11 In procedure
Buildings of the subsidiary-brewing
3,921,371,158.08 In procedure
company
Subtotal 4,250,444,795.87
7.11.4. Disposal of fixed assets
Monetary Unit: CNY
Item Closing Balance Opening Balance
Disposal and retirement of assets 1,270,765.81 1,498,392.76
Total 1,270,765.81 1,498,392.76
7.12. Construction in progress
Monetary Unit: CNY
Item Closing Balance Opening Balance
Construction in progress 1,259,845,487.50 2,012,129,880.15
Total 1,259,845,487.50 2,012,129,880.15
7.12.1. Details of the construction in progress
Monetary Unit: CNY
203
2021 Annual Report of Luzhou Laojiao Co., Ltd.
Closing Balance Opening Balance
Provision Provision
Item
Book balance for Book value Book balance for Book value
impairment impairment
Technical
renovation
project of 968,634,809.01 968,634,809.01
brewing of
Luzhou Laojiao
Improvement
and technical
renovation
project of 563,063,821.82 563,063,821.82 242,719,982.63 242,719,982.63
Luzhou Laojiao
production
supporting
Marketing
network
command
center office
5,473,631.57 5,473,631.57
area
reconstruction
and expansion
project
New model
application
project of
intelligent 16,862,599.30 16,862,599.30
production
workshop of
solid state liquor
Technical
renovation of
Luzhou Laojiao
301,985,162.65 301,985,162.65 206,167,904.88 206,167,904.88
Intelligent
packaging
center
Guojiao Culture
Park Qiankun
Wine Castle 305,548,667.25 305,548,667.25
Cultural Tourism
project
204
2021 Annual Report of Luzhou Laojiao Co., Ltd.
Landscape
improvement
project of
Luzhou Laojiao 149,089,445.94 149,089,445.94 1,883,254.38 1,883,254.38
Huangyi
Brewing
Ecological Park
Other projects 245,707,057.09 245,707,057.09 264,839,031.13 264,839,031.13
1
Total 1,259,845,487.50 1,259,845,487.50 2,012,129,880.15 2,012,129,880.15
Note: 1. The closing balance decreased CNY 752,284,392.65 compared with the opening balance, with
a decrease by 37.39%, because of the carry forward of the technical renovation project of brewing for
completion in the current period.
7.12.2. 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 1,086,4 raised
project 968,634 124,187 6,347,4 100.00 109,424 22,310,
76,500. 74,905. 94.05% 3.67% and
of ,809.01 ,567.03 70.95 % ,753.82 774.20
00 09 self-rais
brewing
ed
of
Luzhou
Laojiao
Improve
ment
and
technica
888,544 242,719 320,343 563,063
l 64.20% 98.00% Other
,100.00 ,982.63 ,839.19 ,821.82
renovati
on
project
of
205
2021 Annual Report of Luzhou Laojiao Co., Ltd.
Luzhou
Laojiao
producti
on
supporti
ng
Marketi
ng
network
comma
nd
center
office 299,600 5,473,6 16,447, 21,921, 100.00
93.62% Other
area ,000.00 31.57 932.75 564.32 %
reconstr
uction
and
expansi
on
project
New
model
applicati
on
project
of
intellige
245,100 16,862, 16,702, 160,199 100.00
nt 95.98% Other
,000.00 599.30 400.18 .12 %
producti
on
worksho
p of
solid
state
liquor
Technic
al
renovati
1,577,9
on of 206,167 95,817, 301,985
13,400. 19.57% 20.00% Other
Luzhou ,904.88 257.77 ,162.65
00
Laojiao
Intellige
nt
206
2021 Annual Report of Luzhou Laojiao Co., Ltd.
packagi
ng
center
Guojiao
Culture
Park
Qiankun
337,885 305,548 10,694, 289,900 26,342, 100.00
Wine 93.76% Other
,813.44 ,667.25 317.63 ,020.76 964.12 %
Castle
Cultural
Tourism
project
Landsc
ape
improve
ment
project
of 200,065 1,883,2 147,206 149,089
79.47% 90.00% Other
Luzhou ,400.00 54.38 ,191.56 ,445.94
Laojiao
Huangyi
Brewing
Ecologi
cal Park
12,426, 1,747,2 1,414,9 1,014,1
714,697 32,850, 109,424 22,310,
Total 385,213 90,849. 98,890. 1
38,430. -- -- 3.67% --
,105.93 634.19 ,753.82 774.20
.44 02 35 41
Note: 1. Other decreases refer to land use rights, software and low priced and easily worn articles
transferred to intangible assets.
7.13. Right-of-use assets
Monetary Unit: CNY
Item Land use right Buildings and constructions Total
I. Original cost
1. Opening Balance 32,680,786.33 17,520,623.03 50,201,409.36
2. Increase in current period 15,369,867.64 15,369,867.64
(1) Lease in 15,556,655.18 15,556,655.18
(2) Changes of exchange
-186,787.54 -186,787.54
rates
3. Decrease in current period
207
2021 Annual Report of Luzhou Laojiao Co., Ltd.
(1) Other
4. Closing Balance 32,680,786.33 32,890,490.67 65,571,277.00
II. Accumulated amortization
1. Opening Balance
2. Increase in current period 3,634,912.70 9,221,554.26 12,856,466.96
(1) Provision 3,634,912.70 9,275,999.65 12,910,912.35
(2) Changes of exchange
-54,445.39 -54,445.39
rates
3. Decrease in current period
(1) Disposal
4. Closing Balance 3,634,912.70 9,221,554.26 12,856,466.96
III. Provision for impairment
1. Opening Balance
2. Increase in current period
(1) Provision
3. Decrease in current period
(1) Disposal
4. Closing Balance
IV. Book Value
1. Closing Book Value 29,045,873.63 23,668,936.41 52,714,810.04
2. Opening Book Value 32,680,786.33 17,520,623.03 50,201,409.36
7.14. Intangible assets
7.14.1. Details of intangible assets
Monetary Unit: CNY
No-patent right Computer Trademark
Item Land use right Patent right Total
technology software right
I. Original cost
1. Opening
2,743,432,254.34 1,700,050.44 48,066,415.14 1,890,746.08 2,795,089,466.00
Balance
2. Increase in 770,063.00 12,649,335.91 13,419,398.91
208
2021 Annual Report of Luzhou Laojiao Co., Ltd.
current period
(1) Acquired 3,356,835.73 3,356,835.73
(2) Internal
developed
(3) Business
combination
(4) Transferred
from
770,063.00 9,292,500.18 10,062,563.18
construction in
progress
3. Decrease in
current period
(1) Disposal
4. Closing
2,744,202,317.34 1,700,050.44 60,715,751.05 1,890,746.08 2,808,508,864.91
Balance
II. Accumulated
amortization
1. Opening
110,708,419.78 570,599.00 24,977,019.46 1,715,402.39 137,971,440.63
Balance
2. Increase in
60,638,766.62 130,005.04 3,326,236.56 83,227.34 64,178,235.56
current period
(1) Provision 60,638,766.62 130,005.04 3,326,236.56 83,227.34 64,178,235.56
3. Decrease in
current period
(1) Disposal
4. Closing
171,347,186.40 700,604.04 28,303,256.02 1,798,629.73 202,149,676.19
Balance
III. Provision for
impairment
1. Opening
Balance
2. Increase in
current period
(1) Provision
209
2021 Annual Report of Luzhou Laojiao Co., Ltd.
3. Decrease in
current period
(1) Disposal
4. Closing
Balance
IV. Book Value
1. Closing Book
2,572,855,130.94 999,446.40 32,412,495.03 92,116.35 2,606,359,188.72
Value
2. Opening
2,632,723,834.56 1,129,451.44 23,089,395.68 175,343.69 2,657,118,025.37
Book Value
There is no proportion of intangible assets formed by internal development to the balance of intangible
assets at the period-end.
7.15. Long-term deferred expense
Monetary Unit: CNY
Item Opening Balance Increase Amortization Other decrease Closing Balance
Improvement
expense of rented 2,305,902.21 842,033.00 1,463,869.21
fixed assets
Total 2,305,902.21 842,033.00 1,463,869.21
7.16. Deferred tax assets/ deferred tax liabilities
7.16.1. 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
127,059,130.30 31,755,535.22 208,184,340.96 52,032,763.16
impairment
Unrealized profits from
3,161,541,177.98 790,385,294.49 2,210,592,352.66 552,648,088.16
internal transactions
Deductible losses 5,716,197.58 1,429,049.40 11,342,715.00 2,835,678.76
Impact from salary 591,456,408.66 145,429,434.14 441,020,431.90 108,714,676.83
Impact from deferred
28,531,014.28 7,132,753.57 29,739,000.00 7,434,750.00
earnings
210
2021 Annual Report of Luzhou Laojiao Co., Ltd.
Impact from fixed
529,787.16 96,441.51 260,745.17 43,022.95
assets depreciation
Recognition costs of
restricted shares for 1
34,895,071.18 8,446,243.50
equity incentive in the
lock-up period
Impact from fair value
changes of other
5,752,926.37 1,438,231.59 6,006,723.91 1,501,680.98
equity instrument
investment
Total 3,955,481,713.51 986,112,983.42 2,907,146,309.60 725,210,660.84
Note: 1. Deductible temporary differences of CNY 34,895,071.18 of costs and expenses recognized
during the lock-up period of restricted shares for share incentives represent the estimated future pre-tax
deductible amounts based on the Company's share price less the grant price at the end of the period.
7.16.2. Deferred tax liabilities before offset
Monetary Unit: CNY
Closing Balance Opening Balance
Item Taxable temporary Taxable temporary
Deferred tax liabilities Deferred tax liabilities
differences differences
Fair value changes of
other equity instrument 263,959,837.80 65,989,959.48 248,604,284.33 62,151,071.11
investment
Fair value changes of
held-for-trading 6,352,241.79 1,588,060.45
financial assets
Total 270,312,079.59 67,578,019.93 248,604,284.33 62,151,071.11
7.16.3. Details of unrecognized deferred tax assets
Monetary Unit: CNY
Item Closing Balance Opening Balance
Deductible losses 201,219,210.53 123,969,302.33
Impact from employee benefits payable 139,023.54 74,816.40
Total 201,358,234.07 124,044,118.73
7.16.4. Deductible losses from unrecognized deferred tax assets will due on the following years
Monetary Unit: CNY
211
2021 Annual Report of Luzhou Laojiao Co., Ltd.
Year Closing Amount Opening Amount Notes
st
The 1 year
nd
The 2 year 6,713,657.39 535,737.90
rd
The 3 year 14,491,365.44 11,691,604.41
th
The 4 year 108,989,982.02 111,741,960.02
th
The 5 year 71,024,205.68
Total 201,219,210.53 123,969,302.33 --
7.17. Other non-current assets
Monetary Unit: CNY
Closing Balance Opening Balance
Provisio
Item n for Book Provision for
Book balance Book value Book value
impairm balance impairment
ent
650,384,435 10,806,325. 10,806,325.
Prepaid equipment and land expense 650,384,435.70
.70 86 86
650,384,435 10,806,325. 10,806,325.
Total 650,384,435.70 1
.70 86 86
Note: 1. The closing balance increased CNY 639,578,109.84 compared with the opening balance, with
an increase by 5918.55%, mainly due to the prepayment of land expense and security deposits for
intended constructions of the Brewing Company, the Company's subsidiary, in the current period.
7.18. 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.
7.19. Accounts payable
7.19.1. Presentation of accounts payable
Monetary Unit: CNY
Category Closing Balance Opening Balance
Materials and service expense 1,171,595,976.46 845,025,160.84
212
2021 Annual Report of Luzhou Laojiao Co., Ltd.
Engineering equipment expense 1,248,758,493.07 1,759,264,038.93
Total 2,420,354,469.53 2,604,289,199.77
7.19.1. Significant accounts payable whose aging is longer than 1 year
Monetary Unit: CNY
Reason for not payment or carrying
Category Closing Balance
forward
China Construction First Group
350,304,244.39 Within the contract settlement period
Corporation Limited
Total 350,304,244.39 --
7.20. Contract liabilities
Monetary Unit: CNY
Category Closing Balance Opening Balance
Within 1 year 3,484,385,115.64 1,637,685,488.79
1-2 years 4,042,470.18 15,504,524.56
2-3 years 1,569,941.86 14,385,601.53
Over 3 years 20,113,173.57 11,261,552.06
1
Total 3,510,110,701.25 1,678,837,166.94
Note: 1. The closing balance increased CNY 1,831,273,534.31 compared with the opening balance, with
an increase by 109.08%, mainly due to the increase of advances from customers with the expansion of
sales scale. 2. There is no significant contract liability whose aging is longer than 1 year.
7.21. Employee benefits payable
7.21.1. 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 439,256,934.36 1,082,211,974.58 910,278,343.02 611,190,565.92
2. Post-employment
benefits- defined 65,756,721.30 82,898,386.32 111,750,904.11 36,904,203.51
contribution plans
3. Termination benefits 8,971.53 436,289.79 436,289.79 8,971.53
Total 505,022,627.19 1,165,546,650.69 1,022,465,536.92 648,103,740.96
213
2021 Annual Report of Luzhou Laojiao Co., Ltd.
7.21.2. 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,
362,289,928.18 944,161,801.21 757,135,473.94 549,316,255.45
allowances and grants
2. Employees’ welfare 32,343,838.35 32,343,838.35
3. Social insurance
15,250,336.23 28,695,655.44 38,579,989.96 5,366,001.71
premiums
Including: Medical
11,428,828.49 27,046,556.20 36,236,506.00 2,238,878.69
insurance premium
Work-related injury
2,035,870.30 1,565,937.23 2,192,141.96 1,409,665.57
insurance
Maternity insurance
1,784,957.44 83,162.01 151,342.00 1,716,777.45
premium
Other insurance
680.00 680.00
premium
4. Housing funds 4,504,648.59 61,219,031.71 56,493,151.07 9,230,529.23
5. Labor union
expenditures and
57,212,021.36 15,791,647.87 25,725,889.70 47,277,779.53
employee education
funds
Total 439,256,934.36 1,082,211,974.58 910,278,343.02 611,190,565.92
7.21.3. 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
44,864,948.21 46,637,986.15 73,852,099.51 17,650,834.85
insurance premium
2. Unemployment
7,388,102.26 1,286,795.26 2,681,630.93 5,993,266.59
insurance premium
3. Enterprise annuity 13,503,670.83 34,973,604.91 35,217,173.67 13,260,102.07
Total 65,756,721.30 82,898,386.32 111,750,904.11 36,904,203.51
7.22. Taxes payable
Monetary Unit: CNY
214
2021 Annual Report of Luzhou Laojiao Co., Ltd.
Item Closing Balance Opening Balance
Value-added tax 421,216,223.94 244,763,614.30
Consumption tax 1,263,440,836.05 1,059,445,349.23
Enterprise income tax 1,327,750,786.20 606,140,406.79
Urban maintenance and construction
82,437,545.17 72,389,068.64
tax
Education surcharge 35,234,596.27 31,023,067.68
Local education surcharge 23,651,376.27 20,682,045.08
Individual income tax 10,467,970.24 5,265,751.31
Stamp duty 8,490,523.62 5,351,912.65
Land use tax 437,619.35 616,030.55
Property tax 337,645.12 337,763.14
Others 14,505.56 12,201.76
1
Total 3,173,479,627.79 2,046,027,211.13
Note: 1. At the end of the period, the revenue increased by CNY 1,127,452,416.66, up 55.10%
compared with the beginning of the period, which was mainly due to the impact of the corresponding
increase in turnover and additional taxes and enterprise income tax related to the sale of products as the
scale of revenue and profit increased during the period.
7.23. Other payables
Monetary Unit: CNY
Item Closing Balance Opening Balance
Other payables 652,393,292.60 501,623,924.54
Total 652,393,292.60 501,623,924.54
7.23.1. Other payables
7.23.1.1. Categories by nature
Monetary Unit: CNY
Item Closing Balance Opening Balance
Security deposit 628,174,772.12 485,228,527.19
Intercourse funds 17,757,284.78 8,599,977.98
Others 6,461,235.70 7,795,419.37
Total 652,393,292.60 501,623,924.54
215
2021 Annual Report of Luzhou Laojiao Co., Ltd.
7.23.1.2. Significant other payables whose aging are longer than 1 year
Other statements:
Other payables whose aging are longer than 1 year are mainly security deposits collected from dealers.
7.24. Non-current liabilities due within one year
Monetary Unit: CNY
Item Closing Balance Opening Balance
Interest of bonds payable due within
72,219,178.08 72,219,178.08
one year
Lease liabilities due within one year 13,983,036.95 9,987,955.08
Total 86,202,215.03 82,207,133.16
7.25. Other current liabilities
Monetary Unit: CNY
Item Closing Balance Opening Balance
Output VAT to be transferred 456,314,391.17 218,267,353.36
Total 456,314,391.17 218,267,353.36
7.26. Bonds payable
7.26.1. Bonds payable
Monetary Unit: CNY
Item Closing Balance Opening Balance
Corporate bonds in 2019 (Phase I) 2,494,539,629.08 2,492,799,107.31
Corporate bonds in 2020 (Phase I) 1,496,246,113.15 1,495,072,992.71
Total 3,990,785,742.23 3,987,872,100.02
7.26.2. Increase/decrease of bonds payable (excluding other financial instrument classified as
financial liabilities such as preferred shares and perpetual bonds)
Monetary Unit: CNY
Withdra Amortiza
Issued in Repaym
wal of tion of
Bond Par Issuing Issuing Opening the ent in the Closing
Duration interest premium
name value date amount Balance current reporting Balance
by par and
period period
value depreciat
216
2021 Annual Report of Luzhou Laojiao Co., Ltd.
ion
Corporat
27
e bonds 2,500,00 2,490,00 2,492,79 89,500,0 1,740,52 2,494,53
August 3+2
in 2019 0,000.00 0,000.00 9,107.31 00.00 1.77 9,629.08
2019
(Phase I)
Corporat
16
e bonds 1,500,00 1,494,00 1,495,07 52,500,0 1,173,12 1,496,24
March 5
in 2020 0,000.00 0,000.00 2,992.71 00.00 0.44 6,113.15
2020
(Phase I)
3,984,00 3,987,87 142,000, 2,913,64 3,990,78
Total -- -- --
0,000.00 2,100.02 000.00 2.21 5,742.23
7.27. Lease liabilities
Monetary Unit: CNY
Item Closing Balance Opening Balance
Lease payment 61,305,700.55 57,445,299.62
Less: unrecognized financing cost -6,654,995.52 -7,243,890.26
Lease liabilities due within one year -13,983,036.95 -9,987,955.08
Total 40,667,668.08 40,213,454.28
7.28. Deferred income
Monetary Unit: CNY
Increase in current Decrease in
Item Opening Balance Closing Balance Reason
period current period
Reception of
Government grants 29,739,000.00 12,175,000.00 13,382,985.72 28,531,014.28
financial allocation
Total 29,739,000.00 12,175,000.00 13,382,985.72 28,531,014.28 --
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
1,904,000.0 Related to
application 1,904,000.00
0 assets
project of
intelligent
217
2021 Annual Report of Luzhou Laojiao Co., Ltd.
production
line for
liquor
brewing
and
qu-making
New mode
application
project of
digital 3,465,000.0 Related to
3,465,000.00 859,700.00 6,070,300.00
workshop 0 assets
for solid
state liquor
production
Constructio
n project of
spirit room
of Luzhou 1,050,000.0 Related to
7,000,000.00 5,950,000.00
Laojiao 0 assets
brewing
technical
renovation
Luzhou
Laojiao
automatic
wine
Related to
production 500,000.00 75,000.00 425,000.00
assets
line
technical
renovation
project
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
5,850,000.0 1,264,285.7 Related to
reconstructi 3,000,000.00 7,585,714.28
0 2 assets
on project
218
2021 Annual Report of Luzhou Laojiao Co., Ltd.
of Luohan
Brewing
Base of
Luzhou
Laojiao
New mode
application
project of
2,860,000.0 2,860,000.0 Related to
workshop
0 0 assets
for solid
state liquor
production
Brewing
wastewater 1,500,000.0 Related to
10,000,000.00 8,500,000.00
treatment 0 assets
project
12,175,000. 13,382,985.
Total 29,739,000.00 28,531,014.28
00 72
7.29. Share capital
Monetary Unit: CNY
Increases/decreases in the current period (+, -)
Issuance Conversion of
Opening Balance of reserves Closing Balance
Bonds share Others Subtotal
new funds into
shares shares
Total number
1,464,752,476.00 1,464,752,476.00
of shares
7.30. 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 32,577,602.60 212,387,158.25
Total 3,722,777,063.13 32,577,602.60 3,755,354,665.73
Other statements, including increase/decrease and reasons thereof:
During the period, the Company implemented a share incentive scheme under which a total of 6,928,600
219
2021 Annual Report of Luzhou Laojiao Co., Ltd.
stock options were granted to 441 core management and key personnel at CNY 92.71 per share; the
increase in other capital reserves for the period was mainly due to the impact of the income tax of the
costs and expenses to be recognized in the period for the issuance of restricted shares and the expected
pre-tax deductible amount in future periods in excess of the recognized costs and expenses.
7.31. 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
181,898,17 11,707,01 11,707,01 193,605
that will not be reclassified into
0.29 3.25 3.25 ,183.54
profit and loss
Fair value changes of other 181,898,17 11,707,01 11,707,01 193,605
equity instrument investment 0.29 3.25 3.25 ,183.54
II. Other comprehensive
4,165,154. -30,788,5 -30,243,1 -545,385. -26,078,
income that will be reclassified
74 71.62 85.96 66 031.22
into profit and loss
Including: Other
comprehensive income that will 3,193,937. -29,576,3 -29,576,3 -26,382,
be reclassified into profit and 48 01.94 01.94 364.46
loss under equity method
Difference from conversion of
-1,212,26 -666,884. -545,385. 304,333
financial statements in foreign 971,217.26
9.68 02 66 .24
currency
186,063,32 -19,081,5 -18,536,1 -545,385. 167,527
Total
5.03 58.37 72.71 66 ,152.32
Other statements, including the adjustment of the effective gain/loss on cash flow hedges to the initial
recognized amount:
220
2021 Annual Report of Luzhou Laojiao Co., Ltd.
7.32. 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
7.33. Undistributed profits
Monetary Unit: CNY
Item Current Period Previous Period
Undistributed profit before adjustment at the
16,236,513,212.43 12,559,746,579.91
end of the last year
Undistributed profit after adjustment at the
16,236,513,212.43 12,559,746,579.91
beginning of year
Plus: Net profit attributable to owners of the
7,955,554,351.73 6,005,723,069.36
parent company for the current period
Less: Ordinary share dividends payable 3,004,207,328.27 2,328,956,436.84
Undistributed profits at the end of the period 21,187,860,235.89 16,236,513,212.43
7.34. Operating revenue and cost of sales
Monetary Unit: CNY
Current Period Previous Period
Item
Revenue Cost of sales Revenue Cost of sales
Primary business 20,415,170,469.09 2,885,685,151.63 16,447,960,569.22 2,711,434,006.97
Other business 227,091,255.28 66,746,336.68 204,893,980.58 112,050,551.09
Total 20,642,261,724.37 2,952,431,488.31 16,652,854,549.80 2,823,484,558.06
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 20,415,170,469.09 20,415,170,469.09
221
2021 Annual Report of Luzhou Laojiao Co., Ltd.
Including:
Medium and high
18,397,360,159.99 18,397,360,159.99
grade liquor
Other liquor 2,017,810,309.10 2,017,810,309.10
By operating segment 20,415,170,469.09 20,415,170,469.09
Including:
Domestic 20,331,834,106.49 20,331,834,106.49
Outbound 83,336,362.60 83,336,362.60
Contract type 20,415,170,469.09 20,415,170,469.09
Including:
Commodity sales
20,415,170,469.09 20,415,170,469.09
contract
Total 20,415,170,469.09 20,415,170,469.09
Details about performance obligations:
N/A
7.35. Business taxes and surcharges
Monetary Unit: CNY
Item Current Period Previous Period
Consumption tax 2,251,935,882.19 1,789,225,806.16
Urban maintenance and construction
286,067,925.02 219,027,065.80
tax
Educational surcharge 122,600,539.31 93,865,221.95
Property tax 74,979,375.32 12,002,201.20
Land use tax 30,117,077.49 29,309,222.09
Stamp duty 17,354,822.83 17,510,277.63
Local education surcharge 81,733,692.89 62,576,814.64
Others 112,227.80 55,347.36
Total 2,864,901,542.85 2,223,571,956.83
7.36. Selling and distribution expenses
Monetary Unit: CNY
Item Current Period Previous Period
Advertising promotion expense 1,769,053,962.56 1,316,519,804.16
222
2021 Annual Report of Luzhou Laojiao Co., Ltd.
Promotion expense 1,139,273,684.38 1,074,611,735.49
Employee compensation 357,659,249.63 324,598,768.07
Storage and logistics costs 100,059,219.52 92,177,677.09
Others 233,165,488.47 282,747,847.44
Total 3,599,211,604.56 3,090,655,832.25
7.37. General and administrative expenses
Monetary Unit: CNY
Item Current Period Previous Period
Employee compensation 540,848,428.46 407,645,132.83
Depreciation and amortization 128,396,634.90 106,498,999.53
Management fee and service expense 73,918,283.32 68,388,629.63
Others 312,953,021.17 261,921,705.48
Total 1,056,116,367.85 844,454,467.47
7.38. Research and development expenses
Monetary Unit: CNY
Item Current Period Previous Period
Comprehensive research and
137,712,329.78 85,858,119.80
development expenses
Total 137,712,329.78 85,858,119.80
7.39. Financial expenses
Monetary Unit: CNY
Item Current Period Previous Period
Interest expenses 195,125,786.35 190,368,213.56
Less: Interest income 419,897,541.04 333,430,076.04
Losses from currency exchange 3,646,806.44 8,940,312.77
Handling charges 2,280,061.14 1,676,346.97
Amortization of unrecognized financing
1,958,887.90
costs
Total -216,885,999.21 -132,445,202.74
Other statements:
Note: The current period decreased CNY 84,440,796.47 compared with previous period with a decrease
by 63.76%, mainly due to increase in interest income of capital.
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
7.40. Other income
Monetary Unit: CNY
Item Current Period Previous Period
Government grants 50,986,059.68 31,409,825.37
Individual income tax commission
1,333,171.71 635,628.11
refund
Total 52,319,231.39 32,045,453.48
Including: details of government grants
Projects
Transfer from deferred income 13,382,985.72 976,000.00
Subsidy project of liquor industry
22,711,700.00 13,967,500.00
development
High-value Patent Incubation Center
800,000.00
Project of Luzhou Laojiao
Demonstration project of brewing
waste and thermochemical soil
150,000.00 800,100.00
improvement materials coupled with
green planting
Provincial industrial development fund 150,000.00 790,000.00
Special fund for central foreign
2,000,000.00
economic and trade development
Other projects-related to income 13,791,373.96 12,876,225.37
Subtotal 50,986,059.68 31,409,825.37
7.41. Investment income
Monetary Unit: CNY
Item Current Period Previous Period
Investment income from long-term equity
195,543,058.40 192,119,093.92
investments under the equity method
Dividend income gained during the period
of holding other equity instrument 6,662,660.52 9,379,824.36
investment
Total 202,205,718.92 201,498,918.28
Other statements:
Note: There is no major restriction on the repatriation of the Company's investment income.
Including: investment income from long-term equity investments under the equity method:
224
2021 Annual Report of Luzhou Laojiao Co., Ltd.
Item Current Period Previous Period
Huaxi Securities Co.,Ltd. 169,638,351.75 197,511,851.10
Sichuan Development Wine Investment Co., Ltd. -1,127,623.31 -6,128,272.50
Sichuan Tongniang Liquor Industry Technology Research Institute -122,437.28 9,898.80
Co., Ltd.
CTS Luzhou Laojiao Cultural Tourism Development Co., Ltd. 27,154,767.24 725,616.52
Subtotal 195,543,058.40 192,119,093.92
Including: dividend income gained during the period of holding other equity instrument investment:
Item Current Period Previous Period
North Chemical Industries Co.,Ltd. 62,542.20 85,995.53
Luzhou Bank Co., Ltd. 4,700,800.00
Guotai Junan Securities Co.,Ltd. 6,595,118.32 4,593,028.83
Luzhou Zunchi Automobile Service Co., Ltd. 5,000.00
Subtotal 6,662,660.52 9,379,824.36
7.42. Gain on changes in fair value
Monetary Unit: CNY
Item Current Period Previous Period
Held-for-trading financial assets 6,352,241.79
Total 6,352,241.79
7.43. Credit impairment loss
Monetary Unit: CNY
Item Current Period Previous Period
Bad debt loss of other receivables 81,132,441.19 -519,776.25
Bad debt loss of accounts receivable -6,326.31 893,511.05
Total 81,126,114.88 373,734.80
7.44. Gains from disposal of assets
Monetary Unit: CNY
Item Current Period Previous Period
Gains from disposal of non-current
-347,429.88 8,123,010.18
assets
Including: Gains from disposal of fixed
-347,429.88 8,123,010.18
assets
Total -347,429.88 8,123,010.18
225
2021 Annual Report of Luzhou Laojiao Co., Ltd.
7.45. Non-operating income
Monetary Unit: CNY
The amount included in the
Item Current Period Previous Period extraordinary gains and
losses of the current period
Government grants 770,893.47 770,893.47
Compensation for default 19,559,751.36 10,199,933.23 19,559,751.36
Gains from damage
retirement of non-current 1,537.72
assets
Others 6,916,063.05 22,444,302.22 6,916,063.05
Total 27,246,707.88 32,645,773.17 27,246,707.88
Government grants included in the current gains and losses
Monetary Unit: CNY
Whether
Related to
influence Special
Distribution Distribution Current Previous assets/relat
Item Nature the profits or subsidy or
entity reason Period Period ed to
losses of the not
income
year or not
Subsidies
obtained
from the
state by
undertaking
Subsidies
the
for the daily Luzhou City
sustainabilit
managemen Administrati
y of public Related to
t of the on and Law Subsidy Yes No 47,169.81 0.00
utilities, the income
"National Enforcemen
supply of
Cellar t Bureau
socially
Square”
necessary
products, or
the function
of price
control
Paycheck
Related to
Protection SBA Subsidy Yes No 723,723.66 0.00
income
Program
Subtotal 770,893.47
226
2021 Annual Report of Luzhou Laojiao Co., Ltd.
7.46. 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 60,835,600.00 34,512,439.19 60,835,600.00
Losses from damage
retirement of non-current 806,635.52 4,038,052.47 806,635.52
assets
Others 5,075,251.57 14,384,367.97 5,075,251.57
Total 66,717,487.09 52,934,859.63 66,717,487.09
7.47. Income tax expense
7.47.1. Statement of income tax expense
Monetary Unit: CNY
Item Current Period Previous Period
Current period income tax 2,872,508,387.20 2,029,490,921.16
Deferred income tax -258,811,286.01 -48,978,715.23
1
Total 2,613,697,101.19 1,980,512,205.93
Note: 1. The current period increased CNY 633,184,895.26 compared with previous period with an
increase by 31.97%, mainly due to the increase in corporate income tax with the increase in profits. 2.
Details of income tax rates were shown on “6. Taxes”.
7.47.2. Adjustment for accounting profit and income tax expense
Monetary Unit: CNY
Item Current Period
Total profit 10,550,959,488.12
Income tax expenses determined by statutory/applicable
2,637,739,872.03
tax rate
Impact from subsidiaries’ different tax rates -4,418,344.91
Impact from adjust for impact from income tax expense in
4,951,923.72
previous period
Impact from non-taxable income -45,503,284.40
Impact from non-deductible costs, expenses and losses 3,297,976.60
Impact from deductible temporary difference or losses due 17,802,499.56
227
2021 Annual Report of Luzhou Laojiao Co., Ltd.
to unrecognized deferred tax asset in current period
Impact from research and development expense deduction -173,541.41
Income tax expense 2,613,697,101.19
7.48. Other comprehensive income
Details in Note 5.31. Other comprehensive income.
7.49. Notes to the statement of cash flow
7.49.1. Cash received from other operation activities
Monetary Unit: CNY
Item Current Period Previous Period
Recovery of saving deposits involving
152,667,999.25 2,355,385.84
contract disputes
Government grants 50,548,967.43 37,303,825.37
Interest income from bank deposit 376,116,197.20 323,791,542.69
Others 390,669,424.61 173,255,839.98
Total 970,002,588.49 536,706,593.88
7.49.2. Cash paid for other operating activities
Monetary Unit: CNY
Item Current Period Previous Period
Cash paid for expenses 3,304,969,529.27 2,830,977,073.82
Total 3,304,969,529.27 2,830,977,073.82
7.49.3. Cash paid for other financing activities
Monetary Unit: CNY
Item Current Period Previous Period
Rating and registration fee for
180,000.00
corporate bonds in 2020 (Phase I)
Cash paid for rent of right-of-use assets 11,862,090.12
Cash deposits paid for L/G 10,509,017.10
Total 22,371,107.22 180,000.00
228
2021 Annual Report of Luzhou Laojiao Co., Ltd.
7.50. Supplementary information to statement of cash flow
7.50.1. 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 7,937,262,386.93 5,958,514,642.48
Plus: Provision for asset impairment -81,126,114.88 -373,734.80
Depreciation of fixed asset, oil and gas
486,856,196.13 286,685,687.57
assets and productive biological assets
Depreciation of right-of-use assets 12,910,912.35
Amortization of intangible assets 64,178,235.56 21,556,291.52
Amortization of long-term deferred
842,033.00 671,330.69
expense
Losses from disposal of fixed assets,
intangible assets and other long-term 347,429.88 -8,123,010.18
assets (Gains use “-”)
Losses from retirement of fixed assets
806,635.52 4,036,514.75
(Gains use “-”)
Losses from change in fair value (Gains
-6,352,241.79
use “-”)
Financial expenses (Gains use “-”) 128,173,454.89 67,528,556.11
Losses on investments (Gains use “-”) -202,205,718.92 -201,498,918.28
Decrease in deferred income tax assets
-260,399,346.46 -48,978,715.23
(Increase uses “-”)
Increase in deferred income tax liabilities
1,588,060.45
(Decrease uses “-”)
Decrease in inventories (Increase use
-2,581,909,735.55 -1,054,428,338.92
“-”)
Decrease in operating receivables
-1,483,346,245.17 -742,428,686.42
(Increase use “-”)
Increase in operating payables
3,681,022,162.57 632,940,832.01
(Decrease use “-”)
Others
Net cash flows from operating activities 7,698,648,104.51 4,916,102,451.30
2. Significant investing and financing -- --
229
2021 Annual Report of Luzhou Laojiao Co., Ltd.
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 13,402,528,941.83 11,568,195,062.81
Less: Opening balance of cash 11,568,195,062.81 9,752,266,526.78
Plus: Closing balance of cash
equivalents
Less: Opening balance of cash
equivalents
Net change in cash and cash equivalents 1,834,333,879.02 1,815,928,536.03
7.50.2. Composition of cash and cash equivalent
Monetary Unit: CNY
Item Opening Balance Closing Balance
1. Cash 13,402,528,941.83 11,568,195,062.81
Including: Cash on hand 26,281.86 26,978.10
Unrestricted bank deposit 13,391,713,104.08 11,561,257,398.27
Other unrestricted cash and
10,789,555.89 6,910,686.44
cash equivalents
3. Closing balance of cash and cash
13,402,528,941.83 11,568,195,062.81
equivalents
Including: Cash and cash equivalent with
restriction to use of parent company and 110,965,638.73 56,675,277.79
subsidiaries
Other statements:
Note: 1. The cash and cash equivalent with restriction to use are CNY 110,965,638.73, of which, CNY
1,400,000.00 is a travel service deposit with limited use rights in other cash and cash equivalents, CNY
10,509,017.10 is the bank cash deposits for L/G and CNY 99,056,621.63 is provision for fixed deposit
interest on an accrual basis.
Note 2: The amount of direct payment for goods and long-term assets (not involving cash flows) by the
endorsement of bank acceptances receivable in the current and previous periods was CNY
1,032,537,514.80 and CNY 187,077,553.36, respectively, which were not included in "cash received
from sales of goods or rendering of services", "cash paid for goods and services" and "cash paid for the
purchase of fixed assets, intangible assets and other long-term assets" of the cash flow budget.
230
2021 Annual Report of Luzhou Laojiao Co., Ltd.
7.51. 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 99,056,621.63
an accrual basis
Travel service deposit with limited use
Other cash and cash equivalents 11,909,017.10
rights and bank cash deposits for L/G
Total 110,965,638.73 --
7.52. Foreign currency transactions
7.52.1. 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 39,412,559.35 6.3757 251,282,654.65
EUR 14,944.51 7.2197 107,894.88
HKD 3,611,517.25 0.8176 2,952,776.50
GBP 242,171.42 8.6064 2,084,224.11
AUD 8,647.10 4.6220 39,966.90
Accounts Receivable -- --
Including: USD 172,732.59 6.3757 1,101,291.17
EUR
HKD
Long-term Loans -- --
Including: USD
EUR
HKD
Other Receivables
Including: USD 641.70 6.3757 4,091.29
HKD 1,414,131.69 0.8176 1,156,194.07
Accounts Payable
Including: USD 83,007.03 6.3757 529,227.92
231
2021 Annual Report of Luzhou Laojiao Co., Ltd.
HKD 2,471,754.99 0.8176 2,020,906.88
Other Payables
Including: USD 64,774.59 6.3757 412,983.35
HKD 39,907,105.29 0.8176 32,628,049.29
Non-current liabilities due
within one year
Including: HKD 4,797,379.10 0.8176 3,922,337.15
Lease liabilities
Including: HKD 6,838,115.28 0.81760 5,590,843.05
7.52.2. 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
7.53. Government grants
7.53.1. Details of government grants
Monetary Unit: CNY
Amount included in profit or
Item Amount Presentation
loss of the current period
Related to assets 28,531,014.28 Deferred income 13,382,985.72
Related to income 37,603,073.96 Other income 37,603,073.96
Related to income 770,893.47 Non-operating income 770,893.47
Total 66,904,981.71 51,756,953.15
232
2021 Annual Report of Luzhou Laojiao Co., Ltd.
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
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:
The subsidiary Luzhou Laojiao New Retail Co., Ltd. was established on 26 May 2021. The Company
holds 40% shares of it and the Company’s subsidiary Sales Company holds 60% shares of it.
Subsidiaries Luzhou Laojiao Whitail Innovated Electronic Commerce Co., Ltd., Luzhou Laojiao Selected
Electronic Commerce Co., Ltd., Chengdu Tianfu Panda Whitail Liquor Industry Co., Ltd. and Luzhou
Whitail Tongdao Uncle Constellation Wine Sales Co., Ltd. were liquidated and cancelled respectively in
December, December, July and June 2021.
233
2021 Annual Report of Luzhou Laojiao Co., Ltd.
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.
Luzhou Laojiao
Luzhou Luzhou Liquor sales 100.00% Investment
Sales 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
Chain Luzhou Luzhou Liquor sales 100.00% Investment
Management
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 Luzhou Luzhou Liquor sales 100.00% Investment
234
2021 Annual Report of Luzhou Laojiao Co., Ltd.
Liquor Industry
Sales Co., Ltd.
Luzhou Laojiao
New Liquor
Luzhou Luzhou Liquor sales 100.00% Investment
Industry 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 Laojiao
New Retail Co., Luzhou Luzhou Liquor sales 40.00% 100.00% Investment
Ltd.
Luzhou
Technology
Pinchuang
Luzhou Luzhou development 100.00% Investment
Technology Co.,
and service
Ltd.
Luzhou Laojiao
Liquor sales,
Tourism Culture Luzhou Luzhou 100.00% Investment
tourism
Co., Ltd.
Luzhou Laojiao
International
Development Hong Kong Hong Kong Wine sales 55.00% Investment
(Hong Kong)
Co., Ltd.
235
2021 Annual Report of Luzhou Laojiao 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 Liquor
Luzhou Luzhou Wine sales 35.00% Investment
Industry Co.,
Ltd. Note
Luzhou Baonuo Fermented
Biotechnology Luzhou Luzhou product 100.00% Investment
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 Liquor 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% -8,977,267.45 60,655,083.40
Marketing Co., Ltd.
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
Total -8,977,267.45 60,655,083.40
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
Boda
Liquor 384,313 664,998 384,978 142,358 142,358 767,387 3,501,1 770,888 492,359 492,359
Industry ,678.76 .84 ,677.60 ,344.01 ,344.01 ,583.35 99.33 ,782.68 ,379.30 ,379.30
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 789,612,097 -35,909,069 -35,909,069 209,462,320 1,724,399,6 -74,847,302 -74,847,302 118,338,721
Industry .04 .79 .79 .40 47.44 .68 .68 .44
Marketing
Co., Ltd.
9.2. Interests in joint ventures and associates
9.2.1. Important joint ventures and associates
Name of joint Shareholding proportion
Major business Place of Accounting
venture/associat Business nature
location registration Direct Indirect Method
es
Important joint
ventures: none
Important
associates:
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
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 Company has the substantive decision-making power, so the Company still has significant influence
on Huaxi Securities.
9.2.2. Major financial information of important associates
Monetary Unit: CNY
Closing Balance/Amount in current Opening Balance/Amount in previous
period period
Current assets 86,844,635,628.06 68,518,467,092.86
Non-current assets 8,950,278,369.10 8,710,176,937.94
Total assets 95,794,913,997.16 77,228,644,030.80
Current liabilities 57,157,134,622.07 42,599,988,723.12
Non-current liabilities 16,233,476,784.79 13,261,547,139.00
Total liabilities 73,390,611,406.86 55,861,535,862.12
Non-controlling shareholder interest 26,409,206.44 45,423,771.61
Shareholder interest attributable to
22,377,893,383.86 21,321,684,397.07
parent company
Share of net assets calculated based
2,325,861,429.43 2,216,083,636.60
on shareholding proportion
Adjusted
--Goodwill
--Unrealized profits of internal
transactions
--Others 167,466,735.90 167,466,735.90
Book value of equity investments in
2,493,328,165.33 2,383,550,372.50
associate companies
Fair value of equity investments in
associate companies that have public 2,687,386,768.40 3,404,932,677.12
quote
Operating revenue 5,121,995,492.55 4,682,755,761.60
Net profit 1,632,123,985.51 1,900,327,802.56
Net profit from discontinued operation
238
2021 Annual Report of Luzhou Laojiao Co., Ltd.
Other comprehensive income -284,563,526.94 -28,530,081.19
Total comprehensive income 1,347,560,458.57 1,871,797,721.37
Dividends from associate companies
30,284,256.98 20,735,166.94
this year
9.2.3. 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 133,416,070.92 94,116,798.77
Total following items calculated on the
-- --
basis of shareholding proportion
--Net profit -8,112,270.24 -16,435,307.24
-- Total comprehensive income -8,112,270.24 -16,435,307.24
Other statements:
Unimportant associate companies refer to Sichuan Development Wine Investment Co., Ltd., Sichuan
Tongniang Liquor Industry Technology Research Institute Co., Ltd. and CTS Luzhou Laojiao Cultural
Tourism Development Co., Ltd.
10. Risks related to financial instruments
The Company's primary financial instruments include monetary capital, trading financial assets,
accounts receivable, receivables financing, receivables other than tax refundable, other equity
instruments, bills payable, accounts payable, other payables, lease liabilities and some other current
liabilities. A detailed description of each financial instrument is set out in Note V and notes to the
Consolidated Financial Statement.
Risks related to these financial instruments, and risk management policies the Company has adopted to
reduce these risks are described as follows. The Company management manages and monitors the risk
exposure to ensure the above risks are controlled in a limited scope.
The Company adopts sensitivity analysis technology to analyze the possible impact of reasonable and
possible changes of risk variables on current profits/losses or shareholders' equity. As any risk variable
rarely changes in isolation, and the correlation between variables will have a significant effect on the final
impact amount of the change of a risk variable, the following content is based on the assumption that the
change of each variable is independent.
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
Risk management objective: The Company strikes an appropriate balance between risk and return, and
strives to minimize the negative impact of risk on the Company's operating performance and maximize
the interests of shareholders and other equity investors.
Risk management policy: The Board of Directors shall be responsible for planning and establishing a risk
management framework, formulating risk management policies and related guidelines, and supervising
the implementation of risk management measures. The Risk Management Committee shall carry out risk
management through close collaboration (including the identification, evaluation and avoidance of
relevant risks) with other business units of the Company in accordance with the policies approved by the
Board of Directors. The internal audit department shall conduct regular audits on risk management
controls and procedures and report the results to the Audit Committee.
The Company has formulated risk management policies to identify and analyze the risks it faces,
clarifying specific risks and covering many aspects such as credit risk, liquidity risk and market risk
management. On a regular basis, the Company evaluates the specific marketing environment and
various changes in the Company's business operations to determine whether any risk management
policy and system should be updated. The Company diversifies the risks to financial instruments through
appropriately diversified investments and business portfolios, and reduces the risk of concentration in
any single industry, specific geographic area or specific counterparty by formulating appropriate risk
management policies.
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. In addition, the Company makes full provision for expected credit losses at each balance sheet
date based on the collection of receivables. Therefore, the Company's management believes that the
Company's credit risk has been greatly reduced.
The Company's working capital is deposited in banks with high credit rating, so the credit risk of working
capital is low.
The Company's risk exposures are spread across multiple contract parties and customers in multiple
geographies, with customers in the commerce industry in addition to the alcohol distribution industry (the
main industry). No systemic risk has been identified in the relevant industries. Therefore, the Company
has no significant credit concentration risk. As at 31 December 2021, the balance of the top five
customers of the Company's accounts receivable amounted to CNY 1,552,600.00, accounting for
90.57% of the balance of the Company's accounts receivable.
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.
The liquidity risk is extremely small. The Company's objective is to use a variety of financing instruments
such as bank clearing to maintain a balance between financing sustainability and flexibility. As at 31
December 2021, the Company has been able to meet its own continuing operation requirements through
240
2021 Annual Report of Luzhou Laojiao Co., Ltd.
the use of cash flow from operations.
The analysis of the financial liabilities held by the Company based on the maturity period of the
undiscounted remaining contractual obligations is as follows:
Item Closing Balance
Book value Contract amount Within 1 year 1-2 years 2-3 years Over 3 years
not discounted
Notes
payable
Accounts 2,420,354,469.53 2,420,354,469.53 2,420,354,469.53
payable
Other 652,393,292.60 652,393,292.60 652,393,292.60
payable
Non-current 86,202,215.03 86,508,010.76 86,508,010.76
liabilities
due within
one year
Other 456,314,391.17 456,314,391.17 456,314,391.17
current
liabilities
Lease 40,667,668.08 47,160,837.67 13,210,648.45 7236191.466 26,713,997.75
liabilities
Subtotal 3,655,932,036.41 3,662,731,001.73 3,615,570,164.06 13,210,648.45 7,236,191.47 26,713,997.75
10.3. Market risk
10.3.1. Foreign exchange risk
The foreign exchange risk refers to the risk of loss due to exchange rate changes. Apart from the three
subsidiaries of the Company which make purchases and sales in USD and HKD, the other major
business activities are denominated and settled in CNY. The Company closely monitors the impact of
exchange rate movements on the Company's foreign exchange risk. As at 31 December 2021, the
Company's assets and liabilities are mainly in CNY balance. The Company's management considers the
impact of changes in foreign exchange risk on the Company's financial statements to be minimal.
10.3.2. Rate risk-changes in cash flow
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.
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
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
1.1 Held-for-trading
706,352,241.79 706,352,241.79
financial assets
1.1.1 Financial assets
measured at fair value
with their changes 706,352,241.79 706,352,241.79
included into current
profits/losses
1.1.1.1 Investments in
706,352,241.79 706,352,241.79
debt instruments
1.3 Investments in other
328,828,994.56 34,483,125.87 363,312,120.43
equity instruments
Accounts receivable
4,757,631,778.64 4,757,631,778.64
financing
Total liabilities
continuously measured 328,828,994.56 5,498,467,146.30 5,827,296,140.86
at fair value
2. Discontinuous
measurement at fair -- -- -- --
value
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 CNY exchange rate disclosed on the
same day by China Foreign Exchange Trade System.
242
2021 Annual Report of Luzhou Laojiao Co., Ltd.
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
Trading financial assets are wealth management products of the collective asset management plan and
are measured at fair value based on the amount calculated on the basis of the net unit value of the
underlying assets as published on the official website of the asset manager.
Accounts receivable financing: As the timing and price of bills discounted may not be reliably estimated
due to the short maturity of the bills all being less than one year and the endorsement of the negotiable
bills being valued at book value, the Company measures the bills receivable at their book value as a
reasonable estimate of fair value.
Other equity instrument investment: Due to no significant changes in business environment, business
condition and financial situation of invested companies, the Company shall measure the fair value
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 (state-owned);
Registration place: Ai Rentang Square, China Baijiu Golden Triangle Liquor 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.)
The final control party of the Company is SASAC of Luzhou.
Other statements:
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
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
Luzhou Jiachuang Wine Supply Chain Management Co.,
The same parent company
Ltd.
Luzhou Laojiao Zhitong Trading Co., Ltd. The same parent company
Sichuan Hongxin Financing Guarantee 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
Guangzhou Zhongying Gongyuan Energy Saving
Sub-subsidiary of parent company
Technology Co., Ltd.
Sichuan Yukun Logistics Co., Ltd. Sub-subsidiary of parent company
Sichuan Kangrun Group Construction and Installation
Sub-subsidiary of parent company
Engineering Co., Ltd.
Luzhou Qingxigu Scenic Area Management Co., Ltd. Sub-subsidiary of parent company
Luzhou COSCO Lianzhong Logistics Co., Ltd. Sub-subsidiary of parent company
Luzhou Sanrenxuan Liquor Industry Co., Ltd. Joint venture of parent company
Sichuan Development Wine Investment Co., Ltd. Joint venture
CTS Luzhou Laojiao Cultural Tourism Development Co.,
Joint venture
Ltd.
Luzhou XingLu Water (Group) Co., Ltd. Subsidiary of the second largest shareholder
Luzhou China Resources Xinglu Gas 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
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2021 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. On 27 May 2021, Laojiao Group and XingLu
Investment Group renewed the concerted action agreement. The agreement is valid as of 1 June 2021
and ends on 31 May 2024.
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 13,609,282.77 4,351,746.11
Co., Ltd. and its
fee ,etc.
other subsidiaries
Training,
accommodation,
storage,
Laojiao Group and
transportation
its other 28,428,157.86 45,395,748.17
services,
subsidiaries
property
management fee,
etc.
CTS Luzhou Travel agency
5,512,511.56 1,041,370.00
Laojiao Cultural service fee, etc.
245
2021 Annual Report of Luzhou Laojiao Co., Ltd.
Tourism
Development Co.,
Ltd.
Purchase of
goods:
Laojiao Group and
its other Real estate 328,967,000.00
subsidiaries
Laojiao Group and
Red wine, water,
its other 21,190,526.05 27,682,924.62
power, etc.
subsidiaries
Luzhou XingLu
Investment Group
Gas 11,547,390.36 6,957,769.40
Co., Ltd. and its
other subsidiaries
Sichuan
Meiheshan Village
Other wine 976,637.50 225,374.00
Winery Industry
Co.,Ltd.
Total 81,264,506.10 414,621,932.30
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. 6,885,203.34 11,692,235.06
subsidiaries
XingLu Investment Group
Wine 2,880.00
and its subsidiaries
CTS Luzhou Laojiao Cultural
Tourism Development Co., Wine 84,299,013.96 4,716,024.00
Ltd.
Luzhou Sanrenxuan Liquor
Wine 47,171,605.12
Industry Co., 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.
Luzhou Sanrenxuan Liquor Rendering of service 496,500.00
246
2021 Annual Report of Luzhou Laojiao Co., Ltd.
Industry Co., Ltd.
Total 138,855,202.42 19,448,981.36
12.5.2. Related party leasing
The Company as lessor:
Monetary Unit: CNY
Leasing income recognized Leasing income recognized
Name of lessee Type of leased asset
during current period during previous period
Laojiao Group and its
House lease 2,690,880.00
subsidiaries
Total 2,690,880.00
The Company as lessee:
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 2,926,313.09 2,771,944.90
subsidiaries
Total 2,926,313.09 2,771,944.90
12.5.3. Key management compensation
Monetary Unit: CNY
Item Amount in current period Amount in previous period
Key management 13,798,986.32 8,356,121.42
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
New Shottes Brook
Prepayment 611,542.54
private company
Luzhou XingLu
Prepayment Water (Group) Co., 690,115.49 42,883.70
Ltd.
247
2021 Annual Report of Luzhou Laojiao Co., Ltd.
Luzhou China
Prepayment Resources Xinglu 19,536.30
Gas Co., Ltd.
Sichuan
Meiheshan Village
Prepayment 2,961,479.50 885,834.00
Winery Industry
Co.,Ltd.
Sichuan Kangrun
Other receivables Investment Group 10,000.00
Co., Ltd.
CTS Luzhou
Laojiao Cultural
Other receivables Tourism 3,590,790.65 354,539.53 3,268,472.46 163,423.62
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 Lianzhong Supply
Accounts payable 3,679.25
Chain Service Co., Ltd.
CTS Luzhou Laojiao Cultural
Accounts payable Tourism Development Co., 10,838.00
Ltd.
Guangzhou Zhongying
Accounts payable Gongyuan Energy Saving 355,312.88
Technology Co., Ltd.
Luzhou XingLu Property
Accounts payable 130,000.00
Management Co., Ltd.
Sichuan Yukun Logistics Co.,
Accounts payable 3,851.28
Ltd.
Contractual liabilities (tax Sichuan Lianzhong Supply
158,295.76 35,798.45
inclusive) Chain Service Co., Ltd.
Contractual liabilities (tax Luzhou Laojiao Group Co.,
523,760.03
inclusive) Ltd.
248
2021 Annual Report of Luzhou Laojiao Co., Ltd.
CTS Luzhou Laojiao Cultural
Contractual liabilities (tax
Tourism Development Co., 19,017,274.30 4,704,408.00
inclusive)
Ltd.
Luzhou Jiachuang Wine
Contractual liabilities (tax
Supply Chain Management 4,065,243.22
inclusive)
Co., Ltd.
Luzhou Laojiao Construction
Contractual liabilities (tax
and Installation Engineering 6,144.00
inclusive)
Co., Ltd.
Contractual liabilities (tax Luzhou Laojiao Zhitong
55,586.00
inclusive) Trading Co., Ltd.
Contractual liabilities (tax Luzhou Qingxigu Scenic
460.80
inclusive) Area Management Co., Ltd.
Contractual liabilities (tax Luzhou Sanrenxuan Liquor
14,745,240.00
inclusive) Industry Co., Ltd.
Contractual liabilities (tax Luzhou COSCO Lianzhong
37,762.51
inclusive) Logistics Co., Ltd.
Contractual liabilities (tax Sichuan Hongxin Financing
3,072.00
inclusive) Guarantee Co., Ltd.
CTS Luzhou Laojiao Cultural
Other payables Tourism Development Co., 396,000.00
Ltd.
Luzhou Sanrenxuan Liquor
Other payables 150,000.00
Industry Co., Ltd.
Luzhou Jiachuang Wine
Other payables Supply Chain Management 1,500,000.00 1,500,000.00
Co., Ltd.
Sichuan Lianzhong Supply
Other payables 1,684,148.00 2,384,148.00
Chain Service Co., Ltd.
Luzhou XingLu Property
Other payables 100,000.00
Management Co., Ltd.
Sichuan Kangrun Group
Other payables Construction and Installation 34,175.78 34,175.78
Engineering Co., Ltd.
Luzhou COSCO Lianzhong
Other payables 50,200.00 200,200.00
Logistics Co., Ltd.
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
13. Stock payment
13.1. The overall situation of share-based payments
√ Applicable N/A
Monetary Unit: CNY
Total equity instruments granted by the Company in the reporting
6,928,600.00
period
Total equity instruments exercised by the Company in the reporting
0.00
period
Total equity instruments of the Company expired in the reporting
0.00
period
Other statements:
According to the Proposal on 2021 Restricted Share Incentive Scheme (Draft) and its Summary of
Luzhou Laojiao Co., Ltd., Proposal on the Performance Assessment Measures for 2021 Restricted
Share Incentive Scheme of Luzhou Laojiao Co., Ltd. and other documents deliberated and approved at
the 7th Meeting of the 10th Board of Directors and the 1st Extraordinary General Meeting of Shareholders
of the Company in 2021, the Company plans to grant no more than 521 incentive targets for the first time,
and the number of restricted shares to be granted will not exceed 8,834,600 at CNY 92.71 per share.
According to the 12th Meeting of the 10th Board of Directors of the Company held on 29 December 2021,
the Board of Directors of the Company considered that the conditions for grant under the Restricted
Share Incentive Scheme of the Company had been fulfilled, and agreed to grant 6,928,600 restricted
shares to the eligible 441 incentive targets for the first time at CNY 92.71 per share with 29 December
2021 as the grant date. The original plan agreed that the number of initial granting targets would not
exceed 521, and the final number of initial participants was determined to be 441, which was in line with
the provisions of the incentive scheme. The total number of initial grants was 6,928,600 shares, which
also did not exceed the maximum number of initial grants agreed in the incentive scheme of 7,954,600
shares, and the number of reserved grants remained unchanged.
13.2. Equity-settled share-based payments
√ Applicable N/A
Monetary Unit: CNY
Method of determining the fair value of equity instruments on The closing price of restricted stocks on the grant date
the grant date deducted the grant price thereof
Basis to determine number of equity instrument that can be Making the best estimate based on the latest number of
exercised persons who can exercise rights
Reason for remarkable difference between the estimate of the
N/A
current period and that of previous period
Total amount of equity-settled share-based payments included 32,577,602.60
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
into capital reserves
Total costs of recognizing equity-settled share-based
32,540,603.01
payments in the current period
Other statements
Note: The difference between the cumulative amount included in capital reserve for share payments of
equity settlement and the total expense recognized represents the amount included minority interest and
the income tax effect of the excess of the pre-tax amount to be deductible in the future over the amount
recognized as cost and expense.
14. Commitments and contingencies
14.1. Contingencies
14.1.1. 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. As of the period-end, the Company has recovered the
abovementioned saving deposits involving contract disputes with CNY 367,623,100.
Except for the above matters, the Company has no other significant contingencies that need to be
disclosed as the end of 31 December 2021.
14.1.2. Explanation shall be given even if there is no significant contingency for the Company to
disclose
There was no significant contingency in the Company to disclose.
15. Post balance sheet event
15.1. Profit distribution
Monetary Unit: CNY
Profits or dividends planned to distribute 4,773,919,306.54
Reviewed and approved profits or dividends declared to 1
4,773,919,306.54
distribute
Note: 1. As stated in Note 13.4.1, as of 21 February 2022, the total shares of the Company increased to
1,471,615,076 shares from 1,464,752,476 after the grant and registration of this equity incentive plan.
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
15.2. Sales return
There are no important sales returning after balance sheet date.
15.3. Statement for other post balance sheet events
(1) Complete the registration of restricted share grants
At the 12th Meeting of the 10th Board of Directors of the Company held on 29 December 2021, the
Proposal on the Grant of Restricted Shares to Incentive Targets was deliberated and approved, and the
Board of Directors considered that the conditions for the grant under the Restricted Share Incentive
Scheme had been fulfilled, and agreed to grant 6,928,600 restricted shares to the eligible 441 incentive
targets for the first time at CNY 92.71 per share with 29 December 2021 as the grant date. In the
process of payment of funds after the grant date, four incentive targets voluntarily waived the
subscription of all the restricted shares totaling 66,000 shares to be granted to them for personal
reasons. The actual number of incentive targets who participated in the subscription was 437 and the
number of restricted shares registered for grant was 6,862,600.
As at 31 January 2022, the Company has received a total of CNY 636,231,646.00 from the above 437
incentive targets for the subscription of restricted shares in monetary capital, of which CNY 6,862,600.00
was included in share capital and CNY 629,369,046.00 was included in capital reserve. The grant date
of this incentive scheme is 29 December 2021 and the listing date of the granted shares is 22 February
2022. Upon completion of the grant registration, the total number of shares of the Company increased
from 1,464,752,476 to 1,471,615,076, which will not change the controlling shareholder and the actual
controller of the Company.
(2) Participate in the establishment of Luzhou Laojiao Postdoctoral Workstation Technology Co.,
Ltd.
At the 13th Meeting of the 10th Board of Directors of the Company on 1 March 2022, the Proposal on
Participation in the Establishment of Luzhou Laojiao Postdoctoral Workstation Technology Co., Ltd. and
Related Party Transactions was deliberated and approved. The Company decided to jointly invest with
its controlling shareholder Laojiao Group and Luzhou Energy Investment Co., Ltd. (hereinafter referred
to as "Energy Investment Group") to establish Luzhou Laojiao Postdoctoral Workstation Technology Co.,
Ltd. (hereinafter referred to as "Technology Company", provisional name, subject to actual business
registration). The registered capital of the Technology Company is CNY 100 million, of which the
Company contributes CNY 40 million in cash, accounting for 40% of the total share capital; Laojiao
Group contributes CNY 51 million, accounting for 51% of the total share capital; and Energy Investment
Group contributes CNY 9 million, accounting for 9% of the total share capital. The establishment of the
Technology Company will further enhance the overall technological innovation and quality and technical
strength of the Company.
(3) Recover some savings deposits involved in contractual disputes
On 6 April 2022, the Company recovered a further portion of the saving deposits totaling CNY 2,017,700
involved in contract disputes.
Except for the above matters, the Company has no other post balance sheet events that need to be
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
disclosed as of 31 December 2021.
16. Other important information
16.1. Annuity plan
The Company carried out the enterprise annuity payment work normally during the reporting period. The
enterprise annuity funds are paid by both the Company and employees. The Company's contribution
shall not exceed 8% of the Company's total salary in the previous year as stipulated by the state, and the
individual contribution shall be withheld by the Company according to 1% of total salary of the employee
in the previous year.
16.2. Segment information
16.2.1. 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.
16.3. Other significant events that can affect investors’ decision
16.3.1. 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.
Taking into account the current amount of assets preserved by the public security authorities and the
contents of the professional legal opinion issued by Beijing Weiheng (Chengdu) Law Firm on 4 January
2022 that "given that since the issuance of the previous legal opinion, a partial recovery has been
achieved through the execution of the civil judgment in force, totaling CNY 368 million. At the same time,
it is expected that over CNY 10 million may be recovered in the future, and the actual loss that may arise
from the Company's abnormal deposits in the three aforementioned places is approximately CNY 120
million", the Company has made a bad debt provision of CNY 120 million for savings deposit involved in
contractual disputes as at the end of the period, and the amount of the bad debt provision may be
adjusted in the future based on the litigation process and recovery.
16.3.2 . Impact of implementing the new accounting standards governing leases
16.3.2.1. The Company as the lessee
16.3.2.1.1. See Note 7.13 for information about right-of-use assets.
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
16.3.2.1.2. See Note 5.37 for information about accounting policies of the Company governing
short-term lease and low-value asset lease. The short-term lease expenses and expenses on low-value
asset lease included into the current profits/losses in the reporting period are as follows:
Item Current Period
Short-term lease expenses 10,165,629.93
Low-value asset lease expenses (except short-term lease)
Total 10,165,629.93
16.3.2.1.3. The current profits/losses and cash flow related to leases
Item Current Period
Interest expenses of lease liabilities 1,958,887.90
Variable lease payments included into the current profits/losses but not included into lease N/A
liabilities to measure
Income from the sublease of right-of-use assets N/A
Total cash outflow related to leases 22,027,720.05
Profits/losses generated from sale and leaseback transactions N/A
16.3.2.1.4. See Note 8 for information about the lease liabilities maturity analysis and corresponding
liquidity risk management.
16.3.2.1.5. Nature of leases
Asset type Quantity Leasing period Whether there is the renewal option
Houses and 24 Y2019-Y2027 No
buildings
Land use right 2 Y2021-Y2029 The lease contract includes the renewal option clause
16.3.2.2. The Company as the lessor
16.3.2.2.1. Lease income
Item Current Period
Lease income 4,933,708.76
Including: income related to variable lease payments not included into lease receipts to N/A
measure
16.3.2.2.2. Operating lease assets
Fixed assets leased out from operations mainly represent the non-independent portion of the Company's
tenement leased, the carrying value of which is not separately identified.
16.3.2.2.3. Subject to the lease contract with the lessee, the amount of future undiscounted lease to be
received under the lease is irrevocable
Residual maturity Closing Balance
Within 1 year 6,500.00
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
1-2 years 1,246,952.00
Total 1,253,452.00
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 2021.
17. Notes to the main Items of the financial statements of parent
company (all currency unit is CNY, except other statements)
17.1. Accounts receivable
17.1.1. 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
receivables tested 1,209,70 100.00 1,207,47
2,223.86 0.18% 3,927.50 100.00% 3,927.50
for impairment by 1.49 % 7.63
the portfolio
Including:
Accounts
receivables tested
for impairment on 1,209,70 100.00 1,207,47
2,223.86 0.18% 3,927.50 100.00% 3,927.50
the portfolio with 1.49 % 7.63
characteristics of
credit risk
1,209,70 100.00 1,207,47
Total 2,223.86 0.18% 3,927.50 100.00% 3,927.50
1.49 % 7.63
Accounts receivables tested for impairment by the portfolio:
Monetary Unit: CNY
Closing Balance
Item
Book balance Provision for bad debt Proportion
Risk portfolio 44,477.18 2,223.86 5.00%
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
Other portfolios 1,165,224.31
Total 1,209,701.49 2,223.86 --
Statements for determining the portfolio:
Note: Other portfolios refer to the receivable payment for goods from the subsidiary Luzhou Pinchuang
Technology Co., Ltd. and Luzhou Laojiao Electronic Commerce 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) 1,209,701.49
Total 1,209,701.49
17.1.2. 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
Accounts
receivables
tested for 2,223.86 2,223.86
impairment by
the portfolio
Total 2,223.86 2,223.86
There is no accounts receivable reversed or recovered with significant amount during the reporting
period.
17.1. 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
Luzhou Pinchuang 1,156,870.61 95.63%
256
2021 Annual Report of Luzhou Laojiao Co., Ltd.
Technology Co., Ltd.
Luzhou Laojiao National
44,100.00 3.65% 2,205.00
Cellar Liquor Sales Co., Ltd.
Luzhou Laojiao Electronic
8,353.70 0.69%
Commerce Co., Ltd.
Luzhou Bo'ao Liquor
377.18 0.03% 18.86
Marketing Co., Ltd.
Total 1,209,701.49 100.00% --
17.2. Other receivables
Monetary Unit: CNY
Item Closing Balance Opening Balance
Dividends receivable 1,407,900.00
Other receivables 10,033,554,898.57 7,051,341,794.83
Total 10,033,554,898.57 7,052,749,694.83
17.2.1. Dividend receivable
17.2.1.1. 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
17.2.2. Other receivables
17.2.2.1. Other receivables disclosed by nature
Monetary Unit: CNY
Nature Closing book balance Opening book balance
Intercourse funds of subsidiaries
10,015,555,743.27 6,957,047,554.34
receivable
Intercourse funds and others 6,158,145.13 9,599,994.92
Petty cash 2,574.63 393,142.93
Saving deposits involving contract
132,376,912.43 285,044,911.68
disputes
1
Total 10,154,093,375.46 7,252,085,603.87
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
Note: 1. The closing balance increased by CNY 2,902,007,771.59 compared with opening balance, with
an increase by 40.02%, mainly due to the increase of intercourse funds by CNY 3,058,508,188.93 and
recovery of saving deposits involving contract disputes of CNY 152,667,999.25 in the current period. 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”.
17.2.2.2. Provision for bad and doubtful other receivables in the current period
Monetary Unit: CNY
First stage Second stage Third stage
Expected credit Expected loss in the Expected loss in the
Provision for bad debt Total
loss of the next 12 duration (credit duration (credit
months impairment not occurred) impairment occurred)
Balance of 1 January
743,809.04 200,000,000.00 200,743,809.04
2021
Balance of 1 January
2021 in the current —— —— —— ——
period
Reversal of the current
205,332.15 80,000,000.00 80,205,332.15
period
Balance of 31
538,476.89 120,000,000.00 120,538,476.89
December 2021
Changes of carrying amount with significant amount changed of loss provision in the current period
√ Applicable N/A
Including, changes of carrying amount with significant amount changed of loss provision in the current
period:
Company Name Closing book balance Provision for bad debt Aging Proportion
Agricultural Bank of China Changsha 132,376,912.43 120,000,000.00 Over 5 years 90.65%
Yingxin Sub-branch, Industrial and
Commercial Bank of China Nanyang
Zhongzhou Sub-branch and another bank
Subtotal 132,376,912.43 120,000,000.00 90.65%
Note: see Note 12.2 and 14.7.1 for information about the deposits with involvement in contract disputes.
Disclosure by aging
Monetary Unit: CNY
Aging Book balance
258
2021 Annual Report of Luzhou Laojiao Co., Ltd.
Within 1 year (including 1 year) 10,018,119,588.40
1-2 years 3,511,500.00
2-3 years 32,800.00
Over 3 years 132,429,487.06
Over 5 years 132,429,487.06
Total 10,154,093,375.46
17.2.2.3. 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 receivables
tested for
200,000,000.00 80,000,000.00 120,000,000.00
impairment
individually
Other receivables
tested for
743,809.04 205,332.15 538,476.89
impairment by the
portfolio
Total 200,743,809.04 80,205,332.15 120,538,476.89
Recovery for bad debt and doubtful other receivables with significant amount in the current period:
Monetary Unit: CNY
Company name Amount Recovery way
Agricultural Bank of China Changsha
Yingxin Sub-branch, Industrial and
Commercial Bank of China Nanyang 80,000,000.00 By litigation
Zhongzhou Sub-branch and another
bank
Total 80,000,000.00 --
17.2.2.4. 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
259
2021 Annual Report of Luzhou Laojiao Co., Ltd.
Luzhou Laojiao Internal
8,810,950,083.82 Within 1 year 86.77%
Brewing Co., Ltd. transactions
Luzhou Laojiao New
Internal
Liquor Industry Co., 492,910,494.02 Within 1 year 4.85%
transactions
Ltd.
Luzhou Laojiao
Internal
Electronic 322,638,035.43 Within 1 year 3.18%
transactions
Commerce Co., Ltd.
Luzhou Laojiao
Internal
Import and Export 192,569,492.57 Within 1 year 1.90%
transactions
Trade Co., Ltd.
Agricultural Bank of
China Changsha
Yingxin Sub-branch,
Industrial and Saving deposits
Commercial Bank of involving contract 132,376,912.43 Over 5 years 1.30% 120,000,000.00
China Nanyang disputes
Zhongzhou
Sub-branch and
another bank.
Total -- 9,951,445,018.27 -- 98.00% 120,000,000.00
17.3. Long-term equity investments
Monetary Unit: CNY
Closing Balance Opening Balance
Item Provision for Provision for
Book balance Book value Book balance Book value
impairment impairment
Investment in 3,429,436,240.9 3,429,436,240.9 3,413,960,128.1 3,413,960,128.1
subsidiary 1 1 1 1
Investment in
2,624,531,691.8 2,621,964,593.0 2,472,698,683.1 2,470,131,584.3
associates and 2,567,098.80 2,567,098.80
0 0 6 6
joint venture
6,053,967,932.7 6,051,400,833.9 5,886,658,811.2 5,884,091,712.4
Total 2,567,098.80 2,567,098.80
1 1 7 7
17.3.1. Investment in subsidiary
Monetary Unit: CNY
Investee Opening Balance Changes in current period Closing Balance Closing
260
2021 Annual Report of Luzhou Laojiao Co., Ltd.
(book value) Provision (book value) balance of
Increase Decrease for Other provision for
impairment impairment
Luzhou
Pinchuang
57,649,100.00 1,486,931.69 59,136,031.69
Technology
Co., Ltd.
Luzhou
Laojiao Sales 103,162,447.09 7,803,808.25 110,966,255.34
Co., Ltd.
Luzhou
Laojiao
3,172,109,991.25 4,583,845.03 3,176,693,836.28
Brewing Co.,
Ltd.
Luzhou
Laojiao
International
5,433,789.77 272,400.63 5,706,190.40
Development
(Hong Kong)
Co., Ltd.
Luzhou
Laojiao
Electronic 51,604,800.00 920,526.26 52,525,326.26
Commerce
Co., Ltd.
Luzhou
Baonuo
20,000,000.00 20,000,000.00
Biotechnology
Co., Ltd.
Luzhou
Laojiao
Tourism 4,000,000.00 4,000,000.00
Culture Co.,
Ltd.
Luzhou
Laojiao Health 1
408,600.94 408,600.94
Liquor Industry
Co., Ltd. Note
Total 3,413,960,128.11 15,476,112.80 3,429,436,240.91
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
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
the book cost of long-term equity investment was limited to 0 by the Company. The increase in the
current period is due to the Company's restricted share incentive business, where the parent company
(the settlement enterprise) is an investor in the recipient subsidiary (the service enterprise) and is
recognized as a long-term equity investment in the subsidiary (the recipient service enterprise) based on
the fair value of the equity instruments at the date of grant, and the capital reserve (other capital reserves)
is recognized at the same time.
17.3.2. 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 2,383,55 169,638, -29,576, 30,284,2 2,493,32 2,567,09
s Co., 0,372.50 351.75 301.94 56.98 8,165.33 8.80
Ltd.
Sichuan
Develop
ment
6,854,47 -1,127,6 5,726,84
Wine
1.67 23.31 8.36
Investme
nt Co.,
Ltd.
CTS
Luzhou
Laojiao
Cultural 79,726,7 40,000,0 3,182,83 122,909,
Tourism 40.19 00.00 9.12 579.31
Develop
ment
Co., Ltd.
2,470,13 40,000,0 171,693, -29,576, 30,284,2 2,621,96 2,567,09
Subtotal
1,584.36 00.00 567.56 301.94 56.98 4,593.00 8.80
2,470,13 40,000,0 171,693, -29,576, 30,284,2 2,621,96 2,567,09
Total
1,584.36 00.00 567.56 301.94 56.98 4,593.00 8.80
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
17.4. Operating revenue and cost of sales
Monetary Unit: CNY
Current Period Previous Period
Item
Revenue Cost of sales Revenue Cost of sales
Primary business 7,558,340,885.88 5,664,019,938.24 5,455,096,585.89 4,185,106,836.28
Other business 44,286,894.17 1,137,093.20 43,748,867.59 23,164.25
Total 7,602,627,780.05 5,665,157,031.44 5,498,845,453.48 4,185,130,000.53
Details:
Monetary Unit: CNY
Contract category Liquor sales Total
Commodity type
Including:
Medium and high
7,553,686,005.58 7,553,686,005.58
grade liquor
Other liquor 4,654,880.30 4,654,880.30
By operating segment
Including:
Domestic 7,558,340,885.88 7,558,340,885.88
Outbound
Contract type
Including:
Commodity sales
7,558,340,885.88 7,558,340,885.88
contract
Total 7,558,340,885.88 7,558,340,885.88
Details about performance obligations:
N/A
17.5. Investment income
Monetary Unit: CNY
Item Current Period Previous Period
Investment income from long-term equity
6,296,151,637.80 3,929,019,694.32
investments under cost method
Investment income from long-term equity 171,693,567.56 191,110,318.79
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
investments under equity method
Dividends income gained during the
period of holding other equity instrument 6,657,660.52 9,379,824.36
investment
Total 6,474,502,865.88 4,129,509,837.47
17.6. Other
Note: There is no major restriction on the repatriation of the Company's investment income.
Including: investment income from long-term equity investments under the cost method:
Item Current Period Previous Period
Luzhou Laojiao Sales Co., Ltd. 6,269,283,588.58 3,875,865,582.42
Luzhou Baonuo Biotechnology Co., Ltd. 9,897,435.68
Luzhou Pinchuang Technology Co., Ltd. 26,868,049.22 43,256,676.22
Subtotal 6,296,151,637.80 3,929,019,694.32
Including: investment income from long-term equity investments under the equity method:
Item Current Period Previous Period
Huaxi Securities Co.,Ltd. 169,638,351.75 197,511,851.10
Sichuan Development Wine Investment Co., Ltd. -1,127,623.31 -6,128,272.50
CTS Luzhou Laojiao Cultural Tourism Development Co., Ltd. 3,182,839.12 -273,259.81
Subtotal 171,693,567.56 191,110,318.79
Including: dividend income gained during the period of holding other equity instrument investment:
Item Current Period Previous Period
North Chemical Industries Co.,Ltd. 62,542.20 85,995.53
Luzhou Bank Co., Ltd. 4,700,800.00
Guotai Junan Securities Co.,Ltd. 6,595,118.32 4,593,028.83
Subtotal 6,657,660.52 9,379,824.36
18. Supplementary information
18.1. Detailed statement of extraordinary gain and loss in the current period (+ for
gain, - for loss)
√ Applicable N/A
Monetary Unit: CNY
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2021 Annual Report of Luzhou Laojiao Co., Ltd.
Item Amount Remark
Gains or losses on disposal non-current
-347,429.88 For details please see Note 5.44
assets
Government grants included into current
profits and losses (other than
government grants closely related to For details please see Note 5.40 and
51,756,953.15
enterprise business and granted by 5.45
quota or quantity according to national
unified standard)
Gain or loss on fair-value changes on
held-for-trading financial assets and
liabilities & income from disposal of
held-for-trading financial assets and
6,352,241.79 For details please see Note 5.42
liabilities and available-for-sale financial
assets (exclusive of the effective portion
of hedges that arise in the Company’s
ordinary course of business)
Reverse of provision for impairment of
accounts receivable individually 80,000,000.00 For details please see Note 5.43
conducting impairment test
Other non-operating income and costs For details please see Note 5.45 and
-40,241,672.68
other than above items 5.46
Less: Impact from income tax 24,082,098.59
Impact from non-controlling
2,267,697.66
shareholders’ equity
Total 71,170,296.13 --
Other items that meet the definition of non-recurring gain/loss:
Applicable √ N/A
No such cases for the reporting period.
Explain the reasons if the Company classifies any non-recurring gain/loss item mentioned in the
Explanatory Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to
the Public-Non-Recurring Gains and Losses as a recurring gain/loss item.
Applicable √ N/A
18.2. 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 31.15% 5.43 5.43
265
2021 Annual Report of Luzhou Laojiao Co., Ltd.
ordinary shareholders of the
Company
Net profits attributable to
ordinary shareholders of the
30.87% 5.38 5.38
Company after deduction of
extraordinary gain and loss
266
