2022 Interim Report of Luzhou Laojiao Co., Ltd.
Luzhou Laojiao Co., Ltd.
2022 Interim Report
August 2022
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2022 Interim 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.
All the directors attended the board meeting to deliberate this report by themselves.
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 this 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 Company has no interim dividend plan, either in the form of cash or stock.
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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2022 Interim 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 .......................................................... 9
Section IV Corporate Governance .................................................................................. 28
Section V Environmental and Social Responsibility .................................................... 30
Section VI Significant Events ......................................................................................... 34
Section VII Changes in Shares and Information about Shareholders ......................... 41
Section VIII Preferred Shares .......................................................................................... 49
Section IX Information about Bond ................................................................................ 50
Section X Financial Report ............................................................................................. 53
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2022 Interim 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 originals of all company documents and announcements that are disclosed to the public during
the reporting period.
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2022 Interim Report of Luzhou Laojiao Co., Ltd.
Definitions
Term Reference Definition
Company, the Company, Luzhou
Refer to Luzhou Laojiao Co., Ltd.
Laojiao
Laojiao Group Refer to Luzhou Laojiao Group Co., Ltd.
XingLu Group Refer to Luzhou XingLu Investment Group Co., Ltd.
State-owned Assets Supervision and Administration
SASAC of Luzhou Refer to
Commission of Luzhou
Huaxi Securities Refer to Huaxi Securities Co., Ltd.
Luzhou Bank Refer to Luzhou Bank Co., Ltd.
Sales Company Refer to Luzhou Laojiao Sales Co., Ltd.
Brewing Company Refer to Luzhou Laojiao Brewing Co., Ltd.
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2022 Interim Report of Luzhou Laojiao Co., Ltd.
Section II Company Profile and Key Financial Results
1. Corporate information
Stock abbreviation Luzhou Laojiao Stock code 000568
Stock exchange where
the shares of the Shenzhen Stock Exchange
Company are listed
Name of the Company
泸州老窖股份有限公司
in Chinese
Abbr. of the Company
name in Chinese (if 泸州老窖
any)
Name of the Company
Luzhou Laojiao Co., Ltd.
in English (if any)
Abbr. of the Company
name in English (if LZLJ
any)
Legal representative Liu Miao
2. Contact us
Representative for securities
Secretary of the board
affairs
Name Wang Hongbo Wang Chuan
Luzhou Laojiao Marketing Network Command Center, Nanguang
Address
Road, Luzhou City, Sichuan Province, China
Tel. （0830）2398826 （0830）2398826
Fax （0830）2398864 （0830）2398864
E-mail dsb@lzlj.com dsb@lzlj.com
3. Other Information
3.1. Contact Information of the Company
Whether any change occurred to the registered address, office address and their zip codes, website
address and email address of the Company in the reporting period.
Applicable N/A
No change occurred to the said information in the reporting period, which can be found in the 2021
Annual Report.
3.2. Information disclosure and place where the interim report is kept
Whether any change occurred to the information disclosure and place where the interim report is kept.
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2022 Interim Report of Luzhou Laojiao Co., Ltd.
Applicable N/A
No change occurred to the newspapers designated by the Company for information disclosure, the
website designated by the CSRC for disclosing the interim report and the place where the interim is
kept in the reporting period. The said information can be found in the 2021 Annual Report.
3.3. Other information
Whether any change occurred to other information in the reporting period.
Applicable N/A
4. Key accounting data and financial indicators
Whether the Company performed a retroactive adjustment to or restatement of accounting data.
Yes No
H1 2022 H1 2021 Change
Operating revenues (CNY) 11,664,377,552.94 9,317,097,027.05 25.19%
Net profits attributable to
shareholders of the 5,531,926,340.44 4,226,316,722.25 30.89%
Company (CNY)
Net profits attributable to
shareholders of the
Company before non- 5,496,265,842.50 4,208,650,132.88 30.59%
recurring gains and losses
(CNY)
Net cash flows from
operating activities (CNY) 4,077,014,965.34 2,738,237,039.90 48.89%
Basic earnings per share
3.76 2.89 30.10%
(CNY/share)
Diluted earnings per share
(CNY/share) 3.76 2.89 30.10%
Weighted average ROE 17.96% 16.78% 1.18%
30 June 2022 31 December 2021 Change
Total assets (CNY) 45,206,239,893.13 43,211,782,005.68 4.62%
Net assets attributable to
shareholders of the 28,982,624,244.86 28,040,247,005.94 3.36%
Company (CNY)
5. Differences in accounting data under domestic and overseas
accounting standards
5.1. 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.
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2022 Interim Report of Luzhou Laojiao Co., Ltd.
5.2. 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.
6. Non-recurring gains and losses
Applicable N/A
Unit: CNY
Item Amount Note
Gain or loss from disposal of non-current assets
(including the write-off portion of the impairment 19,789,402.07 See "Section X Note 5.44" for details.
provision)
Government grants accounted for, in the profit or
loss for the current period (except for the
government grants closely related to the business of See "Section X Note 5.40 and 5.45"
9,141,196.38
the Company and consistently given at a fixed for details.
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 5.41 and 5.42"
10,690,773.61
liabilities and available-for-sale financial assets for details.
(exclusive of the effective portion of hedges that
arise in the Company’s ordinary course of business)
Other non-operating income and expenditure except See "Section X Note 5.45 and 5.46"
9,186,723.82
above-mentioned items for details.
Less: Corporate income tax 11,930,835.44
Minority interests (after tax) 1,216,762.50
Total 35,660,497.94
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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2022 Interim Report of Luzhou Laojiao Co., Ltd.
Section III Management Discussion and Analysis
1. Business scope in the reporting period
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. Its primary products include baijiu series such as "National Cellar
1573" and "Luzhou Laojiao", and its main comprehensive performance indicators rank high in the
baijiu industry.
In recent years, although the baijiu industry has seen a shrink in total consumption, a decrease in the
number of consumers, fluctuations of the pandemic, and other impacts, opportunities such as policy
support, brand concentration, and market purification have also emerged. The industry's leading
enterprises have ushered in a period of great development potential.
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.
The Company holds five food business licenses, and its production model is self-production. The
Company’s main business is the research and development, production and sales of baijiu series
such as "National Cellar 1573" and "Luzhou Laojiao".
In the Reporting Period, the Company upheld the development theme of "improving development
quality, strengthening cultural empowerment, and accelerating breakthroughs", striving for success on
key tasks through solid work. The Company continuously promoted the "seven concentrations",
continuously upgraded the height of the brand, firmly consolidated the foundation of quality, and
comprehensively strengthened risk prevention, thus maintaining the momentum of benign and rapid
development. For H1 2022, operating revenue amounted to CNY 11.664 billion, up 25.19% year on
year; and the net profit attributable to the shareholders of the listed company reached CNY 5.532
billion, up 30.89% year on year. Excellent results have been achieved in a market condition full of
competition and uncertainty.
A. Main operations and results in the Reporting Period
a. Adhering to promoting "seven concentrations" to steadily increase the market volume
The Company comprehensively launched the "Hundred Cities Program" to promote the nationalized
market layout in-depth, and continuously improve the capacity for marketing synergy. The Company
optimized and upgraded the "Wave Program" to reach core offline consumers with precision, steadily
enhancing consumption innovation capabilities. The Company deepened the implementation of the
"Double 124" Project, continuously strengthening the consumer cultivation capabilities. Meanwhile, it
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2022 Interim Report of Luzhou Laojiao Co., Ltd.
accelerated the promotion of the "Three-network Integration, Five-flow Interconnection, and Multi-
code Interrelation" project, continuously deepening the digital and intelligent transformation in
marketing.
b. Continuously upgrading the height of the brand to return to the value and image of a famous baijiu
brand
The Company adhered to shaping the brand's characteristic IP and enhanced the brand's cultural
memory from the dimensions of culture, sports, and festivals, further strengthening the brand's
presence. The Company innovated the brand concept and continuously constructed the consumption
scenarios, further enriching the high-end, fashionable, and youthful brand connotation of Luzhou
Laojiao. The Company made full use of the unique core assets as a "Living Dual National Treasures"
brand to create a brand cultural IP of the intangible cultural heritage, further enhancing the brand
value and consumer experience.
c. Making every effort to promote major projects and accelerating the layout of intelligent production
The Company accelerated the planning and construction of a series of major projects such as the
brewing digital and intelligent transformation project, the technical upgrade project of intelligent
brewing, and the technical upgrade project of the Intelligent Packaging Center to promote the
standardization of the brewing system, the automation of production, the digitalization of the process,
and the refinement of management, taking the construction of intelligent factories to a new level.
d. Firmly consolidating the foundation of quality and accelerating the application of scientific research
achievements
Strengthening scientific research management and paying close attention to project implementation,
the Company carried out nine key research projects of applied and prospective nature with a focus on
fields such as functional microorganisms for brewing, production process innovation, and clean
production, participated in the formulation or revision of four national standards and 11 group
standards, applied for 47 patents, and was granted 36 patents, with breakthroughs in key
achievements.
e. Comprehensively strengthening risk prevention to safeguard the development of the Company
First, the Company strengthened political supervision and fully fulfilled the responsibility for the
comprehensively rigorous Party self-governance. Second, the Company prevented integrity risk with
the continued implementation of the full coverage of discipline and law education. Third, the Company
prevented management risk through the accurate governance of key areas and key links. Fourth, the
Company carried out special supervision of hidden danger governance for safety and environmental
protection and effectively strengthened the Company's closed-loop management of hidden danger
governance for safety and environmental protection.
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2022 Interim Report of Luzhou Laojiao Co., Ltd.
B. Priorities in the second half of the year
In the second half of 2022, the Company will focus on the following work:
a. Strengthening marketing progress and comprehensively optimizing the layout
In accordance with the marketing policy of "strategic concentration, operation upgrade, and full
personnel activation", the Company will continue to promote the "seven concentrations" and make
every effort to promote sales expansion. Focusing on the strategy implementation, the Company will
strengthen the closed-loop operation and promote the organizational effectiveness of the sales
system. The Company will focus on the front-line business, strengthen the promotion of
empowerment in the front line, accelerate the digital construction, and continuously improve the
marketing service and guarantee capacity.
b. Strengthening culture cultivation and boosting brand empowerment
The Company will accelerate the construction of cultural projects such as "Luzhou Laojiao Museum
and renovation and upgrading of the National Cellar Square" and continue to improve the image and
service level of scenic spots such as the Cellars of National Treasure, Chunyang Cave, and Qiankun
Baijiu Castle, continuously enhancing the experience and participation of consumers and visitors of
Luzhou Laojiao. The Company will continue to promote consumer-centric characteristic brand
activities, expanding the influence and coverage of brand marketing activities such as the "Seven Star
Feast".
c. Strengthening intelligent production and constantly consolidating the foundation
The Company will promote the digital management of the whole production procedure, continue to
research the brewing mechanism, green brewing, and other cutting-edge key technologies, and
continuously improve the resource utilization rate and production efficiency of brewing. The Company
will continue to deepen the Company-university-research institute integration to boost the technology
upgrade of the intelligent brewing industry. The Company will continue to intensify and accelerate the
joint research of various horizontal technology projects so as to accelerate breakthroughs and
achievement applications in the fields such as brewing raw grain research and brewing process
research.
d. Strengthening management synergy and accelerating empowerment upgrade
The Company will further optimize, deepen, and refine the "14th Five-Year Plan", focusing on the
formation of special plans and implementation plans involving the departments of human resources,
finance, material, production, supply, and marketing. The Company will accelerate the process of
online organization, personnel, and business in various fields through procedure and policy
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2022 Interim Report of Luzhou Laojiao Co., Ltd.
optimization, build a knowledge sharing system, and continuously improve the synergy efficiency.
e. Strengthening talent efficiency gains and continuing to tap the momentum
The Company will continuously optimize the scientific and effective career position system, continue
to improve the creation, implementation, evaluation, and incentive mechanisms for scientific projects,
and implement talent cultivation through projects. Specifically, by encouraging the elite talent and
reserve talent to lead and found projects, the Company will enrich the talent's professional
knowledge, broaden the horizon of openness and innovation, and enhance the management
leadership with the promotion of projects.
f. Strengthening Party building and driving the growth of the Company
The Company will continuously follow, study, publicize, and implement the spirit of the 20th National
Congress of the Communist Party of China, the spirit of the 12th Provincial Congress of the
Communist Party of China, and the spirit of the 9th Municipal Congress of the Communist Party of
China to consolidate ideological consensus and achieve synergy. It will continue to deepen Party
building for development, promote the foundation of grass-roots "five-type Party organizations", and
boost the deep integration and mutual promotion of Party building work and the work of the Company,
so as to test the work and combat effectiveness of the Party organization with results of reform and
development.
Brand operation
The Company firmly followed the development path of "Return to the Value of a Famous Chinese
Baijiu Brand" and focused on the strategy of “dual brands, three product series, and major single
products”. Specifically, National Cellar 1573 has been widely recognized as a high-end Chinese
baijiu; Luzhou Laojiao 1952 has taken up the mission of leading the revival of the Luzhou Laojiao
series brand with its price and image; Tequ and Cellar Age Baijiu focused on synergistic development
and secured the key price zone; Touqu realized operational upgrade of the price, quota, and brand,
and the Hey Guys launched the core city layout and tasting promotion, which laid a solid foundation
for the development of Luzhou Laojiao; innovative products continuously explored new models,
achieved new breakthroughs, and accelerated the opening of the core market to quickly open up the
situation. With years of efforts, the Company has successfully transformed into a new leading baijiu
producer that is "comprehensively consumer-centric".
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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2022 Interim 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
10,837,418,201.38 1,470,222,316.16 86.43% 25.09% 25.76% -0.08%
operation model
Emerging channel
711,909,071.06 125,369,248.70 82.39% 33.88% 6.84% 4.46%
operation model
2. Distributors
Unit: Number
Number of distributors at YoY change of Reason for
Increased number during Decreased number during
Region the end of the reporting number of any significant
the reporting period the reporting period
period distributors (%) change
Domestic 1,526 134 391 -19.64
Overseas 112 6 42 3.70
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
Total sales to top five customers（CNY） 7,761,468,899.89
Total sales to top five customers as % of the
66.54%
total sales
Total sales to related parties among top five
0.00%
customers as % of the total sales
The Company had no accounts receivable from the top five distributors at the end of the period.
5. Information on top five distributors
As % of the total sales for the
No. Customer Sales amount (CNY)
reporting period
1 Customer A 5,457,865,851.83 46.79%
2 Customer B 993,270,897.91 8.52%
3 Customer C 535,236,995.88 4.59%
4 Customer D 440,125,552.78 3.77%
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2022 Interim Report of Luzhou Laojiao Co., Ltd.
5 Customer E 334,970,601.49 2.87%
Total -- 7,761,469,889.89 66.54%
Store sales terminals accounted for more than 10%
□ Applicable N/A
Online direct sales
Applicable □N/A
For the sales of the Company's main products, please refer to the contents under the heading
"Business segment, products or geographical segments contributing over 10% of the operating
revenues or profits" in “3. Analysis of main business” of Section III. The Company's main products are
sold online. Its main cooperation platforms include 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 2,613,369,460.39
grain bases; other raw grains and packaging
materials are purchased through bid invitation
Purchase based on the unified pricing of the
Development and Reform Commission of Luzhou
Fuels and energies 87,266,233.44
and the Price Bureau of Luzhou, and purchase
through bid invitation
Purchase through bid invitation Low-value consumables 29,289,051.04
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
By business Item H1 2022 H1 2021 YoY Change
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2022 Interim Report of Luzhou Laojiao Co., Ltd.
segment As % of cost of As % of cost of
Amount Amount
sales sales
Baijiu Raw materials 1,362,639,995.08 85.40% 1,118,577,468.66 86.95% 21.82%
Baijiu Labor costs 97,048,667.74 6.08% 69,632,827.38 5.41% 39.37%
Manufacturing
Baijiu 135,902,902.04 8.52% 98,238,245.45 7.64% 38.34%
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)
(%) (%)
Inventory
increased year-on-
Mid- and high- year mainly due to
21,572.12 17,454.26 43,294.91 9.10 22.47 55.73
end baijiu the Company's
adjustment of
production plans.
Other baijiu 22,758.29 21,852.34 14,581.45 -7.87 -11.28 6.84
2. Inventory at the end of the reporting period
Unit: Ton
Finished baijiu Semi-finished baijiu (including base baijiu)
57,876.36 421,454.38
3. Capacity
Unit: Ton
Main products Design capacity Actual capacity Capacity in progress
Baijiu 170,000 170,000 80,000
2. Analysis of core competitiveness
A. Geographical advantage
Luzhou City, where the Company is located, sits in the transitional area between the southern rim of the
Sichuan Basin and the Yunnan-Guizhou Plateau, featuring a warmer and more humid sub-tropical
climate compared to other areas at the same latitude, with a temperature above 0℃ throughout the
year. The unique climate and soil are agreeable to grow grains for 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
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2022 Interim Report of Luzhou Laojiao Co., Ltd.
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
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
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2022 Interim Report of Luzhou Laojiao Co., Ltd.
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, 5 masters of Chinese brewing, 3
masters of Chinese baijiu, 1 master of Chinese baijiu technique, 2 Chinese liquor connoisseurs, 8
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.
3. Analysis of main business
Overview
See contents under the heading “1. Business scope in the reporting period” above.
Year-on-year changes in key financial data
Unit：CNY
YoY
H1 2022 H1 2021 Reason for any significant change
Change
Operating revenues 11,664,377,552.94 9,317,097,027.05 25.19%
Cost of sales 1,642,310,550.61 1,335,154,943.46 23.01%
Selling and
1,213,861,984.66 1,183,247,931.92 2.59%
distribution expenses
General and
administrative 542,666,754.49 439,561,779.70 23.46%
expenses
Finance expenses -126,988,421.10 -128,007,967.42
Mainly due to the increased sales
Corporate income revenue from baijiu, resulting in
1,800,020,542.39 1,346,062,434.86 33.72%
tax the increased deferred corporate
income tax
Mainly due to the increased
R&D investments 93,892,252.85 51,984,969.33 80.61% comprehensive research and
development investments
Mainly due to the increased cash
Net cash flows from received from sale of goods and
4,077,014,965.34 2,738,237,039.90 48.89%
operating activities rendering of services in the
current period
Mainly due to the purchase of
wealth management product
Net cash flows from
-1,158,401,612.09 -732,184,328.54 (collective asset management
investing activities
plan) from securities firm in the
current period
Mainly due to the receipt of
Net cash flows from payments from the awardees
financing activities 579,368,826.99 -48,460,474.66
under the restricted share
incentive plan for subscription for
17
2022 Interim Report of Luzhou Laojiao Co., Ltd.
such shares
Mainly due to the increased net
Net increase in cash cash flows from operating and
and cash equivalents 3,512,307,170.67 1,956,159,445.84 79.55%
financing activities in the current
period
Significant changes to the profit structure or sources of the Company in the reporting period
No such changes in the Reporting Period.
Breakdown of operating revenues
Unit：CNY
H1 2022 H1 2021
As % of As % of YoY Change
Amount operating Amount operating
revenues revenues
Total 11,664,377,552.94 100% 9,317,097,027.05 100% 25.19%
By business segment
Baijiu 11,549,327,272.44 99.01% 9,195,242,633.92 98.69% 25.60%
Other
115,050,280.50 0.99% 121,854,393.13 1.31% -5.58%
revenues
By product
Mid- and high-
10,372,408,380.45 88.92% 8,218,296,465.61 88.21% 26.21%
end baijiu
Other baijiu 1,176,918,891.99 10.09% 976,946,168.31 10.48% 20.47%
Other
115,050,280.50 0.99% 121,854,393.13 1.31% -5.58%
revenues
By geographical segment
Domestic 11,570,386,785.08 99.19% 9,264,547,206.51 99.44% 24.89%
Overseas 93,990,767.86 0.81% 52,549,820.54 0.56% 78.86%
Business segment, products or geographical segments contributing over 10% of the operating
revenues or profits
Applicable N/A
Unit：CNY
YoY YoY
Gross YoY change
change of change of
Operating revenue Cost of sales profit of gross profit
operating cost of
margin margin
revenue sales
By business segment
Baijiu 11,549,327,272.44 1,595,591,564.86 86.18% 25.60% 24.03% 0.17%
By product
Mid- and
high-end 10,372,408,380.45 999,050,394.79 90.37% 26.21% 29.31% -0.23%
baijiu
Other baijiu 1,176,918,891.99 596,541,170.07 49.31% 20.47% 16.10% 1.90%
By geographical segment
Domestic 11,570,386,785.08 1,596,761,668.91 86.20% 24.89% 20.34% 0.52%
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 period is calculated
based on adjusted statistical standards at the end of the reporting period
18
2022 Interim Report of Luzhou Laojiao Co., Ltd.
Applicable N/A
Reason for any over 30% YoY movements in the data above
Applicable N/A
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.
A. Breakdown of selling and distribution expenses
Unit：CNY
Selling and distribution
H1 2022 H1 2021 YoY Change Reason for any significant change
expenses
Advertising expenses 691,914,456.49 407,510,592.52 69.79% Increased advertising activities
Sales promotion Decreased sales promotion
142,494,942.50 482,468,677.16 -70.47%
expenses expenses in the current period
Increased sales revenue from baijiu,
Warehousing and
63,874,054.36 48,338,332.97 32.14% leading to a corresponding increase
logistics expenses
in logistics expenses
Labor costs 204,443,388.51 183,923,965.82 11.16%
Other 111,135,142.80 61,006,363.45 82.17% Increased travel expenses, etc.
B. Breakdown of advertising expenses
Unit：CNY
Advertising Expenses
Online advertising (exclusive of TV advertising) 122,126,397.73
Offline advertising 178,363,754.97
TV advertising 240,116,375.42
Other (inclusive of branding ideas, exhibitions & showcases, advertising
151,307,928.37
materials, activity planning, etc.)
4. Analysis of non-core business
Applicable N/A
5. Assets and liabilities
5.1. Significant change of asset items
Unit：CNY
30 June 2022 31 December 2021 Change in Explanation
19
2022 Interim Report of Luzhou Laojiao Co., Ltd.
As % of percentage about any
As % of
Amount Amount total material change
total assets
assets
Cash and cash
equivalents 17,046,109,916.36 37.71% 13,513,494,580.56 31.27% 6.44%
Accounts
receivable 1,403,341.54 0.00% 1,628,248.55 0.00% 0.00%
Inventories 8,713,280,634.28 19.27% 7,277,573,166.80 16.84% 2.43%
Long-term equity
investments 2,657,050,723.78 5.88% 2,626,744,236.25 6.08% -0.20%
Fixed assets 8,557,024,850.52 18.93% 8,089,487,274.39 18.72% 0.21%
Construction in
progress 724,127,630.54 1.60% 1,259,845,487.50 2.92% -1.32%
Right-of-use
assets 48,376,749.33 0.11% 52,714,810.04 0.12% -0.01%
Contract
liabilities 2,329,543,604.94 5.15% 3,510,110,701.25 8.12% -2.97%
Lease liabilities 39,336,140.81 0.09% 40,667,668.08 0.09% 0.00%
5.2. Main assets overseas
Applicable N/A
5.3. Assets and liabilities measured at fair value
Applicable □ N/A
Unit：CNY
Changes in
Changes in
cumulative
Opening fair value Provision for Amount of Amount of Other Closing
Item fair value
balance through impairment purchase sale changes balance
recorded
profit or loss
into equity
Financial
asset
1.Held-for-
trading
financial
assets 706,352,241 5,862,846.2 1,400,000,0 809,303,216 1,302,911,8
(exclusive of .79 9 00.00 .80 71.28
derivative
financial
assets)
4.Investmen -
ts in other 363,312,120 232,988,066 338,068,275
equity 25,218,844. 25,000.00
.43 .65 .65
instruments 78
Accounts -
4,757,631,7 1,671,605,9
receivables 3,086,025,8
financing 78.64 65.76
12.88
Subtotal of - -
5,827,296,1 232,988,066 1,400,000,0 809,328,216 3,312,586,1
financial 19,355,998. 3,086,025,8
assets 40.86 .65 00.00 .80 12.69
49 12.88
- -
5,827,296,1 232,988,066 1,400,000,0 809,328,216 3,312,586,1
Total 19,355,998. 3,086,025,8
40.86 .65 00.00 .80 12.69
49 12.88
Financial
liability 0.00 0.00
Information about other changes
N/A
Whether measurement attribution of main assets changes significantly in the reporting period
20
2022 Interim Report of Luzhou Laojiao Co., Ltd.
Yes No
5.4. Restricted asset rights as of the end of this reporting period
Item Closing Balance Reason
Bank deposits (CNY) 119,786,289.43 Accrued interest on term deposits
Other cash and cash Restricted security deposits for travel service and bank
11,487,514.43
equivalents (CNY) guarantees
Total 131,273,803.86
6. Investment
6.1. Total investment
Applicable N/A
Investment made in the Investment made in the same
YoY change
reporting period (CNY) period of last year (CNY)
1,669,795,904.73 536,408,910.19 211.29%1
Note 1: Mainly due to the purchase of collective asset management plan product from securities firm
in the current period.
6.2. Significant equity investment made in the reporting period
Applicable N/A
6.3. Significant ongoing non-equity investment in the reporting period
Applicable N/A
6.4. Financial assets investment
6.4.1. Securities investment
Applicable □ N/A
Unit: CNY
Chang Chang Profit
es in es in and
Abbre Accou Beginn
Categ Initial fair the Amou loss Closin
viation nting ing Amou Accou
ory of Stock invest value cumul nt of during g book Capital
of measu book nt of nting
securit code ment recogn ative purcha the balanc source
securit rement balanc sale item
ies cost ized in fair se reporti e
ies model e
profit value ng
or loss record period
21
2022 Interim Report of Luzhou Laojiao Co., Ltd.
ed into
equity
Invest
Dome - ments
12,719 Fair 210,69 166,29 179,01
stic in
60121 value 31,680 8,008, Own
and GTJA ,156.7 0,476. 1,197. 0,354. other
1.SH measu ,121.9 357.96 fund
foreign equity
6 rement 31 62 38
stock 3 instru
ments
Invest
Dome ments
Fair 15,963 - 12,244 13,274
stic in
00224 1,030, value 70,359 Own
and SNC ,896.5 2,689, ,581.9 ,581.9 other
6.SZ 000.00 measu .98 fund
foreign equity
rement 4 314.60 4 4
stock instru
ments
Invest
Dome ments
51,120 Fair 102,17 60,205 111,32
stic in
01983. LZBA value 9,150, Own
and ,000.0 4,621. ,213.4 5,213. other
HK NK measu 591.75 fund
foreign equity
0 rement 71 6 46
stock instru
ments
-
64,869 328,82 238,74 303,61
25,218 8,078,
Total ,156.7 -- 8,994. 0,993. 0.00 0.00 0,149. -- --
,844.7 717.94
6 56 02 78
8
6.4.2. Derivative investment
□Applicable N/A
No such cases in the reporting period
6.5. Use of funds raised
Applicable N/A
6.5.1. General use of funds raised
Applicable □ N/A
Unit：CNY 10,000
Total
amount Accumula
Total
Total of re- ted re- Purpose Amount
amount
amount of purpos purposed Total and of funds
Total Accumulate of
raised ed funds amount of direction raised
amount d amount of accumula
Year Method funds used funds raised unused of idle for
of funds raised ted re-
in the raised as % of funds unused more
raised funds used purposed
reporting in the total raised funds than two
funds
period reporti funds raised years
raised
ng raised
period
Public
offering
2019 of 249,000 0 253,081.84 0 0 0.00% 0 N/A 0
corporate
bond
Public Deposite
2020 offering 149,400 24,694.14 60,354.6 0 0 0.00% 97,185.49 d in 0
of special
22
2022 Interim Report of Luzhou Laojiao Co., Ltd.
corporate account
bond for
raised
funds
Total -- 398,400 24,694.14 313,436.44 0 0 0.00% 97,185.49 -- 0
Notes for general use of funds raised
The total amounts of used and unused funds raised include interest on the funds.
6.5.2. Fund raised for committed projects
Applicable □ N/A
Unit：CNY 10,000
Committe
Investme Date of Whether
d Whether Total
Accumula nt the Whether the
investme the amount Investme Realized
Adjusted ted input progress projects the feasibility
nt project of funds nt benefits
Investme by the by the reach the expected of the
projects has been raised for amount in during
nt total end of end of working benefits project
and changed committe the the
amount the reporting condition have has
direction (including d reporting reporting
(1) reporting period (3) for their been changed
of over- partial investme period period
period (2) intended achieved significan
raised change) nt ＝(2)/(1)
use tly
funds
Committed investment projects
Technical
Renovati
on 24,420.5 292,640.
No N/A Yes No
Project of 2 73
Brewing
(Phase II)
Project of
Intelligent
Upgradin
g and
Building
of the No 273.62 3,772.17 N/A No No
Informati
on
Manage
ment
System
Project of
Acquiring
Sealing 398,400 398,400 78.67%
Equipme
nt for the No 0 12,043.3 N/A Yes No
Cellar of
Huangyi
Brewing
Base
Project of
Acquiring
Accessor
y
Equipme
nt for
No 0 4,980.25 N/A Yes No
Leaven
Making
for
Huangyi
Brewing
Base
Subtotal
of
committe
24,694.1 313,436.
d -- 398,4001 398,400 -- -- N/A -- --
investme 4 45
nt
projects
Use of over-raised funds
None
23
2022 Interim Report of Luzhou Laojiao Co., Ltd.
24,694.1 313,436.
Total -- 398,400 398,400 -- -- N/A -- --
4 45
Situation
and
reason
for not
reaching
plan
progress N/A
or
expected
benefits
(by
specific
items)
Significan
t changes
N/A
of project
feasibility
Amount,
purpose
and
progress N/A
of over-
raised
funds
Change
of
implemen
tation site
N/A
of
investme
nt
projects
Adjustme
nt of the
implemen
tation
mode of
N/A
raised
funds
investme
nt
projects
Applicable
On 14 May 2019, the Company held the First Extraordinary General Meeting of Shareholders of 2019, which considered and
Situation approved the Proposal on Requesting the Company’s General Meeting of Shareholders to Fully Authorize Chairman of the
of
advance Board or Other Personnel Authorized by the Board to Go Through Procedures for the Public Offering of Corporate Bond.
investme According to the Proposal, in the event of inconsistency between the payment of the raised funds and the progress of the proj ect
nt and
implementation, the Company may make advance investments using other funds (including self-owned funds, bank project
replacem
ent loans, etc.) according to the actual situation, and replace fund investment other than capital funds when the raised funds ar e in
place. As of 30 June 2022, 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
temporar N/A
y
suppleme
ntary
liquidity
Amount
and
reason
for N/A
surplus of
funds
raised
Purpose The idle raised funds are deposited in the special account No. 9550880046723000135 for raised funds in the Chengdu Branch
and
whereabo of China Guangfa Bank Co., Ltd., the special account No. 517517460013000000860 for raised funds in the Luzhou Branch of
uts of Bank of Communications Co., Ltd., the special account No. 631395395 for raised funds in the Chengdu Branch of China
unused
Minsheng Banking Corp., Ltd., and the special account No. 028900140410888 for raised funds in the Chengdu Branch of China
funds
raised Merchants Bank Co., Ltd.
24
2022 Interim Report of Luzhou Laojiao Co., Ltd.
Problems
and other
situation
when
N/A
raised
funds are
used and
disclosed
Note 1: The subtotal of funds raised for committed projects was CNY 3,984 million, which was the
combined amount of CNY 4,000 million (CNY 2,500 million of corporate bonds issued in August 2019
plus CNY 1,500 million of corporate bonds issued in March 2020) minus the total issuance costs of
CNY 16 million.
Note 2: Because there were uncertainties in the approval and issue time for public offerings of
corporate bond in the review of issue plans, in order to ensure smooth progress of the projects and
protect the interests of the Company’s shareholders, the investment sequence and specific amounts
of the corresponding raised funds should be determined by the Chairman of the Board as authorized
by the general meeting of shareholders or other persons as authorized by the Board of Directors
within the scope of the four raised funds investment projects according to the actual needs, provided
that the capital funds for each project is no less than 20% of the total investment.
Note 3: As of December 2020, construction was completed for the Technical Renovation Project of
Brewing (Phase II), with the project image progress reaching 100%. Quality inspection and
acceptance of the relevant sub-projects was finished. Other inspection and acceptance, as well as
settlement were finished in June 2021.
Note 4: As of 30 June 2022, the Project of Intelligent Upgrading and Building of the Information
Management System was in the process.
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.
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.
Note 7: These raised funds investment projects have helped further expand the Company’s
production and sales, and increase its comprehensive competitiveness. The economic benefits of
these projects cannot be measured separately.
6.5.3. Re-purposed funds raised
Applicable N/A
No such cases in the reporting period
25
2022 Interim Report of Luzhou Laojiao Co., Ltd.
7. Sale of major assets and equity interests
7.1. Sale of major assets
Applicable N/A
No such cases in the reporting period.
7.2. Sale of major equity interests
Applicable N/A
8. 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 Registere Total Operating Operating
Net assets Net profit
name type scope d capital assets Revenue profit
Luzhou
Laojiao
Luzhou
series
Laojiao 100,000,0 10,623,09 5,903,661, 11,007,30 5,129,170, 3,854,305,
Subsidiary unified
Sales Co., 00.00 0,857.06 256.04 8,240.21 763.61 540.46
package
Ltd.
Baijiu
sales
Acquisition and disposal of subsidiaries during the reporting period
□ Applicable N/A
9. Structured entities controlled by the Company
Applicable N/A
10. Risks facing the Company and countermeasures
A. Pandemic-related risk: Although overall the domestic pandemic has gradually eased, there are still
local multi-point occurrences and frequent occurrences of mutated strains, and the pandemic is still
severe in many international regions, which continues to affect the total demand for baijiu and
consumption scenarios. The Company will pay close attention to the domestic and overseas pandemic,
strictly follow the requirements for pandemic prevention and control, actively carry out normalized
26
2022 Interim Report of Luzhou Laojiao Co., Ltd.
prevention and control, and ensure the normal and orderly production and operation of the Company.
B. Macroeconomic risk: Despite the growth recovery in the first half of the year, as China's economy is
continuously impacted by the epidemic, inflation, the Russia-Ukraine war, and other unfavorable factors,
the basis for growth is still not solid, and the macroeconomic operational risk cannot be ignored. The
Company will strengthen the research and judgment of macroeconomic and industry situations, uphold
the development theme of "improving development quality, strengthening cultural empowerment, and
accelerating breakthroughs", and continuously promote the benign and healthy development of the
Company.
C. Environmental risk: As the national awareness of environmental protection continues to grow, the
requirements of production pollutant emissions for the baijiu industry are also increasingly high. The
Company will continue to adhere to environmental protection and management, solidly practice the
environmental management concept of "happy life from green production", strictly regulate the
prevention and control of the "three wastes" pollution, and continuously explore the key technology of
green brewing, so as to continuously promote energy saving, consumption reduction, and green cycle
in baijiu brewing.
D. Risk of food safety: Food safety is a major concern of the society. Baijiu production involves
processes such as processing of raw materials, and fine control of these processes is required for
product quality. Therefore, the Company will further practice the idea of "making the quality visible",
enhance and extend the quality regulation system, and build an intelligent, standardized and visible
quality tracing system with higher level.
E. Public opinion risk: Since the baijiu industry is often affected by public opinion on industrial policies,
social responsibility, and industry competition, and leading enterprises receive high market attention
and are subject to public opinion risk. The Company will actively shoulder social responsibility while
pursuing development and uphold the industry rules of "shared culture, shared standards, shared
market, shared rules, and shared crises" to develop hand in hand with more outstanding Chinese
enterprises and brands and establish a good market image.
27
2022 Interim Report of Luzhou Laojiao Co., Ltd.
Section IV Corporate Governance
1. Annual and extraordinary general meeting convened during the
reporting period
1.1 General meeting convened during the reporting period
Investor
Date of the Date of
Meeting Type participation Resolution of the meeting
meeting disclosure
ratio
Announcement No.:
2022-22 of Luzhou
Laojiao Co., Ltd. on
The 2021 Annual Annual General
63.73% 29 June 2022 30 June 2022 Resolutions of the 2021
General Meeting Meeting
Annual General Meeting
(http://www.cninfo.com.cn
/)
1.2 Extraordinary general meetings convened at the request of preference
shareholders with resumed voting rights
Applicable N/A
2. Changes in directors, supervisors, and senior management
Applicable □ N/A
Name Title Type Date Reason
Li Guowang Independent director Elected 29 June 2022
Gong Zhengying Director Elected 29 June 2022
Tang Shijun Supervisor Elected 29 June 2022
Ou Fei Supervisor Elected 29 June 2022
Sun Dongsheng Independent director Resignation 29 June 2022 Voluntary resignation
Shen Caihong Director Resignation 31 May 2022 Voluntary resignation
Lian Jin Supervisor Resignation 28 May 2022 Voluntary resignation
Guo Shihua Supervisor Resignation 28 May 2022 Voluntary resignation
3. Profit distribution and converting capital reserves into share capital
for the reporting period
Applicable N/A
28
2022 Interim Report of Luzhou Laojiao Co., Ltd.
The Company has no interim dividend plan, either in the form of cash or stock.
4. Implementation of any equity incentive plan, employee stock
ownership plan or other incentive measures for employees
Applicable N/A
4.1. 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 12 th
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 22 February 2022, as the shares granted under the restricted share incentive plan were
listed, the total shares of the Company increased from 1,464,752,476 shares to 1,471,615,076 shares.
4.2. Implementation of employee stock ownership plans
Applicable N/A
4.3. Other incentive measures for employees
Applicable N/A
29
2022 Interim 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 Number Distributio
Emission Pollution Approved
Company pollutant Discharge of n of Total Excessive
concentrati discharge total
name and type discharge discharge emission discharge
on standard emission
particular outlet outlet
pollutant
Luzhou Luohan
Direct 21.173
Laojiao COD 1 Brewery 50 mg/L 5.4842 t/a 25 t/a No
discharge mg/L
Co., Ltd. Eco-Park
Luzhou Luohan
Ammonia Direct 0.162
Laojiao 1 Brewery 5 mg/L 0.0417 t/a 2.5 t/a No
nitrogen discharge mg/L
Co., Ltd. Eco-Park
Luzhou Luohan
Total Direct 5.156
Laojiao 1 Brewery 15 mg/L 1.332 t/a 7.5 t/a No
nitrogen discharge mg/L
Co., Ltd. Eco-Park
Luzhou Total Luohan
Direct
Laojiao phosphoru 1 Brewery 0.110 mg/L 0.5 mg/L 0.0284 t/a 0.25 t/a No
discharge
Co., Ltd. s Eco-Park
Luzhou Luohan 4.336
Organized
Laojiao PM 2 Brewery 20 mg/m3 0.3071 t/a 3.9 t/a No
discharge mg/m3
Co., Ltd. Eco-Park
Luzhou Luohan
Sulfur Organized 0.117
Laojiao 2 Brewery 50 mg/m3 0.0092 t/a 11.5 t/a No
dioxide discharge mg/m3
Co., Ltd. Eco-Park
Luzhou Luohan
Organized 25.185 150
Laojiao Oxynitride 2 Brewery 2.0337 t/a 45.4 t/a No
discharge mg/m3 mg/m3
Co., Ltd. Eco-Park
Luzhou Huangyi
Indirect 25.905
Laojiao COD 1 Brewery 400 mg/L 7.7711 t/a 400 t/a No
discharge mg/L
Co., Ltd. Eco-Park
Luzhou Huangyi
Ammonia Indirect 0.156
Laojiao 1 Brewery 30 mg/L 0.0421 t/a 30 t/a No
nitrogen discharge mg/L
Co., Ltd. Eco-Park
Luzhou Huangyi
Total Indirect 11.028
Laojiao 1 Brewery 50 mg/L 3.3289 t/a 50 t/a No
nitrogen discharge mg/L
Co., Ltd. Eco-Park
Luzhou Total Huangyi 0.576
Indirect
Laojiao phosphoru 1 Brewery 3 mg/L 0.1719 t/a 3 t/a No
discharge mg/L
Co., Ltd. s Eco-Park
Energy
Center of
Luzhou
Sichuan
Laojiao Organized 0.854
PM 2 Luzhou 5 mg/m3 0.3052 t/a 5.64t/a No
Brewing discharge mg/m3
Baijiu
Co., Ltd.
Industrial
Park
Energy
Center of
Luzhou
Sichuan
Laojiao Organized 0.952
PM 1 Luzhou 20 mg/m3 0.0127 t/a 3t/a No
Brewing discharge mg/m3
Baijiu
Co., Ltd.
Industrial
Park
Energy
Center of
Luzhou
Sichuan
Laojiao Sulfur Organized 0.644
2 Luzhou 35 mg/m3 0.2125 t/a 16.68 t/a No
Brewing dioxide discharge mg/m3
Baijiu
Co., Ltd.
Industrial
Park
Luzhou Energy
Sulfur Organized 0.384
Laojiao 1 Center of 50 mg/m3 0.0054 t/a 2.2 t/a No
dioxide discharge mg/m3
Brewing Sichuan
30
2022 Interim Report of Luzhou Laojiao Co., Ltd.
Co., Ltd. Luzhou
Baijiu
Industrial
Park
Energy
Center of
Luzhou
Sichuan
Laojiao Organized 37.592 100 13.3981
Oxynitride 2 Luzhou 113.4 t/a No
Brewing discharge mg/m3 mg/m3 t/a
Baijiu
Co., Ltd.
Industrial
Park
Energy
Center of
Luzhou
Sichuan
Laojiao Organized 45.478 150
Oxynitride 1 Luzhou 0.6055 t/a 22.68 t/a No
Brewing discharge mg/m3 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,
natural gas boilers are used, while in Xiaoshi Base and Zaojiaoxiang Base, 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 to be started in 2022 will go through the approval
procedures in accordance with the relevant requirements.
Emergency plan for environmental emergencies
31
2022 Interim Report of Luzhou Laojiao Co., Ltd.
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
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
During the reporting period, the Company reduced its carbon dioxide emissions by more than 1,400
tons through innovative electricity consumption models, electricity alternative trading programs, and
utilization of renewable energy such as hydropower.
Other information about environment protection
N/A
2. Social responsibility
The Company effectively enhanced its political and social responsibilities and thoroughly
implemented the arrangements and deployments by the Party committees at all levels for rural
revitalization. In the first half of 2022, the Company carried out the 2022 Chinese New Year
consolation activities in Xiangtian Village, Longshan Town, Gulin County and Guntang Village, Maiwa
Town, Hongyuan County to distribute consolation money and gifts to 652 households, including
households that have been lifted out of poverty, difficult households, and ordinary farmers. Also, the
Company helped Guntang Village carry out the 2022 village cultural festival activities, Party building,
and household electrical wiring renovation. The Company continued to implement "purchase instead
of donation" and bought designated supported agricultural products from Hongyuan County and Gulin
County. The case study of rural revitalization, "Shouldering the Mission of Youth and Contributing to
32
2022 Interim Report of Luzhou Laojiao Co., Ltd.
Rural Revitalization", was published and publicized in the Sichuan Party Building magazine and
"Xuexi Qiangguo". While consolidating and expanding the achievements of poverty eradication and
effectively incorporating rural revitalization, the Company was awarded the 2021 "Advanced Group of
Designated Support" in Sichuan Province by the Rural Work Leading Group of the Sichuan Provincial
Committee of the Communist Party of China.
33
2022 Interim Report of Luzhou Laojiao Co., Ltd.
Section VI Significant Events
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.
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. Engagement and disengagement of CPAs firm
Are the interim financial statements audited?
□ Yes No
The interim financial statements are not audited.
34
2022 Interim Report of Luzhou Laojiao Co., Ltd.
5. Explanation of the board of directors and the supervisory committee
regarding the "Non-standard audit opinion" for the reporting period
Applicable N/A
6. Explanations of the board of directors regarding the "Non-standard
audit opinion" of Last Year
Applicable N/A
7. Bankruptcy and reorganization
Applicable N/A
No such cases in the reporting period.
8. Litigation
Material litigation and arbitration
Applicable N/A
Amount Execution of
Whether it forms Progress in Trial results and
Profile of litigation involved in the judgment of Date of Disclosure
an estimate litigation impacts of litigation
(arbitration) case (CNY litigation disclosure index
liability (arbitration) (arbitration)
10,000) (arbitration)
The Company
applied to Hunan
For the losses that Province Higher
The Company filed a
the Company People's Court
lawsuit with ABC
cannot recover for enforcement
Changsha Yingxin
through criminal of the verdict.
Branch over a deposit The second
execution Hunan Province
dispute, and the case trial has
procedures, 40% Higher People's
has been completed been See Section VI
shall be borne by Court ruled that
in the first instance of concluded, 15 October “Other
14,942.5 No ABC Changsha Hunan Changsha
Hunan Province and the case 2014 significant
Yingxin Branch, Intermediate
Higher People's Court is now at the events”
20% shall be borne People’s Court
and the final trial of stage of
by ABC Changsha should see to the
the Supreme People's enforcement.
Hongxin Branch execution of the
Court. The case is
and the rest shall verdict. Upon the
now at the stage of
be borne by the enforcement, the
enforcement.
Company itself. banks have paid
part of the
compensations.
The Company filed a The second ICBC Nanyang The banks have See Section VI
lawsuit with ICBC trial has Zhongzhou Branch, paid part of the 10 January “Other
Nanyang Zhongzhou 15,000 No been ICBC Nanyang compensations. 2015 significant
Branch over a deposit concluded, Branch, and Sanya As there was a events”
dispute, and the case and the case Rural Commercial dispute over the
35
2022 Interim Report of Luzhou Laojiao Co., Ltd.
has been completed is now at the Bank Hongsha verdict, the
in the first instance of stage of Branch shall pay Company applied
Henan Province enforcement. compensations of to Henan
Higher People's Court CNY 75 million, Province Higher
and the final trial of CNY 7.5 million People's Court
the Supreme People's and CNY 6.105 for enforcement
Court. The case is million respectively of the verdict.
now at the stage of with the relevant Henan Province
enforcement. interest to the Higher People's
Company, and the Court ruled that
rest of the loss Nanyang
shall be borne by Intermediate
the Company itself. People’s Court
should see to the
execution of the
verdict. The case
is now at the
stage of
enforcement by
Nanyang
Intermediate
People’s Court.
Other litigation
Applicable N/A
Amount Whether it Trial results Execution of
Profile of Progress in
involved in forms an and impacts of judgment of Date of Disclosure
litigation litigation
the case (CNY estimate litigation litigation disclosure index
(arbitration) (arbitration)
10,000) liability (arbitration) (arbitration)
Other
litigations that
do not meet
the standard No significant
1,076.88 No Pending Pending
of a material impact
litigation which
is required to
be disclosed
9. Punishments and rectifications
Applicable N/A
10. Credit conditions of the Company as well as its controlling
shareholder and actual controller
Applicable N/A
36
2022 Interim Report of Luzhou Laojiao Co., Ltd.
11. Significant related party transactions
11.1. Related party transactions arising from routine operation
Applicable N/A
No such cases in the reporting period.
11.2. Related party transactions regarding purchase or sales of assets or equity
interests
Applicable N/A
No such cases in the reporting period.
11.3. Related party transitions arising from joint investments in external parties
Applicable N/A
No such cases in the reporting period.
11.4. Credits and liabilities with related parties
Applicable N/A
No such cases in the reporting period.
11.5. Transactions with related finance companies
Applicable N/A
The Company did not make deposits in, receive loans or credit from and was not involved in any
other finance business with any related finance company or any of its related parties.
11.6. 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.
37
2022 Interim Report of Luzhou Laojiao Co., Ltd.
11.7. Other significant related party transactions
Applicable N/A
No such cases in the reporting period.
12. Significant contracts and their execution
12.1. Trusteeship, contracting and leasing
12.1.1. Trusteeship
Applicable N/A
No such cases in the reporting period.
12.1.2. Contracting
Applicable N/A
No such cases in the reporting period.
12.1.3. Leasing
Applicable N/A
No such cases in the reporting period.
12.2. Major guarantees
Applicable N/A
No such cases in the reporting period.
12.3. Entrust assets management
Applicable N/A
Unit: CNY 10,000
Impairment
Fund source for Amount of Overdue allowances for
Type entrusted assets entrusted assets Undue balance outstanding the overdue
management management amount outstanding
amount
Wealth
management Own funds 80,000 80,000 0 0
product of bank
38
2022 Interim Report of Luzhou Laojiao Co., Ltd.
Wealth
management
Own funds 30,000 30,000 0 0
product of trust
company
Others Own funds 20,000 20,000 0 0
Total 130,000 130,000 0 0
Particulars of high risk wealth management products with a significant single amount, low security,
poor liquidity or no principal protection
Applicable N/A
Expected inability to recover the principal of entrusted assets management or other circumstances
that may result in impairment
Applicable N/A
12.4. Other significant contracts
Applicable N/A
No such cases in the reporting period.
13. Other significant events
Applicable N/A
The Company disclosed in October 2014 and January 2015 respectively the contract disputes
involving three savings deposits of CNY 500 million in total with banks including ABC Changsha
Yingxin Branch and ICBC Nanyang Zhongzhou Branch. Upon criminal booty recovery, criminal and
civil enforcement, as of the date of this Report, the Company had recovered a total amount of CNY
370.9505 million for the three disputes.
See details in the Company’s announcements:
Date of announcement No. Catalogue Official website
15 October 2014 2014-35 Announcement of significant litigation http://www.cninfo.com.cn/
12 November 2014 2014-41 Announcement of significant litigation progress
6 December 2014 2014-43 Announcement of significant litigation progress part II
10 January 2015 2015-1 Announcement of significant events
4 February 2015 2015-4 Announcement of significant events progress
25 March 2015 2015-11 Announcement of significant litigation progress part III
18 April 2015 2015-20 Announcement of significant litigation progress part IV
22 April 2015 2015-21 Announcement of significant events progress part II
24 April 2015 2015-25 Announcement of significant litigation progress part V
15 July 2015 2015-44 Announcement of significant litigation progress part VI
22 July 2015 2015-45 Announcement of significant litigation progress part
39
2022 Interim Report of Luzhou Laojiao Co., Ltd.
VII
6 June 2018 2018-17 Announcement of significant litigation progress part
VIII
7 May 2019 2019-11 Announcement of significant litigation progress part IX
17 May 2019 2019-13 Announcement of significant litigation progress part X
24 March 2020 2020-6 Announcement of significant litigation progress part XI
6 May 2020 2020-14 Announcement of significant litigation progress part
XII
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
14. Significant events of subsidiaries
Applicable N/A
The Company invested in the technical upgrade program of intelligent brewing (Phase I) with the
wholly-owned subsidiary, Brewing Company, as the implementer. The total investment amount
approximated CNY 4,782.5090 million. The program has been approved at the First Extraordinary
General Meeting of 2022 on 16 August 2022. For further information, see Announcement No. 2022-
24 on the Implementation of Luzhou Laojiao’s Technical Upgrade Program of Intelligent Brewing
(Phase I) by Subsidiary.
40
2022 Interim 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 period (＋，－) After
Capitaliz
Proportio Issuance of Bonus ation of
Number Other Subtotal Number Proportion
n new shares shares capital
reserves
I. Restricted
shares 247,921 0.02% 6,862,600 6,862,600 7,110,521 0.48%
1. Shares
held by the
state
2. Shares
held by state-
owned
corporations
3. Shares
held by other
domestic 247,921 0.02% 6,862,600 6,862,600 7,110,521 0.48%
investors
Of which:
shares held
by domestic
corporations
Shares held
by domestic 247,921 0.02% 6,862,600 6,862,600 7,110,521 0.48%
individuals
4. Shares
held by
foreign
corporations
Of which:
shares held
by foreign
corporations
Shares held
by foreign
individuals
II. Non-
restricted 1,464,504,555 99.98% 1,464,504,555 99.52%
shares
1.CNY
common 1,464,504,555 99.98% 1,464,504,555 99.52%
shares
2.
Domestically
listed foreign
shares
3. Overseas
listed foreign
shares
4. Other
III. Total
shares 1,464,752,476 100.00% 6,862,600 6,862,600 1,471,615,076 100.00%
Reasons for the change in shares
Applicable N/A
On 22 February 2022, as the shares granted under the restricted share incentive plan were listed, the
total shares of the Company increased from 1,464,752,476 shares to 1,471,615,076 shares.
41
2022 Interim Report of Luzhou Laojiao Co., Ltd.
Approval of share changes
Applicable N/A
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 2 December 2021, the Company
received the Reply of State-owned Assets Supervision and Administration Commission of Luzhou on
the Second Equity Incentive Plan of Luzhou Laojiao Co., Ltd. (LGZKP [2021] No. 62). As such, the
Company was agreed, in principle, to implement the restricted share incentive plan. 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.
Transfer of share ownership
Applicable N/A
Implementation progress of shares repurchases
□ Applicable N/A
Implementation progress of share buyback reduction through centralized bidding
□ Applicable N/A
Effects of changes in shares on the basic EPS, diluted EPS, net assets per share attributable to
common shareholders of the Company and other financial indexes over the last year and the last
reporting period
Applicable N/A
Other contents that the Company considers it necessary or required by the securities regulatory
authorities to disclose
Applicable N/A
1.2 Changes in restricted shares
Applicable □ N/A
Unit：Share
Number of
Increase in Number of
restricted Decrease in
restricted restricted
Name of shares held restricted
shares shares held Reason for
shareholde at the shares during Date of unlocking
during the at the end of restriction
r beginning of the reporting
reporting the reporting
the reporting period
period period
period
Locked-up For locked-up shares
Liu Miao 144,140 0 95,900 240,040 shares of of senior
senior management, 25% of
42
2022 Interim Report of Luzhou Laojiao Co., Ltd.
management, such shares are
and shares unlocked and become
granted under transferable on a
restricted yearly basis as legally
share allowed. For
incentive plan restricted shares, see
Announcement No.
2022-1 on the
Completion of the
Grant of Restricted
Shares for the
unlocking dates.
For restricted shares,
Shares see Announcement
granted under No. 2022-1 on the
Lin Feng 0 0 95,900 95,900 restricted Completion of the
share Grant of Restricted
incentive plan Shares for the
unlocking dates.
For restricted shares,
Shares see Announcement
granted under No. 2022-1 on the
Wang
0 0 76,700 76,700 restricted Completion of the
Hongbo
share Grant of Restricted
incentive plan Shares for the
unlocking dates.
For locked-up shares
of senior
management, 25% of
Locked-up such shares are
shares of unlocked and become
senior transferable on a
management, yearly basis as legally
Shen
103,781 0 76,700 180,481 and shares allowed. For
Caihong
granted under restricted shares, see
restricted Announcement No.
share 2022-1 on the
incentive plan Completion of the
Grant of Restricted
Shares for the
unlocking dates.
For restricted shares,
Shares see Announcement
granted under No. 2022-1 on the
Xie Hong 0 0 76,700 76,700 restricted Completion of the
share Grant of Restricted
incentive plan Shares for the
unlocking dates.
For restricted shares,
Shares see Announcement
granted under No. 2022-1 on the
He Cheng 0 0 76,700 76,700 restricted Completion of the
share Grant of Restricted
incentive plan Shares for the
unlocking dates.
Shares For restricted shares,
Zhang Suyi 0 0 76,700 76,700 granted under see Announcement
restricted No. 2022-1 on the
43
2022 Interim Report of Luzhou Laojiao Co., Ltd.
share Completion of the
incentive plan Grant of Restricted
Shares for the
unlocking dates.
For restricted shares,
Shares see Announcement
granted under No. 2022-1 on the
Xiong
0 0 62,800 62,800 restricted Completion of the
Pingting
share Grant of Restricted
incentive plan Shares for the
unlocking dates.
For restricted shares,
Shares see Announcement
granted under No. 2022-1 on the
Li Yong 0 0 62,800 62,800 restricted Completion of the
share Grant of Restricted
incentive plan Shares for the
unlocking dates.
For restricted shares,
Total of the Shares see Announcement
other granted under No. 2022-1 on the
restricted 0 0 6,161,700 6,161,700 restricted Completion of the
share share Grant of Restricted
awardees incentive plan Shares for the
unlocking dates.
Total 247,921 0 6,862,600 7,110,521 -- --
2. Issuance and listing of securities
Applicable □ N/A
Name of Offering Number Date of Index to
stock and Date of price (or Number Date of approved terminatio disclosed Date of
derivative offering interest offered listing for public n of informatio disclosure
securities rate) trading trading n
Stocks
Announce
ment No.
2022-1 on
22 the 21
Restricted CNY
6,862,600 February 6,862,600 Completio February
shares 92.71
2022 n of the 2022
Grant of
Restricted
Shares
Convertible corporate bonds, convertible corporate bonds with warrants, or corporate debt
Other derivative securities
Notes to the offering of securities during the reporting period
See “4. Implementation of any equity incentive plan, employee stock ownership plan or other
incentive measures for employees” in “Section IV Corporate Governance”.
44
2022 Interim Report of Luzhou Laojiao Co., Ltd.
3. Total number of shareholders and their shareholdings
Unit：Share
Total number of common Total number of preferred shareholders with
shareholders at the end of 112,980 resumed voting rights by the end of the 0
the reporting period reporting period (if any)(see Note 8)
Shareholdings of common shareholders with a shareholding percentage over 5% or the top 10 common shareholders
Total Pledged, marked or frozen
common Increase/de Number of Number of shares
Shareholdin shares held crease holding holding non-
Name of Nature of
g by the end during the restricted restricted
shareholder shareholder Status of Number of
percentage of the reporting common common
shares shares
reporting period shares shares
period
Luzhou
Laojiao State-owned
Group Co., corporation 25.90% 381,088,389 0 0 381,088,389
Ltd.
Luzhou
XingLu
State-owned
Investment 24.87% 365,971,142 0 0 365,971,142
corporation
Group Co.,
Ltd.
Bank of
China Co.,
Ltd. – Baijiu
index
classification
securities Other 2.99% 43,958,452 -3,136,882 0 43,958,452
investment
fund by
China
Merchants
Fund
Hong Kong
Securities
Outbound
Clearing 2.90% 42,667,574 7,227,486 0 42,667,574
corporation
Company
Limited
China
Securities
Finance Other 2.30% 33,842,059 0 0 33,842,059
Corporation
Limited
Bank of
China Co.,
Ltd.－Blue
chip
selected Other 1.71% 25,180,000 -820,000 0 25,180,000
hybrid
securities
investment
fund by E
Fund
Industrial
and
Commercial
Bank of
China Co.,
Ltd.-Newly
growth Other 1.25% 18,352,276 -847,724 0 18,352,276
hybrid
securities
investment
fund by
Invesco
Great Wall
Central
Huijin Asset State-owned
Managemen corporation 0.92% 13,539,862 0 0 13,539,862
t Co., Ltd.
Agricultural
Bank of
China Co.,
Other 0.72% 10,573,293 0 0 10,573,293
Ltd. -
Consumptio
n industry
45
2022 Interim Report of Luzhou Laojiao Co., Ltd.
stock -
based
securities
investment
fund by E
Fund
Bank of
China Co.,
Ltd.－High
quality
selected
Other 0.54% 7,970,000 — 0 7,970,000
hybrid
securities
investment
fund by E
Fund
Strategic investors or
general corporations
become the top-ten common
N/A
shareholders due to placing
of new shares (if any) (see
note 3)
1. Luzhou Laojiao Group Co., Ltd. and Luzhou XingLu Investment Group Co., Ltd. are both holding state-
owned companies under the jurisdiction of SASAC of Luzhou. The two companies signed the agreement of
persons acting in concert on 31 December 2015. For details, please refer to the announcement of the
Company on 5 January 2016 - Announcement on the agreement of persons acting in concert signed by
Related parties or acting-in- shareholders. The announcement number is 2016-1 (http://www.cninfo.com.cn/). The two companies signed
concert the renewed agreement of persons acting in concert on 27 May 2021. For details, please refer to the
announcement of the Company on 29 May 2021 - Announcement on the renewed agreement of persons
acting in concert signed by shareholders. The announcement number is 2021-18 (http://www.cninfo.com.cn/).
2. In addition, whether there is an association between the remaining shareholders or they belong to persons
acting in concert is unknown.
Explain if any of the
shareholders above was
involved in entrusting/being N/A
entrusted with voting rights
or waiving voting rights
Special account for
repurchased shares among
N/A
the top 10 shareholders (if
any) (see note 11)
Shareholdings of the top 10 non-restricted common shareholders
Number of non-restricted common shares held by Type of shares
Name of shareholder
the end of the reporting period Type Number
Luzhou Laojiao Group Co.,
381,088,389 CNY common shares 381,088,389
Ltd.
Luzhou XingLu Investment
365,971,142 CNY common shares 365,971,142
Group Co., Ltd.
Bank of China Co., Ltd. –
Baijiu index classification
43,958,452 CNY common shares 43,958,452
securities investment fund
by China Merchants Fund
Hong Kong Securities
42,667,574 CNY common shares 42,667,574
Clearing Company Limited
China Securities Finance
33,842,059 CNY common shares 33,842,059
Corporation Limited
Bank of China Co., Ltd.－
Blue chip selected hybrid CNY common shares
25,180,000 25,180,000
securities investment fund
by E Fund
Industrial and Commercial
Bank of China Co., Ltd.-
Newly growth hybrid 18,352,276 CNY common shares 18,352,276
securities investment fund
by Invesco Great Wall
Central Huijin Asset
13,539,862 CNY common shares 13,539,862
Management Co., Ltd.
Agricultural Bank of China
Co., Ltd. - Consumption
industry stock - based 10,573,293 CNY common shares 10,573,293
securities investment fund
by E Fund
Bank of China Co., Ltd.－
High quality selected hybrid CNY common shares
7,970,000 7,970,000
securities investment fund
by E Fund
The statement of association
See above in this table
or acting-in-concert between
46
2022 Interim Report of Luzhou Laojiao Co., Ltd.
the top 10 shareholders of
unrestricted common shares
and between the top 10
shareholders of common
unrestricted shares and top
10 common shareholders
Top 10 common
shareholders participating in
N/A
securities margin trading (if
any) (see 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.
4. Changes in shares held by directors, supervisors, and senior
management
Applicable □ N/A
Decrease
Increase in Restricted
in Opening Closing
shareholdi shares
Opening shareholdi Closing restricted restricted
Incumbent/ ng in the granted in
Name Office title shareholdi ng in the shareholdi shares shares
former current the current
ng (share) current ng (share) held held
period period
period (share) (share)
(share) (share)
(share)
Chairman
Liu Miao of the Incumbent 192,187 95,900 0 288,087 95,900 0 95,900
board
Director,
Lin Feng General Incumbent 0 95,900 0 95,900 95,900 0 95,900
manager
Director,
Deputy
general
Wang
manager, Incumbent 0 76,700 0 76,700 76,700 0 76,700
Hongbo
Secretary
of the
board
Deputy
Shen
general Incumbent 138,375 76,700 0 215,075 76,700 0 76,700
Caihong
manager
Xie Hong CFO Incumbent 0 76,700 0 76,700 76,700 0 76,700
Deputy
He Cheng general Incumbent 0 76,700 0 76,700 76,700 0 76,700
manager
Deputy
Zhang
general Incumbent 0 76,700 0 76,700 76,700 0 76,700
Suyi
manager
Director,
Xiong Deputy
Incumbent 0 62,800 0 62,800 62,800 0 62,800
Pingting general
manager
Deputy
Li Yong general Incumbent 0 62,800 0 62,800 62,800 0 62,800
manager
Total -- -- 330,562 700,900 0 1,031,462 700,900 0 700,900
47
2022 Interim Report of Luzhou Laojiao Co., Ltd.
5. Change of controlling shareholder or actual controller
Change of the controlling shareholder during the reporting period
Applicable N/A
No such cases in the reporting period.
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.
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2022 Interim Report of Luzhou Laojiao Co., Ltd.
Section VIII Preferred Shares
Applicable N/A
No preferred stock in the Company during the reporting period.
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2022 Interim 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
Value Interest Way of Place of
Name Abbr. Code Issue date Due date Bond balance
date rate redemption trading
In terms of the
bonds of this
phase, interests
2019 Public will be paid by
Offering of year and the
Corporate principal will be
Bond of repaid in lump
28 28 Shenzhen
Luzhou 19 Lao Jiao 27 August sum at maturity.
112959.SZ August August 2,500,000,000.00 3.58% Stock
Laojiao Co., 01 2019 The interests will
2019 2024 Exchange
Ltd. for be paid once
Qualified every year and
Investors the interests for
(Phase I) the last
installment will be
paid together with
the principal.
In terms of the
bonds of this
phase, interests
2020 Public will be paid by
Offering of year and the
Corporate principal will be
Bond of repaid in lump
Shenzhen
Luzhou 20 Lao Jiao 17 March 17 March 17 March sum at maturity.
149062.SZ 1,500,000,000.00 3.50% Stock
Laojiao Co., 01 2020 2020 2025 The interests will
Exchange
Ltd. for be paid once
Qualified every year and
Investors the interests for
(Phase I) 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
Appropriate arrangement of the investors Issue and Transaction Management of Corporate Bonds, Management Measures for the Suitability
(if any) of Securities and Futures Investors, Management Measures of Shenzhen Stock Exchange for the
Suitability of Securities Market Investors, and relevant laws and regulations, and have the
corresponding risk identification and bearing capacity (excluding those prohibited by laws and
regulations)
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2022 Interim Report of Luzhou Laojiao Co., Ltd.
Trading systems applicable Tradable by way of bidding, offering, inquiry and agreement
Risk of termination of listing and trading (if
N/A
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
The term of “19 Lao Jiao 01” is five years with the issuer’s option for adjustment to the stated interest
rate and the investor’s option for sell back at the end of the 3 rd year. The said clause was not triggered
in the reporting period.
2.3. Changes in credit ratings in the reporting period
Applicable N/A
2.4. Execution and changes with respect to guarantees, repayment plans and
other repayment-ensuring measures in the reporting period, as well as the impact
on the interests of bond holders
Applicable N/A
In order to fully and effectively safeguard the interests of bondholders, the issuer has formulated a
series of work plans for the timely and full redemption of "19 Lao Jiao 01" and "20 Lao Jiao 01",
including assigning special departments and personnel to participate in the management, arranging
debt repayment funds, formulating management measures, hiring supervising banks and signing
tripartite supervision agreements with supervising banks and bond trustees, strengthening information
disclosure, and developed a set of safeguard measures to ensure the safe redemption of the bonds.
During the reporting period, the above status remained unchanged.
3. Debt instruments as a non-financial enterprise
Applicable N/A
No such cases in the reporting period.
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2022 Interim Report of Luzhou Laojiao Co., Ltd.
4. Convertible corporate bonds
Applicable N/A
No such cases in the reporting period.
5. Consolidated loss of the reporting period over 10% of net assets as
at the end of last year
Applicable N/A
6. 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 30 June 2022 31 December 2021 Change
Current ratio 2.42 2.43 -0.41%
Debt/asset ratio 35.57% 34.89% 0.68%
Quick ratio 1.68 1.74 -3.45%
H1 2022 H1 2021 Change
Net profits before non-
549,626.58 420,865.01 30.59%
recurring gains and losses
EBITDA/debt ratio 190.37% 145.46% 44.91%
Interest cover (times) 62.60 57.98 7.97%
EBITDA-to-interest cover
65.13 60.65 7.39%
(times)
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2022 Interim Report of Luzhou Laojiao Co., Ltd.
Section X Financial Report
1. Auditor’s report
Are these interim financial statements audited by an independent auditor?
□Yes No
The interim financial statements are not audited by an independent auditor.
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 30 June 2022
Monetary Unit: CNY
Item Balance as at 30 June 2022 Balance as at 1 January 2022
Current assets:
Cash and cash equivalents 17,046,109,916.36 13,513,494,580.56
Settlement reserves
Lending funds
Held-for-trading financial assets 1,302,911,871.28 706,352,241.79
Derivative financial assets
Notes receivables
Accounts receivables 1,403,341.54 1,628,248.55
Accounts receivables financing 1,671,605,965.76 4,757,631,778.64
Prepayment 146,929,974.32 178,087,688.81
Premiums receivable
Reinsurance accounts receivable
Reinsurance contract reserve
Other receivables 71,286,211.55 28,615,361.96
Including：Interests receivable
Dividends receivable 35,361,832.34
Buying back the sale of financial
assets
Inventories 8,713,280,634.28 7,277,573,166.80
Contract assets
Assets held for sale
Non-current assets due within one
year
Other current assets 42,689,792.53 111,974,532.91
Total current assets 28,996,217,707.62 26,575,357,600.02
Non-current assets:
Disbursement of loans and advances
Investments in debt obligations
Investments in other debt obligations
Long-term receivables
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2022 Interim Report of Luzhou Laojiao Co., Ltd.
Long-term equity investments 2,657,050,723.78 2,626,744,236.25
Investments in other equity
338,068,275.65 363,312,120.43
instruments
Other non-current financial assets
Investment property
Fixed assets 8,557,024,850.52 8,089,487,274.39
Construction in progress 724,127,630.54 1,259,845,487.50
Productive biological assets
Oil and gas assets
Use right assets 48,376,749.33 52,714,810.04
Intangible assets 2,545,348,298.90 2,606,359,188.72
Development expenses
Goodwill
Long-term deferred expenses 1,042,852.71 1,463,869.21
Deferred tax assets 552,382,268.40 986,112,983.42
Other non-current assets 786,600,535.68 650,384,435.70
Total non-current assets 16,210,022,185.51 16,636,424,405.66
Total assets 45,206,239,893.13 43,211,782,005.68
Current liabilities:
Short-term loans
Borrowings from the central bank
Loans from other banks
Held-for-trading financial liabilities
Derivative financial liabilities
Notes payable
Accounts payable 1,728,943,332.96 2,420,354,469.53
Advance from customer
Contract liabilities 2,329,543,604.94 3,510,110,701.25
Financial assets sold for repurchase
Deposits from customers and inter-
bank
Customer brokerage deposits
Securities underwriting brokerage
deposits
Employee benefits payable 474,542,544.93 648,103,740.96
Taxes payable 1,053,665,059.39 3,173,479,627.79
Other payable 5,970,193,535.41 652,393,292.60
Including：Interests payable
Dividends payable 4,773,919,306.54
Handling charges and commissions
payable
Reinsurance accounts payable
Liabilities held for sale
Non-current liabilities due within one
year 103,015,445.84 86,202,215.03
Other current liabilities 302,840,668.64 456,314,391.17
Total current liabilities 11,962,744,192.11 10,946,958,438.33
Non-current liabilities:
Insurance contract reserves
Long-term loans
Bonds payable 3,992,391,967.40 3,990,785,742.23
Including：Preferred shares
Perpetual bonds
Lease liabilities 39,336,140.81 40,667,668.08
Long-term payables
Long-term payroll payables
Accrued liabilities
Deferred income 25,455,871.42 28,531,014.28
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2022 Interim Report of Luzhou Laojiao Co., Ltd.
Deferred tax liabilities 60,413,216.08 67,578,019.93
Other non-current liabilities
Total non-current liabilities 4,117,597,195.71 4,127,562,444.52
Total liabilities 16,080,341,387.82 15,074,520,882.85
Owners' equity
Share capital 1,471,615,076.00 1,464,752,476.00
Other equity instruments
Including: preferred shares
Perpetual bonds
Capital reserves 4,573,224,059.40 3,755,354,665.73
Less: treasury stock 613,969,371.60
Other comprehensive income 141,119,108.43 167,527,152.32
Special reserves
Surplus reserves 1,464,752,476.00 1,464,752,476.00
General risk reserve
Undistributed profits 21,945,882,896.63 21,187,860,235.89
Total equity attributable to owners of
28,982,624,244.86 28,040,247,005.94
the parent company
Non-controlling interests 143,274,260.45 97,014,116.89
Total owners' equity 29,125,898,505.31 28,137,261,122.83
Total liabilities and owners' equity 45,206,239,893.13 43,211,782,005.68
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 30 June 2022
Monetary Unit: CNY
Item Balance as at 30 June 2022 Balance as at 1 January 2022
Current assets:
Cash and cash equivalents 16,303,260,723.80 13,038,549,397.55
Held-for-trading financial assets 1,302,911,871.28 706,352,241.79
Derivative financial assets
Notes receivables
Accounts receivables 2,470,496.71 1,207,477.63
Accounts receivables financing
Prepayment 1,867,047.31 1,464,893.09
Other receivables 12,991,445,147.03 10,033,554,898.57
Including：Interests receivable
Dividends receivable 35,361,832.34
Inventories 682,920,870.61 3,918,211.13
Contract assets
Assets held for sale
Non-current assets due within one
year
Other current assets
Total current assets 31,284,876,156.74 23,785,047,119.76
Non-current assets:
Investments in debt obligations
Investments in other debt obligations
Long-term receivables
Long-term equity investments 6,163,259,504.13 6,051,400,833.91
Investments in other equity
337,764,354.02 362,983,198.80
instruments
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2022 Interim Report of Luzhou Laojiao Co., Ltd.
Other non-current financial assets
Investment property
Fixed assets 1,066,168,645.05 1,087,640,695.62
Construction in progress 69,364,075.45 53,881,812.48
Productive biological assets
Oil and gas assets
Use right assets 304,605.68 573,800.02
Intangible assets 630,886,123.45 671,147,243.40
Development expenses
Goodwill
Long-term deferred expenses 956,583.53 1,364,659.65
Deferred tax assets 110,210,683.40 91,734,925.57
Other non-current assets 500,600.00
Total non-current assets 8,378,914,574.71 8,321,227,769.45
Total assets 39,663,790,731.45 32,106,274,889.21
Current liabilities:
Short-term loans
Held-for-trading financial liabilities
Derivative financial liabilities
Notes payable
Accounts payable 732,367,925.11 83,724,151.54
Advance from customer
Contract liabilities 2,878,108.46 2,523,947.74
Employee benefits payable 200,547,774.31 234,008,858.96
Taxes payable 73,236,181.07 285,894,625.64
Other payables 13,011,301,344.75 1,659,106,919.10
Including：Interests payable
Dividends payable 4,773,919,306.54
Liabilities held for sale
Non-current liabilities due within one
year 90,470,476.43 72,625,138.08
Other current liabilities 374,154.10 328,113.21
Total current liabilities 14,111,175,964.23 2,338,211,754.27
Non-current liabilities:
Long-term loans
Bonds payable 3,992,391,967.40 3,990,785,742.23
Including：Preferred shares
Perpetual bonds
Lease liabilities 5,593.91 163,523.64
Long-term payables
Long-term payroll payables
Accrued liabilities
Deferred income
Deferred tax liabilities 60,413,216.08 67,578,019.93
Other non-current liabilities
Total non-current liabilities 4,052,810,777.39 4,058,527,285.80
Total liabilities 18,163,986,741.62 6,396,739,040.07
Owners' equity
Share capital 1,471,615,076.00 1,464,752,476.00
Other equity instruments
Including: preferred shares
Perpetual bonds
Capital reserves 4,559,618,625.79 3,739,666,108.27
Less: treasury stock 613,969,371.60
Other comprehensive income 139,591,347.02 167,572,013.86
Special reserves
Surplus reserves 1,464,752,476.00 1,464,752,476.00
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2022 Interim Report of Luzhou Laojiao Co., Ltd.
Undistributed profits 14,478,195,836.62 18,872,792,775.01
Total owners' equity 21,499,803,989.83 25,709,535,849.14
Total liabilities and owners' equity 39,663,790,731.45 32,106,274,889.21
Consolidated income statement
Monetary Unit: CNY
Item H1 2022 H1 2021
1. Total operating revenue 11,664,377,552.94 9,317,097,027.05
Including: Operating revenue 11,664,377,552.94 9,317,097,027.05
Interest income
Earned premium
Fee and commission
income
2. Total operating costs 4,392,197,692.56 3,859,318,360.86
Including: Cost of sales 1,642,310,550.61 1,335,154,943.46
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 1,045,859,768.74 992,673,552.12
Selling and distribution
expenses 1,213,861,984.66 1,183,247,931.92
General and administrative
542,666,754.49 439,561,779.70
expenses
Research and Development
expenses 74,487,055.16 36,688,121.08
Financial expenses -126,988,421.10 -128,007,967.42
Including：Interest expenses 119,589,682.10 75,787,443.01
Interest income 237,072,806.72 206,402,358.25
Plus: Other income 10,744,728.17 9,041,045.01
Investment income ("-" for losses) 57,499,481.86 128,006,644.21
Including: income from
investment in associates and joint 37,796,914.64 121,343,983.69
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
5,862,846.29
values(“-“ for losses)
Credit impairment losses (“-”
for losses) -584,263.98 -218,830.33
Impairment losses(“-“ for
losses)
Gains from disposal of
assets("-" for losses) 19,789,402.07 180,849.31
3. Operating profits ("-" for losses) 7,365,492,054.79 5,594,788,374.39
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2022 Interim Report of Luzhou Laojiao Co., Ltd.
Plus: non-operating income 11,135,733.33 25,711,304.83
Less: non-operating expenses 1,949,009.51 8,283,409.08
4. Total profits before tax ("-" for
total losses) 7,374,678,778.61 5,612,216,270.14
Less: income tax expenses 1,800,020,542.39 1,346,062,434.86
5. Net profit ("-" for net loss) 5,574,658,236.22 4,266,153,835.28
5.1 By operating continuity
5.1.1 Net profit from continuing
5,574,658,236.22 4,266,153,835.28
operation ("-" for losses)
5.1.2 Net profit from discontinued
operation ("-" for losses)
5.2 By ownership
1) Attributable to owners of the
5,531,926,340.44 4,226,316,722.25
parent company
2) Attributable to non-controlling
interests 42,731,895.78 39,837,113.03
6. Net of tax from other
-25,120,502.64 9,246,453.08
comprehensive income
Net of tax from other comprehensive
income to the owner of the parent -26,408,043.89 10,138,274.15
company
6.1 Other comprehensive income
cannot reclassified into the profit and -18,914,133.57 7,593,799.86
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 -18,914,133.57 7,593,799.86
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 -7,493,910.32 2,544,474.29
and loss
1) Share in other comprehensive
income that will be classified into -9,066,533.27 3,634,687.85
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 1,572,622.95 -1,090,213.56
financial statements
7) Others
Net of tax from other comprehensive
income to non-controlling interests 1,287,541.25 -891,821.07
7. Total comprehensive income 5,549,537,733.58 4,275,400,288.36
Total comprehensive income
attributable to owners of the parent 5,505,518,296.55 4,236,454,996.40
company
Total comprehensive income
attributable to non-controlling 44,019,437.03 38,945,291.96
interests
8. Earnings per share
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2022 Interim Report of Luzhou Laojiao Co., Ltd.
(1) Basic earnings per share 3.76 2.89
(2) Diluted earnings per share 3.76 2.89
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 H1 2022 H1 2021
1. Operating revenue 2,067,048,989.06 2,677,491,673.30
Less: Cost of sales 1,385,687,450.52 1,928,926,973.89
Taxes and surcharges 21,846,321.17 21,482,412.01
Selling and distribution expenses
General and administrative
expenses 471,587,969.18 337,596,961.15
Research and Development
21,774,399.61 11,217,192.99
expenses
Financial expenses -213,866,445.14 -174,298,477.59
Including：Interest expenses 22,117,787.32 30,742,980.11
Interest income 236,000,565.63 205,130,761.41
Plus: Other income 2,964,466.60 4,047,195.83
Investment income ("-" for
52,812,442.16 111,792,244.20
losses)
Including: income from
investment in associates and joint 25,579,283.02 105,134,583.68
ventures
Income from the
derecognition of financial assets at
amortized cost (“-” for losses)
Net gain on exposure hedges
(“-” for losses)
Gains from the changes in fair
values(“-“ for losses) 5,862,846.29
Credit impairment losses (“-”
-103,576.90 -228,556.69
for losses)
Asset impairment losses (“-”
for losses)
Gains from disposal of assets("-"
for losses) 19,786,813.38 180,849.31
2. Operating profits ("-" for losses) 461,342,285.25 668,358,343.50
Plus: non-operating income 5,439,905.79 16,653,311.55
Less: non-operating expenses 1,671,093.97 4,338,960.68
3. Total profits before tax ("-" for
total losses) 465,111,097.07 680,672,694.37
Less: income tax expenses 85,788,728.92 140,409,892.00
4. Net profit ("-" for net loss) 379,322,368.15 540,262,802.37
4.1 Net profit from continuing
379,322,368.15 540,262,802.37
operation ("-" for losses)
4.2 Net profit from discontinued
operation ("-" for losses)
5. Net of tax from other
-27,980,666.84 11,228,487.71
comprehensive income
5.1 Other comprehensive income
cannot reclassified into the profit and -18,914,133.57 7,593,799.86
loss:
1) Remeasure the variation of net
indebtedness or net asset of defined
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2022 Interim Report of Luzhou Laojiao Co., Ltd.
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 -18,914,133.57 7,593,799.86
instruments
4) Changes in fair value of the
company’s credit risks
5) Other
5.2 Other comprehensive income
that will be reclassified into the profit -9,066,533.27 3,634,687.85
and loss
1) Share in other comprehensive
income that will be classified into -9,066,533.27 3,634,687.85
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 351,341,701.31 551,491,290.08
7. Earnings per share
(1) Basic earnings per share 0.24 0.37
(2) Diluted earnings per share 0.24 0.37
Consolidated statement of cash flows
Monetary Unit: CNY
Item H1 2022 H1 2021
1. Cash flows from operating
activities
Cash received from sale of goods
and rendering of services 15,086,273,014.66 10,852,935,107.83
Net increase in customer bank
deposits and placement from banks
and other financial institutions
Net increase in loans from central
bank
Net increase in loans from other
financial institutions
Premiums received from original
insurance contracts
Net cash received from reinsurance
business
Net increase in deposits and
investments from policyholders
Cash received from interest, handling
charges and commissions
Net increase in placements from
other financial institutions
Net capital increase in repurchase
business
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2022 Interim Report of Luzhou Laojiao Co., Ltd.
Net cash received from customer
brokerage deposits
Refunds of taxes and surcharges 89,261,122.49 743,477.96
Cash received from other operating
287,930,011.44 496,103,267.09
activities
Subtotal of cash inflows from
15,463,464,148.59 11,349,781,852.88
operating activities
Cash paid for goods purchased and
3,622,026,296.99 2,612,739,333.51
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
employees 699,560,416.16 609,928,620.07
Cash paid for taxes and surcharges 5,713,535,332.59 4,320,563,608.28
Cash paid for other operating
1,351,327,137.51 1,068,313,251.12
activities
Subtotal of cash outflows from
11,386,449,183.25 8,611,544,812.98
operating activities
Net cash flows from operating
activities 4,077,014,965.34 2,738,237,039.90
2. Cash flows from investing
activities
Cash received from disposal of
814,171,770.96
investments
Cash received from returns on
6,795,921.96 1,412,900.00
investments
Net cash received from disposal of
fixed assets, intangible assets and 47,943,500.00 275,836.47
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
868,911,192.92 1,688,736.47
investing activities
Cash paid to acquire and construct
fixed assets, intangible assets and 587,312,805.01 733,873,065.01
other long-term assets
Cash paid for investments 1,440,000,000.00
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
investing activities 2,027,312,805.01 733,873,065.01
Net cash flows from investing
-1,158,401,612.09 -732,184,328.54
activities
3. Cash flows from financing
activities
Cash received from investors 636,231,646.00 5,886,464.02
Including: cash received by
subsidiaries from investments by 5,886,464.02
minority shareholders
Cash received from borrowings
Cash received from other financing
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2022 Interim Report of Luzhou Laojiao Co., Ltd.
activities
Subtotal of cash inflows from
636,231,646.00 5,886,464.02
financing activities
Cash paid for debt repayments
Cash paid for distribution of
dividends and profits or payment of 52,502,625.00 52,502,625.00
interest
Including: dividends and profits paid
to minority shareholders by
subsidiaries
Cash paid for other financing
4,360,194.01 1,844,313.68
activities
Subtotal of cash outflows from
56,862,819.01 54,346,938.68
financing activities
Net cash flows from financing
579,368,826.99 -48,460,474.66
activities
4. Effect of fluctuation in exchange
rate on cash and cash equivalents 14,324,990.43 -1,432,790.86
5. Net increase in cash and cash
equivalents 3,512,307,170.67 1,956,159,445.84
Plus: balance of cash and cash
equivalents at the beginning of the 13,402,528,941.83 11,568,195,062.81
period
6. Balance of cash and cash
equivalents at the end of the 16,914,836,112.50 13,524,354,508.65
period
Cash flow statements of parent company
Monetary Unit: CNY
Item H1 2022 H1 2021
1. Cash flows from operating
activities
Cash received from sale of goods
2,334,856,499.28 3,026,181,734.93
and rendering of services
Refunds of taxes and surcharges
Cash received from other operating
activities 3,758,977,124.59 2,396,719,536.21
Subtotal of cash inflows from
6,093,833,623.87 5,422,901,271.14
operating activities
Cash paid for goods purchased and
services received 1,596,587,859.22 2,191,470,150.06
Cash paid to and on behalf of
639,918,889.87 562,431,917.32
employees
Cash paid for taxes and surcharges 451,760,425.43 350,499,714.09
Cash paid for other operating
activities 120,449,483.46 95,820,090.04
Subtotal of cash outflows from
2,808,716,657.98 3,200,221,871.51
operating activities
Net cash flows from operating
activities 3,285,116,965.89 2,222,679,399.63
2. Cash flows from investing
activities
Cash received from disposal of
investments 814,131,144.12
Cash received from returns on
6,795,921.96 1,407,900.00
investments
Net cash received from disposal of
fixed assets, intangible assets and 47,943,500.00 275,836.47
other long-term assets
Net cash received from disposal of
62
2022 Interim Report of Luzhou Laojiao Co., Ltd.
subsidiaries and other business units
Cash received from other investing
activities
Subtotal of cash inflows from
868,870,566.08 1,683,736.47
investing activities
Cash paid to acquire and construct
fixed assets, intangible assets and 53,052,249.25 41,220,364.85
other long-term assets
Cash paid for investments 1,440,000,000.00
Net cash paid to acquire subsidiaries
and other business units
Cash paid for other investing
activities
Subtotal of cash outflows from
1,493,052,249.25 41,220,364.85
investing activities
Net cash flows from investing
activities -624,181,683.17 -39,536,628.38
3. Cash flows from financing
activities
Cash received from investors 636,231,646.00
Cash received from loans
Cash received from other financing
activities
Subtotal of cash inflows from
636,231,646.00
financing activities
Cash paid for debt repayments
Cash paid for distribution of
dividends and profits or payment of 52,502,625.00 52,502,625.00
interest
Cash paid for other financing
261,142.60 149,580.00
activities
Subtotal of cash outflows from
52,763,767.60 52,652,205.00
financing activities
Net cash flows from financing
activities 583,467,878.40 -52,652,205.00
4. Effect of fluctuation in exchange
rate on cash and cash equivalents
5. Net increase in cash and cash
3,244,403,161.12 2,130,490,566.25
equivalents
Plus: balance of cash and cash
equivalents at the beginning of the 12,938,983,758.82 11,045,051,933.54
period
6. Balance of cash and cash
equivalents at the end of the 16,183,386,919.94 13,175,542,499.79
period
Consolidated statement of changes in owners' equity
For the six months ended 30 June 2022
Monetary Unit: CNY
H1 2022
Equity attributable to owners of the parent company
Other equity Othe Non- Tota
instruments Less r cont l
Gen Undi
Item Shar Capi ： Com Spe Surp rolli own
Pref Perp eral strib
e tal Trea preh cial lus Othe Subt ng ers'
erre etua risk uted
capi Othe rese sury ensi rese rese r otal inter equi
d l rese profi
tal r rve stoc ve rve rve ests ty
stoc bon rve t
k Inco
k d
me
1. Balance as 1,46 3,75 167, 1,46 21,1 28,0 97,0 28,1
at 31
December of 4,75 5,35 527, 4,75 87,8 40,2 14,1 37,2
last year 2,47 4,66 152. 2,47 60,2 47,0 16.8 61,1
63
2022 Interim Report of Luzhou Laojiao Co., Ltd.
6.00 5.73 32 6.00 35.8 05.9 9 22.8
9 4 3
Plus:
adjustments
for changes in
accounting
policies
Adjustments
for correction
of accounting
errors in prior
year
Business
combinations
under
common
control
Others
21,1 28,0 28,1
1,46 3,75 167, 1,46 97,0
2. Balance as 87,8 40,2 37,2
at 1 January 4,75 5,35 527, 4,75 14,1
of the current 60,2 47,0 61,1
2,47 4,66 152. 2,47 16.8
year 35.8 05.9 22.8
6.00 5.73 32 6.00 9
9 4 3
3.Increases/d -
817, 613, 758, 942, 46,2 988,
ecreases in 6,86 26,4
the current 869, 969, 022, 377, 60,1 637,
period (“-” 2,60 08,0
393. 371. 660. 238. 43.5 382.
for 0.00 43.8
decreases) 67 60 74 92 6 48
9
-
5,53 5,50 44,0 5,54
(1) Total 26,4
1,92 5,51 19,4 9,53
comprehensiv 08,0
e income 6,34 8,29 37.0 7,73
43.8
0.44 6.55 3 3.58
9
817, 613, 210, 213,
(2) Capital 6,86 2,24
contributed or 869, 969, 762, 003,
reduced by 2,60 0,70
393. 371. 622. 328.
owners 0.00 6.53
67 60 07 60
629, 636, - -
Capital 369, 231, 6,86 6,86
contributions
by owners 046. 646. 2,60 2,60
00 00 0.00 0.00
Capital
contributions
by other
equity 0.00
instruments
holders
-
Amounts of 188, 217, 219,
share-based 6,86 22,2 2,24
500, 625, 865,
payments 2,60 62,2 0,70
recognized in 347. 222. 928.
0.00 74.4 6.53
owners' equity 67 07 60
0
Others 0.00
- - -
4,77 4,77 4,77
(3) Profit
distribution 3,91 3,91 3,91
9,30 9,30 9,30
6.54 6.54 6.54
Withdrawal of
surplus 0.00
reserves
Withdrawal of
general risk 0.00
reserve
Profit - - -
64
2022 Interim Report of Luzhou Laojiao Co., Ltd.
distributed to 4,77 4,77 4,77
owners (or
shareholders) 3,91 3,91 3,91
9,30 9,30 9,30
6.54 6.54 6.54
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
comprehensiv
e income
Others
(5) Special
reserves
Withdrawal for
the period
Use for the
period
15,6 15,6 15,6
(6) Others 26.8 26.8 26.8
4 4 4
21,9 28,9 29,1
1,47 4,57 613, 141, 1,46 143,
4. Balance as 45,8 82,6 25,8
at 30 June of 1,61 3,22 969, 119, 4,75 274,
the current 82,8 24,2 98,5
5,07 4,05 371. 108. 2,47 260.
year 96.6 44.8 05.3
6.00 9.40 60 43 6.00 45
3 6 1
For the six months ended 30 June 2021
Monetary Unit: CNY
H1 2021
Equity attributable to owners of the parent company
Other equity Othe Non- Tota
instruments Less r cont l
Gen Undi
Item Shar Capi ： Com Spe Surp rolli own
Pref Perp eral strib
e tal Trea preh cial lus Othe Subt ng ers'
erre etua risk uted
capi Othe rese sury ensi rese rese r otal inter equi
d l rese profi
tal r rve stoc ve rve rve ests ty
stoc bon rve t
k Inco
k d
me
16,2 23,0 23,1
1,46 3,72 186, 1,46 107,
1. Balance as 36,5 74,8 81,8
at 31 4,75 2,77 063, 4,75 011,
December of 13,2 58,5 69,8
2,47 7,06 325. 2,47 321.
last year 12.4 52.5 73.7
6.00 3.13 03 6.00 12
3 9 1
Plus:
65
2022 Interim Report of Luzhou Laojiao Co., Ltd.
adjustments
for changes in
accounting
policies
Adjustments
for correction
of accounting
errors in prior
year
Business
combinations
under
common
control
Others
16,2 23,0 23,1
1,46 3,72 186, 1,46 107,
2. Balance as 36,5 74,8 81,8
at 1 January 4,75 2,77 063, 4,75 011,
of the current 13,2 58,5 69,8
2,47 7,06 325. 2,47 321.
year 12.4 52.5 73.7
6.00 3.13 03 6.00 12
3 9 1
3.Increases/d
10,1 1,22 1,23 44,8 1,27
ecreases in
the current 38,2 2,10 2,24 31,7 7,07
period (“-” 74.1 9,39 7,66 55.9 9,42
for
decreases) 5 3.97 8.12 8 4.10
10,1 4,22 4,23 38,9 4,27
(1) Total
38,2 6,31 6,45 45,2 5,40
comprehensiv
e income 74.1 6,72 4,99 91.9 0,28
5 2.25 6.40 6 8.36
(2) Capital 5,88 5,88
contributed or
reduced by 0.00 6,46 6,46
owners 4.02 4.02
Capital 5,88 5,88
contributions 0.00 6,46 6,46
by owners
4.02 4.02
Capital
contributions
by other
equity 0.00
instruments
holders
Amounts of
share-based
payments 0.00
recognized in
owners' equity
Others 0.00
- - -
3,00 3,00 3,00
(3) Profit
distribution 4,20 4,20 4,20
7,32 7,32 7,32
8.28 8.28 8.28
Withdrawal of
surplus 0.00
reserves
Withdrawal of
general risk 0.00
reserve
- - -
Profit 3,00 3,00 3,00
distributed to
owners (or 4,20 4,20 4,20
shareholders) 7,32 7,32 7,32
8.28 8.28 8.28
Others
(4) Internal
carry-forward
of owners'
equity
66
2022 Interim Report of Luzhou Laojiao Co., Ltd.
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
comprehensiv
e income
Others
(5) Special
reserves
Withdrawal for
the period
Use for the
period
(6) Others
17,4 24,3 24,4
1,46 3,72 196, 1,46 151,
4. Balance as 58,6 07,1 58,9
at 30 June of 4,75 2,77 201, 4,75 843,
the current 22,6 06,2 49,2
2,47 7,06 599. 2,47 077.
year 06.4 20.7 97.8
6.00 3.13 18 6.00 10
0 1 1
Statement of changes in owners' equity of parent company
For the six months ended 30 June 2022
Monetary Unit: CNY
H1 2022
Other equity instruments Less Other
Capita Compr Specia Surplu Undist Total
Item ：
Share Prefer Perpet l ehensi l s ribute owner
Treasu Other
capital red ual Other reserv ve reserv reserv d s'
e ry Incom e e profit equity
stock bond stock e
1. Balance as 1,464, 3,739, 167,57 1,464, 18,872 25,709
at 31
December of 752,47 666,10 2,013. 752,47 ,792,7 ,535,8
last year 6.00 8.27 86 6.00 75.01 49.14
Plus:
adjustments
for changes in
accounting
policies
Adjustments
for correction
of accounting
errors in prior
year
Others
2. Balance as 1,464, 3,739, 167,57 1,464, 18,872 25,709
at January 1
of the current 752,47 666,10 2,013. 752,47 ,792,7 ,535,8
year 6.00 8.27 86 6.00 75.01 49.14
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2022 Interim Report of Luzhou Laojiao Co., Ltd.
3.Increases/d
- - -
ecreases in 819,95 613,96
the current 6,862, 27,980 4,394, 4,209,
period (“-” 2,517. 9,371.
600.00 ,666.8 596,93 731,85
for 52 60
decreases) 4 8.39 9.31
-
(1) Other 379,32 351,34
27,980
comprehensiv 2,368. 1,701.
e income ,666.8
15 31
4
(2) Capital 819,95 613,96 212,84
contributed or 6,862,
reduced by 2,517. 9,371. 5,745.
600.00
owners 52 60 92
Capital 629,36 636,23 -
contributions 9,046. 1,646. 6,862,
by owners
00 00 600.00
Capital
contributions
by other equity
instruments
holders
Amounts of -
share-based 190,58 219,70
6,862, 22,262
payments 3,471. 8,345.
recognized in 600.00 ,274.4
52 92
owners' equity 0
Others
- -
(3) Profit 4,773, 4,773,
distribution 919,30 919,30
6.54 6.54
Withdrawal of
surplus
reserves
- -
Profit
distributed to 4,773, 4,773,
owners (or 919,30 919,30
shareholders)
6.54 6.54
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
comprehensiv
e income
Others
(5) Special
reserves
Withdrawal for
68
2022 Interim Report of Luzhou Laojiao Co., Ltd.
the period
Use for the
period
(6) Others
4. Balance as 1,471, 4,559, 613,96 139,59 1,464, 14,478 21,499
at 30 June of
the current 615,07 618,62 9,371. 1,347. 752,47 ,195,8 ,803,9
year 6.00 5.79 60 02 6.00 36.62 89.83
For the six months ended 30 June 2021
Monetary Unit: CNY
H1 2021
Other equity instruments Less Other
Capita Compr Specia Surplu Undist Total
Item ：
Share Prefer Perpet l ehensi l s ribute owner
Treasu Other
capital red ual Other reserv ve reserv reserv d s'
e ry Incom e e profit equity
stock bond stock e
1. Balance as 1,464, 3,706, 185,44 1,464, 14,305 21,127
at 31
December of 752,47 816,95 1,302. 752,47 ,883,6 ,646,8
last year 6.00 0.12 55 6.00 85.01 89.68
Plus:
adjustments
for changes in
accounting
policies
Adjustments
for correction
of accounting
errors in prior
year
Others
2. Balance as 1,464, 3,706, 185,44 1,464, 14,305 21,127
at January 1
of the current 752,47 816,95 1,302. 752,47 ,883,6 ,646,8
year 6.00 0.12 55 6.00 85.01 89.68
3.Increases/d
- -
ecreases in 11,228
the current 2,463, 2,452,
period (“-” ,487.7
944,52 716,03
for 1
decreases) 5.91 8.20
(1) Other 11,228 540,26 551,49
comprehensiv ,487.7 2,802. 1,290.
e income
1 37 08
(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 3,004, 3,004,
distribution 207,32 207,32
8.28 8.28
Withdrawal of
surplus
reserves
69
2022 Interim Report of Luzhou Laojiao Co., Ltd.
- -
Profit
distributed to 3,004, 3,004,
owners (or 207,32 207,32
shareholders)
8.28 8.28
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
comprehensiv
e income
Others
(5) Special
reserves
Withdrawal for
the period
Use for the
period
(6) Others
4. Balance as 1,464, 3,706, 196,66 1,464, 11,841 18,674
at 30 June of
the current 752,47 816,95 9,790. 752,47 ,939,1 ,930,8
year 6.00 0.12 26 6.00 59.10 51.48
3. Company Profile
3.1 Company Overview
Luzhou Laojiao Co., Ltd. (hereinafter referred to as "Company" or "the Company"), formerly known as
Luzhou Laojiao Brewery, was established in March 1950. On 20 September 1993, Luzhou Laojiao
brewery established a joint-stock limited company with fund-raising exclusively from its operational
assets. On 25 October 1993, the public offering of shares was approved by Sichuan Provincial People's
Government and CSRC with two documents of ChuanFuHan (1993) No.673 and FaShenZi (1993)
No.108. After the offering, the total share capital was 86,880,000 shares, which were listed and traded
in Shenzhen stock exchange on 9 May 1994.
As the end of 31 December 2004, the Company's total share capital reached 841,399,673 shares after
multiple rights issues, among which the controlling shareholder, State Assets Management Bureau of
Luzhou (later renamed as State-owned Assets Supervision and Administration Commission of Luzhou,
hereinafter referred to as "SASAC of Luzhou") held 585,280,800 shares of the Company, with a
shareholding ratio of 69.56%.
70
2022 Interim Report of Luzhou Laojiao Co., Ltd.
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 81,088,300 shares and 84,000,000
shares to Laojiao Group and Xinglu Group respectively. In addition, Laojiao Group has increased its
equity stake through the secondary market of 13,137,100 shares. So far, Laojiao Group, Xinglu Group
and SASAC of Luzhou held 394,225,489 shares, 365,971,142 shares and 1,111,930 shares
respectively, with the shareholding ratios of 28.11%, 26.10% and 0.08% respectively.
On 23 August 2017, the Company issued CNY 62,500,000 ordinary shares (A shares) privately,
raising a total capital of CNY 3,000,000,000. After the additional issuance, the total capital stock of the
Company was changed to 1,464,752,476 shares. In addition, from 2017 to 2018, Laojiao Group
decreased 13,137,100 shares that were increased through the secondary market from April 2014 to
December 2015. After share reduction, Laojiao Group, Xinglu Group and SASAC of Luzhou held
381,088,389 shares, 365,971,142 shares and 1,111,930 shares respectively, with the shareholding
ratios of 26.02%, 24.99% and 0.08% respectively. Laojiao Group still was the first majority
shareholder and SASAC of Luzhou still was the actual controller.
71
2022 Interim Report of Luzhou Laojiao Co., Ltd.
On 22 February 2022, the first grant of 6,862,600 shares under the 2021 Restricted Share Incentive
Plan was completed and registered. As such, the total shares of the Company were changed to
1,471,615,076 shares. The said grant of restricted shares did not result in the change of the
Company’s controlling shareholder or actual controller.
3.2 Registered address of the Company, company type, and headquarter address
Registered address and headquarter address of the Company are located in Sichuan Luzhou Laojiao
Square and company type is other incorporated company (Listed).
3.3 Business nature of the Company and main business activity
Industry of the Company is the 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 Cellar Age
Series” ,”Luzhou Laojiao Tequ”, ”Touqu”, ”Hey Guys” and other baijiu series.
3.4 The name of the controlling shareholder and the ultimate substantive controller
The controlling shareholder is Luzhou Laojiao Group Co., Ltd.; the ultimate substantive control is
SASAC of Luzhou.
3.5 Approval and submission of the financial report and its date
The financial report is approved and submitted by the board of directors of the Company and
disclosed on 25 August 2022.
3.6 Consolidated financial statement scope and their changes
(1) The 24 subsidiaries included in the consolidated financial statements for the current period
are listed as follows:
Shareholding proportion(%)
Name of subsidiary Abbreviation Voting rights (%)
Direct Indirect
Luzhou Laojiao Brewing Co., Ltd. Brewing company 100.00 100.00
Luzhou Red Sorghum Modern Agricultural Development Red sorghum
Co., Ltd. company 60.00 60.00
Luzhou Laojiao Sales Co., Ltd. Sales company 100.00 100.00
Luzhou Laojiao Nostalgic Liquor Marketing Co., Ltd. Nostalgic company 100.00 100.00
Custom liquor
Luzhou Laojiao Custom Liquor Co., Ltd. Note 1 15.00 60.00
company
Luzhou Laojiao Selected Supply Chain Management Co.,
Selected company 100.00 100.00
Ltd.
Guangxi Imported
Guangxi Luzhou Laojiao Imported Liquor Industry Co., Ltd. 100.00 100.00
Liquor 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
New Liquor Industry
Luzhou Laojiao New Liquor Industry Co., Ltd. 100.00 100.00
company
Import and export
Luzhou Laojiao Import and Export trade Co., Ltd. 100.00 100.00
company
Luzhou Laojiao Boda Liquor Industry Marketing Co., Ltd. Boda marketing 75.00 75.00
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
72
2022 Interim Report of Luzhou Laojiao Co., Ltd.
Luzhou Laojiao Tourism Culture Co., Ltd. Note 4 Tourism company 100.00 100.00
Luzhou Pinchuang Technology Co., Ltd. Pinchuang company 100.00 100.00
Luzhou Laojiao International Development（Hong Kong）
Hong Kong company 55.00 55.00
Co., Ltd.
Luzhou Laojiao Commercial Development (North America) North America
Co., Ltd. company 100.00 100.00
Electronic Commerce
Luzhou Laojiao Electronic Commerce Co., Ltd. 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: The subsidiary Luzhou Laojiao Tourism Culture Co., Ltd. completed business and tax cancellation in June
2022. Its travel deposit of CNY 1,400,000 must be approved by the Ministry of Culture and Tourism of the People's
Republic of China before the restriction can be lifted. As of June, the bank account was not canceled as the relevant
procedures were not completed, so it is still included in the combination scope in this reporting period.
Details of the subsidiaries incorporated into the consolidated financial statements show on “7.1.
Interests in subsidiaries”
(2) Liquidation and cancellation for subsidiaries in this period
Name of subsidiary Reason
Luzhou Laojiao Bosheng Hengxiang Liquor 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.
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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 by the Company.
5.1 The declaration about compliance with ASBE
The financial statements of the Company have been prepared in accordance with ASBE, and present
truly and completely, the financial position and the Company’s and results of operations, changes in
shareholders’ equity and cash flows. In addition, in all material respects, the financial statements of the
Company comply with disclosure requirements of the financial statements and their notes in
accordance with Rules on Company Information Disclosure and Preparation of Publicly Issued
Securities No.15- General Rules on Financial Reporting Rules revised by CSRC in 2014.
5.2 Accounting period
The Company adopts the calendar year as its accounting year, i.e. from 1st January to 31st
December.
5.3 Business Cycle
The Company’s business cycle is 12 months.
5.4 Functional currency
The Company has adopted China Yuan (CNY) as functional currency.
5.5 The accounting treatment of business combinations involving enterprises
under common control and business combinations not involving enterprises
under common control
(1) Business combination under common control
Assets and liabilities obtained by the Company from the combine through business combination
under common control shall be measured at the book value as stated in the consolidated financial
statements of ultimate controlling party at the combination date. The share of the book value of the
merged party’s owner’s equity in the consolidated financial statements is taken as the initial
investment cost of long-term equity investments in individual financial statements. The capital reserve
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(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
The consolidated financial statements are based on the financial statements of the Company and its
subsidiaries, and are prepared by the parent company with other relevant information. When
preparing consolidated financial statement, the Company considers the Group as an accounting
entity, adopts unified accounting policies, and applies the requirements of ASBE related to
recognition, measurement and presentation to reflect the Group’s financial position, operating results
and cash flows.
All the subsidiaries within the consolidation scope of consolidated financial statements shall adopt the
same accounting policies and accounting periods as those of the Company. If the accounting policies
or accounting periods of a subsidiary are different from those of the Company, the financial
statements of the subsidiary, upon preparation of consolidated financial statements, shall be made
necessary adjustment based on its own accounting policies and accounting periods of the Company.
For subsidiaries acquired from the business combination not under common control, the financial
statements shall be adjusted on the basis of the fair value of identifiable net assets on the date of
purchase. For the subsidiary acquired from the business combination under common control, its
assets and liabilities (including the goodwill formed by the acquisition of the subsidiary by the ultimate
controlling party) shall be adjusted on the basis of the book value in the consolidated statements of
the ultimate controlling party.
The portion of a subsidiary’s equity, the current net profit and loss of subsidiaries, and the current
comprehensive income attributable to non-controlling interests shall be separately presented as non-
controlling interests in consolidated balance sheet within owners' equity, below the net profit line item
and below the total comprehensive income line item in the consolidated income statement
respectively. When the amount of current loss attributable to non-controlling shareholders of a
subsidiary exceeds the balance of the non-controlling shareholders’ portion in the opening balance of
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owner's equity of the subsidiary, the excess shall be allocated against the non-controlling interests.
Acquisition of subsidiaries or business
During the reporting period, if the Company acquires subsidiaries from the business combination
under common control, the opening balance in the consolidated balance sheet shall be adjusted. The
income, expenses and profits of the newly acquired subsidiaries from the beginning to the end of the
reporting period shall be included in the consolidated income statement. The cash flows of the newly
acquired subsidiaries from the beginning to the end of the reporting period shall be included in the
consolidated statement of cash flows. At the same time, the relevant items of the comparative
information shall be adjusted as the combined entity existed since the control point of the ultimate
controlling party.
If the Company can control the investee from the business combination under common control due to
additional investment or other reasons, the parties involved in the combine shall be deemed to adjust
in the current state when the ultimate controlling party starts to control them. For the equity
investment before obtaining control of the investee, the recognized relevant profit or loss and other
comprehensive income and other changes in net assets between the later of acquisition date of
previous equity and the date on which both the investor and the investee are under common control
and the combination date shall respectively write-down the beginning retained earnings or current
profits and losses during the period of comparative information.
During the reporting period, if the Company acquires subsidiaries from the business combination not
under common control, the opening balance in the consolidated balance sheet shall not be adjusted.
The income, expenses and profits of the newly acquired subsidiaries from the acquisition date to the
end of the reporting period shall be included in the consolidated income statement. The cash flows of
the newly acquired subsidiaries from the acquisition date to the end of the reporting period shall be
included in the consolidated statement of cash flows.
When the Company becomes capable of exercising control over an investee not under common
control due to additional investment or other reasons, the Company shall re-measure the previously
held equity interests to its fair value on the acquisition date, and the difference shall be recognized as
investment income. When the previously held equity investment is accounted for under equity method,
any other comprehensive income previously recognized and other equity changes (excluding other
comprehensive, net profit and loss and profit distribution ) in relation to the acquiree’s equity changes
shall be transferred to profit and loss for the current period when acquisition took place, except for
other comprehensive income resulting from changes in net liabilities or net assets due to re-
measurement of defined benefit plan by investee.
Disposal of subsidiaries and business
General treatments
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
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included in the consolidated statement of cash flows.
In case of loss of control over the investee due to partial disposal of the equity investment or other
reasons, the Company shall re-measure the remaining equity investment at its fair value at the date
of loss of control. The amount of the consideration obtained from the disposal of the equity and the
fair value of the remaining equity, minus the net asset shares calculated continuously from the
acquisition date based on the previous shareholding proportion and the goodwill, the difference shall
be included in the investment income of the period when the control is lost. Other comprehensive
income related to the former subsidiary’s equity investment of or other changes in owners' equity
excluding net profit and loss, other comprehensive income and profit distribution shall be transferred
to investment income for the current period when control is lost. Other comprehensive income
resulting from changes in net liabilities or net assets due to re-measurement of defined benefit plan
by investee is excluded.
Disposal of subsidiaries by step
If the Company loses control of a subsidiary is through multiple transactions by steps, the terms,
conditions and economic impact of the disposal transaction shall be considered. When one or more of
the following conditions may indicate that multiple transactions should be treated as a package of
transactions for accounting treatment:
a.These arrangements were entered into at the same time or in contemplation of each other;
b.These arrangements work together to achieve an overall commercial effect;
c.The occurrence of one arrangement depends on the occurrence of at least one other arrangement;
d.One arrangement alone is not economically justified, but it is economically justified when
considered together with other arrangements
If the transactions of the disposal of the equity investment of the subsidiary until the loss of control
belong to a package transaction, the Company shall account for as a transaction; However, the
difference between each disposal consideration received and the corresponding proportion of the
subsidiary’s net assets before the loss of control shall be recognized as other comprehensive income
in the consolidated financial statements and transferred into the profit and loss of the current period
when the control is lost.
If the transactions from the disposal of the equity investment of the subsidiary to the loss of control
are not considered as a package transactions, the accounting treatment shall be conducted according
to the relevant policies on the partial disposal of the equity investment of the subsidiary where control
is retained before the loss of control. When the control is lost, the disposal shall be accounted for
according to the general treatment.
Purchase of non-controlling interests
The difference between the increase in the cost of long-term equity investment result from acquisition
of 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
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adjusted to equity (share) premium of capital reserves in the consolidated balance sheet. If the capital
reserve is insufficient, any excess shall be adjusted against retained earnings.
Partial disposals of equity investment in subsidiaries without loss of control
When the Company disposes of a portion of a long-term equity investment in a subsidiary without
loss of control, the difference between disposal consideration and net assets of the subsidiary
calculated continuously since the acquisition date or the combination date related to the disposal of
long-term equity investment shall be adjusted to equity (share) premium of capital reserves in the
consolidated balance sheet. If the capital reserve is insufficient, any excess shall be adjusted against
retained earnings.
5.7 Classification of joint venture arrangements and the accounting treatment
method of common operation
(1) Classification of joint venture arrangements
A joint arrangement is classified as either a joint operation or a joint venture according to the structure,
legal form, agreed terms and other facts and conditions of a joint arrangement. A joint arrangement
that is structured through a separate vehicle is usually classified as a joint venture. However, when a
joint arrangement provides clear evidence that it meets any of the following requirements and
complies with applicable laws and regulations as a joint operation:
a. The legal form of the joint arrangement indicates that the parties that have joint control have rights
to the assets, and obligations for the liabilities, relating to the arrangement.
b. The terms of the joint arrangement specify that the parties that have joint control have the rights to
the assets, and the obligations for the liabilities, relating to the arrangement.
c. Other facts and circumstances indicate that the parties that have joint control have rights to the
assets, and the obligations for the liabilities, relating to the arrangement.
The parties that have joint control have rights to substantially all of the output of the arrangement, and
the arrangement depends on the parties that have joint control on a continuous basis for settling the
liabilities of the arrangement.
(2) Accounting by parties of a joint operator
A joint operator shall recognize the following items in relation to its interest in a joint operation, and
account for them in accordance with relevant accounting standards:
a. Its solely-held assets, and its share of any assets held jointly;
b. Its solely-assumed liabilities, and its share of any liabilities incurred jointly;
c. Its revenue from the sale of its share of the output arising from the joint operation;
d. Its share of the revenue from sale of the output by the joint operation; and
e. Its solely-incurred expenses and its share of any expenses incurred jointly.
The Company shall only recognize the portion of the profit and loss attributable to other participants in
the joint venture, resulting from investment or sale of assets to the joint venture by the Company
(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
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sold assets occurring in accordance with the ASBE No.8-Asset Impairment. The Company shall only
recognize the part of the profit and loss attributable to other participants in the joint venture before
selling the assets and other assets purchased from the joint venture (excluding those assets
constituting the business) to a third party. When the impairment loss of the purchased assets is in
accordance with the ASBE No.8-Asset Impairment, the Company shall recognize such losses
according to its share. When the Company does not have common control over the joint venture, if
the Company enjoys the assets related to the joint venture and assumes the liabilities related to the
joint venture, the accounting treatment shall be conducted according to the above principles.
Otherwise, the accounting treatment shall be conducted in accordance with the relevant accounting
standards.
5.8 Cash and cash equivalents
When preparing the cash flow statement, the Company recognizes cash on hand and deposits that
can be readily withdrawn on demand as cash. Cash equivalents are the Company’s short-term (due
within 3 months from purchase date), highly liquid investments that are readily convertible to known
amounts of cash and which are subject to an insignificant risk of changes in value. Restricted bank
deposits are not recognized as cash and cash equivalents in the cash flow statement.
5.9 Foreign currency transactions and translation of foreign currency statements
(1) Foreign currency transactions
At the time of initial recognition of a foreign currency transaction of the Company, the amount in the
foreign currency shall be translated into the amount in CNY currency at the spot exchange rate of the
transaction date. For the monetary items of foreign currencies, the translation is done according to
spot rate of the balance sheet date. The exchange difference generated from the difference of spot
rate of the current balance sheet date and the time of initial recognition of a foreign currency or the
previous balance sheet date is charged to the profit or loss of the current period except that the
exchange difference generated from foreign currency borrowings relating to assets of which the
acquisition or production satisfies the capitalization conditions is capitalized.
Non-monetary items measured at fair value that is reflected in foreign currency at the end of the
period, the Company shall firstly translate the foreign currency into the amount in functional currency
at the spot exchange rate on the date when the fair value is determined, and then compare it with the
original functional currency amount. Difference between the translated functional currency amount
and the original functional currency amount is treated as profit or loss from changes in fair value
(including changes in exchange rate) and is recognized in current profit and loss. If there is a non-
monetary item of available-for-sale financial assets, the differences are recorded into other
comprehensive income.
(2) Translation of foreign currency statements
Assets and liabilities in the balance sheets shall be translated at the spot exchange rates on balance
sheet date. Shareholders’ equity items, except for the item of "undistributed profits", are translated at
the spot exchange rates on the dates when the transactions occur. Revenue and expense items in
the income statement are translated at the spot exchange rates on the dates when the transactions
occur or at the exchange rate determined in a systematical and reasonable method and similar to the
spot exchange rate on the day when the transactions occur. Differences arising from the above
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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
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.
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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 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.
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2) Other financial liabilities
Financial liabilities other than those formed from the transfer of financial assets not meeting
derecognition conditions or continuous involvement into transferred financial assets and those outside
financial guarantee contracts are classified as financial liabilities measured at amortized cost. Such
financial liabilities should be subsequently measured at amortized cost and the gains or losses from
derecognition or amortization should be included into current profits/losses.
(3) Recognition basis and measurement method of transfer of financial assets
If a financial asset meets any of the following conditions, it shall be derecognized: 1)The contractual
right for collecting the cash flow of the financial asset has been terminated; 2)The financial asset has
been transferred and almost all the risks and remunerations in respect of the ownership of the
financial asset has been transferred to the transferee; 3)The financial asset has been transferred, and
although the enterprise neither transfers nor retains almost all the risks and remunerations in respect
of the ownership of the financial asset, it has abandoned its control over the asset.
If the enterprise neither transfers nor retains almost all the risks and remunerations in respect of the
ownership of the financial asset and does not abandon its control over the asset, the involved
financial asset shall be recognized according to the level of continuous involvement of the transferred
financial asset and the relevant liabilities shall be recognized accordingly. The level of continuous
involvement of the transferred financial asset refers to the level of risk faced by the enterprise due to
changes in the value of the financial asset.
If the overall transfer of the financial asset meets the recognition conditions, the difference between
the carrying value of the transferred financial asset as well as the consideration received from the
transfer and the cumulative amount of fair value changes originally-recorded into other
comprehensive incomes shall be recorded into the current profits/losses.
If partial transfer of the financial asset meets the recognition conditions, the carrying value of the
transferred financial asset shall be apportioned at the relative fair value between the derecognition
and underecognition part. The difference between the summation of the consideration received from
the transfer and the cumulative amount of fair value changes originally-recorded into other
comprehensive incomes that should be apportioned to the derecognition part and the apportioned
aforementioned carrying value shall be recorded into the current profits/losses.
For a financial asset sold with the right of recourse or with the transfer of the financial asset
endorsement, the Company shall decide whether almost all the risks and remunerations in respect of
the ownership of the financial asset should be transferred. If they are transferred, the financial asset
shall be derecognized; if they are retained, the financial asset shall not be derecognized; if they are
neither transferred nor retained, the Company will continue to decide whether the enterprise should
retain control over the asset and perform the accounting treatment according to the principles stated
in previous paragraphs.
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(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
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
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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 interest income according to the book balance and the effective interest rate; if
credit impairment has occurred since the initial recognition and is in the third stage, the Company will
measure the loss provision by the amount equivalent to the expected credit loss for the entire
duration and calculate the interest income according to the amortization cost and the effective interest
rate. For financial instruments with low credit risks on balance sheet dates, the Company assumes
that their credit risks have not substantially increased since the initial recognition.
The Company assesses expected credit losses of financial instruments based on individual and
group assessment. The Company considers the credit risk characteristics of different customers and
assesses the expected credit losses of accounts receivable and other receivables based on account
age portfolio. When assessing expected credit losses, the Company considers reasonable and well-
founded information on past matters, present conditions and forecast of future economic conditions.
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When it no longer reasonably expects to recover all or part of the contract cash flow of financial
assets, the Company will directly write down the book balance of such financial assets.
5.11 Notes receivable
Divide notes receivables into various portfolios according to common risk characteristics based on the
credit risk characteristics of acceptors and determine the accounting estimate policies of expected
credit loss:
Portfolio name Provision method
Bank acceptance bill The management evaluates that this type has low credit risk and its fixed bad
portfolio debt provision ratio is 0%.
Trade acceptance The provision for impairment is made according to the expected loss rate with
portfolio the same portfolio classification of accounts receivables
5.12 Accounts receivables
The method of determining the expected credit loss of accounts receivables and accounting
treatment method:
As for accounts receivables, regardless of whether there is a significant financing component, the
Company always measures the provision for loss based on the amount equivalent to the expected
credit loss over the entire life, and the resulting increase or reversal of provision for loss shall be
included in the current profit or loss as gains or losses on impairment. The accrual method is as
follows:
(1) When there is objective evidence showing that an account receivable has incurred credit
impairment, the Company shall make bad debt provision for the account receivable and recognize the
expected credit loss.
(2) When the information about the expected credit loss of a single financial asset cannot be
evaluated at a reasonable cost, the Company shall divide the accounts receivables portfolio
according to credit risk characteristics and measure the expected credit loss based on portfolios.
Portfolio name Provision method
Risk portfolio Expected credit loss
Other portfolio No bad debt provision
Other portfolio refers to the normal intercourse funds among the Company and businesses under the
same control, the recovery of which are controllable with no risks. Thus, no bad debt provision was
made.
The Company combines the accounts receivables classified as risk portfolio in accordance with
similar credit risk characteristics (aging), and calculates the expected credit loss through the exposure
at default and expected credit loss rate over the entire life based on the current situation and
prediction of future economic situation consulting historical credit loss experience. The comparative
table of the credit loss rate is as follows:
Aging Expected loss provision rate %
Within 1 year 5
1-2 years 10
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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.
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
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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 and semi-finished goods shall be accounted according to the actual cost, and the
weighted average method shall be used when they are received and delivered. The actual cost of the
inventory at the end of the month above shall be taken as the standard cost, and the delivery shall be
priced according to the standard cost. At the end of the month, the standard cost of the inventory at
the end of the month shall be adjusted into the actual cost through the cost-sharing difference.
(3) Basis to determine net realizable values of inventories and method of provision for stock
obsolescence
At the end of the period, inventory is measured according to the lower of cost and net realizable value.
The difference between inventory cost and net realizable value is higher than the provision for stock
obsolescence , which is recorded into current profit and loss. For inventories that are related to
product ranges produced and sold in the same district or used for the same or similar ultimate
purpose and are difficult to be measured separately from other inventories, the Company provides for
stock obsolescence as a whole. For inventories that have large quantities but low value, the
Company provides for stock obsolescence on a category basis.
The materials held for production shall be measured at cost if the net realizable value of the finished
products is higher than the cost. If a decline in the value of materials shows that the net realizable
value of the finished products is lower than the cost, the materials shall be measured at the net
realizable value.
(4) Inventory system
The Company adopts perpetual inventory system.
(5) Amortization method of packing materials and low-cost consumables
It is amortized in full at once.
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.
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Considerations that the Company has the right to collect for commodities transferred or services
provided to customers (and such right depends on other factors than time lapses) are presented as
contract assets. The Company presents the right possessed to collect consideration from customers
unconditionally (only depending on the passing of time) as accounts receivable. Refer to “The method
of determining the expected credit loss of accounts receivables and accounting treatment method” for
the detail on the Company’s method of determining the expected credit loss of contract assets and
accounting treatment method.
5.17 Contract costs
Contract costs comprise incremental costs incurred as the Company obtains a contract, and costs for
contract performance. Incremental costs incurred as the Company obtains a contract refer to those
costs which will not incur without entering into a contract (such as sales commission). If it is expected
that the costs are recoverable, the Company will recognize the costs incurred to obtain a contract as
one form of assets. In case that the term of asset amortization is shorter than one year or one normal
operating cycle, the costs will be recognized as profit and loss of the current period after occurrence.
If the costs incurred from contract performance fall outside the inventory or the scope of other
enterprise accounting standards and satisfy all of the following conditions, the Company will recognize
the costs for contract performance as assets: a) The costs are directly related to one existing contract
or contract that is expected to be obtained; b) The costs enrich the Company's resources for future
contract performance (including continual fulfillment); c) The costs are estimated to be recovered.
Assets recognized from costs incurred to obtain a contract and costs for contract performance
(hereinafter referred to as "assets related to contract costs") will be amortized based on the basis the
same with the income from commodities or services related to the assets, and will be recognized as
profit and loss of the current period. In case that the book value of assets related to contract costs is
higher than the difference of the two items below, the Company will set aside provisions for assets
impairment to deal with the extra part, and recognize that part as impairment losses: a) Estimated
residual consideration to be obtained from transfer of commodities or services related to the assets; b)
Estimated costs incurred from transfer of the relevant commodities or services.
5.18 Assets held for sale
(1) Classification of non-current assets held for sale or disposal groups
The Company shall classify the non-current assets or disposal group meeting the following conditions
into the held-for-sale category: The assets (or disposal group) must be available for immediate sale in
its present condition subject only to terms that are usual and customary for sales of such assets (or
disposal groups); Its sale must be highly probable.; The Company has already made a decision to
dispose the component and has a commitment from the purchaser, the transfer will be completed
within one year.
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
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be completed within one year" and if it is likely to meet other conditions for the held-for-sale category
within a short period (usually three months).
Due to one of the following reasons that the Company is unable to control, leading to the transactions
uncompleted with non-related party within one year, and the Company still commits to sale non-
current assets or disposal groups, it can continue to account for non-current assets or disposal
groups as held-for-sale: the buyer or any other party accidentally set sale extension condition. The
Company has to take action in time according to these conditions and the extension problem is
expected to be solved within one year; In rare cases, the Company has taken the necessary steps
and re-satisfy the hold for sale category condition within the first year for the new circumstances
which caused it unable to complete the sale of the non-current assets or disposal group within one
year.
(2) Measurement of non-current assets or disposal groups held for sale
a. Initial measurement and subsequent measurement
When the Company measure a non-current asset or disposal group held for sale initially or re-
measure at balance sheet date subsequently, the impairment loss should be recognized if the book
value is higher than fair value less costs to sell at the amount of the difference of these two in profit
and loss, the provision for assets held for sale need to be recognized at the same time.
For the non-current assets or disposal groups divided into held-for-sale category on the acquisition
date, they shall be measured as the lower of the initial measurement amount and the net amount
after deducting the selling expenses from the fair value under the assumption that it is not divided into
held-for-sale categories at the initial measurement. Except for the non-current assets or the disposal
groups obtained in the enterprise merger, the difference caused by the non-current assets or the
disposal groups taking the net amount after the fair value minus the selling expenses as the initial
measurement amount shall be recorded into the current profit and loss.
For the impairment of disposal group, it should write off goodwill if existing, and then write down the
related assets proportionally.
Depreciation or amortization should cease for the non-current asset held for sale. Interest and other
charges on liabilities in the disposal groups held for sale continue to be recognized.
b. Accounting treatment of reversal of impairment loss
If the net amount of the non-current assets held for sale on the subsequent balance sheet date
increases after the fair value minus the selling expenses, the amount previously written down shall be
reversed, and the amount of the impairment loss recognized after being classified as the held-for-sale
shall be reversed, and the reversed amount shall be included in the current profit and loss. The
impairment loss recognized before the classification of the held-for-sale shall not be reversed.
If the net amount of the disposal groups held for sale on the subsequent balance sheet date
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increases after the fair value deducting the selling expenses, the amount previously written down
shall be reversed, and the amount of the impairment loss recognized as non-current assets after
being classified as the held-for-sale shall be reversed, and the reversed amount shall be included in
the current profit and loss. The book value of the goodwill that has been written down and the
impairment losses recognized before the classification of the held-for-sale shall not be reversed.
The subsequent reversed amount of the impairment loss recognized by the disposal groups held for
sale shall be increased in proportion to the book value of non-current assets except goodwill in the
disposal groups.
c. The accounting treatment that does not continue to be classified as held-for-sale and the
termination of recognition
Non-current assets or disposal groups that are no longer divided into held-for-sale category or non-
current assets are removed from disposal groups held for sale because of no longer meeting the
condition of classification of held-for-sale, they are measured at lower of the following two: book value
before being classified as the held-for-sale considering depreciation, amortization or impairment that
should have been recognized under the assumption that it is not divided into held-for-sale categories;
and recoverable amount.
When terminating the recognition of the non-current assets held for sale or the disposal groups, the
unrecognized gains or losses shall be recorded into the current profit and loss.
5.19 Long-term 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.
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b. To participate in the financial and business policy making process of the investee.
c. Significant transactions with the investee.
d. Dispatch management personnel to the investee.
e. To provide key technical data to the investee.
(2) Determination of the initial investment cost
a. Long-term equity investment resulting from combination
Business combination under common control：
For the long-term equity investments obtained by cash paid, non-monetary assets paid or assumed
liabilities and the equity securities issued by the acquirer, on the merger date, the initial investment
cost of long-term equity investment shall be taken as the share of the owner's equity of the investee in
the book value of the final control party's consolidated financial statements. If the investee under
business combination under common control can be controlled due to additional investment or other
reasons, the initial investment cost of long-term equity investment shall be determined on the merger
date according to the share of the net assets of the investee in the book value of the final control
party's consolidated financial statements. The difference between the initial investment cost of the
long-term equity investment on the merger date and sum of the book value of the long-term equity
investment before the merger and the new consideration of acquiring shares on the merger date shall
be recorded to adjust the equity premium. If the equity premium is insufficient to be written down, the
retained earnings shall be written down.
Business combination not under common control：The Company takes the initial investment cost of
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.
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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.
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.
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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
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
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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
10－45 5% 9.50%－2.11%
Constructions method
Straight-line
Special equipment 5－35 5% 19.00%－2.71%
method
Universal Straight-line
4－25 5% 23.75%－3.80%
equipment 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 m ethod
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.
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(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.
(4) Impairment test method and impairment provision accrued method of fixed assets
At the end of the period, the fixed assets shall be measured at the lower of the book value and the
recoverable amount. If the recoverable amount of fixed assets is lower than the book value due to a
continuous decline in the market value, or technological obsolescence, damage, or long-term
idleness, a provision for impairment of the fixed assets shall be made for the difference between the
recoverable amount and the book value of individual fixed assets. If the recoverable amount of the
individual asset is difficult to estimate, the Company will determine the recoverable amount of the
asset group based on the asset group to which the asset belongs. The impairment losses on fixed
assets must not be reversed in subsequent accounting periods once recognized.
For fixed assets for which depreciation provision has been made, the depreciation rate and
depreciation amount shall be remeasured according to the book value of the fixed assets (the original
price of fixed assets minus accumulated depreciation and provision for impairment), and the
remaining service life.
On the balance sheet date, the fixed assets shall be measured at the lower of the book value and the
recoverable amount.
5. 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
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recognized; After the completion of the final account, the original provisional value shall be adjusted
according to the actual cost, but the amount of depreciation accrued shall not be adjusted.
(3) The loan interest and related expenses incurred during the construction period shall be capitalized
into the cost of the construction in Progress.
(4) On the balance sheet date, the construction in progress is recognized at the lower of book value and
recoverable amount.
5. 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.
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(4) Capitalization suspension of borrowing costs
If the acquisition and construction or production activities of assets eligible for capitalization are
interrupted abnormally and this condition lasts for more than three months, the capitalization of
borrowing costs should be suspended. The borrowing costs incurred during interruption are charged to
profit or loss for the current period, and the capitalization of borrowing costs continues when the
acquisition and construction or production activities of the asset resume.
(5) Capitalization cessation of borrowing costs
Capitalization of borrowing costs should cease when the acquired and constructed or produced assets
eligible for capitalization have reached the working condition for their intended use or sale. Borrowing
costs incurred after the assets eligible for capitalization have reached the working condition for their
intended use or sale should be recognized as the current profit and loss when they incur. If parts of the
acquired and constructed or produced assets are completed separately but the assets cannot be used
or 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
Intangible assets refer to identifiable non-monetary assets that are owned or controlled by the Company
without a physical form.
Measurement method
a. Costs of intangible assets purchased include purchase price, related tax and expenses and other
expenditure that can be distributed to the asset directly to reach its expected use.
b. Intangible assets invested by investors shall be valued at the value agreed upon in the investment
contract or agreement;
c. Expenses on the research phase of internally researched and developed intangible assets shall be
included in the current profit and loss when they incur; The expenditures incurred in the development
stage of the internal research and development projects shall be recognized as intangible assets when
the following conditions are met; otherwise, they shall be recorded into the current profit and loss when
they incur.
i. It is technically feasible to finish intangible assets for use or sale;
ii. It is intended to finish and use or sell the intangible assets;
iii. The usefulness of methods for intangible assets to generate economic benefits shall be proved,
including being able to prove that there is a potential market for the products manufactured by
applying the intangible assets or there is a potential market for the intangible assets themselves or
the intangible assets will be used internally;
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iv. It is able to finish the development of the intangible assets, and able to use or sell the intangible
assets, with the support of sufficient technologies, financial resources and other resources.
v. The expenditure attributable to the intangible asset during its development phase can be
measured reliably.
d. If payment of the purchase price of intangible assets can be deferred and exceeds normal credit
conditions, the purchase has the nature of finance in fact and cost of the intangible asset shall be
determined on the basis of present value of the purchase price. The difference between the amount
actually paid and the present value of the purchase price should be recorded into current profit or loss
other than those should be capitalized during the credit period.
Useful life and amortization method
For intangible assets with limited useful life, amortization shall be carried out according to the straight-
line method within the period that brings economic benefits to the enterprise. At the end of each period,
the useful life and amortization method of intangible assets with limited service life shall be reviewed. If
there are differences with the original estimates, corresponding adjustments shall be made.
Intangible assets whose useful life is uncertain shall be regarded as intangible assets if it is impossible
to foresee the term in which intangible assets bring economic benefits to the enterprise. Intangible
assets with uncertain useful life shall not be amortized during the holding period, and the life of
intangible assets shall be reviewed at the end of each period. If it is still uncertain after the review at the
end of the period, the impairment test shall continue during each accounting period. At the end of each
period, the useful life of intangible assets with uncertain service life shall be reviewed.
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
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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.
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
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liabilities on the balance sheet according to the relationship between the fulfillment of its contract
performance obligations and its customers’ payment. Obligations to be fulfilled by the Company of
transferring commodities or providing services to customers, as the Company has received or should
receive customers’ considerations, are presented as contract liabilities.
5. 30. Employee benefits
Employee benefits refer to the various forms of remuneration or compensation provided by the
Company in order to obtain services offered by employees or terminate an employment relationship.
Employee remuneration mainly includes short-term remuneration, post-employment benefits,
dismissal benefits, and other long-term employee welfare.
(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.
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At the time of settlement of the defined benefit plan, the settlement gains or losses shall be recognized
according to the difference between the present value of the obligations of the defined benefit plan and
the settlement price determined on the settlement date.
(3) Accounting treatment method of termination benefits
Employee benefits liabilities shall be recognized and included into profit or loss for the current period on
the earlier date of the two following circumstances:
a. When the Company is not able to withdraw the benefits from termination of employment or
resignation persuasion unilaterally;
b. When the Company recognizes costs and fees relevant to reforming the termination benefits
payment.
As for the termination benefits that cannot be fully paid within 12 months after the end of the annual
report period, the Company shall choose an appropriate discount rate and record it into current profit
and loss based on it.
(4) Accounting treatment method of other long-term employee benefits
Other long-term employee benefits are all employee benefits other than short-term benefits, post-
employment benefits and termination benefits.
Other long-term employee benefits provided by the Company to the employee that meet the
conditions of the defined contribution plan shall be treated in accordance with the same principles of
the defined contribution plan; If the conditions for defined benefits are met, net liabilities or net assets
of other long-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,
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uncertainty and time value of money related to contingencies. If the time value of money has a
significant impact, the best estimate is determined by discounting the relevant future cash outflows.
The best estimate is processed as follows:
Where there is a continuous range (or range) of required expenditures and the probability of the
occurrence of various results within the range is same, the best estimate is determined according to the
mean of the middle value of the range, namely the mean value of the upper and lower limits.
Where there is no continuous range (or range) of required expenditures, or where there is a continuous
range but the possibility of various outcomes within the range is different, if the contingencies involve a
single item, the best estimate is determined according to the most likely amount; If the contingencies
involve more than one item, the best estimate is calculated and determined according to various
possible results and relevant probabilities.
Where all or part of the expenses required for the liquidation of the estimated liabilities of the Company
are expected to be compensated by a third party, the amount of compensation shall be recognized as
an asset when it is basically confirmed that it can be received, and the confirmed amount of
compensation shall not exceed the book value of the estimated liabilities.
5. 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
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subsequent information, and modifies the number of equity instruments for the estimated vesting. On
the vesting date, the final expected number of vesting instruments is the same as the actual number of
vesting instruments.
(4) Relevant accounting treatment of implement, modification and termination of share-based payment
plan
For equity-settled share-based payment, no adjustments will be made to the recognized costs and total
owners' equity after the vesting date. On the vesting date, the Company shall recognize the share
capital and the equity premium according to the exercise situation, and carry forward the capital reserve
recognized in the waiting period.
No matter how it modifies the terms and conditions of the granted equity instruments or it cancels the
granted equity instruments or its settlement, the equity instruments granted by the Company shall be
recognized at fair value on the grant date and it measures obtained the corresponding services,
unless it cannot be vested because it cannot meet the vesting conditions of equity instruments
(except market conditions).
5. 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,
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the Company will identify the revenue according to the amount of the incurred costs until the
performance progress can be reasonably identified.
(2) The methods of revenue identification
The Company mainly sells alcoholic products, which is a performance obligation performed at a certain
point in time. The revenue identification of domestic products must meet the following requirements: a.
The Company has delivered the products to the purchasers according to the contract and the
purchasers have signed and confirmed the receipts. b. The amount of sales revenue has been
identified. c. The payment has been received; the receipt of the document of title has been obtained
and the relevant economic benefits are likely to flow in. d. The product-related costs can be reliably
calculated. The following requirements must be met to confirm the revenue of export products: a. The
Company has declared the products in accordance with the contract, obtained the bills of lading,
received the payment or obtained the receipt of payment and related economic benefits that are likely
to flow in. b. The main risks and rewards of the product ownership have been transferred. c. The legal
ownership of the goods has been transferred.
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
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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.
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
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
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payments, the Company uses the interest rate implicit in lease as the rate of discount. If the interest
rate implicit in lease cannot be determined, the Company’s incremental lending rate is used as the rate
of discount.
After the commencement of the lease term, the Company uses the cost model for subsequent
measurement of right-of-use assets, depreciates right-of-use assets on a straight-line basis, calculates
the interest expense on the lease liability within the lease term and includes it in the current profit or
loss, unless such interest charge is stipulated to be included in the underlying asset cost. Variable lease
payments that are not included in the measurement of the lease obligation should be included in the
current profit or loss when they are actually incurred, unless such payments are stipulated to be
included in the underlying asset cost.
After the commencement of the lease term, the Company remeasures the lease liability and adjusts the
corresponding right-of-use asset, and if the carrying value of the right-of-use asset has been reduced to
zero but the lease liability is subject to further reduction, the difference is recorded in current profit or
loss: (1) When there is a change in the valuation of the purchase option, renewal option or termination
option, or actual exercise, the Company remeasures the lease liabilities at the present value of the
lease payments after the change and the revised discount rate; (2) When there is a change in the
actual fixed payment, the estimated payable of the residual value of the guarantee, the index or rate
used to confirm the lease payment, the Company calculated the present value based on the changed
lease payment amount and the original discount rate to remeasure the lease liabilities. However, where
changes in lease payments arise from changes in floating interest rates, a revised discount rate was
used to calculate the present value.
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
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.
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On the commencement date of the lease term, the Company recognizes the finance lease
receivables for the finance lease and derecognizes the leased asset of the finance lease. In the initial
measurement of finance lease receivables, the sum of the unsecured residual value and the present
value of the lease payments receivable not yet received on the commencement date of the lease
term discounted at the interest rate implicit in lease is the entry value of the finance lease receivables.
The Company calculates and recognizes the interest income in each period within the lease term at a
fixed interest rate implicit in the lease. The received variable lease payments that are not included in
the measurement of the net investment in the lease are included in profit or loss for the current period
when they are actually incurred.
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 quantity) Quantity of baijiu CNY 1.00/kg
Consumption tax (based on price) Baijiu tax price or ex-factory price 20%
Education surcharge Taxable turnover tax 3%
Local education surcharge Taxable turnover tax 2%
Original value of the property*70%;
Property tax 1.2%, 12%
house rent
Land use tax Land area CNY 5-18.00/m 2
Others According to national regulation
Tax payment subject using different corporate income tax rates, the corporate income tax rates are as
follows:
Company name Corporate income tax rate
Luzhou Pinchuang Technology Co., Ltd. 15%
Luzhou Laojiao International Development (Hong Kong)
16.5%
Co., Ltd.
Luzhou Laojiao Commercial Development (North
21%-40%
America) Co., Ltd.
Mingjiang Co., Ltd. 21%-40%
Luzhou Red Sorghum Modern Agricultural Development
Exempted from corporate income tax
Co., Ltd.
Guangxi Luzhou Laojiao Imported Liquor Industry Co.,
9%
Ltd.
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
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2022 Interim Report of Luzhou Laojiao Co., Ltd.
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.
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 26,149.25 26,281.86
Bank deposit 17,016,946,921.19 13,490,769,725.71
Other cash and cash equivalents 29,136,845.92 22,698,572.99
Total 17,046,109,916.36 13,513,494,580.56
Including: Total deposit outbound 93,630,931.60 63,993,390.31
Total amount with
restriction to use due to mortgage, 131,273,803.86 110,965,638.73
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
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2022 Interim Report of Luzhou Laojiao Co., Ltd.
designated bank according to the regulations of the tourism bureau, the balance of CNY
17,649,331.49 deposited by the subsidiary, Luzhou Laojiao Electronic Commerce Co., Ltd. and the
subsidiary, Luzhou Laojiao Custom Liquor Co., Ltd. on the third-party e-commerce platform, and
guaranty letter deposit of CNY 10,087,514.43 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 1,302,911,871.28 706,352,241.79
current profits/losses
Including:
Including:
Total 1,302,911,871.28 706,352,241.79
Other statements:
The closing balance of held-for-trading financial assets increased by CNY 596,559,629.49, up 84.46%
compared with the beginning of the period, which was mainly due to the purchase of wealth
management products of the collective asset management plan from securities-type companies in the
reporting period.
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 Proporti Proporti value
Amount Amount Amount Amount
on on on on
Includin
g:
Account
s
receiva
ble
tested 1,491,8 100.00 88,530. 1,403,3 1,713,9 100.00 85,699. 1,628,2
5.93% 5.00%
for 71.88 % 34 41.54 47.55 % 00 48.55
impairm
ent by
the
portfolio
Includin
g:
Account
s
1,491,8 100.00 88,530. 1,403,3 1,713,9 100.00 85,699. 1,628,2
receiva 5.93% 5.00%
ble 71.88 % 34 41.54 47.55 % 00 48.55
tested
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2022 Interim Report of Luzhou Laojiao Co., Ltd.
for
impairm
ent on
the
portfolio
with
charact
eristics
of credit
risk
1,491,8 100.00 88,530. 1,403,3 1,713,9 100.00 85,699. 1,628,2
Total 5.93% 5.00%
71.88 % 34 41.54 47.55 % 00 48.55
Accounts receivable tested for impairment on the portfolio:
Monetary Unit: CNY
Closing Balance
Name
Book balance Provision for bad debt Proportion
Risk portfolio 1,491,871.88 88,530.34 5.93%
Other portfolio
Total 1,491,871.88 88,530.34
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) 1,213,136.87
1-2 years 278,735.01
Total 1,491,871.88
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 Closing
Type Reversal or
Balance Allowance Write-off Other Balance
recovery
Provision
allowance by 85,699.00 2,831.34 88,530.34
risk portfolio
Total 85,699.00 2,831.34 88,530.34
Note: There is no significant provision in accounts receivable reversed or recovered in the reporting
period.
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2022 Interim Report of Luzhou Laojiao Co., Ltd.
7.3.3. Accounts receivable actually verified in the current period
Verification of accounts receivable:
There is no verified accounts receivable in the reporting period.
7.3.4. Top five entities with the largest balances of accounts receivable
Monetary Unit: CNY
Proportion to total closing
Closing balance of
Company name Closing Balance balance of accounts
provision for bad debt
receivable
Tai Fung
483,135.87 32.39% 24,156.79
Castelmor. Ltd
Liquor Control Board of
278,007.18 18.64% 13,900.36
Ontario (LCBO)
Beijing Secoo Trading
263,509.80 17.66% 26,350.98
Limited
Park Street
105,840.19 7.09% 5,292.01
Imports, LLC
Beijing Jingdong Century
Information Technology 25,386.86 1.70% 1,269.34
Co., Ltd.
Total 1,155,879.90 77.48%
7.3.5. Accounts receivable derecognized due to the transfer of financial assets
There was no accounts receivable derecognized due to the transfer of financial assets in the current
period.
7.3.6. The amount of the assets and liabilities formed by the transfer and continued
involvement of accounts receivable
The amount of the assets and liabilities formed by the transfer and continued involvement of accounts
receivable in the current period is zero.
7.4. Accounts receivable financing
Monetary Unit: CNY
Item Closing Balance Opening Balance
Bank acceptance bill 1,671,605,965.76 4,757,631,778.64
Total 1,671,605,965.76 4,757,631,778.64
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
111
2022 Interim Report of Luzhou Laojiao Co., Ltd.
Other statements:
Note 1: At the end of the period, the closing balance decreased by CNY 3,086,025,812.88, down
64.86% compared with the opening balance, which was mainly due to the impact of bill discount and
remittance of bills for collection at maturity.
Note 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.
Note 3: There was no allowance of provision for bad debt at the end of the reporting period.
(1) There was no accounts receivable financing pledge at the end of the period.
(2) There is CNY 5,894,055,980.36 as follows of accounts receivable financing that have been
endorsed to other parties by the Company but have not expired at the end of the period:
Item Derecognition at period-end Not derecognition at period-end
Bank acceptance bill 5,894,055,980.36
Subtotal 5,894,055,980.36
Note: The acceptor of the bank acceptance bill is a commercial bank. The probability of not being paid
due is very low, and the possibility of being recourse is very low, so the confirmation has been
terminated.
(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 121,182,947.28 82.48% 174,252,091.59 97.85%
1-2 years 24,252,782.18 16.51% 3,411,121.11 1.92%
2-3 years 1,284,534.19 0.87% 424,476.11 0.24%
Over 3 years 209,710.67 0.14%
Total 146,929,974.32 178,087,688.81
Reasons for significant prepayments whose aging is longer than 1 year without timely settlement:
Note 1: There is no significant prepayment whose aging is longer than 1 year.
112
2022 Interim Report of Luzhou Laojiao Co., Ltd.
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. 63,523,133.52 43.23%
Luzhou Western Gas Co., Ltd. 8,050,769.30 5.48%
Shenzhen Airport Asiaray Media Co., Ltd. 7,408,470.99 5.04%
Luzhou Power Supply Company of State Grid
6,105,000.00 4.16%
Sichuan Electric Power Company
China Railway Chengdu Bureau Group Co.,
5,300,794.54 3.61%
Ltd.
90,388,168.35 61.52%
Subtotal
7.6. Other receivables
Monetary Unit: CNY
Item Closing Balance Opening Balance
Dividend receivable 35,361,832.34
Other receivables 35,924,379.21 28,615,361.96
Total 71,286,211.55 28,615,361.96
7.6.1. Interest receivable
7.6.1.1. Allowance of provision for bad debt
□Applicable N/A
7.6.2. Dividend receivable
7.6.2.1. Classification of dividend receivable
Monetary Unit: CNY
Item (investee) Closing Balance Opening Balance
Guotai Junan Securities Co., Ltd. 8,008,357.96
Huaxi Securities Co., Ltd. 27,283,114.40
North Chemical Industries Co., Ltd. 70,359.98
Total 35,361,832.34
7.6.2.2. Allowance of provision for bad debt
□Applicable N/A
Other statements:
(1) There is no significant dividend receivable whose aging is longer than 1 year at the end of the
reporting period.
(2) There was no allowance of provision for bad debt at the end of the reporting period.
113
2022 Interim Report of Luzhou Laojiao Co., Ltd.
7.6.3. Other receivables
7.6.3.1. Other receivables disclosed by nature
Monetary Unit: CNY
Nature Closing book balance Opening book balance
Intercourse funds and others 29,446,467.39 19,729,613.70
Petty cash 472,546.91 292,228.26
Saving deposits involving contract
130,158,189.98 132,376,912.43
disputes1
Total 160,077,204.28 152,398,754.39
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”.
7.6.3.2. Allowance of provision for bad debt
Monetary Unit: CNY
First stage Second stage Third stage
Provision for bad Expected loss in the
Expected credit loss Expected loss in the Total
debt duration (credit
of the next 12 duration (credit
impairment not
months impairment occurred)
occurred)
Balance of 1 January
3,783,392.43 120,000,000.00 123,783,392.43
2022
Balance of 1 January
2022 in the current
period
Allowance 581,432.64 581,432.64
Write-off 212,000.00 212,000.00
Balance of 30 June
4,152,825.07 120,000,000.00 124,152,825.07
2022
Changes of book balance with significant amount changed of loss provision in the current period
Applicable □ N/A
Company Name Closing book Provision for bad Aging Proportion
balance debt
Agricultural Bank of China Changsha
Yingxin Sub-branch, Industrial and
Commercial Bank of China Nanyang 130,158,189.98 120,000,000.00 Over 5 years 92.20%
Zhongzhou Sub-branch and another
bank
Subtotal 130,158,189.98 120,000,000.00 92.20%
Note: see Note 12.2 and 14.7.1 for information about the deposits with involvement in contract
disputes.
Disclosure by aging
114
2022 Interim Report of Luzhou Laojiao Co., Ltd.
Monetary Unit: CNY
Aging Closing balance
Within 1 year (including 1 year) 22,458,265.66
1-2 years 3,963,179.55
2-3 years 544,969.09
Over 3 years 133,110,789.98
3-4 years 680,000.00
4-5 years 100,000.00
Over 5 years 132,330,789.98
Total 160,077,204.28
7.6.3.3. Provision and recovery for bad and doubtful other receivables in the current period
Allowance of provision for bad debt:
Monetary Unit: CNY
Current Period
Type Opening Balance Reversal or Closing Balance
Allowance Write-off Other
recovery
Other
receivables
tested for 120,000,000.00 120,000,000.00
impairment
individually
Other
receivables
tested for 3,783,392.43 581,432.64 212,000.00 4,152,825.07
impairment by
the portfolio
Total 123,783,392.43 581,432.64 212,000.00 124,152,825.07
7.6.3.4. Other receivables actually verified in the current period
Monetary Unit: CNY
Item Amount
Petty cash 212,000.001
Note: 1. There was no significant other receivables verified in the current period.
7.6.3.5. Top five entities with the largest balances of the other receivables
Monetary Unit: CNY
Provisioning
Proportion in
Company Name Nature Closing Balance Aging amount at period
total receivables
end
Agricultural Bank
of China
Changsha
Yingxin Sub-
branch, Industrial Saving deposits
and Commercial involving 130,158,189.98 Over 5 years 81.31% 120,000,000.00
Bank of China contract disputes
Nanyang
Zhongzhou Sub-
branch and
another bank
Beijing Jingdong
Security deposit 2,602,968.52 Within 1 year 1.63% 130,148.43
Century
115
2022 Interim Report of Luzhou Laojiao Co., Ltd.
Information
Technology Co.,
Ltd.
CTS Luzhou
Laojiao Cultural
Within 1 year, 1-
Tourism Security deposit 2,506,590.68 1.57% 247,689.88
Development 2 years
Co., Ltd.
Zhejiang Tmall
Security deposit,
Technology 1,836,683.58 Within 1 year 1.15% 91,834.18
etc.
Co.,Ltd.
Longmatan
Power Supply
Bureau of Security deposit 1,520,000.00 Over 5 years 0.95% 1,520,000.00
Luzhou Power
Bureau
Total 138,624,432.76 86.60% 121,989,672.49
7.6.3.6. Other receivables derecognized due to the transfer of financial assets
There were no other receivables derecognized due to the transfer of financial assets in the reporting period.
7.6.3.7. Amount of assets and liabilities due to the transfer of other receivables and continued
involvement
The amount of assets and liabilities due to the transfer of other receivables and continued involvement in the reporting
period was zero.
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
Provi Provi
sion sion
for for
stock stock
obsol obsol
escen escen
ce or ce or
Category impair impair
Book Balance ment Book Value Book Balance ment Book Value
provis provis
ion of ion of
contr contr
act act
perfor perfor
manc manc
e e
costs costs
Raw materials 41,943,212.09 41,943,212.09 123,986,924.38 123,986,924.38
Goods in
progress 6,659,413,775.51 6,659,413,775.51 5,255,917,501.41 5,255,917,501.41
116
2022 Interim Report of Luzhou Laojiao Co., Ltd.
Finished
goods 1,976,584,873.55 1,976,584,873.55 1,855,731,688.91 1,855,731,688.91
Goods in
transit 35,338,773.13 35,338,773.13 41,937,052.10 41,937,052.10
Total 8,713,280,634.281 8,713,280,634.28 7,277,573,166.80 7,277,573,166.80
Note: 1. The closing balance increased CNY 1,435,707,467.48 compared with opening balance,
mainly due to the increase in the output of products because some constructions of the technical
renovation project of brewing were put into production 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
7.7.2. Notes to the ending balance of inventories including capitalized borrowing expense
There was no capitalized borrowing expense among the ending balance of inventories.
7.8. Other current assets
Monetary Unit: CNY
Item Closing Balance Opening Balance
Value-added tax 14,096,836.32 82,734,324.31
Corporate income tax 25,611,023.79 24,638,887.44
Other taxes 2,981,932.42 4,601,321.16
Total 42,689,792.53 111,974,532.91
Other statements:
1. The value-added tax expected to be deducted in the next tax period and corporate income tax and
other taxes are disclosed in other current assets.
2. The closing balance decreased CNY 69,284,740.38 compared with opening balance, with a
decrease by 61.88%, mainly due to tax rebate of excess VAT paid in the reporting period.
7.9. Long-term equity investments
Monetary Unit: CNY
Changes in current period
Closin
Openin Gain Adjust Closin g
g or loss ments Cash g Balanc
Investe Balanc recogn of Other divided Provisi Balanc e of
e e Increa Decrea ized other chang or on for e provisi
Other
(book se se under compr es in profit impair (book on for
value) equity ehensi equity declar ment value) impair
metho ve ed ment
d income
1. Joint Ventures
2. Associate
Huaxi
Securit 2,493, 30,289 - 27,283 2,487,
2,567,
ies 328,16 ,606.8 9,066, ,114.4 268,12
Co., 098.80
5.33 0 533.27 0 4.46
Ltd.
Sichua
n 5,726, 110,26 5,837,
Develo 848.36 2.94 111.30
pment
117
2022 Interim Report of Luzhou Laojiao Co., Ltd.
Wine
Invest
ment
Co.,
Ltd.
Sichua
n
Tongni
ang
Liquor
Industr
y
7,887, 16,954 7,904,
Techno
logy 461.52 .03 415.55
Resear
ch
Institut
e Co.,
Ltd.
Note
CTS
Luzho
u
Laojiao
Cultura 119,80 - 115,98
l
1,761. 3,811, 9,865.
Touris
m 04 895.58 46
Develo
pment
Co.,
Ltd.
Luzho
u
Laojiao
Postdo
ctoral
Workst 40,000 40,051
51,207
ation ,000.0 ,207.0
.01
Scienc 0 1
e and
Innova
tion
Co.,
Ltd.
2,626, 40,000 26,656 - 27,283 2,657,
Subtot 2,567,
744,23 ,000.0 ,135.2 9,066, ,114.4 050,72
al 098.80
6.25 0 0 533.27 0 3.78
2,626, 40,000 26,656 - 27,283 2,657,
2,567,
Total 744,23 ,000.0 ,135.2 9,066, ,114.4 050,72
098.80
6.25 0 0 533.27 0 3.78
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. 13,274,581.94 15,963,896.54
118
2022 Interim Report of Luzhou Laojiao Co., Ltd.
Luzhou Bank Co., Ltd. 111,325,213.46 102,174,621.71
Guotai Junan Securities Co., Ltd. 179,010,354.38 210,690,476.31
Guotai Junan Investment
Management Co., Ltd. 22,611,834.24 22,611,834.24
Guojiu Big Data Co., Ltd. 10,000,000.00 10,000,000.00
Sichuan China Liquor Golden
Triangle Brand Operation
Development Co., Ltd. and other 1,846,291.63 1,871,291.63
equity instrument investments
Total 338,068,275.65 363,312,120.43
Categories of non-trading equity instrument investment in the current period:
Monetary Unit: CNY
Reason for
Amount of assigning to Reason of
other measure at other
Recognized comprehens fair value and comprehensiv
Accumulative Accumulative
Item dividends ive income changes e income
gains losses
income transferred recorded into transferred to
to retained other retained
earnings comprehensiv earnings
e income
According to
North the mode of
Chemical managing
70,359.98 12,244,581.94
Industries assets by
Co.,Ltd. management
layer
According to
the mode of
Luzhou Bank managing
60,205,213.46
Co., Ltd. assets by
management
layer
According to
the mode of
Guotai Junan
managing
Securities 8,008,357.96 166,291,197.62
assets by
Co., Ltd.
management
layer
According to
Guotai Junan the mode of
Investment managing
Management assets by
Co., Ltd. management
layer
According to
the mode of
Guojiu Big managing
Data Co., Ltd. assets by
management
layer
According to
Shenzhen the mode of
Xingangfeng managing
Development 2,354,000.00 assets by
Co., Ltd. management
layer
According to
the mode of
Sichuan
managing
Deyang Jintai 2,000,000.00 assets by
Hotel
management
layer
Hainan 1,000,000.00 According to
119
2022 Interim Report of Luzhou Laojiao Co., Ltd.
Huitong the mode of
International managing
Trust assets by
Company management
layer
Sichuan
China Liquor
Golden
According to
Triangle
the mode of
Brand
managing
Operation 398,926.37
assets by
Development
management
Co., Ltd. and
layer
other equity
instrument
investments
Subtotal 8,078,717.94 238,740,993.02 5,752,926.37
7.11. Fixed assets
Monetary Unit: CNY
Item Closing Balance Opening Balance
Fixed assets 8,539,274,171.78 8,088,216,508.58
Disposal of fixed assets 17,750,678.74 1,270,765.81
Total 8,557,024,850.52 8,089,487,274.39
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 6,810,063,839 1,116,825,737 894,181,275.8 1,491,462,062 10,357,604,37
45,071,455.46
balance .38 .03 1 .44 0.12
2.Increase in 416,655,620.2 135,537,134.3 110,872,547.1 729,278,064.8
64,917,177.19 1,295,585.85
current period 6 7 9 6
(1) External
purchase 2,016,371.68 7,809,262.25 637,288.50 757,345.14 11,220,267.57
(2) Transfer
from 419,313,281.2 127,396,081.4 109,843,862.6 720,487,262.7
construction in 63,275,740.15 658,297.35
4 1 1 6
progress
(3) Increase
from business
combination
(4) Changes
of exchange 264.43 83,497.48 83,761.91
rates
(5) Adjustment
for completion -2,657,660.98 -375,199.07 248,293.23 271,339.44 -2,513,227.38
settlement
3.Decrease in 113,288,970.0
41,017,518.40 50,706,488.21 5,513,502.78 1,730,873.16 14,320,587.53
current period 8
(1) Disposal 113,068,243.5
40,796,791.90 50,706,488.21 5,513,502.78 1,730,873.16 14,320,587.53
or retirement 8
(2) Other 220,726.50 220,726.50
4.Closing 7,185,701,941 1,131,036,426 1,024,204,907 1,588,014,022 10,973,593,46
Balance 44,636,168.15
.24 .01 .40 .10 4.90
120
2022 Interim Report of Luzhou Laojiao Co., Ltd.
II.
Accumulated
depreciation
1.Opening 819,228,209.6 383,120,514.5 327,421,150.7 708,371,141.6 2,268,764,921
30,623,904.90
Balance 3 6 5 3 .47
2.Increase in 111,919,375.0 261,396,551.1
67,894,253.30 48,423,855.00 1,605,951.05 31,553,116.73
current period 3 1
111,936,308.3 261,325,836.4
(1) Provision 67,920,977.28 48,330,586.57 1,605,951.05 31,532,013.16
8 4
(2) Changes
of exchange 70,714.67 70,714.67
rates
(3) Adjustment
for completion -16,933.35 -26,723.98 22,553.76 21,103.57 0.00
settlement
3.Decrease in
29,459,909.20 48,372,976.27 5,132,478.01 1,644,329.52 11,855,426.53 96,465,119.53
current period
(1) Disposal
29,451,948.52 48,372,976.27 5,132,478.01 1,644,329.52 11,855,426.53 96,457,158.90
or retirement
(2) Other 7,960.68 7,960.68
4.Closing 901,687,675.4 402,641,791.5 370,712,527.7 728,068,831.8 2,433,696,353
30,585,526.43
Balance 6 9 4 3 .05
III. Provision
for impairment
1.Opening
622,940.07 622,940.07
Balance
2.Increase in
current period
(1) Provision
3.Decrease in
current period
(1) Disposal
or retirement
4.Closing
622,940.07 622,940.07
Balance
IV. Book Value
1.Closing 6,283,391,325 728,394,634.4 653,492,379.6 859,945,190.2 8,539,274,171
Book Value 14,050,641.72
.71 2 6 7 .78
2.Opening 5,990,212,689 733,705,222.4 566,760,125.0 783,090,920.8 8,088,216,508
Book Value 14,447,550.56
.68 7 6 1 .58
7.11.2. Fixed assets without certification of right
Monetary Unit: CNY
Reason for not having the
Item Book value
certification of right
The property ownership certificate
has not been processed yet for the
Buildings of parent company 24,704,619.35 historical reasons, and it plans to be
processed after gradually improving
procedures.
Buildings of brewing company 306,468,869.38 In procedure
Buildings of the subsidiary-brewing
4,118,145,330.28 In procedure
company
Subtotal 4,449,318,819.01
121
2022 Interim Report of Luzhou Laojiao Co., Ltd.
7.11.3. Disposal of fixed assets
Monetary Unit: CNY
Item Closing Balance Opening Balance
Disposal and retirement of assets 17,750,678.74 1,270,765.81
Total 17,750,678.74 1,270,765.81
Other statements:
The closing balance increased CNY 16,479,912.93 compared with opening balance, mainly due to
increase in disposal and retirement of assets.
7.12. Construction in progress
Monetary Unit: CNY
Item Closing Balance Opening Balance
Construction in progress 724,127,630.54 1,259,845,487.50
Total 724,127,630.54 1,259,845,487.50
7.12.1. Details of the construction in progress
Monetary Unit: CNY
Closing Balance Opening Balance
Provi
Provision
Item sion
for
Book balance Book value Book balance for Book value
impairme
impair
nt
ment
Improvement
and technical
renovation
project of
563,063,821.82 563,063,821.82
Luzhou
Laojiao
production
supporting
Technical
renovation of
Luzhou
Laojiao 424,816,003.44 424,816,003.44 301,985,162.65 301,985,162.65
Intelligent
packaging
center
Landscape
improvement
project of
Luzhou
Laojiao 171,451,841.13 171,451,841.13 149,089,445.94 149,089,445.94
Huangyi
Brewing
Ecological
Park
Other projects 127,859,785.97 127,859,785.97 245,707,057.09 245,707,057.09
Total 724,127,630.54 724,127,630.54 1,259,845,487.50 1,259,845,487.50
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2022 Interim Report of Luzhou Laojiao Co., Ltd.
7.12.2. Significant changes in construction in progress
Monetary Unit: CNY
Propo
rtion
Includi
of Accu
ng: Capita
Increa accu mulati
Openi Transf Closin Capita lizatio
se in Other mulati Progr ve Sourc
Budge ng er into g lized n rate
Item curren decre ve ess capital e of
t Balan fixed Balan intere for the
t ases projec (%) ized funds
ce assets ce st for period
period t input intere
the (%)
in st
period
budge
t
Impro
veme
nt and
techni
cal
renov
ation
projec 888,5 563,0 559,9 3,388,
313,8 64.24 100.0
t of 44,10 63,82 89,42 240.5 0.00 Other
44.04 % 0%
Luzho 0.00 1.82 5.29 7
u
Laojia
o
produ
ction
suppo
rting
Techni
cal
renov
ation
of
Luzho
1,886, 301,9 123,7 424,8
u 685,7 267,0 24.32 30.00
176,0 85,16 83,63 16,00 Other
Laojia 71.68 24.78 % %
00.00 2.65 7.25 3.44
o
Intellig
ent
packa
ging
center
Lands
cape
impro
veme
nt
projec 200,0 149,0 22,36 171,4
91.50 100.0
t of 65,40 89,44 2,395. 51,84 Other
% 0%
Luzho 0.00 5.94 19 1.13
u
Laojia
o
Huan
gyi
123
2022 Interim Report of Luzhou Laojiao Co., Ltd.
Brewi
ng
Ecolo
gical
Park
2,974, 1,014, 146,4 560,6 3,655, 596,2
Total 785,5 138,4 59,87 75,19 265.3 67,84
00.00 30.41 6.48 6.97 5 4.57
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 32,890,490.67 65,571,277.00
2. Increase in current
3,396,293.62 3,396,293.62
period
(1) Lease in 2,698,438.06 2,698,438.06
(2) Changes of exchange
697,855.56 697,855.56
rates
3. Decrease in current
period
(1) Other
4. Closing Balance 32,680,786.33 36,286,784.29 68,967,570.62
II. Accumulated
amortization
1. Opening Balance 3,634,912.70 9,221,554.26 12,856,466.96
2. Increase in current
period 1,817,456.35 5,916,897.98 7,734,354.33
(1) Provision 1,817,456.35 5,623,005.00 7,440,461.35
(2) Changes of exchange
293,892.98 293,892.98
rates
3. Decrease in current
period
(1) Disposal
4. Closing Balance 5,452,369.05 15,138,452.24 20,590,821.29
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 27,228,417.28 21,148,332.05 48,376,749.33
2. Opening Book Value 29,045,873.63 23,668,936.41 52,714,810.04
7.14. Intangible assets
7.14.1. Details of intangible assets
Monetary Unit: CNY
124
2022 Interim Report of Luzhou Laojiao Co., Ltd.
No-patent
Computer Trademark
Item Land use right Patent right right Total
software right
technology
I. Original cost
1. Opening 60,715,751.0 1,890,746.0 2,808,508,864.9
2,744,202,317.34 1,700,050.44
Balance 5 8 1
2. Increase in
220,726.50 60,978.66 281,705.16
current period
(1) Acquired
(2) Internal
developed
(3) Business
combination
(4)
Transferred
from 60,978.66 60,978.66
construction in
progress
(5) Other 220,726.50 220,726.50
3. Decrease in
current period 36,454,066.94 36,454,066.94
(1) Disposal 36,454,066.94 36,454,066.94
4. Closing 60,776,729.7 1,890,746.0 2,772,336,503.1
2,707,968,976.90 1,700,050.44
Balance 1 8 3
II.
Accumulated
amortization
1. Opening 28,303,256.0 1,798,629.7
171,347,186.40 700,604.04 202,149,676.19
Balance 2 3
2. Increase in
31,022,321.61 65,002.52 2,030,745.38 38,238.85 33,156,308.36
current period
(1) Provision 31,014,360.93 65,002.52 2,030,745.38 38,238.85 33,148,347.68
(2) Other 7,960.68 7,960.68
3. Decrease in
8,317,780.32 8,317,780.32
current period
(1) Disposal 8,317,780.32 8,317,780.32
4. Closing 30,334,001.4 1,836,868.5
194,051,727.69 765,606.56 226,988,204.23
Balance 0 8
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 30,442,728.3 2,545,348,298.9
2,513,917,249.21 934,443.88 53,877.50
Book Value 1 0
2. Opening 32,412,495.0 2,606,359,188.7
Book Value 2,572,855,130.94 999,446.40 92,116.35
3 2
There is no proportion of intangible assets formed by internal development to the balance of
intangible assets at the period-end.
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7.15. Long-term deferred expense
Monetary Unit: CNY
Item Opening Balance Increase Amortization Other decrease Closing Balance
Improvement
expense of
1,463,869.21 421,016.50 1,042,852.71
rented fixed
assets
Total 1,463,869.21 421,016.50 1,042,852.71
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
127,431,394.30 31,846,288.78 127,059,130.30 31,755,535.22
impairment
Unrealized profits
from internal 1,412,851,344.96 353,212,836.24 3,161,541,177.98 790,385,294.49
transactions
Deductible losses 5,716,197.58 1,429,049.39 5,716,197.58 1,429,049.40
Impact from salary 417,838,496.90 103,095,253.30 591,456,408.66 145,429,434.14
Impact from deferred
25,455,871.42 6,363,967.86 28,531,014.28 7,132,753.57
earnings
Impact from fixed
613,056.00 101,154.24 529,787.16 96,441.51
assets depreciation
Recognition costs of
restricted shares for
224,323,787.121 54,895,487.00 34,895,071.18 8,446,243.50
equity incentive in
the vesting period
Impact from fair
value changes of
other equity 5,752,926.37 1,438,231.59 5,752,926.37 1,438,231.59
instrument
investment
Total 2,219,983,074.65 552,382,268.402 3,955,481,713.51 986,112,983.42
Note: 1. Deductible temporary differences of CNY 224,323,787.12 of costs and expenses recognized
during the vesting period of restricted shares for share incentives represent the estimated future pre-
tax deductible amounts based on the Company's share price less the grant price at the end of the
period.
2. The closing balance decreased CNY 433,730,715.02 compared with opening balance with a
decrease by 43.98%, mainly due to decline in unrealized profits of internal transactions in the current
period.
7.16.2. Deferred tax liabilities before offset
Monetary Unit: CNY
Closing Balance Opening Balance
Item Taxable temporary Deferred tax Taxable temporary Deferred tax
differences liabilities differences liabilities
Fair value changes
of other equity
instrument 238,740,993.02 59,685,248.27 263,959,837.80 65,989,959.48
investment
126
2022 Interim Report of Luzhou Laojiao Co., Ltd.
Fair value changes
of held-for-trading 2,911,871.28 727,967.81 6,352,241.79 1,588,060.45
financial assets
Total 241,652,864.30 60,413,216.08 270,312,079.59 67,578,019.93
7.16.3. Details of unrecognized deferred tax assets
Monetary Unit: CNY
Item Closing Balance Opening Balance
Deductible losses 133,868,585.45 201,219,210.53
Impact from employee benefits
244,647.31 139,023.54
payable
Total 134,113,232.76 201,358,234.07
7.16.4. Deductible losses from unrecognized deferred tax assets will due on the following
years
Monetary Unit: CNY
Year Closing Amount Opening Amount Notes
The 1st year
The 2nd year 6,713,657.39 6,713,657.39
The 3rd year 13,256,244.56 14,491,365.44
The 4th year 37,989,105.20 108,989,982.02
The 5th year 75,909,578.30 71,024,205.68
Total 133,868,585.45 201,219,210.53
7.17. Other non-current assets
Monetary Unit: CNY
Closing Balance Opening Balance
Item Provision for Provision for
Book balance Book value Book balance Book value
impairment impairment
Prepaid
equipment 786,600,535.6 786,600,535.6 650,384,435.7 650,384,435.7
and land 8 8 0 0
expense
786,600,535.6 786,600,535.6 650,384,435.7 650,384,435.7
Total
8 8 0 0
7.18. Accounts payable
7.18.1. Presentation of accounts payable
Monetary Unit: CNY
Category Closing Balance Opening Balance
Materials and service expense 612,933,284.36 1,171,595,976.46
Engineering equipment expense 1,116,010,048.60 1,248,758,493.07
Total 1,728,943,332.96 2,420,354,469.53
7.18.2. Significant accounts payable whose aging is longer than 1 year
Monetary Unit: CNY
Reason for not payment or carrying
Category Closing Balance
forward
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2022 Interim Report of Luzhou Laojiao Co., Ltd.
China Construction First Group
350,304,244.39 Within the contract settlement period
Corporation Limited
Total 350,304,244.39
7.19. Contract liabilities
Monetary Unit: CNY
Category Closing Balance Opening Balance
Within 1 year 2,306,607,990.58 3,484,385,115.64
1-2 years 2,617,692.67 4,042,470.18
2-3 years 722,156.09 1,569,941.86
Over 3 years 19,595,765.60 20,113,173.57
Total 2,329,543,604.94 3,510,110,701.25
The amount of significant changes of carrying value and reason during the reporting period:
Monetary Unit: CNY
Item Amount changed Reason
The closing balance decreased by CNY 1,180,567,096.31, down 33.63%
Contract
1,180,567,096.31 compared with the opening balance, mainly due to the decline in advances from
liabilities
customers.
Total 1,180,567,096.31 ——
7.20. Employee benefits payable
7.20.1. 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
611,190,565.92 531,953,749.90 695,865,600.86 447,278,714.96
benefits
2. Post-employment
benefits- defined 36,904,203.51 56,985,047.92 66,634,392.99 27,254,858.44
contribution plans
3. Termination
benefits 8,971.53 252,600.69 252,600.69 8,971.53
Total 648,103,740.96 589,191,398.51 762,752,594.54 474,542,544.93
7.20.2. 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,
allowances and 549,316,255.45 446,519,809.20 608,241,904.27 387,594,160.38
grants
2. Employees’
21,571,675.02 21,571,675.02
welfare
3. Social insurance
5,366,001.71 19,756,337.64 21,902,029.12 3,220,310.23
premiums
Including: Medical
2,238,878.69 18,495,733.24 20,578,220.52 156,391.41
insurance premium
Work-related injury
insurance 1,409,665.57 1,238,229.92 1,295,362.75 1,352,532.74
Maternity insurance
premium 1,716,777.45 22,374.48 28,445.85 1,710,706.08
Other insurance
premium 680.00 680.00
128
2022 Interim Report of Luzhou Laojiao Co., Ltd.
4. Housing funds 9,230,529.23 35,499,228.22 31,636,817.19 13,092,940.26
5. Labor union
expenditures and
47,277,779.53 8,606,699.82 12,513,175.26 43,371,304.09
employee education
funds
Total 611,190,565.92 531,953,749.90 695,865,600.86 447,278,714.96
7.20.3. 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
insurance premium 17,650,834.85 33,393,959.32 41,337,043.54 9,707,750.63
2. Unemployment
5,993,266.59 1,254,912.80 1,550,344.15 5,697,835.24
insurance premium
3. Enterprise annuity 13,260,102.07 22,336,175.80 23,747,005.30 11,849,272.57
Total 36,904,203.51 56,985,047.92 66,634,392.99 27,254,858.44
7.21. Taxes payable
Monetary Unit: CNY
Item Closing Balance Opening Balance
Value-added tax 261,453,888.73 421,216,223.94
Consumption tax 138,743,071.20 1,263,440,836.05
Enterprise income tax 595,522,900.78 1,327,750,786.20
Individual income tax 8,761,863.19 10,467,970.24
Urban maintenance and construction
26,213,119.08 82,437,545.17
tax
Education surcharge 11,169,162.67 35,234,596.27
Local education surcharge 7,554,333.71 23,651,376.27
Stamp duty 3,482,426.29 8,490,523.62
Land use tax 437,619.06 437,619.35
Property tax 302,010.14 337,645.12
Others 24,664.54 14,505.56
Total 1,053,665,059.39 3,173,479,627.79
Other statements:
The closing balance decreased by CNY 2,119,814,568.40, down 66.80% compared with the opening
balance, mainly due to the taxes of the end of last year put into the treasury in the current period.
7.22. Other payables
Monetary Unit: CNY
Item Closing Balance Opening Balance
Dividend payable 4,773,919,306.54
Other payables 1,196,274,228.871 652,393,292.60
Total 5,970,193,535.41 652,393,292.60
Note: 1. Other payables listed in the above table are other payables minus interest payable and
dividend payable. 2. At the end of the period, the closing balance of other payables increased by
CNY 543,880,936.27, up 83.37% compared with the opening balance, which was mainly due to the
impact of liabilities recognized for repurchase obligations under the restricted share incentive plan.
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2022 Interim Report of Luzhou Laojiao Co., Ltd.
7.22.1. Dividend payable
Monetary Unit: CNY
Item Closing Balance Opening Balance
Ordinary share dividends 4,751,657,032.14
Dividend of restricted shares 22,262,274.40
Total 4,773,919,306.54
7.22.2. Other payables
7.22.2.1. Categories by nature
Monetary Unit: CNY
Item Closing Balance Opening Balance
Security deposit 547,657,735.63 628,174,772.12
Intercourse funds 24,175,030.26 17,757,284.78
Others 10,472,091.38 6,461,235.70
Repurchase obligations of restricted
613,969,371.60
shares
Total 1,196,274,228.87 652,393,292.60
7.22.2.2. 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.
7.23. Non-current liabilities due within one year
Monetary Unit: CNY
Item Closing Balance Opening Balance
Bonds payable due within one year 90,135,616.43 72,219,178.08
Lease liabilities due within one year 12,879,829.41 13,983,036.95
Total 103,015,445.84 86,202,215.03
7.24. Other current liabilities
Monetary Unit: CNY
Item Closing Balance Opening Balance
Output VAT to be transferred 302,840,668.64 456,314,391.17
Total 302,840,668.64 456,314,391.17
7.25. Bonds payable
7.25.1. Bonds payable
Monetary Unit: CNY
Item Closing Balance Opening Balance
Corporate bonds in 2019 (Phase I) 2,495,547,799.60 2,494,539,629.08
Corporate bonds in 2020 (Phase I) 1,496,844,167.80 1,496,246,113.15
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2022 Interim Report of Luzhou Laojiao Co., Ltd.
Total 3,992,391,967.40 3,990,785,742.23
7.25.2. Increase/decrease of bonds payable (excluding other financial instrument classified as
financial liabilities such as preferred shares and perpetual bonds)
Monetary Unit: CNY
Amorti
Withdr Repay
zation
Openin Issued awal of ment Closin
Issuing of
Bond Par Issuing Duratio g in the interes in the g
amoun premiu
name value date n Balanc current t by reporti Balanc
t m and
e period par ng e
deprec
value period
iation
Corpor
ate
bonds 2,500, 27 2,490, 2,494, 44,382 2,495,
1,008,
in 000,00 August 3+2 000,00 539,62 ,191.7 547,79
2019 2019 170.52
0.00 0.00 9.08 8 9.60
(Phase
I)
Corpor
ate
bonds 1,500, 16 1,494, 1,496, 26,034 1,496,
598,05
in 000,00 March 5 000,00 246,11 ,246.5 844,16
2020 2020 4.65
0.00 0.00 3.15 7 7.80
(Phase
I)
3,984, 3,990, 70,416 3,992,
1,606,
Total —— 000,00 785,74 ,438.3 391,96
225.17
0.00 2.23 5 7.40
7.26. Lease liabilities
Monetary Unit: CNY
Item Closing Balance Opening Balance
Lease payment 58,332,807.54 61,305,700.55
Less: unrecognized financing cost -6,116,837.32 -6,654,995.52
Lease liabilities due within one year -12,879,829.41 -13,983,036.95
Total 39,336,140.81 40,667,668.08
7.27. Deferred income
Monetary Unit: CNY
Increase in Decrease in
Item Opening Balance Closing Balance Reason
current period current period
Reception of
Government
28,531,014.28 930,000.00 4,005,142.86 25,455,871.42 financial
grants
allocation
Total 28,531,014.28 930,000.00 4,005,142.86 25,455,871.42
Details:
Monetary Unit: CNY
Non-
Other Cost
Increase operating Related to
Liability Opening income in reduction Other Closing
in current income in assets/
Item Balance current in current changes Balance
period current income
period period
period
New Related to
6,070,300. 693,000.0 5,377,300.
mode assets
131
2022 Interim Report of Luzhou Laojiao Co., Ltd.
applicatio 00 0 00
n project
of digital
workshop
for solid
state
liquor
production
Constructi
on project
of spirit
room of
5,950,000. 700,000.0 5,250,000. Related to
Luzhou
00 0 00 assets
Laojiao
brewing
technical
renovation
Luzhou
Laojiao
automatic
wine
425,000.0 375,000.0 Related to
production 50,000.00
0 0 assets
line
technical
renovation
project
Boiler
reconstruc
tion
project of
7,585,714. 632,142.8 6,953,571. Related to
Luohan assets
28 6 42
Brewing
Base of
Luzhou
Laojiao
Brewing
wastewate
8,500,000. 1,000,000. 7,500,000. Related to
r
00 00 00 assets
treatment
project
930,000.0 930,000.0 Related to
Others
0 0 assets
7.28. Share capital
Monetary Unit: CNY
Increases/decreases in the current period (+, -)
Opening Conversion Closing
Balance Issuance of Bonds of reserves Balance
Others Subtotal
new shares share funds into
shares
Total
1,464,752,4 6,862,600.0 6,862,600.0 1,471,615,0
number of
76.00 0 0 76.00
shares
7.29. Capital reserves
Monetary Unit: CNY
Increase in current Decrease in current
Item Opening Balance Closing Balance
period period
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2022 Interim Report of Luzhou Laojiao Co., Ltd.
Capital premium
(stock premium) 3,542,967,507.48 629,369,046.00 4,172,336,553.481
Other capital
reserves 212,387,158.25 188,500,347.67 400,887,505.92
Total 3,755,354,665.73 817,869,393.67 4,573,224,059.40
Note: 1. The increase in stock premium was mainly due to the impact of issuance of premium
restricted stocks. The increase in other capital reserves 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.
7.30. Treasury shares
Monetary Unit: CNY
Increase in current Decrease in current
Item Opening Balance Closing Balance
period period
Perform the
repurchase
636,231,646.00 22,262,274.40 613,969,371.60
obligations under the
equity incentive
Total 636,231,646.00 22,262,274.40 613,969,371.60
Other statements, including notes to increase and decrease during the reporting period and the
reasons for changes:
The repurchase obligation of restricted shares recognized by the Company was CNY 636,231,646.00;
the decrease in treasury shares for distribution of cash dividends in the current period was CNY
22,262,274.40.
7.31. Other comprehensive income
Monetary Unit: CNY
Current Period
Less:
Less:
Previously
Previously
recognize Amount
Amount in recognize
d in other Amount attribute to
Opening current d in other Closing
Item comprehe Less: attribute to non-
Balance period comprehe Balance
nsive Income parent controlling
before nsive
income tax company sharehold
income income
transferre after tax ers after
tax transferre
d to tax
d to profit
retained
and loss
earnings
I. Other
comprehe
nsive
income - -
that will 193,605,1 174,691,0
not be 18,914,13 18,914,13
83.54 49.97
reclassifie 3.57 3.57
d into
profit and
loss
Fair value
changes - -
of other 193,605,1 174,691,0
equity 18,914,13 18,914,13
83.54 49.97
instrument 3.57 3.57
investmen
133
2022 Interim Report of Luzhou Laojiao Co., Ltd.
t
II. Other
comprehe
nsive
income - - - -
1,287,541.
that will be 26,078,03 6,206,369. 7,493,910. 33,571,94
reclassifie 25
1.22 07 32 1.54
d into
profit and
loss
Including:
Other
comprehe
nsive
income - - - -
that will be
reclassifie 26,382,36 9,066,533. 9,066,533. 35,448,89
d into 4.46 27 27 7.73
profit and
loss under
equity
method
Difference
from
conversio
n of
304,333.2 2,860,164. 1,572,622. 1,287,541. 1,876,956.
financial
statement 4 20 95 25 19
s in
foreign
currency
- -
167,527,1 1,287,541. 141,119,1
Total 25,120,50 26,408,04
52.32 25 08.43
2.64 3.89
7.32. Surplus reserves
Monetary Unit: CNY
Increase in current Decrease in current
Item Opening Balance Closing Balance
period period
Statutory surplus
reserves 1,464,752,476.00 1,464,752,476.00
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 end of the last year 21,187,860,235.89 16,236,513,212.43
Undistributed profit after adjustment
21,187,860,235.89 16,236,513,212.43
at the beginning of year
Plus: Net profit attributable to owners
of the parent company for the current 5,531,926,340.44 4,226,316,722.25
period
Less: Ordinary share dividends
4,773,919,306.54 3,004,207,328.28
payable
Plus: Other 15,626.84
Undistributed profits at the end of the
21,945,882,896.63 17,458,622,606.40
period
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2022 Interim Report of Luzhou Laojiao Co., Ltd.
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 11,549,327,272.44 1,595,591,564.86 9,195,242,633.92 1,286,448,541.49
Other business 115,050,280.50 46,718,985.75 121,854,393.13 48,706,401.97
Total 11,664,377,552.94 1,642,310,550.61 9,317,097,027.05 1,335,154,943.46
Details:
Monetary Unit: CNY
Contract category Liquor sales Total
Commodity type 11,549,327,272.44 11,549,327,272.44
Including:
Medium and high grade liquor 10,372,408,380.45 10,372,408,380.45
Other liquor 1,176,918,891.99 1,176,918,891.99
By operating segment 11,549,327,272.44 11,549,327,272.44
Including:
Domestic 11,458,610,295.98 11,458,610,295.98
Outbound 90,716,976.46 90,716,976.46
Contract type 11,549,327,272.44 11,549,327,272.44
Including:
Commodity sales contract 11,549,327,272.44 11,549,327,272.44
Total 11,549,327,272.44 11,549,327,272.44
7.35. Business taxes and surcharges
Monetary Unit: CNY
Item Current Period Previous Period
Consumption tax 759,217,972.85 768,511,169.55
Urban maintenance and construction
131,976,380.41 113,588,226.81
tax
Educational surcharge 56,558,689.68 48,680,668.64
Property tax 34,169,290.28 8,536,994.15
Land use tax 17,874,337.59 15,056,103.68
Stamp duty 8,264,059.53 5,789,652.51
Others 92,783.65 56,957.69
Local education surcharge 37,706,254.75 32,453,779.09
Total 1,045,859,768.74 992,673,552.12
7.36. Selling and distribution expenses
Monetary Unit: CNY
Item Current Period Previous Period
Advertising promotion expense 691,914,456.49 407,510,592.52
Promotion expense 142,494,942.50 482,468,677.16
Employee compensation 204,443,388.51 183,923,965.82
Storage and logistics costs 63,874,054.36 48,338,332.97
Others 111,135,142.80 61,006,363.45
Total 1,213,861,984.66 1,183,247,931.92
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7.37. General and administrative expenses
Monetary Unit: CNY
Item Current Period Previous Period
Employee compensation 260,100,920.11 258,646,895.05
Depreciation and amortization 55,428,718.37 46,232,227.29
Management fee and service
expense 15,223,826.86 24,286,900.46
Others 211,913,289.15 110,395,756.90
Total 542,666,754.49 439,561,779.70
7.38. Research and development expenses
Monetary Unit: CNY
Item Current Period Previous Period
Comprehensive research and
development expenses 74,487,055.16 36,688,121.08
Total 74,487,055.16 36,688,121.08
Other statements:
The current period increased CNY 37,798,934.08 compared with previous period with an increase by
103.03%, mainly due to increase in comprehensive research and development expenses.
7.39. Financial expenses
Monetary Unit: CNY
Item Current Period Previous Period
Interest expenses 119,589,682.10 75,787,443.01
Less: Interest income 237,072,806.72 206,402,358.25
Losses from currency exchange -10,795,717.36 1,433,551.74
Handling charges 913,004.25 365,454.45
Amortization of unrecognized
377,416.63 807,941.63
financing costs
Total -126,988,421.10 -128,007,967.42
7.40. Other income
Monetary Unit: CNY
Item Current Period Previous Period
Government grants 9,141,196.38 7,226,821.19
Individual income tax commission
refund 1,603,531.79 1,814,223.82
Total 10,744,728.17 9,041,045.01
7.41. Investment income
Monetary Unit: CNY
Item Current Period Previous Period
Investment income from long-term
equity investments under the equity 37,796,914.64 121,343,983.69
method
Investment income gained during the
period of holding held-for-trading 6,795,921.96
financial assets
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Investment income from disposal of
4,827,927.32
held-for-trading financial assets
Dividend income gained during the
period of holding other equity 8,078,717.94 6,662,660.52
instrument investment
Total 57,499,481.86 128,006,644.21
Other statements:
1. There is no major restriction on the repatriation of the Company's investment income.
2. The current period decreased CNY 70,507,162.35 compared with previous period with a decrease
by 55.08%, mainly due to the decline in profitability of the investee Huaxi Securities Co., Ltd.
7.42. Gain on changes in fair value
Monetary Unit: CNY
Item Current Period Previous Period
Held-for-trading financial assets 5,862,846.29
Total 5,862,846.29
7.43. Credit impairment loss
Monetary Unit: CNY
Item Current Period Previous Period
Bad debt loss of other receivables -581,432.64 55,124.50
Bad debt loss of accounts receivable -2,831.34 -273,954.83
Total -584,263.98 -218,830.33
7.44. Gains from disposal of assets
Monetary Unit: CNY
Item Current Period Previous Period
Gains from disposal of non-current
19,789,402.07 180,849.31
assets
Including: Gains from disposal of
2,588.69 180,849.31
fixed assets
Gains from disposal of intangible
19,786,813.38
assets
Total 19,789,402.071 180,849.31
Note: 1. The current period increased CNY 19,608,552.76 compared with previous period, mainly due
to the disposal of land use rights in the current period.
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
Compensation for default 3,384,765.95 1,190,640.00 3,384,765.95
Others 7,750,967.38 24,520,664.83 7,750,967.38
Total 11,135,733.33 25,711,304.83 11,135,733.331
Note: 1. The current period decreased CNY 14,575,571.50 compared with previous period with a
decrease by 56.69%, mainly due to YoY decrease in income from anti-counterfeiting claims.
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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 1,500,000.00 4,045,600.00 1,500,000.00
Losses from damage
retirement of non-current 70,762.97 70,762.97
assets
Others 378,246.54 4,237,809.08 378,246.54
Total 1,949,009.51 8,283,409.08 1,949,009.51
Other statements:
The current period decreased CNY 6,334,399.57 compared with previous period with a decrease by
76.47%, mainly due to the decrease in donation and others.
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 1,366,370,466.01 1,269,426,840.24
Deferred income tax 433,650,076.381 76,635,594.62
Total 1,800,020,542.39 1,346,062,434.86
Note: 1 The current period increased CNY 453,958,107.53 compared with previous period with an
increase by 33.72%, mainly due to increase in deferred income tax expense.
7.47.2. Adjustment for accounting profit and income tax expense
Monetary Unit: CNY
Item Current Period
Total profit 7,374,678,778.61
Income tax expenses determined by statutory/applicable
tax rate 1,843,669,694.65
Impact from subsidiaries’ different tax rates -820,833.86
Impact from adjust for impact from income tax expense in
-15,268,581.86
previous period
Impact from non-taxable income -11,468,908.15
Impact from deductible loss of unrecognized deferred
-18,393,721.17
income tax assets in prior period
Impact from deductible temporary difference or losses
1,556,064.90
due to unrecognized deferred tax asset in current period
Impact from reversal of deductible loss of recognized
746,827.88
deferred income tax assets in prior period
Income tax expense 1,800,020,542.39
7.48. Other comprehensive income
Details in Note 5.31. Other comprehensive income.
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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
2,218,722.45
involving contract disputes
Government grants 5,906,207.21 11,642,998.38
Interest income from bank deposit 210,646,002.01 174,050,502.18
Others 69,159,079.77 310,409,766.53
Total 287,930,011.44 496,103,267.09
7.49.2. Cash paid for other operating activities
Monetary Unit: CNY
Item Current Period Previous Period
Cash paid for expenses 1,351,327,137.51 1,068,313,251.12
Total 1,351,327,137.51 1,068,313,251.12
7.49.3. Cash paid for other financing activities
Monetary Unit: CNY
Item Current Period Previous Period
Cash paid for rent of houses and
4,353,331.41 1,844,313.68
equipment
Registration fee for stocks for equity
6,862.60
incentive
Total 4,360,194.01 1,844,313.68
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 5,574,658,236.22 4,266,153,835.28
Plus: Provision for asset impairment 584,263.98 218,830.33
Depreciation of fixed asset, oil and
gas assets and productive biological 261,325,836.44 229,030,142.28
assets
Depreciation of right-of-use assets 7,440,461.35
Amortization of intangible assets 33,148,347.68 32,077,465.74
Amortization of long-term deferred
421,016.50 421,016.50
expense
Losses from disposal of fixed assets,
intangible assets and other long-term -19,789,402.07 -180,849.31
assets (Gains use “-”)
Losses from retirement of fixed
assets (Gains use “-”)
Losses from change in fair value
-5,862,846.29
(Gains use “-”)
Financial expenses (Gains use “-”) -126,988,421.10 -128,007,967.42
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Losses on investments (Gains use “-
”) -57,499,481.86 -128,006,644.21
Decrease in deferred income tax
assets (Increase uses “-”) 433,730,715.02 76,635,594.62
Increase in deferred income tax
liabilities (Decrease uses “-”)
Decrease in inventories (Increase
use “-”) -1,435,707,467.48 -1,220,911,532.46
Decrease in operating receivables
(Increase use “-”) 3,179,384,157.51 1,047,344,251.88
Increase in operating payables
(Decrease use “-”) -3,767,830,450.56 -1,436,537,103.33
Others
Net cash flows from operating
4,077,014,965.34 2,738,237,039.90
activities
2. Significant investing and financing
activities not involving cash:
Conversion of debt into capital
Convertible corporate bonds due
within one year
Fixed assets under financing lease
3.Net change in cash and cash
equivalents:
Closing balance of cash 16,914,836,112.50 13,524,354,508.65
Less: Opening balance of cash 13,402,528,941.83 11,568,195,062.81
Plus: Closing balance of cash
equivalents
Less: Opening balance of cash
equivalents
Net change in cash and cash
equivalents 3,512,307,170.67 1,956,159,445.84
7.50.2. Composition of cash and cash equivalent
Monetary Unit: CNY
Item Opening Balance Closing Balance
1. Cash 16,914,836,112.50 13,402,528,941.83
Including: Cash on hand 26,149.25 26,281.86
Unrestricted bank deposit 16,897,160,631.76 13,391,713,104.08
Other unrestricted cash and
17,649,331.49 10,789,555.89
cash equivalents
3. Closing balance of cash and cash
16,914,836,112.50 13,402,528,941.83
equivalents
Including: Cash and cash equivalent
with restriction to use of parent 131,273,803.86 110,965,638.73
company and subsidiaries
Other statements:
The cash and cash equivalent with restriction to use are CNY 131,273,803.86, of which, CNY
1,400,000.00 is a travel service deposit with limited use rights in other cash and cash equivalents,
CNY 10,087,514.43 is the bank cash deposits for L/G and CNY 119,786,289.43 is provision for fixed
deposit interest on an accrual basis.
7.51. Notes to items in statements of changes in owners' equity
Notes to names under the item of “Other” in the adjusted ending balance for the same period of last
year and the corresponding amount:
None
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7.52. 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 119,786,289.43
an accrual basis
Travel service deposit with limited
Other cash and cash equivalents 11,487,514.43 use rights and bank cash deposits for
L/G
Total 131,273,803.86
7.53. Foreign currency transactions
7.53.1. 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 46,898,478.91 6.7114 314,754,451.36
EUR 1,044.50 7.0084 7,320.27
HKD 14,524,200.67 0.8552 12,421,096.41
GBP 291,903.10 8.1365 2,375,069.57
AUD 3,186.64 4.6145 14,704.75
Accounts Receivable
Including: USD 40,190.88 6.7114 269,737.04
EUR
HKD 845,506.82 0.8552 723,077.43
Other Receivables
Including: HKD 1,471,719.86 0.8552 1,258,614.82
Accounts Payable
Including: USD 162,108.35 6.7114 1,087,973.99
HKD 2,909,920.94 0.8552 2,488,564.39
Other Payables
Including: HKD 21,171,105.24 0.8552 18,105,529.20
Non-current liabilities due
within one year
Including: HKD 3,249,131.47 0.8552 2,778,657.23
Lease liabilities
Including: HKD 6,201,152.90 0.8552 5,303,225.96
7.53.2. Description of the foreign business entity, including the important foreign business
entity, shall disclose its main foreign business place, bookkeeping standard currency and
selection basis, and shall also disclose the reason for the change of the bookkeeping
standard currency
Applicable □ N/A
Bookkeeping
Company Operation site Choosing Reason
currency
Luzhou Laojiao International Development Currency in the registration
Hong Kong, China HKD
(Hong Kong) Co., Ltd. place
Luzhou Laojiao Commercial Development Currency in the registration
USA USD
(North America) Co., Ltd. place
Mingjiang Co., Ltd. Currency in the registration
USA USD
place
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7.54. Government grants
7.54.1. Details of government grants
Monetary Unit: CNY
Amount included in profit or
Item Amount Presentation
loss of the current period
Related to assets 25,455,871.42 Deferred income 4,005,142.86
Related to income 5,136,053.52 Other income 5,136,053.52
Total 30,591,924.94 9,141,196.38
7.54.2. Return of government grants
□Applicable N/A
Other statements:
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
Other statements:
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
Other statements:
There is no business combination under common control during current period.
8.3. Reverse purchase
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,
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liquidating a subsidiary) and its related situation:
The subsidiary Luzhou Laojiao Bosheng Hengxiang Liquor Sales Co., Ltd. was liquidated and
cancelled in June 2022.
9. Interests in other entities
9.1. Interests in subsidiaries
9.1.1. Group composition
Major Shareholding Proportion
Name of Place of Nature of Acquisition
business
Subsidiaries registration business Direct Indirect method
location
Luzhou
Liquor
Laojiao
Luzhou Luzhou manufacture 100.00% Investment
Brewing Co.,
and sales
Ltd.
Luzhou Red
Business
Sorghum Agricultural
combination
Modern product
Luzhou Luzhou 60.00% under
Agricultural planting and
common
Development sales
control
Co., Ltd.
Luzhou
Laojiao Sales Luzhou Luzhou Liquor sales 100.00% Investment
Co., Ltd.
Luzhou
Laojiao
Nostalgic
Luzhou Luzhou Liquor sales 100.00% Investment
Liquor
Marketing
Co., Ltd.
Luzhou
Laojiao
Custom Luzhou Luzhou Liquor sales 15.00% Investment
Liquor Co.,
Ltd. Note
Luzhou
Laojiao
Selected
Luzhou Luzhou Liquor sales 100.00% Investment
Supply Chain
Management
Co., Ltd.
Guangxi
Luzhou
Laojiao Red wine
Imported Qinzhou Qinzhou production 100.00% Investment
Liquor and sales
Industry Co.,
Ltd.
Luzhou Dingli
Liquor
Luzhou Luzhou Liquor sales 100.00% Investment
Industry Co.,
Ltd.
Luzhou Dingyi
Liquor
Luzhou Luzhou Liquor sales 100.00% Investment
Industry Sales
Co., Ltd.
Luzhou
Laojiao New
Liquor Luzhou Luzhou Liquor sales 100.00% Investment
Industry Co.,
Ltd.
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Luzhou
Laojiao Import Wine import
and Export Luzhou Luzhou and export 100.00% Investment
Trade Co., trade
Ltd.
Luzhou
Laojiao Boda
Liquor
Luzhou Luzhou Liquor sales 75.00% Investment
Industry
Marketing
Co., Ltd.
Luzhou
Laojiao Fruit Fruit wine
Luzhou Luzhou 41.00% Investment
Wine Industry sales
Co., Ltd. Note
Mingjiang Co.,
America America Liquor sales 54.00% Investment
Ltd.
Luzhou
Laojiao New
Luzhou Luzhou Liquor sales 40.00% 100.00% Investment
Retail Co.,
Ltd.
Luzhou
Technology
Pinchuang
Luzhou Luzhou development 100.00% Investment
Technology
and service
Co., Ltd.
Luzhou
Laojiao
Liquor sales,
Tourism Luzhou Luzhou 100.00% Investment
tourism
Culture Co.,
Ltd.
Luzhou
Laojiao
International
Hong Kong Hong Kong Wine sales 55.00% Investment
Development
(Hong Kong)
Co., Ltd.
Luzhou
Laojiao
Commercial
Business
Development America America 100.00% Investment
development
(North
America) Co.,
Ltd.
Luzhou
Laojiao
Electronic Luzhou Luzhou Wine sales 90.00% Investment
Commerce
Co., Ltd.
Luzhou
Laojiao
Whitail Liquor Luzhou Luzhou Wine sales 35.00% Investment
Industry Co.,
Ltd. Note
Luzhou
Fermented
Baonuo
Luzhou Luzhou product 100.00% Investment
Biotechnology
manufacture
Co., Ltd.
Luzhou Business
Health care
Laojiao Health combination
wine
Liquor Luzhou Luzhou 100.00% under
manufacture
Industry common
and sales
Co.,Ltd. control
Luzhou Business
Laojiao Health combination
Health care
Sales Co., Luzhou Luzhou 100.00% under
wine sales
Ltd. common
control
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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 non- Closing balance of
holdings of non- non-controlling
Name of subsidiary Controlling non-controlling
Controlling shareholders during
shareholders during shareholders interest
shareholders current period
current period
Luzhou Laojiao Boda
Liquor Industry 25.00% 17,767,125.46 78,422,208.86
Marketing Co., Ltd.
9.1.3. Major financial information of important non-wholly-owned subsidiaries
Monetary Unit: CNY
Closing Balance Opening Balance
Name Non- Non-
of Non- Curre Non- Curre
Curre curren Total Curre curren Total
subsid curren Total nt curren Total nt
nt t liabiliti nt t liabiliti
iary t assets liabiliti t assets liabiliti
assets liabiliti es assets liabiliti es
assets es assets es
es es
Luzho
u
Laojia
o
Boda
325,2 325,2 11,55 11,55 384,3 384,9 142,3 142,3
Liquor 664,9
40,01 40,01 1,183. 1,183. 13,67 78,67 58,34 58,34
Indust 98.84
9.20 9.20 78 78 8.76 7.60 4.01 4.01
ry
Marke
ting
Co.,
Ltd.
Monetary Unit: CNY
Current Period Previous Period
Name of Total Total
subsidiary Operating comprehe Operating Operating comprehe Operating
Net profit Net profit
revenue nsive cash flow revenue nsive cash flow
income income
Luzhou
Laojiao
Boda -
64,606,73 71,068,50 71,068,50 474,516,9 55,454,12 55,454,12 3,903,880.
Liquor 4,572,218.
3.54 1.83 1.83 72.67 9.49 9.49 92
Industry 59
Marketing
Co., Ltd.
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2022 Interim Report of Luzhou Laojiao Co., Ltd.
9.2. Interests in joint ventures and associates
9.2.1. Important joint ventures and associates
Name of joint Major Shareholding proportion
Place of Business Accounting
venture/associ business
registration nature Direct Indirect Method
ates location
Important joint
ventures:
none
Important
associates:
Huaxi
Chengdu, Chengdu,
Securities Securities 10.39% Equity method
Sichuan Sichuan
Co., Ltd.
Statement for that the proportion of shareholdings in joint ventures or associates is different from the
proportion of voting rights:
The basis of holding less than 20% of the voting rights in other entities but having significant influence
or holding 20% or more than 20% of the voting rights in other entities but having insignificant
influence:
The Company has 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 86,768,241,815.71 86,844,635,628.06
Non-current assets 8,958,613,842.94 8,950,278,369.10
Total assets 95,726,855,658.65 95,794,913,997.16
Current liabilities 56,539,658,868.01 57,157,134,622.07
Non-current liabilities 16,832,807,057.19 16,233,476,784.79
Total liabilities 73,372,465,925.20 73,390,611,406.86
Non-controlling shareholder interest 25,253,884.71 26,409,206.44
Shareholder interest attributable to
parent company 22,329,135,848.74 22,377,893,383.86
Share of net assets calculated based
2,320,793,782.15 2,325,861,429.43
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
2,487,268,124.46 2,493,328,165.33
associate companies
Fair value of equity investments in
associate companies that have public 2,138,996,168.96 2,687,386,768.40
quote
Operating revenue 1,749,801,559.42 2,507,607,439.97
Net profit 290,468,284.96 980,557,738.54
Net profit from discontinued
operation
Other comprehensive income -77,784,068.34 34,982,558.76
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2022 Interim Report of Luzhou Laojiao Co., Ltd.
Total comprehensive income 212,684,216.62 1,015,540,297.31
Dividends from associate companies
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 169,782,599.32 133,416,070.92
Total following items calculated on
the basis of shareholding proportion
--Net profit -11,746,550.86 5,372,490.27
-- Total comprehensive income -11,746,550.86 5,372,490.27
Other statements:
Unimportant associate companies refer to Sichuan Development Wine Investment Co., Ltd., Sichuan
Tongniang Liquor Industry Technology Research Institute Co., Ltd., CTS Luzhou Laojiao Cultural
Tourism Development Co., Ltd. and Luzhou Laojiao Postdoctoral Workstation Science and Innovation
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.
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
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2022 Interim Report of Luzhou Laojiao Co., Ltd.
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 30 June 2022, the balance of the top five
customers of the Company's accounts receivable amounted to CNY 1,155,900.00, accounting for 77.48%
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 30 June 2022, the Company has been able to meet its own continuing operation requirements
through the use of cash flow from operations.
The analysis of the financial liabilities held by the Company based on the maturity period of the
undiscounted remaining contractual obligations is as follows:
Item Closing Balance
Book value Contract amount Within 1 year 1-2 years 2-3 years Over 3 years
not discounted
Notes
payable
Accounts
1,728,943,332.96 1,728,943,332.96 1,728,943,332.96
payable
Other 1,196,274,228.87 1,196,274,228.87 1,196,274,228.87
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payable
Non-
current
liabilities
103,015,445.84 103,018,572.52 103,018,572.52
due
within
one year
Other
current 302,840,668.64 302,840,668.64 302,840,668.64
liabilities
Lease
39,336,140.81 45,449,851.45 8,402,901.31 8,240,030.32 28,806,919.82
liabilities
Subtotal 3,370,409,817.12 3,376,526,654.44 3,331,076,802.99 8,402,901.31 8,240,030.32 28,806,919.82
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 30 June 2022, 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.
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
1,302,911,871.28 1,302,911,871.28
financial assets
1.1.1 Financial
assets measured at
fair value with their
1,302,911,871.28 1,302,911,871.28
changes included
into current
profits/losses
1.1.1.4 Wealth
management 1,302,911,871.28 1,302,911,871.28
products
1.3 Investments in
303,610,149.78 34,458,125.87 338,068,275.65
other equity
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instruments
1.6 Accounts
1,671,605,965.76 1,671,605,965.76
receivable financing
Total assets
continuously
303,610,149.78 3,008,975,962.91 3,312,586,112.69
measured 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.
11.3. Valuation technique adopted and nature and amount determination of
important parameters for continuously and discontinuously within Level 2 of the
fair value hierarchy
None
11.4. Valuation technique adopted and nature and amount determination of
important parameters for continuously and discontinuously within Level 3 of the
fair value hierarchy
Trading financial assets are wealth management products of the collective asset management plan and
are measured at fair value at the end of the period based on the amount calculated on the basis of the
net unit value as presented in the report on net value of assets given by 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.
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11.5. Continuous fair value measurement items at level 3, adjustment between the
beginning carrying value and the ending carrying value and sensitivity analysis on
unobservable parameters
None
11.6. Explain the reason for conversion and the policy governing when the
conversion happens if conversion happens among continuous fair value
measurement items at different level
None
11.7. Changes in valuation techniques in the reporting period and reasons for the
changes
None
11.8. Fair value of financial assets and liabilities not measured at fair value
None
12. Related parties and related party transactions
12.1. The parent company of the Company
Shareholding
Voting rights
Registration proportion by
Parent company Business nature Registered capital proportion by the
place the parent
parent company
company
Investment and
Luzhou Laojiao
Luzhou, Sichuan asset 2,798,818,800.00 25.90% 50.77%
Group Co., Ltd.
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.
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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.
Other statements:
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 Yuanhai Lianzhong Supply Chain Co., Ltd. Note 2 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
Other statements:
1. 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.
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2. Luzhou COSCO Lianzhong Logistics Co., Ltd. was renamed Luzhou Yuanhai Lianzhong Supply
Chain Co., Ltd. in the current period.
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
Transaction approved trading
Party current period amount previous period
amount
Receipt of
services:
Luzhou XingLu
Investment Property
Group Co., Ltd. management 11,777,837.70 5,310,943.19
and its other fee ,etc.
subsidiaries
Training,
accommodation,
storage,
Laojiao Group
transportation
and its other 10,038,101.46 13,826,965.44
services,
subsidiaries
property
management
fee, etc.
CTS Luzhou
Laojiao Cultural
Travel agency
Tourism 43,818.00 3,404,282.00
service fee, etc.
Development
Co., Ltd.
Purchase of
goods:
Laojiao Group
Red wine, water,
and its other 15,407,103.04 19,883,752.63
power, etc.
subsidiaries
Luzhou XingLu
Investment
Group Co., Ltd. Water, gas 6,281,248.54 6,203,699.11
and its other
subsidiaries
Purchase and
Luzhou XingLu construction of
Investment
fixed assets
Group Co., Ltd. 1,071,420.60
and its other (moving and
subsidiaries transformation of
pipelines, etc.)
Sichuan
Meiheshan
Other wine 674,271.50
Village Winery
Industry Co.,Ltd.
Total 43,548,108.74 50,375,334.47
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. 52,806.72 6,578,271.51
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subsidiaries
Luzhou Sanrenxuan Liquor
Wine 32,528,587.08 15,278,637.12
Industry Co., Ltd.
CTS Luzhou Laojiao
Cultural Tourism Wine 30,708,670.79 53,519,643.03
Development Co., Ltd.
Rendering of service:
Laojiao Group and its
Rendering of service 1,095,440.00
subsidiaries
Total 63,290,064.59 76,471,991.66
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 1,111,300.02
subsidiaries
The Company as lessee:
Monetary Unit: CNY
Rental expenses Variable lease
of short-term payments not
Income expense
lease simplified included in the Increased right-
Paid rent of lease liabilities
Type treated and low- measurement of of-use assets
Name undertaken
of value asset lease lease liabilities (if
of
leased (if applicable) applicable)
lessor
asset Amoun Amoun Amoun Amoun Amoun
Amoun Amoun Amoun Amoun Amoun
t in t in t in t in t in
t in t in t in t in t in
previo previo previo previo previo
current current current current current
us us us us us
period period period period period
period period period period period
Laojiao
Group
1,430,
and its Lease
subsidi 038.43
aries
12.5.3. Key management compensation
Monetary Unit: CNY
Item Amount in current period Amount in previous period
Key management 3,813,084.72 3,770,000.24
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
Luzhou Xinglu
Accounts
Property 1,243.86 62.19
receivable
Management
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Co., Ltd.
New Shottes
Prepayment Brook private 611,542.54
company
Luzhou China
Resources
Prepayment 21,497.85 19,536.30
Xinglu Gas Co.,
Ltd.
Luzhou XingLu
Prepayment Water (Group) 680,348.88 690,115.49
Co., Ltd.
Sichuan
Meiheshan
Prepayment 2,961,479.50 2,961,479.50
Village Winery
Industry Co.,Ltd.
CTS Luzhou
Laojiao Cultural
Other
Tourism 2,506,590.68 247,689.88 3,590,790.65 354,539.53
receivables
Development
Co., Ltd.
12.6.2. Payables
Monetary Unit: CNY
Item Related party Closing Balance Opening Balance
Guangzhou Zhongying
Accounts payable Gongyuan Energy Saving 355,312.88 355,312.88
Technology Co., Ltd.
Sichuan Lianzhong Supply
Accounts payable 648,998.20 3,679.25
Chain Service Co., Ltd.
Luzhou Yuanhai Lianzhong
Accounts payable 221,000.00
Supply Chain Co., Ltd.
CTS Luzhou Laojiao
Accounts payable Cultural Tourism 413.50 10,838.00
Development Co., Ltd.
Luzhou XingLu Property
Accounts payable 130,000.00
Management Co., Ltd.
Sichuan Yukun Logistics
Accounts payable 3,851.28
Co., Ltd.
Contractual liabilities (tax Luzhou Sanrenxuan Liquor
41,732,509.92 14,745,240.00
inclusive) Industry Co., Ltd.
Contractual liabilities (tax Sichuan Lianzhong Supply
inclusive) Chain Service Co., Ltd. 35,220.78 158,295.76
CTS Luzhou Laojiao
Contractual liabilities (tax
Cultural Tourism 173,273.98 19,017,274.30
inclusive)
Development Co., Ltd.
Contractual liabilities (tax Luzhou Laojiao Group Co.,
inclusive) Ltd. 523,760.03
Luzhou Laojiao
Contractual liabilities (tax Construction and
6,144.00
inclusive) Installation Engineering
Co., Ltd.
Contractual liabilities (tax Luzhou Laojiao Zhitong
inclusive) Trading Co., Ltd. 55,586.00
Luzhou Qingxigu Scenic
Contractual liabilities (tax
Area Management Co., 460.80
inclusive)
Ltd.
Contractual liabilities (tax Luzhou Yuanhai Lianzhong
37,762.51
inclusive) Supply Chain Co., Ltd.
Contractual liabilities (tax Sichuan Hongxin Financing
inclusive) Guarantee Co., Ltd. 3,072.00
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Luzhou Jiachuang Wine
Other payables Supply Chain Management 1,500,000.00
Co., Ltd.
Luzhou Sanrenxuan Liquor
Other payables 150,000.00 150,000.00
Industry Co., Ltd.
Sichuan Lianzhong Supply
Other payables 17,391,463.00 1,684,148.00
Chain Service Co., Ltd.
Sichuan Kangrun Group
Construction and
Other payables 34,175.78
Installation Engineering
Co., Ltd.
Luzhou Yuanhai Lianzhong
Other payables 200.00 50,200.00
Supply Chain Co., Ltd.
CTS Luzhou Laojiao
Other payables Cultural Tourism 396,000.00
Development Co., Ltd.
12.7. Commitments of the related parties
None
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
0.00
reporting period
Total equity instruments exercised by the Company in the
0.00
reporting period
Total equity instruments of the Company expired in the
66,000.001
reporting period
Scope of the exercise price of outstanding stock options
of the Company at the end of the reporting period and N/A
remaining contract term
Scope of the exercise price of other outstanding equity
instruments of the Company at the end of the reporting N/A
period and remaining contract term
Note: 1. There were 4 incentive targets who voluntarily gave up subscripting all restricted shares
granted by the Company with a total of 66,000 shares.
Other statements:
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 12 th
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.
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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 22 February 2022, as the shares granted under the restricted share incentive plan
were listed, the total shares of the Company increased from 1,464,752,476 shares to 1,471,615,076
shares.
13.2. Equity-settled share-based payments
Applicable □ N/A
Monetary Unit: CNY
Method of determining the fair value of equity instruments The closing price of restricted stocks on the grant date
on the grant date deducted the grant price thereof
Basis to determine number of equity instrument that can Making the best estimate based on the latest number of
be exercised persons who can exercise rights
Reason for remarkable difference between the estimate
N/A
of the current period and that of previous period
Total amount of equity-settled share-based payments
included into capital reserves 850,446,996.27
Total costs of recognizing equity-settled share-based
189,917,716.04
payments in the current period
13.3. Cash-settled share-based payments
□ Applicable N/A
13.4. Modification and termination of share-based payments
None
14. Commitments and contingencies
14.1. Commitments
Significant commitments at the balance sheet date
None
14.2. Contingencies
14.2.1. Significant contingencies at the balance sheet date
On 15 October 2014 and 10 January 2015, the Company disclosed three saving deposits involving
contract disputes in Agricultural Bank of China Changsha Yingxin Sub-branch, Industrial and
Commercial Bank of China Nanyang Zhongzhou Sub-branch and another bank, with a total amount of
CNY 500 million. The public security organization has investigated, and the investigation of related
cases and the preservation of assets are under way. The Company has initiated a civil procedure to
recover the loss from the responsible unit. As of the period-end, the Company has recovered the
abovementioned saving deposits involving contract disputes with CNY 369,841,800.
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Except for the above matters, the Company has no other significant contingencies that need to be
disclosed as the end of 30 June 2022.
14.2.2. Explanation shall be given even if there is no significant contingency for the Company
to disclose
There was no significant contingency in the Company to disclose.
15. Post balance sheet event
15.1 Significant non-adjusting events
(1) Grant of reserved restricted shares to awardees
As conditions had been satisfied for the grant of reserved restricted shares under the 2021 Restricted
Share Incentive Plan, and as authorized by the First Extraordinary General Meeting of 2021, the
Proposal on the Grant of Reserved Restricted Shares to Awardees was approved at the 18 th Meeting of
the 10th Board of Directors and the Ninth Meeting of the 10th Supervisory Committee on 25 July 2022.
As such, it was decided that 342,334 reserved restricted shares would be granted to 46 awardees at
the price of CNY 92.71/share on 25 July 2022.
(2) Downward adjustment to the coupon rate of "19 Laojiao 01"
In accordance with the provisions of the Prospectus for Luzhou Laojiao Co., Ltd.’s Corporate Bonds
Publicly Offered in 2019 to Qualified Investors (Tranche 1), the Company, as the issuer of "19 Laojiao
01" (bond code: 112959), has the right to decide the adjustment to the coupon rate of this bond for the
last two years of the duration at the end of the third year of the duration. According to the current
market situation, the Company decided to reduce the coupon rate of the bonds for the last two years by
158 basis points, i.e., the coupon rate of "19 Laojiao 01" bonds for the last two years was adjusted from
3.58% to 2.00%.
(3) Proposed public offering of bonds for professional investors
The Company intended to issue corporate bonds with a total face value not exceeding CNY B2.5 billion
(including CNY 2.5 billion) for professional investors. The proposal was deliberated and approved at the
Company's Extraordinary General Meeting of 2022.
15.2. Profit distribution
Monetary Unit: CNY
Profits or dividends planned to distribute 4,773,919,306.54
Reviewed and approved profits or dividends declared to
4,773,919,306.54
distribute
In accordance with resolutions of shareholders’ meeting,
a cash dividend of CNY 32.44 (tax inclusive) will be
Profit distribution plan
distributed for every 10 existing shares held, which has
been carried out on 26 August 2022.
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15.3. Statement for other post balance sheet events
(1) Security deposits for travel service of Luzhou Laojiao Tourism Culture Co., Ltd.
Luzhou Laojiao Tourism Culture Co., Ltd. completed business and tax cancellation in June 2022. Its
security deposits for travel service of CNY 1.4 million must be approved by the Ministry of Culture and
Tourism of the People’s Republic of China before the restriction can be lifted. The relevant procedures
were completed in August 2022 and the bank account was also cancelled.
(2) Implementation of Luzhou Laojiao’s technical upgrade program of intelligent brewing (Phase
I) by subsidiary
The Company invested in the technical upgrade program of intelligent brewing (Phase I) with the
wholly-owned subsidiary, Brewing Company, as the implementer. The total investment amount
approximated CNY 4,782.5090 million. The program has been approved at the First Extraordinary
General Meeting of 2022. For further information, see Announcement No. 2022-24 on the
Implementation of Luzhou Laojiao’s Technical Upgrade Program of Intelligent Brewing (Phase I) by
Subsidiary.
(3) Recovery of part of savings deposits involving contract disputes
After 30 June 2022, the Company received more amounts associated with the savings deposits
involving contract disputes. As of the date of this Report, the Company had recovered a total amount of
CNY 370.9505 million for the three disputes.
Except for the above matters, the Company has no other post balance sheet events that need to be
disclosed as of the disclosure date of this Report.
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 Recognition basis and accounting policies of reportable segment
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,
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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.
Except for the above matters, the Company has no other significant events that can affect investors’
decision that need to be disclosed as of 30 June 2022.
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 Proporti Proporti value
Amount Amount Amount Amount
on on on on
Includin
g:
Account
s
receiva
bles
2,471,9 100.00 1,491.7 2,470,4 1,209,7 100.00 2,223.8 1,207,4
tested 0.06% 0.18%
for 88.46 % 5 96.71 01.49 % 6 77.63
impairm
ent by
the
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portfolio
Includin
g:
Account
s
receiva
bles
tested
for
impairm
2,471,9 100.00 1,491.7 2,470,4 1,209,7 100.00 2,223.8 1,207,4
ent on 0.06% 0.18%
the 88.46 % 5 96.71 01.49 % 6 77.63
portfolio
with
charact
eristics
of credit
risk
2,471,9 100.00 1,491.7 2,470,4 1,209,7 100.00 2,223.8 1,207,4
Total 0.06% 0.18%
88.46 % 5 96.71 01.49 % 6 77.63
Accounts receivables tested for impairment by the portfolio:
Monetary Unit: CNY
Closing Balance
Item
Book balance Provision for bad debt Proportion
Risk portfolio 29,835.00 1,491.75 5.00%
Other portfolios 2,442,153.46
Total 2,471,988.46 1,491.75
Note: 1 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) 2,471,988.46
Total 2,471,988.46
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 Closing
Type Reversal or
Balance Allowance Write-off Other Balance
recovery
Accounts
receivables
2,223.86 732.11 1,491.75
tested for
impairment by
161
2022 Interim Report of Luzhou Laojiao Co., Ltd.
the portfolio
Total 2,223.86 732.11 1,491.75
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
Company Name Closing Balance balance of accounts
provision for bad debt
receivable
Luzhou Pinchuang
2,442,153.46 98.79%
Technology Co., Ltd.
CTS Luzhou Laojiao
Cultural Tourism 25,335.00 1.03% 1,266.75
Development Co., Ltd.
Luzhou Branch of China
4,500.00 0.18% 225.00
Tower Co., Ltd.
Total 2,471,988.46 100.00%
17.2. Other receivables
Monetary Unit: CNY
Item Closing Balance Opening Balance
Dividends receivable 35,361,832.34
Other receivables 12,956,083,314.69 10,033,554,898.57
Total 12,991,445,147.03 10,033,554,898.57
17.2.1. Dividend receivable
17.2.1.1. Classification of dividend receivable
Monetary Unit: CNY
Item Closing Balance Opening Balance
North Chemical Industries Co.,Ltd. 70,359.98
Huaxi Securities Co., Ltd. 27,283,114.40
Guotai Junan Securities Co., Ltd. 8,008,357.96
Total 35,361,832.34
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
12,938,362,692.73 10,015,555,743.27
receivable
Intercourse funds and others 8,205,217.88 6,158,145.13
Petty cash 2,574.63
Saving deposits involving contract
disputes 130,158,189.981 132,376,912.43
Total 13,076,726,100.591 10,154,093,375.46
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2022 Interim Report of Luzhou Laojiao Co., Ltd.
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”.
17.2.2.2. Provision for bad and doubtful other receivables in the current period
Monetary Unit: CNY
First stage Second stage Third stage
Provision for bad Expected loss in the
Expected credit loss Expected loss in the Total
debt duration (credit
of the next 12 duration (credit
impairment not
months impairment occurred)
occurred)
Balance of 1 January
2022 538,476.89 120,000,000.00 120,538,476.89
Balance of 1 January
2022 in the current
period
Allowance 104,309.01 104,309.01
Balance of 30 June
642,785.90 120,000,000.00 120,642,785.90
2022
Changes of carrying amount with significant amount changed of loss provision in the current period
□ Applicable N/A
Disclosure by aging
Monetary Unit: CNY
Aging Closing balance
Within 1 year (including 1 year) 12,942,963,010.55
1-2 years 3,522,100.06
2-3 years 12,800.00
Over 3 years 130,228,189.98
3-4 years 20,000.00
Over 5 years 130,208,189.98
Total 13,076,726,100.59
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
Type Opening Balance Reversal or Closing Balance
Allowance Write-off Other
recovery
Other
receivables
tested for 120,000,000.00 120,000,000.00
impairment
individually
Other
receivables
tested for 538,476.89 104,309.01 642,785.90
impairment by
the portfolio
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2022 Interim Report of Luzhou Laojiao Co., Ltd.
Total 120,538,476.89 104,309.01 120,642,785.90
17.2.2.4. Top five entities with the largest balances of the other receivables
Monetary Unit: CNY
Provisioning
Proportion in
Company Name Nature Closing Balance Aging amount at period
total receivables
end
Luzhou Laojiao Internal
12,668,231,895.15 Within 1 year 96.88%
Brewing Co., Ltd. transactions
Luzhou Laojiao
Import and Internal
190,758,585.30 Within 1 year 1.46%
Export Trade transactions
Co., Ltd.
Agricultural Bank
of China
Changsha
Yingxin Sub-
branch, Industrial Saving deposits
and Commercial involving 130,158,189.98 Over 5 years 1.00% 120,000,000.00
Bank of China contract disputes
Nanyang
Zhongzhou Sub-
branch and
another bank.
Guangxi Luzhou
Laojiao Imported Internal
48,519,812.18 Within 1 year 0.37%
Liquor Industry transactions
Co., Ltd.
Luzhou Laojiao
Internal
Health Liquor 15,046,908.83 Over 1 year 0.11%
transactions
Industry Co., Ltd.
Total 13,052,715,391.44 99.82% 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 3,512,065,275 3,512,065,275 3,429,436,240 3,429,436,240
subsidiary .78 .78 .91 .91
Investment in
associates 2,653,761,327 2,651,194,228 2,624,531,691 2,621,964,593
and joint 2,567,098.80 2,567,098.80
.15 .35 .80 .00
venture
6,165,826,602 6,163,259,504 6,053,967,932 6,051,400,833
Total 2,567,098.80 2,567,098.80
.93 .13 .71 .91
17.3.1. Investment in subsidiary
Monetary Unit: CNY
Changes in current period Closing
balance
Provi of
Opening Balance sion Closing Balance
Investee provisio
(book value) Increase Decrease for Other (book value)
n for
impair impair
ment ment
164
2022 Interim Report of Luzhou Laojiao Co., Ltd.
Luzhou
Pinchuang
59,136,031.69 8,508,292.65 67,644,324.34
Technology
Co., Ltd.
Luzhou
Laojiao
Sales Co., 110,966,255.34 43,211,192.98 154,177,448.32
Ltd.
Luzhou
Laojiao
3,176,693,836.28 27,535,946.07 3,204,229,782.35
Brewing
Co., Ltd.
Luzhou
Laojiao
Internationa
l
5,706,190.40 1,634,403.78 7,340,594.18
Developme
nt (Hong
Kong) Co.,
Ltd.
Luzhou
Laojiao
Electronic 52,525,326.26 3,649,229.07 56,174,555.33
Commerce
Co., Ltd.
Luzhou
Baonuo
20,000,000.00 20,000,000.00
Biotechnolo
gy Co., Ltd.
Luzhou
Laojiao
Tourism 4,000,000.00 4,000,000.00
Culture Co.,
Ltd.
Luzhou
Laojiao
Health
Liquor 408,600.94 2,089,970.32 2,498,571.26
Industry
Co., Ltd.
Total 3,429,436,240.91 86,629,034.871 4,000,000.00 3,512,065,275.78
Note: 1. 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
Closin
Openin Gain Adjust Closin g
g or loss ments Cash g Balanc
Investe Balanc recogn of Chang divided Provisi Balanc e of
e e Increa Decrea ized other es in or on for e provisi
Other
(book se se under compr other profit impair (book on for
value) equity ehensi equity declar ment value) impair
metho ve ed ment
d income
1. Joint Venture
2. Associate
Huaxi 2,493, 30,289 - 27,283 2,487, 2,567,
165
2022 Interim Report of Luzhou Laojiao Co., Ltd.
Securit 328,16 ,606.8 9,066, ,114.4 268,12 098.80
ies 5.33 0 533.27 0 4.46
Co.,
Ltd.
Sichua
n
Develo
pment
5,726, 110,26 5,837,
Wine
Invest 848.36 2.94 111.30
ment
Co.,
Ltd.
CTS
Luzho
u
Laojiao
Cultura 122,90 - 118,03
l
9,579. 4,871, 7,785.
Touris
m 31 793.73 58
Develo
pment
Co.,
Ltd.
Luzho
u
Laojiao
Postdo
ctoral
Workst 40,000 40,051
51,207
ation ,000.0 ,207.0
.01
Scienc 0 1
e and
Innova
tion
Co.,
Ltd.
2,621, 40,000 25,579 - 27,283 2,651,
Subtot 2,567,
964,59 ,000.0 ,283.0 9,066, ,114.4 194,22
al 098.80
3.00 0 2 533.27 0 8.35
2,621, 40,000 25,579 - 27,283 2,651,
2,567,
Total 964,59 ,000.0 ,283.0 9,066, ,114.4 194,22
098.80
3.00 0 2 533.27 0 8.35
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 2,054,885,320.69 1,385,149,822.80 2,646,531,785.60 1,928,435,115.76
Other business 12,163,668.37 537,627.72 30,959,887.70 491,858.13
Total 2,067,048,989.06 1,385,687,450.52 2,677,491,673.30 1,928,926,973.89
Details:
Monetary Unit: CNY
Contract category Liquor sales Total
Commodity type 2,054,885,320.69 2,054,885,320.69
Including:
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2022 Interim Report of Luzhou Laojiao Co., Ltd.
Medium and high grade liquor 2,048,322,416.00 2,048,322,416.00
Other liquor 6,562,904.69 6,562,904.69
By operating segment 2,054,885,320.69 2,054,885,320.69
Including:
Domestic 2,054,885,320.69 2,054,885,320.69
Outbound
Contract type 2,054,885,320.69 2,054,885,320.69
Including:
Commodity sales contract 2,054,885,320.69 2,054,885,320.69
Total 2,054,885,320.69 2,054,885,320.69
17.5. Investment income
Monetary Unit: CNY
Item Current Period Previous Period
Investment income from long-term
equity investments under equity 25,579,283.021 105,134,583.68
method
Investment income from disposal of
7,530,591.92
long-term equity investments
Investment income gained during the
period of holding held-for-trading 6,795,921.96
financial assets
Investment income from disposal of
4,827,927.32
held-for-trading financial assets
Dividends income gained during
the period of holding other 8,078,717.94 6,657,660.52
equity instrument investment
Total 52,812,442.16 111,792,244.20
Note: 1. There is no major restriction on the repatriation of the Company's investment income. The
current period decreased CNY 58,979,802.04 compared with previous period with a decrease by
52.76%, mainly due to the YoY decline in profitability of the investee Huaxi Securities Co., Ltd.
18. Supplementary information
18.1. Detailed statement of non-recurring gains and losses in the current period (+
for gain, - for loss)
Applicable □ N/A
Monetary Unit: CNY
Item Amount Note
Gain or loss from disposal of non-current assets
(including the write-off portion of the impairment 19,789,402.07 See "Section X Note 5.44" for details.
provision)
Government grants accounted for, in the profit or
loss for the current period (except for the
government grants closely related to the business of See "Section X Note 5.40 and 5.45"
9,141,196.38
the Company and consistently given at a fixed for details.
amount or quantity in accordance with the national
policies or standards)
Gain or loss on fair-value changes on held-for- See "Section X Note 5.41 and 5.42"
trading financial assets and liabilities & income from 10,690,773.61 for details.
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2022 Interim Report of Luzhou Laojiao Co., Ltd.
disposal of held-for-trading financial assets and
liabilities and available-for-sale financial assets
(exclusive of the effective portion of hedges that
arise in the Company’s ordinary course of business)
Other non-operating income and expenditure except See "Section X Note 5.45 and 5.46"
above-mentioned items 9,186,723.82 for details.
Less: Corporate income tax 11,930,835.44
Minority interests (after tax) 1,216,762.50
Total 35,660,497.94
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
18.2. Return on equity and earnings per share
Profit during reporting EPS(CNY/Share)
Weighted average ROE
period Basic EPS Diluted EPS
Net profits attributable to
common shareholders of 17.96% 3.76 3.76
the Company
Net profits attributable to
common shareholders of
17.85% 3.74 3.74
the Company before non-
recurring gains and losses
18.3. Differences between accounting data under domestic and overseas
accounting standards
18.3.1. Differences of net profit and net assets disclosed in financial reports prepared under
international and Chinese accounting standards
□ Applicable N/A
18.3.2. Differences of net profit and net assets disclosed in financial reports prepared under
overseas and Chinese accounting standards
□ Applicable N/A
18.3.3. Explain reasons for the differences between accounting data under domestic and
overseas accounting standards; for any adjustment made to the difference existing in the data
audited by the foreign auditing agent, such foreign auditing agent’s name shall be clearly
stated
168
