2022 Annual Report of Luzhou Laojiao Co., Ltd.
Luzhou Laojiao Co., Ltd.
2022 Annual Report
April 2023
1
2022 Annual Report of Luzhou Laojiao Co., Ltd.
2022 Annual Report
Section I Important Statements, Contents and Definitions
The Board of Directors, Board of Supervisors, directors, supervisors and senior management guarantee
that the information presented in this report is free of any false records, misleading statements or
material omissions, and shall individually and together be legally liable for truthfulness, accuracy and
completeness of its contents.
Liu Miao, responsible person for the Company, Xie Hong, responsible person for accounting work and
Yan Li, responsible person for the Company’s financial affairs (Accounting Supervisor) have warranted
that the financial statements in this report are true, accurate and complete.
Other directors attended the board meeting to deliberate this report by themselves except the following
directors.
Position of directors who
Name of directors who did not Reason for not attending
did not attend the meeting Name of deputies
attend the meeting in person the meeting in person
in person
Liu Miao Chairman of the board Work Lin Feng
Qian Xu Director Work Lin Feng
Ying Hanjie Director Work Wang Hongbo
Affected by risks, uncertainties and assumptions, the forward-looking statements concerning business
objectives and future plans made in this report based on the subjective assumptions and judgments of
the future policies and economic conditions may be significantly different from the actual results. Such
statements shall not be considered as virtual promises of the Company to investors, and the investors
and relevant persons shall maintain adequate risk awareness and shall understand the differences
between plans, forecasts and commitments.
In the annual report, the potential risks in the operation of the Company have been disclosed. Investors
are kindly reminded to pay attention to possible investment risks.
The profit distribution plan approved by the board of directors: based on the existing total share capital
of 1,471,987,769 shares, a cash dividend of CNY 42.25 (tax inclusive) will be distributed for every 10
existing shares held, 0 shares of bonus shares (tax inclusive), and reserves would not be converted into
share capital.
This Report has been prepared in both Chinese and English. Should there be any discrepancies or
misunderstandings between the two versions, the Chinese version shall prevail.
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2022 Annual Report of Luzhou Laojiao Co., Ltd.
Contents
Section I Important Statements, Contents and Definitions ............................................ 2
Section II Company Profile and Key Financial Results .................................................. 6
Section III Management Discussion and Analysis ........................................................ 11
Section IV Corporate Governance .................................................................................. 42
Section V Environmental and Social Responsibility .................................................... 66
Section VI Significant Events ......................................................................................... 78
Section VII Changes in Shares and Information about Shareholders ......................... 86
Section VIII Preferred Shares .......................................................................................... 97
Section IX Information about Bond ................................................................................ 98
Section X Financial Report ........................................................................................... 105
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2022 Annual Report of Luzhou Laojiao Co., Ltd.
Documents Available for Reference
1. Financial statements signed and stamped by the responsible person for the Company, the
responsible person for accounting work and the responsible person for the Company’s financial affairs
(Accounting Supervisor);
2. The original of the auditor’s report with the seal of the accounting firm, and signed and stamped by
CPAs; and
3. The originals of all company documents and announcements that are disclosed to the public on the
website designated by the China Securities Regulatory Commission (CSRC) during the reporting period.
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2022 Annual Report of Luzhou Laojiao Co., Ltd.
Definitions
Term Reference Definition
Company, the Company, Luzhou
Refer to Luzhou Laojiao Co., Ltd.
Laojiao
Laojiao Group Refer to Luzhou Laojiao Group Co., Ltd.
XingLu Group Refer to Luzhou XingLu Investment Group Co., Ltd.
State-owned Assets Supervision and Administration
SASAC of Luzhou Refer to
Commission of Luzhou
Huaxi Securities Refer to Huaxi Securities Co., Ltd.
Luzhou Bank Refer to Luzhou Bank Co., Ltd.
Sales Company Refer to Luzhou Laojiao Sales Co., Ltd.
Brewing Company Refer to Luzhou Laojiao Brewing Co., Ltd.
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2022 Annual Report of Luzhou Laojiao Co., Ltd.
Section II Company Profile and Key Financial Results
1. Corporate information
Stock abbreviation Luzhou Laojiao Stock code 000568
Stock exchange where
the shares of the Shenzhen Stock Exchange
Company are listed
Name of the Company
泸州老窖股份有限公司
in Chinese
Abbr. of the Company
泸州老窖
name in Chinese
Name of the Company
Luzhou Laojiao Co., Ltd.
in English (if any)
Abbr. of the Company
LZLJ
name in English (if any)
Legal representative Liu Miao
Registered address Guojiao Square, Luzhou City, Sichuan Province, China
Postal code 646000
The Company’s registered address has changed from 46 Guihua Street,
Past changes of
Luzhou City, Sichuan Province, China to Guojiao Square, Luzhou City,
registered address
Sichuan Province, China in 2000.
Luzhou Laojiao Marketing Network Command Center, Nanguang Road,
Business address
Luzhou City, Sichuan Province, China
Postal code 646000
Company website www.lzlj.com
E-mail lzlj@lzlj.com
2. Contact us
Representative for securities
Secretary of the board
affairs
Name Li Yong 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
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2022 Annual Report of Luzhou Laojiao Co., Ltd.
3. Information disclosure and place where the annual report is kept
Stock exchange website where this
China Securities Journal, Securities Times, Securities Daily
Report is disclosed
Media and website where this Report
http://www. cninfo.com.cn
is disclosed
Place where the annual report of the
Board office
Company is kept
4. Company registration and alteration
Unified social credit code 91510500204706718H
Changes in main business activities
since the Company was listed (if None
any)
Before September 2009, the controlling shareholder was the
Changes of controlling shareholders SASAC of Luzhou. After the equity transfer in September 2009,
of the Company (if any) the controlling shareholder was changed to Laojiao Group, but the
actual controller is still the SASAC of Luzhou.
5. Other relevant information
Accounting firm engaged by the Company
Name of the accounting
Sichuan Huaxin (Group) CPA Firm
firm
Business address of the 28/F., South Jinmaolidu, NO.18 Ximianqiao Street, Chengdu City,
accounting firm Sichuan Province.
Name of accountants for
Li Wulin, Tang Fangmo, and Fan Bo
writing signature
Sponsors engaged by the Company to continuously perform its supervisory function during the
reporting period
□ Applicable N/A
Financial adviser engaged by the Company to continuously perform its supervisory function during
the reporting period.
Applicable N/A
6. Key accounting data and financial indicators
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2022 Annual Report of Luzhou Laojiao Co., Ltd.
Whether the Company performed a retroactive adjustment to or restatement of accounting data.
Yes No
2022 2021 YoY Change 2020
Operating revenues (CNY) 25,123,563,271.62 20,642,261,724.37 21.71% 16,652,854,549.80
Net profits attributable to
shareholders of the Company 10,365,383,281.80 7,955,554,351.73 30.29% 6,005,723,069.36
(CNY)
Net profits attributable to
shareholders of the Company
10,321,481,236.93 7,884,384,055.60 30.91% 5,990,831,793.72
before non-recurring gains and
losses (CNY)
Net cash flows from operating
8,262,648,269.72 7,698,648,104.51 7.33% 4,916,102,451.30
activities (CNY)
Basic earnings per share
7.06 5.43 30.02% 4.10
(CNY/share)
Diluted earnings per share
7.06 5.43 30.02% 4.10
(CNY/share)
Weighted average ROE 33.32% 31.15% 2.17% 28.27%
At the end of 2022 At the end of 2021 YoY Change At the end of 2020
Total assets (CNY) 51,385,481,354.52 43,211,782,005.68 18.92% 35,009,203,823.45
Net assets attributable to
shareholders of the Company 34,207,871,130.03 28,040,247,005.94 22.00% 23,074,858,552.59
(CNY)
Whether the lower of the net profits attributable to shareholders of the Company before and after non-
recurring gains and losses was negative for the last three accounting years, and the latest auditor’s
report indicated that there was uncertainty about the Company’s ability to continue as a going
concern
Yes No
Whether the lower of the net profits attributable to shareholders of the Company before and after non-
recurring gains and losses was negative
Yes No
7. Differences in accounting data under domestic and overseas
accounting standards
7.1. Differences in the net profits and net assets disclosed in the financial reports
prepared under the international and China accounting standards
Applicable N/A
No such differences for the reporting period.
7.2. Differences in the net profits and net assets disclosed in the financial reports
prepared under the overseas and China accounting standards
Applicable N/A
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2022 Annual Report of Luzhou Laojiao Co., Ltd.
No such differences for the reporting period.
8. Key financial results by quarter
Unit: CNY
Q1 Q2 Q3 Q4
Operating revenues 6,311,964,675.84 5,352,412,877.10 5,860,457,699.51 7,598,728,019.17
Net profits
attributable to
2,875,658,916.19 2,656,267,424.25 2,685,377,572.64 2,148,079,368.72
shareholders of the
Company
Net profits
attributable to
shareholders of the
2,864,799,362.69 2,631,466,479.81 2,670,975,274.37 2,154,240,120.06
Company before
non-recurring gains
and losses
Net cash flows from
1,131,497,885.76 2,945,517,079.58 2,235,327,194.79 1,950,306,109.59
operating activities
Whether there are any material differences between the financial indicators above or their summations
and those which have been disclosed in quarterly or semi-annual reports
Yes No
9. Non-recurring profits and losses
Applicable N/A
Unit: CNY
Item 2022 2021 2020 Note
Profit or loss from disposal of non-
current assets (including the write- See "Section X Note
19,805,093.70 -347,429.88 8,123,010.18
off portion of the impairment 7.46" 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 See "Section X Note
business of the Company and 34,931,161.52 51,756,953.15 31,409,825.37 7.42 and 7.47" for
consistently given at a fixed 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 liabilities and See "Section X Note
-2,585,156.72 6,352,241.79
available-for-sale financial assets 7.43" for details.
(exclusive of the effective portion
of hedges that arise in the
Company’s ordinary course of
business)
Reversed portions of impairment
80,000,000.00
allowances for receivables which
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2022 Annual Report of Luzhou Laojiao Co., Ltd.
are tested individually for
impairment
Other non-operating income and See "Section X Note
expenditure except above- 7,873,927.25 -40,241,672.68 -20,289,086.46 7.47 and 7.48" for
mentioned items details.
Less: Corporate income tax 14,413,895.31 24,082,098.59 4,512,028.92
Minority interests (after tax) 1,709,085.57 2,267,697.66 -159,555.47
Total 43,902,044.87 71,170,296.13 14,891,275.64 --
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 Annual Report of Luzhou Laojiao Co., Ltd.
Section III Management Discussion and Analysis
1. Industry overview for the reporting period
In 2022, the Chinese baijiu industry was under multiple pressures such as the economic downturn,
spending shrinks and fierce competition, and concentration towards the top baijiu producers was
increasingly obvious in the industry. Capacity optimisation, quality upgrade, technological innovation,
cultural development, consumer experience and service enhancement will become the key themes
for the baijiu industry in the new era of high-quality development.
2. Business scope in the reporting period
The Company shall comply with the disclosure requirements for companies engaging in food & liquor
and wine production of the Guidelines No. 3 of the Shenzhen Stock Exchange on Self-regulation of
Listed Companies—Industry-specific Information Disclosure.
Holding five food business licenses, the Company operates within the baijiu subdivision industry
which belongs to the liquor & wine, beverage and refined tea production industry with specialized
baijiu product design, production and sales as its main business model. The Company’s primary
products are baijiu series such as "National Cellar 1573" and "Luzhou Laojiao", and its main
comprehensive performance indicators rank high in the baijiu industry. For the reporting period,
operating revenue amounted to CNY 25.124 billion, up 21.71% year on year; and the net profit
attributable to the shareholders of the listed company reached CNY 10.365 billion, up 30.29% year on
year.
For the Company's brand operations, please refer to "4.1 Overview" under “4. Analysis of main
business” in this section. The Company’s main products are classified as follows:
Main product types Classification criteria Representative brand name
National Cellar 1573, Luzhou
Tax-inclusive sales price ≥ CNY
Mid- and high-end baijiu Laojiao Tequ, and Century-old
150 per bottle
Luzhou Laojiao Jiaoling Baijiu
Tax-inclusive sales price < CNY Luzhou Laojiao Touqu and Luzhou
Other baijiu
150 per bottle Laojiao Hey Guys
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2022 Annual Report of Luzhou Laojiao Co., Ltd.
Main sales models:
Currently, the Company has two main sales models:
1. Traditional channel operation model: It is mainly authorized distribution of the offline distributors. The
Company establishes cooperative relationships with the distributors by product lines and regions. The
Company directly supplies goods to the distributors, and then distributors sell them to consumers and
terminal outlets.
2. Emerging channel operation model: It is mainly online sales operations. The Company establishes
cooperative relationships with e-commerce platforms, self-media and webcasters, and sells the goods
to consumers through flagship stores, specialty stores, live streaming rooms on online platforms and
other network terminals.
Distribution models:
Applicable □N/A
1. Main sales models
Unit: CNY
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2022 Annual Report of Luzhou Laojiao Co., Ltd.
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
23,302,396,093.43 2,939,816,887.75 87.38% 19.36% 9.21% 1.17%
operation model
Emerging channel
1,463,725,905.06 274,436,829.16 81.25% 64.17% 41.65% 2.98%
operation model
Note: Operating revenue and cost of sales of the emerging channel operation model increased 64.17% and 41.65%
respectively year on year. It was mainly due to the increased revenue and cost on e-commerce platforms.
2. Distributors
Increased
Number of Decreased
number YoY change of
distributors at number during
Region during the number of Reason for any significant change
the end of the the reporting
reporting distributors (%)
reporting period period
period
Domestic 1703 47 127 -4.49
Overseas 126 20 42 -14.86
3. Main settlement method for distributors and distribution method
The Company's main settlement method for distributors is payment before delivery. The distribution
method is authorized distribution.
4. Top five distributors
The Company had no accounts receivable from the top five distributors at the end of the period. For
details, please refer to Section III 4.2.8. "Main customers and suppliers".
Store sales terminals accounted for more than 10%
□ Applicable N/A
Online direct sales
Applicable □N/A
For the sales of the Company's main products, please refer to Section III 4.2.1. "Breakdown of
operating revenues". The Company's complete series of products are sold online. Its main cooperation
platforms included JD.com and Tmall.
Sales price of main products contributing over 10% of the total operating revenues for the current
period changed by more than 30% from the previous reporting period
□ Applicable N/A
Purchase model and purchase content
Unit: CNY
Purchase model Purchase content Amount of main purchase content
Organic raw grains are purchased
through cooperative model and
Raw materials 4,528,482,786.16
supplied by organic raw grain bases;
other raw grains and packaging
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2022 Annual Report of Luzhou Laojiao Co., Ltd.
materials are purchased through bid
invitation
Purchase based on the unified
pricing of the National Development
and Reform Commission and the Fuels and energies 163,075,514.73
price bureau, and purchase through
bid invitation
Purchase through bid invitation Low-value consumables 55,904,099.15
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
2022 2021
By business
Item As % of cost of As % of cost of YoY Change
segment Amount Amount
sales sales
Baijiu Raw materials 2,757,973,459.70 85.80% 2,502,121,435.16 86.71% 10.23%
Baijiu Labor costs 208,363,976.36 6.48% 160,836,008.91 5.57% 29.55%
Manufacturing
Baijiu 247,916,280.85 7.71% 222,727,707.56 7.72% 11.31%
overhead
Production volume and inventory
1. Production volume, sales volume and inventory of main products
YoY change YoY change
Production
Product Sales volume Inventory of production of sales YoY change Description of
volume
classification (ton) (ton) volume volume of inventory major changes
(ton)
(%) (%)
Mid- and high-
40,823.92 37,123.96 42,877.01 -16.11 16.87 9.44
end baijiu
Other baijiu 47,078.68 49,058.69 11,695.49 2.00 6.52 -14.48
2. Inventory at the end of the reporting period
Unit: Ton
Finished baijiu Semi-finished baijiu (including base baijiu)
54,572.50 402,613.83
3. Capacity
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2022 Annual Report of Luzhou Laojiao Co., Ltd.
Unit: Ton
Main products Design capacity Actual capacity Capacity in progress
Baijiu 170,000 170,000 80,000
3. Analysis of core competitiveness
A. Geographical advantage
Luzhou City, where the Company is located, sits in the transitional area between the southern rim of the
Sichuan Basin and the Yunnan-Guizhou Plateau, featuring a warmer and more humid sub-tropical
climate compared to other areas at the same latitude, with a temperature above 0℃ throughout the
year. The unique climate and soil are agreeable to grow grains for baijiu brewing. The glutinous red
sorghum and soft wheat grown in this area are the primary raw materials for the baijiu of the Company.
The cellars in which the Company brews its baijiu are made of the local loessal clay characterized by
strong viscosity, rich minerals and excellent moisture retention. In addition, the abundant and quality
water in the region creates a unique geographical advantage for the production of the Company’s baijiu.
B. Advantage of cellars and brewing technique
Aged cellars are the most essential condition for a strong aromatic baijiu maker to produce good quality
baijiu. The Cellars of National Treasure 1573, founded in 1573, was granted by the State Council as the
first Cultural Relic of National Importance in the industry under the Protection of the State in December
1996. 1,619 cellars of Luzhou Laojiao which have been continuously used for over 100 years, together
with its 16 ancient brewing workshops and three natural cellar holes, were all selected as the fourth
batch of Cultural Relics of National Importance under the Protection of the State in 2013. They are
unique resources that cannot be replicated. In both 2006 and 2012, Luzhou Laojiao Daqu Cellars were
twice selected into the preliminary list of China for World Heritage. In November 2018, Luzhou Laojiao
Cellars and Brewing Workshops were selected into China’s Industrial Heritage List. The time-honored
Traditional Brewing Technique of Luzhou Laojiao is a 24-generation inheritance and a classic brewing
technique for strong aromatic baijiu. This technique was selected as the first batch of National
Intangible Cultural Heritage in May 2006. The Cellars of National Treasure 1573 and the Traditional
Brewing Technique of Luzhou Laojiao together provide the most essential basis and assurance for the
quality of the product series of National Cellar 1573 and Luzhou Laojiao. Additionally, Huangyi Brewery
Eco-Park has moved into full production in late 2020. Upholding the cultural connotations of
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2022 Annual Report of Luzhou Laojiao Co., Ltd.
“inheritance of ancient ways, pure-grain brewing, traditional techniques, and intelligent technologies”,
the Company carried out brewing technical renovation featuring automatic, intelligent and information
technology-based transformation. As such, it has established a baijiu brewery eco-park comprising
brewing workshops, leaven making workshops, and base baijiu storage cellars, along with energy and
sewage treatment facilities. This brewery eco-park brings with it new production capacities of 100,000
tons of quality pure-grain solid baijiu and 100,000 tons of leaven in addition to a new storage capacity of
380,000 tons of baijiu per year, marking a substantial increase in the Company’s production capacity.
C. Brand advantage
Brand is a key business resource for baijiu producers. The Company’s reputation is greatly built on its
superiority in brand. National Cellar 1573, which is of a connoisseurship level, is a world-famous high-
end brand. Luzhou Laojiao Tequ, a classic brand for strong aromatic baijiu, was selected in 1952 by the
first national tasting competition judges as one of the four most famous baijiu brands in China. It is the
only strong aromatic baijiu brand that won the title of “National Famous 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.
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2022 Annual Report of Luzhou Laojiao Co., Ltd.
D. Quality and R&D advantage
The Company is committed to producing high-quality baijiu, advocating a healthy lifestyle and “making
the quality visible”. The first “Organic Sorghum Planting Base” was established and the six-factor
management system (including organic, quality, safety, environment, measurement and energy) was
built and improved. The research platforms are established, including National Engineering Research
Center of Solid-State Brewing, National Liquor Test Center, National Postdoctoral Workstation, etc,
which all support the innovation and upgrading of products with their strong technical force. In recent
years, the Company has put in a lot of efforts in researching Tequ production, brewing informatization &
automation. Relying on the technological innovation platforms such as the National Industrial Design
Center, and continuously deepening the cooperation with universities and scientific research institutes
including the Chinese Academy of Sciences and the Jiangnan University, the Company has undertaken
dozens of national- or provincial-level projects and has been granted hundreds of invention or utility
model patents. And remarkable results have been achieved with respect to improvement of the quality
of base Baijiu, as well as production efficiency improvement.
E. Talent advantage
The Company has 1 inheritor of national intangible cultural heritage, 4 masters of Chinese brewing, 2
masters of Chinese baijiu, 2 Chinese liquor connoisseurs, 1 master of Chinese baijiu technique, 11
senior professor engineers, 7 experts who receive special allowances from the State Council, 4 national
technicians, 2 national model workers, 5 national Labor Day Medal winners, 3 academic and
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2022 Annual Report of Luzhou Laojiao Co., Ltd.
technologic leaders of Sichuan province, 1 expert with outstanding contribution in Sichuan province, 1
innovation leader of Tianfu, 1 excellent engineer of Tianfu, 3 craftsmen of Tianfu, 2 craftsmen of
Sichuan province, 1 technological elite of Tianfu, 4 technicians of Sichuan province, as well as
hundreds of highly skilled personnel including national baijiu judges, senior brewing technicians and
brewing technicians. The comprehensive and professional personnel system assures the sound
development of the Company.
4. Analysis of main business
4.1. Overview
In 2022, the Company forged ahead against headwinds and maintained a healthy and rapid
development momentum, establishing a growing pace. For the reporting period, operating revenue
amounted to CNY 25.124 billion, up 21.71% year on year; and the net profit attributable to the
shareholders of the listed company reached CNY 10.365 billion, up 30.29% year on year. The
Company’s main operations and the results in the reporting period are summarized as follows:
A. Continued stable growth in sales
Strategies were effectively implemented. Empowered by new marketing models and new methods,
the system of resource integration plays a powerful driving force. The performance of main single
products was outstanding. National Cellar 1573 maintained its leadership, and Luzhou Laojiao's
brand rejuvenation sped up, with a deep layout of multiple product series and young orientation, and
the formation of new growth poles accelerated. Continuous efforts were made for the core area.
The Company further consolidated the base market, made a breakthrough in the highland market and
expanded the opportunity market, resulting in continuous growth in scale by province, city and
number of customers.
B. A variety of branding highlights
The brand matrix was continuously improved. Adhering to the strategy of "dual brands, three
product series, and major single products", the Company continued to promote the brand
rejuvenation plan, and comprehensively enhanced its market influence. Branding activities were
vigorously carried out. The Company deeply integrated its brand in top international events such as
the Australian Open and the World Cup, conducted cross-border cooperation with the food, art and
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2022 Annual Report of Luzhou Laojiao Co., Ltd.
fashion industries, and achieved precise circle communication and brand promotion. A stronger
brand presence was achieved. In 2022, Luzhou Laojiao became the only Chinese company in the
baijiu industry to have two brands listed in the 2022 Kantar BrandZ Top 100 Most Valuable Chinese
Brands, and was awarded the third place in the list of 2022 Global Top 50 Most Valuable Spirits
Brands.
C. Solid capacity guarantee
The capacity guarantee achieved a higher level. The Company has created a high-quality organic
raw grain planting base, further optimized the digital business system of the brewery eco-parks and
improved the utilization of brewing resources and production efficiency. The product guarantee was
solid and strong. The completion rate of production guarantee, guarantee rate of package materials,
warehousing and logistics efficiency and management system coverage continued to improve, and
Luzhou Laojiao's supply chain system showed a new look. The quality assurance continued to be
consolidated. The Company continuously carried out external audits of quality, food safety and
organic systems, with a 100% pass rate. It participated in drafting and revising nine national
standards, and released a white paper on quality and safety to the community for six consecutive
years. Luzhou Laojiao was awarded six national quality awards, including "National Food Safety
Integrity Demonstration Unit", "National Excellent Case of Food Safety Management Innovation" and
"National Quality and Integrity Benchmark Enterprise".
D. Leading technological innovation
A historic breakthrough was made in major science and technology awards. The Company won
the First Prize of Science & Technology Progress of People's Government of Sichuan Province, the
First Prize of Sichuan Patent Award, and the First Prize of Science & Technology Progress Award of
China Food Industry Association and China National Light Industry Council. Remarkable working
results were achieved in terms of intellectual property. The Company passed the review of
national intellectual property demonstration enterprises and the certification of intellectual property
management system. In addition, it applied for 113 patents, authorized 73 patents and published 31
papers. Collaborative technology innovation was effectively promoted. The Company deepened
the industry-university-research cooperation, made multiple major technological breakthroughs such
as "intelligent brewing" and "low-carbon brewing", with many achievements reaching international
leading levels.
E. Strong support from the talent team
Talent was introduced through multiple channels. Mature and reserve talent was introduced
through campus recruitment and social recruitment. Talent was trained from multiple dimensions.
The Company continued to build a knowledge management platform, and enhanced the development
of a training system, course system and teacher system. It was selected as one of the first batch of
key enterprises to promote the "industry reform" special action in the national light industry. Talent
was selected and appointed by multiple initiatives. The mechanism of open post competition for
middle-level management and department managers of subsidiaries was implemented
comprehensively, and the Luzhou Laojiao assessment officer system was formally implemented to
make the selection and appointment of talent more scientific. In 2022, the Company was awarded
"National Model Enterprise of Harmonious Labor Relations" and "Advanced Unit of Talent Work in
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2022 Annual Report of Luzhou Laojiao Co., Ltd.
Luzhou City". Mr. Liu Miao, Secretary of the Party Committee and Chairman of the Board of the
Company, was awarded the "Baijiu Town Talent - Special Honor Award" in Luzhou City. Yangping
Brewery Workshop was awarded the "Craftsman Innovation Workshop in the National Light Industry".
F. Prominent cultural leadership
The cultural connotations continued to deepen. The "70th Anniversary of Famous Baijiu"
exhibition toured China, and books and courses on corporate culture were published and upgraded.
The cultural cohesion continued to heighten. The corporate culture knowledge competition of
"Strong Flavor Cultural Brewery Cup" was successfully concluded, and the Luzhou Laojiao culture
shaping think tank platform, including the National Cellar 1573 Institute, was successfully built. The
cultural communication covered the whole jurisdiction. New media communication and operation
were optimized, and a matrix communication platform was built. The cultural experience was
innovated and upgraded. The immersive cultural experience was upgraded, the upgrade of the old
museum was completed and the cultural experience services of Luzhou Laojiao continued to climb.
G. Continuous improvement in headquarters capacity
Internal controls were constantly optimized. By continuously improving the management system
and sorting out the procedure system, the Company's ability of risk prevention continued to improve.
The management innovation was efficiently empowered. The Company was selected as one of
the first batch of the province and the third batch of the national list of pilot units for electronic VAT
invoices, as well as one of the first batch of the national pilot units for the construction of digital
archives for enterprise groups, ranking among the first camp of national corporate archive
management. The safety and environmental protection continued to be consolidated. The
Company had zero production safety accidents and zero incidence of occupational diseases
throughout the year, and was awarded as a "tier-one enterprise with standard safety production" and
a "provincial healthy enterprise". For three consecutive years, the Company was awarded as a
provincial "environmental integrity enterprise of corporate environmental credit evaluation". Social
welfare was continuously advanced. The Company supported rural revitalization in paired
assistance regions and was awarded the "Advanced Collective for Paired Assistance" in Sichuan
Province. It continued to carry out public welfare projects such as the "Pillars Project" and the
"Luzhou Laojiao Teacher's Pointer" to support the development of local education.
4.2. Revenues and cost of sales
20
2022 Annual Report of Luzhou Laojiao Co., Ltd.
4.2.1. Breakdown of operating revenues
Unit：CNY
2022 2021
As % of As % of YoY Change
Amount operating Amount operating
revenues revenues
Total 25,123,563,271.62 100% 20,642,261,724.37 100% 21.71%
By business segment
Baijiu 24,766,121,998.49 98.58% 20,415,170,469.09 98.90% 21.31%
Other revenues 357,441,273.13 1.42% 227,091,255.28 1.10% 57.40%
By product
Mid- and high-
22,132,546,058.64 88.10% 18,397,360,159.99 89.12% 20.30%
end baijiu
Other baijiu 2,633,575,939.85 10.48% 2,017,810,309.10 9.78% 30.52%
Other revenues 357,441,273.13 1.42% 227,091,255.28 1.10% 57.40%
By geographical segment
Domestic 24,970,484,945.58 99.39% 20,558,860,984.10 99.60% 21.46%
Overseas 153,078,326.04 0.61% 83,400,740.27 0.40% 83.55%
By sales model
Traditional
channel 23,302,396,093.43 92.75% 19,523,560,616.72 94.58% 19.36%
operation model
Emerging
channel 1,463,725,905.06 5.83% 891,609,852.37 4.32% 64.17%
operation model
Other revenues 357,441,273.13 1.42% 227,091,255.28 1.10% 57.40%
4.2.2. Business segments, products, geographical segments or sales models
contributing over 10% of the operating revenues or profits
Applicable N/A
Unit：CNY
Gross YoY change YoY change YoY change
Operating revenue Cost of sales profit of operating of cost of of gross profit
margin revenue sales margin
By business segment
Baijiu 24,766,121,998.49 3,214,253,716.91 87.02% 21.31% 11.39% 1.16%
By product
Mid- and high-
22,132,546,058.64 1,981,044,707.48 91.05% 20.30% 11.43% 0.71%
end baijiu
Other baijiu 2,633,575,939.85 1,233,209,009.43 53.17% 30.52% 11.31% 8.08%
By geographical segment
Domestic 24,970,484,945.58 3,349,598,518.23 86.59% 21.46% 13.94% 0.89%
By sales model
Traditional
channel
23,302,396,093.43 2,939,816,887.75 87.38% 19.36% 9.21% 1.17%
operation
model
Under the circumstances that the statistical standards for the Company’s main business data were
adjusted in the reporting period, the Company’s main business data in the current year is calculated
based on adjusted statistical standards at the end of the reporting period
Applicable N/A
21
2022 Annual Report of Luzhou Laojiao Co., Ltd.
4.2.3. Whether revenue from sales of goods is higher than revenue of rendering
services
Yes No
By business
Item Unit 2022 2021 YoY Change
segment
Sales volume Ton 86,182.65 77,820.50 10.75%
Production
Baijiu Ton 87,902.60 94,818.24 -7.29%
volume
Inventory Ton 54,572.50 52,852.55 3.25%
Reason for any over 30% YoY movements in the data above
Applicable N/A
4.2.4. Execution of significant sales or purchase contracts in the reporting period
Applicable N/A
4.2.5. Breakdown of cost of sales
By business segment
Unit：CNY
2022 2021
By business As % of As % of
Item YoY Change
segment Amount cost of Amount cost of
sales sales
Baijiu Raw materials 2,757,973,459.70 85.80% 2,502,121,435.16 86.71% 10.23%
Baijiu Labor costs 208,363,976.36 6.48% 160,836,008.91 5.57% 29.55%
Manufacturing
Baijiu 247,916,280.85 7.71% 222,727,707.56 7.72% 11.31%
overhead
4.2.6. Change in the scope of the consolidated financial statements for the
reporting period
Yes No
Subsidiaries that are newly incorporated into the scope of consolidation in this period
Name of subsidiary Reason
Luzhou Laojiao International Trade (Hainan) Co., Ltd. Incorporated through investment
Luzhou Laojiao Technology Innovation Co., Ltd. Incorporated through investment
Liquidation and cancellation for subsidiaries in this period
Name of subsidiary Reason
Luzhou Laojiao Bosheng Hengxiang Liquor Sales Co., Ltd. Liquidation and cancellation
Luzhou Laojiao Tourism Culture Co., Ltd. Liquidation and cancellation
4.2.7. Major changes in the business, products or services in the reporting period
Applicable N/A
22
2022 Annual Report of Luzhou Laojiao Co., Ltd.
4.2.8. Main customers and suppliers
Sales to main customers of the Company
Total sales to top five customers（CNY） 16,855,963,269.03
Total sales to top five customers as % of the total
67.09%
sales
Total sales to related parties among top five
0.00%
customers as % of the total sales
Information on top five customers
As % of the total sales
No. Customer Sales amount (CNY)
for the year
1 Customer A 11,205,287,521.28 44.60%
2 Customer B 2,532,520,076.72 10.08%
3 Customer C 1,464,567,730.63 5.83%
4 Customer D 936,256,733.32 3.73%
5 Customer E 717,331,207.08 2.86%
Total -- 16,855,963,269.03 67.09%
Other information on main customers
Applicable N/A
Main suppliers of the Company
Total purchases from top five suppliers（CNY） 1,893,157,453.08
Total purchases from top five suppliers as % of
39.88%
the total purchases
Total purchases from related parties among top
0.00%
five suppliers as % of the total purchases
Information on top five suppliers
As % of the total
No. Supplier Purchases (CNY)
purchases for the year
1 Supplier A 615,541,310.14 12.97%
2 Supplier B 430,257,905.90 9.06%
3 Supplier C 374,360,322.52 7.89%
4 Supplier D 260,747,023.01 5.49%
5 Supplier E 212,250,891.52 4.47%
Total -- 1,893,157,453.08 39.88%
Other information on main suppliers
Applicable N/A
4.3. Expenses
Unit：CNY
23
2022 Annual Report of Luzhou Laojiao Co., Ltd.
Reason for any
2022 2021 YoY Change
significant change
Selling and
3,448,771,046.02 3,599,211,604.56 -4.18%
distribution expenses
General and
administrative 1,162,422,257.23 1,056,116,367.85 10.07%
expenses
Mainly due to the
increased interest
Finance expenses -286,376,927.48 -216,885,999.21
income in the current
period
Mainly due to the
increased R&D
R&D expenses 206,248,486.57 137,712,329.78 49.77%
projects in the
current period
The Company shall comply with the disclosure requirements for companies engaging in food & liquor
and wine production of the Guidelines No. 3 of the Shenzhen Stock Exchange on Self-regulation of
Listed Companies—Industry-specific Information Disclosure.
4.3.1. Breakdown of selling and distribution expenses
Unit：CNY
Selling and distribution
2022 2021 YoY Change Reason for any significant change
expenses
Advertising expenses 1,880,179,769.91 1,769,053,962.56 6.28%
Mainly due to the decreased sales
Sales promotion
712,641,702.96 1,139,273,684.38 -37.45% promotion expenses in the current
expenses
period
Employee benefits 355,699,286.88 357,659,249.63 -0.55%
Mainly due to the increased sales
Warehousing and revenue from baijiu, leading to a
138,589,417.94 100,059,219.52 38.51%
logistics expenses corresponding increase in
warehousing and logistics expenses
Mainly due to the increased share-
Other 361,660,868.33 233,165,488.47 55.11% based payments apportioned in the
current period
4.3.2. Breakdown of advertising expenses
Unit：CNY
Advertising Expenses
Online advertising (exclusive of TV advertising) 366,297,010.23
Offline advertising 459,949,306.81
TV advertising 601,235,194.18
Other (inclusive of branding ideas, exhibitions & showcases, advertising materials,
452,698,258.69
activity planning, etc.)
4.4. R&D investments
Applicable N/A
24
2022 Annual Report of Luzhou Laojiao Co., Ltd.
Major R&D Expected impact
Purpose Progress Specific objectives
projects on the Company
Taking brewing waste as
the research target and the To develop an
energy- and resource- intelligent
based research and equipment system
The project is a development of with packaged
national key R&D thermochemical treatment technology for the
program during the as the technical resource- and
"13th Five-year Plan" breakthrough, the project energy-based
period undertaken by develops and completes utilization of
Realize a large-
the Company, which one pilot line for drying and brewing waste,
Thermochemical scale resource-
aims to realize the pyrolysis of distiller's successfully build a
Energy- and and energy-based
energy- and resource- grains, and realizes the demonstration base
Resource-based utilization of
based utilization of processing capacity of five for the project
Coupled brewing waste
brewing waste with tons/day for drying and industrialization,
Utilization and achieve both
thermochemical pyrolysis of distiller's and achieve more
Technology of ecological and
technology, and grains. Currently, the than 90% of
Brewing Waste economic
develop a complete set Company plans to build an resource- and
benefits.
of intelligent equipment industrial demonstration energy-based
systems for the line with a processing utilization of
resource- and energy- capacity of 100,000 brewing waste to
based utilization of tons/year, making a ensure the low-
brewing waste. systematic breakthrough in carbon, green
the resource-based development of the
utilization technology of Chinese baijiu
brewing waste and industry.
industrialization in China.
To develop
The project is an A study on the diversity of functional leaven
international project microorganisms in the according to
Study on the that the Company incised notopterygium has different quality
Expression jointly undertook, which been carried out. Multiple indicator
Regulation of studies the evolution omics analyses including requirements based
Improve the
Key Genes in pattern and formation macro-genomic and on functional
leaven and baijiu
Leaven mechanism of metabolomic analysis of leaven-marking
quality and
Microorganisms microbiomes during the strong-flavor baijiu were microorganisms and
enhance the
in China and natural leaven-marking completed. Functional key gene
Company's core
Japan and the and fermentation, and enhanced leaven was expression
competitiveness.
Improvement of screens for microbial developed, and corporate regulation,
Chinese Leaven strains with specific standards for finished systematically
Quality functions for the strong-flavor baijiu and evaluate the
production of functional other products were efficacy of leaven
enhanced leaven. formulated. and optimize the
process.
The project is to The Company has To pass the
implement national strengthened the close "certification of Improve the
standards for integration of intellectual intellectual property Company's
intellectual property property creation and management intellectual
High-value
management, and protection with the whole standard" and property offensive
Patent
achieve efficient process of technological enhance the and defensive
Incubation
management of the innovation, enhanced the awareness of capabilities, and
Center Project
Company in the creation of intellectual intellectual property become a model
of Luzhou
creation, application property at key processes, creation and and leader in
Laojiao
and protection of and formed a series of protection of all terms of
intellectual property. An high-value patent staff. To strengthen intellectual
all-round layout of achievements. Its invention the exploration of property work.
intellectual property is patents won the first prize high-value patents
25
2022 Annual Report of Luzhou Laojiao Co., Ltd.
made around the core of Sichuan Patent Award. and strengthen the
key technologies of the The certification of operation and
industrial chain to enterprise intellectual protection of high-
promote the creation of property management value patents.
high-quality patents standard has been
and build a patent pool conducted, an intellectual
for core technologies. property management
system has been
established and improved,
and a number of normative
documents have been
formulated and operated
effectively. The Company
has successively passed
the review of national
intellectual property
demonstration enterprises
and the certification of
intellectual property
management standard.
The Company has
developed and improved
the policy system for the
Innovation Center,
The Company took the perfected the infrastructure
To create an
lead to jointly build the of the Innovation Center,
innovation alliance
Sichuan Innovation and continued to carry out
in the solid-sate Successfully build
Center for Solid-state solid-sate brewing
brewing sector, a technological
Brewing Technologies technology research,
make innovation
Establishment of with several universities industry exchanges, result
breakthroughs in platform, thereby
Sichuan and institutes, aiming to transformation and talent
core key improving the
Innovation overcome a batch of training. Innovative
technologies in the Company's
Center for Solid- core technological resources in the solid-sate
solid-sate brewing scientific and
state Brewing challenges in solid- brewing sector were
sector, and form a technological
Technologies state brewing and gathered to form a "Solid-
science and innovation
resolve the major state Brewing Technology
technology capabilities and
problem of "large scale Innovation Alliance in the
innovation center level.
but weak capacity" Chengdu-Chongqing Twin
with national
faced by the solid-state City Economic Circle".
influence.
brewing sector. More than 50 member
enterprises have been
absorbed and a meeting of
the Alliance Council is in
preparation.
By applying modern The Company carries out
technologies such as industry-university-
intelligent sensing, research cooperation with
image recognition, universities and research Level up the
A Study on the
spectral technology and institutes in the field of Company's
Optimization of
bio-chips, the project intelligent brewing, deeply To build an intelligent brewing
Key Intelligent
aims to develop core analyzes traditional intelligent brewing and promote the
Equipment and
technologies for each production processes and demonstration transformation
the System
link of brewing fermentation principles, production line. and upgrading of
Control for
production, including innovatively applies the traditional
Brewing
fermentation, vinasse- simulation technology, brewing industry.
based ingredient automation technology,
making, distillation of online testing, industrial
grains in retorts and robots, big data analysis,
26
2022 Annual Report of Luzhou Laojiao Co., Ltd.
baijiu selection, and intelligent decision-making
build intelligent brewing and other technologies to
production lines with the brewing engineering
independent renovation project of
optimization, production Luzhou Laojiao, breaks
decision-making and through the key bottleneck
execution capabilities of intelligent brewing
to comprehensively technology, and forms the
upgrade the solid-state first intelligent baijiu
brewing technologies in brewing demonstration
the baijiu industry. solution for the whole
brewing process in the
industry. The project
results were appraised by
an expert committee with
Academician Sun Baoguo
as the chairman as
"international leading level"
and won the First Prize of
2022 Sichuan Science and
Technology Progress
Award.
The Company carries out
industry-university-
research cooperation with
universities, and has
The project aims to
screened and obtained a
carry out collection of
series of new species and
brewing microbial
key functional
resources, rapid
microorganisms in the pit To establish a
isolation,
mud based on the analysis brewing microbial
authentication, review Master the core
of the metabolic basics of strain bank of a
and transfer of resources of baijiu
the microbial flora of the certain scale, which
microbial resources in brewing
Construction of 400-year-old national can achieve long-
the brewing process of microorganisms
the Brewing treasure fermentation pit, term safe
baijiu and development and enhance the
Microbial analyzed their brewing preservation of
of excellent strains for Company's ability
Resources and performance and applied strains and is
industrial use, establish to protect and
Data Platform them to brewing supplemented by
a brewing microbial utilize brewing
production, which has special information
strain library and microbial
strongly improved the technology to
related enzymology resources.
sensory quality and quality manage strain
library, and promote the
of the base baijiu. The information.
protection, sharing and
relevant achievements
sustainable utilization
have won the First Prize of
of brewing microbial
2022 Sichuan Patent
resources.
Award and the First Prize
of Science & Technology
Progress Award of China
Food Industry Association.
Information about R&D personnel
2022 2021 YoY Change
Number of R&D
480 494 -2.83%
personnel
R&D personnel as % of
13.31% 14.39% -1.08%
total employees
27
2022 Annual Report of Luzhou Laojiao Co., Ltd.
Educational backgrounds of R&D personnel
Bachelor’s degree 320 326 -1.84%
Master’s degree 133 120 10.83%
Doctoral degree
(including postdoctoral 27 23 17.39%
workstations)
Age structure of R&D personnel
Below 30 218 220 -0.91%
30~40 219 210 4.29%
Information about R&D investments
2022 2021 YoY Change
R&D investments
206,248,486.57 169,125,528.48 21.95%
(CNY)
R&D investments as %
0.82% 0.82% 0.00%
of operating revenues
Capitalized R&D
0.00 0.00 0.00%
investments (CNY)
Capitalized R&D
investments as % of 0.00% 0.00% 0.00%
total R&D investments
Reason for any significant change in the composition of R&D personnel and the impact
Applicable N/A
Reason for any significant YoY change in the percentage of the R&D investments in the operating
revenues
Applicable N/A
Reason for any sharp variation in the percentage of the capitalized R&D investments and rationale
Applicable N/A
4.5. Cash flows
Unit：CNY
Item 2022 2021 YoY Change
Subtotal of cash
inflows from operating 26,877,272,861.82 23,520,677,136.09 14.27%
activities
Subtotal of cash
outflows from operating 18,614,624,592.10 15,822,029,031.58 17.65%
activities
Net cash flows from
8,262,648,269.72 7,698,648,104.51 7.33%
operating activities
Subtotal of cash
inflows from investing 2,243,596,415.18 41,893,415.77 5,255.49%
activities
Subtotal of cash 4,117,450,731.91 2,719,942,312.51 51.38%
28
2022 Annual Report of Luzhou Laojiao Co., Ltd.
outflows from investing
activities
Net cash flows from
-1,873,854,316.73 -2,678,048,896.74
investing activities
Subtotal of cash
inflows from financing 5,372,133,945.09 8,305,794.84 64,579.35%
activities
Subtotal of cash
outflows from financing 7,450,522,397.49 3,190,924,317.15 133.49%
activities
Net cash flows from
-2,078,388,452.40 -3,182,618,522.31
financing activities
Net increase in cash
4,326,477,650.04 1,834,333,879.02 135.86%
and cash equivalents
Explanation of why the data above varied significantly
Applicable N/A
Net cash flows from investing activities increased by CNY 804,194,580.01 year-on-year, mainly due
to the decreased cash paid to acquire and construct fixed assets, intangible assets and other long-
term assets in the current period.
Net cash flows from financing activities increased by CNY 1,104,230,069.91 year-on-year, mainly due
to the receipt of bank loan in the current period.
Explanation of main reasons leading to the material difference between net cash flows from operating
activities during the reporting period and net profit for the year
Applicable N/A
5. Analysis of non-core business
Applicable N/A
6. Assets and liabilities
6.1. Significant change of asset items
Unit：CNY
At the end of 2022 At the beginning of 2022 Reason for any
Change in
As % of total As % of total significant
Amount Amount percentage
assets assets change
Cash and cash
equivalents 17,757,528,211.25 34.56% 13,513,494,580.56 31.27% 3.29%
Accounts
receivable 5,939,420.78 0.01% 1,628,248.55 0.00% 0.01%
Inventories 9,840,742,374.85 19.15% 7,277,573,166.80 16.84% 2.31%
Investment
39,149,454.22 0.08% 0.08%
property
Long-term equity
investments 2,667,500,553.17 5.19% 2,626,744,236.25 6.08% -0.89%
Fixed assets 8,856,258,598.78 17.23% 8,089,487,274.39 18.72% -1.49%
29
2022 Annual Report of Luzhou Laojiao Co., Ltd.
Construction in
progress 808,919,047.21 1.57% 1,259,845,487.50 2.92% -1.35%
Right-of-use
assets 39,952,525.63 0.08% 52,714,810.04 0.12% -0.04%
Contract
liabilities 2,566,374,718.76 4.99% 3,510,110,701.25 8.12% -3.13%
Mainly due to the
receipt of bank
Long-term loans 3,179,600,000.00 6.19% 6.19%
loan in the
current period
Lease liabilities 29,096,969.66 0.06% 40,667,668.08 0.09% -0.03%
Whether overseas assets account for a larger proportion in total assets
Applicable N/A
6.2. Assets and liabilities measured at fair value
Applicable □ N/A
Unit：CNY
Changes in
Changes in
cumulative
Opening fair value Provision for Amount of Amount of Other Closing
Item fair value
balance through impairment purchase sale changes balance
recorded
profit or loss
into equity
Financial asset
1.Held-for-
trading
financial -
assets 706,352,241 2,500,000,0 2,120,861,8 1,073,466,7
(exclusive of 12,023,622.
.79 00.00 38.92 80.37
derivative 50
financial
assets)
4.Investmen
ts in other 363,312,120 231,164,476 489,371,388 542,285,380 1,136,736,9
equity 25,000.00
.43 .88 .31 .80 78.11
instruments
5. Accounts -
4,757,631,7 4,583,352,5
receivables 174,279,275
financing 78.64 03.37
.27
Subtotal of -
5,827,296,1 219,140,854 489,371,388 3,042,285,3 2,120,886,8 6,793,556,2
financial 174,279,275
assets 40.86 .38 .31 80.80 38.92 61.85
.27
Investment 39,149,454. 39,149,454.
property 22 22
-
5,827,296,1 219,140,854 489,371,388 3,042,285,3 2,120,886,8 6,832,705,7
Total 135,129,821
40.86 .38 .31 80.80 38.92 16.07
.05
Financial
liability 0.00 0.00
Whether measurement attribution of main assets changes significantly in this year
Yes No
30
2022 Annual Report of Luzhou Laojiao Co., Ltd.
6.3. Restricted asset rights as of the end of this reporting period
Item Closing balance Reason
Other cash and cash
10,000,000.00 Bank guarantees
equivalents (CNY)
Bank deposits (CNY) 17,339,936.14 Accrued interest on term deposits
Bank deposits (CNY) 1,181,683.24 Frozen by court of law
Total 28,521,619.38
Note 1: According to the civil ruling issued by People's Court of Jiangyang District, Luzhou City,
Sichuan Province, a total of CNY 516,806.00 bank deposits of Brewing Company, a subsidiary of the
Company, were frozen in accordance with laws for the case of contractual dispute. The first trial of
the relevant case has been decided on 12 January 2023, based on which Brewing Company was not
required to pay the relevant liabilities.
Note 2: According to the civil ruling issued by People's Court of Dongchangfu District, Liaocheng City,
Shandong Province, a total of CNY 664,877.24 bank deposits of Boda Marketing Company, a
subsidiary of the Company, were frozen in accordance with laws for the case of contractual dispute.
As of 31 December 2022, the case was not decided. Based on the explanation issued by the third-
party law firm, it was predicted that the probability of the rejection of the claims of the plaintiff by
People's Court was over 60%.
7. Investment
7.1. Total investment
Applicable N/A
Investment made in the Investment made in the prior
YoY change
reporting period (CNY) year (CNY)
4,633,852,571.05 1,781,224,057.98 160.15%1
Note 1: Mainly due to the purchase of collective asset management plan product from securities firm
in the current period.
7.2. Significant equity investment made in the reporting period
Applicable N/A
7.3. Significant ongoing non-equity investment in the reporting period
Applicable □ N/A
Unit: CNY
Whethe Industr Amount Accum Accum Reason Date
Invest Project Project Disclosur
r it is a y of the of input ulated Capital ulated s for of
Item ment progres ed e index
fixed investm in the actual source actual not disclo
form s income (if any)
asset ent reportin input income meetin sure
31
2022 Annual Report of Luzhou Laojiao Co., Ltd.
investm project g amount by the g the (if
ent period by the end of schedul any)
end of the e and
the reportin project
reportin g ed
g period income
period
Announc
ement
No.
2022-24
on the
Impleme
ntation of
Luzhou
Luzhou
Laojiao
Laojiao
Technical
583,30 583,30 Self- 13 Technical
Upgrade Self-
Yes Baijiu 0,245.6 0,245.6 financin 1.00% 0.00 0.00 N/A July Upgrade
Project of built
7 7 g 2022 Project of
Intelligen
Intelligen
t Brewing
t Brewing
(Phase I)
(Phase I)
by
Subsidiar
y on
http://ww
w.cninfo.
com.cn/
583,30 583,30
Total -- -- -- 0,245.6 0,245.6 -- -- 0.00 0.00 -- -- --
7 7
7.4. Financial assets investment
7.4.1. Securities investment
Applicable □ N/A
Unit: CNY
Chang
Chang es in Profit
es in the and
Abbre Accou Beginn
Categ Initial fair cumul Amou loss Closin
viation nting ing Amou Accou
ory of Stock invest value ative nt of during g book Capital
of measu book nt of nting
securit code ment recogn fair purcha the balanc source
securit rement balanc sale item
ies cost ized in value se reporti e
ies model e
profit record ng
or loss ed into period
equity
Invest
Dome - ments
12,719 Fair 210,69 147,33 160,04
stic 60121 50,641 8,008, in
value Own
and GTJA ,156.7 0,476. 0,232. 9,389. other
1 measu ,087.1 357.96 fund
foreign equity
6 rement 31 45 21
stock 0 instru
ments
Invest
Dome ments
Fair 15,963 - 13,901 14,931
stic 00224 1,030, 70,359 in
value Own
and SNC ,896.5 1,031, ,950.2 ,950.2 other
6 000.00 measu .97 fund
foreign equity
rement 4 946.30 4 4
stock instru
ments
32
2022 Annual Report of Luzhou Laojiao Co., Ltd.
Invest
Dome ments
51,120 Fair 102,17 17,983 69,038 120,15
stic in
LZBA value Own
and 01983 ,000.0 4,621. ,771.0 ,392.7 8,392. other
NK measu fund
foreign equity
0 rement 71 1 2 72
stock instru
ments
Invest
Dome ments
CTG 542,28 Fair 264,85 264,85 542,28 807,13
stic in
value Own
and 01880 Duty- 5,380. 3,739. 3,739. 5,380. 9,120. other
measu fund
foreign equity
Free 80 rement 27 27 80 07
stock instru
ments
607,15 328,82 231,16 495,12 542,28 1,102,
8,078,
Total 4,537. -- 8,994. 4,476. 4,314. 5,380. 0.00 278,85 -- --
717.93
56 56 88 68 80 2.24
7.4.2. Derivative investment
□Applicable N/A
No such cases in the reporting period
7.5. Use of funds raised
Applicable N/A
7.5.1. General use of funds raised
Applicable □ N/A
Unit：CNY 10,000
Total Accumula
Total Total
amount ted re- Amount
amount Accumula amount Purpose
of re- purposed Total of funds
Total of raised ted of and
purposed funds amount raised
amount funds amount accumula direction
Year Method funds raised of unused idle for
of funds used in of raised ted re- of unused
raised in as % of funds more
raised the funds purposed funds
the total raised than two
reporting used funds raised
reporting funds years
period raised
period raised
Public
offering 253,081.
2019 of 249,000 0 0 0 0.00% 0 N/A 0
corporate 84
bond
Deposite
Public
d in
offering 50,443.7 86,104.2 71,435.6 special
2020 of 149,400 0 0 0
6 2 7 account
corporate
for raised
bond
funds
Public
offering
2022 of 149,880 149,880 149,880 0 0 0.00% 0 N/A 0
corporate
bond
200,323. 489,066. 71,435.6
Total -- 548,280 0 0 0.00% -- 0
76 06 7
Notes for general use of funds raised
33
2022 Annual Report of Luzhou Laojiao Co., Ltd.
The total amounts of used and unused funds raised include interest on the funds.
7.5.2. 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 45,708.4 313,928. 30 June
No N/A Yes No
Project of 2 63 2021
Brewing
(Phase II)
Project of
Intelligent
Upgradin
g and
Building
of the No 4,735.34 8,233.89 N/A N/A No No
Informati
on
Manage
ment
System
Project of
Acquiring
Sealing 398,400 398,400 85.14%
Equipme 30 June
nt for the No 0 12,043.3 N/A Yes No
Cellar of 2021
Huangyi
Brewing
Base
Project of
Acquiring
Accessor
y
Equipme
nt for 30 June
No 0 4,980.25 N/A Yes No
Leaven 2021
Making
for
Huangyi
Brewing
Base
Subtotal
of
committe 50,443.7 339,186.
d -- 398,4001 398,400 -- -- N/A -- --
investme 6 07
nt
projects
Use of over-raised funds
None
50,443.7 339,186.
Total -- 398,400 398,400 -- -- N/A -- --
6 07
Explain
project by
N/A
project
the
34
2022 Annual Report of Luzhou Laojiao Co., Ltd.
situation
and
reason
for not
reaching
plan
progress
or
expected
benefits
(including
reason
for
inputting
“N/A” for
“Whether
the
expected
benefits
have
been
achieved”
)
Significan
t changes
N/A
of project
feasibility
Amount,
purpose
and
progress N/A
of over-
raised
funds
Change
of
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 project
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 are in
place. As of 31 December 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 N/A
and
reason
for
surplus of
funds
raised
35
2022 Annual Report of Luzhou Laojiao Co., Ltd.
Purpose
and The idle raised funds are deposited in the special account No. 9550880046723000135 for raised funds in the Chengdu Branch
whereabo of China Guangfa Bank Co., Ltd., the special account No. 517517460013000000860 for raised funds in the Luzhou Branch of
uts of
unused Bank of Communications Co., Ltd., and the special account No. 631395395 for raised funds in the Chengdu Branch of China
funds Minsheng Banking Corp., Ltd.
raised
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 are uncertainties in the approval and issue time for bond, in order to ensure
smooth progress of the projects and protect the interests of the Company’s shareholders, the
investment sequence and specific amounts of the corresponding raised funds should be determined
by the Chairman of the Board as authorized by the general meeting of shareholders or other persons
as authorized by the Board of Directors within the scope of the four raised funds investment projects
according to the actual needs, provided that the capital funds for each project is no less than 20% of
the total investment.
Note 3: As of 31 December 2022, the Project of Intelligent Upgrading and Building of the Information
Management System was in the process.
Note 4: These raised funds investment projects have helped further expand the Company’s
production and sales, and increase its comprehensive competitiveness. The economic benefits of
these projects cannot be measured separately.
7.5.3. Re-purposed funds raised
Applicable N/A
No such cases in the reporting period
8. Sale of major assets and equity interests
8.1. Sale of major assets
Applicable N/A
No such cases in the reporting period.
36
2022 Annual Report of Luzhou Laojiao Co., Ltd.
8.2. Sale of major equity interests
Applicable N/A
9. Analysis of major subsidiaries
Applicable N/A
Main subsidiaries and joint companies with an over 10% influence on the Company’s net profit
Unit：CNY
Company Company Business Registere Total Operating Operating
Net assets Net profit
name type scope d capital assets Revenue profit
Luzhou
Laojiao
Luzhou
series
Laojiao 100,000,0 7,798,894, 2,282,135, 23,969,74 10,532,59 7,904,562,
Subsidiary unified
Sales Co., 00.00 814.04 373.83 8,769.23 4,410.23 366.561
package
Ltd.
Baijiu
sales
Note 1: Net profit increased 30.07% year on year, mainly due to the increased sales revenue from
baijiu, leading to a corresponding increase in profit.
Acquisition and disposal of subsidiaries during the reporting period
□ Applicable N/A
Notes for major holding companies and joint stock companies
There were no major holding companies or joint stock companies during the reporting period of which
information shall be disclosed.
10. Structured entities controlled by the Company
Applicable N/A
11. Outlook for the future development of the Company
11.1. Industry landscape and trends
A. According to the data released by the National Bureau of Statistics, total production of brewed
baijiu by baijiu producers above the designated size was 6.7124 million kl between January and
December 2022, down 5.58% year on year; total sales revenues reached CNY 662.645 billion, up
9.64% year on year; total profits of CNY 220.172 billion were realized, up 29.36% year on year.
Though the total consumption in the baijiu industry has been shrinking in recent years, the industry
concentration continues to rise, with a clear trend towards high-quality development of the baijiu
industry.
37
2022 Annual Report of Luzhou Laojiao Co., Ltd.
B. With the recovery of the consumption and the rebound of residents' income, the baijiu industry has
opened a new cycle and entered the era of giant competition. The winning elements of the
competitive landscape have changed, challenging the competitive ability of all systems and the
systematic promotion ability of enterprises. Customer value creation and operational efficiency
improvement have become the base point for marketing innovation.
C. Digital and intelligent technologies have been fully integrated into the production, supply,
circulation, communication and consumption of the baijiu industry, forming a new industrial ecology
with technological and digital empowerment, integrated traditional and intelligent brewing techniques,
and combined offline and online channels.
11.2. The Company’s development strategy
11.2.1. Development opportunities in the future
A. The value of famous baijiu has been highlighted, consumers' demand for high quality baijiu has
increased, the proportion of high-end baijiu consumption has continued to rise, and the advantages of
production regions and brands of famous baijiu will be further enhanced.
B. With social progress, economic development and consumer upgrade, new industries and models
are emerging. Chinese baijiu, with its fully independent intellectual property and independent pricing
rights, has a good opportunity for innovation and breakthrough.
C. Domestic industrial policies favorable to the development of baijiu brands continued to be
introduced, which not only enhanced the confidence of consumers and investors in baijiu, but also
provided strong momentum for the high-quality development of baijiu. Luzhou Laojiao, as a leading
enterprise in China's baijiu industry, embraces a valuable opportunity of strategic development.
D. In recent years, the Company has developed benignly and expanded its operation scale. The
Huangyi Brewery Eco-Park with solid-state baijiu brewing scale, leaven production capacity and
intelligent brewing level has been built, and the layout of capacity guarantee has been completed
ahead of schedule. The Company enhanced the overall corporate governance, making its
management more powerful, scientific, systematic and pragmatic. In the accelerating reshuffle of the
baijiu industry, Luzhou Laojiao has the leading edge and strong strength of maintaining stability while
seeking progress and achieving leapfrog development.
11.2.2. Possible challenges and risks in the future
A. Macroeconomic risk: The global economy will continue to face multiple pressures in 2023. The
ongoing Russia-Ukraine conflict has further intensified the impact on the global economy, with
successive bank crashes in Europe and the US, which may trigger a contraction in monetary policies
and recession, thereby adversely affecting the domestic consumer market.
B. Market competition risk: China's population is experiencing negative growth again, the consumer
market size tends to shrink, and consumption upgrade and downgrade coexist. As the market
concentration continues to rise, the industry will gradually enter the existing competition stage, and
competition among baijiu enterprises will become increasingly intense. To this end, the Company will
firmly insist on its strategic goals and seize opportunities to achieve high-quality leapfrog
development.
11.2.3. The Company's "14th five-year" development strategy
38
2022 Annual Report of Luzhou Laojiao Co., Ltd.
No change occurred to the Company’s "14th five-year" development strategy. For details, see the
2021 Annual Report.
11.3. Completion of the business plan in 2022
For the reporting period, operating revenue amounted to CNY 25.124 billion, up 21.71% year on year;
and the net profit attributable to the shareholders of the listed company reached CNY 10.365 billion,
up 30.29% year on year. The Company has successfully completed its business target “to achieve a
year-on-year increase in operating revenue by at least 15%" as set by the Board of Directors at the
beginning of the year.
11.4. Business plan in 2023
According to the Outline of Production and Operation in 2023 reviewed and approved by the Board of
Directors, the Company will closely center on the development theme of "promoting reform, enhancing
collaboration, focusing on main areas and achieving leapfrog development", and strive to achieve a
year-on-year increase in operating revenue by at least 15% (The business plan in 2023 is formulated by
the Company according to the 14th five-year strategic plan and based on its business capabilities. It
does not represent the Company's profit forecast for 2023, and is not a commitment by the Company.
Whether it can be achieved depends on many factors such as changes in market conditions and efforts
of the operation team. There are great uncertainties. Investors are kindly reminded to pay special
attention).
The main measures are as follows:
A. Promote reform and comprehensively enhance endogenous driving force
Reform of idea and work style led by breakthrough and progress. The Company must make
efforts to eliminate three harmful ideas and work styles, namely the ideas and work styles of
pessimism and fear, complacency, and bureaucracy.
Reform of the governance model themed by overlapping strengths. The Company will advance
the reform and optimization of the control model, organizational structure and operational mechanism
in an orderly manner, continuously enhance collaborative management, and strive to achieve
convergence effects in business management, industrial layout, quality and efficiency, innovation
capability and brand value.
Reform of the top-level architecture guaranteed by digital and intelligent support. The
Company will effectively plan and design the top-level architecture of digitalization and intelligence,
promote the digital upgrade of products, consumers, channel customers, employees and
organizations, and financial services, and advance the integration of order, capital, information,
logistics and administration.
Reform of internal procurement control driven by efficiency improvement. An internal control
and management system for the whole procurement process will be established to lay a solid
foundation for the Company to keep pace with and even seize the opportunity in the fierce market
competition.
B. Enhance collaboration and comprehensively improve enterprise effectiveness
39
2022 Annual Report of Luzhou Laojiao Co., Ltd.
Enhance strategic collaboration. The Company will develop a three-year development plan, and
adhere to the "one map" for current and long-term development, the "one chessboard" for the whole
Company and the "one network" of national market to complete sales tasks with high quality.
Enhance organizational collaboration. The Company will accelerate the development of a modern
management model, comprehensively break down organizational barriers, improve organizational
effectiveness and form an organizational operating system with rapid response, clear tasks and
standardized actions.
Enhance PR collaboration. In accordance with the general idea of "overall thinking, forward-looking
planning, substantial results and collaboration", a three-dimensional and long-term PR system that
covers all staff will be built to constantly inject power for sales development.
C. Focus on main areas and comprehensively win the battle.
Focus on sales breakthrough. The Company will seize core resources, master core tactics, and
adhere to the path of brand-leading marketing. It will build core markets, gather core strength,
promote national development strategies, advance innovation in product lines and models, and create
more growth poles for Luzhou Laojiao.
Focus on the development of a brand culture. The Company will create a pilgrimage site of
baijiu in the world, seize the first and only brand promotion resources, promote the transformation of
traditional publicity to a new traffic matrix, and build up a new media matrix for Luzhou Laojiao
through content and form innovation to form the main entrance for converging traffic.
Focus on quality assurance. Based on the new "1 + 2 + N" capacity pattern, the Company will insist
on quality as life, constantly improve the quality traceability system covering the whole life cycle of
products, strengthen scientific and technological research and development and transformation of
achievements, and build a leading technological innovation highland in the industry.
D. Achieve leapfrog development and take the lead in seizing the development highland
Achieve leapfrog development in targeted objectives. The company will make leapfrog
breakthrough in the National Cellar series and maintain high-speed growth. More efforts and another
breakthrough will be made for the Luzhou Laojiao series. The marketing layout and market
breakthrough in the innovation sector will be accelerated to achieve objectives as soon as possible.
Achieve leapfrog development in the leadership of party building. The Company will enhance
party building in terms of politics, ideology, organization, work style and discipline, comprehensively
strengthen scientific party building, and continue to promote the development of trade unions, the
Communist Youth League and the United Front Work, to form an inspiring pattern that integrates
energy and wisdom.
Achieve leapfrog development in talent improvement. The Company will make more efforts in the
scale, structure and quality of talent to raise its human-efficiency ratio to a higher level. By
continuously enriching the talent ladder, optimizing the talent structure, and improving material
incentives, spiritual incentives and growth incentives, the Company will further stimulate the
endogenous driving force for enterprise development.
40
2022 Annual Report of Luzhou Laojiao Co., Ltd.
12. Visits paid to the Company for purposes of research,
communication, interview, etc. in the reporting period
Applicable N/A
Main inquiry
Index to main
information
Date of visit Place of visit Way of visit Type of visitor Visitor inquiry
and materials
information
provided
Company Institutional Company http://www.cni
13 May 2022 Field survey Institution
Headquarters investor performance nfo.com.cn/
Company Company http://www.cni
13 May 2022 Other Other All investors
Headquarters performance nfo.com.cn/
Institutional Industry
Company and individual trends and http://www.cni
29 June 2022 Other Other
Headquarters investors and company nfo.com.cn/
media performance
Institutional Industry
16 August Company and individual trends and http://www.cni
Other Other
2022 Headquarters investors and company nfo.com.cn/
media performance
Industry
16 September Company trends and http://www.cni
Other Other All investors
2022 Headquarters company nfo.com.cn/
performance
8 November Company Institutional Company http://www.cni
Field survey Institution
2022 Headquarters investor performance nfo.com.cn/
41
2022 Annual Report of Luzhou Laojiao Co., Ltd.
Section IV Corporate Governance
1. Basic situation of corporate governance
Since it was listed, in accordance with the Corporate Law, the Securities Law, The Listed Company
Governance Standards and other laws, administrative regulations and departmental rules and
normative documents, the Company has constantly perfected corporate governance structure,
standardized its operation, established the rules and system on the basis of the Company's articles of
association whose main framework is the rules of procedure of the shareholders' general meeting,
rules of procedure of the board of directors and rules of procedure of the board of supervisors, which
is formed the management system whose main structure is the shareholders meeting, board of
directors, board of supervisors and management. During the reporting period, the Company won a
number of honors and awards, including “The 24th Golden Bull Awards—Best Investment Value
Award and Golden Bull Board Secretary Award”, “The 13th Tianma Awards—Best Investor Relations
Award”, “The 16th Awards of the Value of Listed Companies in China—Top 100 Main Board Listed
Companies by Value, Outstanding Management Team of the Year, and Sunshine Board Secretary”,
“Listed Companies Market Capitalisation Ranking—Top 50 Most Popular Listed Companies among
Institutions”, “Top 10 Influential Listed Companies of the Year, and Value Focus Listed Company of
the Year”, “The List of Gold Medal Companies—Investment Value Top List”, and “China Association
for Public Companies—Listed Company Board Office Best Practice”.
Any incompliance with the applicable laws and administrative regulations, as well as regulations
related to the governance of listed companies issued by the CSRC
Yes No
There is no incompliance with the applicable laws and administrative regulations, as well as
regulations related to the governance of listed companies issued by the CSRC.
2. Independency of assets, personnel, finance, organizations and
businesses which are separated from the controlling shareholder and
the actual controller
The Company has an independent and complete production and operation system and independent
decision-making ability. There is no horizontal competition between the Company and the controlling
shareholders and its subsidiaries. The Company has daily affiliated transactions with the controlling
shareholders and its subsidiaries. Such daily affiliated transactions belong to the need of rational
allocation of resources and do not affect the independence of the Company. For affiliated
transactions, the Company has strictly fulfilled the relevant decision-making procedures and
information disclosure obligations, and implemented the system of Non-executive directors' prior
examination and avoidance system of related directors (shareholders).
2.1 In the aspect of assets
42
2022 Annual Report of Luzhou Laojiao Co., Ltd.
Asset integrity. There are clear ownership and independency of the Company's assets invested by
controlling shareholders. The Company has an independent and complete production, supply, sales
system and auxiliary production system and supporting facilities. The industrial property rights,
trademarks and non-patented technology and other intangible assets are owned by the Company.
There is no situation that the controlling shareholders occupy and transfer the assets of the company.
2.2. In the aspect of business
Business apart. The Company is totally independent in the operation, production and sales of baijiu
series of “Luzhou Laojiao” and “National Cellar 1573”. It has the ability to operate independently in the
market. The board of directors and the management can independently make production and
operation decisions within the corresponding authority.
2.3 In the aspect of personnel
The Company has built independent labor management, personnel management and salary
management. The Company has established a relatively complete labor management system and
post responsibility system. Meanwhile, the Company's senior management personnel all receive
salary in the Company, but not at the controlling shareholders.
2.4 In the aspect of organization
Organization independence. The Company has independent production management organization
and system, independent office and production management place, and independent management
organization, functional organization and branch.
2.5 In the aspect of finance
Financial independence. The Company has completed and independent financial department.
Independent accounting system and financial management are established. The Company separately
sets bank accountants, conducts external settlement and pays taxes according to law.
3. Horizontal competition
Applicable N/A
4. Annual meeting of shareholders and special meetings of
shareholders convened during the reporting period
4.1. Meetings of shareholders convened during the reporting period
Investor Convened Disclosure
Meeting Type Resolutions
participation ratio date date
Announcement on
2021 Annual
General Meeting Resolutions of The
General Meeting 63.73% 29 June 2022 30 June 2022
of Shareholders 2021 Annual General
of Shareholders
Meeting of
43
2022 Annual Report of Luzhou Laojiao Co., Ltd.
Shareholders
Announcement No:
2022-22
(http://www.cninfo.co
m.cn/)
Announcement on
Resolutions of The
First Special Meeting
The First Special
of Shareholders of
Meeting of Special Meeting 16 August 17 August
62.15% 2022
Shareholders of of Shareholders 2022 2022 Announcement No:
2022
2022-39
(http://www.cninfo.co
m.cn/)
4.2. Special meetings of shareholders convened at the request of preferred
shareholders with resumed voting rights
Applicable N/A
5. Directors, supervisors, and senior management
5.1 General information
Shares Shares
Shares
increas decrea Shares
held by
ed sed held by
the Other
Incumb during during the end Reason for
Ag Period of beginnin increase/
Name Title ent/ Gender the the of the share
e service g of the decrease
Former reporti reporti reporting changes
reporting (share)
ng ng period
period
period period (share)
(share)
(share) (share)
Restricted
Chairman share
Liu Incumb 2015.6.30-
of the Male 53 192,187 95,900 0 0 288,087
Miao ent 2024.6.29 incentive
board
plan
Restricted
Director, share
Lin Incumb 2015.6.30-
General Male 49 0 95,900 0 0 95,900
Feng ent 2024.6.29 incentive
manager
plan
Restricted
Director,
Wang share
Deputy Incumb 2015.3.6-
Hongb Male 59 0 76,700 0 0 76,700
general ent 2024.6.29 incentive
o
manager
plan
Restricted
Director,
Xiong share
Deputy Incumb 2021.6.29-
Pingtin Female 47 0 62,800 0 0 62,800
general ent 2024.6.29 incentive
g
manager
plan
Non-
Liu Incumb 2018.6.27-
executive Male 53 0 0 0 0 0
Junhai ent 2024.6.29
director
Non-
Chen Incumb 2021.6.29-
executive Male 65 0 0 0 0 0
You’an ent 2024.6.29
director
Lyu Non- 2021.6.29-
Incumb
Xianpe executive Male 59 0 0 0 0 0
ent 2024.6.29
i director
Li Non- Incumb Male 59 2022.6.29- 0 0 0 0 0
44
2022 Annual Report of Luzhou Laojiao Co., Ltd.
Guowa executive ent 2024.6.29
director
ng
Qian External Incumb 2015.6.30-
Male 59 0 0 0 0 0
Xu director ent 2024.6.29
Ying External Incumb 2016.9.13-
Male 53 0 0 0 0 0
Hanjie director ent 2024.6.29
Gong
External Incumb 2022.6.29-
Zheng Female 53 0 0 0 0 0
director ent 2024.6.29
ying
Chairman
of the
Yang Incumb 2021.6.29-
Board of Male 46 0 0 0 0 0
Ping ent 2024.6.29
Supervisor
s
Li
Incumb 2018.6.27-
Guangj Supervisor Male 53 0 0 0 0 0
ent 2024.6.29
ie
Li Incumb 2021.6.29-
Supervisor Female 36 0 0 0 0 0
Lunyu ent 2024.6.29
Tang Incumb 2022.6.29-
Supervisor Male 46 0 0 0 0 0
Shijun ent 2024.6.29
Incumb 2022.6.29-
Ou Fei Supervisor Male 37 0 0 0 0 0
ent 2024.6.29
Restricted
share
incentive
Shen Deputy plan and
Incumb 2002.6.30-
Caihon general Male 57 138,375 76,700 19,500 0 195,575 shareholdin
ent 2024.6.29
g manager g reduction
on the
open
market
Restricted
Xie Incumb 2015.3.6- share
CFO Female 53 0 76,700 0 0 76,700
Hong ent 2024.6.29 incentive
plan
Restricted
Deputy share
He Incumb 2015.6.30-
general Male 56 0 76,700 0 0 76,700
Cheng ent 2024.6.29 incentive
manager
plan
Restricted
Deputy share
Zhang Incumb 2015.12.29
general Male 51 0 76,700 0 0 76,700
Suyi ent -2024.6.29 incentive
manager
plan
Deputy
Restricted
general
manager, Incumb 2021.9.20- share
Li Yong Male 46 0 62,800 0 0 62,800
Secretary ent 2024.6.29 incentive
of the
board plan
Sun Non- 2021.6.29-
Dongs executive Former Male 64 0 0 0 0 0
director 2022.6.29
heng
Lian 2012.6.27-
Supervisor Former Male 53 0 0 0 0 0
Jing 2022.5.28
Restricted
Guo 2021.6.29- share
Supervisor Former Female 44 0 19,000 0 0 19,000
Shihua 2022.5.28 incentive
plan
719,90 1,030,96
Total -- -- -- -- -- 330,562 19,500 0 --
0 2
Whether any director, supervisor or senior management resigned before the expiry of their periods of
45
2022 Annual Report of Luzhou Laojiao Co., Ltd.
service during the reporting period
□ Yes No
Changes in directors, supervisors, and senior management
Applicable □ N/A
Name Title Type Date Reason
Sun Dongsheng Independent director Resignation 2022.6.29 Voluntary resignation
Shen Caihong Director Resignation 2022.5.31 Voluntary resignation
Lian Jing Supervisor Resignation 2022.5.28 Voluntary resignation
Guo Shihua Supervisor Resignation 2022.5.28 Voluntary resignation
5.2 Employment information
Professional background, work experience and major duties of current directors, supervisors and
senior management.
Mr. Liu Miao, male, born in 1969, MBA of Wright State University in the USA, Master of Chinese
Brewing, senior marketing specialist. He used to serve as planning minister, general manager of
Sales Company, general manager assistant, and deputy general manager of the Company. At
present, he is secretary of the party committee and chairman of the board in Laojiao Group, secretary
of the party committee and chairman of the board in the Company, as well as chairman of the board
in Luzhou Sanrenxuan Liquor Industry Co., Ltd.
Mr. Lin Feng, male, born in 1973, Master degree, senior marketing specialist. He was deputy general
manager and general manager of Sales Company, director of marketing, director of human resources,
chief dispatcher, deputy general manager of the Company. At present, he is deputy secretary of the
party committee, director, and general manager of the Company.
Mr. Wang Hongbo, male, born in 1964, Master degree. He was director and secretary of party
committee of Luzhou Commerce Bureau, director of Luzhou Liquor Industry Development Bureau,
director of Luzhou branch of China council for the promotion of international trade, deputy secretary
general, office director of Luzhou Municipal Party Committee and deputy secretary of the party
committee of the Company. At present, he is member of the party committee, director, and deputy
general manager of the Company, chairman of the board of Luzhou Laojiao International
Development（Hong Kong）Co., Ltd., as well as executive director of Luzhou Laojiao I & E Co., Ltd.
Ms. Xiong Pingting, female, born in 1975, holds a master's degree and the titles of Human Resource
Management Professional (grade one), Economist, and Political Mentor. Positions previously held by
her include Deputy Director and Director of the Office of Luzhou Laojiao Sales Co., Ltd., Deputy
Director of the Office of Jiangyang District People's Government of Luzhou (temporary), Deputy
Director of the Human Resources Department and Corporate Management Department of Luzhou
Laojiao Co., Ltd., General Manager of the Brand Operation Department, Director of the Office
(concurrently), Secretary of the general Party branch, and Deputy General Manager of Luzhou
Laojiao Sales Co., Ltd. Currently, she serves as Member of the Party Committee, Director, Deputy
46
2022 Annual Report of Luzhou Laojiao Co., Ltd.
General Manager, and Chairman of the Labor Union of the Company.
Mr. Liu Junhai, male, born in 1969, holds a Ph.D. degree in law and is a doctoral supervisor.
Positions previously held by him include Assistant to the Director and Researcher at the Institute of
Law of the Chinese Academy of Social Sciences ("CASS"), Professor at CASS, Vice Chairman of
China Consumers Association, and Deputy Director Researcher at the Planning Committee under the
China Securities Regulatory Commission ("CSRC"). Currently, he serves as Professor at the Law
School of Renmin University of China, Director at the Institute of Commercial Law of Renmin
University of China, Arbitrator at China International Economic and Trade Arbitration Commission and
Beijing Arbitration Commission (Beijing International Arbitration Center) (concurrently). He has served
as a non-executive director of the Company since June 2018.
Mr. Chen You'an, male, born in 1958, holds an Eng.D. degree in management science and
engineering and is a Senior Engineer. He once took a job at government macro regulation agencies,
development financing agencies, and local and national sovereign wealth fund agencies. Besides, he
served as Deputy General Manager of Central Huijin Investment Ltd. and Chairman of China Galaxy
Financial Holdings Co., Ltd. and China Galaxy Securities Co., Ltd. (concurrently). Currently, he is
Independent Director of CPIC Fund Management Co., Ltd., Nomura Orient International Securities
Co., Ltd., Hexie Health Insurance Co., Ltd., and Tech-bank Food Co., Ltd. He has served as a non-
executive director of the Company since June 2021.
Mr. Lyu Xianpei, male, born in 1964, holds a Ph.D. degree in accounting. Positions previously held by
him include Vice Dean at the School of Accounting and Director at the Auditing Department of
Southwestern University of Finance and Economics. Currently, he serves as Professor and Doctoral
Supervisor at Southwestern University of Finance and Economics, Chairman of Sichuan Educational
Audit Society, as well as Independent Director of Sichuan Teway Food Group Co., Ltd., North
Chemical Industries Co., Ltd., and HuangShan NOVEL Co., Ltd. He has served as a non-executive
director of the Company since June 2021.
Mr. Li Guowang, male, born in 1963, holds a postgraduate degree and is a senior economist. He
once served as the Deputy Director of the Information Center of the Ministry of Commerce, Deputy
General Manager of Futures Brokerage Co., Ltd. under China Banking and Insurance Information
Technology Management Co., Ltd., General Manager of the Shanghai Securities Business
Department of China Banking and Insurance Information Technology Management Co., Ltd., Director
of the Strategic Development Department of the R&D Center of China Galaxy Securities Co., Ltd.,
General Manager of the R&D Center of Shanghai Securities Co., Ltd., Marketing Director of Galaxy
Asset Management Co., Ltd., Director of the Research Institute of Hwa Bao Securities Co., Ltd., Chief
Economist and Director of the Research Institute of Zhongshan Securities Co., Ltd., and Chief
Economist of Shanghai Dalu Futures Co., Ltd. At present, he is the Deputy Director of the Green
Finance Committee of the Jiangsu Financial Association, part-time professor at the Law School of
Shanghai University, special professor at Qinghai Minzu University, member of the Association of
Zhejiang Talent in Shanghai, and Director of Shanghai Jiayan Supply Chain Management Co., Ltd.
He has served as a non-executive director of the Company since June 2022.
47
2022 Annual Report of Luzhou Laojiao Co., Ltd.
Mr. Qian Xu, Male, born in 1963, PhD. He was general manager and chairman of the board of Beijing
Enterprises Real-Estate Group Co., Ltd.. At present, he is chairman of the board and general
manager of Beijing Enterprises Urban Development Group Co., Ltd., chairman of the board of Beijing
Properties （Holdings） Limited (Listed on the Hong Kong Stock Exchange), non-executive director
of CAQ Holdings Limited (Listed on the Australian Stock Exchange). He has served as a director of
the Company since June 2015.
Mr. Ying Hanjie, Male, born in 1969, Doctor of Biochemistry, professor, and academician of the
Chinese Academy of Engineering. He was deputy director of Pharmacy and Life Sciences School of
Nanjing University of Technology. At present, he is director of National Biochemical Engineering
Technology Research Center of Nanjing Tech University, chairman of the board of Nanjing
Biotogether Co., Ltd., director of Nanjing High Tech University Biological Technology Research
Institute Co., Ltd., and director of Jiangsu Institute of Industrial Biotechnology. He has served as a
director of the Company since September 2016.
Ms. Gong Zhengying, female, born in 1969, holds a postgraduate degree and is a senior economist.
She once served as the Deputy Head of the Open Development and Social System Section of
Luzhou Economic System Reform Commission, Deputy Head and Head of the Enterprise Property
Rights Supervision Section of Luzhou State-owned Assets Supervision and Administration
Commission, Party Secretary and Chairman of Luzhou Xinglu Asset Management Co., Ltd.,
Chairman of Luzhou Parking Lot Infrastructure Investment Co., Ltd., and Executive Director (legal
representative) of Luzhou Qihang Parking Lot Construction Investment Co., Ltd. and Luzhou Xinglu
Lantian Market Management Co., Ltd. At present, she is a full-time external director of Luzhou
Laojiao Group Co., Ltd., Luzhou Aviation Development Investment Group Co., Ltd., Sichuan
Lutianhua Co., Ltd., Luzhou Industrial Development Investment Group Co., Ltd. and Luzhou Yunlong
Airport Development Co., Ltd. She has served as a director of the Company since June 2022.
Mr. Yang Ping, male, born in 1976, Professor of Engineering, holds a doctoral degree. Positions
previously held by him include Deputy Director and Director at the National Cellar Workshop Section,
Director at the Production and Technology Department, and Deputy General Manager of Luzhou
Laojiao Brewing Co., Ltd. Currently, he is Chairman of the Board of Supervisors of the Company, as
well as Secretary of the Party Committee and General Manager of Luzhou Laojiao Brewing Co., Ltd.
Mr. Li Guangjie, male, born in 1969, Master degree, economist. He was manager of Planning
Department of the Company, deputy director of Sales Company, manager of Import and Export
company, general manager assistant of Sales Company. At present, he is supervisor and deputy
general manager of Sales Company.
Ms. Li Lunyu, female, born in 1986, holds a university degree as well as is Assistant Political Mentor
and Assistant Engineer. Positions previously held by her include Publicity Officer at the Office of the
CPC Luzhou Laojiao Committee, Deputy Head and Manager of Tianjin Division of the Business
Department for Luzhou Laojiao Tequ 60 and 80, Secretary of the CPC National Cellar Section Branch
48
2022 Annual Report of Luzhou Laojiao Co., Ltd.
of Luzhou Laojiao Brewing Co., Ltd., Director of the Office of the CPC Luzhou Laojiao Brewing
Committee, and Director of the Discipline Inspection Department and Vice Chairman of the Labor
Union of Luzhou Laojiao Brewing Co., Ltd. Currently, she is Supervisor, Vice Chairman of the Labor
Union, and Director of the Office of the Labor Union of the Company.
Mr. Tang Shijun, male, born in 1976, holds a bachelor's degree and is a senior accountant. He once
served as the Head of the Finance Department and Director of the Business Finance Center of
Luzhou Laojiao Lundao Liquor Sales Co., Ltd., Audit Manager of Sichuan Balance C.P.A, Chief
Controller of Shanghai Pharmaceutical (Luzhou) Co., Ltd., Chief Accountant and Director of Luzhou
Naxi District State-owned Assets Management Co., Ltd., and Director of the Financing Department of
Luzhou Huixing Investment Group Co., Ltd. At present, he is a part-time external supervisor of
Luzhou Laojiao Group Co., Ltd., Luzhou Public Transport Group Co., Ltd. and Digital Luzhou
Industrial Investment Group Co., Ltd., as well as Manager of the Finance and Asset Management
Department of Luzhou State Owned Capital Operation Management Co., Ltd. He has served as a
supervisor of the Company since June 2022.
Mr. Ou Fei, male, born in 1985, holds a bachelor's degree. He once worked in Guizhou Renhuai
Fengzhiji Liquor Co., Ltd., Sichuan Dashan Law Firm and Jiangyang District People's Procuratorate,
Luzhou City. At present, he is a full-time external supervisor of Sichuan Lutianhua Co., Ltd., Luzhou
Industrial Development Investment Group Co., Ltd., Sichuan Xinhuoju Chemical Co., Ltd. and Luzhou
State Owned Capital Operation Management Co., Ltd. He has served as a supervisor of the
Company since June 2022.
Mr. Shen Caihong, Male, born in 1966, Master degree, professor-level senior engineer, one of the
first batch of representative inheritors of national intangible cultural heritage, one of the first batch of
“Master of Chinese Brewing”, and one of the first batch of "Sichuan craftsmen". He was manager of
the Company’s leaven-making branch, manager of base baijiu company, general manager assistant
and director of production department. At present, he is deputy general manager, chief engineer,
director of national solid brewing engineering technology research center and chairman of the board
of Luzhou Pinchuang Technology Co., Ltd.
Ms. Xie Hong, female, born in 1969, Master degree, senior accountant, and senior economist. She
was section chief of Treasury Section of the Finance Bureau, section chief of Non-tax Revenue
Collection Management Section, director of Luzhou Municipal Finance Treasury Payment Center,
chief accountant of Luzhou Finance Bureau. At present, she is a member of the party committee and
CFO of the Company.
Mr. He Cheng, male, born in 1966, Master of Management Economics of Nanyang Technological
University, senior engineer, expert who receives special allowances from the State Council, Master of
Chinese Baijiu, and Master of Chinese Brewing. He was chief dispatcher of the Company, general
manager of Brewing Company, as well as director of the business administration department, director
of the human resources department, director of the quality department, and director of the dispatching
center of the Company. At present, he is a member of the party committee, deputy general manager
49
2022 Annual Report of Luzhou Laojiao Co., Ltd.
and chief quality officer of the Company.
Mr. Zhang Suyi, male, born in 1971, PhD, professor-level senior engineer, representative inheritor of
Sichuan Intangible Cultural Heritage. He was a worker, production team leader and assistant
superintendent at Brewing Workshop No. 6, vice director and director of Gouchu Center, and deputy
chief engineer of the Company, as well as deputy general manager, and director of the Baijiu Body
Design Centre of Brewing Company. At present, he is deputy general manager, director of safety and
environmental protection, and chief engineer of baijiu body design of the Company.
Mr. Li Yong, male, born in 1977, holds a postgraduate degree and is a brewing engineer. He once
worked in the education sector at the Party and government organizations at the township level as
well as departments at the county and municipal levels. Also, he used to be Director of the Group
Office of Luzhou Laojiao Group, Director of the General Manager’s Office of the Company, as well as
Deputy Secretary of the Party Committee, Secretary of the Party Committee, and Deputy General
Manager of Sales Company. Currently, he is Deputy General Manager, Secretary of the Board, and
member of the Discipline Inspection Committee of the Company, as well as Chairman of the Board of
Luzhou Laojiao Technology Innovation Co., Ltd.
Position in shareholder-holding companies
Applicable N/A
Any
Name of Position in remunerations
shareholder- shareholder- Beginning date Ending date of received from
Name
holding holding of term term shareholder-
companies companies holding
companies
Secretary of the
party committee,
Liu Miao Laojiao Group 11 March 2022 No
Chairman of the
board
15 February
Gong Zhengying Laojiao Group Director No
2022
15 February
Tang Shijun Laojiao Group Supervisor No
2022
Position in other companies
Applicable N/A
Any
Position in Beginning Ending
remunerations
Name Name of other companies other date of date of
received from
companies term term
other companies
China International Economic and
Trade Arbitration Commission, and
Liu Junhai Beijing Arbitration Commission Arbitrator
(Beijing International Arbitration
Center)
Liu Junhai Institute of Commercial Law of Director
50
2022 Annual Report of Luzhou Laojiao Co., Ltd.
Renmin University of China
CPIC Fund, Nomura Oriental
Non-
International Securities Co., Ltd.,
Chen You’an executive
Hexie Health Insurance Co., Ltd.,
director
and Tech-bank Food Co., Ltd.
Sichuan Education and Audit
Lyu Xianpei Chairman
Society
Sichuan Teway Food Group Co.,
Non-
Ltd., North Chemical Industries Co.,
Lyu Xianpei executive
Ltd., and HuangShan NOVEL Co.,
director
Ltd.
Green Finance Committee of the Vice
Li Guowang
Jiangsu Financial Association chairman
Adjunct
Li Guowang Law School of Shanghai University
professor
Distinguishe
Li Guowang Qinghai Minzu University
d professor
Association of Zhejiang Talent in
Li Guowang Director
Shanghai
Shanghai Jiayan Supply Chain
Li Guowang Director
Management Co., Ltd.
Chairman of
Beijing Enterprises Urban the board,
Qian Xu
Development Group Co., Ltd. general
manager
Beijing Properties （Holdings） Chairman of
Qian Xu
Limited the board
Non-
Qian Xu CAQ Holdings Limited. executive
director
National Biochemical Engineering
Ying Hanjie Technology Research Center of Director
Nanjing University of Technology
Chairman of
Ying Hanjie Nanjing Biotogether Co., Ltd.
the board
Nanjing High Tech University
Biological Technology Research
Ying Hanjie Director
Institute Co., Ltd., and Jiangsu
Institute of Industrial Biotechnology
Luzhou Aviation Development
Investment Group Co., Ltd.,
Sichuan Lutianhua Co., Ltd.,
Gong Zhengying Luzhou Industrial Development Director
Investment Group Co., Ltd., Luzhou
Yunlong Airport Development Co.,
Ltd.
Luzhou Public Transport Group
Tang Shijun Co., Ltd., Digital Luzhou Industrial Supervisor
Investment Group Co., Ltd.
Finance and Asset Management
Department of Luzhou State
Tang Shijun Manager
Owned Capital Operation
Management Co., Ltd.
Sichuan Lutianhua Co., Ltd.,
Luzhou Industrial Investment Group
Ou Fei Supervisor
Co., Ltd., Sichuan Xinhuoju
Chemical Co., Ltd., Luzhou State
51
2022 Annual Report of Luzhou Laojiao Co., Ltd.
Owned Capital Operation
Management Co., Ltd.
Punishments imposed in the recent three years by the securities regulators on the incumbent
directors, supervisors and senior management as well as those who left in the reporting period
Applicable N/A
5.3 Remuneration of directors, supervisors and senior management
The following describes the decision-making procedures, grounds on which decisions are made and
actual remuneration payment of directors, supervisors and senior management.
Decision-making procedures for directors, supervisors and senior management: The remuneration of
non-executive directors, external directors and external supervisors shall be determined by the
general meeting of shareholders, and the remuneration of directors, supervisors and senior
management who hold positions within the Company shall be determined by relevant rules of SASAC
of Luzhou and relevant rules of the Company.
Grounds on which decisions are made of directors, supervisors and senior management: Calculate
according to the assessment index and weight established at the beginning of the year.
Actual remuneration payment of directors, supervisors and senior management: Details refer to
“Remuneration of directors, supervisors and senior management during the reporting period”.
Remuneration of directors, supervisors and senior management during the reporting period
Unit: CNY 10,000
Total before-
Remuneration
tax
Incumbent/ from related
Name Position Gender Age remuneration
Former parties of the
from the
Company
Company
Liu Miao Chairman of the board Male 53 Incumbent 164.63 No
Director, General
Lin Feng Male 49 Incumbent 162.69 No
manager
Director, Deputy general
Wang Hongbo Male 59 Incumbent 130.49 No
manager
Director, Deputy general
Xiong Pingting Female 47 Incumbent 94.34 No
manager
Liu Junhai Non-executive director Male 53 Incumbent 9.52 No
Chen You’an Non-executive director Male 65 Incumbent 9.52 No
Lyu Xianpei Non-executive director Male 59 Incumbent 9.52 No
Li Guowang Non-executive director Male 59 Incumbent 4.9 No
Qian Xu External director Male 59 Incumbent 9.52 No
Ying Hanjie External director Male 53 Incumbent 9.52 No
Gong
External director Female 53 Incumbent 0 No
Zhengying
52
2022 Annual Report of Luzhou Laojiao Co., Ltd.
Chairman of the Board of
Yang Ping Male 46 Incumbent 119.55 No
Supervisors
Li Guangjie Supervisor Male 53 Incumbent 100.72 No
Li Lunyu Supervisor Female 36 Incumbent 48.49 No
Tang Shijun Supervisor Male 46 Incumbent 0 No
Ou Fei Supervisor Male 37 Incumbent 0 No
Shen Caihong Deputy general manager Male 57 Incumbent 113.04 No
Xie Hong CFO Female 53 Incumbent 128.62 No
He Cheng Deputy general manager Male 56 Incumbent 110.2 No
Zhang Suyi Deputy general manager Male 51 Incumbent 107.28 No
Deputy general manager,
Li Yong Male 46 Incumbent 94.34 No
Secretary of the board
Sun
Non-executive director Male 64 Former 0 No
Dongsheng
Lian Jing Supervisor Male 53 Former 0 No
Guo Shihua Supervisor Female 44 Former 21.72 No
Total -- -- -- -- 1,448.611 --
Note 1: The table above shows the remunerations of directors, supervisors and senior management
for their periods of service in 2022.
6. Performance of directors during the reporting period
6.1. Board meetings convened during the reporting period
Meeting Convened date Disclosure date Resolutions
Announcement on Resolutions of the 13th
The 13th Meeting of the Meeting of the 10th Board of Directors
28 February 2022 1 March 2022
10th Board of Directors (Announcement No. 2022-2)
(http://www.cninfo.com.cn/)
Announcement on Resolutions of the 14th
The 14th Meeting of the Meeting of the 10th Board of Directors
27 April 2022 29 April 2022
10th Board of Directors (Announcement No. 2022-5)
(http://www.cninfo.com.cn/)
Announcement on Resolutions of the 15th
The 15th Meeting of the Meeting of the 10th Board of Directors
6 June 2022 8 June 2022
10th Board of Directors (Announcement No. 2022-17)
(http://www.cninfo.com.cn/)
Announcement on Resolutions of the 16th
The 16th Meeting of the Meeting of the 10th Board of Directors
29 June 2022 30 June 2022
10th Board of Directors (Announcement No. 2022-21)
(http://www.cninfo.com.cn/)
Announcement on Resolutions of the 17th
The 17th Meeting of the Meeting of the 10th Board of Directors
12 July 2022 13 July 2022
10th Board of Directors (Announcement No. 2022-23)
(http://www.cninfo.com.cn/)
Announcement on Resolutions of the 18th
The 18th Meeting of the Meeting of the 10th Board of Directors
25 July 2022 26 July 2022
10th Board of Directors (Announcement No. 2022-26)
(http://www.cninfo.com.cn/)
The 19th Meeting of the Announcement on Resolutions of the 19th
28 July 2022 30 July 2022
10th Board of Directors Meeting of the 10th Board of Directors
53
2022 Annual Report of Luzhou Laojiao Co., Ltd.
(Announcement No. 2022-29)
(http://www.cninfo.com.cn/)
Announcement on Resolutions of the 20th
The 20th Meeting of the Meeting of the 10th Board of Directors
1 August 2022 1 August 2022
10th Board of Directors (Announcement No. 2022-31)
(http://www.cninfo.com.cn/)
Announcement on Resolutions of the 21st
The 21st Meeting of the Meeting of the 10th Board of Directors
25 August 2022 29 August 2022
10th Board of Directors (Announcement No. 2022-43)
(http://www.cninfo.com.cn/)
Announcement on Resolutions of the
The 22nd Meeting of the 22nd Meeting of the 10th Board of
2 September 2022 3 September 2022
10th Board of Directors Directors (Announcement No. 2022-47)
(http://www.cninfo.com.cn/)
Announcement on Resolutions of the 23rd
The 23rd Meeting of the Meeting of the 10th Board of Directors
18 October 2022 19 October 2022
10th Board of Directors (Announcement No. 2022-57)
(http://www.cninfo.com.cn/)
The 24th Meeting of the
26 October 2022 — —
10th Board of Directors
Announcement on Resolutions of the 25th
The 25th Meeting of the Meeting of the 10th Board of Directors
1 December 2022 2 December 2022
10th Board of Directors (Announcement No. 2022-63)
(http://www.cninfo.com.cn/)
Announcement on Resolutions of the 26th
The 26th Meeting of the Meeting of the 10th Board of Directors
29 December 2022 30 December 2022
10th Board of Directors (Announcement No. 2022-65)
(http://www.cninfo.com.cn/)
6.2. Attendance of directors in board meeting and general meeting of shareholders
Attendance of director in board meeting and general meeting of shareholders
Attendance Attendance Attendance
Attendance Absence for
due in the Attendance by at general
through a Absence two
Director reporting on site telecommun meeting of
proxy (times) consecutive
period (times) ication shareholder
(times) times
(times) (times) s (times)
Liu Miao 14 6 8 0 0 No 1
Lin Feng 14 5 8 1 0 No 2
Wang
14 5 8 1 0 No 2
Hongbo
Xiong
14 3 8 3 0 No 1
Pingting
Liu Junhai 14 6 8 0 0 No 2
Chen
14 6 8 0 0 No 2
You’an
Lyu Xianpei 14 6 8 0 0 No 1
Li Guowang 10 4 6 0 0 No 1
Qian Xu 14 2 8 4 0 No 1
Ying Hanjie 14 5 8 1 0 No 2
Gong
10 3 6 1 0 No 2
Zhengying
Shen
2 1 1 0 0 No 0
Caihong
54
2022 Annual Report of Luzhou Laojiao Co., Ltd.
Sun
4 1 2 1 0 No 0
Dongsheng
6.3. Objections from directors in related issues of the Company
Were there any objections on related issues of the Company from director
Yes No
Directors have no objection on related issues of the Company during the reporting period.
6.4. Other details about the performance of duties by directors
Was there any advice from directors adopted by the Company?
Yes No
Explanation about advice of directors is adopted or not adopted by the Company or not
The Company adopted the advice of non-executive directors in respect of safe production, system
improvement, and internal control construction.
7. Activities of special committees under the Board of Directors during
the reporting period
Number
Substantial
of Other Details of
Convene opinion and
Committee Members meetings Topics inform objection
d date recommendat
convene ation s (if any)
ions
d
Review of the following proposal:
The Proposal on Participation in the
25
Incorporation of Luzhou Laojiao
February
Postdoctoral Workstation Technology
2022
Innovation Co., Ltd. & the Related-
party Transaction
Review of the following proposals:
1. The Proposal on the De-registration
17 April of Luzhou Laojiao Bosheng Hengxiang
Liu Miao, Lin 2022 Liquor Sales Co., Ltd.; and 2. The
Feng, and Proposal on the Investment and
Wang Hongbo Wealth Management with Own Funds
Approved, to
(Sun Review of the following proposal:
be submitted
Dongsheng The Proposal on the Implementation of
The Strategy 7 July to the Board
has ceased to 6 Luzhou Laojiao Technical Upgrade
Committee 2022 of Directors
be a member Project of Intelligent Brewing (Phase I)
for further
of the Strategy by Subsidiary
review
Committee Review of the following proposal:
since 29 June 28 July The Proposal on the Incorporation of
2022) 2022 Luzhou Laojiao Innovation and
Development Co., Ltd.
Review of the following proposal:
12
The Proposal on the Incorporation of
October
Luzhou Laojiao International Trade
2022
(Hainan) Co., Ltd.
Review of the following proposal:
28
The Proposal on the De-registration of
Novemb
Luzhou Baonuo Biotechnology Co.,
er 2022
Ltd.
Liu Junhai, Review of the following proposals: Approved, to
The
Lyu Xianpei 2 June 1. The Proposal on the Review of the be submitted
Nomination 2
and Xiong 2022 Qualifications of Mr. Li Guowang as a to the Board
Committee
Pingting (Shen Non-executive Director Candidate; and of Directors
55
2022 Annual Report of Luzhou Laojiao Co., Ltd.
Caihong has 2. The Proposal on the Review of the for further
ceased to be a Qualifications of Ms. Gong Zhengying review
member of the as a Non-employee Director Candidate
Nomination
28 Review of the following proposal:
Committee
Novemb The Proposal on the Recommendation
since 31 May
er 2022 of Secretary of the Board
2022)
Review of the following proposals: 1.
The 2021 Annual Financial Report; 2.
The 2021 Internal Control Self-
assessment Report; 3. The Summary
17 April
Report of the 2021 Annual Audit of the
2022
Audit Committee under the Board of
Directors; 4. The Work Plan for the Approved, to
2022 Internal Audit; and 5. The Q1 be submitted
Lyu Xianpei,
The Audit 2022 Report to the Board
Chen You’an 4
Committee Review of the following proposal: The of Directors
and Qian Xu 19 May
Proposal on the Re-appointment of for further
2022
CPA Firm review
22 Review of the following proposal: The
August Proposal on the 2022 Interim Financial
2022 Report
21
Review of the following proposal: The
October
Q3 2022 Report
2022
Chen You’an, Review of the following proposals: 1.
Ying Hanjie, The Proposal on the Amendments to
and Li the Specific Management Rules of
Guowang Luzhou Laojiao Co., Ltd. for
(Sun Remunerations of Senior Management Approved, to
The Dongsheng and the Specific Management Rules of be submitted
Remuneration has ceased to 10 June Luzhou Laojiao Co., Ltd. for to the Board
and Appraisal be a member 1 2022 Performance Appraisal of Senior of Directors
Committee of the Management; 2. The Proposal on the for further
Remuneration Review of the Remunerations of the review
and Appraisal Management for 2020; and 3. The
Committee Proposal on the Prepayment of the
since 29 June 2021 Annual Salaries for the
2022) Management for 2021
8. Performance of duties by the board of supervisors
Were there any risks to the Company identified by the board of supervisors when performing its duties
during the reporting period
Yes No
The board of supervisors has no objection during the reporting period.
9. Staff in the Company
9.1. Number, functions and educational backgrounds of the staff
Number of in-service staff of the parent company at the
1,292
end of the reporting period
Number of in-service staff of main subsidiaries at the end
2,313
of the reporting period
Total number of in-service staff at the end of the reporting
3,605
period
Total number of staff with remuneration in the period 3,605
Number of retirees to whom the Company or its main
942
subsidiaries need to pay retirement pension
Functions
Function by category Number of staff
Production staff 1,323
Sales staff 924
56
2022 Annual Report of Luzhou Laojiao Co., Ltd.
R&D staff 734
Financial staff 100
Administrative staff 524
Total 3,605
Educational backgrounds
Educational background by category Number of staff
Senior high school and below 510
Junior college 956
Bachelor 1,759
Master 369
Doctor 11
Total 3,605
9.2. Staff remuneration policy
In 2022, the Company implemented the distribution policy of "sharing benefits, paying for losses,
classification and setting, and long-term policy effects", continuously strengthened the digital
assessment, linked individual performance with organizational performance, and highlighted the
distribution according to performance. The Company implemented the post rating wage system and
strengthened the performance management of all employees. According to the following principles:
Link individual performance with organizational performance: The increase of wages is linked to the
increase of the Company's operating performance and profit growth; Under the same caliber, the
proportion of increase in salaries shall not exceed the proportion of increase in performance and profit
growth.
Salary and its changes based on position, ability and performance: The salary of employee shall be
determined by position and the depth of their expertise. The salary shall be adjusted accordingly
when the position, ability and performance change. Performance orientation, bonus and forfeit:
Performance assessment is conducted according to the actual contributions of employees, and the
salary distribution is inclined to the employees with excellent performance.
The principle of equal wage negotiation: Abide by the principles that both sides of labor and capital
agrees in collective negotiation, so as to realize the unity of benefit and fairness.
9.3. Staff training plans
In 2022, based on the staff career development system and job qualification standards, the Company
implemented a targeted training system comprising different levels to meet demands for staff ability
improvement for different positions and different levels.
Sail Program: The “Sail Program” training was conducted for new employees hired through campus
and social recruitment and for other grassroots employees. The purpose was to enhance new
employees’ understanding and recognition of the Company’s core values, familiarize them with the
Company’s production and operation statuses and their work procedures, and allow them to
57
2022 Annual Report of Luzhou Laojiao Co., Ltd.
accumulate professional knowledge and skills and improve their ability to work independently.
Dive Program: The “Dive Program” training was conducted for general employees on specialized
lines. The purpose was to strengthen their specialty knowledge and ability to solve specialty problems,
enhance their basic management skills, improve their competency and raise their performance. Due
to the huge coverage of trainees across different business segments, the training was conducted in
the form of sub-programs, such as “Happy Learning Sub-program” and “Excellent Frontline Manager
Sub-program” to provide specialty knowledge and skills of different systems.
Voyage Program: The “Voyage Program” training was conducted for key personnel with a systematic
design of three-year development plans and a focus on three themes, including “self-management”,
“work management” and “interpersonal management”. The purpose was to enrich employees’
knowledge on corporate business management, improve their knowledge structure, and enhance
their strategic understanding and abilities of work and team management.
Steering Program: The “Steering Program” training was conducted for middle management personnel
and department experts in the form of online and offline combined, “coming in” and “going out”
combined and ability enhancement and work style building combined. Through the learning of
advanced management concepts and practices, the training aimed to drive employees to broaden
their mind, expand their vision, strengthen their leadership skills and enhance their level of corporate
management.
In addition, in terms of professional talents training, in combination with the strategic needs of talent
development and relevant policies of provinces and cities, the Company actively carries out the work
of staff title appraisal, skill rating, recommendation and assessment and so on.
9.4. Labor outsourcing
Applicable N/A
10. Profit distribution and converting capital reserves into share capital
Formulation, execution or adjustments of profit distribution policy, especially cash dividend policy, in
the reporting period.
Applicable N/A
According to the plan for profit distribution for 2021 deliberated and approved by 2021 annual meeting
of shareholders, based on its total of 1,471,615,076 shares, the Company distributed a cash dividend
of CNY 32.44 (tax inclusive) per 10 shares to all shareholders. The distribution plan was implemented
on 26 August 2022.
58
2022 Annual Report of Luzhou Laojiao Co., Ltd.
A special statement of the policy of cash dividends
Whether it meets the requirements of the articles
of corporation or the resolution of shareholders' Yes
meeting:
Whether the standard and proportion of dividends
Yes
are clear:
Whether the relevant decision-making process and
Yes
systems are complete:
Whether non-executive directors perform their
Yes
duties and play their due role:
Whether the minority shareholders have the
opportunity to fully express their opinions and
Yes
appeals and whether their legitimate rights and
interests have been adequately protected:
Whether the conditions and procedures are
The Company's cash dividend policy has not been
compliant and transparent and whether the cash
adjusted or changed in the reporting period
dividend policy is adjusted or changed:
The Company made a profit in the reporting period and the profit distributable to shareholders of the
Company was positive, but it did not put forward a preliminary plan for cash dividend distribution to
shareholders.
Applicable N/A
Preliminary plan for profit distribution and converting capital reserves into share capital for the
reporting period
Applicable N/A
Bonus shares for every 10 shares (share) 0
Dividends for every 10 shares (CNY) (tax included) 42.25
Total shares as the basis for the preliminary plan for profit
1,471,987,769
distribution (share)
Total cash dividends (CNY) (tax included) 6,219,148,324.03
Cash dividends in other forms (e.g. repurchase share) 0.00
Total cash dividends (CNY) (including other forms) 6,219,148,324.03
Distributable profit (CNY) 26,772,197,213.98
Percentage of cash dividends in the total distributed profit
100%
(including other forms)
Information of the cash dividends
The development stage of the Company is mature and the Company has no major fund expenditure arrangement.
When the profit distribution is carried out, the proportion of cash dividends in this profit distribution should at least
reach 80%.
Details of preliminary plan for profit distribution and converting capital reserves into share capital
11. Implementation of any equity incentive plan, employee stock
ownership plan or other incentive measures for employees
Applicable N/A
59
2022 Annual Report of Luzhou Laojiao Co., Ltd.
11.1. Equity incentives
A. On 26 September 2021, relevant proposals such as the Proposal on the 2021 Restricted Share
Incentive Plan (Draft) and Summary of Luzhou Laojiao Co., Ltd. were approved at the Seventh Meeting
of the 10th Board of Directors and the Third Meeting of the 10th Board of Supervisors of the Company,
respectively.
B. On 2 December 2021, the Company received the Approval of Luzhou State-owned Assets
Supervision and Administration Commission on the Implementation of the Second Phase of the Equity
Incentive Plan for Listed Companies by Luzhou Laojiao Co., Ltd. (L.G.Z.K.P. [2021] No. 62) from the
Luzhou State-owned Assets Supervision and Administration Commission, which approved in principle
to the implementation of the Restricted Share Incentive Plan by the Company.
C. On 24 December 2021, the Board of Supervisors of the Company issued the review opinion, i.e.,
Explanation on the Review and Announcement of the List of Awardees of the 2021 Restricted Share
Incentive Plan.
D. On 29 December 2021, the relevant proposals such as the Proposal on the 2021 Restricted Share
Incentive Plan (Draft) and Summary of Luzhou Laojiao Co., Ltd. were approved at the First
Extraordinary General Meeting of Shareholders of 2021. Meanwhile, a self-inspection on the trading of
the Company's shares by insiders of the Incentive Plan and the proposed awardees was conducted,
and the Self-Inspection Report on the Trading of the Company's Shares by Insiders and Awardees in
the 2021 Restricted Share Incentive Plan was disclosed.
E. On 29 December 2021, the Company held the 12th Meeting of the 10th Board of Directors and the
Sixth Meeting of the 10th Board of Supervisors and reviewed and approved the Proposal on the Grant
of Restricted Shares to Awardees respectively. The independent directors consented to the relevant
matters.
F. On 21 February 2022, the Company disclosed the Announcement on the Completion of Registration
of Restricted Share Grant, completed the registration of the first grant of restricted shares. Upon the
registration of the grant, 6,862,600 restricted shares were granted to 437 objects, the grant price was
CNY 92.71 per share and the listing date was 22 February 2022.
G. On 25 July 2022, the Company held the 18th Meeting of the 10th Board of Directors and the Ninth
Meeting of the 10th Board of Supervisors and reviewed and approved the Proposal on the Grant of
Reserved Restricted Shares to Awardees respectively. The independent directors consented to this
matter.
H. On 4 August 2022, the Board of Supervisors of the Company issued the review opinion, i.e.,
Explanation on the Review and Announcement of the List of Awardees for the Reserved Restricted
Shares of the 2021 Restricted Share Incentive Plan.
I. On 2 September 2022, the Company held the 22nd Meeting of the 10th Board of Directors and the
13th Meeting of the 10th Board of Supervisors, at which the Proposal on the Repurchase and
Retirement of Certain Restricted Shares and the Adjustment of Repurchase Price and the Proposal on
the Adjustment of the Granted Price of Reserved Restricted Shares of 2021 Restricted Share Incentive
Plan were reviewed and approved respectively. In accordance with the relevant provisions of the
incentive plan of the Company and the authorization of the First Extraordinary General Meeting of
Shareholders of 2021, the Board of Directors of the Company agreed to adjust the grant price and
repurchase price of the reserved restricted shares under the incentive plan from CNY 92.71 per share
to CNY 89.466 per share in view of the implementation of the Company's profit distribution plan for
60
2022 Annual Report of Luzhou Laojiao Co., Ltd.
2021. The independent directors consented to this matter.
J. On 3 September 2022, the Company disclosed the Announcement on the Repurchase and
Cancellation of Some Restricted Shares to Reduce Registered Capital and Notice to Creditors. By the
expiration of the declaring period, the Company had not received any declaration from the relevant
creditors for early payout of debts or provision of guarantee.
K. On 26 September 2022, the Company disclosed the Announcement on the Completion of the
Registration of the Grant of the Reserved Restricted Shares under the 2021 Restricted Share Incentive
Plan. Upon the registration of the grant of the reserved restricted shares, 342,334 restricted shares
were granted to 46 objects, the grant price was CNY 89.466 per share and the listing date was 28
September 2022.
L. On 29 November 2022, the Company disclosed the Announcement on the Completion of the
Repurchase and Cancellation of Some Restricted Shares. The Company proposed to repurchase and
cancel a total of 62,310 restricted shares granted but not lifted from restricted sales. As at 29 November
2022, the Company completed the aforesaid repurchase and cancellation of restricted shares.
M. On 29 December 2022, the Company held the 26th Meeting of the 10th Board of Directors and the
15th Meeting of the 10th Board of Supervisors and reviewed and approved the Proposal on the Grant of
Reserved Restricted Shares to Awardees respectively. The independent directors consented to this
matter.
N. On 13 January 2023, the Board of Supervisors of the Company issued the review opinion, i.e.,
Explanation on the Review and Announcement of the List of Awardees for the Reserved Restricted
Shares of the 2021 Restricted Share Incentive Plan.
O. On 16 February 2023, the Company disclosed the Announcement on the Completion of the
Registration of the Grant of the Reserved Restricted Shares under the 2021 Restricted Share Incentive
Plan. Upon the registration of the grant of the reserved restricted shares, 92,669 restricted shares were
granted to 17 objects, the grant price was CNY 89.466 per share and the listing date was 17 February
2023.
Equity incentives for directors and senior management
Applicable N/A
Unit: share
Exerci
se
price Restric
Stock Market Restric
Stock Exerci Exerci for Stock ted Restric
option price Grant ted
option sable sed exerci option shares Unlock ted
s held at the price shares
s share share sed s held held at ed shares
at the end of of the held at
grante option option share at the the shares grante
begin the restrict the
Name Office title d in s for s in option end of beginn in the d in
ning reporti ed end of
the the the s in the ing of reporti the
of the ng shares the
reporti reporti reporti the reporti the ng reporti
reporti period (CNY/ reporti
ng ng ng reporti ng reporti period ng
ng (CNY / share) ng
period period period ng period ng period
period share) period
period period
(CNY /
share)
Chairman
Liu Miao of the 0 0 0 0 0 0 0 0 0 0 92.71 95,900
board
Director,
Lin Feng General 0 0 0 0 0 0 0 0 0 0 92.71 95,900
manager
Director,
Wang Deputy
Hongbo general 0 0 0 0 0 0 0 0 0 0 92.71 76,700
manager
61
2022 Annual Report of Luzhou Laojiao Co., Ltd.
Deputy
Shen
general 0 0 0 0 0 0 0 0 0 0 92.71 76,700
Caihong
manager
Xie Hong CFO 0 0 0 0 0 0 0 0 0 0 92.71 76,700
Deputy
He
general 0 0 0 0 0 0 0 0 0 0 92.71 76,700
Cheng
manager
Deputy
Zhang
general 0 0 0 0 0 0 0 0 0 0 92.71 76,700
Suyi
manager
Deputy
Xiong
general 0 0 0 0 0 0 0 0 0 0 92.71 62,800
Pingting
manager
Deputy
general
manager,
Li Yong 0 0 0 0 0 0 0 0 0 0 92.71 62,800
Secretary
of the
board
700,90
Total -- 0 0 0 0 -- 0 -- 0 0 0 --
0
The first grant date for the 2021 Restricted Share Incentive Plan was 29 December 2021 and the registration date of the
Notes (if any) grant was 21 February 2022. Therefore, the above personnel were granted a total of 700,900 new restricted shares
during the reporting period.
Appraisal mechanism and incentives for senior management
For details, please refer to the 2021 Restricted Share Incentive Plan (Draft) and Summary of Luzhou
Laojiao Co., Ltd., the Performance Appraisal Methods for the 2021 Restricted Share Incentive Plan of
Luzhou Laojiao Co., Ltd., and the Management Methods for the 2021 Restricted Share Incentive Plan
of Luzhou Laojiao Co., Ltd., which have been disclosed by the Company on www.cninfo.com.cn on 26
September 2021.
11.2. Implementation of employee stock ownership plans
Applicable N/A
11.3. Other incentive measures for employees
Applicable N/A
12. Establishment and implementation of the internal control system
during the reporting period
12.1. Establishment and implementation of the internal control system
During the reporting period, in accordance with the Basic Rules for Internal Control of Enterprises, the
Guidelines of the Shenzhen Stock Exchange for the Internal Control of Listed Companies, relevant laws,
administrative regulations, normative documents, and other regulatory requirements concerning internal
control, as well as the reality of the Company, the Company consistently improved and optimized its
internal control systems and established a well-developed system that covered the corporate
governance, administrative management, operations management, financial management, human
62
2022 Annual Report of Luzhou Laojiao Co., Ltd.
resources, production guarantee, and safety and environmental protection. Additionally, it strengthened
the implementation, supervision, inspection, feedback, and improvement of the internal control systems
in the operations management to ensure that each internal control system is reasonable, complete, and
effective, thereby promoting the sound, sustainable development of the Company.
12.2. Material internal control deficiencies found in the reporting period
□ Yes No
13. The Company’s management and control of subsidiaries during the
reporting period
Problems Solution
Consolidation Consolidation Subsequent
Company name arising in Solutions taken implementation
plan progress solutions
consolidation progress
N/A
14. Internal control self-assessment report and auditor report
14.1. Internal control self-assessment report
Disclosure date of the internal control
29 April 2023
self-assessment report
Disclosure index of the internal control
2022 Internal Control Self-assessment Report （http://www.cninfo.com.cn/）
self-assessment report
Ratio of the total assets of the
appraised entitles to the consolidated 90.00%
total assets
Ratio of the operating revenues of the
appraised entitles to the consolidated 90.00%
operating revenue
Deficiencies identification standard
Type Financial report Non-financial report
Material deficiencies：（1）violate
Material deficiencies：（1）Correction of national regulations and laws；（2）
material errors in financial reports that The Company’s decision-making
have been announced (except procedures are unscientific；if there
retroactive adjustment of previous years is a decision-making misplay, it will
due to changes in policies or other result in significant deal failure; （3）
objective factors)；（2）Material The substantial loss of managerial or
Qualitative standard misstatement of current financial report technical staff；（4）Important
which was unrecognized but found by business lacks system control or
the auditor；（3） Corrupt transaction of system failure, important economic
senior management；（4）Audit business has internal control system
committee and internal audit department guidance, but with no effective
are not effective to the internal control operation；（5）material deficiencies
supervision . of internal control cannot be rectified
in time.
63
2022 Annual Report of Luzhou Laojiao Co., Ltd.
1. Material deficiencies：Misstatement ≥
5% of total profits；Misstatement ≥ 1%
of total assets；Misstatement ≥ 5% of
total operating revenue；Misstatement
≥5% of owner's equity
2. Significant deficiencies：3% of gross
profits≤Misstatement<5% of gross
profits；0.5% of total 1. Material deficiencies：loss≥5% of
assets≤Misstatement<1% of total net profits.
assets；3% of total operating 2. Significant deficiencies：3% of net
Quantitative standard
revenue≤Misstatement<5% of total profits≤ loss＜5% of net profits.
operating revenue；3% of owner's 3. General deficiencies：loss＜3% of
equity≤Misstatement<5% of owner's net profits
equity.
3. General deficiencies：
Misstatement<3% of gross profits；
Misstatement<0.5% of total assets；
Misstatement<3% of total operating
revenue；Misstatement<3% of owner's
equity.
Number of financial-report material
0
deficiencies
Number of non-financial-report material
0
deficiencies
Number of significant financial-report
0
related deficiencies
Number of significant Non-financial-
0
report related deficiencies
14.2. Internal control auditor report
Applicable N/A
Deliberation opinion section in the internal control audit report
In accordance with the Basic Rules for Internal Control of Enterprises, the guidelines for assessment, and the other
applicable laws and regulations, the Company has assessed the reasonableness and effectiveness of the design and
operation of internal control as of 31 December 2022. During the reporting period, the Company has established
internal control over businesses and matters within the assessment scope, which were effectively executed. The
internal control objectives have been met, with no material deficiencies. No significant change occurred to the
Company’s internal control during the period from the base day of the internal control assessment report to the issue
day of the report that had a substantial impact on the conclusion of the assessment report.
Disclosure of internal control
Disclosed
audit report
Disclosure date of the internal
29 April 2023
control audit report
Disclosure index of the internal
2022 Internal Control Auditor Report （http://www.cninfo.com.cn/）
control audit report
Type of the audit’s opinion Standard unqualified opinion
Significant deficiencies found in
No
the non-financial report
The accounting firm issued the internal control audit report of non-standard opinions
Yes No
64
2022 Annual Report of Luzhou Laojiao Co., Ltd.
Whether the internal control audit report issued by the accounting firm is consistent with the self-
assessment report issued by the board of directors.
Yes No
15. Remediation of Problems Identified by Self-inspection in the Special
Campaign on Listed Company Governance
None.
65
2022 Annual Report of Luzhou Laojiao Co., Ltd.
Section V Environmental and Social Responsibility
1. Information about environment protection
Whether the listed company and its subsidiaries belong to heavy polluting industries prescribed by
the environmental protection department
Yes □ No
Policies and industry standards on environmental protection
In the process of production and operation, the Company strictly follow the laws, regulations and
industry standards related to environmental protection, such as the Environmental Protection Law of
the People's Republic of China, Policies and Industry Standards on Environmental Protection,
Regulations on Environmental Protection of Sichuan Province, Law of the People's Republic of China
on Environmental Impact Assessment, Regulations on the Administration of Environmental Protection
of Construction Projects of the People's Republic of China, Law of the People's Republic of China on
Water Pollution Prevention and Control, Standards for the Emission of Water Pollutants in the
Fermented Alcohol and Liquor Industry, Law of the People's Republic of China on Atmospheric
Pollution Prevention and Control, Regulations on the Prevention and Control of Environmental
Pollution by Solid Waste in Sichuan Province, Standard for Pollution Control on Hazardous Waste
Storage, Regulations on Administration of Pollutant Discharge Permits, and Administrative Measures
for the Legal Disclosure of Enterprise Environmental Information.
Environmental protection administrative permission
In 2022, the Company obtained four ecological and environmental administrative permits, including a
total of three permits for change and renewal of discharge permits and one approval of environmental
impact assessment report.
Ecological Environmental Administrative Permission
Review and
Name of Acquiring
Administrative permit No. issuance Valid term Permitted matter Remark
permit time
authority
Concentration limit on fugitive emission
Discharge
of air pollutants: 2.0 mg/Nm3 for non-
Permit for Luzhou
methane hydrocarbon (NMHC) and 20
Luzhou Municipal 29
dimensionless for odor concentration.
Laojiao Co., 91510500204706718H002V Ecology and November 5 years Renewal
The noise emission standard is Class 2
Ltd. (Xiaoshi Environment 2022
in the Emission Standard for Noise of
Brewery Bureau
Industrial Enterprises at Boundary
Base)
(GB12348-2008).
Environmental Luzhou The project aims at technique
Impact Report Municipal 18 May transformation in the premises of the Newly
L.SH.H.J.H. [2022] No. 43 Permanent
on Flavoring Ecology and 2022 Brewery Center 7 (formerly Workshop acquired
Baijiu Environment 707) of the Luohan Brewery Eco-Park.
66
2022 Annual Report of Luzhou Laojiao Co., Ltd.
Production Bureau Main construction content: Dismantle
Equipment the distillation system in the existing
and Brewery Center 7, re-layout according
Engineering to the process design, and renovate an
Application area of approximately 14,000 m2;
Research dismantle the original equipment in the
Project of distiller's grains drying area, carryout
Luzhou civil engineering renovation according
Laojiao Co., to the process design layout, and
Ltd. renovate a distiller's grains fermentation
area of approximately 5,000 m2; add
(renovate) a distillation system. After
technique transformation, the capacity
of the Brewery Center 7 (formerly
Workshop 707) was reduced from
40,000 t/a to 14,000 t/a.
Permitted annual discharge limits for
Discharge wastewater: 400 t/a for chemical
Permit for Luzhou oxygen demand (COD), 30 t/a for
Luzhou Municipal 20 ammonia nitrogen, 50 t/a for total
Laojiao Co., 91510500204706718H004Q Ecology and September 5 years nitrogen (TN), and 3 t/a for total Change
Ltd. (Huangyi Environment 2022 phosphorus (TP). Permitted noise limits:
Brewery Eco- Bureau Class 3 in the Emission Standard for
Park) Noise of Industrial Enterprises at
Boundary (GB12348-2008).
The permitted annual emission limits for
the main emission outlet of waste gas
are 3.9 t/a of particulate matter, 11.5 t/a
for sulfur dioxide and 45.4 t/a for
nitrogen oxides; the permitted annual
emission limits for the main emission
Discharge outlet of waste water are 23.183 t/a for
Permit for Luzhou COD, 2.017 t/a for ammonia nitrogen,
Luzhou Municipal 29 5.796 t/a for TN and 0.232 t/a for TP;
Laojiao Co., 91510500204706718H001V Ecology and November 5 years the east, west and south sides of the Renewal
Ltd. (Luohan Environment 2022 noise factory boundary are subject to
Brewery Eco- Bureau the Class 2 standard in the Emission
Park) Standard for Noise of Industrial
Enterprises at Boundary (GB12348-
2008), while the north side is subject to
the Class 4 standard limit in the
Emission Standard for Noise of
Industrial Enterprises at Boundary
(GB12348-2008).
Industry discharge standards and pollutants in producing and operating activities
Type of Name of
main main Number Distributi Emission
Pollution Approved Excessiv
Company pollutant pollutant Discharge of on of concentra Total
discharge total e
name and and type discharg discharge tion/inten emission
standard emission discharge
particular particular e outlet outlet sity
pollutant pollutant
Luzhou Luohan
Water Direct 22.60mg/
Laojiao COD 1 Brewery 50 mg/L 9.466t/a 23.183t/a No
Co., Ltd. pollutant discharge m3
Eco-Park
Luzhou Water Direct Luohan 0.149mg/
Ammonia
Laojiao 1 5 mg/L 0.062t/a 2.017t/a No
pollutant nitrogen discharge Brewery L
Co., Ltd.
67
2022 Annual Report of Luzhou Laojiao Co., Ltd.
Eco-Park
Luzhou Luohan
Water Total Direct 5.976
Laojiao 1 Brewery 15 mg/L 2.503t/a 5.796t/a No
pollutant nitrogen discharge mg/L
Co., Ltd.
Eco-Park
Luzhou Total Luohan
Water Direct 0.090mg/
Laojiao phosphor 1 Brewery 0.5mg/L 0.038t/a 0.232t/a No
Co., Ltd. pollutant us discharge L
Eco-Park
Luzhou Luohan
Air Organized 2.991mg/
Laojiao PM 2 Brewery 20mg/m3 0.0003 2.8 t/a No
Co., Ltd. pollutant discharge m3
Eco-Park
Luzhou Luohan
Air Sulfur Organized 0.2715m 0.0001
Laojiao 2 Brewery 50mg/m3 4.7 t/a No
pollutant dioxide discharge g/m3 t/a
Co., Ltd.
Eco-Park
Luzhou Luohan
Air Oxynitrid Organized 26.683 150mg/m 0.0032
Laojiao 2 Brewery 22.1 t/a No
pollutant e discharge mg/m3 3 t/a
Co., Ltd.
Eco-Park
Luzhou Huangyi
Water Indirect 34.157 19.184
Laojiao COD 1 Brewery 400mg/L 400 t/a No
Co., Ltd. pollutant discharge mg/L t/a
Eco-Park
Luzhou Huangyi
Water Ammonia Indirect 0.316
Laojiao 1 Brewery 30 mg/L 0.148 t/a 30 t/a No
pollutant nitrogen discharge mg/L
Co., Ltd.
Eco-Park
Luzhou Huangyi
Water Total Indirect 11.478
Laojiao 1 Brewery 50 mg/L 6.890 t/a 50 t/a No
pollutant nitrogen discharge mg/L
Co., Ltd.
Eco-Park
Luzhou Total Huangyi
Water Indirect 0.515
Laojiao phosphor 1 Brewery 3 mg/L 0.316 t/a 3 t/a No
Co., Ltd. pollutant us discharge mg/L
Eco-Park
Luzhou Huangyi
Laojiao Air Smoke Organized 0.859
Brewing and dust 2 Brewery 5 mg/m3 0.579 t/a 5.64t/a No
pollutant discharge mg/m3
Co., Ltd. Eco-Park
Luzhou Huangyi
Laojiao Air Organized 1.090
PM 1 Brewery 20 mg/m3 0.027 t/a 3t/a No
Brewing pollutant discharge mg/m3
Co., Ltd. Eco-Park
Luzhou Huangyi
Laojiao Air Sulfur Organized 0.530
Brewing dioxide 2 Brewery 35 mg/m3 0.331 t/a 16.68 t/a No
pollutant discharge mg/m3
Co., Ltd. Eco-Park
Luzhou Huangyi
Laojiao Air Sulfur Organized 0.766
Brewing dioxide 1 Brewery 50 mg/m3 0.010 t/a 2.2 t/a No
pollutant discharge mg/m3
Co., Ltd. Eco-Park
Luzhou Huangyi
Laojiao Air Oxynitrid Organized 39.675 100
Brewing e 2 Brewery 27.44 t/a 113.4 t/a No
pollutant discharge mg/m3 mg/m3
Co., Ltd. Eco-Park
Luzhou Huangyi
Laojiao Air Oxynitrid Organized 44.828m 150
Brewing e 1 Brewery 1.144 t/a 22.68 t/a No
pollutant discharge g/m3 mg/m3
Co., Ltd. Eco-Park
Treatments of pollutants
A. Waste water: Areas of the Company that produce wastewater are National Cellar, Zaojiaoxiang
Brewery Base, Xiaoshi Brewery Base, Anning Technology Park, Luohan Brewery Eco-Park, and
Huangyi Brewery Eco-Park. In National Cellar, Zaojiaoxiang Brewery Base, Xiaoshi Brewery Base, and
Anning Technology Park, the high-concentration brewing wastewater is temporarily collected in pools
(or tanks), and is later transferred to the wastewater treatment station of Huangyi Brewery Eco-Park by
truck for treatment. The wastewater treatment stations of Luohan Brewery Eco-Park and Huangyi
68
2022 Annual Report of Luzhou Laojiao Co., Ltd.
Brewery Eco-Park are equipped with online monitors to automatically monitor COD, ammonia nitrogen,
total phosphorus, total nitrogen, pH value and flows, and transmit the monitoring data to the supervision
platform of the higher authority. The Company's facilities for prevention and control of wastewater
pollution are under normal operations, ensuring up-to-standard discharge through general discharging
outlets. Compared to 2021, in 2022 the Company reduced suspended matter discharge per unit of
product by 63.25%, COD discharge by 12.44%, total nitrogen discharge by 16.94%, total phosphorus
discharge by 23.25% and ammonia nitrogen discharge by 60.46%.
B. Waste gas: Areas of the Company that produce exhaust gas are National Cellar, Zaojiaoxiang
Brewery Base, Xiaoshi Brewery Base, Luohan Brewery Eco-Park, and Huangyi Brewery Eco-Park. In
National Cellar Brewery Base, natural gas boilers are used, while in Xiaoshi Brewery Base and
Zaojiaoxiang Brewery Base, direct-fired bottom boilers are used. The natural gas boilers of Luohan
Brewery Eco-Park (20t/h, 30t/h) and the natural gas boilers of Huangyi Brewery Eco-Park (20t/h, 75t/h,
75t/h) are equipped with online monitors to automatically monitor exhaust gas, and transmit the
monitoring data to the supervision platform of the higher authority. Low NOx combustion technology is
adopted for the natural gas boilers. The Company's facilities for prevention and control of exhaust gas
pollution are under normal operations, ensuring up-to-standard emission of exhaust gas through outlets.
Compared to 2021, the Company reduced PM discharge per unit of product by 40.22% in 2022.
Emergency plan for environmental emergencies
The Company developed the Contingency Plan for Environmental Emergencies (Revision 2020), the
Environmental Risk Assessment Report and the Emergency Resources Survey Report, and reported to
the Environmental Emergency Service Center of Luzhou for filing. The Company carried out drills of
contingency plans, which improved employees' capability to respond to environmental emergencies.
Environmental self-monitoring plan
2022
Monitoring Implementation Monitoring Monitoring
Monitoring site Emission limit Monitoring
indicator standard frequency form
compliance rate
Odor
Emission Standards 20 (dimensionless)
concentration
for Odor Pollutants
Hydrogen sulfide 0.06 mg/m3
Unorganized (GB14554- 93)
Ammonia 1.5 mg/m3
monitoring
points 1#-4# for Sichuan Emission
the exhaust gas Control Standard for
NMHC Volatile Organic 2 mg/m3 1 time/half-year Manual 100%
emission outlets
of Luohan Compounds
Brewery Eco- (DB51/2377-2017)
Park Integrated Emission
Particulate Standards for Air
1 mg/m3
matters Pollutants (GB16297-
1996)
Exhaust gas Ringelman
≤1 Manual
emission outlets emittance
Emission Standards
DA022, DA021 Nitrogen oxide 150 mg/m3
for Air Pollutants for
(unused) and Particulate 1 time/quarter 100%
Boiler (GB13271- 20 mg/m3
DA020 of matters Automatic
2014)
Luohan Brewery
Eco-Park Sulfur dioxide: 50 mg/m3
15,000
Exhaust gas Hydrogen sulfide
/
emission outlet Emission Standards
/
DA019 of Ammonia for Odor Pollutants 1 time/half-year Manual 100%
1.8 kg/h
Luohan Brewery (GB14554- 93)
Eco-Park Odor /
concentration 27 kg/h
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2022 Annual Report of Luzhou Laojiao Co., Ltd.
240 mg/m3
Sulfur dioxide:
Integrated Emission 0.77 kg/h
Particulate Standards for Air 120 mg/m3
Exhaust gas matters Pollutants (GB16297- 3.5 kg/h
emission outlet 1996) 550 mg/m3
DA018 of Nitrogen oxide 1 time/quarter Manual 100%
2.6 kg/h
Luohan Brewery
Sichuan Emission
Eco-Park
Control Standard for
Volatile organic 60 mg/m3
Volatile Organic
compounds 3.4 kg/h
Compounds
(DB51/2377-2017)
Exhaust gas Sichuan Emission
emission outlet Control Standard for
60 mg/m3
DA017 of NMHC Volatile Organic 1 time/quarter Manual 100%
3.4 kg/h
Luohan Brewery Compounds
Eco-Park (DB51/2377-2017)
Exhaust gas
emission outlets Integrated Emission
DA001-DA016 Particulate Standards for Air
120 mg/m3 1 time/half-year Manual 100%
of Luohan matters Pollutants (GB16297-
Brewery Eco- 1996)
Park
Flow /
PH value 6-9
Main outlet COD 50 mg/L
Standards for the 1 time/quarter Automatic
DW001 of the Ammonia Emission of Water 5 mg/L
wastewater nitrogen Pollutants in the
treatment station 100%
TP Fermented Alcohol 0.5 mg/L
of Luohan
TN and Liquor Industry 15 mg/L
Brewery Eco-
(GB27931-2011)
Park Suspended
20 mg/L
solids
Five-day BOD 20mg/L 1 time/month Manual
Chroma 20
Suspended Standards for the
Rainwater 20 mg/L 1 time/month (1
solids Emission of Water
outlets DW002- time/quarter in
Pollutants in the
DW006 of case of no Manual 100%
Fermented Alcohol
Luohan Brewery COD 50 mg/L abnormalities
and Liquor Industry
Eco-Park monitored)
(GB2731-2011)
Noise monitoring Emission Standard
points 1-4# at for Noise of Industrial
Daytime: 60 dB (A);
the boundary of Boundary noise Enterprises at 1 time/quarter Manual 100%
nighttime: 50 dB (A)
Luohan Brewery Boundary (GB12348-
Eco-Park 2008)
Circulating
cooling water
outlet DW002 of
the Energy PH value, COD,
/ / 1 time/quarter Manual 100%
Center of TP
Sichuan Luzhou
Baijiu Industrial
Park
PH value 6-9
Total dissolved
/
Wastewater solids (TDS)
outlet DW001 of Suspended
Integrated 140 mg/L
the Energy solids
Wastewater
Center of Five-day BOD 80 mg/L 1 time/quarter Manual 100%
Discharge Standard
Sichuan Luzhou COD 400 mg/L
(GB8978-1996)
Baijiu Industrial TN 50 mg/L
Park Ammonia
30 mg/L
nitrogen
TP 3 mg/L
Boiler exhaust Ringelman
≤1 Manual
gas vents emittance
Emission Standard of
DA001-DA002 Nitrogen oxide 100 mg/m3
Air Pollutants for
of the Energy Soot 5 mg/m3
Thermal Power 1 time/quarter 100%
Center of
Plants (GB13223- Automatic
Sichuan Luzhou
Sulfur dioxide: 2011) 35 mg/m3
Baijiu Industrial
Park
Boiler exhaust Ringelman Emission Standards
≤1 1 time/quarter Manual
gas vent DA003 emittance for Air Pollutants for 100%
of the Energy Nitrogen oxide Boiler (GB13271- 150 mg/m3 Automatic
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2022 Annual Report of Luzhou Laojiao Co., Ltd.
Center of Particulate 2014)
20 mg/m3
Sichuan Luzhou matters
Baijiu Industrial
Sulfur dioxide: 50 mg/m3
Park
Rainwater Suspended Standards for the
50 mg/L 1 time/month (1
outlets DW004- solids Emission of Water
time/quarter in
DW010 of Pollutants in the
case of no Manual 100%
Huangyi Fermented Alcohol
COD 100 mg/L abnormalities
Brewery Eco- and Liquor Industry
monitored)
Park (GB2731-2011)
Odor
Emission Standards 20 (dimensionless)
concentration
for Odor Pollutants
Hydrogen sulfide 0.06 mg/m3
(GB14554-93)
Unorganized Ammonia 1.5 mg/m3
monitoring Sichuan Emission
points 1#-4# at Control Standard for
the boundary of NMHC Volatile Organic 2 mg/m3 1 time/quarter Manual 100%
Huangyi Compounds
Brewery Eco- (DB51/2377-2017)
Park Integrated Emission
Particulate Standards for Air
1 mg/m3
matters Pollutants (GB16297-
1996)
DA041 and Odor 2,000
DA042 of concentration Emission Standards (dimensionless)
Huangyi Ammonia for Odor Pollutants 4.9 kg/h 1 time/half-year Manual 100%
Brewery Eco- (GB14554- 93)
Park Hydrogen sulfide 0.33 kg/h
DA087, DA096-
Sichuan Emission
DA097 and
Control Standard for
DA072-DA075 60 mg/m3
NMHC Volatile Organic 1 time/quarter Manual 100%
of Huangyi 4.76 kg/h
Compounds
Brewery Eco-
(DB51/2377-2017)
Park
DA034-DA040,
DA043-DA070,
DA076-DA086 Integrated Emission
and DA088- Particulate Standards for Air
120 mg/m3 1 time/half-year Manual 100%
DA095 of matters Pollutants (GB16297-
Huangyi 1996)
Brewery Eco-
Park
Flow /
PH value 6-9
COD 400 mg/L
Main outlet of Standards for the 1 time/quarter Automatic
Ammonia
the wastewater Emission of Water 30 mg/L
nitrogen
treatment station Pollutants in the
TP 3 mg/L 100%
of Huangyi Fermented Alcohol
Brewery Eco- TN and Liquor Industry 50 mg/L
Park Suspended (GB2731-2011) 140 mg/L
solids
1 time/month Manual
Five-day BOD 80 mg/L
Chroma 80
Noise monitoring
Emission Standard
points 1-4# at
for Noise of Industrial
the boundary of Daytime: 65 dB (A);
Boundary noise Enterprises at 1 time/quarter Manual 100%
Huangyi nighttime: 55 dB (A)
Boundary (GB12348-
Brewery Eco-
2008)
Park
Emission Standards
Odor
for Odor Pollutants 20
Unorganized concentration
(GB14554- 93)
monitoring
Sichuan Emission
points 1#-7# at 1 time/half-year Manual 100%
Control Standard for
Xiaoshi Brewery
Base NMHC Volatile Organic 2.0 mg/m3
Compounds
(DB51/2377-2017)
Boiler exhaust Ringelman
Emission Standards ≤1
gas vents emittance
for Air Pollutants for 1 time/year
DA001-DA010 Soot 20 mg/m3 Manual 100%
Boiler (GB13271-
of Xiaoshi Sulfur dioxide: 50 mg/m3
2014)
Brewery Base Nitrogen oxide 150 mg/m3 1 time/month
Noise monitoring Emission Standard
points at the for Noise of Industrial
boundary of Boundary noise Enterprises at Daytime: 60 dB (A) 1 time/quarter Manual 100%
Xiaoshi Brewery Boundary (GB12348-
Base 2008)
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2022 Annual Report of Luzhou Laojiao Co., Ltd.
Emission Standards
Unorganized Odor
for Odor Pollutants 20
monitoring concentration
(GB14554- 93)
points of
Sichuan Emission
National Cellar 1 time/half-year Manual 100%
Control Standard for
and
Zaojiaoxiang NMHC Volatile Organic 2.0 mg/m3
Brewery Bases Compounds
(DB51/2377-2017)
Boiler exhaust Ringelman
≤1
gas vents emittance
Emission Standards 1 time/year
DA001-DA003 Soot 20 mg/m3
for Air Pollutants for
of National Sulfur dioxide: 50 mg/m3 Manual 100%
Boiler (GB13271-
Cellar and
2014)
Zaojiaoxiang Nitrogen oxide 150 mg/m3 1 time/month
Brewery Bases
Noise monitoring
points at the Emission Standard
boundary of for Noise of Industrial
National Cellar Boundary noise Enterprises at Daytime: 60 dB (A) 1 time/quarter Manual 100%
and Boundary (Class 4
Zaojiaoxiang for street frontage)
Brewery Bases
Rainwater outlet Suspended Standards for the
20 mg/L 1 time/month (1
DW003 of solids Emission of Water
time/quarter in
National Cellar Pollutants in the
case of no Manual 100%
and Fermented Alcohol
COD 50 mg/L abnormalities
Zaojiaoxiang and Liquor Industry
monitored)
Brewery Bases (GB2731-2011)
Input in environmental management and protection and the payment of environmental protection-
related taxes
Unit: CNY
Amount of tax Actual
Taxable pollutant Taxable pollutant Tax deduction
payable amount paid
Suspended solids, COD, ammonia
Water pollutant 36,754.91 367,54.91 0.00
nitrogen (NH3-N), TP (calculated as P)
Ammonia, nitrogen oxides, sulfur
Air pollutant 137,932.77 137,932.77 0.00
dioxide, hydrogen sulphide, soot
Measures taken to reduce carbon emissions during the reporting period and the results
Applicable N/A
Luzhou Laojiao Huangyi Brewery Eco-Park is a green and low-carbon brewery ecological park with the
largest scale of solid-state baijiu brewing, the largest capacity of leaven and the highest level of
automation and intelligence in the industry. The Company has successfully developed industry-leading
automated baijiu brewing equipment, and realized the fully automated operation of the entire brewing
process. A set of green, low-carbon, energy-saving and environment-friendly production, operation and
development mode has been developed using green energy-saving technologies, automated control
means and digital management platforms, reducing carbon dioxide emissions. The Company has
developed a unique digital, green and low-carbon development path of Luzhou Laojiao.
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
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2022 Annual Report of Luzhou Laojiao Co., Ltd.
Other information about environment protection
N/A
2. Social responsibility
See the 2022 Social Responsibility Report disclosed on the same day with this Annual Report.
3. Efforts in poverty alleviation and rural revitalization
3.1. Work Plan for Rural Revitalization in 2022
In 2022, the Company thoroughly practiced General Secretary Mr. Xi Jinping's important instructions on
consolidating and expanding the achievements of poverty alleviation and rural revitalization,
implemented the requirements of the "four no-removals" and the decisions and deployments of the
central, provincial and municipal committees, and strove to build model and demonstration areas for
rural revitalization by fully leveraging its strengths in terms of capital, technology, talent and
management in accordance with the general requirements of "prosperous industry, livable ecology,
civilized rural style, effective governance and well-off life" to promote its sustainable development.
A. Intensified the leadership of organizations and fulfill the assistance responsibility. The Company
further improved its political stance, assumed the social responsibility of a state-owned enterprise, and
provided assistance and fulfilled its responsibilities in poverty alleviation. Additionally, to fulfill its
assistance responsibility, the Company promoted the cooperation between its Party branches and
assisted villages as well as the training of cadres of the two village Party branches and team members
of the Company stationed in the two villages.
B. Promoted the upgrading of industries and income increase through poverty alleviation. Giving full
play to its advantages in resources and platforms, the Company trained more technological, sales, and
management talent in Hongyuan County to enlarge the group of "forgoers in getting rich", thereby
encouraging the developed groups to assist backward ones. Besides, it built a brand image for yak
products in Hongyuan County and increased the inputs in the development of derivatives, so as to
enhance the visibility and reputation and lend constant impetus to the development of the assisted
villages.
C. Established a long-term mechanism to facilitate rural revitalization. The Company focused on the
standard that rural poor people are free from worries over food and clothing and have access to
compulsory education, basic medical services, and safe housing, strengthened dynamic monitoring of
any trends indicating a return to poverty, and consistently promoted the development of the assisted
villages to share the fruits of poverty alleviation with villagers. Meanwhile, measures including "external
support and self-motivation" and "building up self-belief and providing access to education" were
incorporated into the long-term mechanism for rural revitalization.
3.2. Results of the 2022 Rural Revitalization
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2022 Annual Report of Luzhou Laojiao Co., Ltd.
In 2022, the Company spent a total of CNY 2.5515 million to implement seven projects with high quality,
such as infrastructure construction, industrial support, self-belief and education support, and Pillars
Project, effectively helping villages to strengthen their special industries, optimize education and culture,
and solve development problems with practical strategies and real measures to seek true results. In
recent years, the Company has won honors and awards, including "The Most Charitable Model" of the
Third Sichuan Charity Award, the "Outstanding Contribution Award for Social Poverty Alleviation" of
Luzhou City and the "Advanced Group for Paired Assistance" in Sichuan Province.
A. Organizational guarantee continued to be strengthened and the assistance responsibility was fulfilled.
In 2022, the Company continued to fulfill its assistance responsibility by holding two party committee
meetings to study paired assistance, carrying out four special exchange seminars, and leading
members of the Company's leadership team to the village four times. The steering group stationed in
the village to carry out field research for six days, and selected and assigned two full-time cadres with
outstanding ability for paired assistance. Under the guidance of the Company's Rural Revitalization
Steering Group, cadres stationed in the village fully collaborated with the two village Party branches to
provide organizational guarantee for the comprehensive promotion of rural revitalization.
B. Upgrade industrial assistance and increase income through production and marketing linkage. The
"self-motivation-based" assistance model was continuously deepened. Based on the construction of the
paddy field fish farming base in Xiangtian Village, the production and operation model of "Party Branch
+ Collective Company + Base + Farmers" was continued to achieve "dual-purpose water, multiple
harvest from one field, increased food volume and efficiency, and win-win situation for food and fishery",
and promote the scale-based development of the rice and fishery industry, integration of ecology and
rural landscape. The Company adopted a village-enterprise cooperation approach to help Xiangtian
Village sell special agricultural products, totaling CNY 210,000. In the Guntang Village, the Company
coordinated the village and a professional ranch operating company to build a model ranch, and
developed an integrated production and marketing chain of "production by farmers in Guntang Village -
processing by the agricultural product company - sales by Luzhou Laojiao". The Company used its e-
commerce platform, the party group service center and other online and offline vehicles to widely
publicize the products assisted, expanded the unique advantages of the Damaiwa yak as a
geographical certified breed, and generated CNY 1,135,400 through activities such as "Creating Wealth
through Sales" and "purchase instead of donation". In addition, the Company created a collective
economic income model of "guaranteed income + profit dividends", incorporated 101 households out of
poverty into the income chain, allowed the collective and farmers to get cash for breeding, capital for
shares buy-in and funds for development, and donated 10% of sales to the collective economy of
Guntang Village, which effectively opened up the "last mile" of the problem with the production and
marketing of poverty-alleviating products, and boosted the production and marketing linkage for rural
revitalization to achieve substantial results.
C. Consistently assist farmers in building up self-belief and provide them with necessary education to
stimulate the self-motivation of villages. Adhering to the idea of "teaching people how to fish rather than
just giving them fish" and aiming to cultivate "four" new types of farmers, the Company used farmers'
night schools, special meetings, "Volunteer Activities for the Country People" and other carriers to carry
out more than 20 lectures on agricultural knowledge and farming techniques to help farmers improve
their scientific and cultural quality. By organizing unemployed youths and stable households out of
poverty to participate in e-commerce training, the Company successfully cultivated a group of new
farmers and herdsmen who are dedicated to agriculture and know technology, as well as rural
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2022 Annual Report of Luzhou Laojiao Co., Ltd.
revitalization leaders who are good at business and management, effectively driving villagers to
develop a path and increase income, and promoting the material and spiritual poverty alleviation of the
assisted villages. The education assistance of "Pillars Project" was continuously implemented, and
CNY 170,000 was invested to help 34 fresh high school graduates to attend university. For seven
consecutive years, the Company has carried out the "Voluntary Education" campaign by sending
courses, teaching aids and warmth to encourage students in rural areas to pursue their studies and
prevent poverty from passing down from generation to generation. In addition, the Company organized
warmth-sending and invested CNY 180,000 in Spring Festival care-extension activities, through which it
sent warmth and care to 230 assisted households and more than 350 common farming households and
further aroused their enthusiasm and initiative in getting rich.
D. Take various steps in terms of infrastructure guarantees to solve the urgent and difficult problems of
the masses. The Company's leadership team members and members of the rural revitalization group
visited paired households and poor villagers for research, communicated with villagers face to face and
heart to heart. A total of CNY 50,000 was invested throughout the year to upgrade the electricity supply
to 36 poor households to ensure safe utilization of electricity. The Company solidly promoted the pilot
reform of the rural road management and maintenance system, assisted the government in promoting
the renovation of dangerous rural houses and earthquake resistant retrofitting, and improved the
standards and specifications for rural housing construction. Focusing on the problem of difficult
employment for the masses, the Company made efforts to coordinate multiple resources to secure 96
public service jobs for 96 households out of poverty and low-income families from the assisted village,
effectively solving the difficulties of living of unstable households in poverty alleviation and marginal
households prone to poverty. Besides, the Company effectively fulfilled the caring and assistance
responsibility, promoted the sharing of the fruits of development, and gathered the villagers' strength to
move forward.
E. Continue to cultivate civilized rural style and enhance the overall spirit. The Company's experience
and advantages in brand culture promotion were fully leveraged to promote the civilized rural style
cultivation in an integrated manner. In the past two years, the Company has invested a total of CNY
588,000 in special expenses to build a cultural square covering an area of 3,500 square meters in
Guntang Village. Since the square was officially opened and operated in August 2022, a total of more
than ten activities have been carried out to disseminate intangible cultural heritage such as Maiwa
Guozhuang Dance, Maiwa Tibetan Opera and Baiwang Playing and Singing, successfully making
Maiwa Village a popular scenic spot. The Company continuously promoted the formulation of rules and
regulations, collaborated with the assisted villages to develop nine reporting requirements for party
members and cadres to arrange for weddings and funerals, and gave full play to the leading and
demonstration role of party members and cadres to encourage local people to transform outmoded
habits and customs. To continuously expand civilization publicity, based on the characteristics of ethnic
areas, the Company publicized filial piety, civilization, politeness and other traditional virtues through
multiple channels such as regular household publicity by cadres stationed in the village, offline bulletin
boards, WeChat group of villagers, broadcasting and telephone reminders. A total of 12 lectures and
training sessions on grassland fire prevention, health knowledge, prevention of Internet fraud and other
themes were carried out, and villagers were organized to participate in four special activities such as
"moral model lecture", which promoted the mutual integration and promotion of good rural customs and
modern civilization, and the overall spirit of the villagers continued to improve.
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2022 Annual Report of Luzhou Laojiao Co., Ltd.
3.3. Work Plan for Rural Revitalization in 2023
In 2023, the Company will strictly implement the arrangement of the central, provincial and municipal
Party committees regarding effectively connecting consolidation and expansion of poverty alleviation
achievements with rural revitalization, coordinate various resources and strengths to improve areas of
weakness, consolidate the achievements, lay the foundation and promote the revitalization, and take
multiple measures to resolutely fulfill the paired assistance responsibility. With greater determination,
stronger commitment and more practical measures, the Company will comprehensively promote new
progress in rural revitalization and new levels in agricultural and rural modernization in assisted villages.
A. Enhance the leadership of party building and consolidate the rural governance. The party branches
of the Company will continue to collaborate with the party branches of the assisted villages, and party
workers will be selected to guide the standard implementation of policies such as the "three meetings
and one lecture" and organizational life meetings. The Company will help villages establish and improve
a rural governance system that combines autonomy, rule of law and moral governance under the
leadership of party organizations, promote grassroots party organizations in rural areas to publicize the
Party's ideas, implement the Party's decisions, lead grassroots governance and unite and mobilize the
masses, regulate the management of village affairs and support rural revitalization.
B. Enhance the building of the assistance team to boost rural revitalization. The Company will strive to
consolidate the responsibilities of the assistance team stationed in the village, continuously improve the
comprehensive ability of the assistance cadres, and build a high-quality and responsible force for rural
revitalization with excellent work style. In addition, it will strongly cooperate with the "two committees" of
the village to consolidate and expand the results of poverty eradication, complete rural revitalization
tasks such as rural industrial development and spiritual civilization construction, and contribute to the
comprehensive rural revitalization from industry, talent, culture and ecology.
C. Enhance consumption assistance and stimulate industrial development momentum. Relying on the
resource and platform advantages, the Company will continue to integrate resources and coordinate
the integrated development of "livestock, production, promotion and sales" around special industries
such as Maiwa yak, continuously enhance product promotion and development, promote the upgrading
of industrial supporting facilities and the improvement of chains, and facilitate the effective
transformation of the "geographical card" into a "treasure for wealth". It will continue to carry out
"purchase instead of donation" campaign, and adopt market-oriented means to sign annual targeted
purchase agreements with the assisted counties for agricultural and sideline products, and bring high-
quality agricultural products onto e-commerce platforms.
D. Deepen employment assistance and enhance blood-creation momentum. In assisted villages, the
Company will establish a ledger of employment assistance for poverty-alleviation and low-income
families, actively help them compete for public service jobs, and organize training on employment skills
such as e-commerce and farming techniques to extensively cultivate training groups of wealthy leaders.
Fully relying on the assistance projects, the Company will support unstable households in poverty
alleviation and marginal households prone to poverty to develop yard economy and work to increase
income according to local conditions. Additionally, the Company will identify, intervene and assist
farmers who are at risk of returning to poverty as early as possible to firmly guard the bottom line of
preventing large-scale return to poverty.
E. Advocate the transformation of outmoded habits and customs and promote a new style of civilization.
The Company will enhance the promotion of the socialist core values and guide party members and
cadres in assisted villages to update their ideology and form a diligent, civilized and healthy lifestyle. In
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2022 Annual Report of Luzhou Laojiao Co., Ltd.
addition, the Company will cooperate with the assisted villages to continue to carry out activities rich in
rural culture, such as the Guozhuang Dance and equestrian to enrich the spiritual and cultural life of the
villagers and promote the transformation into a harmonious, aggressive and good society.
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2022 Annual Report of Luzhou Laojiao Co., Ltd.
Section VI Significant Events
1. Performance of undertakings
1.1. Undertakings of the Company's actual controller, shareholders, related parties
and acquirer, as well as the Company and other commitment makers fulfilled in
the reporting period or ongoing by the end of this reporting period
Applicable N/A
No such cases in the reporting period.
1.2. Where any earnings forecast was made for any of the Company's assets or
projects and the reporting period is still within the forecast period, the Company
shall explain whether the performance of the asset or project reaches the earnings
forecast and reasons
Applicable N/A
2. Occupation of the Company's fund by the controlling shareholder or
its related parties for non-operating purposes
Applicable N/A
No such cases in the reporting period.
3. Irregularities in the provision of guarantees
Applicable N/A
No such cases in the reporting period.
4. Explanation of the board of directors regarding the latest "non-
standard audit opinion"
Applicable N/A
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2022 Annual Report of Luzhou Laojiao Co., Ltd.
5. Explanation of the board of directors, the board of supervisors and
non-executive directors (if any) regarding the "non-standard audit
opinion" for the reporting period
Applicable N/A
6. Reason for changes in accounting policies and accounting estimates,
as well as correction of major accounting errors compared to the
financial report for the prior year
Applicable □ N/A
Approval
Content and reason for changes in accounting policies Remark
procedure
On 31 December 2021, the Ministry of Finance issued the Interpretation No.
These changes in
15 of the Accounting Standards for Business Enterprises (C.K. [2021] No.
accounting policies had
35), of which the “accounting treatment for the sale of products or by-
no material impact on
products produced by an enterprise before the fixed assets reach their N/A
the consolidated
intended useable state or during the research and development process”
financial statements of
and “judgment on loss-making contracts” were carried out by the Company
the Company.
from 1 January 2022.
On 30 November 2022, the Ministry of Finance issued the Interpretation No.
These changes in
16 of the Accounting Standards for Business Enterprises (C.K. [2022] No.
accounting policies had
31), of which the “accounting treatment of the income tax effects of dividends
no material impact on
on financial instruments classified as equity instruments by the issuer” and N/A
the consolidated
“accounting treatment of the revision of cash-settled share-based payment to
financial statements of
equity-settled share-based payment by an enterprise” were carried out by
the Company.
the Company from the date of publication.
7. Reason for changes in scope of the consolidated financial statements
compared to the financial report for the prior year
Applicable □ N/A
Subsidiaries that are newly incorporated into the scope of consolidation in this period
Name of subsidiary Reason
Luzhou Laojiao International Trade (Hainan) Co., Ltd. Incorporated through investment
Luzhou Laojiao Technology Innovation Co., Ltd. Incorporated through investment
Liquidation and cancellation for subsidiaries in this period
Name of subsidiary Reason
Luzhou Laojiao Bosheng Hengxiang Liquor Sales Co., Ltd. Liquidation and cancellation
Luzhou Laojiao Tourism Culture Co., Ltd. Liquidation and cancellation
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2022 Annual Report of Luzhou Laojiao Co., Ltd.
8. Engagement and disengagement of CPA firm
CPA firm at present
Name of the domestic CPA firm Sichuan Huaxin (Group) CPA Firm
The Company’s payment for the domestic CPA
98
firm (CNY 10,000)
Consecutive years of the audit service provided
24
by the domestic CPA firm
Names of the certified public accountants from
Li Wulin, Tang Fangmo, Fan Bo
the domestic CPA firm
Consecutive years of the audit service provided Li Wulin 3 years, Tang Fangmo 4 years, Fan Bo 1
by the certified public accountants year
Whether the CPAs firm was changed in the current period
Yes No
Engagement of any CPAs firm for internal control audit, financial advisor or sponsor
Applicable N/A
The Company appointed Sichuan Huaxin (Group) CPA Firm as the internal control auditor for this
year. The remuneration of audit in total paid by the Company was CNY 500 thousand.
9. Possibility of delisting after disclosure of this annual report
Applicable N/A
10. Bankruptcy and reorganization
Applicable N/A
No such cases in the reporting period.
11. Material litigation and arbitration
Applicable N/A
Amount Execution of
Whether it forms Progress in Trial results and
Profile of litigation involved in 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 filed a For the losses that The Company
lawsuit with ABC The second the Company applied to Hunan
Changsha Yingxin trial has cannot recover Province Higher
Branch over a deposit been through criminal People's Court See Section VI
dispute, and the case concluded, execution for enforcement 15 October “Other
has been completed 14,942.5 No procedures, 40% of the verdict.
and the case 2014 significant
in the first instance of is now at the shall be borne by Hunan Province events”
Hunan Province stage of ABC Changsha Higher People's
Higher People's Court enforcement. Yingxin Branch, Court ruled that
and the final trial of 20% shall be borne Hunan Changsha
the Supreme People's by ABC Changsha Intermediate
80
2022 Annual Report of Luzhou Laojiao Co., Ltd.
Court. The case is Hongxin Branch People’s Court
now at the stage of and the rest shall should see to the
enforcement. be borne by the execution of the
Company itself. verdict. Upon the
enforcement, the
banks have paid
part of the
compensations.
The banks have
paid part of the
compensations.
As there was a
dispute over the
ICBC Nanyang
verdict, the
Zhongzhou Branch,
Company applied
The Company filed a ICBC Nanyang
to Henan
lawsuit with ICBC Branch, and Sanya
Province Higher
Nanyang Zhongzhou Rural Commercial
People's Court
Branch over a deposit The second Bank Hongsha
for enforcement
dispute, and the case trial has Branch shall pay
of the verdict.
has been completed been compensations of See Section VI
Henan Province
in the first instance of concluded, CNY 75 million, 10 January “Other
15,000 No Higher People's
Henan Province and the case CNY 7.5 million 2015 significant
Court ruled that
Higher People's Court is now at the and CNY 6.105 events”
Nanyang
and the final trial of stage of million respectively
Intermediate
the Supreme People's enforcement. with the relevant
People’s Court
Court. The case is interest to the
should see to the
now at the stage of Company, and the
execution of the
enforcement. rest of the loss
verdict. The case
shall be borne by
is now at the
the Company itself.
stage of
enforcement by
Nanyang
Intermediate
People’s Court.
12. Punishments and rectifications
Applicable N/A
No such cases in the reporting period.
13. Credit conditions of the Company as well as its controlling
shareholder and actual controller
Applicable N/A
14. Significant related party transactions
14.1. Related party transactions arising from routine operation
Applicable N/A
No such cases in the reporting period.
14.2. Related party transactions regarding purchase or sales of assets or equity
interests
Applicable N/A
81
2022 Annual Report of Luzhou Laojiao Co., Ltd.
No such cases in the reporting period.
14.3. Related party transitions arising from joint investments in external parties
Applicable N/A
No such cases in the reporting period.
14.4. Credits and liabilities with related parties
Applicable N/A
No such cases in the reporting period.
14.5. Transactions with related finance companies
Applicable N/A
The Company did not make deposits in, receive loans or credit from and was not involved in any
other finance business with any related finance company or any of its related parties.
14.6. Transactions between finance companies controlled by the Company and
related parties
Applicable N/A
No related parties made deposits in, received loans or credit from or was involved in any other
finance business with any finance company controlled by the Company.
14.7. Other significant related party transactions
Applicable N/A
No such cases in the reporting period.
15. Significant contracts and their execution
15.1. Trusteeship, contracting and leasing
15.1.1. Trusteeship
Applicable N/A
No such cases in the reporting period.
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2022 Annual Report of Luzhou Laojiao Co., Ltd.
15.1.2. Contracting
Applicable N/A
No such cases in the reporting period.
15.1.3. Leasing
Applicable N/A
No such cases in the reporting period.
15.2. Major guarantees
Applicable N/A
No such cases in the reporting period.
15.3. Entrusted cash asset management
15.3.1. Entrusted assets management
Applicable N/A
Entrusted assets management during the reporting period
Unit: CNY 10,000
Impairment
Fund source for Amount of Overdue allowances for
Type entrusted assets entrusted assets Undue balance outstanding the overdue
management management amount outstanding
amount
Wealth
management Own funds 20,000 20,000 0 0
product of bank
Wealth
management
Own funds 100,000 60,000 0 0
product of
securities firm
Wealth
management
Own funds 40,000 30,000 0 0
product of trust
company
Others Own funds 20,000 0 0 0
Total 180,000 110,000 0 0
Particulars of high risk wealth management products with a significant single amount or low security
or poor liquidity
Applicable N/A
Expected inability to recover the principal of entrusted assets management or other circumstances
that may result in impairment
Applicable N/A
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2022 Annual Report of Luzhou Laojiao Co., Ltd.
15.3.2 Entrust loans
Applicable N/A
No such cases in the reporting period.
15.4. Other significant contracts
Applicable N/A
No such cases in the reporting period.
16. Other significant events
Applicable N/A
The Company disclosed in October 2014 and January 2015 respectively the contract disputes
involving three savings deposits of CNY 500 million in total with banks including ABC Changsha
Yingxin Branch and ICBC Nanyang Zhongzhou Branch. Upon criminal booty recovery, criminal and
civil enforcement, as of 31 December 2022, the Company had recovered a total amount of CNY 371
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 VII
Announcement of significant litigation progress part
6 June 2018 2018-17
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
Announcement of significant litigation progress part
7 November 2020 2020-34
XIII
Announcement of significant litigation progress part
6 July 2021 2021-30
XIV
84
2022 Annual Report of Luzhou Laojiao Co., Ltd.
15 December 2021 2021-57 Announcement of significant litigation progress part XV
Announcement of significant litigation progress part
30 December 2021 2021-64
XVI
Note: The Company shall disclose other significant events that occurred during the reporting period
as stipulated in the Securities Law and the Administrative Measures for Disclosure of Information by
Listed Companies, as well as matters that the Board of Directors of the Company judges to be
significant events. If the aforesaid significant events have been disclosed on the designated website
as current announcements, only the relevant search index of the designated website for information
disclosure and the date of disclosure need to be stated.
17. Significant events of subsidiaries
Applicable □ N/A
The Company invested in the technical upgrade program of intelligent brewing (Phase I) with the
wholly-owned subsidiary, Brewing Company, as the implementer. The total investment amount
approximated CNY 4,782.5090 million. The program has been approved at the First Extraordinary
General Meeting of Shareholders of 2022 on 16 August 2022. For further information, see
Announcement No. 2022-24 on the Implementation of Luzhou Laojiao Technical Upgrade Project of
Intelligent Brewing (Phase I) by Subsidiary.
85
2022 Annual Report of Luzhou Laojiao Co., Ltd.
Section VII Changes in Shares and Information about
Shareholders
1. Changes in shares
1.1 Changes in shares
Unit：Share
Before Changes in this year (＋，－) After
Capitaliz
Proportio Issuance of Bonus ation of
Number Other Subtotal Number Proportion
n new shares shares capital
reserves
I.
Restricted 247,921 0.02% 7,142,624 7,142,624 7,390,545 0.50%
shares
1. Shares
held by the
state
2. Shares
held by
state-
owned
corporatio
ns
3. Shares
held by
other 247,921 0.02% 7,142,624 7,142,624 7,390,545 0.50%
domestic
investors
Of which:
shares
held by
domestic
corporatio
ns
Shares
held by
domestic 247,921 0.02% 7,142,624 7,142,624 7,390,545 0.50%
individuals
4. Shares
held by
foreign
corporatio
ns
Of which:
shares
held by
foreign
corporatio
ns
Shares
held by
foreign
individuals
II. Non-
restricted 1,464,504,555 99.98% 0 1,464,504,555 99.50%
shares
1.CNY
common 1,464,504,555 99.98% 0 1,464,504,555 99.50%
shares
2.
Domestical
ly listed
foreign
shares
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2022 Annual Report of Luzhou Laojiao Co., Ltd.
3.
Overseas
listed
foreign
shares
4. Other
III. Total
shares 1,464,752,476 100.00% 7,142,624 7,142,624 1,471,895,100 100.00%
Reasons for the change in shares
Applicable □ N/A
A. On 29 December 2021, the Proposal on the Grant of Restricted Shares to Awardees was deliberated
and approved at the 12th Meeting of the 10th Board of Directors and the Sixth Meeting of the 10th
Supervisory Committee. As such, it was decided to grant the restricted shares to eligible awardees and
the grant was completed and registered on 21 February 2022. A total of 6,862,600 restricted shares
were granted to 437 awardees as registered, which were listed on 22 February 2022.
B. On 25 July 2022, the Proposal on the Grant of Reserved Restricted Shares to Awardees was
deliberated and approved at the 18th Meeting of the 10th Board of Directors and the Ninth Meeting of
the 10th Supervisory Committee, respectively. As such, it was decided to grant the restricted shares to
eligible awardees and the grant was completed and registered on 26 September 2022. A total of
342,334 restricted shares were granted to 46 awardees as registered, which were listed on 28
September 2022.
C. On 2 September 2022, the Proposal on the Repurchase and Retirement of Certain Restricted
Shares and the Adjustment of Repurchase Price was deliberated and approved at the 22nd Meeting of
the 10th Board of Directors and the 13th Meeting of the 10th Supervisory Committee. As such, the
Company decided to repurchase and retire the restricted shares held by awardees who were no longer
eligible which had been granted but not lifted from restricted sales. A total of 62,310 restricted shares
involving 7 awardees were repurchased and retired which was completed on 29 November 2022.
D. On 29 December 2022, the Proposal on the Grant of Reserved Restricted Shares to Awardees was
deliberated and approved at the 26th Meeting of the 10th Board of Directors and the 15th Meeting of
the 10th Supervisory Committee, respectively. As such, it was decided to grant the restricted shares to
eligible awardees and the grant was completed and registered on 16 February 2023. A total of 92,669
restricted shares were granted to 17 awardees as registered, which were listed on 17 February 2023.
Approval of share changes
Applicable □ N/A
A. On 29 December 2021, the Proposal on the Grant of Restricted Shares to Awardees was deliberated
and approved at the 12th Meeting of the 10th Board of Directors and the Sixth Meeting of the 10th
Supervisory Committee. As such, it was decided to grant the restricted shares to eligible awardees and
the grant was completed and registered on 21 February 2022. A total of 6,862,600 restricted shares
were granted to 437 awardees as registered, which were listed on 22 February 2022. Upon the
completion of this grant registration, the total share capital of the Company increased to 1,471,615,076
shares from 1,464,752,476.
B. On 25 July 2022, the Proposal on the Grant of Reserved Restricted Shares to Awardees was
deliberated and approved at the 18th Meeting of the 10th Board of Directors and the Ninth Meeting of
the 10th Supervisory Committee, respectively. As such, it was decided to grant the restricted shares to
eligible awardees and the grant was completed and registered on 26 September 2022. A total of
342,334 restricted shares were granted to 46 awardees as registered, which were listed on 28
September 2022. Upon the completion of this grant registration, the total share capital of the Company
increased to 1,471,957,410 shares from 1,471,615,076.
C. On 2 September 2022, the Proposal on the Repurchase and Retirement of Certain Restricted
Shares and the Adjustment of Repurchase Price was deliberated and approved at the 22nd Meeting of
the 10th Board of Directors and the 13th Meeting of the 10th Supervisory Committee. As such, the
87
2022 Annual Report of Luzhou Laojiao Co., Ltd.
Company decided to repurchase and retire the restricted shares held by awardees who were no longer
eligible which had been granted but not lifted from restricted sales. A total of 62,310 restricted shares
involving 7 awardees were repurchased and retired which was completed on 29 November 2022. Upon
the completion of this grant registration, the total share capital of the Company increased to
1,471,895,100 shares from 1,471,957,410.
D. On 29 December 2022, the Proposal on the Grant of Reserved Restricted Shares to Awardees was
deliberated and approved at the 26th Meeting of the 10th Board of Directors and the 15th Meeting of
the 10th Supervisory Committee, respectively. As such, it was decided to grant the restricted shares to
eligible awardees and the grant was completed and registered on 16 February 2023. A total of 92,669
restricted shares were granted to 17 awardees as registered, which were listed on 17 February 2023.
Upon the completion of this grant registration, the total share capital of the Company increased to
1,471,987,769 shares from 1,471,895,100.
Transfer of share ownership
Applicable N/A
Effects of changes in shares on the basic EPS, diluted EPS, net assets per share attributable to
common shareholders of the Company and other financial indexes over the last year and the last
reporting period
Applicable N/A
Other contents that the Company considers it necessary or required by the securities regulatory
authorities to disclose
Applicable N/A
1.2 Changes in restricted shares
Applicable □ N/A
Unit：Share
Number of
Number of
restricted Increase in Decrease in
restricted
shares held at restricted restricted
Name of shares held at Reason for Date of
the beginning shares during shares during
shareholder the end of the restriction unlocking
of the the reporting the reporting
reporting
reporting period period
period
period
In accordance
with the
relevant
provisions
governing
2021 Restricted
lifting the
Restricted shares for
0 7,142,624 0 7,142,624 restriction of
Share equity
the
Incentive Plan incentive
Company’s
2021
Restricted
Share
Incentive Plan
Total 0 7,142,624 0 7,142,624 -- --
88
2022 Annual Report of Luzhou Laojiao Co., Ltd.
2. Issuance and listing of securities
2.1 Securities (excluding preferred shares) issued in the reporting period
Applicable □ N/A
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
the
First grant
Completio
of 2021
22 CNY 22 n of the 21
Restricted
February 92.71/shar 6,862,600 February 6,862,600 Grant of February
Share
2022 e 2022 Restricted 2022
Incentive
Shares
Plan
disclosed
on
www.cninf
o.com.cn
Announce
ment No.
2022-54
on the
Completio
Grant of n of the
reserved Grant of
restricted Reserved
shares for 28 CNY 28 Restricted 26
2021 Septembe 89.466/sh 342,334 Septembe 342,334 Shares for Septembe
Restricted r 2022 are r 2022 2021 r 2022
Share Restricted
Incentive Share
Plan Incentive
Plan
disclosed
on
www.cninf
o.com.cn
Convertible corporate bonds, convertible corporate bonds with warrants, or corporate debt
Other derivative securities
Notes to the offering of securities during the reporting period
A. On 29 December 2021, the Proposal on the Grant of Restricted Shares to Awardees was deliberated
and approved at the 12th Meeting of the 10th Board of Directors and the Sixth Meeting of the 10th
Supervisory Committee. As such, it was decided to grant the restricted shares to eligible awardees and
the grant was completed and registered on 21 February 2022. A total of 6,862,600 restricted shares
89
2022 Annual Report of Luzhou Laojiao Co., Ltd.
were granted to 437 awardees as registered, which were listed on 22 February 2022. For details, see
the Announcement No. 2022-1 on the Completion of the Grant of Restricted Shares disclosed on
www.cninfo.com.cn.
B. On 25 July 2022, the Proposal on the Grant of Reserved Restricted Shares to Awardees was
deliberated and approved at the 18th Meeting of the 10th Board of Directors and the Ninth Meeting of
the 10th Supervisory Committee, respectively. As such, it was decided to grant the restricted shares to
eligible awardees and the grant was completed and registered on 26 September 2022. A total of
342,334 restricted shares were granted to 46 awardees as registered, which were listed on 28
September 2022. For details, see the Announcement No. 2022-54 on the Completion of the Grant of
Reserved Restricted Shares for 2021 Restricted Share Incentive Plan disclosed on www.cninfo.com.cn.
2.2 Changes in total shares of the Company and the shareholder structure, as well
as the asset and liability structure
Applicable □ N/A
During the Reporting Period, the total shares of the Company increased by 7,142,624 shares due to the
implementation of the 2021 Restricted Share Incentive Plan, among which, the grant, registration and
listing of 6,862,600 restricted shares for the first time and 342,334 reserved restricted shares were
completed on 22 February and 28 September 2022, respectively; and the repurchase and retirement of
62,310 restricted shares was completed on 29 November 2022.
2.3 Existing staff-held shares
□Applicable N/A
3. Shareholders and actual controller
3.1 Total number of shareholders and their shareholdings
Unit：Share
Total
Total number of
number of preferred
Total
common shareholder
number of
shareholder s with Total number of preferred
common
s at the prior resumed shareholders with resumed
shareholder
111,220 month-end 86,898 voting rights 0 voting rights by the end of 0
s at the end
before the by the end the reporting period (if
of the
disclosure of the any)(see Note 8)
reporting
date of the reporting
period
annual period (if
report any)(see
Note 8)
90
2022 Annual Report of Luzhou Laojiao Co., Ltd.
Shareholdings of shareholders with a shareholding percentage over 5% or the top 10 shareholders
Total shares Increase/de Pledged, marked or frozen
Number of Number of
Shareholdin held by the crease shares
Name of Nature of holding holding non-
g end of the during the
shareholder shareholder restricted restricted Status of Number of
percentage reporting reporting
shares shares shares shares
period period
Luzhou
Laojiao State-owned
Group Co., corporation 25.89% 381,088,389 0 0 381,088,389
Ltd.
Luzhou
XingLu
State-owned
Investment 24.86% 365,971,142 0 0 365,971,142
corporation
Group Co.,
Ltd.
Bank of
China Co.,
Ltd. – Baijiu
index
classification
securities Other 3.13% 46,076,226 -1,019,108 0 46,076,226
investment
fund by
China
Merchants
Fund
Hong Kong
Securities
Outbound
Clearing 3.10% 45,612,656 10,172,568 0 45,612,656
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 1.56% 22,930,000 -3,070,000 0 22,930,000
hybrid
securities
investment
fund by E
Fund
Industrial
and
Commercial
Bank of
China Co.,
Ltd.-Newly
growth Other 1.20% 17,673,777 -1,526,223 0 17,673,777
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.,
Ltd. -
Consumptio
n industry Other 0.72% 10,573,293 0 0 10,573,293
stock -
based
securities
investment
fund by E
91
2022 Annual Report of Luzhou Laojiao Co., Ltd.
Fund
China Life
Insurance
Company
Limited-
Tradition-
common Other 0.58% 8,594,014 / 0 8,594,014
insurance
product-
005L－
CT001 Shen
Strategic investors or
general corporations
become the top-ten
shareholders due to placing N/A
of new shares（if any）（see
note 3）
1. Luzhou Laojiao Group Co., Ltd. and Luzhou XingLu Investment Group Co., Ltd. are both holding state-
owned companies under the jurisdiction of SASAC of Luzhou. The two companies signed the agreement of
persons acting in concert on 31 December 2015. For details, please refer to the announcement of the
Company on 5 January 2016 - Announcement on the agreement of persons acting in concert signed by
Related parties or acting-in- shareholders. The announcement number is 2016-1 (http://www.cninfo.com.cn/). The two companies signed
concert the renewed agreement of persons acting in concert on 27 May 2021. For details, please refer to the
announcement of the Company on 29 May 2021 - Announcement on the renewed agreement of persons
acting in concert signed by shareholders. The announcement number is 2021-18 (http://www.cninfo.com.cn/).
2. In addition, whether there is an association between the remaining shareholders or they belong to persons
acting in concert is unknown.
Explain if any of the
shareholders above was
involved in entrusting/being
N/A
entrusted with voting rights
or waiving voting rights
Special account for
repurchased shares among
the top 10 shareholders (if N/A
any) (see note 10)
Shareholdings of the top 10 non-restricted shareholders
Type of shares
Name of shareholder Number of non-restricted shares held in by the end of the reporting period
Type Number
CNY
Luzhou Laojiao Group Co.,
381,088,389 common 381,088,389
Ltd.
shares
CNY
Luzhou XingLu Investment
365,971,142 common 365,971,142
Group Co., Ltd.
shares
Bank of China Co., Ltd. –
CNY
Baijiu index classification
46,076,226 common 46,076,226
securities investment fund
shares
by China Merchants Fund
CNY
Hong Kong Securities
45,612,656 common 45,612,656
Clearing Company Limited
shares
CNY
China Securities Finance
33,842,059 common 33,842,059
Corporation Limited
shares
Bank of China Co., Ltd.－
CNY
Blue chip selected hybrid common
securities investment fund 22,930,000 22,930,000
shares
by E Fund
Industrial and Commercial
Bank of China Co., Ltd.- CNY
Newly growth hybrid 17,673,777 common 17,673,777
securities investment fund shares
by Invesco Great Wall
CNY
Central Huijin Asset
13,539,862 common 13,539,862
Management Co., Ltd.
shares
Agricultural Bank of China CNY
Co., Ltd. - Consumption common
10,573,293 10,573,293
industry stock - based shares
securities investment fund
92
2022 Annual Report of Luzhou Laojiao Co., Ltd.
by E Fund
China Life Insurance
Company Limited-Tradition- CNY
8,594,014 common 8,594,014
common insurance product-
shares
005L－CT001 Shen
The statement of association
or acting-in-concert between
the top 10 shareholders of
unrestricted shares and
between the top 10 See the table above
shareholders of unrestricted
shares and top 10
shareholders
Top 10 common
shareholders participating in
securities margin trading (if N/A
any) (see note 4)
Did any of the top 10 common shareholders or the top non-restricted common shareholders of the
Company conduct any promissory repurchase during the reporting period.
□Yes No
The top 10 non-restricted common shareholders, the top10 common shareholders did not conduct any
promissory repurchase during the reporting period.
3.2 Controlling shareholder
Nature of controlling shareholder：Local state-owned
Type of controlling shareholder：Corporation
Legal
Name of controlling representative Date of
Credibility code Main business scope
shareholder /Company establishment
principal
General project: Social economy consulting
services; business management consulting;
financial consulting; business headquarters
management; import and export agency; trade
brokerage; crops planting services; trees
planting operation; elder care services; tourism
development project planning and consulting;
technical agency services; engineering and
technological research and experimental
development; display device manufacturing;
supply chain management services; technical
Luzhou Laojiao Group 21 December
Liu Miao 91510500723203346U services, technical development, technical
Co., Ltd. 2000
consulting, technical communication, technical
transfer, and technical promotion; domestic
freight transport agency; and equity fund-
invested asset management services. It shall
also include licensed projects (business
activities can be carried out legally and
independently with business license in addition
to projects that must be approved by law):
Agency bookkeeping; career intermediary
activities; food production; food sales; and
medical services. (business activities that
93
2022 Annual Report of Luzhou Laojiao Co., Ltd.
require approval in accordance with laws can
be carried out upon approval of relevant
authorities, and the specific business projects
shall be subject to the approval document or
license of relevant departments)
1. As of 30 June 2022, Laojiao Group holds 70,406,310 shares of Luzhou Xinglu Water (Group) Co., Ltd.
Shareholdings of the (02281.HK), accounting for 8.19% of the total issued shares.
controlling shareholder in 2. As of 30 September 2022, Laojiao Group holds 212,954,666 shares of Hongli Zhihui Group Co., Ltd.
other controlled or non- (300219.SZ) through its wholly-owned subsidiary, Sichuan Jinduo investment Co., Ltd., accounting for 30.08% of
controlled listed the total issued shares.
companies at home or 3. As of 30 September 2022, Laojiao Group holds 475,940,143 shares of Huaxi Securities Co., Ltd. (002926.SZ),
abroad during the accounting for 18.13% of the total issued shares.
reporting period 4. As of 31 December 2022, Laojiao Group holds 390,528,000 shares of Luzhou Bank (01983.HK), accounting
for 14.37% of the total issued shares.
Change of the controlling shareholder during the reporting period
□Applicable N/A
No such cases in the reporting period
3.3 Actual controller and its persons acting in concert
Nature of actual controller：Local State-owned Assets Supervision and Administration Commission
Type of actual controller：Corporation
Legal
Name of actual controller representative/Company Date of establishment Credibility code Main business scope
principal
State-owned assets
supervision and
SASAC of Luzhou Du Lei 1 March 2005 11510400771686813T
administration
department
1. As of 30 June 2022, XingLu Group, a controlled subsidiary of SASAC of Luzhou, holds 511,654,127 shares of
Luzhou Xinglu Water (Group) Co., Ltd. (02281.HK), accounting for 59.51% of the total issued shares. Luzhou
Infrastructure Construction Investment Co., Ltd., a holding subsidiary of XingLu Group, holds 62,709,563 shares
of Luzhou Xinglu Water (Group) Co., Ltd. (02281.HK), and accounting for 7.29% of the total issued shares.
Laojiao Group, a controlled subsidiary under SASAC of Luzhou, holds 70,406,310 shares of Luzhou Xinglu
Water (Group) Co., Ltd. (02281.HK), accounting for 8.19% of the total issued shares.
2. As of 30 September 2022, Laojiao Group holds 212,954,666 shares of Hongli Zhihui Group Co., Ltd.
Share holdings of the
(300219.SZ) through its controlled subsidiary, Sichuan Jinduo investment Co., Ltd., accounting for 30.08% of the
controlling shareholder in
total shares issued.
other controlled or non-
3. As of 30 September 2022, Luzhou Industrial Investment Group Co., Ltd., a holding Company under the
controlled listed
jurisdiction of SASAC of Luzhou, holds 193,464,610 shares of Sichuan Lutianhua Company Limited
companies at home or
(000912.SZ), accounting for 12.34% of the total shares issued. Lutianhua Group Company Limited, a wholly-
abroad during the
owned subsidiary of Luzhou Industrial Investment Group Co., Ltd., holds 221,458,993 shares of Sichuan
reporting period.
Lutianhua Company Limited (000912.SZ), and accounting for 13.49% of the total issued shares.
4. As of 30 September 2021, Laojiao Group, a controlled subsidiary under SASAC of Luzhou, holds 475,940,143
shares of Huaxi Securities Co., Ltd. (002926.SZ), accounting for 18.13% of the total issued shares.
5. As of 31 December 2022, Laojiao Group, a controlled subsidiary under SASAC of Luzhou, holds 325,440,000
shares of Luzhou Bank (01983.HK), accounting for 14.37% of the total issued shares. XingLu Group, a
controlled subsidiary under SASAC of Luzhou, holds 40,549,462 shares of Luzhou Bank (01983.HK), accounting
for 1.79% of the total issued shares.
Change of the actual controller during the reporting period
□Applicable N/A
The actual controller of the Company has not changed during the reporting period.
Ownership and control relations between the actual controller and the Company
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2022 Annual Report of Luzhou Laojiao Co., Ltd.
The actual controller control the company through a trust or other ways of assets management
□Applicable N/A
3.4 Number of accumulative pledged shares held by the company’s controlling
shareholder or the largest shareholder as well as its acting-in-concert parties
accounts for 80% of all shares of the company held by them
□Applicable N/A
3.5 Other corporate shareholders with a shareholding proportion over 10%
Applicable □ N/A
Legal
Name of
representat Date of Registered
corporate Main business scope
ive/Compa establishment capital (CNY)
shareholder
ny principal
Investment and asset management; project
management services; self-finance real estate
business activities; investment advisory
Luzhou XingLu services and financial advisory services
28 January
Investment Group Dai Zhiwei 4,934,049,244 (excluding such financial activities as illegal
2003
Co., Ltd. capital raising and collecting public funds)
(business activities that require approval in
accordance with laws can be carried out upon
approval of relevant authorities)
95
2022 Annual Report of Luzhou Laojiao Co., Ltd.
3.6 Limits on reduction of the Company’s shares held by its controlling shareholder,
actual controller, restructuring party and other commitment entities.
□Applicable N/A
4. Specific implementation of share repurchase during the reporting
period
Implementation progress of shares repurchases
□Applicable N/A
Implementation progress of share buyback reduction through centralized bidding
□Applicable N/A
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2022 Annual 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 Annual Report of Luzhou Laojiao Co., Ltd.
Section IX Information about Bond
Applicable N/A
1. Enterprise bonds
Applicable N/A
No such cases in the reporting period.
2. Corporate bonds
Applicable N/A
2.1. Basic information about the corporate bond
Unit: CNY
Way of
Issue Value Bond Interest Place of
Name Abbr. Code Due date redempti
date date balance rate trading
on
2019
Public
Offering
of
Corporat
Fully
e Bond Shenzhe
27 28 28 redeeme
of 19 Lao 112959. 2,500,00 n Stock
August August August 3.58% d on 29
Luzhou Jiao 01 SZ 0,000.00 Exchang
2019 2019 2022 August
Laojiao e
2022
Co., Ltd.
for
Qualified
Investors
(Phase I)
In terms
of the
2020 bonds of
Public this
Offering phase,
of interests
Corporat will be
e Bond paid by Shenzhe
16 17 17
of 20 Lao 149062. 1,500,00 year and n Stock
March March March 3.50%
Luzhou Jiao 01 SZ 0,000.00 the Exchang
2020 2023 2025
Laojiao principal e
Co., Ltd. will be
for repaid in
Qualified lump
Investors sum at
(Phase I) maturity.
The
interests
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2022 Annual Report of Luzhou Laojiao Co., Ltd.
will be
paid
once
every
year and
the
interests
for the
last
installme
nt will be
paid
together
with the
principal.
In terms
of the
bonds of
this
phase,
interests
will be
paid by
year and
2022 the
Public principal
Offering will be
of repaid in
Corporat lump
e Bond sum at
Shenzhe
of 2 2 2 maturity.
22 Lao 148133. 1,500,00 n Stock
Luzhou Decemb Decemb Decemb 2.85% The
Jiao 01 SZ 0,000.00 Exchang
Laojiao er 2022 er 2022 er 2025 interests
e
Co., Ltd. will be
for paid
Professi once
onal every
Investors year and
(Phase I) the
interests
for the
last
installme
nt will be
paid
together
with the
principal.
The bonds are applicable to eligible investors who have qualified securities
accounts with Shenzhen Branch of China Securities Depository and Clearing Co.,
Ltd., are permitted to engage in the subscription and transfer of corporate bonds
in accordance with the Management Measures for the Issue and Transaction
Appropriate arrangement of the
Management of Corporate Bonds, Management Measures for the Suitability of
investors (if any)
Securities and Futures Investors, Management Measures of Shenzhen Stock
Exchange for the Suitability of Securities Market Investors, and relevant laws and
regulations, and have the corresponding risk identification and bearing capacity
(excluding those prohibited by laws and regulations)
Trading systems applicable Tradable by way of bidding, offering, inquiry and agreement
Risk of termination of listing and
trading (if any) and N/A
countermeasures
Overdue bonds
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2022 Annual Report of Luzhou Laojiao Co., Ltd.
□Applicable N/A
2.2. Triggering and execution of issuer or investor option clauses and investor
protection clauses
□Applicable N/A
2.3. Information about the intermediaries
Signature Contact person
Bond Intermediary Office address Contact number
accountant of intermediary
2019 Public
Offering of
Corporate Bond
of Luzhou
Laojiao Co., Ltd.
for Qualified
Investors (Phase
I)/ 2020 Public
33rd Floor, China
Offering of
China World Office 2,
Corporate Bond
International No. 1
of Luzhou
Capital Jianguomenwai N/A Qi Qin (010)65051166
Laojiao Co., Ltd.
Corporation Avenue,
for Qualified
Limited. Chaoyang
Investors (Phase
District, Beijing
I)/ 2022 Public
Offering of
Corporate Bond
of Luzhou
Laojiao Co., Ltd.
for Professional
Investors (Phase
I)
2019 Public
Offering of
Corporate Bond
of Luzhou
Laojiao Co., Ltd.
for Qualified
Investors (Phase
I)/ 2020 Public Building 6,
Offering of Galaxy SOHO,
Corporate Bond China Chengxin No.2 Nanzhugan
of Luzhou International hutong,
N/A Sun Shu (010)66428877
Laojiao Co., Ltd. Credit Rating Chaoyangmenne
for Qualified Co., Ltd. i Avenue,
Investors (Phase Dongcheng
I) / 2022 Public District, Beijing
Offering of
Corporate Bond
of Luzhou
Laojiao Co., Ltd.
for Professional
Investors (Phase
I)
Indicate by tick mark whether above intermediaries changed in the reporting period
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2022 Annual Report of Luzhou Laojiao Co., Ltd.
□Yes No
2.4. List of the usage of the raised funds
Unit: CNY
Whether is
consistent
Rectificat
with the
ion of
usage, using
raised
Total Amount Unused Operation of special account plan and
Bonds funds for
amount spent amount for raised funds (if any) other
violation
agreements
operation
stipulated in
(if any)
the raising
specification
Fully redeemed in August
2022. The company has set
up a special account to
deposit the funds raised and
has signed a fund account
supervision agreement to
clarify it. The special account
for fund raising was
operating normally during the
Reporting Period. (1)
Account name: Luzhou
2019 Public Laojiao Co., Ltd.; Opening
Offering of bank: Guangfa Bank Co.,
Corporate Ltd., Chengdu Branch; Bank
Bond of account:
Luzhou 2,500,000,0 2,530,818,42 9550880046723000135. (2)
0.00 N/A Yes
Laojiao Co., 00.00 3.111 Account name: Luzhou
Ltd. for Laojiao Co., Ltd.; Opening
Qualified bank: Bank of
Investors Communications Co., Ltd.,
(Phase I) Luzhou Branch; Bank
account:
517517460013000000860.
(3) Account name: Luzhou
Laojiao Co., Ltd.; Opening
bank: China Merchants Bank
Co., Ltd., Chengdu Fucheng
Avenue Sub-branch; Bank
account: 028900140410888.
(The bonds have been fully
redeemed on 29 August
2022)
The company has set up a
special account to deposit
2020 Public the funds raised and has
Offering of signed a fund account
Corporate supervision agreement to
Bond of clarify it. The special account
Luzhou 1,500,000,0 861,042,216. 714,356, for fund raising was
Laojiao Co., operating normally during the N/A Yes
00.00 81 703.50
Ltd. for Reporting Period. (1)
Qualified Account name: Luzhou
Investors Laojiao Co., Ltd.; Opening
(Phase I) bank: Guangfa Bank Co.,
Ltd., Chengdu Branch; Bank
account:
9550880046723000135. (2)
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2022 Annual Report of Luzhou Laojiao Co., Ltd.
Account name: Luzhou
Laojiao Co., Ltd.; Opening
bank: Bank of
Communications Co., Ltd.,
Luzhou Branch; Bank
account:
517517460013000000860.
(3) Account name: Luzhou
Laojiao Co., Ltd.; Opening
bank: China Minsheng Bank
Co., Ltd., Chengdu Branch;
Bank account: 631395395.
2022 Public
Offering of
Corporate Luzhou Laojiao Co., Ltd.;
Bond of Opening bank: China
Luzhou 1,500,000,0 1,498,800,00 Merchants Bank Co., Ltd.,
0.00 N/A Yes
Laojiao Co., 00.00 0.002 Chengdu Fucheng Avenue
Ltd. for Sub-branch; Bank account:
Professional 028900140410888.
Investors
(Phase I)
Note 1: Including accumulated interest income of CNY 40,825,632.44, net of issue costs of CNY
10,000,000 and accumulated handling expenses of CNY 7,209.33.
Note 2: Deducted the issue costs of CNY 1,200,000.
The raised funds were used for project construction
Applicable □ N/A
The Company raised a fund of CNY 4.0 billion through the issue of corporate bonds respectively on 27
August 2019 and 16 March 2020. After deduction of the issue fees, the balance amount was set to use
in the technical renovation project of brewing (Phase II), Project of Intelligent Upgrading and Building of
the Information Management System, Project of Acquiring Sealing Equipment for the Cellar of Huangyi
Brewing Base and Project of Acquiring Accessory Equipment for Leaven Making for Huangyi Brewing
Base. As of 31 December 2022, CNY 3,391,860,600 of the fund-raising through the issue of corporate
bonds had been used.
The Company changed the usage of above funds raised from bonds during the reporting period.
□Applicable N/A
2.5. Changes in credit ratings in the reporting period
□Applicable N/A
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2022 Annual Report of Luzhou Laojiao Co., Ltd.
2.6. Execution and changes with respect to guarantees, repayment plans and other
repayment-ensuring measures in the reporting period, as well as the impact on the
interests of bond holders
□Applicable N/A
3. Debt instruments as a non-financial enterprise
□Applicable N/A
No such cases in the reporting period.
4. Convertible corporate bonds
□Applicable N/A
No such cases in the reporting period.
5. Consolidated loss of the reporting period over 10% of net assets as at
the end of last year
□Applicable N/A
6. Matured interest-bearing debt excluding bonds up the period-end
□Applicable N/A
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2022 Annual Report of Luzhou Laojiao Co., Ltd.
7. Whether there was any violation of rules and regulations during the
reporting period
□Yes No
8. The major accounting data and the financial indicators of the recent 2
years of the company as of the end of the reporting period
Unit：CNY 10,000
Item 31 December 2022 31 December 2021 Change
Current ratio 3.15 2.43 29.63%
Debt/asset ratio 33.19% 34.89% -1.70%
Quick ratio 2.20 1.74 26.44%
2022 2021 Change
Net profits before non-
1,032,148.12 788,438.41 30.91%
recurring gains and losses
EBITDA/debt ratio 235.37% 277.43% -42.06%
Interest cover (times) 61.28 49.41 24.02%
EBITDA-to-interest cover
64.08 52.01 23.21%
(times)
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2022 Annual Report of Luzhou Laojiao Co., Ltd.
Section X Financial Report
1. Auditor’s report
Type of audit report Standard without reserved opinion
Signing date of auditor’s report 28 April 2023
Name of Audit Sichuan Huaxin (Group) CPA Firm
No. of auditor’s report Chuan Huaxin Audit [2023] No. 0042
Names of auditors Li Wulin, Tang Fangmo, Fan Bo
Auditor’s Report
To the shareholders of Luzhou Laojiao Co., Ltd.:
Opinion
We have audited the financial statements of Luzhou Laojiao Co., Ltd. (hereinafter referred to as the
“Company”), which comprise the consolidated balance sheet and balance sheet as at 31 December
2022, consolidated income statement and income statement, consolidated cash flow statement and
cash flow statement, consolidated statement of changes in owners' equity and statement of changes in
owners' equity for the year then ended; and notes to the financial statements.
In our opinion, the attached financial statements are prepared, in all material respects, in accordance
with Accounting Standards for Business Enterprises and present fairly the financial position of the
company as at 31 December 2022 and its operating results and cash flow for the year then ended.
Basis for opinion
We conducted our audit in accordance with China Standards on Auditing (“CSAs”) for Certified Public
Accountants. Our responsibilities under those standards are further described in the Auditor's
Responsibilities for the Audit of the Financial Statements section of our report. We are independent of
the Company in accordance with the Code of professional ethics for Certified Public Accountants in
China (“the Code”), and we have fulfilled our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Key audit matters
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2022 Annual Report of Luzhou Laojiao Co., Ltd.
Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the consolidated financial statements of the current period. These matters were addressed in
the context of our audit of the consolidated financial statements as a whole and, in forming our opinion
thereon, and we do not provide a separate opinion on these matters. Key audit matters identified in our
audit are summarized as follows:
1. Key audit matters-Recognition of domestic baijiu sales revenue
Key audit matters How our audit addressed the Key Audit Matter
Our procedures in relation to recognition of domestic
baijiu sales revenue included:
1. Understood, evaluated and tested the
reasonableness and effectiveness of the internal
control design related to the Company's revenue.
Particular attention was paid to the appropriateness of
specific conditions for recognition of revenue.
2. Compared the key indicators such as sales volume,
unit price of sales and gross profit rate of the Company
in the current period with those in the previous period,
so as to identify the rationality of changes in key
indicators and reasons for changes.
3. The income of the top five customers accounted for
67.09% of the total business income. For main
customers, we carried out the following audit
procedures to verify the occurrence, completeness and
accuracy of the revenue recognized by the
management:
(1) Obtained the sales contract signed by the
Company and the customer, carefully read the key
As shown in Note 5.36 in the Financial Statements, terms of the contract, and understand the
the domestic baijiu sales revenue in the Company implementation of the contract;
is CNY 24,613,436,200, accounting for 99.38% of (2) Performed the confirmation procedure. We sent
the primary business revenue of CNY confirmation letters to verify the amount of sales
24,766,122,000. It is the main source of the revenue in the reporting period and the closing
Company's operating profit. For the operating balance of accounts receivables or contract liabilities
revenue is one of the key results indicators and the during the reporting period. For local customers in
inherent risk of its misstatement is relatively high, Luzhou, we went to their office to carry out
therefore, we identified the recognition of domestic confirmation procedure and obtained the situation of
baijiu sales revenue as a key audit matter. purchase, sales and storage of Luzhou Laojiao brand
baijiu during the reporting period, so as to analyze and
judge whether there are abnormal fluctuations in its
inventory and its rationality; For customers outside
Luzhou, we mailed confirmation letters and controlled
the whole process of reply letter by ourselves.
(3) Inquired the customer's business information and
key personnel information, and checked whether they
are related party of the Company.
4. For other customers, randomly checked sales
contracts, customers' purchase orders, shipping
documents, transport documents, accounting
vouchers, payment receipts, customer signature
records and other materials to verify the occurrence,
completeness and accuracy of the revenue recognized
by the management.
5. Selected the confirmation voucher of large amount
of sales before and after the balance sheet date, paid
attention to the date of sales invoice and customer
receipt, and paid attention to whether there is a large
amount of return after the period, so as to verify
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2022 Annual Report of Luzhou Laojiao Co., Ltd.
whether the corresponding revenue is included in the
appropriate accounting period.
The evidence obtained from the above audit
procedures can support the Company's management's
recognition of domestic baijiu sales revenue.
2. Key audit matters-Existence of bank deposits
Key audit matters How our audit addressed the Key Audit Matter
Our procedures in relation to existence of bank
deposits included:
1. Understood and tested the design and
implementation of key internal controls related to the
funds management cycle to confirm the effectiveness
of relevant internal controls.
2. Accompanied by relevant personnel of the
Company, auditors went to the bank by themselves
where the Company opens a basic bank account to
print the account opening list of the Company and
check the account opening information individually.
3. Checked the carrying amount of all bank accounts
with the original amount of bank statements and
certificates of deposit, and obtained all copies.
4. Based on the results of checking the amount of
bank statements, obtained the balance reconciliation
As shown in Note 5.1 in the Financial Statements, of all bank accounts compiled by the Company, and
as of 31 December 2022, the bank balance of the check all the outstanding items, whether there are any
Company is CNY 17,729,643,100, accounting for important overdue items that are not booked in time.
34.50% of the total assets. Bank deposits are high- 5. Implemented the confirmation procedure for the
risk assets. Therefore, we identified the existence Company's bank deposits, the confirmation letters
of bank deposits as a key audit matter. were sent out by mailing after auditors checked the
address and the receiver through telephone, network
and other public information, and we controlled the
whole reply letter process by ourselves.
6. Obtained and reviewed time deposits or structured
deposit agreements, identified the types of relevant
bank deposits, analyzed the principal and interest
recovery risks, and judged the adequacy of the
disclosure.
7. Inquired the management and relevant personnel
about the purpose of all bank accounts on the
Company's books and analyzed whether there are
abnormal use or bank accounts opened for unknown
reasons.
The evidence obtained from the above audit
procedures can support the Company's management's
assertion of the existence of bank deposits.
Other information
The directors of the Company are responsible for the other information. The other information
comprises the information included in the annual report, but does not include the financial statements
and our auditor’s report thereon.
Our opinion on the financial statements does not cover the other information and we do not express any
form of assurance conclusion thereon.
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2022 Annual Report of Luzhou Laojiao Co., Ltd.
In connection with our audit of the financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with the
financial statements or our knowledge obtained in the audit or otherwise appears to be materially
misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of directors and those charged with governance for the financial statements
The directors of the Company are responsible for the preparation of the financial statements that give a
true and fair view in accordance with the disclosure requirements of Accounting Standards for Business
Enterprises, and designing, implementing and maintaining internal control that is necessary to ensure
the financial statements are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Company’s ability
to continue as a going concern, disclosing, as applicable, matters related to going concern and using
the going concern basis of accounting unless the directors either intend to liquidate the Company or to
cease operations, or have no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company’s financial reporting
process.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with CSAs will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements.
As part of an audit in accordance with CSAs, we exercise professional judgment and maintain
professional skepticism throughout the audit. We also:
(1) Identify and assess the risks of material misstatement of the financial statements, whether due to
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2022 Annual Report of Luzhou Laojiao Co., Ltd.
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a
material misstatement resulting from fraud is higher than for one resulting from error, as fraud may
involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
(2) Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Company’s internal control.
(3) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
(4) Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If
we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report
to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify
our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s
report. However, future events or conditions may cause the Company to cease to continue as a going
concern.
(5) Evaluate the overall presentation, structure and content of the financial statements, and whether the
financial statements represent the underlying transactions and events in a manner that achieves fair
presentation.
(6) Obtain sufficient and appropriate audit evidence regarding the financial information of the entities or
business activities within the Company to express an opinion on the financial statements. We are
responsible for the direction, supervision and performance of the group audit. We remain solely
responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.
We also provide the governance with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
From the matters communicated with the governance, we determine those matters that were of most
significance in the audit of the consolidated financial statements of the current period and are therefore
the key audit matters. We describe these matters in our auditor’s report unless law or regulation
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2022 Annual Report of Luzhou Laojiao Co., Ltd.
precludes public disclosure about the matter or when, in extremely rare circumstances, we determine
that a matter should not be communicated in our report because the adverse consequences of doing so
would reasonably be expected to outweigh the public interest benefits of such communication.
Sichuan Huaxin (Group) CPA Firm Chinese CPA: Li Wulin
(Engagement Partner)
ChengduChina Chinese CPA: Tang Fangmo
Chinese CPA: Fan Bo
28 April 2023
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2022 Annual Report of Luzhou Laojiao Co., Ltd.
2. Financial statements
Monetary unit for the financial statements and the notes thereto: CNY
Prepared by: Luzhou Laojiao Co., Ltd.
Consolidated balance sheet
As at 31 December 2022
Monetary Unit: CNY
Item Balance as at 31 December 2022 Balance as at 1 January 2022
Current assets:
Cash and cash equivalents 17,757,528,211.25 13,513,494,580.56
Settlement reserves
Lending funds
Held-for-trading financial assets 1,073,466,780.37 706,352,241.79
Derivative financial assets
Notes receivables
Accounts receivables 5,939,420.78 1,628,248.55
Accounts receivables financing 4,583,352,503.37 4,757,631,778.64
Prepayment 114,257,506.26 178,087,688.81
Premiums receivable
Reinsurance accounts receivable
Reinsurance contract reserve
Other receivables 23,396,533.98 28,615,361.96
Including：Interests receivable
Dividends receivable
Buying back the sale of financial
assets
Inventories 9,840,742,374.85 7,277,573,166.80
Contract assets
Assets held for sale
Non-current assets due within one
year
Other current assets 153,035,946.94 111,974,532.91
Total current assets 33,551,719,277.80 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
Long-term equity investments 2,667,500,553.17 2,626,744,236.25
Investments in other equity
1,136,736,978.11 363,312,120.43
instruments
Other non-current financial assets
Investment property 39,149,454.22
Fixed assets 8,856,258,598.78 8,089,487,274.39
Construction in progress 808,919,047.21 1,259,845,487.50
Productive biological assets
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2022 Annual Report of Luzhou Laojiao Co., Ltd.
Oil and gas assets
Use right assets 39,952,525.63 52,714,810.04
Intangible assets 3,083,271,852.79 2,606,359,188.72
Development expenses
Goodwill
Long-term deferred expenses 710,010.92 1,463,869.21
Deferred tax assets 1,005,167,353.80 986,112,983.42
Other non-current assets 196,095,702.09 650,384,435.70
Total non-current assets 17,833,762,076.72 16,636,424,405.66
Total assets 51,385,481,354.52 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 2,311,665,585.04 2,420,354,469.53
Advance from customer
Contract liabilities 2,566,374,718.76 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 675,034,885.31 648,103,740.96
Taxes payable 3,481,150,728.98 3,173,479,627.79
Other payable 1,202,409,278.49 652,393,292.60
Including：Interests payable
Dividends payable 16,594,850.58
Handling charges and commissions
payable
Reinsurance accounts payable
Liabilities held for sale
Non-current liabilities due within one
81,879,466.63 86,202,215.03
year
Other current liabilities 333,627,225.47 456,314,391.17
Total current liabilities 10,652,141,888.68 10,946,958,438.33
Non-current liabilities:
Insurance contract reserves
Long-term loans 3,179,600,000.00
Bonds payable 2,996,099,571.86 3,990,785,742.23
Including：Preferred shares
Perpetual bonds
Lease liabilities 29,096,969.66 40,667,668.08
Long-term payables
Long-term payroll payables
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2022 Annual Report of Luzhou Laojiao Co., Ltd.
Accrued liabilities
Deferred income 33,704,323.80 28,531,014.28
Deferred tax liabilities 166,043,663.88 67,578,019.93
Other non-current liabilities
Total non-current liabilities 6,404,544,529.20 4,127,562,444.52
Total liabilities 17,056,686,417.88 15,074,520,882.85
Owners' equity
Share capital 1,471,895,100.00 1,464,752,476.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserves 4,800,154,468.99 3,755,354,665.73
Less: treasury stock 639,021,998.78
Other comprehensive income 330,751,245.84 167,527,152.32
Special reserves
Surplus reserves 1,471,895,100.00 1,464,752,476.00
General risk reserve
Undistributed profits 26,772,197,213.98 21,187,860,235.89
Total equity attributable to owners of
34,207,871,130.03 28,040,247,005.94
the parent company
Non-controlling interests 120,923,806.61 97,014,116.89
Total owners' equity 34,328,794,936.64 28,137,261,122.83
Total liabilities and owners' equity 51,385,481,354.52 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 31 December 2022
Monetary Unit: CNY
Item Balance as at 31 December 2022 Balance as at 1 January 2022
Current assets:
Cash and cash equivalents 17,009,231,873.64 13,038,549,397.55
Held-for-trading financial assets 974,505,894.18 706,352,241.79
Derivative financial assets
Notes receivables
Accounts receivables 47,500.00 1,207,477.63
Accounts receivables financing
Prepayment 2,141,256.01 1,464,893.09
Other receivables 12,042,401,844.84 10,033,554,898.57
Including：Interests receivable
Dividends receivable
Inventories 2,499,333.08 3,918,211.13
Contract assets
Assets held for sale
113
2022 Annual Report of Luzhou Laojiao Co., Ltd.
Non-current assets due within one
year
Other current assets 34,163.66
Total current assets 30,030,861,865.41 23,785,047,119.76
Non-current assets:
Investments in debt obligations
Investments in other debt obligations
Long-term receivables
Long-term equity investments 6,278,966,093.87 6,051,400,833.91
Investments in other equity
1,136,433,056.48 362,983,198.80
instruments
Other non-current financial assets
Investment property 39,149,454.22
Fixed assets 1,021,509,077.72 1,087,640,695.62
Construction in progress 49,136,390.14 53,881,812.48
Productive biological assets
Oil and gas assets
Use right assets 600,190.05 573,800.02
Intangible assets 617,211,243.56 671,147,243.40
Development expenses
Goodwill
Long-term deferred expenses 548,507.41 1,364,659.65
Deferred tax assets 147,351,049.81 91,734,925.57
Other non-current assets 14,808,459.12 500,600.00
Total non-current assets 9,305,713,522.38 8,321,227,769.45
Total assets 39,336,575,387.79 32,106,274,889.21
Current liabilities:
Short-term loans
Held-for-trading financial liabilities
Derivative financial liabilities
Notes payable
Accounts payable 51,174,790.68 83,724,151.54
Advance from customer
Contract liabilities 1,510,508.26 2,523,947.74
Employee benefits payable 241,471,148.70 234,008,858.96
Taxes payable 381,259,266.93 285,894,625.64
Other payables 1,730,335,596.91 1,659,106,919.10
Including：Interests payable
Dividends payable
Liabilities held for sale
Non-current liabilities due within one
67,673,936.27 72,625,138.08
year
Other current liabilities 196,366.07 328,113.21
Total current liabilities 2,473,621,613.82 2,338,211,754.27
Non-current liabilities:
Long-term loans 3,179,600,000.00
Bonds payable 2,996,099,571.86 3,990,785,742.23
114
2022 Annual Report of Luzhou Laojiao Co., Ltd.
Including：Preferred shares
Perpetual bonds
Lease liabilities 203,920.20 163,523.64
Long-term payables
Long-term payroll payables
Accrued liabilities
Deferred income
Deferred tax liabilities 132,565,131.74 67,578,019.93
Other non-current liabilities
Total non-current liabilities 6,308,468,623.80 4,058,527,285.80
Total liabilities 8,782,090,237.62 6,396,739,040.07
Owners' equity
Share capital 1,471,895,100.00 1,464,752,476.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserves 4,789,603,151.65 3,739,666,108.27
Less: treasury stock 639,021,998.78
Other comprehensive income 328,542,995.36 167,572,013.86
Special reserves
Surplus reserves 1,471,895,100.00 1,464,752,476.00
Undistributed profits 23,131,570,801.94 18,872,792,775.01
Total owners' equity 30,554,485,150.17 25,709,535,849.14
Total liabilities and owners' equity 39,336,575,387.79 32,106,274,889.21
Consolidated income statement
Monetary Unit: CNY
Item Year 2022 Year 2021
1. Total operating revenue 25,123,563,271.62 20,642,261,724.37
Including: Operating revenue 25,123,563,271.62 20,642,261,724.37
Interest income
Earned premium
Fee and commission
income
2. Total operating costs 11,424,541,543.84 10,393,487,334.14
Including: Cost of sales 3,369,528,394.02 2,952,431,488.31
Interest expense
Handling charges and
commission expenses
Refunded premiums
Net payments for
insurance claims
Net provision for
insurance contracts
Bond insurance expense
115
2022 Annual Report of Luzhou Laojiao Co., Ltd.
Reinsurance Expenses
Taxes and surcharges 3,523,948,287.48 2,864,901,542.85
Selling and distribution
3,448,771,046.02 3,599,211,604.56
expenses
General and administrative
1,162,422,257.23 1,056,116,367.85
expenses
Research and
206,248,486.57 137,712,329.78
Development expenses
Financial expenses -286,376,927.48 -216,885,999.21
Including：Interest
229,673,136.36 195,125,786.35
expenses
Interest income 505,746,664.32 419,897,541.04
Plus: Other income 36,524,317.09 52,319,231.39
Investment income ("-" for
104,715,915.31 202,205,718.92
losses)
Including: income from
investment in associates and joint 84,626,608.53 195,543,058.40
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
-12,023,622.50 6,352,241.79
values(“-“ for losses)
Credit impairment losses (“-”
-1,165,718.34 81,126,114.88
for losses)
Impairment losses(“-“ for
losses)
Gains from disposal of
19,805,093.70 -347,429.88
assets("-" for losses)
3. Operating profits ("-" for losses) 13,846,877,713.04 10,590,430,267.33
Plus: non-operating income 27,833,420.31 27,246,707.88
Less: non-operating expenses 19,959,493.06 66,717,487.09
4. Total profits before tax ("-" for
total losses) 13,854,751,640.29 10,550,959,488.12
Less: income tax expenses 3,444,162,535.86 2,613,697,101.19
5. Net profit ("-" for net loss) 10,410,589,104.43 7,937,262,386.93
5.1 By operating continuity
5.1.1 Net profit from continuing
10,410,589,104.43 7,937,262,386.93
operation ("-" for losses)
5.1.2 Net profit from discontinued
operation ("-" for losses)
5.2 By ownership
1) Attributable to shareholders of the
10,365,383,281.80 7,955,554,351.73
parent company
2) Attributable to non-controlling
45,205,822.63 -18,291,964.80
interests
6. Net of tax from other
comprehensive income 165,065,173.42 -19,081,558.37
116
2022 Annual Report of Luzhou Laojiao Co., Ltd.
Net of tax from other comprehensive
income to the owner of the parent 163,224,093.52 -18,536,172.71
company
6.1 Other comprehensive income
cannot reclassified into the profit and 173,373,357.69 11,707,013.25
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 173,373,357.69 11,707,013.25
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 -10,149,264.17 -30,243,185.96
and loss
1) Share in other comprehensive
income that will be classified into -12,402,376.19 -29,576,301.94
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 2,253,112.02 -666,884.02
financial statements
7) Others
Net of tax from other comprehensive
1,841,079.90 -545,385.66
income to non-controlling interests
7. Total comprehensive income 10,575,654,277.85 7,918,180,828.56
Total comprehensive income
attributable to owners of the parent 10,528,607,375.32 7,937,018,179.02
company
Total comprehensive income
attributable to non-controlling 47,046,902.53 -18,837,350.46
interests
8. Earnings per share
(1) Basic earnings per share 7.06 5.43
(2) Diluted earnings per share 7.06 5.43
Legal representative：Liu Miao
Person in charge of accounting affairs：Xie Hong
Person in charge of accounting department：Yan Li
117
2022 Annual Report of Luzhou Laojiao Co., Ltd.
Income statement of parent company
Monetary Unit: CNY
Item Year 2022 Year 2021
1. Operating revenue 8,410,433,537.26 7,602,627,780.05
Less: Cost of sales 6,178,065,196.37 5,665,157,031.44
Taxes and surcharges 65,990,094.21 48,515,753.23
Selling and distribution
expenses
General and administrative
963,400,839.26 771,788,593.30
expenses
Research and Development
90,299,057.13 56,568,184.04
expenses
Financial expenses -465,296,222.32 -353,442,195.81
Including：Interest expenses 145,296,657.64 156,432,933.96
Interest income 613,452,430.61 511,551,991.26
Plus: Other income 18,824,179.28 32,634,508.70
Investment income ("-" for
7,842,231,445.15 6,474,502,865.88
losses)
Including: income from
investment in associates and joint 45,123,842.50 171,693,567.56
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
-10,984,508.69 6,352,241.79
values(“-“ for losses)
Credit impairment losses (“-” for
-610,527.84 80,203,108.29
losses)
Asset impairment losses (“-” for
losses)
Gains from disposal of assets("-"
19,786,813.38 546,546.66
for losses)
2. Operating profits ("-" for losses) 9,447,221,973.89 8,008,279,685.17
Plus: non-operating income 18,588,745.48 15,646,393.45
Less: non-operating expenses 17,852,225.18 61,173,017.79
3. Total profits before tax ("-" for
total losses) 9,447,958,494.19 7,962,753,060.83
Less: income tax expenses 408,118,536.71 391,636,642.56
4. Net profit ("-" for net loss) 9,039,839,957.48 7,571,116,418.27
4.1 Net profit from continuing
9,039,839,957.48 7,571,116,418.27
operation ("-" for losses)
4.2 Net profit from discontinued
operation ("-" for losses)
5. Net of tax from other
comprehensive income 160,970,981.50 -17,869,288.69
5.1 Other comprehensive income
cannot reclassified into the profit and 173,373,357.69 11,707,013.25
loss:
1) Remeasure the variation of net
indebtedness or net asset of defined
118
2022 Annual 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 173,373,357.69 11,707,013.25
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 -12,402,376.19 -29,576,301.94
and loss
1) Share in other comprehensive
income that will be classified into -12,402,376.19 -29,576,301.94
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 9,200,810,938.98 7,553,247,129.58
7. Earnings per share
(1) Basic earnings per share
(2) Diluted earnings per share
Consolidated statement of cash flows
Monetary Unit: CNY
Item Year 2022 Year 2021
1. Cash flows from operating
activities
Cash received from sale of goods
25,912,851,214.24 22,547,242,658.59
and rendering of services
Net increase in customer bank
deposits and placement from banks
and other financial institutions
Net increase in loans from central
bank
Net increase in loans from other
financial institutions
Premiums received from original
insurance contracts
Net cash received from reinsurance
business
119
2022 Annual Report of Luzhou Laojiao Co., Ltd.
Net increase in deposits and
investments from policyholders
Cash received from interest, handling
charges and commissions
Net increase in placements from
other financial institutions
Net capital increase in repurchase
business
Net cash received from customer
brokerage deposits
Refunds of taxes and surcharges 96,229,396.25 3,431,889.01
Cash received from other operating
868,192,251.33 970,002,588.49
activities
Subtotal of cash inflows from
operating activities 26,877,272,861.82 23,520,677,136.09
Cash paid for goods purchased and
5,224,385,672.55 5,071,928,013.73
services received
Net increase in loans and advances
to customers
Net increase in deposits in central
bank and other banks and financial
institutions
Cash paid for original insurance
contract claims
Net increase in lending funds
Cash paid for interests, handling
charges and commissions
Cash paid for policy dividends
Cash paid to and on behalf of
1,159,257,102.51 1,016,371,335.03
employees
Cash paid for taxes and surcharges 9,242,016,336.48 6,428,760,153.55
Cash paid for other operating
2,988,965,480.56 3,304,969,529.27
activities
Subtotal of cash outflows from
operating activities 18,614,624,592.10 15,822,029,031.58
Net cash flows from operating
activities 8,262,648,269.72 7,698,648,104.51
2. Cash flows from investing
activities
Cash received from disposal of
2,130,340,931.54
investments
Cash received from returns on
47,015,525.79 38,354,817.50
investments
Net cash received from disposal of
fixed assets, intangible assets and 66,239,957.85 3,538,598.27
other long-term assets
Net cash received from disposal of
subsidiaries and other business units
Cash received from other investing
activities
Subtotal of cash inflows from
investing activities 2,243,596,415.18 41,893,415.77
Cash paid to acquire and construct
fixed assets, intangible assets and 1,035,165,351.11 1,979,399,942.51
other long-term assets
120
2022 Annual Report of Luzhou Laojiao Co., Ltd.
Cash paid for investments 3,082,285,380.80 740,542,370.00
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 4,117,450,731.91 2,719,942,312.51
Net cash flows from investing
activities -1,873,854,316.73 -2,678,048,896.74
3. Cash flows from financing
activities
Cash received from investors 670,224,927.99 8,305,794.84
Including: cash received by
subsidiaries from investments by 3,366,028.35 8,305,794.84
minority shareholders
Cash received from borrowings 4,700,000,000.00
Cash received from other financing
1,909,017.10
activities
Subtotal of cash inflows from
financing activities 5,372,133,945.09 8,305,794.84
Cash paid for debt repayments 2,500,000,000.00
Cash paid for distribution of
dividends and profits or payment of 4,928,927,484.50 3,168,553,209.93
interest
Including: dividends and profits paid
to minority shareholders by 14,784,831.00
subsidiaries
Cash paid for other financing
21,594,912.99 22,371,107.22
activities
Subtotal of cash outflows from
financing activities 7,450,522,397.49 3,190,924,317.15
Net cash flows from financing
activities -2,078,388,452.40 -3,182,618,522.31
4. Effect of fluctuation in exchange
rate on cash and cash equivalents 16,072,149.45 -3,646,806.44
5. Net increase in cash and cash
equivalents 4,326,477,650.04 1,834,333,879.02
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 17,729,006,591.87 13,402,528,941.83
period
Cash flow statements of parent company
Monetary Unit: CNY
Item Year 2022 Year 2021
1. Cash flows from operating
activities
Cash received from sale of goods 7,836,045,120.10 6,550,150,291.27
121
2022 Annual Report of Luzhou Laojiao Co., Ltd.
and rendering of services
Refunds of taxes and surcharges
Cash received from other operating
633,774,675.70 625,297,165.56
activities
Subtotal of cash inflows from
8,469,819,795.80 7,175,447,456.83
operating activities
Cash paid for goods purchased and
5,463,276,771.05 4,522,910,945.39
services received
Cash paid to and on behalf of
994,821,318.51 357,239,225.81
employees
Cash paid for taxes and surcharges 700,305,299.72 540,331,615.01
Cash paid for other operating
232,654,650.21 280,329,112.79
activities
Subtotal of cash outflows from
operating activities 7,391,058,039.49 5,700,810,899.00
Net cash flows from operating
activities 1,078,761,756.31 1,474,636,557.83
2. Cash flows from investing
activities
Cash received from disposal of
2,141,935,199.60
investments
Cash received from returns on
7,816,398,926.76 6,334,501,455.30
investments
Net cash received from disposal of
fixed assets, intangible assets and 50,809,694.44 1,087,162.03
other long-term assets
Net cash received from disposal of
subsidiaries and other business units
Cash received from other investing
activities
Subtotal of cash inflows from
investing activities 10,009,143,820.80 6,335,588,617.33
Cash paid to acquire and construct
fixed assets, intangible assets and 92,415,078.78 19,211,172.69
other long-term assets
Cash paid for investments 2,982,285,380.80 740,542,370.00
Net cash paid to acquire subsidiaries
and other business units
Cash paid for other investing
activities
Subtotal of cash outflows from
investing activities 3,074,700,459.58 759,753,542.69
Net cash flows from investing
activities 6,934,443,361.22 5,575,835,074.64
3. Cash flows from financing
activities
Cash received from investors 666,858,899.64
Cash received from loans 4,700,000,000.00
Cash received from other financing
110,999,028.72
activities
Subtotal of cash inflows from
financing activities 5,477,857,928.36
Cash paid for debt repayments 2,500,000,000.00
Cash paid for distribution of
4,930,586,734.79 3,146,207,328.27
dividends and profits or payment of
122
2022 Annual Report of Luzhou Laojiao Co., Ltd.
interest
Cash paid for other financing
2,008,038,082.56 2,010,331,534.97
activities
Subtotal of cash outflows from
financing activities 9,438,624,817.35 5,156,538,863.24
Net cash flows from financing
activities -3,960,766,888.99 -5,156,538,863.24
4. Effect of fluctuation in exchange
rate on cash and cash equivalents 469,950.14 -943.95
5. Net increase in cash and cash
equivalents 4,052,908,178.68 1,893,931,825.28
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 16,991,891,937.50 12,938,983,758.82
period
Consolidated statement of changes in owners' equity
For the year ended 31 December 2022
Monetary Unit: CNY
Year 2022
Equity attributable to owners of the parent company
Other equity Othe Non-
instruments Less r Total
Gene contr
Item Shar Capit ： Com Spec Surpl Undi owne
ral ollin
e al Trea preh ial us strib Othe Subt rs'
Prefe risk g
capit Perp reser sury ensiv reser reser uted r otal equit
rred Othe reser inter
al etual ve stoc e ve ve profit y
stoc r ve ests
bond k Inco
k
me
1,464 3,755 1,464 21,18 28,04 28,13
1. Balance 167,5 97,01
as at 31 ,752, ,354, ,752, 7,860 0,247 7,261
December 27,15 4,116
476.0 665.7 476.0 ,235. ,005. ,122.
of last year 2.32 .89
0 3 0 89 94 83
Plus:
adjustments
for changes
in
accounting
policies
Adjustment
s for
correction
of
accounting
errors in
prior year
Business
combination
s under
common
control
Others
2. Balance 1,464 3,755 1,464 21,18 28,04 28,13
as at 1 167,5 97,01
,752, ,354, ,752, 7,860 0,247 7,261
January of 27,15 4,116
the current 476.0 665.7 476.0 ,235. ,005. ,122.
2.32 .89
year 0 3 0 89 94 83
3.Increase 7,142 1,044 639,0 163,2 7,142 5,584 6,167 23,90 6,191
s/decrease
s in the ,624. ,799, 21,99 24,09 ,624. ,336, ,624, 9,689 ,533,
123
2022 Annual Report of Luzhou Laojiao Co., Ltd.
current 00 803.2 8.78 3.52 00 978.0 124.0 .72 813.8
period (“-”
for 6 9 9 1
decreases)
10,36 10,52 10,57
(1) Total 163,2 47,04
5,383 8,607 5,654
comprehen 24,09 6,902
sive income ,281. ,375. ,277.
3.52 .53
80 32 85
1,044
(2) Capital 7,142 639,0 412,9 8,242 421,1
contributed ,799,
or reduced ,624. 21,99 20,42 ,468. 62,89
803.2
by owners 00 8.78 8.48 77 7.25
6
Capital 7,142 654,1 661,2 3,366 3,366
contribution ,624. 41,64 84,27 0 ,028. ,028.
s by owners
00 9.18 3.18 35 35
Capital
contribution
s by other
equity
instruments
holders
Amounts of
share- -
based 390,6 412,9 4,876 417,7
22,26
payments 58,15 20,42 ,440. 96,86
recognized 2,274
4.08 8.48 42 8.90
in owners' .40
equity
Others
- - -
-
7,142 4,781 4,773 4,805
(3) Profit 31,37
distribution ,624. ,061, ,919, ,298,
9,681
00 930.5 306.5 988.1
.58
5 5 3
-
Withdrawal 7,142
7,142
of surplus ,624.
reserves ,624.
00
00
Withdrawal
of general
risk reserve
Profit - - -
-
distributed 4,773 4,773 4,805
to owners 31,37
(or ,919, ,919, ,298,
9,681
shareholder 306.5 306.5 988.1
s) .58
5 5 3
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
124
2022 Annual Report of Luzhou Laojiao Co., Ltd.
Carry-
forward of
retained
earnings
from
changes in
defined
benefit
plans
Carry-
forward of
retained
earnings
from other
comprehen
sive income
Others
(5) Special
reserves
Withdrawal
for the
period
Use for the
period
15,62 15,62 15,62
(6) Others
6.84 6.84 6.84
4. Balance
1,471 4,800 1,471 26,77 34,20 34,32
as at 31 639,0 330,7 120,9
December ,895, ,154, ,895, 2,197 7,871 8,794
of the 21,99 51,24 23,80
100.0 468.9 100.0 ,213. ,130. ,936.
current 8.78 5.84 6.61
year 0 9 0 98 03 64
For the year ended 31 December 2021
Monetary Unit: CNY
Year 2021
Equity attributable to owners of the parent company
Other equity Othe Non-
instruments Less r Total
Gene contr
Item Shar Capit ： Com Spec Surpl Undi owne
ral ollin
e al Trea preh ial us strib Othe Subt rs'
Prefe risk g
capit Perp reser sury ensiv reser reser uted r otal equit
rred Othe reser inter
al etual ve stoc e ve ve profit y
stoc r ve ests
bond k Inco
k
me
1,464 3,722 1,464 16,23 23,07 23,18
1. Balance 186,0 107,0
as at 31 ,752, ,777, ,752, 6,513 4,858 1,869
December 63,32 11,32
476.0 063.1 476.0 ,212. ,552. ,873.
of last year 5.03 1.12
0 3 0 43 59 71
Plus:
adjustments
for changes
in
accounting
policies
Adjustment
s for
correction
of
accounting
errors in
prior year
Business
combination
s under
common
control
Others
125
2022 Annual Report of Luzhou Laojiao Co., Ltd.
2. Balance 1,464 3,722 1,464 16,23 23,07 23,18
as at 1 186,0 107,0
,752, ,777, ,752, 6,513 4,858 1,869
January of 63,32 11,32
the current 476.0 063.1 476.0 ,212. ,552. ,873.
5.03 1.12
year 0 3 0 43 59 71
3.Increase
s/decrease - 4,951 4,965 - 4,955
s in the 32,57
18,53 ,347, ,388, 9,997 ,391,
current 7,602
period (“-” 6,172 023.4 453.3 ,204. 249.1
.60
for .71 6 5 23 2
decreases)
- 7,955 7,937 - 7,918
(1) Total 18,53 ,554, ,018, 18,83 ,180,
comprehen
sive income 6,172 351.7 179.0 7,350 828.5
.71 3 2 .46 6
(2) Capital 32,57 32,57 8,840 41,41
contributed
or reduced 7,602 7,602 ,146. 7,748
by owners .60 .60 23 .83
Capital 8,305 8,305
contribution ,794. ,794.
s by owners
84 84
Capital
contribution
s by other
equity
instruments
holders
Amounts of
share-
based 32,57 32,57 33,11
534,3
payments 7,602 7,602 1,953
recognized 51.39
.60 .60 .99
in owners'
equity
Others
- - -
3,004 3,004 3,004
(3) Profit
distribution ,207, ,207, ,207,
328.2 328.2 328.2
7 7 7
Withdrawal
of surplus
reserves
Withdrawal
of general
risk reserve
Profit - - -
distributed 3,004 3,004 3,004
to owners
(or ,207, ,207, ,207,
shareholder 328.2 328.2 328.2
s) 7 7 7
Others
(4) Internal
carry-
forward of
owners'
equity
Conversion
of capital
reserves
into paid-in
capital
Conversion
of surplus
reserves
into paid-in
126
2022 Annual Report of Luzhou Laojiao Co., Ltd.
capital
Surplus
reserves
offsetting
losses
Carry-
forward of
retained
earnings
from
changes in
defined
benefit
plans
Carry-
forward of
retained
earnings
from other
comprehen
sive income
Others
(5) Special
reserves
Withdrawal
for the
period
Use for the
period
(6) Others
4. Balance
1,464 3,755 1,464 21,18 28,04 28,13
as at 31 167,5 97,01
December ,752, ,354, ,752, 7,860 0,247 7,261
of the 27,15 4,116
476.0 665.7 476.0 ,235. ,005. ,122.
current 2.32 .89
year 0 3 0 89 94 83
Statement of changes in owners' equity of parent company
For the year ended 31 December 2022
Monetary Unit: CNY
Year 2022
Other equity instruments Other
Less： Compr Specia Surplu
Item Capital Undistr Total
Share Preferr Perpet Treasu ehensi l s
reserv ibuted Other owners
capital ed ual Other ry ve reserv reserv
e profit ' equity
stock bond stock Incom e e
e
1. Balance as 1,464,7 3,739,6 167,57 1,464,7 18,872, 25,709,
at 31
December of 52,476. 66,108. 2,013.8 52,476. 792,77 535,84
last year 00 27 6 00 5.01 9.14
Plus:
adjustments
for changes in
accounting
policies
Adjustments
for correction
of accounting
errors in prior
year
Others
2. Balance as 1,464,7 3,739,6 167,57 1,464,7 18,872, 25,709,
127
2022 Annual Report of Luzhou Laojiao Co., Ltd.
at January 1 52,476. 66,108. 2,013.8 52,476. 792,77 535,84
of the
current year 00 27 6 00 5.01 9.14
3.Increases/d
ecreases in 1,049,9 639,02 160,97 4,258,7 4,844,9
the current 7,142,6 7,142,6
period (“-” 37,043. 1,998.7 0,981.5 78,026. 49,301.
24.00 24.00
for 38 8 0 93 03
decreases)
(1) Other 160,97 9,039,8 9,200,8
comprehensiv 0,981.5 39,957. 10,938.
e income
0 48 98
(2) Capital 1,049,9 639,02 418,05
contributed or 7,142,6
reduced by 37,043. 1,998.7 7,668.6
24.00
owners 38 8 0
Capital 654,14 661,28
7,142,6
contributions 1,649.1 4,273.1 0
by owners 24.00
8 8
Capital
contributions
by other
equity
instruments
holders
Amounts of
share-based 395,79 - 418,05
payments
recognized in 5,394.2 22,262, 7,668.6
owners' 0 274.40 0
equity
Others
- -
(3) Profit 7,142,6 4,781,0 4,773,9
distribution 24.00 61,930. 19,306.
55 55
Withdrawal of -
7,142,6
surplus 7,142,6
reserves 24.00
24.00
- -
Profit
distributed to 4,773,9 4,773,9
owners (or 19,306. 19,306.
shareholders)
55 55
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
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2022 Annual Report of Luzhou Laojiao Co., Ltd.
earnings from
other
comprehensiv
e income
Others
(5) Special
reserves
Withdrawal
for the period
Use for the
period
(6) Others
4. Balance as
at 31 1,471,8 4,789,6 639,02 328,54 1,471,8 23,131, 30,554,
December of 95,100. 03,151. 1,998.7 2,995.3 95,100. 570,80 485,15
the current
00 65 8 6 00 1.94 0.17
year
For the year ended 31 December 2021
Monetary Unit: CNY
Year 2021
Other equity instruments Other
Less： Compr Specia Surplu
Item Capital Undistr Total
Share Preferr Perpet Treasu ehensi l s
reserv ibuted Other owners
capital ed ual Other ry ve reserv reserv
e profit ' equity
stock bond stock Incom e e
e
1. Balance as 1,464,7 3,706,8 185,44 1,464,7 14,305, 21,127,
at 31
December of 52,476. 16,950. 1,302.5 52,476. 883,68 646,88
last year 00 12 5 00 5.01 9.68
Plus:
adjustments
for changes in
accounting
policies
Adjustments
for correction
of accounting
errors in prior
year
Others
2. Balance as 1,464,7 3,706,8 185,44 1,464,7 14,305, 21,127,
at January 1
of the 52,476. 16,950. 1,302.5 52,476. 883,68 646,88
current year 00 12 5 00 5.01 9.68
3.Increases/d
ecreases in - 4,566,9 4,581,8
the current 32,849,
period (“-” 17,869, 09,090. 88,959.
158.15
for 288.69 00 46
decreases)
(1) Other - 7,571,1 7,553,2
comprehensiv 17,869, 16,418. 47,129.
e income
288.69 27 58
(2) Capital
contributed or 32,849, 32,849,
reduced by 158.15 158.15
owners
Capital
contributions
by owners
Capital
contributions
by other
equity
instruments
holders
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2022 Annual Report of Luzhou Laojiao Co., Ltd.
Amounts of
share-based
payments 32,849, 32,849,
recognized in 158.15 158.15
owners'
equity
Others
- -
(3) Profit 3,004,2 3,004,2
distribution 07,328. 07,328.
27 27
Withdrawal of
surplus
reserves
- -
Profit
distributed to 3,004,2 3,004,2
owners (or 07,328. 07,328.
shareholders)
27 27
Others
(4) Internal
carry-forward
of owners'
equity
Conversion of
capital
reserves into
paid-in capital
Conversion of
surplus
reserves into
paid-in capital
Surplus
reserves
offsetting
losses
Carry-forward
of retained
earnings from
changes in
defined
benefit plans
Carry-forward
of retained
earnings from
other
comprehensiv
e income
Others
(5) Special
reserves
Withdrawal
for the period
Use for the
period
(6) Others
4. Balance as
at 31 1,464,7 3,739,6 167,57 1,464,7 18,872, 25,709,
December of 52,476. 66,108. 2,013.8 52,476. 792,77 535,84
the current
00 27 6 00 5.01 9.14
year
130
2022 Annual Report of Luzhou Laojiao Co., Ltd.
3. Company Profile
3.1 Company Overview
Luzhou Laojiao Co., Ltd. (hereinafter referred to as "Company" or "the Company"), formerly known as
Luzhou Laojiao Brewery, was established in March 1950. On 20 September 1993, Luzhou Laojiao
brewery established a joint-stock limited company with fund-raising exclusively from its operational
assets. On 25 October 1993, the public offering of shares was approved by Sichuan Provincial People's
Government and CSRC with two documents of ChuanFuHan (1993) No.673 and FaShenZi (1993)
No.108. After the offering, the total share capital was 86,880,000 shares, which were listed and traded
in Shenzhen stock exchange on 9 May 1994.
As the end of 31 December 2004, the Company's total share capital reached 841,399,673 shares after
multiple rights issues, among which the controlling shareholder, State Assets Management Bureau of
Luzhou (later renamed as State-owned Assets Supervision and Administration Commission of Luzhou,
hereinafter referred to as "SASAC of Luzhou") held 585,280,800 shares of the Company, with a
shareholding ratio of 69.56%.
On 27 October 2005, the Company implemented the non-tradable share reform. After the
implementation, the total share capital remained unchanged, and the shareholding ratio of SASAC of
Luzhou decreased from 69.56% to 60.43%.
In November 2006, the Company implemented private placement, and the total share capital increased
from 841,399,673 shares to 871,399,673 shares. The shareholding ratio of SASAC of Luzhou
decreased from 60.43% to 58.35%.
As the end of 27 February 2007, SASAC of Luzhou sold 42,069,983 shares of the Company, and after
the sale, it still held 466,375,156 shares of the Company, with its shareholding ratio reduced to 53.52%.
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.
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2022 Annual Report of Luzhou Laojiao Co., Ltd.
On 10 April 2014 and 18 July 2016, SASAC of Luzhou transferred 81,088,320 shares and 84,000,000
shares to Laojiao Group and Xinglu Group respectively. In addition, Laojiao Group has increased its
equity stake through the secondary market of 13,137,100 shares. So far, Laojiao Group, Xinglu Group
and SASAC of Luzhou held 394,225,489 shares, 365,971,142 shares and 1,111,930 shares
respectively, with the shareholding ratios of 28.11%, 26.10% and 0.08% respectively.
On 23 August 2017, the Company issued CNY 62,500,000 ordinary shares (A shares) privately, raising
a total capital of CNY 3,000,000,000. After the additional issuance, the total capital stock of the
Company was changed to 1,464,752,476 shares. In addition, from 2017 to 2018, Laojiao Group
decreased 13,137,100 shares that were increased through the secondary market from April 2014 to
December 2015. After share reduction, Laojiao Group, Xinglu Group and SASAC of Luzhou held
381,088,389 shares, 365,971,142 shares and 1,111,930 shares respectively, with the shareholding
ratios of 26.02%, 24.99% and 0.08% respectively. Laojiao Group still was the first majority shareholder
and SASAC of Luzhou still was the actual controller.
In February 2022, the registration of 6,862,600 shares of the Restricted Share Incentive Plan granted
by the Company for the first time were completed; in September 2022, the Company granted 342,334
shares of the Restricted Share Incentive Plan for the second time; in September 2022, with seven
awardees no longer eligible, the Company decided to repurchase and retire the 62,310 restricted
shares of them which had been granted but not lifted from restricted sales; so far, the above grant and
repurchase of the Restricted Share Incentive Plan had all been registered and the total shares of the
Company changed to 1,471,895,100 shares. The grant and repurchase of the Restricted Share
Incentive Plan this year caused no changes in the controlling shareholders and the actual controller of
the Company.
3.2 Registered address of the Company, company type, and headquarter address
Registered address and headquarter address of the Company are located in Sichuan Luzhou Laojiao
Square and company type is other incorporated company (Listed).
3.3 Business nature of the Company and main business activity
Industry of the Company is the baijiu subdivision industry of the liquor and wine, beverage and refined
tea production industry.
The main activity are research and development, production and sales of “National Cellar
1573”,”Luzhou Laojiao” and other baijiu series.
The main products are: “National Cellar 1573 Series”, ”Century-old Luzhou Laojiao Jiaoling
Series” , ”Luzhou Laojiao Tequ”, ”Touqu”, ”Hey Guys” and other baijiu series.
3.4 The name of the controlling shareholder and the ultimate substantive controller
The controlling shareholder is Luzhou Laojiao Group Co., Ltd.; the ultimate substantive control is
SASAC of Luzhou.
3.5 Approval and submission of the financial report and its date
The financial report is approved and submitted by the board of directors of the Company on 28 April
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2022 Annual Report of Luzhou Laojiao Co., Ltd.
2023.
3.6 Consolidated financial statement scope and their changes
(1) The 27 subsidiaries included in the consolidated financial statements for the current period
are listed as follows:
Shareholding proportion(%)
Name of subsidiary Abbreviation Direct Indirect Voting rights (%)
Luzhou Laojiao Brewing Co., Ltd. Brewing Company 100.00 100.00
Luzhou Red Sorghum Modern Agricultural Development Red Sorghum
60.00 60.00
Co., Ltd. Company
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
Luzhou Laojiao I & E Co., Ltd. I & E Company 100.00 100.00
Luzhou Laojiao Boda Liquor Industry Marketing Co., Ltd. Boda Marketing 75.00 75.00
Luzhou Laojiao Bosheng Hengxiang Liquor Sales Co., Ltd.
Bosheng Hengxiang 75.00 75.00
Note 4
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 International Trade (Hainan) Co., Ltd.
Hainan Company 100.00 100.00
Note 5
Luzhou Pinchuang Technology Co., Ltd. Pinchuang Company 100.00 100.00
Luzhou Laojiao Tourism Culture Co., Ltd. Note 4 Tourism Culture 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
100.00 100.00
Co., Ltd. Company
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
Luzhou Laojiao New Retail Co., Ltd. New Retail Company 40.00 100.00 100.00
Technology
Luzhou Laojiao Technology Innovation Co., Ltd. Note 5 40.00 60.00 100.00
Innovation Company
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
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2022 Annual Report of Luzhou Laojiao Co., Ltd.
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. and Luzhou Laojiao Bosheng Hengxiang Liquor Sales
Co., Ltd. completed business and tax cancellation in June 2022.
Note 5: Luzhou Laojiao International Trade (Hainan) Co., Ltd. and Luzhou Laojiao Technology Innovation Co., Ltd. were
newly established in December 2022.
Details of the subsidiaries incorporated into the consolidated financial statements show on “7.1.
Interests in subsidiaries”
(2) Subsidiaries that are newly incorporated into the scope of consolidation in this period
Name of subsidiary Reason
Luzhou Laojiao International Trade (Hainan) Co., Ltd. Incorporated through investment
Luzhou Laojiao Technology Innovation Co., Ltd. Incorporated through investment
(3) Liquidation and cancellation for subsidiaries in this period
Name of subsidiary Reason
Luzhou Laojiao Bosheng Hengxiang Liquor Sales Co., Ltd. Liquidation cancellation
Luzhou Laojiao Tourism Culture Co., Ltd. Liquidation cancellation
Details of changes in the scope of consolidation show on “6.5. Changes in consolidated scope for other
reasons”.
4. Basis of preparation of financial statements
4.1. Basis of preparation of financial statements
The Company has prepared its financial statements on a going concern basis, and the preparation is
based on actual transactions and events in compliance with Accounting Standards for Business
Enterprises and relevant guidance and explanation (the following called the ASBE) issued by Ministry of
Finance, and Rules on Company Information Disclosure and Preparation of Publicly Issued Securities
No.15- General Rules on Financial Reporting Rules (2014 Revision) issued by CSRC.
4.2. Going concern
The Company’s business activities have adequate financial support. Based on the current information
obtained by the Company, comprehensively considering factors such as macro-policy risk, market
operation risk, current or long-term profitability, debt repayment ability of the Company, as well as its
resource of financial support, the Company believes that it is reasonable to prepare the financial
134
2022 Annual Report of Luzhou Laojiao Co., Ltd.
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
Tips on specific accounting policies and accounting estimates:
N/A
5.1 The declaration about compliance with ASBE
The financial statements of the Company have been prepared in accordance with ASBE, and present
truly and completely, the financial position and the Company’s and results of operations, changes in
shareholders’ equity and cash flows. In addition, in all material respects, the financial statements of the
Company comply with disclosure requirements of the financial statements and their notes in
accordance with Rules on Company Information Disclosure and Preparation of Publicly Issued
Securities No.15- General Rules on Financial Reporting Rules revised by CSRC in 2014.
5.2 Accounting period
The Company adopts the calendar year as its accounting year, i.e. from 1st January to 31st December.
5.3 Business Cycle
The Company’s business cycle is 12 months.
5.4 Functional currency
The Company has adopted China Yuan (CNY) as functional currency.
5.5 The accounting treatment of business combinations involving enterprises under
common control and business combinations not involving enterprises under
common control
(1) Business combination under common control
Assets and liabilities obtained by the Company from the combine through business combination under
common control shall be measured at the book value as stated in the consolidated financial statements
of ultimate controlling party at the combination date. The share of the book value of the merged party’s
owner’s equity in the consolidated financial statements is taken as the initial investment cost of long-
term equity investments in individual financial statements. The capital reserve (stock premium or capital
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
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2022 Annual Report of Luzhou Laojiao Co., Ltd.
earnings shall be adjusted.
(2) Business combination not under common control
Assets paid, liabilities incurred or assumed and the equity securities issued as consideration for
combination shall be measured based on fair value on the acquisition date, the difference between fair
value and its book value shall be included in current profit and loss. The Company shall recognize the
difference of the combination costs in excess of the fair value of the net identifiable asset acquired from
the acquiree through combination as goodwill. After the review, if the combination costs are still in short
of the fair value of the net identifiable asset acquired from the acquiree through combination, include
the difference in the current profit and loss.
Fees, commissions, and other transaction expenses paid on issuance of equity securities as
combination consideration in the business combination shall be included in the initial measurement
amount of equity securities.
5.6 Preparation of consolidated financial statements
(1) Consolidated Financial Statement Scope
The scope of the Company’s consolidated financial statements is based on control, and all subsidiaries
controlled are included in the consolidation scope of the consolidated financial statements.
(2) Consolidation procedures
The consolidated financial statements are based on the financial statements of the Company and its
subsidiaries, and are prepared by the parent company with other relevant information. When preparing
consolidated financial statement, the Company considers the Group as an accounting entity, adopts
unified accounting policies, and applies the requirements of ASBE related to recognition, measurement
and presentation to reflect the Group’s financial position, operating results and cash flows.
All the subsidiaries within the consolidation scope of consolidated financial statements shall adopt the
same accounting policies and accounting periods as those of the Company. If the accounting policies or
accounting periods of a subsidiary are different from those of the Company, the financial statements of
the subsidiary, upon preparation of consolidated financial statements, shall be made necessary
adjustment based on its own accounting policies and accounting periods of the Company. For
subsidiaries acquired from the business combination not under common control, the financial
statements shall be adjusted on the basis of the fair value of identifiable net assets on the date of
purchase. For the subsidiary acquired from the business combination under common control, its assets
and liabilities (including the goodwill formed by the acquisition of the subsidiary by the ultimate
controlling party) shall be adjusted on the basis of the book value in the consolidated statements of the
ultimate controlling party.
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2022 Annual Report of Luzhou Laojiao Co., Ltd.
The portion of a subsidiary’s equity, the current net profit and loss of subsidiaries, and the current
comprehensive income attributable to non-controlling interests shall be separately presented as non-
controlling interests in consolidated balance sheet within owners' equity, below the net profit line item
and below the total comprehensive income line item in the consolidated income statement respectively.
When the amount of current loss attributable to non-controlling shareholders of a subsidiary exceeds
the balance of the non-controlling shareholders’ portion in the opening balance of owner's equity of the
subsidiary, the excess shall be allocated against the non-controlling interests.
Acquisition of subsidiaries or business
During the reporting period, if the Company acquires subsidiaries from the business combination under
common control, the opening balance in the consolidated balance sheet shall be adjusted. The income,
expenses and profits of the newly acquired subsidiaries from the beginning to the end of the reporting
period shall be included in the consolidated income statement. The cash flows of the newly acquired
subsidiaries from the beginning to the end of the reporting period shall be included in the consolidated
statement of cash flows. At the same time, the relevant items of the comparative information shall be
adjusted as the combined entity existed since the control point of the ultimate controlling party.
If the Company can control the investee from the business combination under common control due to
additional investment or other reasons, the parties involved in the combine shall be deemed to adjust in
the current state when the ultimate controlling party starts to control them. For the equity investment
before obtaining control of the investee, the recognized relevant profit or loss and other comprehensive
income and other changes in net assets between the later of acquisition date of previous equity and the
date on which both the investor and the investee are under common control and the combination date
shall respectively write-down the beginning retained earnings or current profits and losses during the
period of comparative information.
During the reporting period, if the Company acquires subsidiaries from the business combination not
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
137
2022 Annual Report of Luzhou Laojiao Co., Ltd.
income. When the previously held equity investment is accounted for under equity method, any other
comprehensive income previously recognized and other equity changes (excluding other
comprehensive, net profit and loss and profit distribution ) in relation to the acquiree’s equity changes
shall be transferred to profit and loss for the current period when acquisition took place, except for other
comprehensive income resulting from changes in net liabilities or net assets due to re-measurement of
defined benefit plan by investee.
Disposal of subsidiaries and business
General treatments
During the reporting period, if the Company disposes subsidiaries, the income, expenses and profits of
the newly disposed subsidiaries from the beginning to the disposal date shall be included in the
consolidated income statement. The cash flows from the beginning to the disposal date shall be
included in the consolidated statement of cash flows.
In case of loss of control over the investee due to partial disposal of the equity investment or other
reasons, the Company shall re-measure the remaining equity investment at its fair value at the date of
loss of control. The amount of the consideration obtained from the disposal of the equity and the fair
value of the remaining equity, minus the net asset shares calculated continuously from the acquisition
date based on the previous shareholding proportion and the goodwill, the difference shall be included in
the investment income of the period when the control is lost. Other comprehensive income related to
the former subsidiary’s equity investment of or other changes in owners' equity excluding net profit and
loss, other comprehensive income and profit distribution shall be transferred to investment income for
the current period when control is lost. Other comprehensive income resulting from changes in net
liabilities or net assets due to re-measurement of defined benefit plan by investee is excluded.
Disposal of subsidiaries by step
If the Company loses control of a subsidiary is through multiple transactions by steps, the terms,
conditions and economic impact of the disposal transaction shall be considered. When one or more of
the following conditions may indicate that multiple transactions should be treated as a package of
transactions for accounting treatment:
a.These arrangements were entered into at the same time or in contemplation of each other;
b.These arrangements work together to achieve an overall commercial effect;
c.The occurrence of one arrangement depends on the occurrence of at least one other arrangement;
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
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belong to a package transaction, the Company shall account for as a transaction; However, the
difference between each disposal consideration received and the corresponding proportion of the
subsidiary’s net assets before the loss of control shall be recognized as other comprehensive income in
the consolidated financial statements and transferred into the profit and loss of the current period when
the control is lost.
If the transactions from the disposal of the equity investment of the subsidiary to the loss of control are
not considered as a package transactions, the accounting treatment shall be conducted according to
the relevant policies on the partial disposal of the equity investment of the subsidiary where control is
retained before the loss of control. When the control is lost, the disposal shall be accounted for
according to the general treatment.
Purchase of non-controlling interests
The difference between the increase in the cost of long-term equity investment result from acquisition of
non-controlling shareholders and the share of net assets of the subsidiary calculated continuously from
the acquisition date or combination date based on newly shareholding proportion shall be adjusted to
equity (share) premium of capital reserves in the consolidated balance sheet. If the capital reserve is
insufficient, any excess shall be adjusted against retained earnings.
Partial disposals of equity investment in subsidiaries without loss of control
When the Company disposes of a portion of a long-term equity investment in a subsidiary without loss
of control, the difference between disposal consideration and net assets of the subsidiary calculated
continuously since the acquisition date or the combination date related to the disposal of long-term
equity investment shall be adjusted to equity (share) premium of capital reserves in the consolidated
balance sheet. If the capital reserve is insufficient, any excess shall be adjusted against retained
earnings.
5.7 Classification of joint venture arrangements and the accounting treatment
method of common operation
(1) Classification of joint venture arrangements
A joint arrangement is classified as either a joint operation or a joint venture according to the structure,
legal form, agreed terms and other facts and conditions of a joint arrangement. A joint arrangement that
is structured through a separate vehicle is usually classified as a joint venture. However, when a joint
arrangement provides clear evidence that it meets any of the following requirements and complies with
applicable laws and regulations as a joint operation:
a. The legal form of the joint arrangement indicates that the parties that have joint control have rights to
the assets, and obligations for the liabilities, relating to the arrangement.
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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 is any impairment loss of invested or sold
assets occurring in accordance with the ASBE No.8-Asset Impairment. The Company shall only
recognize the part of the profit and loss attributable to other participants in the joint venture before
selling the assets and other assets purchased from the joint venture (excluding those assets
constituting the business) to a third party. When the impairment loss of the purchased assets is in
accordance with the ASBE No.8-Asset Impairment, the Company shall recognize such losses
according to its share. When the Company does not have common control over the joint venture, if the
Company enjoys the assets related to the joint venture and assumes the liabilities related to the joint
venture, the accounting treatment shall be conducted according to the above principles. Otherwise, the
accounting treatment shall be conducted in accordance with the relevant accounting standards.
5.8 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.
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5.9 Foreign currency transactions and translation of foreign currency statements
(1) Foreign currency transactions
At the time of initial recognition of a foreign currency transaction of the Company, the amount in the
foreign currency shall be translated into the amount in CNY currency at the spot exchange rate of the
transaction date. For the monetary items of foreign currencies, the translation is done according to spot
rate of the balance sheet date. The exchange difference generated from the difference of spot rate of
the current balance sheet date and the time of initial recognition of a foreign currency or the previous
balance sheet date is charged to the profit or loss of the current period except that the exchange
difference generated from foreign currency borrowings relating to assets of which the acquisition or
production satisfies the capitalization conditions is capitalized.
Non-monetary items measured at fair value that is reflected in foreign currency at the end of the period,
the Company shall firstly translate the foreign currency into the amount in functional currency at the
spot exchange rate on the date when the fair value is determined, and then compare it with the original
functional currency amount. Difference between the translated functional currency amount and the
original functional currency amount is treated as profit or loss from changes in fair value (including
changes in exchange rate) and is recognized in current profit and loss. If there is a non-monetary item
of available-for-sale financial assets, the differences are recorded into other comprehensive income.
(2) Translation of foreign currency statements
Assets and liabilities in the balance sheets shall be translated at the spot exchange rates on balance
sheet date. Shareholders’ equity items, except for the item of "undistributed profits", are translated at
the spot exchange rates on the dates when the transactions occur. Revenue and expense items in the
income statement are translated at the spot exchange rates on the dates when the transactions occur
or at the exchange rate determined in a systematical and reasonable method and similar to the spot
exchange rate on the day when the transactions occur. Differences arising from the above translations
of 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.
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(1) Classification, recognition and measurement of financial assets
Based on the business model of financial asset management and the contract cash flow characteristics
of financial assets, the Company classifies financial assets into: financial assets measured at amortized
cost; financial assets measured at fair value with their changes included into other comprehensive
income; and financial assets measured at fair value with their changes included into current
profits/losses.
At the initial recognition, financial assets are measured at fair value. For financial assets measured at
fair value with their changes included into current profits/losses, the expenses involved in the
transaction are directly recorded into current profits/losses; for other financial liabilities, the expenses
involved in the transaction are recorded into the initially recognized amount.
1) Financial assets measured at amortized cost
The business model in which the Company manages financial assets measured at amortized cost aims
to receive contract cash flow. Furthermore, the characteristics of the contract cash flow of such financial
assets are consistent with basic borrowing and lending arrangements, which means that cash flow
generated on a specific date serves only as payment for principal and interests based on the amount of
unpaid principal. The Company adopts the effective interest method for such financial interests,
performs subsequent measurement of them at amortized cost, and includes the gains or losses from
derecognition, changes or impairment of them into current profits/losses.
2) Financial assets measured at fair value with their changes included into other comprehensive income
The business model in which the Company manages such financial assets both aims to receive
contract cash flow and for the purpose of sale. Furthermore, the characteristics of the contract cash
flow of such financial assets are consistent with basic borrowing and lending arrangements. The
Company measure such financial assets at fair value and include their changes into other
comprehensive income, but record impairment losses or gains, exchange gains or losses and interest
income calculated in the effective interest method into current profits/losses.
At the initial recognition, the Company may specify non-trading equity instrument investment as a
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
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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.
2) Other financial liabilities
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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
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neither transferred nor retained, the Company will continue to decide whether the enterprise should
retain control over the asset and perform the accounting treatment according to the principles stated in
previous paragraphs.
(4) Derecognition of financial liabilities
When the current obligation of a financial liability (or a part of it) is relieved, the Company will
derecognize the financial liability (or the part of it). When the Company (borrower) signs an agreement
with a lender to replace an original financial liability in the form of bearing a new financial liability and
the contract terms for the new financial liability differ from those for the original in substance, the
original financial liability should be derecognized and the new one should be recognized. When the
Company makes substantial changes to the contract terms of an original financial liability (or a part of it),
the original financial liability should be derecognized and a new financial liability should be recognized
according to the amended contract terms.
When a financial liability (or a part of it) is derecognized, the Company will include the difference
between its carrying value and the consideration paid (including non-cash assets or liabilities borne that
are transferred out) into current profits/losses.
(5) Offsetting of financial assets and financial liabilities
When the Company has the legal right to offset recognized financial assets and financial liabilities and
may execute the legal right currently and simultaneously, the Company plans to settle or
simultaneously encash the financial assets in net amounts and pay off the financial liabilities, the
financial assets and the financial liabilities which are presented in the net amount after the mutual offset
in the balance sheet. Other than that, they shall be presented separately in the balance sheet without
the mutual offset.
(6) Method of determining the fair value of financial assets and financial liabilities
Fair value refers to the price that a market participant can receive for selling an asset or transferring a
liability in an orderly transaction on the measurement date. For an existing financial instrument in an
active market, the Company adopts the quotations in the active market to determine its fair value.
Quotations in the active market refer to prices that can be easily obtained from exchanges, brokers,
industrial associations and pricing service institutions and represent the actual prices in the market
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
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uses a valuation technique that is applicable in the current situation with sufficient data available and
other information support, chooses input values that are consistent with the asset or liability
characteristics considered by market players in related asset or liability transactions, and make
maximum effort to use related observable input values on a preferential basis. When it is unable or
unfeasible to obtain related observable input values, unobservable will be used.
(7) Equity instruments
Equity instruments refer to the contracts that can prove the Company’s residual equity of assets after
the deduction of all liabilities. The Company’s issuance (including refinancing), repurchase, sale or
cancellation of equity instruments serve as the change treatment of equity. Transaction expenses
related to the equity transactions are deducted from the equity. The Company does not recognize
changes in the fair value of equity instruments.
Dividends from the Company’s equity instruments distributed during the validity (including the “interests”
from instruments classified as equity instruments) are treated as profit distribution.
(8) Impairment of financial instruments
Based on the expected credit loss, the Company treats financial assets measured at amortized cost
and debt instrument investment measured at fair value with its changes included into other
comprehensive income by impairment and recognizes the provision for loss.
Credit loss means the difference between all contract cash flow discounted at the original effective
interest rate to be received according to contracts and all contract cash flow expected to be received,
namely, the present value of all cash shortage. For a financial asset with credit impairment purchased
by or originated from the Company, it should be discounted by the effective interest rate after credit
adjustment to the financial asset.
For accounts receivable that do not contain significant financing components, the Company adopts
simplified measurement to measure loss provisions according to the amount equivalent to the expected
credit loss for the entire duration.
For a financial asset other than those using the above simplified measurement, the Company assesses
on each balance sheet date whether its credit risk has substantially increased since the initial
recognition. If it has not and is in the first stage, the Company will measure the loss provision at the
amount equivalent to the expected credit loss for the next 12 months and calculate the interest income
according to the book balance and the effective interest rate; if it has substantially increased since the
initial recognition without credit impairment and is in the second stage, the Company will measure the
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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.
When it no longer reasonably expects to recover all or part of the contract cash flow of financial assets,
the Company will directly write down the book balance of such financial assets.
5.11 Notes receivable
The method of determining the expected credit loss of notes receivables and accounting treatment
method:
Divide notes receivables into various portfolios according to common risk characteristics based on the
credit risk characteristics of acceptors and determine the accounting estimate policies of expected
credit loss：
Portfolio name Provision method
Bank acceptance bill The management evaluates that this type has low credit risk and its fixed bad
portfolio debt provision ratio is 0%.
Trade acceptance The provision for impairment is made according to the expected loss rate with
portfolio the same portfolio classification of accounts receivables
5.12 Accounts receivables
The method of determining the expected credit loss of accounts receivables and accounting treatment
method:
As for accounts receivables, regardless of whether there is a significant financing component, the
Company always measures the provision for loss based on the amount equivalent to the expected
credit loss over the entire life, and the resulting increase or reversal of provision for loss shall be
included in the current profit or loss as gains or losses on impairment. The accrual method is as follows:
(1) When there is objective evidence showing that an account receivable has incurred credit impairment,
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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
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:
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(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
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, and dispatched inventories.
(2) Measurement method of dispatched inventories
The standard cost is used for daily accounting of raw materials, and the difference of material cost
should be carried forward on a monthly basis to adjust the standard cost into the actual cost; The goods
in progress (including semi-finished goods) shall be accounted according to the actual cost, and the
weighted average method shall be used when they are received and delivered. The actual cost of the
inventory at the end of the month above shall be taken as the standard cost, and the delivery shall be
priced according to the standard cost. At the end of the month, the standard cost of the inventory at the
end of the month shall be adjusted into the actual cost through the cost-sharing difference.
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(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.
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
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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 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-
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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 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
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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. Investments in debt obligations
N/A
5.20 Investments in other debt obligations
N/A
5.21 Long-term receivables
For more details, see Note 5.10 Financial instruments.
5.22 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
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the relevant conventions. Such a separate entity shall be regarded as a joint venture and accounted by
the equity method. If the Company is judged to be not entitled to the net assets of the separate entity
according to relevant conventions, the separate entity shall be regarded as a joint venture and the
Company shall recognize the items related to the shares of the joint venture and perform accounting
treatment in accordance with relevant accounting standards.
The term ‘significant influence’ refers to the power to participate in decision-making on the financial and
operating policies of the investee, but with no control or joint control over the formulation of these
policies. The Company judges that it has a significant impact on the invested entity through one or more
of the following situations and taking all the facts and circumstances into consideration:
a. Dispatch representatives to the board of directors or similar authorities of the investee.
b. To participate in the financial and business policy making process of the investee.
c. Significant transactions with the investee.
d. Dispatch management personnel to the investee.
e. To provide key technical data to the investee.
(2) Determination of the initial investment cost
a. Long-term equity investment resulting from combination
Business combination under common control：
For the long-term equity investments obtained by cash paid, non-monetary assets paid or assumed
liabilities and the equity securities issued by the acquirer, on the merger date, the initial investment cost
of long-term equity investment shall be taken as the share of the owner's equity of the investee in the
book value of the final control party's consolidated financial statements. If the investee under business
combination under common control can be controlled due to additional investment or other reasons, the
initial investment cost of long-term equity investment shall be determined on the merger date according
to the share of the net assets of the investee in the book value of the final control party's consolidated
financial statements. The difference between the initial investment cost of the long-term equity
investment on the merger date and sum of the book value of the long-term equity investment before the
merger and the new consideration of acquiring shares on the merger date shall be recorded to adjust
the equity premium. If the equity premium is insufficient to be written down, the retained earnings shall
be written down.
Business combination not under common control：The Company takes the initial investment cost of
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.
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b. Long-term equity investment obtained by other means
For the long-term equity investments obtained by cash paid, the Company recognizes their fair value as
the initial investment costs.
For the long-term equity investments acquired by the issue of equity securities, the initial investment
cost shall be the fair value of the equity securities issued.
For long-term equity investments obtained by non-monetary assets exchange, under the condition that
an exchange of non-monetary assets is of commerce nature and the fair value of assets exchanged
can be reliably measured, non-monetary assets traded in is initially stated at the fair value of the assets
traded out, unless there is conclusive evidence indicating that the fair value of the assets traded in is
more reliable; if the above conditions are not satisfied, initial investment costs of long-term equity
investments traded in shall be recognized at the book value of the assets traded out and the relevant
taxes and surcharges payable.
For long-term equity investments obtained by debt restructuring, the Company recognizes the fair value
of shares of debt-for-equity swap as the initial investment costs.
(3) Subsequent measurement and recognition of profit and loss
a. Long-term equity investments measured under the cost method
Long-term equity investments that can control the investee are measured under the cost method. For
long-term equity investments accounted at the cost method, except cash dividends or profits declared
but not yet distributed which are included in the actual payments or the consideration actually paid for
the investment, the cash dividends or profits declared by the investee shall be recognized as the
investment income irrespective of net profits realized by the investee before investment or after
investment.
b. Long-term equity investments measured under the equity method
For the long-term equity investment which has joint control or significant influence over the investee, the
equity method is adopted for accounting. For long-term equity investments measured at the equity
method, if the initial investment costs are higher than the investor’s attributable share of the fair value of
the investee’s identifiable net assets, no adjustment will be made to the initial costs of the long-term
equity investments; if the initial investment costs are lower than the investor’s attributable share of the
fair value of the investee’s identifiable net assets, the difference shall be recognized in current profit and
loss.
The Company shall, according to the shares of net profits and other comprehensive income realized by
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the investee that shall be enjoyed or borne by the Company, recognize the profit and loss on the
investments and adjust the book value of the long-term equity investments. When recognizing the net
profits and losses and other comprehensive income of the investee that the Company shall enjoy or
bear, the Company shall make a recognition and calculation based on the net book profits and losses of
the investee after appropriate adjustments. However, where the Company is unable to obtain the
relevant information due to failure to reasonably determine the fair value of the investee’s identifiable
assets, minor difference between the investee’s identifiable assets and the book value thereof or other
reasons, the profits or losses on the investments shall be directly calculated and recognized based on
the net book profits and losses of the investee. The Company shall calculate the part distributed from
cash dividends or profits declared by the investee and correspondingly reduce the book value of the
long-term equity investments. When recognizing the income from investments in associates and joint
ventures, the Company shall write off the part of incomes from internal unrealized transactions between
the Company and associates and joint ventures which are attributable to the Company and recognize
the profit and loss on investments on such basis. Where the losses on internal transactions between
the Company and the investee are impairment of related assets, full amounts of such losses shall be
recognized. Profit and loss from internal unrealized transactions between the Company’s subsidiaries
included into the combination scope and associates and joint ventures shall be written off according to
the above principles and the profit and loss on investments thereafter shall be recognized on such basis.
When the share of net loss of the investee attributable to the Company is recognized, it is treated in the
following sequence: Firstly, write off the book value of the long-term equity investments; where the book
value of the long-term equity investments is insufficient to cover the loss, investment losses are
recognized to the extent that book value of long-term equity which form net investment in the investee
in other substances and the book value of long-term receivables shall be written off; after all the above
treatments, if the Company still assumes additional obligation according to investment contracts or
agreements, the obligation expected to be assumed should be recognized as provision and included
into the investment loss in the current period. If the investee is profitable in subsequent accounting
periods, the Company shall treat the loss in reverse order against that described above after deducting
unrecognized share of loss: i.e. write down the book value of the recognized provision, then restore the
book value of long-term interests which substantially form net investments in the investee, then restore
the book value of long-term investments, and recognize investment income at the same time.
5.23 Investment property
Investment property is the property that is held to earn rent or capital appreciation or both and can be
measured and sold separately. The Company’s investment property includes land use right already rent,
land use right held for appreciation and then sold, and buildings already rent.
(1) Initial Recognition
When the Company can obtain the rental income or value-added income related to the investment
property and the cost of the investment property that can be measured reliably, the Company will
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initially measure it according to the actual expenditure of purchase or construction:
The cost of the purchased investment property includes the purchase price and related taxes directly
attributable to the asset;
The cost of self-built investment property consists of the necessary expenses incurred before the asset
reaches the intended use condition;
The cost of the investment property obtained by other means shall be recognized in accordance with
relevant accounting standards.
(2) Subsequent measurement
In general, the Company adopts the cost model to measure the follow-up expenditure of investment
property. The depreciation or amortization of investment property shall be carried out in accordance
with the accounting policies for the Company's fixed assets or intangible assets.
If there is solid evidence suggests that the investment property acquired can be measured at fair value
continuously and reliably, the Company can use fair value model for subsequent measurement. For the
investment property measured at fair value model, the Company does not provide depreciation or
amortization and adjusts its book value based on the fair value of investment property at the balance
sheet date. The difference between the fair value and book value is recorded into current profit or loss.
(3) When the Company changes the use of investment property, the relevant investment property will
be transferred to other assets.
5.24. Fixed assets
(1) Recognition of fixed assets
Fixed assets refer to tangible assets held for the purpose of producing commodities, providing services,
renting or business management with useful life exceeding one accounting year. Fixed assets are
recognized when the following criteria are satisfied simultaneously: It is probable that the economic
benefits relating to the fixed assets will flow into the Company; the cost of the fixed assets can be
measured reliably.
(2) Depreciation of fixed assets
Except for fixed assets still in use after full depreciation, the Company depreciates all fixed assets and
calculates the depreciation in the straight-line depreciation method.
Based on the nature and use of fixed assets, the Company determines their service life and estimated
net salvage value and reviews their service life, estimated net salvage value and depreciation method
at the end of the year. Changes in the service life, estimated net salvage value and depreciation
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method of the same type of assets are treated as changes in accounting estimation.
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. The category, estimated useful life, estimated residual value rate and annual
depreciation rate of fixed assets of the Company are as follows:
Estimated Annual
Depreciation Estimated useful
Category residual value depreciation rate
method life (Year)
rate (%) (%)
Buildings and Straight-line
Constructions 10-45 5% 9.50－2.11
method
Special Straight-line
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
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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.
5. 25. Construction in progress
(1) Construction in progress refers to various construction and installation works carried out for the
construction or repair of fixed assets, including the actual expenditure incurred in new construction,
reconstruction and expansion, and the net value of fixed assets transferred from the reconstruction and
expansion projects.
(2) Construction in progress is accounted on an individual project basis with actual cost valuation
method. The borrowing costs incurred before the projects reach the intended use condition shall be
included in the project cost. The fixed assets shall be carried forward in the month when the project is
qualified for acceptance and delivery for use. For those that have reached the intended use condition
but have not yet completed the final account, from the date of reaching the intended use condition,
according to the project budget, construction cost or the actual cost of the project, the cost transferred
to the fixed assets shall be determined according to the estimated value, and the depreciation shall be
recognized; After the completion of the final account, the original provisional value shall be adjusted
according to the actual cost, but the amount of depreciation accrued shall not be adjusted.
(3) The loan interest and related expenses incurred during the construction period shall be capitalized
into the cost of the construction in Progress.
(4) On the balance sheet date, the construction in progress is recognized at the lower of book value and
recoverable amount.
5. 26. Borrowing costs
(1) Scope of borrowing costs and its capitalization conditions
The Company’s borrowing costs capitalized during period of capitalization are relevant loan expenses
directly attributable to the assets eligible for capitalization, including interest thereon, amortization of
discounts or premiums, ancillary expenses and exchange differences incurred from foreign currency
loan, etc.
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Borrowing costs are capitalized when the following three conditions are met simultaneously: ① the
asset expenditure has occurred, ② the borrowing costs have occurred, ③ the purchase and
construction activities necessary to make the assets reach the intended use condition have started.
(2) Recognition of capitalized amounts
The capitalized amount of borrowing expenses is calculated as follows: As for special loan borrowed for
acquiring and constructing or producing assets eligible for capitalization, borrowing costs of special loan
actually incurred in the current period less the interest income of the loans unused and deposited in
bank or return on temporary investment should be recognized as the capitalization amount of borrowing
costs. As for general loans used for acquiring and constructing or producing assets eligible for
capitalization, the interest of general loans to be capitalized should be calculated by multiplying the
weighted average of asset disbursements of the part of accumulated asset disbursements in excess of
special loans by the capitalization rate of used general loans. During the period of capitalization, the
capitalized amount of interest of each accounting period shall not exceed the current actual interest of
the relevant loans. Where there are discounts or premiums on loans, the amounts of interest for each
accounting period should be adjusted taking account of amortizable discount or premium amounts for
the period by effective interest method. Auxiliary expenses incurred from special loans before the
acquired or constructed assets eligible for capitalization reach the working condition for their intended
use or sale should be capitalized when they incur and charged to the costs of assets eligible for
capitalization; those incurred after the acquired or constructed assets eligible for capitalization reach the
working condition for their intended use or sale should be recognized as costs according to the
amounts incurred when they incur and charged to the current profit or loss.
(3) Recognition of capitalization rate
For a special loan for the purchase and construction of fixed assets, the capitalization rate is the
interest rate of the loan;
For more than one special loan for the acquisition and construction of fixed assets, the capitalization
rate is a weighted average interest rate of these loans.
(4) Capitalization suspension of borrowing costs
If the acquisition and construction or production activities of assets eligible for capitalization are
interrupted abnormally and this condition lasts for more than three months, the capitalization of
borrowing costs should be suspended. The borrowing costs incurred during interruption are charged to
profit or loss for the current period, and the capitalization of borrowing costs continues when the
acquisition and construction or production activities of the asset resume.
(5) Capitalization cessation of borrowing costs
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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.
5.27. Biological assets
N/A
5.28. Oil and gas assets
N/A
5. 29. Using right assets
Refer to Note 5.42 Lease for the detail.
5. 30. 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
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applying the intangible assets or there is a potential market for the intangible assets themselves or
the intangible assets will be used internally;
iv. It is able to finish the development of the intangible assets, and able to use or sell the intangible
assets, with the support of sufficient technologies, financial resources and other resources.
v. The expenditure attributable to the intangible asset during its development phase can be
measured reliably.
d. If payment of the purchase price of intangible assets can be deferred and exceeds normal credit
conditions, the purchase has the nature of finance in fact and cost of the intangible asset shall be
determined on the basis of present value of the purchase price. The difference between the amount
actually paid and the present value of the purchase price should be recorded into current profit or loss
other than those should be capitalized during the credit period.
Useful life and amortization method
For intangible assets with limited useful life, amortization shall be carried out according to the straight-
line method within the period that brings economic benefits to the enterprise. At the end of each period,
the useful life and amortization method of intangible assets with limited service life shall be reviewed. If
there are differences with the original estimates, corresponding adjustments shall be made.
Intangible assets whose useful life is uncertain shall be regarded as intangible assets if it is impossible
to foresee the term in which intangible assets bring economic benefits to the enterprise. Intangible
assets with uncertain useful life shall not be amortized during the holding period, and the life of
intangible assets shall be reviewed at the end of each period. If it is still uncertain after the review at the
end of the period, the impairment test shall continue during each accounting period. At the end of each
period, the useful life of intangible assets with uncertain service life shall be reviewed.
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
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assets will be used internally;
d. It is able to finish the development of the intangible assets, and able to use or sell the intangible
assets, with the support of sufficient technologies, financial resources and other resources.
e. The expenditure attributable to the intangible asset during its development phase can be measured
reliably.
Development expenditures that have been recorded into profit and loss in previous periods are not
recognized as assets in subsequent periods. The capitalized expenditure in the development stage is
listed as development expenditure in the balance sheet, and it will be recorded into intangible assets
from the date when the project reaches its intended purpose.
5. 31. 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
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(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. 32. 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. 33. Contract liabilities
The recognition method of contract liabilities: The Company presents contract assets or contract
liabilities on the balance sheet according to the relationship between the fulfillment of its contract
performance obligations and its customers’ payment. Obligations to be fulfilled by the Company of
transferring commodities or providing services to customers, as the Company has received or should
receive customers’ considerations, are presented as contract liabilities.
5. 34. 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
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According to the formula determined by the expected accumulative projected unit credit method, the
Company will record the benefit obligation generated by the defined benefit plan belonging to the period
during in which the employee provides the service into the current profit and loss or the relevant assets
cost.
The deficit or surplus resulting from the present value minus the fair value of the assets of a defined
benefit plan is recognized as a net liability or net asset of a defined benefit plan. If there is surplus in the
defined benefit plan, the net assets of the defined benefit plan shall be measured at the lower of the
surplus and the upper limit of assets of the defined benefit plan.
All defined benefit plan obligations, including those expected to be paid within the twelve months
following the end of the annual reporting period in which the employee provides the service, are
discounted based on the market yield and high quality corporate bonds in an active market that match
the duration and currency of defined benefit plan obligations on the balance sheet date.
The service costs generated by the defined benefit plan and the net interest on net liabilities or net
assets of the defined benefit plan are included in the current profit and loss or relevant assets cost;
Changes in net liabilities or net assets generated by the re-measurement of the defined benefit plan are
included in other comprehensive income and are not reversed to profit and loss in subsequent
accounting periods.
At the time of settlement of the defined benefit plan, the settlement gains or losses shall be recognized
according to the difference between the present value of the obligations of the defined benefit plan and
the settlement price determined on the settlement date.
(3) Accounting treatment method of termination benefits
Employee benefits liabilities shall be recognized and included into profit or loss for the current period on
the earlier date of the two following circumstances:
a. When the Company is not able to withdraw the benefits from termination of employment or
resignation persuasion unilaterally;
b. When the Company recognizes costs and fees relevant to reforming the termination benefits
payment.
As for the termination benefits that cannot be fully paid within 12 months after the end of the annual
report period, the Company shall choose an appropriate discount rate and record it into current profit
and loss based on it.
(4) Accounting treatment method of other long-term employee benefits
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
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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. 35. Lease liabilities
Refer to the Note 5.42 Lease for details.
5. 36. Estimated liabilities
(1) Recognition criteria of estimated liabilities
If the contingent obligations meet the following conditions simultaneously, the Company shall recognize
it as an estimated liability:
This obligation is the Company's current obligation; the performance of this obligation is highly likely to
result in an outflow of economic benefits from the Company; The amount of the obligation can be
measured reliably.
(2) Measurement method of estimated liabilities
The Company's estimated liabilities are initially measured in terms of the best estimate of the
expenditure of fulfilling the relevant current obligations.
For determining the best estimate, the Company takes various factors into account such as the risk,
uncertainty and time value of money related to contingencies. If the time value of money has a
significant impact, the best estimate is determined by discounting the relevant future cash outflows.
The best estimate is processed as follows:
Where there is a continuous range (or range) of required expenditures and the probability of the
occurrence of various results within the range is same, the best estimate is determined according to the
mean of the middle value of the range, namely the mean value of the upper and lower limits.
Where there is no continuous range (or range) of required expenditures, or where there is a continuous
range but the possibility of various outcomes within the range is different, if the contingencies involve a
single item, the best estimate is determined according to the most likely amount; If the contingencies
involve more than one item, the best estimate is calculated and determined according to various
possible results and relevant probabilities.
Where all or part of the expenses required for the liquidation of the estimated liabilities of the Company
are expected to be compensated by a third party, the amount of compensation shall be recognized as
an asset when it is basically confirmed that it can be received, and the confirmed amount of
compensation shall not exceed the book value of the estimated liabilities.
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5. 37. Share-based payment
(1) The type of share-based payment
Share-based payment is classified as equity-settled share-based payment and cash-settled share-
based payment.
(2) The method of determining the fair value of equity instruments
For equity-settled share-based payment related with employees, the equity instrument is measured at
fair value. The cash-settled share-based payment shall be measured according to the fair value of the
liabilities calculated and determined on the basis of shares or other equity instruments undertaken by
the Company.
For the fair value of the stock option granted, the fair value is determined by using the stock option
pricing model, and the following factors are taken into account: the current price of the underlying
shares, the exercise price of the option, the risk-free interest rate within the period of the option, the
option life, and the expected volatility of the stock price.
(3) Recognition of the best estimate basis of instrument that can be exercised
For the equity-settled share-based payment settled immediately after the grant, the fair value of the
equity instrument shall be included in the relevant costs or expenses on the grant date, and the capital
reserve shall be increased accordingly. Grant date means the date on which the share-payment
agreement is approved.
For the equity-settled share-based payment, in which the services during waiting period are completed
and the performance conditions are met, in return for services of employees, on each balance sheet
date during waiting period, the current obtained service shall be included in the relevant costs or
expenses and the capital reserves in accordance with the fair value of the equity instruments on the
grant date, based on best estimate of the number of vested equity instruments, and the subsequent
changes in fair value shall not be recognized. On each balance sheet date during waiting period, the
Company makes the best estimate based on the latest available employee number change and other
subsequent information, and modifies the number of equity instruments for the estimated vesting. On
the vesting date, the final expected number of vesting instruments is the same as the actual number of
vesting instruments.
(4) Relevant accounting treatment of implement, modification and termination of share-based payment
plan
For equity-settled share-based payment, no adjustments will be made to the recognized costs and total
owners' equity after the vesting date. On the vesting date, the Company shall recognize the share
capital and the equity premium according to the exercise situation, and carry forward the capital reserve
recognized in the waiting period.
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No matter how it modifies the terms and conditions of the granted equity instruments or it cancels the
granted equity instruments or its settlement, the equity instruments granted by the Company shall be
recognized at fair value on the grant date and it measures obtained the corresponding services, unless
it cannot be vested because it cannot meet the vesting conditions of equity instruments (except market
conditions).
5.38. Other financial instruments such as preferred shares and perpetual bonds
N/A
5. 39. Revenue
(1) Basic principles of revenue identification
The Company recognizes revenue when it has fulfilled the performance obligations under the contract,
that is, when the customers obtain the control of relevant goods or services, at the transaction price
allocated to the performance obligations.
Performance obligations refer to the Company's promise that it will transfer clearly distinguishable
goods or services to customers under the contract.
Obtaining control of related goods refers to that customers can control the use of the goods and obtain
almost all the economic benefits from the goods.
The Company will evaluate the contract on the contract start date, identify each individual performance
obligation contained in the contract, and judge whether each individual performance obligation will be
performed within a certain period of time or at a certain point in time. If one of the following conditions is
met, and the performance obligation are performed within a certain period of time, the Company will
identify revenue within a period of time according to the performance progress: a. The customers obtain
and consume the economic profits while the Company performs the contract. b. The customers can
control the products under construction during the performance of the Company; c. The products
produced during the performance of the Company cannot be replaced, and the Company has the right
to collect payment for the completed performance accumulated during the entire contract period.
Otherwise, the Company will identify revenue when the customers obtain control rights of the relevant
goods or services.
For the performance obligations performed within a certain period of time, the Company will apply the
input-output method to identify the appropriate performance progress based on the nature of the goods
and services. The input-output method is to identify the performance progress based on the value of the
goods that have been transferred to the customers to the customers. When the performance progress
cannot be reasonably identified and the Company's incurred costs are expected to be compensated,
the Company will identify the revenue according to the amount of the incurred costs until the
performance progress can be reasonably identified.
(2) The methods of revenue identification
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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. 40. 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.
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c. Recognition time-point of government grants
Government grants are recognized when the Company can meet the attached conditions for the
government grants and the Company can receive the grants.
d. Measurement of government grants
If a government grant is a monetary asset, it shall be measured in the light of the received or receivable
amount. If a government grant is a non-monetary asset, it shall be measured at its fair value; and if its
fair value cannot be obtained in a reliable way, it shall be measured at a nominal amount.
5. 41. 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. 42. 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
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direct expenses incurred by the Company; D. The expected cost to be borne by the Company in order
to dismantle and remove the assets leased, restore original state of the place where the assets leased
are in, or restore the assets leased to the state stipulated in the lease terms.
The Company initially measures the lease obligation at the present value of the lease payments
outstanding at the commencement date of the lease term. When calculating the present value of lease
payments, the Company uses the interest rate implicit in lease as the rate of discount. If the interest
rate implicit in lease cannot be determined, the Company’s incremental lending rate is used as the rate
of discount.
After the commencement of the lease term, the Company uses the cost model for subsequent
measurement of right-of-use assets, depreciates right-of-use assets on a straight-line basis, calculates
the interest expense on the lease liability within the lease term and includes it in the current profit or
loss, unless such interest charge is stipulated to be included in the underlying asset cost. Variable lease
payments that are not included in the measurement of the lease obligation should be included in the
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
① Lease classification
The Company classifies leases into finance leases and operating leases at the inception of leases. A
finance lease refers to a lease where almost all the risks and rewards, related to the ownership of the
leased asset, are substantially transferred, regardless of whether the ownership is eventually
transferred or not. All leases other than finance leases are classified as operating leases.
② Accounting treatment of finance leases
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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.
③ Accounting treatment of operating leases
The Company recognizes the lease payments receivable of the operating lease as rental earnings in
each period within the lease term on a straight-line basis or according to other systematic and
reasonable methods. The initial direct costs related to the operating lease are capitalized, amortized
within the lease term on the same basis as the recognition of rental earnings, and included in profit or
loss for the current period. The received variable lease payments related to the operating lease that are
not included in the lease payments receivable are included in profit or loss for the current period when
they are actually incurred.
5.43. Income tax expenses
The Company adopts the balance sheet liability method to account for income tax.
The Company recognizes deferred tax assets when the following conditions are met simultaneously:
1. Temporary differences are highly likely to be reversed in the foreseeable future;
2. Taxable income that may be used to offset the deductible temporary difference is likely to be obtained
in the future and is limited to the amount of taxable income that is likely to be obtained.
On each balance sheet date, the current income tax liabilities (or assets) incurred in the current period
or prior periods shall be measured by the Company in light of the expected payable (refundable)
amount of income taxes according to the tax law; The deferred income tax assets and deferred income
tax liabilities shall be measured at the tax rate applicable to the period during which the assets are
expected to be recovered or the liabilities are expected to be settled.
The Company shall review the carrying amount of deferred income tax assets on each balance sheet
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.
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5. 44 Changes in significant accounting policies and accounting estimates
5.44.1. Changes in significant accounting policies
Applicable □ N/A
Approval
Content and reason of changes Note
procedures
On 31 December 2021, the Ministry of Finance issued the
Interpretation No. 15 of the Accounting Standards for
This change in
Business Enterprises (C.K. [2021] No. 35), of which the
accounting policies
“accounting treatment for the sale of products or by-
does not significantly
products produced by an enterprise before the fixed assets N/A
affect the Company’s
reach their intended useable state or during the research
consolidated financial
and development process” and “judgment on loss-making
statements.
contracts” were carried out by the Company from 1 January
2022.
On 30 November 2022, the Ministry of Finance issued the
Interpretation No. 16 of the Accounting Standards for
This change in
Business Enterprises (C.K. [2022] No. 31), of which the
accounting policies
“accounting treatment of the income tax effects of dividends
does not significantly
on financial instruments classified as equity instruments by N/A
affect the Company’s
the issuer” and “accounting treatment of the revision of
consolidated financial
cash-settled share-based payment to equity-settled share-
statements.
based payment by an enterprise” were carried out by the
Company from the date of publication.
There was no other change in significant accounting policies in the reporting period other than the
above changes.
5.44.2. Changes in significant accounting estimates
□Applicable N/A
5.45. Other
N/A
6. Taxes
6.1. Major tax types and rates
Tax type Tax base Tax rate
Value-added tax Taxable sales income 13 %, 9%, 6%
Urban maintenance and construction
Taxable turnover tax 7%
tax
Corporate income tax Taxable income 25%, 15%, 16.5%, 9%, 0%
Consumption tax (based on price) Baijiu tax price or ex-factory price 20%
Consumption tax (based on quantity) Quantity of baijiu CNY 1.00/kg
Education surcharge Taxable turnover tax 3%
Local education surcharge Taxable turnover tax 2%
Property tax Original value of the property*70%; 1.2%, 12%
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house rent
Land use tax Land area CNY 5-18.00/m2
Others According to national regulation
Tax payment subject using different corporate income tax rates, the corporate income tax rates are as
follows:
Company name Corporate income tax rate
Luzhou Pinchuang Technology Co., Ltd. 15%
Luzhou Laojiao International Development (Hong Kong)
16.5%
Co., Ltd.
Luzhou Laojiao Commercial Development (North
21%-40%
America) Co., Ltd.
Mingjiang Co., Ltd. 21%-40%
Luzhou Red Sorghum Modern Agricultural Development
Exempted from corporate income tax
Co., Ltd.
Guangxi Luzhou Laojiao Imported Liquor Industry Co.,
9%
Ltd.
6.2. Tax preferences
(1) According to Announcement of the Ministry of Finance, State Taxation Administration and National
Development and Reform Commission on Continuing the Corporate Income Tax Policies Concerning
the Western Development Strategy (No. 23 in 2020, Ministry of Finance), from 1 January 2021 to 31
December 2030, companies are located in the western region whose primary business is listed in the
Catalogue of Encouraged Industries in the Western Region, and the primary business income
accounting for over 60% of the total enterprise income. These companies shall be subject to the
corporate income tax at a reduced rate of 15%. The Company's holding subsidiary, Luzhou Pinchuang
Technology Co., Ltd., whose primary business income meet the requirements of scope and standard of
the Catalogue of Encouraged Industries in the Western Region, is paid at the rate of 15% for corporate
income tax.
(2) According to Article 27 of the Corporate Income Tax Law of the People's Republic of China and
Article 86, Item 1 of the Implementation Regulations of the Corporate Income Tax Law, companies are
exempted from enterprise income tax when they engage in agricultural, forestry, animal husbandry and
fishery industries. The holding subsidiary of the Company, Luzhou Red Sorghum Modern Agricultural
Development Co., Ltd., is engaged in the cultivation and sale of organic sorghum and enjoys the
reduction of corporate income tax preferences.
(3) According to the Article 15, Item 1 of the Provisional Regulations on Value-Added Tax, agricultural
producers sell self-produced agricultural products exempt from value-added tax. The holding subsidiary
of the Company, Luzhou Red Sorghum Modern Agricultural Development Co., Ltd., is engaged in the
cultivation and sale of organic sorghum and enjoys the value-added tax exemption.
(4) According to the Article 3, Item 7 of the Notice on Revise of Interim Measures of Accelerating the
Development in Headquarters Economy of China-Malaysia Qinzhou Industrial Park, till 31 December
2025, the enterprises in the Qinzhou Industrial Park that enjoy 15% of tax rate of Western Development
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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 28,711.93 26,281.86
Bank deposit 17,729,643,050.90 13,490,769,725.71
Other cash and cash equivalents 27,856,448.42 22,698,572.99
Total 17,757,528,211.25 13,513,494,580.56
Including: Total deposit outbound 68,948,954.39 63,993,390.31
Total amount with
restriction to use due to mortgage, 28,521,619.38 110,965,638.73
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 balance of CNY 17,856,448.42
deposited by the subsidiary, Luzhou Laojiao Electronic Commerce Co., Ltd. on the third-party e-
commerce platform, and guaranty letter deposit of CNY 10,000,000.00 by 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.
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 1,073,466,780.37 706,352,241.79
current profits/losses
Including:
Financial products at fair value
1,073,466,780.37 706,352,241.79
through profit or loss
Including:
Total 1,073,466,780.37 706,352,241.79
Other statements:
The closing balance represents the wealth management products of the collective asset management
plan purchased by the Company from securities-type companies and is measured at fair value based
on the amount calculated on the basis of the net unit value of the underlying assets as published on
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the official website of the asset manager.
7.3. Accounts receivable
7.3.1. Classification of accounts receivable
Monetary Unit: CNY
Closing Balance Opening Balance
Provision for bad Provision for bad
Book balance Book balance
Type debt Book debt Book
Proporti Proporti value Proporti Proporti value
Amount Amount Amount Amount
on on on on
Includin
g:
Account
s
receiva
ble
tested 6,265,8 100.00 326,470 5,939,4 1,713,9 100.00 85,699. 1,628,2
5.21% 5.00%
for 90.81 % .03 20.78 47.55 % 00 48.55
impairm
ent by
the
portfolio
Includin
g:
Account
s
receiva
ble
tested
for
impairm
6,265,8 100.00 326,470 5,939,4 1,713,9 100.00 85,699. 1,628,2
ent on 5.21% 5.00%
the 90.81 % .03 20.781 47.55 % 00 48.55
portfolio
with
charact
eristics
of credit
risk
6,265,8 100.00 326,470 5,939,4 1,713,9 100.00 85,699. 1,628,2
Total 5.21% 5.00%
90.81 % .03 20.78 47.55 % 00 48.55
Note: 1 The closing book balance increased by CNY 4,551,943.26, up 265.58% compared with the
opening balance, which was mainly due to the impact of the policy about sales on open account of the
overseas business of the Hong Kong Company.
Accounts receivable tested for impairment on the portfolio:
Monetary Unit: CNY
Closing Balance
Name
Book balance Provision for bad debt Proportion
Risk portfolio 6,265,890.81 326,470.03 5.21%
Other portfolio
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Total 6,265,890.81 326,470.03
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) 6,002,381.01
1-2 years 263,509.80
Total 6,265,890.81
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 85,699.00 240,771.03 326,470.03
risk portfolio
Total 85,699.00 240,771.03 326,470.031
Note: There is no significant provision in accounts receivable reversed or recovered in the reporting
period.
7.3.3. Top five entities with the largest balances of accounts receivable
Monetary Unit: CNY
Proportion to total closing
Closing balance of
Company name Closing Balance balance of accounts
provision for bad debt
receivable
China
Duty Free International 3,890,598.54 62.09% 194,529.93
LTD
Sazerac Distiller LLC 1,182,640.06 18.87% 59,132.00
BAIWAN WINES INC. 559,788.31 8.93% 27,989.42
Beijing Secoo Trading
263,509.80 4.21% 26,350.98
Limited
Park Street Imports, LLC 112,240.94 1.79% 5,612.05
Total 6,008,777.65 95.89%
7.4. Accounts receivable financing
Monetary Unit: CNY
Item Closing Balance Opening Balance
Bank acceptance bill 4,583,352,503.371 4,757,631,778.64
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Total 4,583,352,503.37 4,757,631,778.64
Note: 1. 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.
2. There was no allowance of provision for bad debt at the end of the reporting period.
Changes in accounts receivable financing in the reporting period and fair value:
□Applicable N/A
Please refer to the relevant information of disclosure of impairment provision of other accounts
receivable if adopting the general mode of expected credit loss to withdraw impairment provision of
accounts receivable financing.
□Applicable N/A
Other statements:
(1) There was no accounts receivable financing pledge at the end of year.
(2) There is CNY 9,632,933,882.81 as follows of accounts receivable financing that have been
endorsed to other parties by the Company but have not expired at the end of year:
Item Derecognition at period-end Not derecognition at period-end
Bank acceptance bill 9,632,933,882.81
Subtotal 9,632,933,882.81
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 108,917,843.70 95.33% 174,252,091.59 97.85%
1-2 years 3,541,174.81 3.10% 3,411,121.11 1.92%
2-3 years 1,633,422.20 1.43% 424,476.11 0.24%
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Over 3 years 165,065.55 0.14%
Total 114,257,506.261 178,087,688.81
Note: 1. The closing balance decreased by CNY 63,830,182.55 compared with opening balance, with
an decrease by 35.84%, mainly due to the decrease of prepayments with the decline of product
promotion activities.
Reasons for significant prepayments whose aging is longer than 1 year without timely settlement:
There is no significant prepayment whose aging is longer than 1 year.
7.5.2. Top five entities with the largest balances of prepayment
Proportion to the total closing
Company Name Closing Balance
balance of prepayment
Sports Equipment Center of General
26,712,328.78 23.38%
Administration of Sport of China
China Railway Chengdu Group Co.,Ltd. 13,101,150.69 11.47%
Luzhou Western Gas Co., Ltd. 12,050,769.30 10.55%
Luzhou Power Supply Company of State Grid
6,984,742.47 6.11%
Sichuan Electric Power Company
Sichuan Jiacheng Jingwei Culture
5,342,465.75 4.68%
Communication Co., Ltd.
Subtotal 64,191,456.99 56.18%
7.6. Other receivables
Monetary Unit: CNY
Item Closing Balance Opening Balance
Other receivables 23,396,533.981 28,615,361.96
Total 23,396,533.98 28,615,361.96
Note: 1. Other receivables above-mentioned refer to other receivables after deducted interest
receivable and dividend receivable.
7.6.1. Other receivables
7.6.1.1. Other receivables disclosed by nature
Monetary Unit: CNY
Nature Closing book balance Opening book balance
Intercourse funds 18,516,591.35 19,729,613.70
Petty cash 326,785.39 292,228.26
Saving deposits involving contract
129,049,496.98 132,376,912.43
disputes
Total 147,892,873.721 152,398,754.39
Note 1: The saving deposits involving contract disputes are three deposits amounting to CNY
500,000,000.00 with Changsha Yingxin Sub-branch of Agricultural Bank of China and Nanyang
Zhongzhou Sub-branch of Industrial and Commercial Bank of China disclosed by the Company in the
2014 Annual Report. The deposits have lost the nature of monetary fund due to their involvement in
179
2022 Annual Report of Luzhou Laojiao Co., Ltd.
contract disputes and have thus been transferred into “other receivables”.
7.6.1.2. 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 of the
924,947.31 924,947.31
current period
Write-off of the
212,000.00 212,000.00
current period
Balance of 31
4,496,339.741 120,000,000.00 124,496,339.74
December 2022
Note 1: There is no significant amount change of loss provision in the current period.
Changes of book balance with significant amount changed of loss provision in the current period
□Applicable N/A
Disclosure by aging
Monetary Unit: CNY
Aging Book balance
Within 1 year (including 1 year) 11,192,350.26
1-2 years 636,514.08
2-3 years 3,542,500.00
Over 3 years 132,521,509.38
3-4 years 122,800.00
4-5 years 1,168,807.90
Over 5 years 131,229,901.48
Total 147,892,873.72
7.6.1.3. 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
120,000,000.00 120,000,000.00
tested for
impairment
180
2022 Annual Report of Luzhou Laojiao Co., Ltd.
individually
Other
receivables
tested for 3,783,392.43 924,947.31 212,000.00 4,496,339.74
impairment by
the portfolio
Total 123,783,392.43 924,947.31 212,000.00 124,496,339.74
7.6.1.4. Other receivables actually verified in the current period
Monetary Unit: CNY
Item Amount
Other receivables 212,000.001
Note 1: There are no other receivables actually verified in the current period.
7.6.1.4. 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
Agricultural Bank
of China
Changsha
Yingxin Sub-
branch, Industrial Saving deposits
and Commercial involving 129,049,496.98 Over 5 years 87.26% 120,000,000.00
Bank of China contract disputes
Nanyang
Zhongzhou Sub-
branch and
another bank
CTS Luzhou
Laojiao Cultural Security deposit
Within 1 year, 2-
Tourism and intercourse 5,111,743.43 3.46% 780,587.17
Development funds 3 years
Co., Ltd.
Longmatan
Power Supply
Bureau of Security deposit 1,520,000.00 Over 5 years 1.03% 1,520,000.00
Luzhou Power
Bureau
Southwest
United Equity
Security deposit 1,250,000.00 Within 1 year 0.85% 62,500.00
Exchange Co.,
Ltd.
Online Banking
(Beijing) 1-2 years, 3-4
Security deposit 500,000.00 0.34% 80,000.00
Technology Co., years
Ltd.
Total 137,431,240.41 92.93% 122,443,087.17
7.7. Inventories
Whether the Company needs to comply with the disclosure requirements of real estate industry
No
181
2022 Annual Report of Luzhou Laojiao Co., Ltd.
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 128,252,608.95 128,252,608.95 123,986,924.38 123,986,924.38
Goods in
7,305,642,685.28 7,305,642,685.28 5,255,917,501.41 5,255,917,501.41
progress
Finished
2,382,939,263.97 2,382,939,263.97 1,855,731,688.91 1,855,731,688.91
goods
Goods in
23,907,816.65 23,907,816.65 41,937,052.10 41,937,052.10
transit
Total 9,840,742,374.851 9,840,742,374.85 7,277,573,166.80 7,277,573,166.80
Note: 1. At the end of the period, it increased by CNY 2,563,169,208.05, up 35.22% compared with
the beginning of the period, which was mainly due to the joint impact of the Company's continuous
promotion of the plan on high-quality liquor production capacity and quality improvement,
management requirements for product storage period and increase of the production volume of
product.
2. The closing balance of inventories included no capitalized amount of borrowing expenses.
3. The closing balance included no restricted balance.
4. There were no unsettled assets of finished job caused by the construction contract at the end of
the period.
7.8. Other current assets
Monetary Unit: CNY
Item Closing Balance Opening Balance
Value-added tax 139,165,221.10 82,734,324.31
Corporate income tax 9,447,204.77 24,638,887.44
Other taxes 4,423,521.07 4,601,321.16
Total 153,035,946.94 111,974,532.91
Other statements:
The value-added tax expected to be deducted in the next fiscal year and corporate income tax and
other taxes are disclosed in other current assets.
182
2022 Annual Report of Luzhou Laojiao Co., Ltd.
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, 43,897 27,283 2,497,
12,402 2,567,
ies 328,16 ,917.3 ,114.4 540,59
Co., ,376.1 098.80
5.33 1 0 2.05
Ltd. 9
Luzho
u
Laojiao
Postdo
ctoral
Workst 40,000 40,185
185,89
ation ,000.0 ,894.7
Techno 4.77
0 7
logy
Innova
tion
Co.,
Ltd.
Sichua
n
Develo
pment
5,726, 162,80 5,889,
Wine
Invest 848.36 5.88 654.24
ment
Co.,
Ltd.
Sichua
n
Tongni
ang
Baijiu
Industr
y
7,887, 199,39 8,086,
Techno
logy 461.52 4.39 855.91
Resear
ch
Institut
e Co.,
Ltd.
Note
CTS
Luzho 119,80 - 115,79
u
1,761. 4,004, 7,556.
Laojiao
Cultura 04 204.84 20
l
183
2022 Annual Report of Luzhou Laojiao Co., Ltd.
Touris
m
Develo
pment
Co.,
Ltd.
-
2,626, 40,000 40,441 27,283 2,667,
Subtot 12,402 2,567,
744,23 ,000.0 ,807.5 ,114.4 500,55
al ,376.1 098.80
6.25 0 1 0 3.17
9
-
2,626, 40,000 40,441 27,283 2,667,
12,402 2,567,
Total 744,23 ,000.0 ,807.5 ,114.4 500,55
,376.1 098.80
6.25 0 1 0 3.171
9
Note: 1. On 10 March 2022, Luzhou Laojiao Postdoctoral Workstation Technology Innovation Co., Ltd.
was incorporated, and the Company contributes CNY 40 million with the shareholding ratio as 40.00%
measured by equity method; Laojiao Group contributes CNY 51 million with the shareholding ratio as
51.00%; and Luzhou Energy Investment Co., Ltd. contributes CNY 9 million with the shareholding ratio
as 9.00%.
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:
China Tourism Group Duty Free
807,139,120.071
Corporation Limited
Guotai Junan Securities Co., Ltd. 160,049,389.21 210,690,476.31
Luzhou Bank Co., Ltd. 120,158,392.72 102,174,621.71
Guotai Junan Investment
22,611,834.24 22,611,834.24
Management Co., Ltd.
North Chemical Industries Co.,Ltd. 14,931,950.24 15,963,896.54
Guojiu Big Data Co., Ltd. 10,000,000.00 10,000,000.00
Sichuan China Baijiu Golden Triangle
Brand Operation Development Co.,
1,846,291.63 1,871,291.63
Ltd. and other equity instrument
investments
Total 1,136,736,978.11 363,312,120.43
Note: 1 In August 2022, the Company subscribed 3,928,600 shares of China Tourism Group Duty Free
Corporation Limited at HKD 158 per share; based on the holding intention, the Company classified
them as financial assets measured at fair value through other comprehensive income.
Categories of non-trading equity instrument investment in the current period:
Monetary Unit: CNY
Recognized Amount of Reason for Reason of
Accumulative Accumulative
Item dividends other assigning to other
gains losses
income comprehens measure at comprehensiv
184
2022 Annual Report of Luzhou Laojiao Co., Ltd.
ive income fair value and e income
transferred changes transferred to
to retained recorded into retained
earnings other earnings
comprehensiv
e income
According to
China Tourism the mode of
Group Duty
managing
Free 264,853,739.27
Corporation assets by
Limited management
layer
According to
the mode of
Guotai Junan
managing
Securities 8,008,357.96 147,330,232.45
Co., Ltd. assets by
management
layer
According to
the mode of
Luzhou Bank managing
69,038,392.72
Co., Ltd. assets by
management
layer
According to
Guotai Junan the mode of
Investment managing
Management assets by
Co., Ltd. management
layer
According to
North the mode of
Chemical managing
70,359.97 13,901,950.24
Industries 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
2,354,000.00
Development assets by
Co., Ltd. management
layer
According to
the mode of
Sichuan
managing
Deyang Jintai 2,000,000.00
Hotel assets by
management
layer
Hainan According to
Huitong the mode of
1,000,000.00
International managing
Trust assets by
185
2022 Annual Report of Luzhou Laojiao Co., Ltd.
Company management
layer
Sichuan
China Baijiu
Golden According to
Triangle the mode of
Brand
managing
Operation 398,926.37
Development assets by
Co., Ltd. and management
other equity layer
instrument
investments
7.11. Investment property
7.11.1. Investment property with cost measurement model
Applicable □ N/A
Monetary Unit: CNY
Buildings and Construction in
Item Land use right Total
constructions progress
I. Original cost:
1.Opening balance
2.Increase in current
47,321,613.93 9,566,480.21 56,888,094.14
period
(1) External
purchase
(2) Transfer from
inventories/fixed
47,321,613.93 9,566,480.21 56,888,094.14
assets/construction
in progress
(3) Increase from
business
combination
3.Decrease in
current period
(1) Disposal
(2) Other transfer out
4.Closing Balance 47,321,613.93 9,566,480.21 56,888,094.14
II. Accumulated
depreciation and
amortization
1.Opening Balance
2.Increase in current
15,125,126.70 2,613,513.22 17,738,639.92
period
(1) Provision or
amortization
(2) Transfer from
fixed
15,125,126.70 2,613,513.22 17,738,639.92
assets/intangible
assets
3.Decrease in
186
2022 Annual Report of Luzhou Laojiao Co., Ltd.
current period
(1) Disposal
(2) Other transfer out
4.Closing Balance 15,125,126.70 2,613,513.22 17,738,639.92
III. Provision for
impairment
1.Opening Balance
2.Increase in current
period
(1) Provision
3.Decrease in
current period
(1) Disposal
(2) Other transfer out
4.Closing Balance
IV. Book Value
1.Closing Book Value 32,196,487.23 6,952,966.99 39,149,454.22
2.Opening Book
Value
7.11.2. Investment property without certification of right
Monetary Unit: CNY
Reason for not having the
Item Book value
certification of right
Buildings of the Company 32,196,487.23 In procedure
Subtotal 32,196,487.23
7.12. Fixed assets
Monetary Unit: CNY
Item Closing Balance Opening Balance
Fixed assets 8,853,348,204.831 8,088,216,508.58
Disposal of fixed assets 2,910,393.95 1,270,765.81
Total 8,856,258,598.78 8,089,487,274.39
Note 1: The fixed assets listed above refer to the fixed assets deducted those disposed.
7.12.1. 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 45,071,455.46 1,491,462,062 10,357,604,37
187
2022 Annual Report of Luzhou Laojiao Co., Ltd.
balance .38 .03 1 .44 0.12
2.Increase in 925,644,723.5 110,722,803.2 211,188,662.2 128,237,528.2 1,378,817,730
3,024,012.74
current period 9 3 1 8 .05
(1) External
18,068,453.53 11,456,545.13 25,381,366.38 2,106,828.31 3,985,597.83 60,998,791.18
purchase
(2) Transfer
from 598,283,047.9 181,067,493.5 123,284,209.7 1,003,528,058
99,983,655.91 909,651.79
construction in 0 5 0 .85
progress
(3) Increase
from business
combination
(4) Adjustment
309,293,222.1 314,144,839.8
for completion -717,397.81 4,593,762.07 7,532.64 967,720.75
settlement 6 1
(5) Transfer
from
146,040.21 146,040.21
intangible
assets
3.Decrease in 151,567,091.0 234,190,540.3
53,437,448.01 12,348,792.39 1,730,873.16 15,106,335.79
current period 2 7
(1) Disposal 104,245,477.0 186,752,519.5
53,437,448.01 12,232,385.45 1,730,873.16 15,106,335.79
or retirement 9 0
(2) Transfer to
investment 47,321,613.93 47,321,613.93
property
(3) Transfer to
long-term
116,406.94 116,406.94
deferred
expenses
(4) Transfer to
intangible
assets
4.Closing 7,584,141,471 1,174,111,092 1,093,021,145 1,604,593,254 11,502,231,55
46,364,595.04
Balance .95 .25 .63 .93 9.80
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 232,220,325.7 138,186,034.0 108,522,159.6 547,739,384.3
3,286,434.42 65,524,430.56
current period 6 1 4 9
232,220,325.7 138,186,034.0 108,400,989.2 547,618,213.9
(1) Provision 3,286,434.42 65,524,430.56
6 1 2 7
(2) Changes
of exchange 121,170.42 121,170.42
rates
3.Decrease in 168,243,890.9
94,729,431.21 50,538,170.92 9,048,465.02 1,644,329.52 12,283,494.29
current period 6
(1) Disposal 153,086,797.4
79,604,304.51 50,538,170.92 9,016,498.18 1,644,329.52 12,283,494.29
or retirement 2
(2) Transfer to
investment 15,125,126.70 15,125,126.70
property
(3) Transfer to
long-term
31,966.84 31,966.84
deferred
expenses
188
2022 Annual Report of Luzhou Laojiao Co., Ltd.
4.Closing 956,719,104.1 470,768,377.6 426,894,845.3 761,612,077.9 2,648,260,414
32,266,009.80
Balance 8 5 7 0 .90
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 6,626,799,427 703,342,714.6 666,126,300.2 842,981,177.0 8,853,348,204
14,098,585.24
Book Value .70 0 6 3 .83
2.Opening 5,990,212,689 733,705,222.4 566,760,125.0 783,090,920.8 8,088,216,508
14,447,550.56
Book Value .68 7 6 1 .58
7.12.2. Fixed assets leased out through operating lease
Monetary Unit: CNY
Item Closing book value
Buildings and constructions 25,700,763.32
Subtotal 25,700,763.32
7.12.3. 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 the Company 23,940,326.21 historical reasons, and it plans to be
processed after gradually improving
procedures.
Buildings of the Company 266,081,326.56 In procedure
Buildings of the subsidiary-brewing
4,411,836,502.14 In procedure
company
Buildings of the subsidiary- Guangxi
59,132,570.34 In procedure
Imported Liquor Industry
Subtotal 4,760,990,725.25
7.12.4. Disposal of fixed assets
Monetary Unit: CNY
Item Closing Balance Opening Balance
Disposal and retirement of assets 2,910,393.95 1,270,765.81
189
2022 Annual Report of Luzhou Laojiao Co., Ltd.
Total 2,910,393.95 1,270,765.81
7.13. Construction in progress
Monetary Unit: CNY
Item Closing Balance Opening Balance
Construction in progress 808,919,047.21 1,259,845,487.50
Total 808,919,047.21 1,259,845,487.50
7.13.1. 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 638,798,849.16 638,798,849.16 301,985,162.65 301,985,162.65
Intelligent
packaging
center
Landscape
improvement
project of
Luzhou
Laojiao 149,089,445.94 149,089,445.94
Huangyi
Brewing
Ecological
Park
Technical
renovation
project of
Luzhou 12,284,062.35 12,284,062.35
Laojiao
intelligent
brewing (I)
Other projects 157,836,135.70 157,836,135.70 245,707,057.09 245,707,057.09
Total 808,919,047.211 808,919,047.21 1,259,845,487.50 1,259,845,487.50
Note: 1. The closing balance decreased CNY 450,926,440.29 compared with the opening balance, with
a decrease by 35.79%, because of the carry forward of the project for completion in the current period.
190
2022 Annual Report of Luzhou Laojiao Co., Ltd.
7.13.2. 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 669,3 563,0 1,724, 561,4 3,388,
91.57 100.0
t of 21,56 63,82 916.3 00,49 240.5 Other
% 0%
Luzho 1.00 1.82 5 7.60 7
u
Laojia
o
produ
ction
suppo
rting
Techni
cal
renov
ation
of
Luzho
1,886, 301,9 337,7 638,7
u 685,7 267,0 36.54 40.00 150,7 150,7
176,0 85,16 66,48 98,84 3.59% Other
Laojia 71.68 24.78 % % 69.29 69.29
00.00 2.65 2.97 9.16
o
Intellig
ent
packa
ging
center
Lands
cape
impro
veme
nt
projec 200,0 149,0 28,25 177,3
3,653. 95.16 100.0
t of 65,40 89,44 9,956. 45,74 Other
94 % 0%
Luzho 0.00 5.94 65 8.65
u
Laojia
o
Huan
gyi
191
2022 Annual Report of Luzhou Laojiao Co., Ltd.
Brewi
ng
Ecolo
gical
Park
Techni
cal
renov
ation
projec
t of
4,782, 583,3 571,0 12,28
Luzho 12.20
509,0 00,24 16,18 4,062. 1.00% Other
u %
00.00 5.67 3.32 35
Laojia
o
intellig
ent
brewi
ng (I)
7,538, 1,014, 951,0 739,4 574,6 651,0
150,7 150,7
Total 071,9 138,4 51,60 32,01 75,10 82,91 3.59%
69.29 69.29
61.00 30.41 1.64 7.93 2.61 1.511
Note: 1. Other decreases refer to land use rights, software and low priced and easily worn articles
transferred to intangible assets.
7.14. 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
4,759,660.94 4,759,660.94
period
(1) Lease in 3,237,563.67 3,237,563.67
(2) Changes of exchange
1,522,097.27 1,522,097.27
rates
3. Decrease in current
12,753,514.58 12,753,514.58
period
(1) Adjustment for change
12,753,514.58 12,753,514.58
of lease term
4. Closing Balance 32,680,786.33 24,896,637.03 57,577,423.36
II. Accumulated
amortization
1. Opening Balance 3,634,912.70 9,221,554.26 12,856,466.96
2. Increase in current
3,634,912.70 11,832,498.22 15,467,410.92
period
(1) Provision 3,634,912.70 11,003,664.32 14,638,577.02
(2) Changes of exchange
828,833.90 828,833.90
rates
3. Decrease in current
10,698,980.15 10,698,980.15
period
(1) Disposal
(1) Adjustment for change 10,698,980.15 10,698,980.15
192
2022 Annual Report of Luzhou Laojiao Co., Ltd.
of lease term
4. Closing Balance 7,269,825.40 10,355,072.33 17,624,897.73
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 25,410,960.93 14,541,564.70 39,952,525.63
2. Opening Book Value 29,045,873.63 23,668,936.41 52,714,810.04
7.15. Intangible assets
7.15.1. Details of intangible assets
Monetary Unit: CNY
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.
2,744,202,317.34 1,700,050.44 2,808,508,864.91
Balance 5 08
2. Increase in
589,960,901.10 2,620,476.67 224,168.74 592,805,546.51
current period
(1) Acquired 6,754,009.86 2,545,221.23 224,168.74 9,523,399.83
(2) Internal
developed
(3) Business
combination
(4)
Transferred
from 582,258,391.12 75,255.44 582,333,646.56
construction in
progress
(5) Adjustment
for completion 948,500.12 948,500.12
settlement
3. Decrease in
46,020,547.15 46,020,547.15
current period
(1) Disposal 36,454,066.94 36,454,066.94
(2) Transfer to
investment 9,566,480.21 9,566,480.21
property
4. Closing 63,336,227.7 2,114,914.
3,288,142,671.29 1,700,050.44 3,355,293,864.27
Balance 2 82
II.
Accumulated
193
2022 Annual Report of Luzhou Laojiao Co., Ltd.
amortization
1. Opening 28,303,256.0 1,798,629.
171,347,186.40 700,604.04 202,149,676.19
Balance 2 73
2. Increase in
76,292,727.98 130,005.05 4,104,831.25 76,477.68 80,604,041.96
current period
(1) Provision 76,292,727.98 130,005.05 4,104,831.25 76,477.68 80,604,041.96
3. Decrease in
10,731,706.67 10,731,706.67
current period
(1) Disposal 8,118,193.45 8,118,193.45
(2) Transfer to
investment 2,613,513.22 2,613,513.22
property
4. Closing 32,408,087.2 1,875,107.
236,908,207.71 830,609.09 272,022,011.48
Balance 7 41
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 30,928,140.4
3,051,234,463.58 869,441.35 239,807.41 3,083,271,852.79
Book Value 5
2. Opening 32,412,495.0
2,572,855,130.94 999,446.40 92,116.35 2,606,359,188.72
Book Value 3
There is no proportion of intangible assets formed by internal development to the balance of intangible
assets at the period-end.
7.16. Long-term deferred expense
Monetary Unit: CNY
Item Opening Balance Increase Amortization Other decrease Closing Balance
Improvement
expense of
1,463,869.21 116,406.94 872,334.97 -2,069.74 710,010.92
rented fixed
assets
Total 1,463,869.21 116,406.94 872,334.97 -2,069.741 710,010.92
Note: 1 Other decrease was generated from changes of exchange rates.
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2022 Annual Report of Luzhou Laojiao Co., Ltd.
7.17. Deferred tax assets/ deferred tax liabilities
7.17.1. 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
128,012,783.36 31,895,371.12 127,059,130.30 31,755,535.22
impairment
Unrealized profits
from internal 2,839,779,249.07 709,944,812.27 3,161,541,177.98 790,385,294.49
transactions
Deductible losses 9,551,262.70 2,312,572.68 5,716,197.58 1,429,049.40
Impact from salary 630,936,117.63 155,191,186.34 591,456,408.66 145,429,434.14
Impact from deferred
33,704,323.80 8,426,080.95 28,531,014.28 7,132,753.57
earnings
Impact from fixed
227,859.62 37,596.84 529,787.16 96,441.51
assets depreciation
Recognition costs of
restricted shares for
367,875,588.321 89,288,197.09 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
Impact of income tax
from fair value
changes of held-for- 26,533,219.63 6,633,304.92
trading financial
assets
Total 4,042,373,330.50 1,005,167,353.80 3,955,481,713.51 986,112,983.42
Note: 1. Deductible temporary differences of CNY 367,875,588.32 of costs and expenses recognized
during the vesting period of restricted shares for share incentives represent the estimated future pre-tax
deductible amounts based on the Company's share price less the grant price at the end of the period.
7.17.2. Deferred tax liabilities before offset
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
495,124,314.68 123,781,078.67 263,959,837.80 65,989,959.48
instrument
investment
Fair value changes
of held-for-trading 6,352,241.79 1,588,060.45
financial assets
Impact from the
policy of one-time 172,516,000.07 42,262,585.21
pre-tax deduction of
195
2022 Annual Report of Luzhou Laojiao Co., Ltd.
fixed assets
Total 667,640,314.75 166,043,663.88 270,312,079.59 67,578,019.93
7.17.3. Details of unrecognized deferred tax assets
Monetary Unit: CNY
Item Closing Balance Opening Balance
Deductible losses 72,503,754.75 201,219,210.53
Credit impairment losses and Asset
65.28
impairment losses
Impact from employee benefits
2,369,328.86 139,023.54
payable
Total 74,873,148.89 201,358,234.07
7.17.4. 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 6,496,423.50
The 2nd year 14,491,365.44 6,713,657.39
The 3rd year 21,651,366.58 14,491,365.44
The 4th year 11,572,224.60 108,989,982.02
The 5th year 18,292,374.63 71,024,205.68
Total 72,503,754.75 201,219,210.53
7.18. Other non-current assets
Monetary Unit: CNY
Closing Balance Opening Balance
Provision
Item Provision
for
Book balance Book value Book balance for Book value
impairme
impairment
nt
Prepaid
equipment 650,384,435.7
196,095,702.09 196,095,702.091 650,384,435.70
and land 0
expense
650,384,435.7
Total 196,095,702.09 196,095,702.09 650,384,435.70
0
Note: 1. At the end of the period, it decreased by CNY 454,288,733.61, down 69.85%, which was
mainly due to the impact of the completion and transfer to fixed assets of construction in progress and
the settlement of project device prepayment of Brewing Company as the Company's subsidiary.
7.19. Accounts payable
7.19.1. Presentation of accounts payable
Monetary Unit: CNY
Category Closing Balance Opening Balance
196
2022 Annual Report of Luzhou Laojiao Co., Ltd.
Materials and service expense 1,042,394,395.05 1,171,595,976.46
Engineering equipment expense 1,269,271,189.99 1,248,758,493.07
Total 2,311,665,585.04 2,420,354,469.53
7.19.2. Significant accounts payable whose aging is longer than 1 year
Monetary Unit: CNY
Reason for not payment or carrying
Category Closing Balance
forward
China Construction First Group
257,461,125.73 Within the contract settlement period
Corporation Limited
Total 257,461,125.73
7.20. Contract liabilities
Monetary Unit: CNY
Category Closing Balance Opening Balance
Within 1 year 2,540,635,630.98 3,484,385,115.64
1-2 years 10,654,577.66 4,042,470.18
2-3 years 1,199,843.23 1,569,941.86
Over 3 years 13,884,666.89 20,113,173.57
Total 2,566,374,718.761 3,510,110,701.25
Note: 1. There is no significant contract liability whose aging is longer than 1 year.
7.21. Employee benefits payable
7.21.1. Employee benefits payable shown as follows
Monetary Unit: CNY
Increase in current Decrease in current
Item Opening Balance Closing Balance
period period
1. Short-term
611,190,565.92 1,061,312,546.58 1,016,890,980.76 655,612,131.74
benefits
2. Post-employment
benefits- defined 36,904,203.51 122,740,481.69 140,230,903.16 19,413,782.04
contribution plans
3. Termination
8,971.53 268,397.42 268,397.42 8,971.53
benefits
Total 648,103,740.96 1,184,321,425.69 1,157,390,281.34 675,034,885.31
7.21.2. Short-term employee benefits payable shown as follows
Monetary Unit: CNY
Increase in current Decrease in current
Item Opening Balance Closing Balance
period period
1. Wages, bonuses,
allowances and 549,316,255.45 901,369,990.30 838,840,852.30 611,845,393.45
grants
2. Employees’
19,745,831.50 19,745,831.50
welfare
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2022 Annual Report of Luzhou Laojiao Co., Ltd.
3. Social insurance
5,366,001.71 61,808,037.97 65,136,740.21 2,037,299.47
premiums
Work-related injury
1,409,665.57 1,615,456.21 2,514,871.07 510,250.71
insurance
Medical and
maternity insurance 3,956,336.14 60,192,581.76 62,621,869.14 1,527,048.76
premium
4. Housing funds 9,230,529.23 58,371,693.30 65,513,976.94 2,088,245.59
5. Labor union
expenditures and
47,277,779.53 20,016,993.51 27,653,579.81 39,641,193.23
employee education
funds
Total 611,190,565.92 1,061,312,546.58 1,016,890,980.76 655,612,131.74
7.21.3. Defined contribution plan shown as follows
Monetary Unit: CNY
Increase in current Decrease in current
Item Opening Balance Closing Balance
period period
1. Basic endowment
17,650,834.85 87,225,437.36 86,514,493.25 18,361,778.96
insurance premium
2. Unemployment
5,993,266.59 559,321.55 6,225,768.28 326,819.86
insurance premium
3. Enterprise annuity 13,260,102.07 34,955,722.78 47,490,641.63 725,183.22
Total 36,904,203.51 122,740,481.69 140,230,903.16 19,413,782.04
7.22. Taxes payable
Monetary Unit: CNY
Item Closing Balance Opening Balance
Value-added tax 502,641,326.22 421,216,223.94
Consumption tax 1,386,271,621.60 1,263,440,836.05
Enterprise income tax 1,345,243,541.07 1,327,750,786.20
Individual income tax 10,295,445.63 10,467,970.24
Urban maintenance and construction
131,841,222.44 82,437,545.17
tax
Education surcharge 56,445,651.96 35,234,596.27
Local education surcharge 37,733,654.17 23,651,376.27
Stamp duty 9,937,931.91 8,490,523.62
Land use tax 437,618.74 437,619.35
Others 302,715.24 352,150.68
Total 3,481,150,728.98 3,173,479,627.79
7.23. Other payables
Monetary Unit: CNY
Item Closing Balance Opening Balance
Dividend payable 16,594,850.58
Other payables 1,185,814,427.911 652,393,292.60
Total 1,202,409,278.49 652,393,292.60
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2022 Annual Report of Luzhou Laojiao Co., Ltd.
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 533,421,135.31, up
81.76% compared with the opening balance, which was mainly due to the impact of liabilities of CNY
639,021,998.78 recognized for repurchase obligations under the restricted share incentive plan.
7.23.1. Dividend payable
Monetary Unit: CNY
Item Closing Balance Opening Balance
Ordinary share dividends 16,594,850.581
Total 16,594,850.58
Note: 1. The closing balance refer to the dividends distributed but not yet paid to minority shareholders
of the Company’s subsidiary Boda Marketing Company.
7.23.2. Other payables
7.23.2.1. Categories by nature
Monetary Unit: CNY
Item Closing Balance Opening Balance
Security deposit 527,881,969.37 628,174,772.12
Intercourse funds 10,226,769.10 17,757,284.78
Repurchase obligations of restricted
639,021,998.78
shares
Others 8,683,690.66 6,461,235.70
Total 1,185,814,427.91 652,393,292.60
7.23.2.2. 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.
7.24. Non-current liabilities due within one year
Monetary Unit: CNY
Item Closing Balance Opening Balance
Long-term loans due within one year 20,400,000.00
Lease liabilities due within one year 14,530,370.36 13,983,036.95
Interest of long-term loans due within
1,984,027.78
one year
Interest of bonds payable due within
44,965,068.49 72,219,178.08
one year
Total 81,879,466.63 86,202,215.03
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2022 Annual Report of Luzhou Laojiao Co., Ltd.
7.25. Other current liabilities
Monetary Unit: CNY
Item Closing Balance Opening Balance
Output VAT to be transferred 333,627,225.47 456,314,391.17
Total 333,627,225.47 456,314,391.17
7.26. Long-term loans
7.26.1. Long-term loans
Monetary Unit: CNY
Item Closing Balance Opening Balance
Credit loans 3,200,000,000.00
Less: Long-term loans due within one
-20,400,000.00
year
Total 3,179,600,000.00
7.27. Bonds payable
7.27.1. Bonds payable
Monetary Unit: CNY
Item Closing Balance Opening Balance
Corporate bonds in 2019 (Phase I) 2,494,539,629.08
Corporate bonds in 2020 (Phase I) 1,497,461,348.61 1,496,246,113.15
Corporate bonds in 2022 (Phase I) 1,498,638,223.25
Total 2,996,099,571.86 3,990,785,742.23
7.27.2. 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
Issuing of
Bond Par Issuing Duratio g in the interes in the
amoun premiu Closing Balance
name value date n Balanc current t by reporti
t m and
e period par ng
deprec
value period
iation
Corpor
ate
bonds 2,500, 27 2,490, 2,494, 58,849 2,500,
5,460,
in 000,00 August 3+2 000,00 539,62 ,315.0 000,00
2019 370.92
0.00 0.00 9.08 7 0.00
(Phase 2019
I)
Corpor
ate 1,500, 16 1,494, 1,496, 52,500
bonds 1,215,
000,00 March 5 000,00 246,11 ,000.0 1,497,461,348.61
in 235.46
2020 0.00 0.00 3.15 0
2020
(Phase
200
2022 Annual Report of Luzhou Laojiao Co., Ltd.
I)
Corpor
ate 2
bonds 1,500, 1,498, 1,498, -
Decem 3,562,
in 000,00 3 800,00 800,00 161,77 1,498,638,223.25
2022 ber 500.00
0.00 0.00 0.00 6.75
(Phase 2022
I)
5,482, 3,990, 1,498, 114,91 2,500,
6,513,
Total —— 800,00 785,74 800,00 1,815. 000,00 2,996,099,571.86
829.63
0.00 2.23 0.00 07 0.00
7.28. Lease liabilities
Monetary Unit: CNY
Item Closing Balance Opening Balance
Lease payment 48,776,000.46 61,305,700.55
Less: unrecognized financing cost -5,148,660.44 -6,654,995.52
Lease liabilities due within one year -14,530,370.36 -13,983,036.95
Total 29,096,969.66 40,667,668.08
7.29. 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 11,800,000.00 6,626,690.48 33,704,323.80 financial
grants
allocation
Total 28,531,014.28 11,800,000.00 6,626,690.48 33,704,323.80 --
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
mode
applicatio
n project
of digital 6,070,300. 1,386,000. 4,684,300. Related to
workshop 00 00 00 assets
for solid
state
baijiu
production
Constructi
on project
of spirit
5,950,000. 1,400,000. 4,550,000. Related to
room of
00 00 00 assets
Luzhou
Laojiao
brewing
201
2022 Annual Report of Luzhou Laojiao Co., Ltd.
technical
renovation
Luzhou
Laojiao
automatic
wine
425,000.0 830,000.0 119,761.9 1,135,238. Related to
production
0 0 0 10 assets
line
technical
renovation
project
Boiler
reconstruc
tion
project of
7,585,714. 1,264,285. 6,321,428. Related to
Luohan
28 72 56 assets
Brewing
Base of
Luzhou
Laojiao
Brewing
wastewate
8,500,000. 5,000,000. 2,357,142. 11,142,85 Related to
r
00 00 86 7.14 assets
treatment
project
Improvem
ent and
technical
renovation
5,970,000. 5,870,500. Related to
project of 99,500.00
00 00 assets
Luzhou
Laojiao
production
supporting
7.30. Share capital
Monetary Unit: CNY
Increases/decreases in the current period (+, -)
Conversi
on of
Opening Balance Issuance of Bond Closing Balance
reserves Other
s Subtotal
new shares funds s
share
into
shares
Total
number of 1,464,752,476.00 7,142,624.00 7,142,624.001 1,471,895,100.00
shares
Note: 1. In February 2022, the registration of 6,862,600 shares of the Restricted Share Incentive Plan
granted by the Company for the first time were completed; in September 2022, the Company granted
342,334 shares of the Restricted Share Incentive Plan for the second time; in September 2022, with
seven awardees no longer eligible, the Company decided to repurchase and retire the 62,310 restricted
shares of them which had been granted but not lifted from restricted sales; so far, the above grant and
repurchase of the Restricted Share Incentive Plan had all been registered and the total shares of the
202
2022 Annual Report of Luzhou Laojiao Co., Ltd.
Company changed to 1,471,895,100 shares.
7.31. Capital reserves
Monetary Unit: CNY
Increase in current Decrease in current
Item Opening Balance Closing Balance
period period
Share premium
3,542,967,507.48 659,653,965.64 5,512,316.46 4,197,109,156.66
(capital premium)
Other capital
212,387,158.25 390,658,154.08 603,045,312.33
reserves
Total 3,755,354,665.73 1,050,312,119.72 5,512,316.46 4,800,154,468.99
Other statements, including increase/decrease and reasons thereof:
Note 1: The increase and decrease of capital premium of the period is the premium payment received
and paid for the grant and repurchase of restricted shares.
Note 2: The increase in other capital reserves for the period was mainly due to the impact of the
income tax of the costs and expenses to be recognized in the period for the issuance of restricted
shares and the expected pre-tax deductible amount in future periods in excess of the recognized
costs and expenses.
7.32. Treasury shares
Monetary Unit: CNY
Increase in current Decrease in current
Item Opening Balance Closing Balance
period period
Perform the
repurchase
666,858,899.64 27,836,900.86 639,021,998.78
obligations under the
equity incentive
Total 666,858,899.64 27,836,900.86 639,021,998.78
Other statements, including notes to increase and decrease during the reporting period and the
reasons for changes:
Note: The Company recognized restricted shares repurchase obligations in the current period, raising
the treasury stock by CNY 666,858,899.64; the Company repurchased and retired restricted shares in
the current period, declining the treasury stock by CNY 5,574,626.46; and the treasury stock was
down by CNY 22,262,274.40 due to the expected cash dividend of unlockable restricted shares.
7.33. Other comprehensive income
Monetary Unit: CNY
Current Period
Less: Less:
Previously Previously Amount
Amount in
recognize recognize Amount attribute to
Opening current Closing
Item d in other d in other Less: attribute to non-
Balance period Balance
comprehe comprehe Income parent controlling
before
nsive nsive tax company sharehold
income
income income after tax ers after
tax
transferre transferre tax
d to profit d to
203
2022 Annual Report of Luzhou Laojiao Co., Ltd.
and loss retained
earnings
I. Other
comprehe
nsive
income
that will 193,605,1 173,373,3 173,373,3 366,978,5
not be 83.54 57.69 57.69 41.23
reclassifie
d into
profit and
loss
Fair value
changes
of other
193,605,1 173,373,3 173,373,3 366,978,5
equity
instrument 83.54 57.69 57.69 41.23
investmen
t
II. Other
comprehe
nsive
income - - - -
1,841,079.
that will be 26,078,03 8,308,184. 10,149,26 36,227,29
reclassifie 90
1.22 27 4.17 5.39
d into
profit and
loss
Including:
Other
comprehe
nsive
income - - - -
that will be
26,382,36 12,402,37 12,402,37 38,784,74
reclassifie
d into 4.46 6.19 6.19 0.65
profit and
loss under
equity
method
Difference
from
conversio
n of
304,333.2 4,094,191. 2,253,112. 1,841,079. 2,557,445.
financial
statement 4 92 02 90 26
s in
foreign
currency
167,527,1 165,065,1 163,224,0 1,841,079. 330,751,2
Total
52.32 73.42 93.52 90 45.84
7.34. Surplus reserves
Monetary Unit: CNY
Increase in current Decrease in current
Item Opening Balance Closing Balance
period period
Statutory surplus
1,464,752,476.00 7,142,624.00 1,471,895,100.00
reserves
Total 1,464,752,476.00 7,142,624.00 1,471,895,100.00
204
2022 Annual Report of Luzhou Laojiao Co., Ltd.
7.35. Undistributed profits
Monetary Unit: CNY
Item Current Period Previous Period
Undistributed profit before
21,187,860,235.89 16,236,513,212.43
adjustment at the end of the last year
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 10,365,383,281.80 7,955,554,351.73
period
Less: Provision of statutory surplus
7,142,624.00
reserves
Ordinary share dividends payable 4,773,919,306.55 3,004,207,328.27
Plus: Other transfer in 15,626.841
Undistributed profits at the end of the
26,772,197,213.98 21,187,860,235.89
period
Note: 1. Other transfers were the investment of the disposal of other equity instruments of Tourism
Company as the subsidiary of the Company in the current period, which was due to the impact of
transfers to retained earnings of relevant changes in fair value.
7.36. Operating revenue and cost of sales
Monetary Unit: CNY
Current Period Previous Period
Item
Revenue Cost of sales Revenue Cost of sales
Primary business 24,766,121,998.49 3,214,253,716.91 20,415,170,469.09 2,885,685,151.63
Other business 357,441,273.13 155,274,677.11 227,091,255.28 66,746,336.68
Total 25,123,563,271.62 3,369,528,394.02 20,642,261,724.37 2,952,431,488.31
Whether the lower of the net profit before and after deduction of non-recurring gains and losses through
audit is negative
□Yes No
Details:
Monetary Unit: CNY
Contract category Liquor sales Total
Commodity type
Including:
Medium and high
22,132,546,058.64 22,132,546,058.64
grade liquor
Other liquor 2,633,575,939.85 2,633,575,939.85
By operating
segment
Including:
Domestic 24,613,436,212.24 24,613,436,212.24
Outbound 152,685,786.25 152,685,786.25
Market or customer
type
205
2022 Annual Report of Luzhou Laojiao Co., Ltd.
Including:
Contract type
Including:
Commodity sales
24,766,121,998.49 24,766,121,998.49
contract
By commodity
transfer time
Including:
By contract term
Including:
By sales channel
Including:
Total 24,766,121,998.49 24,766,121,998.49
7.37. Business taxes and surcharges
Monetary Unit: CNY
Item Current Period Previous Period
Consumption tax 2,753,367,764.57 2,251,935,882.19
Urban maintenance and construction
370,928,389.23 286,067,925.02
tax
Educational surcharge 158,966,546.28 122,600,539.31
Property tax 75,661,405.90 74,979,375.32
Land use tax 35,777,691.90 30,117,077.49
Stamp duty 23,111,385.94 17,354,822.83
Local education surcharge 105,978,159.07 81,733,692.89
Others 156,944.59 112,227.80
Total 3,523,948,287.48 2,864,901,542.85
7.38. Selling and distribution expenses
Monetary Unit: CNY
Item Current Period Previous Period
Advertising promotion expense 1,880,179,769.91 1,769,053,962.56
Promotion expense 712,641,702.96 1,139,273,684.38
Employee compensation 355,699,286.88 357,659,249.63
Storage and logistics costs 138,589,417.94 100,059,219.52
Others 361,660,868.33 233,165,488.47
Total 3,448,771,046.02 3,599,211,604.56
7.39. General and administrative expenses
Monetary Unit: CNY
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2022 Annual Report of Luzhou Laojiao Co., Ltd.
Item Current Period Previous Period
Employee compensation 467,979,805.98 540,848,428.46
Depreciation and amortization 132,084,757.27 128,396,634.90
Management fee and service
115,361,022.69 73,918,283.32
expense
Others 446,996,671.29 312,953,021.17
Total 1,162,422,257.23 1,056,116,367.85
7.40. Research and development expenses
Monetary Unit: CNY
Item Current Period Previous Period
Comprehensive research and
206,248,486.571 137,712,329.78
development expenses
Total 206,248,486.57 137,712,329.78
Note: 1. The current period increased CNY 68,536,156.79 compared with previous period with an
increase by 49.77%, mainly due to increase in research and development projects.
7.41. Financial expenses
Monetary Unit: CNY
Item Current Period Previous Period
Interest expenses 229,673,136.36 195,125,786.35
Less: Interest income 505,746,664.32 419,897,541.04
Losses from currency exchange -16,072,149.45 3,646,806.44
Handling charges 4,070,627.61 2,280,061.14
Amortization of unrecognized
1,698,122.32 1,958,887.90
financing costs
Total -286,376,927.481 -216,885,999.21
Note: The current period decreased CNY 69,490,928.27 compared with previous period with a
decrease by 32.04%, mainly due to increase in interest income of capital.
7.42. Other income
Monetary Unit: CNY
Item Current Period Previous Period
Government grants 34,931,161.52 50,986,059.68
Individual income tax commission
1,593,155.57 1,333,171.71
refund
7.43. Investment income
Monetary Unit: CNY
Item Current Period Previous Period
Investment income from long-term
equity investments under the equity 84,626,608.53 195,543,058.40
method
Investment income gained during the 6,813,617.83
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2022 Annual Report of Luzhou Laojiao Co., Ltd.
period of holding held-for-trading
financial assets
Investment income from disposal of
9,438,465.78
held-for-trading financial assets
Dividend income gained during the
period of holding other equity 8,078,717.93 6,662,660.52
instrument investment
Investment income from early
-4,241,494.76
redemption of bonds
Total 104,715,915.31 202,205,718.92
Other statements:
Note: There is no major restriction on the repatriation of the Company's investment income.
Including: investment income from long-term equity investments under the equity method:
Item Current Period Previous Period
Huaxi Securities Co., Ltd. 43,897,917.31 169,638,351.75
Luzhou Laojiao Postdoctoral Workstation Technology
185,894.77
Innovation Co., Ltd.
Sichuan Development Wine Investment Co., Ltd. 162,805.88 -1,127,623.31
Sichuan Tongniang Baijiu Industry Technology Research
199,394.39 -122,437.28
Institute Co., Ltd.
CTS Luzhou Laojiao Cultural Tourism Development Co., Ltd. 40,180,596.18 27,154,767.24
Subtotal 84,626,608.53 195,543,058.40
Including: dividend income gained during the period of holding other equity instrument investment:
Item Current Period Previous Period
North Chemical Industries Co., Ltd. 70,359.97 62,542.20
Guotai Junan Securities Co., Ltd. 8,008,357.96 6,595,118.32
Luzhou Zunchi Automobile Service Co., Ltd. 5,000.00
Subtotal 8,078,717.93 6,662,660.52
7.44. Gain on changes in fair value
Monetary Unit: CNY
Item Current Period Previous Period
Held-for-trading financial assets -12,023,622.50 6,352,241.79
Total -12,023,622.50 6,352,241.79
7.45. Credit impairment loss
Monetary Unit: CNY
Item Current Period Previous Period
Bad debt loss of other receivables -924,947.31 81,132,441.19
Bad debt loss of accounts receivable -240,771.03 -6,326.31
Total -1,165,718.34 81,126,114.88
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2022 Annual Report of Luzhou Laojiao Co., Ltd.
7.46. Gains from disposal of assets
Monetary Unit: CNY
Item Current Period Previous Period
Gains from disposal of non-current
19,805,093.70 -347,429.88
assets
Including: Gains from disposal of
24,600.37 -347,429.88
fixed assets
Gains from disposal of intangible
19,786,813.38
assets
Gains from disposal of use right
-6,320.05
assets
7.47. Non-operating income
Monetary Unit: CNY
The amount included in the
Item Current Period Previous Period extraordinary gains and
losses of the current period
Government grants 770,893.47
Others 8,326,631.57 6,916,063.05 8,326,631.57
Compensation for default 19,506,788.74 19,559,751.36 19,506,788.74
Total 27,833,420.31 27,246,707.88 27,833,420.31
7.48. 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 8,710,000.00 60,835,600.00 8,710,000.00
Losses from damage
retirement of non-current 10,778,148.07 806,635.52 10,778,148.07
assets
Others 471,344.99 5,075,251.57 471,344.99
Total 19,959,493.06 66,717,487.09 19,959,493.06
7.49. Income tax expense
7.49.1. Statement of income tax expense
Monetary Unit: CNY
Item Current Period Previous Period
Current period income tax 3,422,712,211.76 2,872,508,387.20
Deferred income tax 21,450,324.10 -258,811,286.01
Total 3,444,162,535.861 2,613,697,101.19
Note: 1. The current period increased CNY 830,465,434.67 compared with previous period with an
increase by 31.77%, mainly due to the increase in corporate income tax with the increase in profits.
2. Details of income tax rates were shown on “6. Taxes”.
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2022 Annual Report of Luzhou Laojiao Co., Ltd.
7.49.2. Adjustment for accounting profit and income tax expense
Monetary Unit: CNY
Item Current Period
Total profit 13,854,751,640.29
Income tax expenses determined by statutory/applicable
3,463,687,910.07
tax rate
Impact from subsidiaries’ different tax rates -2,160,306.98
Impact from adjust for impact from income tax expense in
704,999.35
previous period
Impact from non-taxable income -13,330,549.27
Impact from non-deductible costs, expenses and losses 5,127,246.40
Impact from deductible loss of unrecognized deferred
-21,129,993.66
income tax assets in prior period
Impact from deductible temporary difference or losses
4,606,437.70
due to unrecognized deferred tax asset in current period
Income tax impact of expected pre-tax deductible
amounts of restricted shares in future periods that are 6,656,792.25
less than the recognized cost and expenses
Income tax expense 3,444,162,535.86
7.50. Other comprehensive income
Details in Note 7.33. Other comprehensive income.
7.51. Notes to the statement of cash flow
7.51.1. Cash received from other operation activities
Monetary Unit: CNY
Item Current Period Previous Period
Recovery of saving deposits
3,327,415.45 152,667,999.25
involving contract disputes
Government grants 40,104,471.04 50,548,967.43
Interest income from bank deposit 582,623,274.18 376,116,197.20
Others 242,137,090.66 390,669,424.61
Total 868,192,251.33 970,002,588.49
7.51.2. Cash paid for other operating activities
Monetary Unit: CNY
Item Current Period Previous Period
Cash paid for expenses 2,987,783,797.32 3,304,969,529.27
Restricted court frozen funds paid 1,181,683.24
Total 2,988,965,480.56 3,304,969,529.27
7.51.3. Cash received from other financing activities
Monetary Unit: CNY
Item Current Period Previous Period
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Cash deposits received for L/G 509,017.10
Cash deposits received for travel 1,400,000.00
Total 1,909,017.10
7.51.4. Cash paid for other financing activities
Monetary Unit: CNY
Item Current Period Previous Period
Cash paid for reducing registered
5,574,626.46
capital
Rating and registration fee for issuing
1,394,339.62
bonds
Net losses from early redemption of
117,924.53
bonds
Cash paid for rent of right-of-use
14,508,022.38 11,862,090.12
assets
Cash deposits paid for L/G 10,509,017.10
Total 21,594,912.99 22,371,107.22
7.52. Supplementary information to statement of cash flow
7.52.1. 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 10,410,589,104.43 7,937,262,386.93
Plus: Provision for asset impairment 1,165,718.34 -81,126,114.88
Depreciation of fixed asset, oil and
gas assets and productive biological 547,618,213.97 486,856,196.13
assets
Depreciation of right-of-use assets 14,638,577.02 12,910,912.35
Amortization of intangible assets 80,604,041.96 64,178,235.56
Amortization of long-term deferred
872,334.97 842,033.00
expense
Losses from disposal of fixed assets,
intangible assets and other long-term -19,805,093.70 347,429.88
assets (Gains use “-”)
Losses from retirement of fixed
10,778,148.07 806,635.52
assets (Gains use “-”)
Losses from change in fair value
12,023,622.50 -6,352,241.79
(Gains use “-”)
Financial expenses (Gains use “-”) 114,617,073.40 128,173,454.89
Losses on investments (Gains use “-
-104,715,915.31 -202,205,718.92
”)
Decrease in deferred income tax
-19,224,200.66 -260,399,346.46
assets (Increase uses “-”)
Increase in deferred income tax
40,674,524.76 1,588,060.45
liabilities (Decrease uses “-”)
Decrease in inventories (Increase
-2,563,169,208.05 -2,581,909,735.55
use “-”)
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2022 Annual Report of Luzhou Laojiao Co., Ltd.
Decrease in operating receivables
279,234,000.55 -1,483,346,245.17
(Increase use “-”)
Increase in operating payables
-543,252,672.53 3,681,022,162.57
(Decrease use “-”)
Others
Net cash flows from operating
8,262,648,269.72 7,698,648,104.51
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 17,729,006,591.87 13,402,528,941.83
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
4,326,477,650.04 1,834,333,879.02
equivalents
7.52.2. Composition of cash and cash equivalent
Monetary Unit: CNY
Item Opening Balance Closing Balance
1. Cash 17,729,006,591.87 13,402,528,941.83
Including: Cash on hand 28,711.93 26,281.86
Unrestricted bank deposit 17,711,121,431.52 13,391,713,104.08
Other unrestricted cash and
17,856,448.42 10,789,555.89
cash equivalents
3. Closing balance of cash and cash
17,729,006,591.87 13,402,528,941.83
equivalents
Including: Cash and cash equivalent
with restriction to use of parent 28,521,619.381 110,965,638.73
company and subsidiaries
Note: 1. The cash and cash equivalent with restriction to use are CNY 28,521,619.38, of which, CNY
10,000,000.00 is the bank cash deposits for L/G, CNY 17,339,936.14 is provision for fixed deposit
interest on an accrual basis and CNY 1,181,683.24 is the frozen fund by the court.
2: The amount of direct payment for goods and long-term assets (not involving cash flows) by the
endorsement of bank acceptances receivable in the current and previous periods was CNY
1,074,632,849.98 and CNY 80,496,017.45, respectively, which were not included in "cash received
from sales of goods or rendering of services", "cash paid for goods and services" and "cash paid for the
purchase of fixed assets, intangible assets and other long-term assets" of the cash flow budget.
7.53. Assets with restricted ownership or use rights
Monetary Unit: CNY
Item Closing book balance Reason for restriction
Cash and cash equivalents 17,339,936.14 Provision for fixed deposit interest on
212
2022 Annual Report of Luzhou Laojiao Co., Ltd.
an accrual basis
Cash and cash equivalents 10,000,000.00 Bank cash deposits for L/G
Cash and cash equivalents 1,181,683.241 Frozen fund by the court
Total 28,521,619.38
Note: 1. According to the civil ruling issued by People's Court of Jiangyang District, Luzhou City,
Sichuan Province, a total of CNY 516,806.00 bank deposits of Brewing Company, a subsidiary of the
Company, were frozen in accordance with laws for the case of contractual dispute. The first trial of the
relevant case has been decided on 12 January 2023, based on which Brewing Company was not
required to pay the relevant liabilities. 2 According to the civil ruling issued by People's Court of
Dongchangfu District, Liaocheng City, Shandong Province, a total of CNY 664,877.24 bank deposits of
Boda Marketing Company, a subsidiary of the Company, were frozen in accordance with laws for the
case of contractual dispute. As of 31 December 2022, the case was not decided. Based on the
explanation issued by the third-party law firm, it was predicted that the probability of the rejection of the
claims of the plaintiff by People's Court was over 60%.
7.54. Foreign currency transactions
7.54.1. 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 28,705,752.99 6.9646 199,924,087.27
EUR 189,276.07 7.4229 1,404,977.34
HKD 4,867,957.63 0.89327 4,348,400.51
GBP 140,099.22 8.3941 1,176,006.86
AUD 2,367.12 4.7138 11,158.13
Accounts Receivable
Including: USD 185,923.24 6.9646 1,294,881.00
EUR
HKD 4,982,129.53 0.89327 4,450,386.85
Long-term Loans
Including: USD
EUR
HKD
Other Receivables
Including: HKD 1,531,409.56 0.89327 1,367,962.22
Accounts Payable
Including: USD 305,139.48 6.9646 2,125,174.42
HKD 2,335,432.69 0.89327 2,086,171.96
Other Payables
Including: USD 185,610.39 6.9646 1,292,702.12
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2022 Annual Report of Luzhou Laojiao Co., Ltd.
HKD 33,389,449.95 0.89327 29,825,793.96
Non-current liabilities due
within one year
Including: USD 66,782.74 6.9646 465,115.07
HKD 4,375,620.00 0.89327 3,908,610.08
Lease liabilities
Including: USD 201,558.98 6.9646 1,403,777.67
HKD 647,342.20 0.89327 578,251.37
7.54.2. Description of the foreign business entity, including the important foreign business
entity, shall disclose its main foreign business place, bookkeeping standard currency and
selection basis, and shall also disclose the reason for the change of the bookkeeping standard
currency
Applicable □ N/A
Bookkeeping
Company Operation site Choosing Reason
currency
Luzhou Laojiao International Development Currency in the registration
Hong Kong, China HKD
(Hong Kong) Co., Ltd. place
Luzhou Laojiao Commercial Development Currency in the registration
USA USD
(North America) Co., Ltd. place
Currency in the registration
Mingjiang Co., Ltd. USA USD
place
7.55. Government grants
7.55.1. Details of government grants
Monetary Unit: CNY
Amount included in profit or
Item Amount Presentation
loss of the current period
Related to assets 33,704,323.80 Deferred income 6,626,690.48
Related to income 28,304,471.04 Other income 28,304,471.04
Total 62,008,794.84 34,931,161.52
7.55.2. Return of government grants
□Applicable N/A
8. Changes in consolidated scope
8.1. Business combination under common control
8.1.1. Business combination under common control during current period
There is no business combination under common control during current period.
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8.2. Reverse purchase
The basic information of the transaction, the basis of the transaction constitutes the reverse purchase,
whether the assets and liabilities retained by the listed company constitute the business and its basis,
the determination of the merger cost, and the adjustment of the equity amount and its calculation
according to the equity transaction:
There is no reverse purchase during current period.
8.3. 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
8.4. Consolidated scope changes due to other reasons
Explain other reasons for changing consolidated scope (such as establishing a new subsidiary,
liquidating a subsidiary) and its related situation:
As the Note 3.6, two subsidiaries were newly established in the reporting period: Luzhou Laojiao
International Trade (Hainan) Co., Ltd. and Luzhou Laojiao Technology Innovation Co., Ltd.; two
subsidiaries were liquidated and cancelled: Luzhou Laojiao Bosheng Hengxiang Liquor Sales Co., Ltd.
and Luzhou Laojiao Tourism Culture Co., Ltd.
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
Baijiu
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 Luzhou Luzhou Baijiu sales Investment
100.00%
Laojiao Sales
215
2022 Annual Report of Luzhou Laojiao Co., Ltd.
Co., Ltd.
Luzhou
Laojiao
Nostalgic
Luzhou Luzhou Baijiu sales 100.00% Investment
Liquor
Marketing
Co., Ltd.
Luzhou
Laojiao
Custom Luzhou Luzhou Baijiu sales 15.00% Investment
Liquor Co.,
Ltd.
Luzhou
Laojiao
Selected
Luzhou Luzhou Baijiu 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 Baijiu sales 100.00% Investment
Industry Co.,
Ltd.
Luzhou Dingyi
Liquor
Luzhou Luzhou Baijiu sales 100.00% Investment
Industry Sales
Co., Ltd.
Luzhou
Laojiao New
Liquor Luzhou Luzhou Baijiu sales 100.00% Investment
Industry Co.,
Ltd.
Luzhou Wine import
Laojiao I & E Luzhou Luzhou and export 100.00% Investment
Co., Ltd. trade
Luzhou
Laojiao Boda
Liquor
Luzhou Luzhou Baijiu sales 75.00% Investment
Industry
Marketing
Co., Ltd.
Luzhou
Laojiao
Bosheng
Luzhou Luzhou Baijiu sales 75.00% Investment
Hengxiang
Liquor Sales
Co., Ltd.
Luzhou
Laojiao Fruit Fruit wine
Luzhou Luzhou 41.00% Investment
Wine Industry sales
Co., Ltd.
Mingjiang Co.,
America America Baijiu sales 54.00% Investment
Ltd.
Luzhou Food import
Laojiao Hainan Hainan 100.00% Investment
and export
International
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2022 Annual Report of Luzhou Laojiao Co., Ltd.
Trade
(Hainan) Co.,
Ltd.
Luzhou
Technology
Pinchuang
Luzhou Luzhou development 100.00% Investment
Technology
and service
Co., Ltd.
Luzhou
Laojiao
Baijiu 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
Business
Luzhou
combination
Laojiao Health Health care
Luzhou Luzhou 100.00% under
Sales Co., wine sales
common
Ltd.
control
Luzhou
Laojiao New
Luzhou Luzhou Baijiu sales 40.00% 100.00% Investment
Retail Co.,
Ltd.
Luzhou
Laojiao Technology
Technology Chengdu Chengdu development 40.00% 60.00% Investment
Innovation and service
Co., Ltd.
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
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2022 Annual Report of Luzhou Laojiao Co., Ltd.
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% 17,783,639.47 16,594,850.58 61,843,872.29
Marketing Co., Ltd.
Total 17,783,639.47 16,594,850.58 61,843,872.29
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 275,4 275,4 28,04 28,04 384,3 384,9 142,3 142,3
Liquor 664,9
19,42 19,42 3,931. 3,931. 13,67 78,67 58,34 58,34
Indust 98.84
ry 1.12 1.12 97 97 8.76 7.60 4.01 4.01
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 - -
64,698,45 71,134,55 71,134,55 99,816,98 789,612,0 209,462,3
Liquor 35,909,06 35,909,06
1.93 7.89 7.89 0.78 97.04 20.40
Industry 9.79 9.79
Marketing
Co., Ltd.
9.1.4. Significant restrictions on using the assets and liquidating the liabilities of the Company
No such cases for the reporting period.
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2022 Annual Report of Luzhou Laojiao Co., Ltd.
9.1.5. Financial support or other supports provided to structural entities incorporated into the
scope of consolidated financial statements
There is no structural entity incorporated into the scope of consolidated financial statements in the
reporting period.
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.
Note: 1. 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 89,547,378,203.44 86,844,635,628.06
Non-current assets 8,199,779,781.47 8,950,278,369.10
Total assets 97,747,157,984.91 95,794,913,997.16
Current liabilities 54,767,331,978.36 57,157,134,622.07
Non-current liabilities 20,539,402,724.68 16,233,476,784.79
Total liabilities 75,306,734,703.04 73,390,611,406.86
Non-controlling shareholder interest 22,000,726.84 26,409,206.44
Shareholder interest attributable to
22,418,422,555.03 22,377,893,383.86
parent company
Share of net assets calculated based
2,330,073,856.15 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
2,497,540,592.05 2,493,328,165.33
associate companies
Fair value of equity investments in
2,054,418,514.32 2,687,386,768.40
associate companies that have public
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quote
Operating revenue 3,375,583,530.03 5,121,995,492.55
Net profit 422,356,594.84 1,632,123,985.51
Net profit from discontinued
operation
Other comprehensive income -119,327,423.67 -284,563,526.94
Total comprehensive income 303,029,171.17 1,347,560,458.57
Dividends from associate companies
27,283,114.40 30,284,256.98
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 169,959,961.12 133,416,070.92
Total following items calculated on
the basis of shareholding proportion
--Net profit -3,456,109.80 -8,112,270.24
-- Total comprehensive income -3,456,109.80 -8,112,270.24
Other statements:
Unimportant associate companies refer to Luzhou Laojiao Postdoctoral Workstation Technology
Innovation Co., Ltd., Sichuan Development Wine Investment Co., Ltd., Sichuan Tongniang Baijiu
Industry Technology Research Institute Co., Ltd. and CTS Luzhou Laojiao Cultural Tourism
Development Co., Ltd.
9.2.4. Notes to the significant restrictions on the ability of joint ventures or associate companies
to transfer funds to the Company
None
9.2.5. The excess loss of joint ventures or associate companies
None
9.2.6. The unrecognized commitment related to investment to joint ventures
None
9.2.7. Contingent liabilities related to investment to joint ventures or associate companies
None
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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, some other current
liabilities and loans. A detailed description of each financial instrument is set out in Note V and notes to
the Consolidated Financial Statement.
Risks related to these financial instruments, and risk management policies the Company has adopted
to reduce these risks are described as follows. The Company management manages and monitors the
risk exposure to ensure the above risks are controlled in a limited scope.
The Company adopts sensitivity analysis technology to analyze the possible impact of reasonable and
possible changes of risk variables on current profits/losses or shareholders' equity. As any risk variable
rarely changes in isolation, and the correlation between variables will have a significant effect on the
final impact amount of the change of a risk variable, the following content is based on the assumption
that the change of each variable is independent.
Risk management objective: The Company strikes an appropriate balance between risk and return, and
strives to minimize the negative impact of risk on the Company's operating performance and maximize
the interests of shareholders and other equity investors.
Risk management policy: The Board of Directors shall be responsible for planning and establishing a
risk management framework, formulating risk management policies and related guidelines, and
supervising the implementation of risk management measures. The Risk Management Committee shall
carry out risk management through close collaboration (including the identification, evaluation and
avoidance of relevant risks) with other business units of the Company in accordance with the policies
approved by the Board of Directors. The internal audit department shall conduct regular audits on risk
management controls and procedures and report the results to the Audit Committee.
The Company has formulated risk management policies to identify and analyze the risks it faces,
clarifying specific risks and covering many aspects such as credit risk, liquidity risk and market risk
management. On a regular basis, the Company evaluates the specific marketing environment and
various changes in the Company's business operations to determine whether any risk management
policy and system should be updated. The Company diversifies the risks to financial instruments
through appropriately diversified investments and business portfolios, and reduces the risk of
concentration in any single industry, specific geographic area or specific counterparty by formulating
appropriate risk management policies.
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
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credit review for all customers who require credit to trade. In addition, the Company continuously
monitors and controls the balance of the receivables to ensure that the Company does not face
significant bad debt risks. In addition, the Company makes full provision for expected credit losses at
each balance sheet date based on the collection of receivables. Therefore, the Company's
management believes that the Company's credit risk has been greatly reduced.
The Company's working capital is deposited in banks with high credit rating, so the credit risk of working
capital is low.
The Company's risk exposures are spread across multiple contract parties and customers in multiple
geographies, with customers in the commerce industry in addition to the alcohol distribution industry
(the main industry). No systemic risk has been identified in the relevant industries. Therefore, the
Company has no significant credit concentration risk. As at 31 December 2022, the balance of the top
five customers of the Company's accounts receivable amounted to CNY 6,008,800, accounting for
95.90% 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 and bank loans to maintain a balance between financing
sustainability and flexibility. As at 31 December 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:
Closing Balance
Item Contract amount
Book value Within 1 year 1-2 years 2-3 years Over 3 years
not discounted
Notes
0
payable
Accounts
2,311,665,585.04 2,311,665,585.04 2,311,665,585.04
payable
Other
1,185,814,427.91 1,185,814,427.91 1,185,814,427.91
payable
Non-
current
liabilities
81,879,466.63 81,879,466.63 81,879,466.63
due
within
one year
Other
current 333,627,225.47 333,627,225.47 333,627,225.47
liabilities
Long-
term 3,179,600,000.00 3,179,600,000.00 20,400,000.00 1,919,200,000.00 1,240,000,000.00
loans
Bonds
2,996,099,571.86 3,000,000,000.00 3,000,000,000.00
payable
Lease
29,096,969.66 34,245,630.10 8,424,462.32 5,154,370.00 20,666,797.78
liabilities
Subtotal 10,117,783,246.57 10,126,832,335.15 3,912,986,705.05 28,824,462.32 4,924,354,370.00 1,260,666,797.78
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10.3. Market risk
10.3.1. Foreign exchange risk
The foreign exchange risk refers to the risk of loss due to exchange rate changes. Apart from the three
subsidiaries of the Company which make purchases and sales in USD and HKD, the other major
business activities are denominated and settled in CNY. The Company closely monitors the impact of
exchange rate movements on the Company's foreign exchange risk. As at 31 December 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
The Company's interest rate risk mainly arises from the borrowings. Financial liabilities based on the
floating interest rate will cause the cash flow interest rate risk to the Company, and financial liabilities
based on the fixed interest rate the fair value interest rate risk. The Company will determine the
corresponding proportion between the contracts with fixed interest rate and those with floating interest
rate in combination with current market condition.
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 investments in other equity instruments 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
1,073,466,780.37 1,073,466,780.37
financial assets
1.1.1 Financial
assets measured at
fair value with their
1,073,466,780.37 1,073,466,780.37
changes included
into current
profits/losses
1.1.1.4 Wealth
management 1,073,466,780.37 1,073,466,780.37
products
1.3 Investments in
other equity 1,102,278,852.24 34,458,125.87 1,136,736,978.11
instruments
1.6 Accounts
4,583,352,503.37 4,583,352,503.37
receivable financing
Total assets
continuously
1,102,278,852.24 5,691,277,409.61 6,793,556,261.85
measured at fair
value
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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 based on the amount calculated on the basis of the net unit value of the
underlying assets as published on the official website of the asset manager.
Accounts receivable financing: As the timing and price of bills discounted may not be reliably estimated
due to the short maturity of the bills all being less than one year and the endorsement of the negotiable
bills being valued at book value, the Company measures the bills receivable at their book value as a
reasonable estimate of fair value.
Other equity instrument investment: Due to no significant changes in business environment, business
condition and financial situation of invested companies, the Company shall measure the fair value
according to the lower one between investment cost and the share of net assets enjoyed by invested
companies on the base date as the reasonable estimation.
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
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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 25.89% 50.75%
Group Co., Ltd.
management
Statements for situation of parent company:
Note: The reason for the inconsistency between the shareholding proportion and voting rights
proportion by the parent company is that on 27 May 2021, Laojiao Group and XingLu Investment
Group, the second biggest shareholder, renewed the concerted action agreement which is valid as of
1 June 2021 and ends on 31 May 2024. The agreement: when the parties in deal with the Company’s
business development and make decisions by shareholders meeting and board of directors according
to the company law and other relevant laws and regulations and the articles of association, the
parties should adopt the consistent actions. During the effective period of this agreement, before any
party submits proposals involving the major issues of the Company's business development to the
shareholders meeting or exercise the voting rights at the shareholders meeting and the board of
directors, the internal coordination for relevant proposals and voting events shall be conducted by
persons acting in concert. If there are different opinions, it will be subject to Laojiao Group’s opinion.
The nature of parent company: Limited liability company (state-owned); Registration place: Ai
Rentang Square, China Baijiu Golden Triangle Liquor Industry Park, Luzhou, Sichuan Province;
Business Scope: General project: Social economy consulting services; business management
consulting; financial consulting; business headquarters management; import and export agency; trade
brokerage; crops planting services; trees planting operation; elder care services; tourism
development project planning and consulting; technical agency services; engineering and
technological research and experimental development; display device manufacturing; supply chain
management services; technical services, technical development, technical consulting, technical
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communication, technical transfer, and technical promotion; domestic freight transport agency; and
equity fund-invested asset management services. It shall also include licensed projects (business
activities can be carried out legally and independently with business license in addition to projects
that must be approved by law): Agency bookkeeping; career intermediary activities; food production;
food sales; and medical services. (business activities that require approval in accordance with laws
can be carried out upon approval of relevant authorities, and the specific business projects shall be
subject to the approval document or license of relevant departments)
The final control party of the Company is SASAC of Luzhou.
12.2. Subsidiaries of the Company
For details please see Note 9.1. Interests in subsidiaries.
12.3. Joint ventures and associates of the Company
For details please see Note 9.3. Interests in joint ventures and associates.
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 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. Sub-subsidiary of parent company
Luzhou Sanrenxuan Liquor Industry Co., Ltd. Joint venture of parent company
CTS Luzhou Laojiao Cultural Tourism Development Co.,
Joint venture
Ltd.
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 Meihe Winery Industry Co.,Ltd. Minority shareholder of the subsidiary Fruit Wine Industry
Luzhou Public Transport Group Co., Ltd. Subsidiary of the second largest shareholder
Other subsidiaries of Luzhou XingLu Investment Group
Other subsidiary of the second largest shareholder
Co., Ltd.
Other subsidiaries of Luzhou Laojiao Group Co., Ltd. Other subsidiary of parent company
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Other statements:
Note: As the Note 10.1, the Company will disclose the transactions with XingLu Investment Group and
its controlling enterprises as other related parties of the Company.
12.5. Related transactions
12.5.1. Related transactions of purchase and sales of goods / rendering and receipt of services
Table of purchase of goods / receipt of services
Monetary Unit: CNY
Whether over
Name of Related Amount in Approved trading Amount in
Transaction approved trading
Party current period amount previous period
amount
Receipt of
services:
Luzhou XingLu
Investment Property service,
Group Co., Ltd. advertising 26,186,859.88 13,609,282.77
and its other service, etc.
subsidiaries
Loading and
unloading
Laojiao Group transportation,
and its other technical 27,895,483.79 28,428,157.86
subsidiaries services,
installation
services, etc.
CTS Luzhou
Laojiao Cultural Conference fees,
Tourism travel service 9,296,122.35 5,512,511.56
Development fee, etc.
Co., Ltd.
Purchase of
goods:
Laojiao Group Raw materials,
and its other water, power, 106,345,871.05 21,190,526.05
subsidiaries etc.
Luzhou XingLu
Investment
Group Co., Ltd. Gas, water 11,773,961.98 11,547,390.36
and its other
subsidiaries
Sichuan Meihe
Winery Industry Other wine 976,637.50
Co.,Ltd.
Total 181,498,299.05 81,264,506.10
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 52,481,609.52 6,885,203.34
subsidiaries
XingLu Investment Group
Wine 2,880.00
and its subsidiaries
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CTS Luzhou Laojiao
Cultural Tourism Wine 134,111,657.39 84,299,013.96
Development Co., Ltd.
Luzhou Sanrenxuan Liquor
Wine 162,125,345.72 47,171,605.12
Industry Co., Ltd.
Rendering of service:
Luzhou Sanrenxuan Liquor
Rendering of service 496,500.00
Industry Co., Ltd.
Total 348,718,612.63 138,855,202.42
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 1,681,340.00 2,690,880.00
subsidiaries
Total 1,681,340.00 2,690,880.00
The Company as lessee:
Monetary Unit: CNY
Rental expenses Variable lease
of short-term payments not
Income expense
lease simplified included in the Increased use
Paid rent of lease liabilities
Type treated and low- measurement of right assets
undertaken
Name value asset lease lease liabilities (if
of
of (if applicable) applicable)
lessor assets
Amoun Amoun Amoun Amoun Amoun
Amoun Amoun Amoun Amoun Amoun
leased t in t in t in t in t in
t in t in t in t in t in
previo previo previo previo previo
current current current current current
us us us us us
period period period period period
period period period period period
Laojiao
Group
House 1,924, 2,926,
and its
lease 834.44 313.09
subsidi
aries
1,924, 2,926,
Total
834.44 313.09
12.5.3. Key management compensation
Monetary Unit: CNY
Item Amount in current period Amount in previous period
Key management 14,486,473.15 13,798,986.32
12.5.4. Other related transactions
As the Note 7.9, on 10 March 2022, the Company and Luzhou Energy Investment Co., Ltd. jointly
incorporated Luzhou Laojiao Postdoctoral Workstation Technology Innovation Co., Ltd. The Company’s
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shareholding ratio is 40.00% measured by equity method; Laojiao Group’s shareholding ratio is 51.00%;
and Luzhou Energy Investment Co., Ltd.’s shareholding ratio is 9.00%.
12.6. Receivables and payables of related parties
12.6.1. Receivables
Monetary Unit: CNY
Closing Balance Opening Balance
Item Related party Provision for bad Provision for bad
Book value Book value
debt debt
Sichuan Meihe
Prepayment Winery Industry 2,961,479.50 2,961,479.50
Co.,Ltd.
CTS Luzhou
Laojiao Cultural
Prepayment Tourism 2,379.50
Development
Co., Ltd.
Luzhou XingLu
Prepayment Water (Group) 690,115.49
Co., Ltd.
New Shottes
Prepayment Brook private 611,542.54
company
Luzhou China
Resources
Prepayment 19,536.30
Xinglu Gas Co.,
Ltd.
CTS Luzhou
Laojiao Cultural
Other
Tourism 5,111,743.43 780,587.17 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
Sichuan Lianzhong Supply
Accounts payable 6,993,503.13 3,679.25
Chain Service Co., Ltd.
Luzhou Public Transport
Accounts payable 469,479.45
Group Co., Ltd.
Guangzhou Zhongying
Accounts payable Gongyuan Energy Saving 355,312.88
Technology Co., Ltd.
Luzhou XingLu Property
Accounts payable 130,000.00
Management Co., Ltd.
CTS Luzhou Laojiao
Accounts payable Cultural Tourism 10,838.00
Development Co., Ltd.
Sichuan Yukun Logistics
Accounts payable 3,851.28
Co., Ltd.
Contractual liabilities (tax CTS Luzhou Laojiao
6,070,341.82 19,017,274.30
inclusive) Cultural Tourism
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2022 Annual Report of Luzhou Laojiao Co., Ltd.
Development Co., Ltd.
Luzhou Jiachuang Wine
Contractual liabilities (tax
Supply Chain Management 4,525,508.00
inclusive)
Co., Ltd.
Contractual liabilities (tax Luzhou Sanrenxuan Liquor
1,621,994.29 14,745,240.00
inclusive) Industry Co., Ltd.
Contractual liabilities (tax Sichuan Lianzhong Supply
51,114.78 158,295.76
inclusive) Chain Service Co., Ltd.
Contractual liabilities (tax Luzhou Laojiao Zhitong
0.00 55,586.00
inclusive) Trading Co., Ltd.
Contractual liabilities (tax Luzhou Laojiao Group Co.,
0.00 523,760.03
inclusive) Ltd.
Contractual liabilities (tax Luzhou Yuanhai Lianzhong
37,762.51
inclusive) Supply Chain Co., Ltd.
Sichuan Kangrun Group
Contractual liabilities (tax Construction and
6,144.00
inclusive) Installation Engineering
Co., Ltd.
Contractual liabilities (tax Sichuan Hongxin Financing
3,072.00
inclusive) Guarantee Co., Ltd.
Luzhou Qingxigu Scenic
Contractual liabilities (tax
Area Management Co., 460.80
inclusive)
Ltd.
Sichuan Lianzhong Supply
Other payables 17,633,148.00 1,684,148.00
Chain Service Co., Ltd.
CTS Luzhou Laojiao
Other payables Cultural Tourism 750,000.00 396,000.00
Development Co., Ltd.
Luzhou Jiachuang Wine
Other payables Supply Chain Management 360,000.00 1,500,000.00
Co., Ltd.
Luzhou Sanrenxuan Liquor
Other payables 150,000.00 150,000.00
Industry Co., Ltd.
Guangzhou Zhongying
Other payables Gongyuan Energy Saving 140,444.35
Technology Co., Ltd.
Luzhou Laojiao Group Co.,
Other payables 80,000.00
Ltd.
Luzhou Yuanhai Lianzhong
Other payables 50,200.00
Supply Chain Co., Ltd.
Sichuan Kangrun Group
Construction and
Other payables 34,175.78
Installation Engineering
Co., Ltd.
13. Stock payment
13.1. The overall situation of share-based payments
Applicable □ N/A
Unit: Share
Total equity instruments granted by the Company in the
435,003.00
reporting period
Total equity instruments exercised by the Company in the
0.00
reporting period
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Total equity instruments of the Company expired in the
128,310.00
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
Other statements:
Note 1: In September 2022, the Company granted 342,334 shares of the Restricted Share Incentive
Plan for the second time; in December 2022, the Company granted 92,669 shares of the Restricted
Share Incentive Plan for the third time (not registered); the total granted shares of the period were
435,003 shares.
Note 2: In December 2021, the Company granted 6,928,600 shares of the Restricted Share Incentive
Plan for the first time, and in January 2022, during the payment process after the grant date was
determined, four awardees chose to waive a total of 66,000 restricted shares that the Company had
intended to grant to them due to personal reasons; in September 2022, with seven awardees no longer
eligible, the Company decided to repurchase and retire the 62,310 restricted shares of them which had
been granted but not lifted from restricted sales; the total invalid shares in the period were 128,310
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
of the current period and that of previous period N/A
Total amount of equity-settled share-based payments
1,077,377,405.86
included into capital reserves
Total costs of recognizing equity-settled share-based
396,102,725.02
payments in the current period
13.3. Cash-settled share-based payments
□ Applicable N/A
13.4. Modification and termination of share-based payments
According to the 22nd Meeting of the 10th Board of Directors of the Company held on 2 September
2022, the Proposal on the Adjustment of the Granted Price of Reserved Restricted Shares of 2021
Restricted Share Incentive Plan was deliberated and approved. With the implementation of the 2021
profit distribution plan of the Company completed, the Company agreed to adjust the granted price of
reserved restricted shares from CNY 92.71 per share to CNY 89.466 per share based on the 2021
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2022 Annual Report of Luzhou Laojiao Co., Ltd.
Restricted Share Incentive Plan (Draft) of Luzhou Laojiao Co., Ltd. Other than that, all are consistent
with relevant contents in the disclosed Incentive Plan.
14. Commitments and contingencies
14.1. Commitments
14.1.1. Significant contingencies at the balance sheet date
On 15 October 2014 and 10 January 2015, the Company disclosed three saving deposits involving
contract disputes in Agricultural Bank of China Changsha Yingxin Sub-branch, Industrial and
Commercial Bank of China Nanyang Zhongzhou Sub-branch and another bank, with a total amount of
CNY 500 million. The public security organization has investigated, and the investigation of related
cases and the preservation of assets are under way. The Company has initiated a civil procedure to
recover the loss from the responsible unit. As of the period-end, the Company has recovered the
abovementioned saving deposits involving contract disputes with CNY 370,950,500.
Except for the above matters, the Company has no other significant contingencies that need to be
disclosed as the end of 31 December 2022.
14.1.2. Explanation shall be given even if there is no significant contingency for the Company to
disclose
There was no significant contingency in the Company to disclose.
15. Post balance sheet event
15.1. Profit distribution
Monetary Unit: CNY
Profits or dividends planned to distribute 6,219,148,324.03
Reviewed and approved profits or dividends declared to
6,219,148,324.03
distribute
Upon the resolution of the Board of Directors, the 2022
profit distribution plan was approved: Based on the
current 1,471,987,769 shares, a cash dividend of CNY
42.25 (tax included) will be distributed for every 10
existing shares held, representing a total cash dividend
Profit distribution plan
amount of CNY 6,219,148,324.03 (tax included). Where
any change occurs to the Company's total share capital
before the implementation of the distribution plan,
relevant adjustments shall be made with the same total
distribution amount.
15.2. Sales return
There are no important sales returning after balance sheet date.
232
2022 Annual Report of Luzhou Laojiao Co., Ltd.
15.3. Statement for other post balance sheet events
Completing the payment and registration of reserved restricted shares
According to the 26th Meeting of the 10th Board of Directors of the Company held on 29 December
2022, the Board of Directors considered that the grant of reserved restricted shares for this period met
the requirements of Administrative Measures for Equity Incentive of Listed Companies and other
relevant laws and the 2021 Restricted Share Incentive Plan (Draft) of Luzhou Laojiao Co., Ltd., the
conditions for the reserved grant under the Restricted Share Incentive Plan had been fulfilled, and the
awardees met the requirements of relevant laws, administrative rules, departmental regulations and
normative document and their qualifications of the awardees of Restricted Share Incentive Plan are
legal and valid. Therefore, the Board agreed to grant 92,669 restricted shares to 17 eligible awardees at
CNY 89.466 per share with 29 December 2022 as the date of grant. The Company issued an actual
amount of 92,669 shares to 17 awardees through private offering in the period at a price of CNY 89.466
per share, with a total of CNY 8,290,724.74 granted restricted shares.
As of 15 January 2023, the Company has received a total of CNY 8,290,724.74 from the above 17
awardees for the subscription of restricted shares in monetary capital, of which CNY 92,669.00 was
included in share capital and CNY 8,198,055.74 was included in capital reserve. The listing date of the
granted shares is 17 February 2023. Upon completion of the grant registration, the total number of
shares of the Company increased from 1,471,895,100 to 1,471,987,769, which will not change the
controlling shareholder and the actual controller of the Company.
Except for the above matters, the Company has no other post balance sheet events that need to be
disclosed as of 31 December 2022.
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 from China and main
assets also located in China, so the Company does not need to disclose segment data.
233
2022 Annual Report of Luzhou Laojiao Co., Ltd.
16.3. Lease
16.3.1 The Company as the lessee
Item Amount
Interest expenses of lease liabilities 1,698,122.32
Simplistically treated short-term lease expenses included into related asset costs or the current
profits/losses 8,551,460.53
Simplistically treated low-value asset lease expenses included into related asset costs or the
current profits/losses (except the short-term lease expenses of low-value assets)
Variable lease payments included into related asset costs or the current profits/losses but not
included into lease liabilities to measure
Income from the sublease of right-of-use assets
Total cash outflow related to leases 23,059,482.91
Profits/losses generated from sale and leaseback transactions
The leased assets of the Company include the buildings and constructions and the land use right
involved in operation. The leasing period of land use right is normally 15-30 years and the lease
contract of land use right generally includes the renewal option clause.
16.3.2 See “Note X. Risks Related to Financial Instruments” for information about the lease liabilities
maturity analysis and corresponding liquidity risk management.
16.4. Other significant events that can affect investors’ decision
16.4.1. 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 24
February 2023 that “given that since the issuance of the previous legal opinion, a few recovery has
been achieved through the criminal and civil execution, totalling CNY 371 million. At the same time, it is
suggested that the total amount of bad debt provision for the three aforementioned places remain CNY
120 million”, the Company has made a bad debt provision of CNY 120 million for savings deposit
involved in contractual disputes as of the end of the period, and the amount of the bad debt provision
may be adjusted in the future based on the litigation process and recovery.
16.4.2. Deliberating and approving the Proposal on the De-registration of Luzhou Baonuo
Biotechnology Co., Ltd.
234
2022 Annual Report of Luzhou Laojiao Co., Ltd.
On 2 December 2022, the Proposal on the De-registration of Luzhou Baonuo Biotechnology Co., Ltd.
was deliberated and approved on the 25th Meeting of the 10th Board of Directors. Luzhou Baonuo
Biotechnology Co., Ltd. (hereinafter referred to as “Baonuo”) is wholly owned by the Company and
mainly takes charge of the comprehensive use and research as well as result transformation of brewing
by-product and waste. According to the position and schedule of the scientific and technological
research and innovation of the brewing production system of the Company, relevant business of
Baonuo will be taken over by Brewing Company, a subsidiary of the Company, based on which the
Company decided to cancel Baonuo.
Except for the above matters, the Company has no other significant events that can affect investors’
decision that need to be disclosed as of 31 December 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
Type Book balance Book balance
debt Book debt Book
Proporti Proporti value Proporti Proporti value
Amount Amount Amount Amount
on on on on
Includin
g:
Account
s
receiva
bles
tested 50,000. 100.00 2,500.0 47,500. 1,209,7 100.00 2,223.8 1,207,4
5.00% 0.18%
for 00 % 0 00 01.49 % 6 77.63
impairm
ent by
the
portfolio
Includin
g:
Account
s
receiva
bles
tested
for 50,000. 100.00 2,500.0 47,500. 1,209,7 100.00 2,223.8 1,207,4
5.00% 0.18%
impairm 00 % 0 00 01.49 % 6 77.63
ent on
the
portfolio
with
charact
235
2022 Annual Report of Luzhou Laojiao Co., Ltd.
eristics
of credit
risk
50,000. 100.00 2,500.0 47,500. 1,209,7 100.00 2,223.8 1,207,4
Total 5.00% 0.18%
00 % 0 00 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 50,000.00 2,500.00 5.00%
Other portfolios
Total 50,000.00 2,500.00
Please refer to the relevant information of disclosure of provision for bad debt of other accounts
receivable if adopting the general mode of expected credit loss to withdraw provision for bad debt of
accounts receivable.
□ Applicable N/A
Disclosure by aging
Monetary Unit: CNY
Aging Book balance
Within 1 year (including 1 year) 50,000.00
Total 50,000.00
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
tested for 2,223.86 276.14 2,500.00
impairment by
the portfolio
Total 2,223.86 276.14 2,500.00
Note: 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
One-time sporadic
50,000.00 100.00% 2,500.00
customers
Total 50,000.00 100.00%
236
2022 Annual Report of Luzhou Laojiao Co., Ltd.
17.1. 4. Accounts receivable derecognized due to the transfer of financial assets
There are no assets and liabilities formed from the transfer of accounts receivable and continued
involvement during the reporting period.
17.2. Other receivables
Monetary Unit: CNY
Item Closing Balance Opening Balance
Other receivables 12,042,401,844.84 10,033,554,898.57
Total 12,042,401,844.84 10,033,554,898.57
17.2.1. Other receivables
17.2.1.1. Other receivables disclosed by nature
Monetary Unit: CNY
Nature Closing book balance Opening book balance
Intercourse funds of subsidiaries
12,023,243,459.84 10,015,555,743.27
receivable
Intercourse funds and others 11,257,616.61 6,158,145.13
Petty cash 2,574.63
Saving deposits involving contract
129,049,496.981 132,376,912.43
disputes
Total 12,163,550,573.43 10,154,093,375.46
Note: 1. The saving deposits involving contract disputes refer to three deposits amounting to CNY
500,000,000.00 with Changsha Yingxin Sub-branch of Agricultural Bank of China and Nanyang
Zhongzhou Sub-branch of Industrial and Commercial Bank of China disclosed by the Company in the
2014 Annual Report. The deposits have lost the nature of monetary fund due to their involvement in
contract disputes and have thus been transferred into “other receivables”. As of 31 December 2022, the
closing balance of that fund was CNY 129,049,496.98.
17.2.1.2. 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
538,476.89 120,000,000.00 120,538,476.89
2022
Balance of 1 January
2022 in the current
period
Allowance 610,251.70 610,251.70
Balance of 31
1,148,728.59 120,000,000.00 121,148,728.59
December 2022
Changes of carrying amount with significant amount changed of loss provision in the current period
237
2022 Annual Report of Luzhou Laojiao Co., Ltd.
□ Applicable N/A
Disclosure by aging
Monetary Unit: CNY
Aging Closing balance
Within 1 year (including 1 year) 12,030,843,921.37
1-2 years 72,855.08
2-3 years 3,511,500.00
Over 3 years 129,122,296.98
3-4 years 22,800.00
Over 5 years 129,099,496.98
Total 12,163,550,573.43
17.2.1.3. Provision and recovery for bad and doubtful other receivables in the current period
Allowance of provision for bad debt:
Monetary Unit: CNY
Current Period
Opening Closing
Type Reversal or
Balance Allowance Write-off Other Balance
recovery
Other
receivables
120,000,000.0 120,000,000.0
tested for
impairment 0 0
individually
Other
receivables
tested for 538,476.89 610,251.70 1,148,728.59
impairment by
the portfolio
120,538,476.8 121,148,728.5
Total 610,251.70
9 9
17.2.1.4. Other receivables with actual verification in the current period
No such cases for the reporting period.
17.2.1.5. 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
Luzhou Laojiao Internal
10,107,795,765.44 Within 1 year 83.10%
Brewing Co., Ltd. transactions
Luzhou Laojiao Internal
1,028,552,748.43 Within 1 year 8.46%
Sales Co., Ltd. transactions
Luzhou Dingyi
Internal
Liquor Industry 418,929,316.46 Within 1 year 3.44%
transactions
Sales Co., Ltd.
Luzhou Laojiao
Internal 150,162,478.49 Within 1 year 1.23%
Electronic
238
2022 Annual Report of Luzhou Laojiao Co., Ltd.
Commerce Co., transactions
Ltd.
Agricultural Bank
of China
Changsha
Yingxin Sub-
branch, Industrial Saving deposits
and Commercial involving 129,049,496.98 Over 5 years 1.06% 120,000,000.00
Bank of China contract disputes
Nanyang
Zhongzhou Sub-
branch and
another bank.
Total 11,834,489,805.80 97.29% 120,000,000.00
17.2.1.6. Accounts receivable involving government grants
There is no accounts receivable involving government grants in the current period.
17.2.1.7. Other receivables derecognized due to the transfer of financial assets
There are no other receivables derecognized due to the transfer of financial assets in the current period.
17.2.1.8. The amount of the assets and liabilities formed due to the transfer and continued
involvement of accounts receivable
No such cases for the reporting period.
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 3,611,563,148 3,611,563,148 3,429,436,240 3,429,436,240
subsidiary .96 .96 .91 .91
Investment in
associates 2,669,970,043 2,667,402,944 2,624,531,691 2,621,964,593
2,567,098.80 2,567,098.80
and joint .71 .91 .80 .00
venture
6,281,533,192 6,278,966,093 6,053,967,932 6,051,400,833
Total 2,567,098.80 2,567,098.80
.67 .87 .71 .91
17.3.1. Investment in subsidiary
Monetary Unit: CNY
Opening Changes in current period Closing Closing
Balance Provision Balance balance of
Investee
(book Increase Decrease for Other (book provision for
value) impairment value) impairment
Luzhou 59,136,031. 17,817,693. 76,953,725.
Pinchuang 69 63 32
239
2022 Annual Report of Luzhou Laojiao Co., Ltd.
Technology
Co., Ltd.
Luzhou
Laojiao 110,966,255 94,798,800. 205,765,05
Sales Co., .34 22 5.56
Ltd.
Luzhou
Laojiao 3,176,693,8 57,485,392. 3,234,179,2
Brewing 36.28 03 28.31
Co., Ltd.
Luzhou
Laojiao
Internationa
l 5,706,190.4 3,317,446.5 9,023,636.9
Developme 0 6 6
nt (Hong
Kong) Co.,
Ltd.
Luzhou
Laojiao
52,525,326. 7,423,061.0 59,948,387.
Electronic
Commerce 26 8 34
Co., Ltd.
Luzhou
Baonuo 20,000,000. 20,000,000.
Biotechnolo 00 00
gy Co., Ltd.
Luzhou
Laojiao
4,000,000.0 4,000,000.0
Tourism
Culture Co., 0 0
Ltd.
Luzhou
Laojiao
Health
5,284,514.5 5,693,115.4
Liquor 408,600.94
Industry 3 7
Co., Ltd.
Note
3,429,436,2 4,000,000.0 186,126,90 3,611,563,1
Total
40.91 0 8.05 48.96
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, 43,897 27,283 2,497,
Securit 12,402 2,567,
328,16 ,917.3 ,114.4 540,59
ies ,376.1 098.80
Co., 5.33 1 0 2.05
9
240
2022 Annual Report of Luzhou Laojiao Co., Ltd.
Ltd.
Luzho
u
Laojiao
Postdo
ctoral
Workst 40,000 40,185
185,89
ation ,000.0 ,894.7
Techno 4.77
0 7
logy
Innova
tion
Co.,
Ltd.
Sichua
n
Develo
pment
5,726, 162,80 5,889,
Wine
Invest 848.36 5.88 654.24
ment
Co.,
Ltd.
CTS
Luzho
u
Laojiao
Cultura 122,90 123,78
l 877,22
9,579. 6,803.
Touris 4.54
m 31 85
Develo
pment
Co.,
Ltd.
-
2,621, 40,000 45,123 27,283 2,667,
Subtot 12,402 2,567,
964,59 ,000.0 ,842.5 ,114.4 402,94
al ,376.1 098.80
3.00 0 0 0 4.91
9
-
2,621, 40,000 45,123 27,283 2,667,
12,402 2,567,
Total 964,59 ,000.0 ,842.5 ,114.4 402,94
,376.1 098.80
3.00 0 0 0 4.91
9
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 8,390,524,714.12 6,176,755,863.73 7,558,340,885.88 5,664,019,938.24
Other business 19,908,823.14 1,309,332.64 44,286,894.17 1,137,093.20
Total 8,410,433,537.26 6,178,065,196.37 7,602,627,780.05 5,665,157,031.44
Details:
Monetary Unit: CNY
Contract category Liquor sales Total
Commodity type
Including:
241
2022 Annual Report of Luzhou Laojiao Co., Ltd.
Medium and high
8,361,787,830.28 8,361,787,830.28
grade liquor
Other liquor 28,736,883.84 28,736,883.84
By operating
segment
Including:
Domestic 8,390,524,714.12 8,390,524,714.12
Outbound
Market or customer
type
Including:
Contract type
Including:
Commodity sales
8,390,524,714.12 8,390,524,714.12
contract
By commodity
transfer time
Including:
By contract term
Including:
By sales channel
Including:
Total 8,390,524,714.12 8,390,524,714.12
17.5. Investment income
Monetary Unit: CNY
Item Current Period Previous Period
Investment income from long-term
equity investments under cost 7,777,018,295.87 6,296,151,637.80
method
Investment income from long-term
equity investments under equity 45,123,842.50 171,693,567.56
method
Investment income gained during the
period of holding held-for-trading 6,813,617.83
financial assets
Investment income from disposal of
9,438,465.78
held-for-trading financial assets
Dividends income gained during the
period of holding other equity 8,078,717.93 6,657,660.52
instrument investment
Investment income from early
-4,241,494.76
redemption of bonds
Total 7,842,231,445.15 6,474,502,865.88
242
2022 Annual Report of Luzhou Laojiao Co., Ltd.
17.6. Other
Note: There is no major restriction on the repatriation of the Company's investment income.
Including: investment income from long-term equity investments under the cost method:
Item Current Period Previous Period
Luzhou Laojiao Sales Co., Ltd. 7,709,806,254.66 6,269,283,588.58
Luzhou Baonuo Biotechnology Co., Ltd. 10,515,293.70
Luzhou Pinchuang Technology Co., Ltd. 30,991,503.61 26,868,049.22
Luzhou Laojiao International Development（Hong Kong）Co.,
18,070,349.00
Ltd.
Luzhou Laojiao Tourism Culture Co., Ltd. 7,634,894.90
Subtotal 7,777,018,295.87 6,296,151,637.80
Including: investment income from long-term equity investments under the equity method:
Item Current Period Previous Period
Huaxi Securities Co.,Ltd. 43,897,917.31 169,638,351.75
Luzhou Laojiao Postdoctoral Workstation Technology
185,894.77
Innovation Co., Ltd.
Sichuan Development Wine Investment Co., Ltd. 162,805.88 -1,127,623.31
CTS Luzhou Laojiao Cultural Tourism Development Co.,
877,224.54 3,182,839.12
Ltd.
Subtotal 45,123,842.50 171,693,567.56
Including: dividend income gained during the period of holding other equity instrument investment:
Item Current Period Previous Period
North Chemical Industries Co.,Ltd. 70,359.97 62,542.20
Guotai Junan Securities Co.,Ltd. 8,008,357.96 6,595,118.32
Subtotal 8,078,717.93 6,657,660.52
18. Supplementary information
18.1. Detailed statement of extraordinary gain and loss in the current period (+ for
gain, - for loss)
Applicable □ N/A
Monetary Unit: CNY
Item Amount Note
Gains or losses on disposal non-
19,805,093.70 For details please see Note 7.46
current assets
Government grants included into
current profits and losses (other than
government grants closely related to For details please see Note 7.42 and
34,931,161.52
enterprise business and granted by Note 7.47
quota or quantity according to
national unified standard)
Gain or loss on fair-value changes on
-2,585,156.72 For details please see Note 7.43
held-for-trading financial assets and
243
2022 Annual Report of Luzhou Laojiao Co., Ltd.
liabilities & income from 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 For details please see Note 7.47 and
7,873,927.25
costs other than above items Note 7.48
Less: Impact from income tax 14,413,895.31
Impact from non-controlling
1,709,085.57
shareholders’ equity
Total 43,902,044.87 --
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 33.32% 7.06 7.06
the Company
Net profits attributable to
common shareholders of
33.18% 7.03 7.03
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
244
