2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Jiangsu Yanghe Distillery Co., Ltd.
2020 Annual Report
April 2021
1
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Section I Important Statements, Contents and Definitions
The board of directors, board of supervisors, directors, supervisors and senior management of Jiangsu
Yanghe Brewery Co., Ltd. (hereinafter referred to as the Company) hereby 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.
Mr. Zhang Liandong, responsible person for the Company, Mr. Yin Qiuming, responsible person for
accounting affairs and Mr. Zhao Qike, responsible person for accounting department (accounting
supervisor) have warranted that the financial statements in this report are true, accurate and complete.
All directors attended the board meeting to review this report.
The future plans and some other forward-looking statements mentioned in this report shall not be
considered as virtual promises of the Company to investors. Investors and people concerned should
maintain adequate risk awareness and understand the difference between plans, predictions and
promises. Investors are kindly reminded to pay attention to possible investment risks.
In the annual report, the possible risks in the operation of the Company are described in detail (see
9.Outlook for the future development of the Company in Section IV Performance Discussion and
Analysis). Investors are kindly reminded to pay attention to relevant content.
The profit distribution plan approved by the board of directors: based on total share capital participating
in the dividend on the registration date (excluding the repurchased shares held in the Company's
special repurchase securities account) when the profit distribution plan is implemented in the future, a
cash dividend of CNY 30.00 (tax inclusive) will be distributed for every 10 existing shares held, 0 shares
of bonus shares (tax inclusive), and reserves would not be converted into share capital.
The Company’s Chinese 2020 Annual Report was publicly disclosed on the Shenzhen Stock Exchange
and www.cninfo.com.cn on 29 April 2021. If there are any differences between the English version and
the Chinese one, please refer to the latter.
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Contents
Section I Important Statements, Contents and Definitions ........................ 2
Section II Company Profile and Key Financial Results ............................... 5
Section III Business Profile .............................................................................. 9
Section IV Performance Discussion and Analysis ..................................... 12
Section V Significant Events ......................................................................... 36
Section VI Changes in Shares and Information about Shareholders ..... 98
Section VII Information about Preference Shares .....................................106
Section VIIIInformation about Convertible Bonds ....................................107
Section IX Profiles of Directors, Supervisors, Senior Management and
Employees .......................................................................................................108
Section X Corporate Governance ................................................................121
Section XI Information about Corporate Bond ..........................................128
Section XII Financial Report..........................................................................129
Section XIII Documents Available for Reference.......................................257
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Definitions
Term Reference Definition
The Company, This Company, Yanghe Refer to Jiangsu Yanghe Distillery Co., Ltd.
Yanghe Group, Controlling shareholder Refer to Jiangsu Yanghe Group Co.,Ltd.
The current year, In the reporting period Refer to 1 Jan. 2020 to 31 Dec. 2020
The report Refer to 2020 Annual Report
Yuan, Ten thousand yuan, A hundred CNY 0.00, CNY 10,000.00,CNY
Refer to
million yuan 100,000,000.00
The shareholders'meeting, the board of
The shareholders' meeting, the board of
Refer to directors and the board of supervisors of
directors, the board of supervisors
the Company
Articles of incorporation of Jiangsu Yanghe
Articles of incorporation Refer to
Distillery Co., Ltd.
SSE Refer to Shenzhen Stock Exchange
SRC,CSRC Refer to China Securities Regulatory Commission
State-owned Assets Supervision and
SAC of Suqian, SASAC of Suqian Refer to
Administration Commission of Suqian
Suya Jincheng, Accounting firm Refer to Suya Jincheng CPA LLP
Blue Alliance Refer to Jiangsu Blue Alliance Co., Ltd.
Jiangsu Yanghe Distillery Co., Ltd. Yanghe
Yanghe Branch of the Company Refer to
Branch
Jiangsu Yanghe Distillery Co., Ltd. Siyang
Siyang Branch of the Company Refer to
Branch
Jiangsu Shuanggou Distillery Stock
Shuanggou Distillery Refer to
Co.,Ltd.
Guijiu Company Refer to Guizhou Guijiu Co., Ltd.
Lihuacun Distillery Refer to Hubei Lihuacun Distillery Co., Ltd.
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Section II Company Profile and Key Financial Results
1. Corporate information
Stock abbreviation Yanghe Stock code 002304
Stock exchange where
the shares of the Shenzhen Stock Exchange
Company are listed
Name of the Company
江苏洋河酒厂股份有限公司
in Chinese
Abbr. of the Company
洋河股份
name in Chinese
Name of the Company
Jiangsu Yanghe Distillery Co., Ltd.
in English (if any)
Abbr. of the Company
Yanghe
name in English (if any)
Legal representative Zhang Liandong
Registered address No.118 Middle Avenue, Yanghe Town, Suqian City, Jiangsu Province, China
Postal code of
223800
registered address
Business address No.118 Middle Avenue, Yanghe Town, Suqian City, Jiangsu Province, China
Postal code of business
223800
address
Company website http://www.chinayanghe.com
E-mail yanghe002304@vip.163.com
2. Contact us
Company secretary Representative for securities affairs
Name Lu Hongzhen Sun Dali
Address No. 18, Fenghui Avenue, Yuhua Economic Development Zone, Nanjing
Tel. 025-52489218
Fax 025-52489218
E-mail yanghe002304@vip.163.com
3. Information disclosure and place where the annual report is kept
Media designated by the Company for Securities Times, Shanghai Securities Times, China Securit
information disclosure ies Journal, Securities Daily
Website designated by CSRC for the
http://www. cninfo.com.cn
publication of the Annual Report
Place where the Annual Report of the Shareholder reading room, the headquarters of the
Company is kept Company, Suqian City, Jiangsu Province
4. Company registration and alteration
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Organization code 9132000074557990XP
Changes in main business activities since
None
the Company was listed (if any)
Changes of controlling shareholders of the
None
Company (if any)
5. Other relevant information
Accounting firm engaged by the Company
Name of the accounting firm Suya Jincheng CPA LLP
22-23/F., Central International Plaza, No.105-6 North
Business address of the accounting firm
Zhongshan Road, Nanjing.
Name of accountants for writing signature Li Laimin, Li Yan
Sponsors engaged by the Company to continuously perform its supervisory function during the
reporting period
Applicable √ N/A
Financial adviser engaged by the Company to continuously perform its supervisory function during the
reporting period
Applicable √ N/A
6. Key accounting data and financial indicators
Whether the Company performed a retroactive adjustment or restatement of accounting data
Yes √ No
2020 2019 YoY 2018
Change
Operating revenues (CNY) 21,101,051,131.79 23,126,476,885.07 -8.76% 24,159,801,994.68
Net profits attributable to
shareholders of the Company 7,482,228,633.63 7,382,822,726.87 1.35% 8,115,189,794.69
(CNY)
Net profits attributable to
shareholdersof the Company
5,652,068,941.98 6,555,890,029.81 -13.79% 7,369,331,605.77
before non-recurring gains and
losses (CNY)
Net cash flows from operating
3,978,790,835.80 6,797,891,871.41 -41.47% 9,056,748,816.28
activities (CNY)
Basic earnings per share
4.9843 4.8991 1.74% 5.3850
(CNY/share)
Diluted earnings per share
4.9843 4.8991 1.74% 5.3850
(CNY/share)
Weighted average ROE 20.20% 21.21% -1.01% 25.95%
YoY
At the end of 2020 At the end of 2019 At the end of 2018
Change
Total assets (CNY) 53,866,259,306.59 53,455,037,840.98 0.77% 49,563,767,816.22
Net assets attributable to
shareholders of the Company 38,484,583,983.54 36,508,835,491.47 5.41% 33,644,530,266.23
(CNY)
The Company's net profit before or after deducting non-recurring profits and losses in the last three
fiscal years is negative, and the audit report of the last year shows that the Company's ability to
continue operating is uncertain
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Yes √ No
The net profit before or after deducting non-recurring profits and losses is 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 duringthisperiod.
7.2. Differences in the net profits and net assets disclosed in the financial reports
prepared under the outbound and China accounting standards
Applicable √ N/A
No such differences during thisperiod.
8. Key financial results by quarter
Unit: CNY
Q1 Q2 Q3 Q4
9,268,167,143.40 4,160,338,695.33 5,485,125,629.89 2,187,419,663.17
Operating revenues
Net profits attributable to 4,002,168,546.84 1,398,695,739.33 1,784,839,005.01 296,525,342.45
shareholders of the Company
Net profits attributable to
shareholders of the Company 3,201,845,555.14 1,064,452,695.12 1,368,107,888.33 17,662,803.39
before deductingnon-recurring
profits and losses
Net cash flows from operating -328,870,647.68 -2,404,512,251.66 2,289,330,408.21 4,422,843,326.93
activities
Whether there are any material differences between the financial indicators above or their summations
and those which have been disclosed in quarterly or semi-annual reports.
Yes √ No
9. Non-recurring profits and losses
√ Applicable N/A
Unit: CNY
Item 2020 2019 2018 Note
Profit or loss from disposal of non-current
-4,735,638.66 13,797,266.00 22,203,572.96
assets (including the write-off portion of the
impairment provision)
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Item 2020 2019 2018 Note
Government grants recorded in the profit or
loss for the current period (except for the
government grants closely related to the 98,175,595.19 85,605,383.19 59,870,221.67
business of the Company and given at a fixed
amount or quantity in accordance with uniform
national standards)
Except for effective hedging business related
to normal business operations of the
Company, investment income from holding
financial assets held for trading, derivative
financial assets, financial liabilities held for 2,356,818,184.75 973,456,912.43 56,995,537.28
trading, derivative financial liabilities, and
disposal of financial assets held for trading,
derivative financial assets, financial liabilities
held for trading, derivative financial liabilities
and investment in other debt instruments.
Impairment provision reversal of the accounts
receivables and contract assets on which the
impairment test is carried out individually
Other non-operating income and expenditure -11,429,697.22 12,845,147.02 27,967,026.98
except above-mentioned items
Other profit and loss items that conform to the 818,031.70 1,670,388.78 827,837,138.81
definition of non-recurring profits and losses
609,395,883.18 260,122,467.95 248,875,376.58
Less: Corporate income tax
90,900.93 319,932.41 139,932.20
Minority interests (after tax)
1,830,159,691.65 826,932,697.06 745,858,188.92
Total --
Explain the reasons if the Company classifies an item as a non-recurring profit and loss according to
the definition in the Explanatory Announcement No. 1 on Information Disclosure for Listed Companies -
Non-recurring Profits and Losses, or classifies any non-recurring profit or loss item mentioned in the
explanatory announcement as a recurring profit or loss item.
Applicable √ N/A
No such cases for the reporting period.
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Section III Business Profile
1. Main business scope in the reporting period
The Company shall comply with the disclosure requirements of Shenzhen Stock Exchange Industry
Information Disclosure Guidelines No. 14 -Listed Companies Engaging in Food and Liquor
Manufacturing Related Businesses
The Company is mainly engaged in the production and sales of Chinese Baijiu. The production of Baijiu
adopts solid-state fermentation. The sales of Baijiu mainly adopt two models, namely distribution and
online direct selling. During the reporting period, the Company's primary business and business
modelsdid not changed. According to the Guidelines for the Industry Classification of Listed Companies
(2012 Revision) issued by CSRC, the Company belongs to C15 Manufacturing industry of
liquor,beverages and refined tea.
The Company is a national large-scale Baijiu production enterprise. Among the enterprises in the Baijiu
industry, the Company is the only one which has two famous Chinese Baijiu, namely Yanghe and
Shuanggou, two Chinese time-honored brands, and six Chinese well-known trademarks. The leading
products of the Company are a series of Baijiu including Dream Blue, Sky Blue, Ocean Blue, Sujiu,
Zhenbaofang, Yanghe Daqu, Shuanggou Daqu. They have high brand awareness and reputation
throughout the country.
During the reporting period, the development of liquor industry kept growing in the fierce competition.
Premium and sub-premiumliquor both showed significant development advantages. The concentration,
branding and premiumisation of the industry continued significantly. According to disclosed Baijiu
industry periodic reports, the Company's operating revenue and profit remained in the third place in the
liquor industry.
2. Significant changes in the main assets
2.1 .Significant changes in the main assets
Main assets Reasons for any significant change
An increase of 68.44% YoY was mainly due to the decrease in cash
Cash and cash equivalents paid for investment in the current period which led to an increase in
the net cash flow generated by investment activities.
Andecrease of 95.32% YoY was mainly due to lower prepaid
Prepayment
advertising expenses at the end of the current period.
2.2 .Main assets overseas
Applicable √ N/A
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
3. Analysis of core competitiveness
The Company has significant advantages in natural environment, quality technology, brand building,
marketing network and so on. The Company has formed its unique core competitiveness, which has not
changed during the reporting period.
3.1 Natural environment advantage
The Company is located in Suqian, the capital of Baijiuwith 'three rivers, two lakes and one wetland’. As
one of the three famous wetlands in the world, Suqian enjoys equal popularity with the Scotch whisky
producing area and the French Cognac producing area. The long history and unique ecological
environment provide a good source of water, soil and air for production for liquor production. Especially
the microorganism condition is significantly beneficial to production. The Yanghe distillerywas in the Sui
and Tang Dynasties, flourished in the Ming and Qing Dynasties. It had been sold in Jianghuai area
during the period of Yong Zheng of Qing Dynasty. It has a good reputation that 'dainty taste derived
from fortune spring and liquor ocean, which makes Yanghe rank first place in Jianghuai area'.
Shuanggou alongside Yanghe has been praised as the origin of Chinese natural liquor by domestic and
overseas experts due to the discovery of drunken ape fossils in Xiacaowan.
3.2 Quality advantage
Considering the diversification and individuation of consumption demand, the Company took the lead in
breaking the traditional classification of Baijiu flavor. The Company classifies Baijiubased on taste and
emphasizes the value of taste. The Company strengthens the mellowness of Baijiu, puts forward the
new style of the mellow Baijiu quality, and deeply meets core demand of target consumers. It has
successfully establishednew craftof mellow Baijiu production andsystem framework of mellowness
mechanism, which caters to market consumption. In June 2008, 'Mellowness', a special type of Yanghe,
was first written into the national standard in China Protected Geographical Indication Product- Yanghe
Daqu (Standard No. GB/T220406-2008).
3.3 Technologyadvantage
The Company has 39Masters of Chinese Baijiu, 69 provincial Baijiutasting committee members and
1854 technicians. The Company also has 10 national and provincial technical research and
development platforms. The obvious advantage of technical talents provides technical support for the
continuous improvement of mellow Baijiu quality. In the national liquor taster contest sponsored by
ChinaAlcoholic Drinks Association, the Company is the only one that won three consecutive
championships among all contestants; In 2020, talents of theCompany won the top 4 in the 4th National
Liquor Tasting Professional Skills Competition, and the project of "Research and Application of Key
Technology and Intelligent Production of Mellowness Flavor Brewing" won the first prize of "Food
Industry Science and Technology Award". It once again showed the Company’s great advantage of
talents and technology.
3.4 Brand advantage
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
The Company, as one of the eight traditional well-known Baijiu enterprises, is the only one which has
two famous Chinese Baijiu brands, namely Yanghe and Shuanggou, two Chinese time-honored brands,
and six Chinese well-known trademarks, including Yanghe, Shuanggou, Yanghe Spirit Classic,
Zhenbaofang, Dream Blue, and Su. The brand value of the Company has been ranked the top 3 in the
National Light Industry List, and has been listed in the "Global Top 500 Most Valuable Brands" and
"Top 100 Most Valuable Chinese Brands" for five consecutive years, and ranked the third in the "2020
Top 50Global Spirits Brand Value List”.
3.5 Marketing network advantage
The Company has a marketing team with strong executive force. The marketing network has
penetrated into every county and every city throughout the country. High speed channel has been
basically completed. These laid a solid foundation for market expansion and extension of the category
in the future. The Company obtained several honors such as model enterprise of industrial Internet
development in Jiangsu province, Jiangsu Provincial Governor Quality Award, and service-oriented
manufacturing enterprise in Jiangsu province. At the same time, as a traditional enterprise, the
Company has also insisted on exploring new marketing mode, and has made some achievements in
Internet application innovation.
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Section IV Performance Discussion and Analysis
1. Overview
2020 was a key year for the Company to deepen reforms, adjustments and
transformation.Facing the impact of COVID-19 epidemic, complex and ever-changing
macro environment and increasingly fierce industry competition, the Company spared no
effort to cope with difficulties and challenges, thoroughly implemented the overall work
strategy of "12633", focused on epidemic prevention and control on one hand, and on
adjustments and transformation on the other hand, and realized the stable development
in the complex internal and external environment.In 2020, the Company achieved
operating revenue of CNY 21.101 billion and net profit attributable to shareholders of the
listed company of CNY 7.482 billion.
First, the Company deepened marketing transformation and accumulated potential
energy for development. The Company adhered to the problem-oriented thinking,
deepened the implementation of transformation ideas, further built a new relationship
between Yanghe and distributors with integration strategy, and gradually optimized the
distribution of dealers with the aim of "one main distributor and multiple auxiliary
distributors". The Company implemented the strategy of Twin Famous Baijiu, adjusted
the organizational structure, equipped corresponding resources, and further deepened
the operation of Shuanggou brand. It continuously improved the market service and
marketing management system, oriented assessment, price control, group purchase
construction, digital marketing and other measures. The Company's marketing potential
energy has been accumulated in the deep transformation and adjustment.
Second, the Company focused on quality breakthroughs and laid a solid foundation for
development. The Company adhered to the strategy that "quality is king", sublimated the
new connotation of "Fine Baijiu" with the consumer-orientation, continuously optimized
the distilling process, and further enhanced the aroma complex sense of raw liquor. It
focused on key topics and the Company successfully constructed the mode system of
"big base liquor combination", improved the elegance of aroma, mellow taste and comfort
after drinking at multiple levels, made more achievements in a number of scientific
research projects, and continued to improve the quality of products through joint efforts.
The crystal version of Dream Blue was launched gorgeously, and the M6+ completed the
nationwide promotion, and won the new liquor product award of "Green Drink Award".
Third, the Company improved brand value and enabled the development of power.
Telling the brand story well through multiple channels and organizing cultural activities
such as Seal Ceremony and Toupai Baijiu Opening Cellar Festival, presented the beauty
of Chinese Baijiu culture inheritance. "Million Space Partner Program" and other activities
conveyed the strongest cultural message of "there is always Dream Blue for big
family/nation events". Public welfare activities such as anti-epidemic, student aid and
targeted poverty alleviation conveyed the brand image of warmth and feelings. The
Company was awarded the Top 100 Most Valuable Chinese Brands in 2020 and ranked
the third in the Top 50 Global Spirits Brand Value List in 2020. The brand awareness and
reputation have been further improved.
Fourth, the company upgraded management and improved the quality of development.
The Company focused on improving management, quality and efficiency and promoting
transformation. The 14th Five-Year Plan has been scientifically formulated. Digital
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
transformation, supply chain management, quality control, investment management,
information disclosure, audit management and other work have been upgraded, and
more efforts have been made. The management efficiency has been continuously
improved in the process of striving for excellence. The construction of a new digital
management system, packaging production efficiency and market response speed
significantly improved. Production costs were further reduced and intelligent packaging
performed well. It further improved the logistics support ability of the Company.
Fifth, the Company strengthened cultural construction and condensed synergy for
development. The Company gave full play to the dual advantages of leading Party
building and shaping culture, and continued to strengthen Party building work. The
Company adhered to the political guidance, through the "three lectures and one
comparison" theme education and other activities. The effect of style construction has
been shown. More than 80 activities, such as summer camp for Su wine students, and
more than 200 cultural activities such as Mid-Autumn Festival National Day Gala, have
been carried out to actively build a large ecological circle of corporate humanistic care.
The Company adhered to cultural confidence, started the construction of "cultural
Yanghe", established Yanghe University, Sujiuzhihui and other enterprising learning and
growth platforms. Post knowledge system construction showed initial results. The
Company created typical character images to highlight the power of examples. The
Company has been awarded 53 national and provincial honors, such as "Outstanding
Contributor of the Hope Project for 30 Years, Craftsman of China Brewing Industry,
National Civilized Family, Good Youth of Jiangsu Province, and Jiangsu May Day
Innovative Expert". The guiding role is more powerful and the forging ahead is more
profound.
The Company shall comply with the disclosure requirements of Shenzhen Stock
Exchange Industry Information Disclosure Guidelines No. 14 -Listed Companies
Engaging in Food and Liquor Manufacturing Related Businesses
Information about brand operation
The Company’s products include Dream Blue, Sujiu, Sky Blue, Zhenbaofang, Ocean
Blue, Yanghe Daqu, Shuanggou Daqu, Guijiu, Sidus Wine and so on. According to the
price range standard of ex-factory price, the Company divides the products into mid/high
end and ordinary products. The mid/high end products refer to those with ex-factory price
≥ CNY 100 / 500ml, mainly including Dream Blue, Sujiu, Sky Blue, Zhenbaofang (Difang,
Shengfang) and Ocean Blue. Ordinary products refer to those with ex-factory price ＜
CNY 100 / 500ml, mainly including Yanghe Daqu and Shuanggou Daqu.
The revenue of various products is as follows:
Unit：CNY
Operating revenue
Products
2020 YoY change
Mid/high end products 17,647,666,173.96 -7.15%
Ordinary products 2,686,616,269.02 -14.86%
Main sales model
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
The Company adopts the marketing and sales model mainly based on distribution, which
is divided into wholesale distribution and online direct selling, among which wholesale
distribution is the main sales model.
Distribution model
Applicable √ N/A
1. Disclosure of main business composition by different types
Unit:CNY
Types Operating revenue YoY Operating cost YoY Gross YoY
change change margin change
By product
Mid/high
end 17,647,666,173.96 -7.15% 3,556,004,734.05 -7.51% 79.85% 0.08%
products
Ordinary
2,686,616,269.02 -14.86% 1,687,531,385.06 -12.47% 37.19% -1.71%
products
Subtotal 20,334,282,442.98 -8.24% 5,243,536,119.11 -9.17% 74.21% 0.26%
By sales model
Wholesale
20,008,281,801.72 -8.49% 5,197,737,787.91 -9.32% 74.02% 0.24%
distribution
Online
direct 326,000,641.26 9.68% 45,798,331.20 11.83% 85.95% -0.27%
selling
Subtotal 20,334,282,442.98 -8.24% 5,243,536,119.11 -9.17% 74.21% 0.26%
By geographical segment
Jiangsu 9,559,956,587.96 -7.18% 2,733,139,743.54 -9.13% 71.41% 0.61%
Ex-
10,774,325,855.02 -9.17% 2,510,396,375.57 -9.21% 76.70% 0.01%
Jiangsu
Subtotal 20,334,282,442.98 -8.24% 5,243,536,119.11 -9.17% 74.21% 0.26%
According to the price range standard of ex-factory price, the Company divides the
products into mid/high end products and ordinary products. The mid/high end products
refer to those with ex-factory price ≥ CNY 100 / 500ml. Ordinary products refer to those
with ex-factory price ＜CNY 100 / 500ml.
2. Disclose the number of distributors according to regional classification
Geographical segment Distributor number at Increase number during Decrease number
the end of the reporting the reporting period during the reporting
period period
Jiangsu 3116 227 413
Ex-Jiangsu 5935 976 1887
Total 9051 1203 2300
Since 2019, the Company has carried out marketing adjustment and transformation with
"one main distributor and multiple auxiliary distributors". It has built a distributing network
around the guiding ideology of complementary and coordinated development. As a result,
the number of distributors decreased.
3. Settlement method and distribution method
The Company mainly adopts the bank transfer method for settlement, and adopts the
method of payment before goods for product sales.
4. Sales amount and sales proportion of the top five distributors
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
In 2020, the total sales amount of the top five distributors was CNY 973.1852 million,
accounting for 4.61% of the total sales of this year. Among the sales of the top five
distributors, the sales from related parties were CNY 0, accounting for 0% of the total
sales of this year. The total amount of receivables of the top five distributors at the end of
the period were CNY 0.
Store sales terminals accounted for more than 10%
Applicable √ N/A
Online direct selling
Applicable √ N/A
Unit:CNY
Online direct selling Sales amount in Sales amount in YoY change
2020 2019
T-mall, JD.COM and
326,000,641.26 297,224,498.99 9.68%
other platforms
The sales price of the main products accounting for more than 10% of the total operating
revenue of the current period changed by more than 30% compared with the previous
reporting period
Applicable √ N/A
Procurement mode and content
Unit:CNY
Procurement mode Procurement content Amount
Market bidding Distilling raw materials and
3,912,774,029.08
packaging materials
Marketing purchase Energy 293,209,174.11
Procurement of raw materials from cooperatives or farmers accounted for more than 30%
of the total purchase amount
Applicable √ N/A
The price of major outsourced raw materials changed by over 30% year on year
Applicable √ N/A
Main production mode
The Company's production mode is self-produced mode, the main links including raw
material crushing, fermentation, distillation, grade storage, liquor body design and
combination, product packaging.
Commissioned production
Applicable √ N/A
The main components of operating costs
Unit:CNY
Types Cost item 2020 2019 YoY
Amount As a Amount As a change
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
percentage percentag
of operating e of
cost operating
cost
Baijiu Direct 3,735,886,638.99 63.84% 4,159,654,057.94 62.77% -10.19%
materials
Direct labor 900,387,427.26 15.39% 902,420,369.83 13.62% -0.23%
Fuels and 211,348,204.70 3.61% 225,184,624.70 3.40% -6.14%
energy
Manufacturing 297,087,576.41 5.08% 356,239,324.36 5.38% -16.60%
overhead
Output and inventory
1. Production volume, sales volume and inventory of major products
Types Item Unit 2020 2019 YoY change
Baijiu Sales ton 155,757.37 186,022.52 -16.27%
Production ton 161,498.22 179,315.33 -9.94%
Inventory ton 23,897.60 18,156.75 31.62%
2. Inventory of finished and semi-finished Baijiu at the end of the period
Unit: ton
Inventory of finished Baijiu Inventory of semi-finished Baijiu (including
raw liquor)
24,324.62 609,146.56
3. Capacity of the Company
Unit: ton
Name of production entity Design capacity Actual capacity in 2020
Yanghe (including Yanghe branch
222,545 122,366
and siyang branch)
Shuanggou Distillery 97,040 38,127
2. Analysis of main business
2.1. Overview
Same with the contents presented in “1.Overview” of this section.
2.2. Revenues and cost of sales
2.2.1. Breakdown of operating revenues
Unit：CNY
2020 2019
As a percentage As a percentage
YoY change
Amount of operating Amount of operating
revenues revenues
Total 21,101,051,131.79 100% 23,126,476,885.07 100% -8.76%
By business segment
Liquor 20,334,282,442.98 96.37% 22,161,278,307.05 95.83% -8.24%
Others 766,768,688.81 3.63% 965,198,578.02 4.17% -20.56%
By product
Baijiu 20,152,435,029.41 95.51% 21,967,044,396.58 94.99% -8.26%
Wine 181,847,413.57 0.86% 194,233,910.47 0.84% -6.38%
Others 766,768,688.81 3.63% 965,198,578.02 4.17% -20.56%
16
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
By geographical segment
Jiangsu 9,990,396,422.72 47.35% 11,011,399,137.52 47.61% -9.27%
Ex-Jiangsu 11,110,654,709.07 52.65% 12,115,077,747.55 52.39% -8.29%
2.2.2. Business segment, products or geographical segments
contributing over 10% of the operating revenues or profits
√ Applicable N/A
Unit：CNY
Gross YoY change YoY change
Operating YoY change of
Cost of sales profit of operating of gross
revenues cost of sales
margin revenue profit margin
By business segment
Liquor 20,334,282,442.98 5,243,536,119.11 74.21% -8.24% -9.17% 0.26%
By product
Baijiu 20,152,435,029.41 5,144,709,847.36 74.47% -8.26% -8.84% 0.16%
By geographical segment
Jiangsu 9,559,956,587.96 2,733,139,743.54 71.41% -7.18% -9.13% 0.61%
Ex-
10,774,325,855.02 2,510,396,375.57 76.70% -9.17% -9.21% 0.01%
Jiangsu
Under the circumstances that the statistical standards for the Company’s main business
data adjusted in the reporting period, the Company’s main business data in the current
one year is calculated based on adjusted statistical standards at the end of the reporting
period.
Applicable √ N/A
2.2.3. Whether revenue from physical sales is higher than service
revenue
√ Yes □ No
By
business Item Unit 2020 2019 YoY change
segment
Sales volume ton 155,757.37 186,022.52 -16.27%
Production
Baijiu ton 161,498.22 179,315.33 -9.94%
volume
Inventory volume ton 23,897.60 18,156.75 31.62%
Sales volume ton 3,202.27 4,854.36 -34.03%
Production
Wine ton 2,985.04 4,137.99 -27.86%
volume
Inventory volume ton 427.02 644.25 -33.72%
Reasons for any over 30% YoY changes in the data above.
√ Applicable N/A
The increase of 31.62% YoY in inventoryvolume of Baijiu was mainly due to stock for
Spring Festival sales season.
The decrease of 34.03% YoY in sales volume of wine was mainly due to the epidemic
and the Company's product sales model. The Company's wine sales declined in this
reporting period, resulting in a corresponding decline in wine sales volume.
The decrease of 33.72% YoY in inventory volume of wine was mainly due to clearing and
digesting inventory in this reporting period.
17
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
2.2.4. Execution of significant sales contracts in the reporting period
Applicable √ N/A
2.2.5. Breakdown of cost of sales
By business and product segment
Unit：CNY
By 2020 2019
YoY
business Item As a percentage As a percentage
Amount Amount change
segment of cost of sales of cost of sales
Liquor 5,243,536,119.11 89.60% 5,772,779,588.18 87.12% -9.17%
Unit：CNY
2020 2019
By As a
As a YoY
product Item percentage
Amount percentage of Amount Change
segment of cost of
cost of sales
sales
Direct
Liquor 3,831,187,362.53 65.47% 4,284,348,458.13 64.66% -10.58%
materials
Liquor Direct labor 902,098,885.05 15.42% 904,555,426.95 13.65% -0.27%
Fuels and
Liquor 212,167,471.34 3.63% 226,377,369.91 3.42% -6.28%
energy
Manufacturing
Liquor 298,082,400.19 5.09% 357,498,333.19 5.40% -16.62%
overhead
Note: Nil
2.2.6. Changes in the scope of the consolidated financial statements for
the reporting period
√ Yes No
1. Establishment of subsidiaries
Su Wine Group Co.,Ltd. ,the Company’s holding subsidiary,invested CNY 2 million to
establishJiangsu Yanghe Painting and Calligraphy Academy. On 6 July 2020, the
Registration Certificate of Private Non-Enterprise Unit (Legal Person) issued by the Civil
Affairs Department of Jiangsu Province was obtained. It was included in the consolidated
financial statements from July 2020.
2. Cancellation of subsidiaries
(1) Huaian Huaqu Wine Development Co.,Ltd., Jiangsu Huaqu Wine Group Nanjing
Co.,Ltd., Taizhou Huaqu Wine Development Co.,Ltd.,Guizhou Guijiu Package Co.,Ltd.,
the holding subsidiaries, were liquidated and terminated onJanuary 2020.FromFebruary
2020, theyare no longer included in the consolidated scope of the consolidated financial
statements.
(2) Jiangsu Huaqu Wine Group Suzhou Co., Ltd., Jiangsu Huaqu Wine Group Yancheng
Co., Ltd., the holding subsidiaries, were liquidated and terminatedonMarch 2020.
FromApril 2020, theyare no longer included in the consolidated scope of the consolidated
financial statements.
18
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
(3) Jiangsu Huaqu Wine Group Nantong Co., Ltd., Jiangsu Huaqu Wine Group Wuxi Co.,
Ltd., the holding subsidiaries, were liquidated and terminated on April 2020. From May
2020, they are no longer included in the consolidated scope of the consolidated financial
statements.
2.2.7. Major changes in the business, products or services in the
reporting period
Applicable √ N/A
2.2.8. Main customers and suppliers
Sales to major customers of the Company
Total sales from top five customers（CNY） 973,185,221.90
Total sales from top five customers as a percentage of the total sales 4.61%
Total sales from related parties among top five customers as a
0.00%
percentage of the total sales
Information on top five customers
As a percentage of the total sales
No. Customer Sales amount(CNY)
for the year
1 Customer A 250,020,588.88 1.18%
2 Customer B 226,028,249.31 1.07%
3 Customer C 219,523,255.31 1.04%
4 Customer D 139,377,749.01 0.66%
5 Customer E 138,235,379.39 0.66%
Total -- 973,185,221.90 4.61%
Other information on major customers
Applicable √ N/A
Major suppliers of the Company
Total purchasefrom top five suppliers（CNY） 1,046,394,506.36
Total purchasefrom top five suppliers as a percentage of the total
20.47%
sales
Total purchasefrom related parties among top five suppliers as a
0.00%
percentage of the total purchase
Information on top five suppliers
As a percentage of the total
No. Supplier Purchases(CNY)
purchase for the year
1 Supplier A 289,002,139.70 5.65%
2 Supplier B 225,020,586.44 4.40%
3 Supplier C 211,926,877.93 4.15%
4 Supplier D 164,202,585.50 3.21%
5 Supplier E 156,242,316.79 3.06%
Total -- 1,046,394,506.36 20.47%
Other information on major suppliers
Applicable √ N/A
19
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
2.3. Expense
Unit：CNY
Reason for any
2020 2019 YoY change
significant change
Selling and
2,603,804,157.78 2,691,711,170.59 -3.27%
distribution
expenses
General and
1,729,080,201.93 1,856,491,727.00 -6.86%
administrative
expenses
-87,234,764.39 -78,426,551.41 -11.23%
Finance expenses
During this period, the
R&D investment of raw
260,094,291.03 159,965,593.88 62.59% liquor production base
R&D expenses
increased, so the
amount of R&D expense
increased accordingly
The Company shall comply with the disclosure requirements of Shenzhen Stock
Exchange Industry Information Disclosure Guidelines No. 14 - Listed Companies
Engaging in Food and Liquor Manufacturing Related Businesses
(1) The composition of selling and distribution expenses
Unit: CNY 10,000
Item As a percentage of As a percentage of YoY
Current Previous
selling and selling and change
period period
distribution distribution
amount amount
expenses expenses
Advertising and 141,109.00 54.19% 156,690.39 58.21% -9.94%
promotion
expense
Payroll 64,627.10 24.82% 50,283.64 18.68% 28.53%
Cargo charge 518.50 0.20% 1,032.70 0.38% -49.79%
Labor expense 11,797.59 4.53% 15,623.91 5.80% -24.49%
Travel expense 35,343.47 13.57% 36,573.51 13.59% -3.36%
Business 162.81 0.06% 380.98 0.14% -57.27%
entertainment
Other expense 6,821.95 2.62% 8,585.99 3.19% -20.55%
Total 260,380.42 100.00% 269,171.12 100.00% -3.27%
(2) The composition of advertising expense
Unit: CNY 10,000
Item As a percentage of advertising
Current period amount
expenses
National advertising expense 89,074.58 87.32%
Regional advertising expense 12,937.74 12.68%
Total 102,012.32 100.00%
2.4. R&D input
√ Applicable N/A
The Company seeksstable improvement and lays a solid quality foundation. It makes
more efforts from "brewing, selecting, storing and using good liquor" to build a new
combination system of large base liquor, to enrich the resources of multiple types of
characteristic liquor, and to realize the transformation of the structure of raw liquor and
20
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
base liquor from characteristics to advantages, and continuously to consolidate the
guarantee force of quality Yanghe resources.
The Company seeks stable breakthrough and empowers scientific and technological
innovation.Through in-depth basic theoretical research, analysis of mellowness
mechanism, exploration of health function factors and health experience factors,
outstanding results have been achieved, and the quality connotation of mellowness has
been enriched.The dynamic model of solid state fermentation with the highest quality
matching degree and the micro-ecological regulation method of pit and pond were
established. The brewing process of raw liquor was more controllable, and the
improvement effect of raw liquor quality was continuously highlighted.
The Company seeks new changes with stability to lead intelligent brewing. It adheres to
thetransformation "from traditional industrial technology to digital and intelligent" as a
goal.The Company deeply applies MES system, and achieves a number of brewing core
technology breakthroughs. Jiangsu Province intelligent manufacturing demonstration
plant construction projectwas approved.
The Company seeks quality improvement with stability.Product innovation also
achievesnew breakthroughs.Based on characteristics of Yanghe and Shuanggou, the
comfort, satisfaction and ease of the liquor body are regarded as an evaluation criteria for
quality improvement to realize a systematic solidification of flavor characteristics of a
whole series of products. The Company successfully creates crystal version of Dream
Blue, and forms the product characteristics of "brightness, mellowness, super value and
super volume". It bringsan experience of "outside temperament and inside quality of good
Baijiu" to the consumer market.
Information about R&D input
2020 2019 YoY change
Number of R&D personnel 549 396 38.64%
R&D personnel as a percentage
3.47% 2.51% 0.96%
in total employees
R&D input(CNY) 269,360,145.63 166,917,025.32 61.37%
R&D input as a percentage in
1.28% 0.72% 0.56%
operating revenues
Capitalized R&D input(CNY) 9,265,854.60 6,951,431.44 33.29%
Capitalized R&D input
3.44% 4.16% -0.72%
percentage in total R&D input
Reasons for any significant YoY change in the ratio of the R&D input to the operating
revenues.
Applicable √ N/A
Reasons for any sharp variation in the capitalization rate of R&D input and statement of
its rationale.
Applicable √ N/A
2.5. Cash flows
Unit：CNY
21
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Item 2020 2019 YoY change
Subtotal of cash inflows from
21,900,973,449.03 28,418,153,682.08 -22.93%
operating activities
Subtotal of cash outflows
17,922,182,613.23 21,620,261,810.67 -17.10%
from operating activities
Net cash flows from
3,978,790,835.80 6,797,891,871.41 -41.47%
operating activities
Subtotal of cash inflows from
30,896,999,982.51 40,698,105,842.28 -24.08%
investing activities
Subtotal of cash outflows
26,424,165,197.95 41,991,320,976.18 -37.07%
from investing activities
Net cash flows from
4,472,834,784.56 -1,293,215,133.90 445.87%
investing activities
Subtotal of cash outflows
5,504,913,990.79 4,823,150,583.00 14.14%
from financing activities
Net cash flows from
-5,504,913,990.79 -4,823,150,583.00 -14.14%
financing activities
Net increase in cash and
2,943,041,513.62 684,796,540.70 329.77%
cash equivalents
Explanation of why the data above varied significantly.
√ Applicable □ N/A
(1)The decrease of 41.47% YoY of net cash flows from operating activities was mainly
due to the decline of revenue in this periodthe increase, leading tothe decrease in cash
inflow from operating activities more than the decrease in cash outflow from operating
activities.It resulted in an decrease in net cash flow from current operating activities.
(2) The increase of 445.87% YoY of net cash flows from investing activities was mainly
due to a large decrease of purchasing financial products in this period, leading to the
decrease in cash outflow from investing activities more than the decrease in cash inflow
from investing activities. It resulted in an increase in net cash flow from current investing
activities.
(3) The increase of 329.77% YoY of net increase in cash and cash equivalent was mainly
due to a large decrease of purchasing wealth management products in this period,
leading to an increase in net cash flow from current investing activities. It resulted in an
increase in net increase in cash and cash equivalent in this period.
Main reasons for the material difference between net cash flows from operating activities
during the reporting period and net profit for the year.
Applicable √ N/A
3. Analysis of non-corebusiness
√ Applicable N/A
Unit：CNY
As a percentage
Amount Reasons Sustainability
of total profits
22
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Mainly due to the investment
Investment income generated by finance
1,206,683,362.49 12.21% No
income management and equity
investment
Mainly due to changes in fair
Changes in
1,267,682,598.52 12.83% value of financial assets held No
fair value
for trading
Asset Mainly due to provision for
-6,196,876.85 -0.06% No
impairment stock obsolescence
Mainly due to donation
Non-operating
25,039,870.29 0.25% acceptance, compensation and No
income
liquidated damages income
Mainly due to donation
Non-operating
41,325,490.38 0.42% expenses and losses from No
expenses
retirement of fixed assets
4. Analysis of assets and liabilities
4.1 Significantchanges of asset items
The Company implemented the new revenue standards or new leasing standards for the
first time since 2020, and adjusted opening balance of related items in financial reports
due to the first implementation.
Applicable
Unit：CNY
As at the end of 2020 As at the beginning of 2020 Explanati
Change
As a As a on about
in
percentage percentag any
Amount Amount percenta
of total e of total significant
ge
assets assets changes
Cash and cash
7,243,186,362.29 13.45% 4,300,144,848.67 8.04% 5.41%
equivalents
Accounts
4,225,230.90 0.01% 16,080,618.65 0.03% -0.02%
receivable
Inventories 14,852,694,146.30 27.57% 14,433,244,696.27 27.00% 0.57%
Long-term equity
29,528,377.16 0.05% 25,361,651.38 0.05%
investments
Fixed assets 6,882,953,634.34 12.78% 7,256,557,503.85 13.58% -0.80%
Construction in
223,468,482.24 0.41% 263,153,505.12 0.49% -0.08%
progress
Long-term
36,360.00 72,723.00
borrowings
Financial assets
14,301,978,905.17 26.55% 17,976,767,209.45 33.63% -7.08%
held for trading
Other non-current
6,366,958,225.81 11.82% 5,050,851,671.16 9.45% 2.37%
financial assets
4.2 Assets and liabilities measured at fair value
√Applicable □ N/A
Unit：CNY
23
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Changes
in the
Changes in
cumulati Provisi
fair value Other
Opening ve fair on for Amount of Amount of Closing
Item recognized change
balance value impair purchase sale balance
in profit or s
recorded ment
loss
into
equity
Financial
Assets
1. Financial
assets held
for -
23,027,618, 1,267,682,5 26,071,060 29,697,17 20,668,93
trading(exclud 249,88
880.61 98.52 ,798.23 5,266.30 7,130.98
ing derivative 0.08
financial
assets)
-
23,027,618, 1,267,682,5 26,071,060 29,697,17 20,668,93
Total 249,88
880.61 98.52 ,798.23 5,266.30 7,130.98
0.08
Financial
0.00 0.00 0.00 0.00 0.00
liabilities
Other changes
Whether measurement attribution of main assets changed significantly during this period.
Yes √ No
4.3 Restricted asset rights as of the end of this reporting period
No
5. Investment
5.1. Total investment
√ Applicable N/A
Investment made in the reporting period(CNY) Investment made in the prior year(CNY) YoY change
2,204,658,425.17 2,169,877,269.95 1.60%
5.2. Significant equity investment made in the reporting period
Applicable √ N/A
24
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
5.3. Significant non-equity investment ongoing in the reporting period
Applicable √ N/A
5.4.Investment in financial assets
(1) Securities investment
√Applicable N/A
Unit：CNY
Categor Stock Abbr. of Initial Accounting Opening Changes in fair Changes Amount of Amou Profit and loss Closing Accounti Capit
y of code securitie investment measureme balance value in the purchase nt of during the balance ng al
securiti s cost nt model recognized in cumulati sale reporting subject sourc
es profit or loss ve fair period e
value
recorded
into
equity
Domesti 60169 Other Owne
c and 6 BOCI non- d
300,000,000.0 402,516,510. 1,345,694,006. 1,348,062,427. 1,748,210,516.
foreign Securiti Fair value current Fund
0 70 29 33 99
stocks es financial
assets
Trust Nil Avic Financial Owne
Trust- assets d
Apocaly held for Fund
1,000,000,000. 1,000,000,000. 1,000,000,000.
pse Fair value trading
00 00 00
No.328
Tianji
Jufu
Trust Nil MinShe Financial Owne
ng assets d
600,000,000.0 600,000,000.0 600,784,109.5
Trust- Fair value 784,109.59 784,109.59 held for Fund
0 0 9
Zhongm trading
in
25
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Yongfen
g No.1
Collectiv
e Fund
Trust
Plan
Trust Nil MinShe Financial Owne
ng assets d
Trust- held for Fund
Zhongm trading
in
500,000,000.0 500,000,000.0 509,674,657.5
Yongfen Fair value 9,674,657.53 9,674,657.53
0 0 3
g No.1
Collectiv
e Fund
Trust
Plan
Trust Nil Avic Financial Owne
Trust- assets d
Tianji held for Fund
Huicai trading
No.3
Bond 500,000,000.0 500,000,000.0 507,421,917.8
Fair value 7,421,917.81 7,421,917.81
Investm 0 0 1
ent
Collectiv
e Fund
Trust
Plan
Trust Nil Zhongro Financial Owne
ng assets d
Trust- held for Fund
Huijujin trading
No.1 500,000,000.0 500,000,000.0 506,935,616.4
Fair value 6,935,616.44 6,935,616.44
Money 0 0 4
Fund
Collectiv
e Fund
Trust
26
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Plan
Trust Nil Avic Financial Owne
Trust- assets d
Tianji held for Fund
Huicai trading
No.3
Bond 500,000,000.0 500,000,000.0 500,685,616.4
Fair value 685,616.44 10,595,890.41
Investm 0 0 4
ent
Collectiv
e Fund
Trust
Plan
Trust Nil Zhongro Financial Owne
ng assets d
Trust- held for Fund
Huijujin trading
No.1
500,000,000.0 500,000,000.0 500,000,000.0
Money Fair value 10,528,767.12
0 0 0
Fund
Collectiv
e Fund
Trust
Plan
Trust Nil Avic Financial Owne
Trust- assets d
Tianji held for Fund
Huicai trading
No.3
Bond 500,000,000.0 500,000,000.0 500,000,000.0
Fair value
Investm 0 0 0
ent
Collectiv
e Fund
Trust
Plan
Trust Nil Zhongro 500,000,000.0 500,000,000.0 500,000,000.0 Financial Owne
Fair value
ng 0 0 0 assets d
27
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Trust- held for Fund
Huijujin trading
No.1
Money
Fund
Collectiv
e Fund
Trust
Plan
Other securities investments 12,12
held at the end of this period 10,025,444,40 12,353,786,3 10,168,046,83 6,260, 845,786,212.4 10,325,948,42
-- -69,374,769.64 -- --
0.98 55.66 4.74 120.1 9 0.54
4
Total 12,12
15,425,444,40 12,756,302,8 1,301,821,154. 15,268,046,83 6,260, 2,239,789,598. 17,199,660,85
-- 0.00 -- --
0.98 66.36 46 4.74 120.1 72 5.34
4
Disclosure date of the
announcement of the board
April 29, 2020
of directors for the approval
of securities investment
Disclosure date of
announcement of
shareholders' committee for 23 May, 2020
approval of securities
Investment (if any)
(2) Derivative investments
Applicable √ N/A
No such cases in the reporting period.
5.5. Use of fund-raising
Applicable √ N/A
28
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
No such cases in the reporting period.
6. Sale of major assets and equity Interests
6.1. Sale of major Assets
Applicable √ N/A
No such cases in the reporting period
6.2. Sale of major equity Interests
Applicable √ N/A
7. Analysis of major subsidiaries
√ Applicable N/A
Main subsidiaries and joint companies with an over 10% influence on the Company’s net profit
Unit：CNY
Company Registered
Company name Business scope Total assets Net assets Operating revenue Operating profit Net profit
type capital
Wholesaling and
Su Wine Trade Group
Subsidiary retailing of 334,400,000.00 17,523,095,738.91 3,812,370,210.74 19,994,698,526.68 3,810,931,697.73 2,969,807,865.72
Limited by Share Ltd.
prepackaged food
Jiangsu Shuanggou Production and sales
Subsidiary 110,000,000.00 8,480,167,211.27 2,082,121,890.26 1,299,058,672.33 1,631,972,165.61 1,712,488,476.69
Distillery Stock Co.,Ltd. of Baijiu
Wholesaling and
Jiangsu Shuanggou Liquor
Subsidiary retailing of 5,000,000.00 4,140,870,588.94 1,182,136,028.53 3,685,694,999.59 1,559,022,241.40 1,169,148,142.52
Operation Co.,Ltd.
prepackaged food
29
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Acquisition and disposal of subsidiaries during the reporting period
√ Applicable □ N/A
How subsidiary was acquired or disposed Impact on overall operation and
Subsidiary name
during the reporting period results(CNY)
Jiangsu Yanghe Painting and Calligraphy Academy Establishment Tiny
Huaian Huaqu Wine Development Co.,Ltd. Liquidation and cancellation Tiny
Jiangsu Huaqu Wine Group Nanjing Co.,Ltd. Liquidation and cancellation Tiny
Jiangsu Huaqu Wine Group Nantong Co., Ltd. Liquidation and cancellation Tiny
Jiangsu Huaqu Wine Group Suzhou Co., Ltd. Liquidation and cancellation Tiny
Taizhou Huaqu Wine Development Co.,Ltd. Liquidation and cancellation Tiny
Jiangsu Huaqu Wine Group Wuxi Co., Ltd. Liquidation and cancellation Tiny
Jiangsu Huaqu Wine Group Yancheng Co., Ltd. Liquidation and cancellation Tiny
Guizhou Guijiu Package Co.,Ltd. Liquidation and cancellation Tiny
30
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
8. Structured entities controlled by the Company
□ Applicable √ N/A
9. Outlook for the future development of the Company
9.1. Analysis of industry situation
First, industry concentration has been further enhanced. According to data from the
National Bureau of Statistics, the number of Baijiu enterprises above designated size
dropped to 1,040 in 2020, which was 538 fewer than that in 2016. With the gradual
improvement of consumers' brand awareness, Baijiu market share tends to concentrate
on top brands and leading enterprises, and the industry divergence continues to intensify.
Famous and excellent Baijiu enterprises with capital advantages, management
advantages, brand advantages, talent advantages and channel advantages will
outperform in the future Baijiu market competition.
Second, brand premiumization continues. In recent years, the continuous high growth of
the domestic economy, the steady increase of residents' income and the structural
change of the main consumer groups have provided strong support for the high-end
Baijiu. In 2020, the total output of Chinese Baijiu enterprises above designated size was
7.4073 million kiloliters, down 2.46% year on year. Their sales revenue reached CNY
583.639 billion, up 4.61% year on year, and the total profit reached CNY 158.541 billion,
up 13.35% year on year. The rapid profit growth fully demonstrated and verified the
development trend of brand premiumization in Baijiu industry.
Third, the quality of products is further highlighted. As the economic environment and
consumption concept continue to change, the majority of consumers have gradually
strengthened the concept of "drinking less but drinking better". In 2020, multiple Baijiu
enterprises continued to increase the investment in "intelligent distilling" and capacity
expansion projects to improve the capacity and production stability of high-quality Baijiu.
The importance of quality improvement and communication in enterprise operation and
development are increasingly highlighted. The Company's leading production capacity,
storage scale and raw liquor quality laid a solid foundation for the future high-quality
development.
9.2. Future development strategy and next business plan
(1) Future development strategy
Looking into the 14th Five-Year Period, the Company will adhere to Xi Jinping Thought
on Socialism with Chinese Characteristics for a New Era as guidance, earnestly
implement the important spirit on Jiangsu work that "spearheading as an example and
demonstration" instructed by General Secretary and further meet the latest requirements
by Provincial Party Committee of Suqian on "the reform and innovation of genes into
modernization, and making new era legend”. Yanghe will focus on "new journey, new
legend, new Baijiu capital" with consumers as a center, twin famous Baijiu as a main
31
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
carrier, multiple brands as a pillar, quality as a foundation, brand as a soul, culture as a
basis, marketing as a king, innovation as a need, to build the "12345" strategic system, to
create a wave leading Yanghe and a surging power Shuanggou. The Company will
promote to maintain sustained growth in quantity and steady improvement in quality at a
higher level, and achieve a more fully balanced, high-quality and efficient development.
This will become a Chinese flavor that people are proud of and a Chinese name card that
will be remembered by the world.
"1" refers to one goal. That is to create a wonderful era of Yanghe and a colorful era of
Shuanggou, so that mellowness become an immortal legend and the aroma continues
the classic of history.
"2" refers two priorities. That is the quality of the industry in the forefront and the brand in
the forefront of the country. It tries to be Chinese baijiu's leader and vanguard.
"3" refers to three types of synergy mechanisms. First is a quaternity of symbiosis of
manufacturers and dealers, co-construction of factory and city, industry sharing and
integration of business forms. Second is a quaternity of production, living, ecology, life.
Third is a quaternity of premiumization, branding, internationalization and capitalization.
"4" refers to four aggressive attitudes. Those are an attitude of a competitive combatant,
an attitude of development and pursuit, an attitude of practitioner of responsibility, and an
attitude of a loyal member of Party.
"5" refers to five strategic initiatives. That is to actively promote the quality strategy, brand
strategy, innovation strategy, culture strategy, talent strategy to help the Company to
achieve high-quality development.
(2) Business plan in 2021
2021 is the start of the implementation of the 14th Five-Year Plan, the Company will
surround the overall tone of "deepening the transformation and upgrading with gathering
change energy" to gathering six forces and six improvements and to implement six
hardcore projects. In the new historical starting point, the Company aims to build a new
pattern of high-quality development. It will help Yanghe to become a famous Chinese
Baijiu enterprise that is a trend-setting player in the world. The operating target in 2021 is
to achieve a year-on-year increase in operating revenue of more than 10%.
Gathering six forces and six improvements. First is a system thinking and strong
marketing promotes deep transformation. Second is long-term doctrine and strong quality
promotes product upgrading. Third is a positioning law and strong brand promotes
reputation building. Fourth is secondary entrepreneurship and strong innovation
promotes deep reform. Fifth is to combat entropy increase and strong management
promotes efficiency improvement. Sixth is to face the future and strong culture promotes
value identification.
Implementing the six hardcore projects. Those refer to marketing depth transformation
project, product overall upgrade project, brand matrix enhancement project, system
mechanism activation project, management efficiency perfection project and culture
Yanghe building project.
(3) Possible risks
32
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
First is a risk of intensified market competition. With the continuous improvement of
industry concentration, the industry has gradually entered the stage of accelerated
competition, and famous Baijiu enterprises have accelerated the pace of national
expansion, presenting new changes in five aspects such as brand, channel, marketing,
digitalization and organization. In view of the above risks, the Company will take
consumer demand as the core guidance, through constantly optimizing the product
structure, expanding the channel market, innovative marketing mode and other ways,
effectively improve the Company's comprehensive competitiveness and market share.
Second is a risk of market demand changes. Due to the long duration and wide range of
the epidemic, it has had a profound impact on consumers' consumption concept and
behavior, prompting consumers to pay more attention to the concept of healthy life, and
"drinking less but drinking better" has become a new trend of consumption. In view of the
above risks, the Company will always adhere to the consumer demand as the core
guidance, and conduct in-depth consumer insight researches, increase the strength of
market research, product innovation and model innovation to continuously meet
consumers' diversified needs.
10. Visits paid to the Company for research, communication,
interview, etc.
10.1 Activity registerin the reporting period
√ Applicable N/A
The main
contents of the
Reception Type of Index to main
Date of visit Way of visit Visitor discussion and
site visitor inquiry information
the information
provided
Log Sheet of
Communicatio Investor Relations
Attending the
n on the Activities
Nanjing Company's 2019
Company's on19May 2020 on
19May 2020 operation Other Other annual results
performance www.cninfo.com.c
center presentation
in 2019 and n（No：2020-
online
other aspects
001）
Communicatio
101 shareholders
n on the Log Sheet of
and investors
Company's Investor Relations
who participated
annual Activities on22
Nanjing in the on-site
22 May business May 2020 on
operations Field survey Other communication
2020 objectives, www.cninfo.com.c
center at the Company's
market n（No：2019-
2019 annual
competition
shareholders' 002）
and other
meeting
aspects
Communicate Log Sheet of
14 investors from
on the Investor Relations
Telephone CITIC, Fullgoal
11Septembe Institutio progress and Activities on
/ communicatio Fund, Taikang
r 2020 n effectiveness 11September
n Assets and other
of the 2020 on
institutions
company's www.cninfo.com.c
33
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
The main
contents of the
Reception Type of Index to main
Date of visit Way of visit Visitor discussion and
site visitor inquiry information
the information
provided
marketing n（No：2020-
adjustment
and 003）
transformation
, product
upgrading and
other aspects
Communicate
on the Log Sheet of
Company's Investor Relations
dealer Activities
4 investors from
inventory, on15September
15Septembe Headquarte Institutio Kaifeng Fund
Field survey marketing 2020 on
r 2020 r n and Huatai
organization www.cninfo.com.c
Securities
structure, n（No：2020-
marketing
systemand 004）
other aspects
Log Sheet of
Investor Relations
Communicate
Activities
on the effect of
on22October
11 investors from channel
Nanjing 2020, 26October
22October Institutio CITIC and public adjustment,
operation Field survey 2020, 27October
2020 n and private product
center 2020 on
equity institutions inventory, cost
www.cninfo.com.c
inputand other
aspects n（No：2020-
005）
Log Sheet of
Investor Relations
Communicate
Activities
9 investors from on the effect of
on22October
Guosheng channel
Nanjing 2020, 26October
26October Institutio Securities and adjustment,
operation Field survey 2020, 27October
2020 n public and product
center 2020 on
private equity inventory, cost
www.cninfo.com.c
institutions inputand other
aspects n（No：2020-
005）
27 investors from
Guotai Junan Log Sheet of
Securities,Sinolin Investor Relations
Communicate
k Securities, Activities
on the effect of
Haitong on22October
channel
Nanjing Securities, HSBC 2020, 26October
27October Institutio adjustment,
operation Field survey Qianhai 2020, 27October
2020 n product
center Securities, China 2020 on
inventory, cost
Merchants www.cninfo.com.c
inputand other
Securities, n（No：2020-
aspects
Soochow
Securities, 005）
Industrial
34
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
The main
contents of the
Reception Type of Index to main
Date of visit Way of visit Visitor discussion and
site visitor inquiry information
the information
provided
Securities,
Shenggang
Securities, and
public and China
Galaxy
Securities,
Pacific
Securities,
Changjiang
Securities, Credit
Suisse, Zhongtai
Securities and
other securities
brokerages and
private equity
institutions
57 investors from
CICC, CITIC,
Everbright
Securities,
Guangfa
Securities,
Guotai Junan,
Huatai
Securities, Credit
Suisse, Guosen
Securities, Bank
of China Log Sheet of
Securities, Investor Relations
Northeast Communicate Activities
Securities, on product on4November
4November Headquarte Institutio
Field survey Soochow sales and 2020 on
2020 r n
Securities, marketing of www.cninfo.com.c
Dongxing the Company n（No：2020-
Securities,
Hongta 006）
Securities,
Kaiyuan
Securities, New
Times Securities,
Zheshang
Securities and
other securities
brokerages and
public offering,
private offering,
and QFII
35
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Section V Significant Events
1. Profit distribution and converting capital reserves into
share capital for common shareholders
Profit distribution policy for common stock during this period, especially formulation,
execution or adjustments of cash dividend policy.
√ Applicable N/A
On 22 May 2020, the Company held 2019 annual shareholders' meeting, and the plan for
profit distribution for 2019 was reviewed and approved by this meeting. Plan for profit
distribution: based on the share capital participating in the dividend on the equity
registration date when the profit distribution plan is implemented (the base is the total
share capital of 1,506,988,000 shares excluding the repurchased shares of 6,072,339
shares), the Company used undistributed profit to distribute a cash dividend of CNY 30
(tax inclusive) per 10 shares. The total cash dividend was CNY 4,502,746,983 (tax
inclusive).
A special statement of cash dividend policy
Whether it meets the requirements of the articles
of incorporation or the resolution of shareholders' Yes
meeting.
Whether the standard and proportion of dividends
Yes
are definite and clear.
Whether the relevant decision-making processand
Yes
systemare 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
compliant and transparent it the cash dividend
has not been adjusted or changed.
policy is adjusted or changed.
Plans (or preliminary plans) for profit distribution and converting capital reserves into
share capital for common shareholders for the recent three years (including the reporting
period) are as following:
2020: The Company intends to use the undistributed profits to distribute to all
shareholders a cash dividend of CNY 30 (including tax) for every 10 shares of the total
capital stock (excluding the repurchased shares held in the Company's repurchase
special securities account) on the basis of the total capital stock on the registration date
of the implementation of the profit distribution plan, and does not send bonus shares or
convert to additional capital stock. Assuming that the current total capital stock of the
Company is 1,506,988,000 shares, deducting 1,497,326,690 shares repurchased after
9,661,310 shares held in the special securities account for share repurchase of the
Company as the base, the Company is expected to pay out a cash dividend of CNY
4,491,980,070 (tax included) this year.
36
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
2019:based on the share capital participating in the dividend on the equity registration
date when the profit distribution plan is implemented (the base is the total share capital of
1,506,988,000 shares excluding the repurchased shares of 6,072,339 shares), the
Company used undistributed profit to distribute a cash dividend of CNY30 (tax inclusive)
per 10 shares. The total cash dividend is CNY4,502,746,983 (tax inclusive). The
registration date was 23 June 2020 and the ex-right & ex-dividend day was 24 June 2020.
2018: Based on its total of 1,506.988 million shares as at 31 December 2018, the
Company is to distribute a cash dividend of CNY32 (tax inclusive) per 10 shares. The
total cash dividend is CNY4,822.3616 million (tax inclusive). The registration date was 26
June 2019 and the ex-right & ex-dividend day was 27 June 2019.
Cash dividend distribution over the recent three years (including the reporting period)
Unit: CNY
Ratio to net
Net profit profit Cash
Ratio of
attributable to attributable dividends
Ratio of cash
in other Total cash
common to common cash dividends
forms dividends
Year Cash dividends shareholders in shareholder dividends (including
(tax inclusive) (e.g. (including other
in other other
the consolidated s in the share forms)
forms forms)
statement in the consolidated repurchas
year statement in e)
the year
4,491,980,070. 1,002,128 5,494,108,750.
2020 7,482,228,633.63 60.04% 13.39% 73.43%
00 ,680.79 79
4,502,987,691. 4,502,987,691.
2019 7,382,822,726.87 60.99% 0.00 0.00% 60.99%
00 00
4,822,361,600. 4,822,361,600.
2018 8,115,189,794.69 59.42% 0.00 0.00% 59.42%
00 00
The Company made a profit in the reporting period and the profit distributed to common
shareholders of the parentcompany was positive, but it did not put forward a preliminary
plan for cash dividend distribution to its common shareholders
Applicable √ N/A
2. 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
Dividend for every 10 shares (CNY) (tax 30
included)
Total shares as the basis for the preliminary
1,497,326,690
plan for profit distribution (share)
Total cash dividends (CNY) (tax inclusive) 4,491,980,070.00
Cash dividends in other forms (e.g. share
1,002,128,680.79
repurchase)
Total cash dividends (CNY) (including other
5,494,108,750.79
forms)
37
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Distributable profit (CNY) 28,279,648,717.65
Percentage of cash dividends in the total
100%
distributed profit (including other forms)
Information about 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 about the preliminary plan for profit distribution and converting capital reserves into share
capital
As audited by Suya Jincheng CPA LLP, the Company realized a net profit of CNY 8,225,517,084.03 for
2020. It provided CNY 0 as statutory surplus reserves, plus undistributed profit at the beginning of the
year of CNY 24,556,878,616.62 and minus the distributed profit of CNY 4,502,746,983, the actual
distributable profit would be CNY 28,279,648,717.65.
In line with both the long-term development needs of the Company and the principle of giving
appropriate returns to shareholders, The Company intends to use the undistributed profits to distribute
to all shareholders a cash dividend of CNY 30 (including tax) for every 10 shares of the total capital
stock (excluding the repurchased shares held in the Company's repurchase special securities account)
on the basis of the total capital stock on the registration date of the implementation of the profit
distribution plan. There is no bonus shares and reserves would not be converted into share capital. The
profit distribution conforms to the cash dividend policy stipulated in the articles of association.
Assuming that the current total capital stock of the Company is 1,506,988,000 shares, deducting
1,497,326,690 shares repurchased after 9,661,310 shares held in the special securities account for
share repurchase of the Company as the base, the Company is expected to pay out a cash dividend of
CNY 4,491,980,070 (tax included) this year.
3. Performance of undertakings
3.1. Undertakings of the Company's actual controller, shareholders,
related parties and acquirer, as well as the Company and other
commitment makers fulfilled during the reporting period or ongoing at
the end of this period
√ Applicable N/A
Undertaking Type of Undertaki Perfor
Undertaking Details of undertaking Term
giver undertaking ng date mance
Stock reform
undertaking
Undertaking made in
the report of acquisition
or change of interest
Undertaking made in
the reorganization of
assets
1. The commitment to
avoid horizontal competitio
n:
(1) At present, the
Company has not engaged
Horizontal com in the business of
Undertakings given in petition, related competing with the joint
Jiangsu
transactions stock company. The 26 August Long- In
time of IPO or Yanghe Group
and capital Company is committed to 2009 term progress
refinancing Co.,Ltd.
occupation maintaining the existing
business structure and does
not directly or indirectly
operate any business that
competes with the actual
operation of the joint stock
company or may constitute
38
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Undertaking Type of Undertaki Perfor
Undertaking Details of undertaking Term
giver undertaking ng date mance
a competition, or a
subsidiary or subsidiary
enterprise that is engaged
in the above business.
(2) If the Company violates
the above commitments,
the joint stock company has
the right to require the
company to immediately
terminate its business
competition and to
compensate for the
economic losses caused to
the joint stock company. At
the same time, the
Company should pay
liquidated damages to the
joint stock company for
CNY 10 million.
(3) The Company has
committed itself to the
legitimate rights and
interests of the
shareholders of jointstock
companies, other
shareholders of jointstock
companies and the
creditors of jointstock
companies without the use
of their holding shareholder
status in the joint stock
company.
(4) This undertaking shall
enter into force on the date
of signing, and shall not be
revoked without the consent
of the stock company.
2. The commitment to
reduce the related
transactions: the Company
will strictly follow the
requirements of the relevant
laws as Corporation Law,
Securities Law and Code of
Corporate Governance for
Listed Companies, and
further reduce and strictly
standardize the various
related transactions
between the Company and
the joint stock companies,
so as to ensure that the
controlling shareholders
and the actual control are
not used. The status of
making a person damages
the interests of the
shareholders of a joint stock
company and other
shareholders and does not
occur in the case of new
share holding companies.
Horizontal com The commitment to avoid In
Jiangsu Blue 23
petition, related horizontal competition: Long- progress
Alliance Co., November
transactions 1. The Company is mainly term .
Ltd. 2017
and capital engaged in investment Blue
39
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Undertaking Type of Undertaki Perfor
Undertaking Details of undertaking Term
giver undertaking ng date mance
occupation management and does not Alliance
operate the same or merged
associated business with Blue Sky
the issuer. The Company Trade
will not engage in the and Blue
business of the same or Ocean
associated business with Trade.
the issuer, without prejudice Blue
to the interests of the Alliance
issuer, nor from the issuer carries
for unfair interests. on
2. If the Company violates relevant
the above commitment, the commitm
issuer has the right to claim ents
compensation for the
economic loss resulting
from the issuer, and to pay
a liquidated penalty of CNY
5 million, and the right to
purchase the business item
at the market price of the
business item or the
establishment of a cost
price (which is the principle
of the lowest value).3. This
undertaking shall enter into
force on the date of signing,
and shall not be revoked
without the consent of the
issuer.
In
progress
，Blue
Alliance
After a year of trading in the merged
stock exchange, the shares Blue Sky
of the issuer will not exceed Trade
Jiangsu Blue 25% of the total number of 23
Long- and Blue
Alliance Co., Share reduction shares held by the issuer, November
term Ocean
Ltd. and the issuer's shares and 2017 Trade.
changes in the shares are Blue
declared to the issuer in a Alliance
timely manner. Carries
on
relevant
commitm
ents
As directors, supervisors
and senior managers of
Blue Alliance made the
commitment:
1. During the tenure of the
issuer, Blue Alliance equity
transferred annually shall
not exceed 25% of the total
number of shares held by 23
Other Long- In
Cong Xuenian Blue Sky Trade。 November
undertaking term progress
2. If I leave the issuer, I will 2017
not transfer the shares of
Blue Alliance that I have
held within six months after
my departure.
3. If I leave from the issuer,
the number of Blue Alliance
transferred shares trade
within twelve months after
40
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Undertaking Type of Undertaki Perfor
Undertaking Details of undertaking Term
giver undertaking ng date mance
six months of departure
does not exceed 50% of the
total share of Blue Alliance.
As directors, supervisors
and senior managers of
Blue Alliance made the
commitment:
1. During the tenure of the
issuer, Blue Alliance equity
transferred annually shall
not exceed 25% of the total
number of shares held by
Blue Sky Trade。
23 8Janu
Other 2. If I leave the issuer, I will November In
Feng Pantai ary20
undertaking not transfer the shares of progress
2017 22
Blue Alliance that I have
held within six months after
my departure.
3. If I leave from the issuer,
the number of Blue Alliance
transferred shares trade
within twelve months after
six months of departure
does not exceed 50% of the
total share of Blue Alliance.
Equity incentive
undertaking
Other undertakings to
non-controlling
shareholders
Whether the undertaking
Yes
is fulfilled on time
If the undertaking is
overdue and not fulfilled,
specific reasons for
N/A
failing to fulfill any
undertakings and plan
for the next step
3.2. Where any earnings forecast was made for any of the Company's
assets or projects and the reporting period is still within the forecast
period, the Company shall explain whether the performance of the asset
or project reaches the earnings forecast and why
Applicable √ N/A
4. Occupation of the Company's capital by the controlling
shareholder or its related parties for non-operating purposes
Applicable √ N/A
No such cases in the reporting period.
5. Explanation of the board of directors, the supervisory
committee and non-executive directors (if any) regarding the
"non-standard audit opinion" for the reporting period
41
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Applicable √ N/A
6. Reasons for changes in accounting policies, accounting
estimates and accounting methods as compared to the
financial report for the prior year
√ Applicable N/A
Since 1 January 2020, the Company has implemented the revised by Ministry of Finance
on July 2017: the Accounting Standards for Business Enterprises No. 14 - Revenue
(Caikuai[2017]No.22). According to the requirements of the new revenue standard, the
Company presents the relevant information of financial instruments without retroactively
adjusting the comparative financial statements.
7. Reasons for retrospective restatement of major accounting
errors during the reporting period
Applicable √ N/A
No such cases in the reporting period.
8. Reasons for changes in scope of the consolidated financial
statements as compared to the financial report for the prior
year
√ Applicable N/A
8.1 Establishment of subsidiaries
Su Wine Group Co.,Ltd. ,the Company’s holding subsidiary,invested CNY 2 million to
establishJiangsu Yanghe Painting and Calligraphy Academy. On 6 July 2020, the
Registration Certificate of Private Non-Enterprise Unit (Legal Person) issued by the Civil
Affairs Department of Jiangsu Province was obtained. It was included in the consolidated
financial statements from July 2020.
8.2 Cancellation of subsidiaries
(1) Huaian Huaqu Wine Development Co.,Ltd., Jiangsu Huaqu Wine Group Nanjing
Co.,Ltd., Taizhou Huaqu Wine Development Co.,Ltd.,Guizhou Guijiu Package Co.,Ltd.,
the holding subsidiaries, were liquidated and terminated onJanuary 2020.FromFebruary
2020, theyare no longer included in the consolidated scope of the consolidated financial
statements.
(2) Jiangsu Huaqu Wine Group Suzhou Co., Ltd., Jiangsu Huaqu Wine Group Yancheng
Co., Ltd., the holding subsidiaries, were liquidated and terminatedonMarch 2020.
FromApril 2020, theyare no longer included in the consolidated scope of the consolidated
financial statements.
(3) Jiangsu Huaqu Wine Group Nantong Co., Ltd., Jiangsu Huaqu Wine Group Wuxi Co.,
Ltd., the holding subsidiaries, were liquidated and terminated on April 2020. From May
42
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
2020, they are no longer included in the consolidated scope of the consolidated financial
statements.
9. Engagement and disengagement of accounting firm
Accounting firm at present
Name of the domestic accounting firm Suyajincheng CPA LLP
Remuneration for the domestic accounting 190.8
firm (CNY 10,000)
Consecutive years of the audit service 14
provided by the domestic accounting firm
Names of the certified public accountants Li Laimin, Li Yan
from the domestic accounting firm
Consecutive years of the audit service
provided by the certified public Li Laimin (1 year), Li Yan (2 years)
accountants
Whether the accounting firm was changed in the current period.
Yes √ No
Engagement of any accounting firm for internal control audit, financial adviser or sponsor
Applicable √ N/A
10. Possibility of listing suspension and termination after
disclosure of this annual report
Applicable √ N/A
11. Bankruptcy and reorganization
Applicable √ N/A
No such cases in the reporting period.
12. Material litigation and arbitration
Applicable √ N/A
No such cases in the reporting period.
13. Punishments and rectifications
Applicable √ N/A
No such cases in the reporting period.
14. Credit conditions of the company as well as its controlling
shareholder and actual controller
Applicable √ N/A
43
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
15. Implementation of any equity incentive plan, employee
stock ownership plan or other incentive measures for
employees
Applicable √ N/A
16. Significant related-party transactions
16.1. Related-party transactions arising from routine operation
Applicable √ N/A
No such cases in the reporting period.
16.2. Related-party transactions regarding purchase or sales of assets
or equity interests
Applicable √ N/A
No such cases in the reporting period.
16.3. Related-partytransactions arising from joint investments in
external parties
Applicable √ N/A
No such cases in the reporting period.
16.4. Credits and liabilities with related parties
√Applicable □N/A
There are no non-operational related creditor's rights and debt transactions.
16.5. Other significant related-party transactions
Applicable √ N/A
No such cases in the reporting period.
17. Significant contracts and their execution
17.1. Trusteeship, contracting and leasing
17.1.1. Trusteeship
Applicable √ N/A
No such cases in the reporting period.
17.1.2. Contracting
Applicable √ N/A
No such cases in the reporting period.
17.1.3. Leasing
Applicable √ N/A
No such cases in the reporting period.
44
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
17.2. Major guarantees
Applicable √ N/A
No such cases in the reporting period.
17.3. Entrusted cash assets management
17.3.1. Entrust finance management
√ Applicable N/A
Entrust finance in the reporting period.
Unit:CNY10, 000
Overdue
Source of Undue closing
Product type Amount outstanding
entrust finance balance
amount
Trust finance Owned Fund 1,212,041 1,212,041 0
Bank finance Owned Fund 391,225 391,225 0
Total 1,603,266 1,603,266 0
Information about significant amount of individual entrust finance or high-risk entrust
finance with principle nonguaranteed and poor liquidity.
√ Applicable N/A
45
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Unit： CNY10,000
Summary
Actual Whether
Amount and
Referenc prospective Actual principal Whether it there will
Method of reserved for reference
Name of Trustee Source of Commence Terminati Funds ed profit & amount go through be entrust
Product type Amount Remunerat earnings（if impairment （if
trustee type funding ment date on date allocation annualize loss for the recovered statutory finance
ion applicable) (if
d return period for the procedures plans in applicable
applicable)
period the future ）
Used to
issue loans
to
Shenzhen
Jushenghu
a Co., Ltd.,
to
Avic Trust supplemen
apocalypse t the
[2018] No.561 company's
Avic Trust 2August 1August
Trust Baohua 16,000 Owned fund liquidity Cash 9.40% 3,008 1,504 1,508.12 0 Yes Yes
Co.,Ltd. 2019 2021
YihaoCollecti fund
ve Fund Trust gap;Payme
Plan nt for the
constructio
n of
Guangzho
u Airport
High-end
Warehousi
ng Project.
Used to
issue trust
Chongqing loans to
Trust-Gusu Suzhou
Chongqing No.2 Wuxiang
30August2 23August
Trust Trust Collective 8,752 Owned fund Real Cash 8.00% 1,388.81 700.16 786.27 0 Yes Yes
019 2021
Co.,Ltd. Fund Trust Estate Co.,
Plan (Phase Ltd., and
V) finally used
the
borrowed
46
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Summary
Actual Whether
Amount and
Referenc prospective Actual principal Whether it there will
Method of reserved for reference
Name of Trustee Source of Commence Terminati Funds ed profit & amount go through be entrust
Product type Amount Remunerat earnings（if impairment （if
trustee type funding ment date on date allocation annualize loss for the recovered statutory finance
ion applicable) (if
d return period for the procedures plans in applicable
applicable)
period the future ）
funds for
the
developme
nt and
constructio
n of Block
No. 59,
Changnan
Road
Southand
Wuxing
RoadEast,
Suxiang
Cooperatio
n Zone,
Xiangchen
g District,
Suzhou
City,
Jiangsu
Province,
as well as
the
repayment
of
shareholde
r loans.
Used to
Chongqing
issue trust
Trust -Gusu
Chongqing loan to
No.3 27Septemb 7August
Trust Trust 7,980 Owned fund Suzhou Cash 7.80% 1,159.61 622.44 1,016.83 0 Yes Yes
Collective er 2019 2021
Co.,Ltd. Evergrand
Fund Trust
e Real
Plan
Estate
47
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Summary
Actual Whether
Amount and
Referenc prospective Actual principal Whether it there will
Method of reserved for reference
Name of Trustee Source of Commence Terminati Funds ed profit & amount go through be entrust
Product type Amount Remunerat earnings（if impairment （if
trustee type funding ment date on date allocation annualize loss for the recovered statutory finance
ion applicable) (if
d return period for the procedures plans in applicable
applicable)
period the future ）
Developme
nt Co.,
Ltd., and
finally used
for the
developme
nt and
constructio
n of Block
No. 60,
Fangqiao
Road East
and
Chunqiu
Road
North,
Huangdai
Town,
Xiangchen
g District,
Suzhou
City,
Jiangsu
Province,
as well as
the
repayment
of
shareholde
r loan.
Zhongrong ZhongrongTr Used
Internation ust-Fengteng 15Novemb 15Novem toissue
Trust 16,000 Owned fund Cash 8.70% 2,787.81 1,392 1,395.81 0 Yes Yes
al Trust No.56Collecti er 2019 ber 2021 business
Co.,Ltd. ve Fund Trust property
48
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Summary
Actual Whether
Amount and
Referenc prospective Actual principal Whether it there will
Method of reserved for reference
Name of Trustee Source of Commence Terminati Funds ed profit & amount go through be entrust
Product type Amount Remunerat earnings（if impairment （if
trustee type funding ment date on date allocation annualize loss for the recovered statutory finance
ion applicable) (if
d return period for the procedures plans in applicable
applicable)
period the future ）
Plan loan to
Nanchang
Wanda
City
Investment
Co., Ltd.
Used to
participant
in
Chongqing
Chongqing
Chongqing Trust -Qirui
12Decemb 8May Trust
Trust Trust No.10Collecti 15,000 Owned fund Cash 7.90% 1,665.49 1,185 1,077.86 0 Yes Yes
er 2019 2021 Hongrui
Co.,Ltd. ve Fund Trust
No.6
Plan
Collective
Fund Trust
Plan
Used for
"Chongqin
g Trust -
Kunming
Wanda
City
Chongqing
Project
Trust-
Collective
Chongqing Zhangxin
3March 7August Fund Trust
Trust Trust No.2 20,000 Owned fund Cash 8.00% 2,288.22 1,328.22 1,280.00 0 Yes Yes
2020 2021 Plan
Co.,Ltd. Collective
Phase I",
Fund Trust
and will
Plan
eventually
be used for
Kunming
Wanda
City to
invest in
49
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Summary
Actual Whether
Amount and
Referenc prospective Actual principal Whether it there will
Method of reserved for reference
Name of Trustee Source of Commence Terminati Funds ed profit & amount go through be entrust
Product type Amount Remunerat earnings（if impairment （if
trustee type funding ment date on date allocation annualize loss for the recovered statutory finance
ion applicable) (if
d return period for the procedures plans in applicable
applicable)
period the future ）
the
developme
nt and
constructio
n of
projects in
line with
the "432"
conditiona
nd to repay
its
developme
nt loans
and debts
Used to
issue loans
to
Chengdu
Evergrand
FOTIC- e New
Furong North City
No.160 Real
Chengdu Estate Co.,
13Septe
Evergrande 13March Ltd. for the
FOTIC Trust 10,000 Owned fund mber Cash 8.20% 1,233.37 658.25 635.78 0 Yes Yes
Loan Project 2020 developme
2021
Collective nt and
Fund Trust constructio
Plan(Phase n of
IX) Evergrand
e Chengdu
Caojiaxian
g Plaza
Block C
Project
50
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Summary
Actual Whether
Amount and
Referenc prospective Actual principal Whether it there will
Method of reserved for reference
Name of Trustee Source of Commence Terminati Funds ed profit & amount go through be entrust
Product type Amount Remunerat earnings（if impairment （if
trustee type funding ment date on date allocation annualize loss for the recovered statutory finance
ion applicable) (if
d return period for the procedures plans in applicable
applicable)
period the future ）
Used to
issue loans
to
Chengdu
Evergrand
FOTIC- e New
Furong North City
No.160 Real
Chengdu Estate Co.,
13
Evergrande 13March20 Ltd. for the
FOTIC Trust 10,000 Owned fund Septemb Cash 8.20% 1,233.375 658.25 635.78 0 Yes Yes
Loan Project 20 developme
er2021
Collective nt and
Fund Trust constructio
Plan(Phase n of
X) Evergrand
e Chengdu
Caojiaxian
g Plaza
Block C
Project
Used for
transfer of
10% equity
of
ZhongrongTr Shanghai
Zhongrong ust- Rongzhu Fengshun
Internation No.220 24April 27Februa Real
Trust 20,000 Owned fund Cash 8.20% 3,028.38 1,127.78 1,078.36 0 Yes Yes
al Trust Collective 2020 ry2022 Estate Co.,
Co.,Ltd. Fund Trust Ltd held by
Plan Evergrand
e Real
Estate
Group or
its
51
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Summary
Actual Whether
Amount and
Referenc prospective Actual principal Whether it there will
Method of reserved for reference
Name of Trustee Source of Commence Terminati Funds ed profit & amount go through be entrust
Product type Amount Remunerat earnings（if impairment （if
trustee type funding ment date on date allocation annualize loss for the recovered statutory finance
ion applicable) (if
d return period for the procedures plans in applicable
applicable)
period the future ）
designated
third party;
Also used
for the
developme
nt and
constructio
n of Block
G of
Zhujiajiao
Residential
Area,
Qingpu
District,
Shanghai.
Used to
issue a
trust loan
to
Baoneng
Automobile
Co., Ltd..
Chongqing
Baoneng
Trust-
Chongqing Automobile
Pengrui 27April202 18March
Trust Trust 12,000 Owned fund Co., Ltd., Cash 7.90% 1,792.11 644.12 615.55 0 Yes Yes
No.1Collectiv 0 2022
Co., Ltd will mainly
e Fund Trust
use the
Plan
loan funds
for
workshop
constructio
n,
production
equipment
52
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Summary
Actual Whether
Amount and
Referenc prospective Actual principal Whether it there will
Method of reserved for reference
Name of Trustee Source of Commence Terminati Funds ed profit & amount go through be entrust
Product type Amount Remunerat earnings（if impairment （if
trustee type funding ment date on date allocation annualize loss for the recovered statutory finance
ion applicable) (if
d return period for the procedures plans in applicable
applicable)
period the future ）
procureme
nt and
other fund
purposes
approved
by the
trustee of
its "Xi 'an
Baoneng
New
Energy
Automobile
Parts
Production
Base"
project.
Used to
provide
financing
support for
the
Avic Trust-
constructio
Apocalypse[2
n of
019]No.721Ki
Changsha
ds’ World
Avic Trust 29April 29April "Kids’
Trust Cultural and 7,000 Owned fund Cash 8.20% 574 386.86 369.56 0 Yes Yes
Co.,Ltd. 2020 2021 World"
Travel
amusemen
ServicesColle
t park and
ctive Fund
the
Trust Plan
purchase
of tourism
equipment
for the
borrower
53
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Summary
Actual Whether
Amount and
Referenc prospective Actual principal Whether it there will
Method of reserved for reference
Name of Trustee Source of Commence Terminati Funds ed profit & amount go through be entrust
Product type Amount Remunerat earnings（if impairment （if
trustee type funding ment date on date allocation annualize loss for the recovered statutory finance
ion applicable) (if
d return period for the procedures plans in applicable
applicable)
period the future ）
Evergrand
e Tourism
Group Co.,
Ltd by
issuing
trust loans.
Used for
transfer of
20% equity
proceeds
of
Sunshine
Avic Trust- City
Apocalypse[2 Guangxi
019]No.19 held by
Nanning Fujian
Avic Trust 29April202 29April
Trust Wuxiang 15,000 Owned fund Sunshine Cash 8.70% 2,610 879.53 851.88 0 Yes Yes
Co., Ltd 0 2022
Lake Project andfollow-
Collective updevelop
Fund Trust ment and
Plan constructio
n of the
real estate
project of
Sunshine
City
Guangxi.
Used for
Zhongrong
the trustee
Zhongrong Trust-
to
Internation Fengying 30April 30April
Trust 10,000 Owned fund purchase Cash 7.90% 790 530.27 380.93 0 Yes Yes
al Trust No.90Collecti 2020 2021
the specific
Co.,Ltd. ve Fund Trust
assets
Plan
proceeds
54
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Summary
Actual Whether
Amount and
Referenc prospective Actual principal Whether it there will
Method of reserved for reference
Name of Trustee Source of Commence Terminati Funds ed profit & amount go through be entrust
Product type Amount Remunerat earnings（if impairment （if
trustee type funding ment date on date allocation annualize loss for the recovered statutory finance
ion applicable) (if
d return period for the procedures plans in applicable
applicable)
period the future ）
of Huzhou
Xiangshen
g Hongjing
Real
Estate
Developme
nt Co.,
Ltd., and
the
subscriptio
n fund is
specially
used for
the
developme
nt and
constructio
n of
"Xiangshen
g Xunyue"
project and
other
purposes
approved
by the
trustee.
Used to
Zhongrong issue trust
Zhongrong Trust- Junrui loan to
Internation No.175 12May 12May Fuzhou
Trust 11,000 Owned fund Cash 8.20% 902 575.8 548.61 0 Yes Yes
al Trust Collective 2020 2021 Shengjing
Co.,Ltd. Fund Trust Sunshine
Plan City Real
Estate
55
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Summary
Actual Whether
Amount and
Referenc prospective Actual principal Whether it there will
Method of reserved for reference
Name of Trustee Source of Commence Terminati Funds ed profit & amount go through be entrust
Product type Amount Remunerat earnings（if impairment （if
trustee type funding ment date on date allocation annualize loss for the recovered statutory finance
ion applicable) (if
d return period for the procedures plans in applicable
applicable)
period the future ）
Developme
nt Co.,
Ltd., for the
follow-up
developme
nt and
constructio
n of
Sunshine
Wuyi
Garden
Project.
Used to
transfer the
specific
assets
proceeds
CITIC Trust- of Block 7
Light City of Kunming
Kunming Dianchi
Dianchi Lake Banshan
CITIC
Half Mountain 19May 19May Garden
Trust Trust 15,000 Owned fund Cash 7.20% 1,080 668.71 636.16 0 Yes Yes
Garden 2020 2021 Project
Co.,Ltd,
Financing held by
Collective project
Fund Trust company
Plan for the
developme
nt and
constructio
n of Block
7.
MinmetalsI MinmetalsInte 22May 22May Used to
Trust 10,000 Owned fund Cash 8.30% 830 507.1 482.08 Yes Yes
nternationa rnational 2020 2021 issue trust
56
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Summary
Actual Whether
Amount and
Referenc prospective Actual principal Whether it there will
Method of reserved for reference
Name of Trustee Source of Commence Terminati Funds ed profit & amount go through be entrust
Product type Amount Remunerat earnings（if impairment （if
trustee type funding ment date on date allocation annualize loss for the recovered statutory finance
ion applicable) (if
d return period for the procedures plans in applicable
applicable)
period the future ）
l Trust Trust- loans to Xi
Co.,Ltd. Hengxin 'an
Gongzhu Chengmin
No.310Fengyi g Tourism
ng No.2 Developme
Collective nt Co.,
Fund Trust Ltd., and
Plan finally be
used for
the
developme
nt and
constructio
n of the
Block B-02
of
Evergrand
e Cultural
Tourism
City
Project,
located in
Qinhan
New Town
Block of
West Xian
New Area.
Shaanxi Used for
InternationalT the
Shaanxi
rust- developme
Internation 28May 28 May
Trust Evergrande 18,000 Owned fund nt and Cash 8.40% 1,512 898.92 853.35 0 Yes Yes
alTrust 2020 2021
Hainan constructio
Co.,Ltd,
Specific Debt n of Block
Collective 1601 of
57
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Summary
Actual Whether
Amount and
Referenc prospective Actual principal Whether it there will
Method of reserved for reference
Name of Trustee Source of Commence Terminati Funds ed profit & amount go through be entrust
Product type Amount Remunerat earnings（if impairment （if
trustee type funding ment date on date allocation annualize loss for the recovered statutory finance
ion applicable) (if
d return period for the procedures plans in applicable
applicable)
period the future ）
Fund Trust Haikou
Plan Meilisha
Project
under the
name of
New World
China Real
Estate
(Haikou)
Co., Ltd.
Used to
transfer
specific
assets
proceeds
from
"mortgage"
of the
Industrial 18824.4
Trust- square
ZhidiI062(Jinli meters of
Industrial
ngGuanlan) 29May 29May underlined
Trust Trust 15,000 Owned fund Cash 7.40% 1,110 377.1 0 0 Yes Yes
Collective 2020 2021 land of
Co.,Ltd.
Fund Trust Cuican
Plan (Phase Jiangshan
IV) Project
held by
Nanjing
Shirong
Real
Estate Co.,
Ltd. After
the
financier
58
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Summary
Actual Whether
Amount and
Referenc prospective Actual principal Whether it there will
Method of reserved for reference
Name of Trustee Source of Commence Terminati Funds ed profit & amount go through be entrust
Product type Amount Remunerat earnings（if impairment （if
trustee type funding ment date on date allocation annualize loss for the recovered statutory finance
ion applicable) (if
d return period for the procedures plans in applicable
applicable)
period the future ）
obtains the
transfer
price, it is
specially
used to
replace
part of the
developme
nt loan of
Minsheng
Bank
under
Cuican
Jiangshan
Project and
the
constructio
n and
developme
nt of Block
G024
Project
(Phase I)
Used for
the
CITIC Trust-
developme
JIahe No.118
nt and
Evergrande
CITIC constructio
Guiyang New 29May 29Novem
Trust Trust 19,000 Owned fund n of Cash 7.60% 2,171.93 854.53 814.97 0 Yes Yes
World 2020 ber 2021
Co.,Ltd, Guiyang
Collective
Evergrand
Fund Trust
e Jinyang
Plan
New World
Block 4C
59
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Summary
Actual Whether
Amount and
Referenc prospective Actual principal Whether it there will
Method of reserved for reference
Name of Trustee Source of Commence Terminati Funds ed profit & amount go through be entrust
Product type Amount Remunerat earnings（if impairment （if
trustee type funding ment date on date allocation annualize loss for the recovered statutory finance
ion applicable) (if
d return period for the procedures plans in applicable
applicable)
period the future ）
and 4D
project.
Used for
acquisition
of specific
assets
proceeds
of
"Xiangshen
g Jiuxi"
project of
Anjixiang
ZhongrongTr
Shenghon
Zhongrong ust- Fengying
gjing Real
Internation No.91 2June 2 June
Trust 10,000 Owned fund Estate Cash 7.90% 790 458.85 359.29 0 Yes Yes
al Trust Collective 2020 2021
Developme
Co.,Ltd. Fund Trust
nt Co.,
Plan
Ltd., and
the fundis
used for
the
developme
nt and
constructio
n of
"Xiangshen
g Jiuxi"
Zhongrong Used to
Trust- acquire
Zhongrong
Fengying specific
Internation 19 June 19 June
Trust No.99 10,000 Owned fund assets Cash 7.90% 790 422.05 389.59 0 Yes Yes
al Trust 2020 2021
Collective proceeds
Co.,Ltd.
Fund Trust of "Taixing
Plan Future
60
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Summary
Actual Whether
Amount and
Referenc prospective Actual principal Whether it there will
Method of reserved for reference
Name of Trustee Source of Commence Terminati Funds ed profit & amount go through be entrust
Product type Amount Remunerat earnings（if impairment （if
trustee type funding ment date on date allocation annualize loss for the recovered statutory finance
ion applicable) (if
d return period for the procedures plans in applicable
applicable)
period the future ）
City"
project of
Taixing
Xiangrui
Real
Estate Co.,
Ltd.
Used to
issue trust
loans to
Evergrand
e Real
Estate
Group
Nanjing
Real
AvicTrust-
Estate Co.,
apocalypse
Ltd. The
[2020] Pan
fund is
'an Lake
AvicTrust 19 June 19June used for
Trust Ecological 14,320 Owned fund Cash 8.70% 2,491.68 665.39 636.76 0 Yes Yes
Co.,Ltd. 2020 2022 the
Town Project
developme
LoanCollectiv
nt and
e Fund Trust
constructio
Plan
n of
Xuzhou
Evergrand
e Pan 'an
Lake
Ecological
Town
Housing
Project.
CITIC Trust CITIC Trust- 7,000 Owned fund 23June 12Novem Used to Cash 7.50% 729.25 274.73 244.59 0 Yes Yes
61
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Summary
Actual Whether
Amount and
Referenc prospective Actual principal Whether it there will
Method of reserved for reference
Name of Trustee Source of Commence Terminati Funds ed profit & amount go through be entrust
Product type Amount Remunerat earnings（if impairment （if
trustee type funding ment date on date allocation annualize loss for the recovered statutory finance
ion applicable) (if
d return period for the procedures plans in applicable
applicable)
period the future ）
Trust Fuli 2020 ber 2021 issue a
Co.,Ltd. Hangzhou trust loan
Project to Zhejiang
Collective Fuli Real
Fund Trust Estate
Plan Developme
nt Co.,
Ltd., for the
residential
and
apartment
developme
nt and
constructio
n of the
project in
Yuhang
District,
Hangzhou
(Phase I
and Phase
II).
Used for
the
developme
FOTIC- nt and
Furong constructio
No.191 1 August n of
FOTIC Trust 10,000 Owned fund 8July 2020 Cash 7.20% 1,082.96 347.18 327.45 0 Yes Yes
Collective 2022 Evergrand
Fund Trust e Tianjin
Plan Shanshui
City
Project
(Block 4)
62
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Summary
Actual Whether
Amount and
Referenc prospective Actual principal Whether it there will
Method of reserved for reference
Name of Trustee Source of Commence Terminati Funds ed profit & amount go through be entrust
Product type Amount Remunerat earnings（if impairment （if
trustee type funding ment date on date allocation annualize loss for the recovered statutory finance
ion applicable) (if
d return period for the procedures plans in applicable
applicable)
period the future ）
and the
repayment
of
shareholde
r loans.
Used to
issue
Avic Trust -
developme
Apocalypse[2
nt and
020]
constructio
No.81Sunac
10 n loan
Avic Trust Chongqing 10July
Trust 8,000 Owned fund January forSunac Cash 7.40% 890.43 282.21 264.37 0 Yes Yes
Co.,Ltd. Caijia Project 2020
2022 HanmingC
Loan
hongqing
Collective
Caijia
Fund Trust
Yinghu
Plan
Ten-mile
Project.
Used for
investment
Avic Trust- bank
Tianji Huicai deposits
No.3 Bond (current
AvicTrust 14July 21June
Trust Investment 50,000 Owned fund deposit, Cash 4.55% 2,131.64 1,059.59 991.03 0 Yes Yes
Co., Ltd 2020 2021
Collective time
Fund Trust deposit,
Plan interbank
deposit),
etc.
Chongqing Used to
Chongqing Trust- Jingrun invest in
14July 25July20
Trust Co., Trust No.1 8,800 Owned fund "Chongqin Cash 7.40% 670.83 303.3 283.67 0 Yes Yes
2020 21
Ltd. Collective g
Fund Trust Trust Gus
63
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Summary
Actual Whether
Amount and
Referenc prospective Actual principal Whether it there will
Method of reserved for reference
Name of Trustee Source of Commence Terminati Funds ed profit & amount go through be entrust
Product type Amount Remunerat earnings（if impairment （if
trustee type funding ment date on date allocation annualize loss for the recovered statutory finance
ion applicable) (if
d return period for the procedures plans in applicable
applicable)
period the future ）
Plan u No.1
Collective
Fund Trust
Plan".
During idle
period, the
trust funds
can be
invested in
bank
deposits,
bonds,
bank
financial
products,
directional
asset
manageme
nt plans of
securities
companies
, asset
manageme
nt plans of
funds, trust
products,
trust
proceeds
and other
investment
s.
Minmetals Minmetals Used to
23July 23July
Internation Trust International 15,000 Owned fund transferspe Cash 8.00% 1,200 529.32 493.15 0 Yes Yes
2020 2021
al Trust Trust- cific assets
64
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Summary
Actual Whether
Amount and
Referenc prospective Actual principal Whether it there will
Method of reserved for reference
Name of Trustee Source of Commence Terminati Funds ed profit & amount go through be entrust
Product type Amount Remunerat earnings（if impairment （if
trustee type funding ment date on date allocation annualize loss for the recovered statutory finance
ion applicable) (if
d return period for the procedures plans in applicable
applicable)
period the future ）
Co.,Ltd. Hengxin proceeds
Gongzhu of the
No.362- project
Jingrong "west of
No.23 Longhusha
Collective n Avenue
Fund Trust and north
Plan of
Shangrao
Street (part
of Block
JLH601-
B08 and
B09) in
Jiulong
Lake,
Honggutan
New Area,
held by
Nanchang
Xinming
Real
Estate
Developme
nt Co.,
Ltd., and
the
financier
uses the
transfer
price for
the
developme
nt and
65
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Summary
Actual Whether
Amount and
Referenc prospective Actual principal Whether it there will
Method of reserved for reference
Name of Trustee Source of Commence Terminati Funds ed profit & amount go through be entrust
Product type Amount Remunerat earnings（if impairment （if
trustee type funding ment date on date allocation annualize loss for the recovered statutory finance
ion applicable) (if
d return period for the procedures plans in applicable
applicable)
period the future ）
constructio
n of the
target
project.
Used to
acquire
specific
assets
Zhongrong proceeds
Trust- of"Nanning
Zhongrong
Fengteng Yongjin
Internation 24July 24July20
Trust No.97 10,000 Owned fund Bay Phase Cash 7.70% 770 337.53 179.32 0 Yes
al Trust 2020 21 Yes
Collective II"Project
Co.,Ltd.
Fund Trust held by
Plan Nanning
Senchi
Real
Estate Co.,
Ltd.
Used
toissue a
installment
Avic Trust - trust loan
Apocalypse to Oriental
[2020] Movie
No.77Qingda Capital
Avic Trust 24 July 24 July
Trust o Oriental 8,800 Owned fund Sunac Cash 7.30% 642.4 281.6 262.24 0 Yes Yes
Co.,Ltd. 2020 2021
Movie Capital Investment
loanCollective Co., Ltd.,
Fund Trust and the
Plan fund is
used for
the
developme
66
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Summary
Actual Whether
Amount and
Referenc prospective Actual principal Whether it there will
Method of reserved for reference
Name of Trustee Source of Commence Terminati Funds ed profit & amount go through be entrust
Product type Amount Remunerat earnings（if impairment （if
trustee type funding ment date on date allocation annualize loss for the recovered statutory finance
ion applicable) (if
d return period for the procedures plans in applicable
applicable)
period the future ）
nt and
constructio
n of Block
A-4-3
project of
Qingdao
"Oriental
Movie
Capital".
Used to
issue a
trust loan
to Beijing
Fuhua
Real
Estate
Zhongrong
Developme
Trust-
nt Co.,
Zhongrong Rongzhu
29July 29July Ltd., which
Trust Co., Trust No.339 12,000 Owned fund Cash 7.60% 912 384.79 357.3 0 Yes Yes
2020 2021 is used for
Ltd Collective
the
Fund Trust
developme
Plan
nt and
constructio
n of Beijing
Evergrand
e Ligong
Project
(Phase IV)
Minsheng Used to
China
Trust- Zhixing acquire the
Minsheng 7August 7Februar
Trust No.930 7,000 Owned fund proceedsof Cash 8.70% 916 243.6 216.9 0 Yes Yes
Trust 2020 y2022
Chongqing 81% equity
Co.,Ltd.
Aoyuan of
67
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Summary
Actual Whether
Amount and
Referenc prospective Actual principal Whether it there will
Method of reserved for reference
Name of Trustee Source of Commence Terminati Funds ed profit & amount go through be entrust
Product type Amount Remunerat earnings（if impairment （if
trustee type funding ment date on date allocation annualize loss for the recovered statutory finance
ion applicable) (if
d return period for the procedures plans in applicable
applicable)
period the future ）
Specific Shanghai
Assets Aogang
Proceeds held by
Collective Aoyuan
Fund Trust Group
Plan Chongqing
Real
Estate Co.,
Ltd, and
the fund
eventually
is used for
the
developme
nt and
constructio
n of the
large block
of Dapu
Aoyuan
Plaza
project.
Used to
invest the
Shaanxi specificdeb
InternationalT t of the
Shaanxi rust- Agile debtor in
Internation Hainan 14August 14August Hainan
Trust 15,000 Owned fund Cash 7.30% 1,095 417 384 0 Yes Yes
alTrust Specific Debt 2020 2020 Yajule
Co.,Ltd, Collective Real
Fund Trust Estate
Plan Developme
nt Co.,
Ltd.The
68
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Summary
Actual Whether
Amount and
Referenc prospective Actual principal Whether it there will
Method of reserved for reference
Name of Trustee Source of Commence Terminati Funds ed profit & amount go through be entrust
Product type Amount Remunerat earnings（if impairment （if
trustee type funding ment date on date allocation annualize loss for the recovered statutory finance
ion applicable) (if
d return period for the procedures plans in applicable
applicable)
period the future ）
fund is
used for
the
developme
nt and
constructio
n of high-
rise
projects
(Phase I
and Phase
II) in
Hainan
Qingshui
Bay Area
B09and
26 high-
rise
residential
buildings in
B11-1 and
B11-2
under the
name of
Hainan
Agile.
Minmetals Used to
Trust - transfer
Minmetals Hengxing specific
Internation Gongzhu 14August 14August assetsproc
Trust 20,000 Owned fund Cash 8.00% 1,600 609.32 561.1 0 Yes Yes
al Trust No.324- 2020 2021 eeds
Co.,Ltd. Xingcheng formed by
No.30 Danfu
Collective Project of
69
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Summary
Actual Whether
Amount and
Referenc prospective Actual principal Whether it there will
Method of reserved for reference
Name of Trustee Source of Commence Terminati Funds ed profit & amount go through be entrust
Product type Amount Remunerat earnings（if impairment （if
trustee type funding ment date on date allocation annualize loss for the recovered statutory finance
ion applicable) (if
d return period for the procedures plans in applicable
applicable)
period the future ）
Fund Trust Yangguan
Plan g City,
Middle
Lantang
Road, 108
District,
Duanzhou
District,
Zhaoqing
City held
by
Zhaoqing
Haoyang
Real
Estate
Developme
nt Co., Ltd.
The trust
fund is
used for
the
developme
nt and
constructio
n of
Yangguan
g City
Danfu
Project
(Block A
and Block
B) on the
south of
Middle
70
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Summary
Actual Whether
Amount and
Referenc prospective Actual principal Whether it there will
Method of reserved for reference
Name of Trustee Source of Commence Terminati Funds ed profit & amount go through be entrust
Product type Amount Remunerat earnings（if impairment （if
trustee type funding ment date on date allocation annualize loss for the recovered statutory finance
ion applicable) (if
d return period for the procedures plans in applicable
applicable)
period the future ）
Lantang
Road, 108
District,
Duanzhou
District,
Zhaoqing
City.
Used to
transfer
6% equity
proceeds
of
Shenzhen
Jushenghu
a Co.Ltd..
held by
Minsheng
Shenzhen
Trust- Zhixing
Baoneng
No.1047
Investment
China Baoneng
21 Group. The
Minsheng Investment 21 August
Trust 20,000 Owned fund August fund is Cash 8.90% 3,560 643.73 614.66 0 Yes Yes
Trust and Finance 2020
2022 used to
Co.,Ltd. Project
supplemen
Collective
t working
Fund Trust
capital and
Plan
repayment
of loans
from
financial
institutions,
bond
financing,
shareholde
r and
71
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Summary
Actual Whether
Amount and
Referenc prospective Actual principal Whether it there will
Method of reserved for reference
Name of Trustee Source of Commence Terminati Funds ed profit & amount go through be entrust
Product type Amount Remunerat earnings（if impairment （if
trustee type funding ment date on date allocation annualize loss for the recovered statutory finance
ion applicable) (if
d return period for the procedures plans in applicable
applicable)
period the future ）
affiliated
company,
etc. arising
from the
need to
supplemen
t working
capital for
Baoneng
Investment
and its
subsidiarie
s
Used for
investment
in bank
deposits
(current
deposit,
time
Avic Trust- deposit
Tianji Huicai and inter-
No.3 Bond bank
Avic Trust 27 August 24 May
Trust Investment 50,000 Owned fund deposit);R Cash 4.30% 1,590.41 742.19 0 0 Yes Yes
Co.,Ltd. 2020 2021
Collective everse
Fund Trust bond
Plan repurchase
, inter-bank
certificates
of deposit,
bonds and
bills in the
exchange
and inter-
72
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Summary
Actual Whether
Amount and
Referenc prospective Actual principal Whether it there will
Method of reserved for reference
Name of Trustee Source of Commence Terminati Funds ed profit & amount go through be entrust
Product type Amount Remunerat earnings（if impairment （if
trustee type funding ment date on date allocation annualize loss for the recovered statutory finance
ion applicable) (if
d return period for the procedures plans in applicable
applicable)
period the future ）
bank
markets;Bo
nd funds
(including
convertible
bond
funds) and
bond
segregated
accounts;C
ash
manageme
nt financial
instrument
s;Other
inter-bank
or
exchange
fixed
income
products
with high
security
permitted
by laws,
regulations
and
regulatory
authorities
Zhongrong Used to
Zhongrong Trust- Huijujin invest in
27 August 24 May
Trust Trust No.1 50,000 Owned fund bank Cash 6.10% 2,256.16 1,052.88 1,052.88 0 Yes Yes
2020 2021
Co.,Ltd. Monetary deposits,
Collective money
73
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Summary
Actual Whether
Amount and
Referenc prospective Actual principal Whether it there will
Method of reserved for reference
Name of Trustee Source of Commence Terminati Funds ed profit & amount go through be entrust
Product type Amount Remunerat earnings（if impairment （if
trustee type funding ment date on date allocation annualize loss for the recovered statutory finance
ion applicable) (if
d return period for the procedures plans in applicable
applicable)
period the future ）
Fund Trust market
Plan funds,
bond
funds,
exchange
and inter-
bank
market
bonds and
fixed
income
products.
Used for
operation
turnover
and
Chongqing repayment
Trust- of debts of
Chongqing 27
Jinyang No.1 27 August the
Trust Trust 20,000 Owned fund February Cash 7.80% 2,346.41 538.52 491.51 0 Yes Yes
Collective 2020 borrower,
Co.,Ltd. 2022
Fund Trust Shenzhen
Plan Jushenghu
a Co., Ltd.,
or its
subsidiarie
s
Minsheng Used to
Trust- invest in
China Zhongmin bonds,
Minsheng Yongfeng 28 August 25 May money
Trust 50,000 Owned fund Cash 5.65% 2,089.73 967.47 0 0 Yes Yes
Trust No.1 2020 2021 market
Co.,Ltd. Collective instrument
Fund Trust s, money
Plan funds,
74
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Summary
Actual Whether
Amount and
Referenc prospective Actual principal Whether it there will
Method of reserved for reference
Name of Trustee Source of Commence Terminati Funds ed profit & amount go through be entrust
Product type Amount Remunerat earnings（if impairment （if
trustee type funding ment date on date allocation annualize loss for the recovered statutory finance
ion applicable) (if
d return period for the procedures plans in applicable
applicable)
period the future ）
bond funds
traded on
exchanges
and inter-
bank
markets
Used to
invest in
money
market
instrument
Shanghai
s, including
Trust- Ruby
cash, bank
Shanghai An’xin 3
8 June deposits,
Trust Trust Wenjian 30,000 Owned fund September Cash 4.60% 1,051.07 449.92 0 0 Yes Yes
2021 large
Co.,Ltd. Series 2020
negotiable
(Shanghai
certificates
Trust-H-6001)
of deposit,
and
reverse
repurchase
of bonds
Used to
invest in
money
Shanghai
market
Trust- Ruby
instrument
Shanghai An’xin 23
15 June s, including
Trust Trust Wenjian 20,000 Owned fund September Cash 4.60% 667.95 249.53 0 0 Yes Yes
2021 cash, bank
Co.,Ltd. Series 2020
deposits,
(Shanghai
large
Trust-H-6001)
negotiable
certificates
of deposit,
75
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Summary
Actual Whether
Amount and
Referenc prospective Actual principal Whether it there will
Method of reserved for reference
Name of Trustee Source of Commence Terminati Funds ed profit & amount go through be entrust
Product type Amount Remunerat earnings（if impairment （if
trustee type funding ment date on date allocation annualize loss for the recovered statutory finance
ion applicable) (if
d return period for the procedures plans in applicable
applicable)
period the future ）
and
reverse
repurchase
of bonds
Used to
invest in
specific
debt of the
debtor of
Nantong
Changhai
Constructio
n
Investment
Shaanxi Developme
InternationalT nt
rust- Youzhai Co.,Ltd..Th
Shaanxi
No.28 24 24 e fund is
Internation
Trust Nantong 4,000 Owned fund September Septemb used to Cash 7.00% 560 75.18 67.67 0 Yes Yes
alTrust
Haian 2020 er 2022 supplemen
Co.,Ltd,
Collective t the funds
Fund Trust required by
Plan the
infrastructu
re
constructio
n and
greening
and
renovation
projects in
the market
field
Avic Trust Trust Avic Trust- 6,000 Owned fund 25 24 Used to Cash 8.50% 1,018.6 135.53 120.16 0 Yes Yes
76
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Summary
Actual Whether
Amount and
Referenc prospective Actual principal Whether it there will
Method of reserved for reference
Name of Trustee Source of Commence Terminati Funds ed profit & amount go through be entrust
Product type Amount Remunerat earnings（if impairment （if
trustee type funding ment date on date allocation annualize loss for the recovered statutory finance
ion applicable) (if
d return period for the procedures plans in applicable
applicable)
period the future ）
Co.,Ltd. Apocalypse[2 September Septemb increase
020] No.408 2020 er 2022 capital and
Nanjing share of
Banqiao Nanjing
Project Equity Hengze
Investment Real
Trust Plan Estate
Developme
nt Co., Ltd
and
Nanjing
Hengshen
g Real
Estate
Developme
nt Co., Ltd
through
Shenzhen
Hangqiao
Investment
Partnershi
p (Limited
Partnershi
p), and the
fund finally
is used for
the
developme
nt and
constructio
n of
Nanjing
Lishui
Block
77
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Summary
Actual Whether
Amount and
Referenc prospective Actual principal Whether it there will
Method of reserved for reference
Name of Trustee Source of Commence Terminati Funds ed profit & amount go through be entrust
Product type Amount Remunerat earnings（if impairment （if
trustee type funding ment date on date allocation annualize loss for the recovered statutory finance
ion applicable) (if
d return period for the procedures plans in applicable
applicable)
period the future ）
under the
company's
name
Used to
issue a
trust loan
to
Shenzhen
Jushenghu
a Co., Ltd.,
and the
loan fund
is mainly
Chongqing used for
Trust- operation
Chongqing
Pengrui No.3 13 October 18 March turnover
Trust Trust 10,000 Owned fund Cash 7.60% 1,084.82 164.49 141.59 0 Yes Yes
Collective 2020 2022 such as
Co.,Ltd.
Fund Trust repayment
Plan of
financing
from
financial
institutions,
and other
fund
purposes
approved
by the
trustee.
Shanghai Used to
Shanghai Trust- Xinyue invest in
14 October 9 June
Trust Trust Fengli 30,000 Owned fund bonds, Cash 4.50% 880.27 288.49 0 0 Yes Yes
2020 2021
Co.,Ltd. Collective including
Fund Trust but not
78
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Summary
Actual Whether
Amount and
Referenc prospective Actual principal Whether it there will
Method of reserved for reference
Name of Trustee Source of Commence Terminati Funds ed profit & amount go through be entrust
Product type Amount Remunerat earnings（if impairment （if
trustee type funding ment date on date allocation annualize loss for the recovered statutory finance
ion applicable) (if
d return period for the procedures plans in applicable
applicable)
period the future ）
Plan limited to,
governmen
t bonds,
finance
debt
(including
subordinat
ed debt
and hybrid
capital
debt),
corporate
bonds,
corporate
bonds
(including
non-public
corporate
bonds),
central
bank bills,
(very)
short-term,
medium-
term notes,
directional
(PPN),
convertible
bond
financing
tools/excha
ngeable
bonds,
project
79
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Summary
Actual Whether
Amount and
Referenc prospective Actual principal Whether it there will
Method of reserved for reference
Name of Trustee Source of Commence Terminati Funds ed profit & amount go through be entrust
Product type Amount Remunerat earnings（if impairment （if
trustee type funding ment date on date allocation annualize loss for the recovered statutory finance
ion applicable) (if
d return period for the procedures plans in applicable
applicable)
period the future ）
yield
bonds,
asset-
backed
securities
(notes), etc
Used to
invest in
bonds,
including
but not
limited to,
governmen
t bonds,
finance
debt
(including
Shanghai subordinat
Trust- Xinyue ed debt
Shanghai
Fengli 21 October 16 June and hybrid
Trust Trust 20,000 Owned fund Cash 4.50% 586.85 175.07 0 0 Yes Yes
Collective 2020 2021 capital
Co.,Ltd.
Fund Trust debt),
Plan corporate
bonds,
corporate
bonds
(including
non-public
corporate
bonds),
central
bank bills,
(very)
short-term,
80
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Summary
Actual Whether
Amount and
Referenc prospective Actual principal Whether it there will
Method of reserved for reference
Name of Trustee Source of Commence Terminati Funds ed profit & amount go through be entrust
Product type Amount Remunerat earnings（if impairment （if
trustee type funding ment date on date allocation annualize loss for the recovered statutory finance
ion applicable) (if
d return period for the procedures plans in applicable
applicable)
period the future ）
medium-
term notes,
directional
(PPN),
convertible
bond
financing
tools/excha
ngeable
bonds,
project
yield
bonds,
asset-
backed
securities
(notes), etc
Used to
issue a
trust loan
to Yunnan
Avic Trust- Shangju
Apocalypse[2 Real
019] No.116 Estate Co.,
Kunming 6 6 Ltd., and it
Avic Trust
Trust Evergrande 15,000 Owned fund November Novembe specifically Cash 8.00% 2,433.33 180.82 146.67 0 Yes Yes
Co.,Ltd.
Yunxi Manor 2020 r 2022 is used for
Collective the
Fund Trust developme
Plan nt and
constructio
n of
Kunming
"Evergrand
81
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Summary
Actual Whether
Amount and
Referenc prospective Actual principal Whether it there will
Method of reserved for reference
Name of Trustee Source of Commence Terminati Funds ed profit & amount go through be entrust
Product type Amount Remunerat earnings（if impairment （if
trustee type funding ment date on date allocation annualize loss for the recovered statutory finance
ion applicable) (if
d return period for the procedures plans in applicable
applicable)
period the future ）
e Yunxi
Manor"Proj
ect in
Block 5,
11, 12 and
13
Used to
issue a
trust loan
to Taiyuan
Fuli
Shengda
Huarun Trust-
Real
Dingxin
Estate
No.240 Fuli
Huarun 17 17 Developme
Taiyuan
Trust Trust 10,000 Owned fund November Novembe nt Co., Cash 6.90% 690 83.18 64.27 0 Yes Yes
Project
Co.,Ltd. 2020 r 2021 Ltd., for the
Collective
developme
Fund Trust
nt and
Plan
constructio
n of Block
A, B, C, E
and X2
projects in
Jinxi City
Minmetals Used to
Trust- transfer
Hengxin specific
Minmetals
Gongzhu 20 20 assets
Internation
Trust No.318- Xinjiu 9,500 Owned fund November Novembe proceeds Cash 7.90% 750.5 84.3 61.68 0 Yes Yes
al Trust
No.77 2020 r 2021 formed by
Co.,Ltd.
Collective Block A1-2
Fund Trust "Evergrand
Plan e Jiulong
82
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Summary
Actual Whether
Amount and
Referenc prospective Actual principal Whether it there will
Method of reserved for reference
Name of Trustee Source of Commence Terminati Funds ed profit & amount go through be entrust
Product type Amount Remunerat earnings（if impairment （if
trustee type funding ment date on date allocation annualize loss for the recovered statutory finance
ion applicable) (if
d return period for the procedures plans in applicable
applicable)
period the future ）
Bay"
located in
Guandu
District,
Kunming
City, which
is held by
Kunming
Henghai,
and it is
specifically
used for
the
constructio
n and
developme
nt of the
target
blockin line
with the
“432”
condition
CITIC
Trust offers
CITIC Trust- financing
Country to Nantong
Garden Ruixing in
CITIC 25
Suyun No.4 25 May the mode
Trust Trust 8,000 Owned fund November Cash 6.70% 801.8 52.87 0 0 Yes Yes
Finance 2022 of asset
Co.,Ltd. 2020
Collective proceeds
Fund Trust transfer
Plan and
repurchase
, and
83
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Summary
Actual Whether
Amount and
Referenc prospective Actual principal Whether it there will
Method of reserved for reference
Name of Trustee Source of Commence Terminati Funds ed profit & amount go through be entrust
Product type Amount Remunerat earnings（if impairment （if
trustee type funding ment date on date allocation annualize loss for the recovered statutory finance
ion applicable) (if
d return period for the procedures plans in applicable
applicable)
period the future ）
Nantong
Ruixing
uses the
trust fund
for the
developme
nt and
constructio
n of
Country
Garden
Xingchen
Garden
Project in
line with
the "432"
condition
Used to
invest in
bank
deposits
(current
Avic Trust- deposit,
Tianji Huicai time
No.3 Bond 30 deposit
Avic Trust 31 May
Trust Investment 50,000 Owned fund November and inter- Cash 4.45% 1,109.45 188.97 0 0 Yes Yes
Co.,Ltd. 2021
Collective 2020 bank
Fund Trust deposit);R
Plan everse
bond
repurchase
, inter-bank
certificates
of deposit,
84
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Summary
Actual Whether
Amount and
Referenc prospective Actual principal Whether it there will
Method of reserved for reference
Name of Trustee Source of Commence Terminati Funds ed profit & amount go through be entrust
Product type Amount Remunerat earnings（if impairment （if
trustee type funding ment date on date allocation annualize loss for the recovered statutory finance
ion applicable) (if
d return period for the procedures plans in applicable
applicable)
period the future ）
bonds and
bills in the
exchange
and inter-
bank
markets;Bo
nd funds
(including
convertible
bond
funds) and
bond
segregated
accounts;C
ash
manageme
nt financial
instrument
s;Other
inter-bank
or
exchange
fixed
income
products
with high
security
and
permitted
by laws,
regulations
and
regulatory
authorities
85
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Summary
Actual Whether
Amount and
Referenc prospective Actual principal Whether it there will
Method of reserved for reference
Name of Trustee Source of Commence Terminati Funds ed profit & amount go through be entrust
Product type Amount Remunerat earnings（if impairment （if
trustee type funding ment date on date allocation annualize loss for the recovered statutory finance
ion applicable) (if
d return period for the procedures plans in applicable
applicable)
period the future ）
Used to
transfer
specific
assets
proceeds
of Haidian
Northwest
Wang
Minmetals Block
Trust- Project
Hengxin held by
Minmetals Gongzhu Beijing
4 4
Internation No.372- Minghai
Trust 8,000 Owned fund December Decembe Cash 5.47% 926.29 32.37 19.45 0 Yes Yes
al Trust Dingning Real
2020 r 2022
Co.,Ltd. No.10 Estate Co.,
Collective Ltd., and
Fund Trust the fund is
Plan ultimately
used for
the
developme
nt and
constructio
n of the
target
project.
Minsheng Used to
Trust- invest in
China Zhongmin bonds,
18
Minsheng Yongfeng 15 June money
Trust 20,000 Owned fund December Used 5.30% 519.84 37.75 0 0 Yes Yes
Trust No.1 2021 market
2020
Co.,Ltd. Collective instrument
Fund Trust s, money
Plan funds,
86
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Summary
Actual Whether
Amount and
Referenc prospective Actual principal Whether it there will
Method of reserved for reference
Name of Trustee Source of Commence Terminati Funds ed profit & amount go through be entrust
Product type Amount Remunerat earnings（if impairment （if
trustee type funding ment date on date allocation annualize loss for the recovered statutory finance
ion applicable) (if
d return period for the procedures plans in applicable
applicable)
period the future ）
bond
funds, etc.
traded on
exchanges
and inter-
bank
markets
Used to
invest in
bonds,
money
Minsheng
market
Trust-
instrument
China Zhongmin
22 s, money
Minsheng Yongfeng 22 June
Trust 60,000 Owned fund December funds, Cash 5.30% 1,585.64 78.41 0 0 Yes Yes
Trust No.1 2021
2020 bond
Co.,Ltd. Collective
funds, etc.
Fund Trust
traded on
Plan
exchanges
and inter-
bank
markets
Used for all
kinds of
deposits,
Jiangsu all kinds of
Trust- An’xin reverse
Jiangsu 31
Tianli No.1 24 June repurchase
Trust Trust 20,000 Owned fund December Cash 4.80% 460.27 0 0 0 Yes Yes
Collective 2021 bonds and
Co.,Ltd. 2020
Fund Trust bonds,
Plan asset-
backed
securities,
money
87
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Summary
Actual Whether
Amount and
Referenc prospective Actual principal Whether it there will
Method of reserved for reference
Name of Trustee Source of Commence Terminati Funds ed profit & amount go through be entrust
Product type Amount Remunerat earnings（if impairment （if
trustee type funding ment date on date allocation annualize loss for the recovered statutory finance
ion applicable) (if
d return period for the procedures plans in applicable
applicable)
period the future ）
market
funds,
bond
funds,
other
standardiz
eddebt
assets and
trust,
securities,
funds,
insurance,
banking
and futures
and fixed
income
asset
manageme
nt products
issued by
subsidiarie
s where
investment
scope in
standardizi
ng asset
approved
by laws
and
regulations
or
regulatory
body
88
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Summary
Actual Whether
Amount and
Referenc prospective Actual principal Whether it there will
Method of reserved for reference
Name of Trustee Source of Commence Terminati Funds ed profit & amount go through be entrust
Product type Amount Remunerat earnings（if impairment （if
trustee type funding ment date on date allocation annualize loss for the recovered statutory finance
ion applicable) (if
d return period for the procedures plans in applicable
applicable)
period the future ）
Used to
invest in
bank
deposits,
money
market
funds,
bond
funds,
bonds in
the
exchange
and inter-
bank
Zhongrong
market,
Trust- Huijujin
fixed
Zhongrong No.1 31
29 June income
Trust Trust Monetary 50,000 Owned fund December Cash 6.10% 1,479.45 0 0 0 Yes Yes
2021 products
Co.,Ltd. Collective 2020
(including
Fund Trust
but not
Plan
limited to
reverse
repurchase
with a
maturity of
less than
one year
and other
fixed
income
products
approved
by the
client) and
89
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Summary
Actual Whether
Amount and
Referenc prospective Actual principal Whether it there will
Method of reserved for reference
Name of Trustee Source of Commence Terminati Funds ed profit & amount go through be entrust
Product type Amount Remunerat earnings（if impairment （if
trustee type funding ment date on date allocation annualize loss for the recovered statutory finance
ion applicable) (if
d return period for the procedures plans in applicable
applicable)
period the future ）
other
purposes
as
stipulated
in the
contract
Total 1,022,152 -- -- -- -- -- -- 76,326.13 28,337.37 -- 0 -- -- --
Entrust finance expected to be failed to recover principle or other situation leading to impairment
Applicable √ N/A
17.3.2 Entrust loans
Applicable √ N/A
No such cases in the reporting period.
17.4 Daily operation significant contracts
Applicable √ N/A
No such cases in the reporting period.
17.5 Other significant contracts
Applicable √ N/A
No such cases in the reporting period.
18. Social responsibilities
18.1 Information about taking social responsibilities
The information about taking social responsibilities disclosed in 2020 Annual Social Responsibilities Report in detail on www.cninfo.com.cn.
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
18.2Information about targeted poverty alleviation
18.2 18.2.1 Targeted poverty alleviation plan
According to the call of Suqian municipal party committee and municipal government on
poverty alleviation with the work of "guacun baohu" and "three into three help", the
Company actively takes actual action to practice the enterprise spirit of "serving the
country and the people" and takes bravely social responsibility.According to the overall
work arrangement of "guacun baohu" by Suqian municipal government, the Company
supports Qiuzhuang village in Zhenglou branch, Yanghe new district and is responsible
for the assistance work for 177 low-income households in Daguo village and Taiping
village, Zhenglou branch, among which 88 households are in Taiping village and 89 in
Daguo village. Combined with the local actual condition of Zhenglou branch, the
Company makes the support plan carefullyto complete the support mission. It promotes
the rural development, and enhances the farmers' income, strengthens the relationship
between cadres and masses, and makes due contributions to “liang ju yi gao” work.
18.2.2 Summary of annual targeted poverty alleviation
In 2020, each task for "guacun baohu" was completed successfully. In 2020, the
Company conducted in-depth field researches, continued to follow up the village
collective economic income increase projects, and invested CNY 200,000 in Qiuzhuang
Village for land transfer and planning rice-shrimp farming project.The village collective
economy has achieved sustainable development. The Company actively publicized local
policies for the benefit of the people, organized regular poverty-alleviation visits, carried
out special care activities for the Spring Festival and the epidemic, and sent holidaywarm,
anti-epidemic knowledge and related materials to low-income farmers. By the end of
2020, all 177 low-income households have been lifted out of poverty.The Company
continues to participate in the "group" poverty alleviation and education aid in Suqian,
donating CNY 4 million to help poor students realize their dreams. The Company was
awarded "Group" charity enterprise in the "group" poverty alleviation and education aid
activity and "Suqian Charity Award" in Suqian in 2020.
18.2.3 Poverty alleviation achievement
Indicator Unit Amount/Implementation situation
A.Overall situation —— ——
Including：1.Fund CNY 10,000 420
2.Goods converted into cash CNY 10,000 11
3.Establishing card for archives of poor
Person 716
people out of poverty
B. Input by project —— ——
1.Industrial development —— ——
2.Transfer and employment —— ——
3.Removal and relocation —— ——
4.Educational poverty alleviation —— ——
Including: 4.1 investment amount to
CNY 10,000 400
subsidize poor students
4.2 Number of poor students subsidized Person 2,000
5.Health poverty alleviation —— ——
6.Ecological protection —— ——
7.Basic guarantee —— ——
8.Social poverty alleviation —— ——
8.2 investment amount of fixed-point
CNY 10,000 11
poverty alleviation work
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
9.Other project —— ——
Including：9.1.Item Item 1
9.2.Input amount CNY 10,000 20
9.3. The number of registered impoverished
Person 716
people to be out of poverty
C. Awards（content and level） —— ——
"Group" charity enterprise in the "group"
poverty alleviation and education aid
Suqian
activity and "Suqian Charity Award" in
Suqian in 2020
18.2.4 Follow-up poverty alleviation plan
After several years of support, the collective economy of Qiuzhuang Village has achieved
sustainable income increase, the low-income farmers in Dagou and Taiping Village have
achieved comprehensive poverty alleviation, and the consolidation of the achievements
of "guacun baohu" has become the top priority in the next stage of poverty alleviation
work. In 2021, the Company will continue to implement the policy unremittingly.The
investment will not be reduced.The support team will not withdraw to ensure that the
work of "guacun baohu" continues to be carried out continuously, and the Company
resolutely keep the fruits of poverty alleviation victory.
First, continue to follow up the village collective economic assistance projects. The
Company actively connects with the village "two committees" team members, discusses
poverty alleviation projects, focuses on Qiuzhuang village collective transfer of land, and
grain farmers jointly set up grain planting base, further plans and implements collective
economic projects. With the help of the Company's production and management platform,
it will coordinate different stakeholders with wisdom and efforts to expand channels of
assistance and unblock channels of production and marketing, and to improve the
autonomy of sustainable development. The Company will help and revitalize the village
collective economy, and form project experience that can be referred to and promoted,
promote other projects, form an initial poverty alleviation industry, and lay an important
foundation for continuing to promote the revitalization of rural industries.
Second, consolidate and expand the achievements of low-income farmers in poverty
alleviation.In the process of poverty alleviation visits, timely adjustments and
improvements were made to help farmers out of poverty according to the changes in their
situations, so as to reduce the dependence of low-income farmers on external help. The
Company will focus on rural households with relatively low incomes and the elderly, the
weak, the sick and the disabled, and increase assistance to ensure that all registered
poor people under the current standards continue to lift themselves out of
poverty.Through in-depth investigation, the Company revitalizes the rural human capital,
strengthen the excavation and cultivation of local talents in rural areas, cultivate a batch
of local experts, so that they can serve the village collective economic projects nearby,
and drive the employment of low-income farmers.
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
18.3 Information about environment protection
Whether the listed company and its subsidiaries belong to heavy polluting industries prescribed by the environmental protection departments
√YesNo
Name of main
Amount of Distribution
Company pollutant and Discharge Emission Pollution discharge Approved total Excessive
discharge of discharge Total emission
name particular type concentration standard emission discharge
outlet outlet
pollutant
COD:454.7 ton per
COD COD:60.7mg/L;Amm COD:400mg/L;Amm COD:91.47 ton; year;Ammonia
Ammonia onia Ammonia
Jiangsu onia nitrogen:74.4 tons
nitrogen nitrogen:1.11mg/L;T nitrogen :30mg/L;Tot nitrogen:1.52ton;Tot
Yanghe per year;Total
Total Indirect discharge 1 Within site No
Distillery Co., otal phosphorus： al phosphorus: al phosphorus： phosphorus:2.07
phosphorusTot
Ltd. 1.53mg/L; Total 3mg/L;Total 2.00tons; Total tons per year; Total
al
nitrogen:22.6mg/L nitrogen: 50mg/L nitrogen:35.06 tons nitrogen:37.3 tons
nitrogen
per year
COD:356.48 tons per
COD COD:75mg/L;Ammo COD:400mg/L;Amm COD:47.63 tons; year;Ammonia
Jiangsu Ammonia nia onia Ammonia
nitrogen:31.19 tons
Shuanggou nitrogen nitrogen:3.5mg/L;Tot nitrogen:35mg/L;Tot nitrogen :2.22 tons; per year; Total
Distillery Total Indirect discharge 1 Within site al phosphorus:8 Total No
al phosphorus： phosphorus:7.129
Stock phosphorusTot mg/L;Total phosphorus:1.39mg
2.2mg/L; Total tons per year; Total
Co.,Ltd. al nitrogen:45 mg/L /L;Total
nitrogen:20mg/L nitrogen:40.104 tons
nitrogen nitrogen:12.70mg/L
per year
COD:672 tons per
COD COD:125mg/L;Amm COD:400mg/L;Amm COD:83.49 tons; year;Ammonia
Jiangsu Ammonia onia onia Ammonia
nitrogen:42 tons per
Yanghe nitrogen nitrogen :2.8mg/L;To nitrogen :30mg/L;Tot nitrogen :1.87 tons; year;Total
Distillery Co., Total Indirect discharge 1 Within site Total No
tal phosphorus：1.8 al phosphorus：3 phosphorus:5tons
Ltd. Siyang phosphorusTot phosphorus:1.20mg
mg/L; Total mg/L; Total per year; Total
Branch al /L;Total
nitrogen:16mg/L nitrogen:40 mg/L nitrogen:58.5 tons
nitrogen nitrogen:10.69mg/L
per year
Guizhou COD After treatment up 1 Within site COD： COD;100mg/L;Amm COD:1.94tons;Amm COD:2.057 tons per No
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Name of main
Amount of Distribution
Company pollutant and Discharge Emission Pollution discharge Approved total Excessive
discharge of discharge Total emission
name particular type concentration standard emission discharge
outlet outlet
pollutant
Guijiu Ammonia to the standards 32mg/L;Ammonia onia onia nitrogen:0.24 year;Ammonia
Co.,Ltd. nitrogen nitrogen:0.402mg/L; nitrogen:10mg/L; tons ;Nitrogenoxide nitrogen:0.308 tons
Nitrogen oxides Nitrogen Nitrogenoxides:200 s:0.06 tons;Sulfur per year;Nitrogen
Sulfur dioxide oxides:25mg/m;Sul mg/m;Sulfur dioxide :0.02tons oxides:0.06244 tons
fur per year
dioxide:11.8mg/m dioxide :50mg/m
Hubei COD:12 ton per
COD COD:26.0mg/L;Amm COD:400mg/L;Amm COD:0.14tons ;Am
Lihuacun year;Ammonia
Ammonia Indirect discharge 1 Within site onia onia monia No
Distillery nitrogen:0.72 tons
nitrogen nitrogen:0.30mg/L nitrogen:30mg/L nitrogen:0.002 tons
Co.,Ltd. per year
Construction and operation of pollution prevention and control facilities
(1) Jiangsu Yanghe Distillery Co., Ltd.: The sewage treatment station was built in 2012. The project total investment is CNY 96 million and it covers an
area of 19,000 square meters. Its designed capacity is 10,000 tons per day. The sewage treatment adopts physical treatment method, chemical
treatment method and anaerobic biological treatment method, aerobic biological treatment method, which achieves the treatment of high-
concentration waste water of 250 tons per hour. It implements the"Fermentation Alcohol and Liquor Industrial Pollutants Emission Standards
CB27631-2011" Indirect Emissions Standards. In 2020, CNY 12.26 million was spent on sewage treatment operations. It treated 1.52 million tons of
wastewater, and the discharge concentrations of various pollutants are lower than the national discharge standards.The biogas boiler room was built,
and the biogas produced by anaerobic fermentation of sewage treatment is all used for biogas boiler combustion.
(2) Jiangsu Shuanggou Distillery Stock Co.,Ltd.: The sewage treatment station was built in 2013. The project total investment is CNY 42.50 million
and it covers an area of 15,000 square meters. Its designed capacity is 5,400 tons per day. The sewage treatment adopts anaerobic tower, UASB,
AAO, secondary sedimentation tank and dephosphorization tank treatment process, and implements "Shuanggou Town Sewage Treatment Plant
Takeover Standard". In 2020, the anaerobic tank of sewage treatment facilities and equipment was repaired and cleaned, and the deodorant system
was maintained and upgraded, and pollution equipment and facilities in the Qu-making workshop was reformed. In 2020, CNY 13 million was invested
and it treated 635,100 tons of wastewater, and the discharge concentration of various pollutants is lower than the national discharge standard. The
biogas boiler room was built, and the biogas produced by anaerobic fermentation of sewage treatment is all used for biogas boiler combustion.
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
(3) Jiangsu Yanghe Distillery Co., Ltd. Siyang Branch: The sewage treatment station was built in 2015. The project total investment is CNY 50 million
and it covers an area of 15,000 square meters. Its designed capacity is 6,000 tons per day.In terms of process treatment, EGSB+AAO+deep
treatment technology is adopted. The high-concentration waste water can be treated up to 250 tons per hour. After treatment, all indicators reached
the indirect emission standard of "Fermented Alcohol and Liquor Industrial Pollutant Emission Standard CB27631-2011". In 2020, a total of CNY
11.32 million was invested to further optimize the effluent index through the implementation of measures such as improvement of aerobic cooling
equipment, fan improvement and deodorization equipment. A total of 667,900 tons of wastewater was treated, and the discharge concentration of
various pollutants is lower than the national discharge standard.The biogas boiler room was built, and the biogas produced by anaerobic fermentation
of sewage treatment is all used for biogas boiler combustion.
(4) Guizhou Guijiu Co.,Ltd.: The sewage treatment station was built in 2013. The project total investment is CNY 3.58 million and it covers an area of
600 square meters. Its designed capacity is 220 tons per day. The wastewater was treated by UASB anaerobic/contact oxidation aerobic process. The
discharge of waste water is in accordance with the Discharge Standards for Water Pollutants in Fermented Alcohol and Liquor Industry GB27631-
2011Table 2 Emission Standards. At the same time, an online detection system is installed and the facilities are in good condition. The discharge
concentration of various pollutants is lower than the national discharge standard in 2020.The boiler uses gas-fired boiler, and its fuel is natural gas.
(5) Hubei Lihuacun Distillery Co.,Ltd.: The sewage treatment station was built in 2020. The project total investment is CNY 4.76 million and it covers
an area of 702 square meters.The production and living wastewater was treated by AAO process.Its designed capacity is 240 tons per day. The
discharge of waste water is in accordance with the Discharge Standards for Water Pollutants in Fermented Alcohol and Liquor Industry GB27631-
2011Table 2 Emission Standards. The discharge concentration of various pollutants is lower than the national discharge standard in 2020.The boiler
uses gas-fired boiler, and its fuel is natural gas.
Environmental impact assessment of construction projects and other administrative permits for environmental protection
The Company and each subsidiary’s construction project environmental impact reports and "three at the same time" acceptance materials, pollutant
discharge permit and other materials are complete.
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Emergency plan for environmental emergencies
The Company and its subsidiaries have made emergency plans for environmental
emergencies, among which the Company and Shuanggou Distillery have filed with
Jiangsu Province Environmental Protection Department. Siyang Branch of the Company
has filed with Siyang Town Environmental Protection Bureau. Guijiu Companyhas filed
with Xiuwen Town Environmental Protection Bureau, which is managed by Guizhou
Province Environmental Emergencies Center. Lihuacun Distillery has filed with Yunyang
District Environmental Protection Bureau.
Environmental self-monitoring programme
(1) The Company has installed COD, ammonia nitrogen, total nitrogen, total phosphorus,
PH online monitoring instruments, conducted daily manual sampling and self-testing,
monthly commissioned a third-party qualification agency to carry outa sampling
inspection;
(2) Shuanggou Distillery has installed COD, ammonia nitrogen, total nitrogen, total
phosphorus, PH online monitoring instruments, conducted daily manual sampling and
self-testing, monthly commissioned a third-party qualification agency to carry out a
sampling inspection;
(3) Siyang Branch of the Company has installed COD, ammonia nitrogen, total nitrogen,
total phosphorus, PH online monitoring instruments, conducted daily manual sampling
and self-testing, quarterly commissioned a third-party qualification agency to carry out a
sampling inspection;
(4)Guijiu Company has installed COD, ammonia nitrogen, total nitrogen, total phosphorus,
PH online monitoring instruments, conducted daily manual sampling and self-testing,
quarterly commissioned a third-party qualification agency to carry out a sampling
inspection;
(5)Lihuacun Distillery monitors wastewater discharge index daily, and entrusts a third-
party qualification agency to monitor it every six months.
Other environmental information that should be made public
N/A
Other environmental related information
During the reporting period, Shuanggou Distillery was awarded the title of "Jiangsu Green
Factory", and Shuanggou Distillery and Siyang Branch of the Company were also
awarded the title of "2020 Suqian Environmental Protection and Green Trusted
Enterprise".
19. Other significant events
√ Applicable N/A
1. The Company indirectly held partnership share of Jiangsu Jiequan Emerging Industry
Development Fund (Limited Partnership) via Jiangsu Xinghe Investment Management
Co.,Ltd. and Nanjing Xingnahe Venture Capital Investment partnership (Limited
Partnership). Jiangsu Jiequan Emerging Industry Development Fund (Limited
Partnership) completed fund-raising and put on record in AMAC. The record numbers are
SCF515 and SCL005. It was disclosed in detail on the Announcement of cooperative
investment with professional investment institutions (No: 2017-021) on 30 December
2017 and the Announcement of progress of cooperative investment with professional
investment institutions (No: 2018-011) on 12 April 2018.
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
2. Su Wine Wealth Management Co., Ltd., a wholly-owned subsidiary of the Company,
subscribed the partnership shares of Suzhou Danqing Phase II Innovative
Pharmaceutical Industry Investment Partnership (limited partnership). Danqing Phase II
completed fund-raising and put on record in AMAC. The record number is SED720. For
details, please refer to theAnnouncement on cooperation and investment with
professional investment institutions (Announcement No: 2018-021) and Announcement
on cooperation, Announcement on cooperation andinvestment with professional
investment institutions (Announcement No: 2018-030) and Announcement on
cooperation andinvestment with professional investment institutions (Announcement No:
2019-004)disclosed by the Company on 28 April 2018,16 November 2018 and 11 April
2019 respectively.
3. Jiangsu Yanghe Investment Management Co.,Ltd. subscribed the partnership shares
of Panmao (Shanghai) Investment Center (limited partnership). For details, please refer
to the Announcement on cooperation and investment with professional investment
institutions (Announcement No: 2018-025) disclosed by the Company on 22 June 2018.
4. Jiangsu Yanghe Investment Management Co.,Ltd. subscribed the partnership shares
of Jiangsu Zijin Hongyun Health Industry Investment Partnership (limited partnership),
Suqian Yida Industry Venture Capital Fund (limited partnership), and Hunan Huaye
Tiancheng Venture Capital Partnership (limited partnership). For details, please refer to
the Announcement on cooperation and investment with professional investment
institutions (Announcement No: 2019-002) disclosed by the Company on 28 March 2019,
Announcement on participating in Suqian Yida Industrial Venture Capital Fund and
related transaction (Announcement No: 2019-012) disclosed by the Company on 30 April
2019, and Announcement on the subscription of Hunan Huaye Tiancheng Venture
Capital Fund (Announcement No: 2019-021) disclosed by the Company on 6 September
2019.
5. Jiangsu Yanghe Investment Management Co.,Ltd.subscribed the partnership shares of
Nanjing Xingna Heyuan Venture Capital Partnership (Limited Partnership), Suzhou
Zhongxin Xingfu Shuzhi Venture Capital Partnership (Limited Partnership), Nanjing
Hongyang Equity Investment Partnership (Limited Partnership). For details, please refer
to the Announcement on cooperation and investment with professional investment
institutions (Announcement No: 2020-031) disclosed by the Company on 12August 2020,
Announcement on the subscription of Suzhou Zhongxin Xingfu Shuzhi Venture Capital
Fund(Announcement No: 2019-035) disclosed by the Company on 19October 2020,
Announcement on the subscription of Nanjing Hongyang Equity Investment
Fund(Announcement No: 2020-038) disclosed by the Company on 4 November 2020.
20. Significant events of subsidiaries
Applicable √ N/A
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Section VI Changes in Shares and Information about Shareholders
1. Changes in shares
1.1 Changes in shares
Unit：Share
Before Changes in this year ( + , - ) After
Issuance of Bonus Capitalization of
Number Proportion Other Subtotal Number Proportion
new shares shares capital reserves
I.Restricted shares 258,048,426 17.12% 0 0 0 1,421,297 1,421,297 259,469,723 17.22%
1.Shares held by the state 0 0.00% 0 0 0 0 0 0 0.00%
2.Shares held by state-owned
0 0.00% 0 0 0 0 0 0 0.00%
corporations
3.Shares held by other domestic
258,048,426 17.12% 0 0 0 1,421,297 1,421,297 259,469,723 17.22%
investors
Including:Shares held by domestic
249,480,000 16.55% 0 0 0 0 0 249,480,000 16.55%
corporations
Shares held by domestic individuals 8,568,426 0.57% 0 0 0 1,421,297 1,421,297 9,989,723 0.67%
4.Shares held by foreign investors 0 0.00% 0 0 0 0 0 0 0.00%
Including: Shares held by foreign
0 0.00% 0 0 0 0 0 0 0.00%
corporations
Shares held by foreign individuals 0 0.00% 0 0 0 0 0 0 0.00%
II.Non-restricted shares 1,248,939,574 82.88% 0 0 0 -1,421,297 -1,421,297 1,247,518,277 82.78%
1.CNY common shares 1,248,939,574 82.88% 0 0 0 -1,421,297 -1,421,297 1,247,518,277 82.78%
2.Domestically listed foreign shares 0 0.00% 0 0 0 0 0 0 0.00%
3.Overseas listed foreign shares 0 0.00% 0 0 0 0 0 0 0.00%
4.Others 0 0.00% 0 0 0 0 0 0 0.00%
III.Total shares 1,506,988,000 100.00% 0 0 0 0 0 1,506,988,000 100.00%
Reasons for the change in shares
√ Applicable N/A
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
The reasons for the change of the Company's shares are mainly caused by changes of the locked shares held by the Company's executives.
Approval of share changes
Applicable √N/A
Transfer of share ownership
Applicable √N/A
Implementation progress of share repurchase
√ Applicable N/A
On 29 October 2019, the sixth session of the ninth meeting of the board of directors was held. It reviewed and approved the plan about repurchasing
part of the social public shares, and agreed to use its own funds to repurchase shares through centralized bidding. The total amount of repurchase is
not less than CNY 1 billion (inclusive) and not more than CNY 1.5 billion (inclusive). The repurchase price is not more than CNY 135.00 per share
(inclusive). The period of repurchases is within 12 months since the repurchase plan is reviewed and approved by the sixth session of the ninth
meeting of the board of directors. This share repurchased is used to implement equity incentive or employee stock ownership plan for core key
employees of the Company.The repurchase affairs was disclosed in details in “About the plan of share repurchase from part of public shares”
(Announcement No. 2019-026), “Repurchase report” (Announcement No.2019-028), etc. on China Securities Journal, Shanghai Securities News and
Securities Times, Securities Daily and www.cninfo.com.cn on 30 October 2019 and on 5 November 2019.
The Company's 2019 annual equity distribution plan has been implemented on 24 June 2020. According to the Company's repurchase plan, the upper
limit of the price of repurchased shares has been adjusted from no more than RMB 135 / share (inclusive) to no more than RMB 132.01 / share
(inclusive).For details, please refer to the "Announcement on Adjusting the Price Limit of Repurchased Shares After Implementing the 2019 Annual
Equity Distribution Plan" disclosed by the Company in China Securities Journal, Shanghai Securities News, Securities Times, Securities Daily and
www.cninfo.com.cn on 20June 2020 (Announcement No. 2020-024).
On 21 January 2020, the Company repurchase shares for the first time. On 22 January 2020, the Company disclosed the repurchase of shares for the
first time.On 3 February, 4March, 2 April, 8 May, 3 June, 3 July, 5 August, 3 September, 9 October 2020, theCompanies disclosed the progress of
repurchase of shares. For details, please refer to the relevant announcements disclosed by the Company in China Securities Journal, Shanghai
Securities News, Securities Times, Securities Daily and www.cninfo.com.cn.
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
The actual repurchase period of the Company wasfrom 21 January 2020 to29 October
2020.The Company has repurchased 9,661,310 shares of the Company through the
special securities account of share repurchase with its own funds in the way of
centralized bidding, accounting for 0.6411% of the total share capital of the
Company.The highest purchase price wasCNY 131.99 per share, and the lowest
wasCNY 80.37 per share. The total amount of funds used wasCNY 1,002,128,680.79
(including transaction costs).The repurchase amount of the Company reached the lower
limit of the total amount of repurchase funds in the repurchase plan and not exceeded the
upper limit of the total amount of repurchase funds, and the repurchase plan has been
completed.
Implementation progress of share repurchase reduction through centralized bidding
Applicable √N/A
Effects of changes in shares on the basic EPS, diluted EPS, net assets per share
attributable to common shareholders of the Company and other financial indexes over
the last year and the last reporting period
√Applicable N/A
Increased basic earnings per share and diluted earnings per share by CNY 0.0193 per
share due to the number of shares repurchased.
Other contents that the Company considers necessary or is required by the securities
regulatory authorities to disclose
Applicable √N/A
2. Changes in restricted shares
√Applicable N/A
Unit：Share
Opening Unlocked Closing
Name of Increase in this Date of
restricted in this restricted Reason
shareholder period unlocking
shares period shares
The sales
restriction
was not
unlocked
during the
reporting
Locked due to leaving
period.Th
Feng Pantai 4,258,489 1,419,497 0 5,677,986 executive position
e
(Supervisor)
restricted
sale of
25% of
the shares
held will
be
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
unlocked
on 8
January
2021, and
the
restricted
sale of the
remaining
shares
locked will
be
unlocked
in
accordanc
e with the
relevant
rules.
Locked due to current
Wang Kai 0 1,800 0 1,800 executive position N/A
(Director)
Total 4,258,489 1,421,297 0 5,679,786 -- --
2. Issuance and listing of securities
2.1 Securities（excluding preference shares）issued in the reporting
period
Applicable √N/A
2.2 Changes in total shares of the company and the shareholder
structure, as well as the asset and liability structure
Applicable √N/A
2.3 Existing staff-held shares
Applicable √N/A
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
3. Shareholders and actual controller
3.1 Total number of shareholders and their shareholdings
Unit:share
Total number of
Total number of common preference
Total number of preference
shareholders at the prior shareholders
Total number of common shareholders at shareholders with resumed
77,730 month-end before the 136,216 0 with resumed 0
the end of the reporting period voting rights at the period-
disclosure date of the annual voting rights at
end(if any)(see Note 8)
report the period-end(if
any)(see Note 8)
Shareholdings of shareholders with a shareholding percentage over 5% or the top 10 shareholders
Shareho Increase/decr Pledged or frozen shares
Total shares Number of Number of
lding ease during
Name of shareholder Nature of shareholder held at the restricted non-restricted Status of Number of
percent the reporting
period-end shares held shares held shares shares
age period
Jiangsu Yanghe Group Co.,Ltd. State-owned corporation 34.16% 514,858,939 0 0 514,858,939
Domestic non-state-owned
Jiangsu Blue Alliance Co., Ltd. 19.55% 294,591,926 -28,546,700 249,480,000 45,111,926
corporation
Shanghai Haiyan Logistics Development
State-owned corporation 9.67% 145,708,137 0 0 145,708,137
Co.,Ltd.
Shanghai Jieqiang Tobacco Sugar
State-owned corporation 3.96% 59,744,099 -864,400 0 59,744,099
&Wine(Group)Co.,Ltd
Hong Kong Securities Clearing Company
Outboundcorporation 3.06% 46,048,354 -72,536,890 0 46,048,354
Ltd. (HKSCC)
Bank of China Co.,Ltd. – Liquor index
classification securities investment fund by Other 1.92% 28,882,107 13,964,550 0 28,882,107
China Merchants Fund
Bank of China Co.,Ltd. – E-funds blue chip
selected and hybridsecurities investment Other 1.80% 27,200,000 27,200,000 0 27,200,000
funds
Bank of China Co.,Ltd. – E-funds SME
Other 1.11% 16,700,000 9,219,999 0 16,700,000
hybrid securities investment funds
China Securities Finance Corporation limited State-owned corporation 0.92% 13,790,044 0 0 13,790,044
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Central Huijin Asset Management Co., Ltd. Outbound corporation 0.85% 12,766,400 0 0 12,766,400
Strategic investors or general corporations to be top 10 shareholders due
Nil
to placing of new shares(if any)(see Note 3)
Related-parties or acting-in-concert N/A
Explanation of above shareholders involving in entrusting/ entrusted voting
Nil
rights and abandonment of voting rights
Shareholdings of the top 10 non-restricted shareholders
Number of non-restricted shares Type of shares
Name of shareholder
held in the period end Type Number
Jiangsu Yanghe Group Co.,Ltd. 514,858,939 CNY common shares 514,858,939
Shanghai Haiyan Logistics Development Co.,Ltd. 145,708,137 CNY common shares 145,708,137
Shanghai Jieqiang Tobacco Sugar & Wine(Group)Co.,Ltd. 59,744,099 59,744,099
Hong Kong Securities Clearing Company Ltd. (HKSCC) 46,048,354 CNY common shares 46,048,354
Jiangsu Blue Alliance Co., Ltd. 45,111,926 CNY common shares 45,111,926
Bank of China Co.,Ltd. – Liquor index classification securities investment
28,882,107 CNY common shares 28,882,107
fund by China Merchants Fund
Bank of China Co.,Ltd. – E-funds blue chip selected and hybridsecurities
27,200,000 CNY common shares 27,200,000
investment funds
Bank of China Co.,Ltd. – E-funds SME hybrid securities investment funds 16,700,000 16,700,000
China Securities Finance Corporation limited 13,790,044 CNY common shares 13,790,044
Central Huijin Asset Management Co., Ltd. 12,766,400 CNY common shares 12,766,400
Description of the relationship or concerted action between the top 10
unlimited outstanding shareholders, and between the top 10 outstanding N/A
shareholders and the top 10 shareholders
Description of the top 10 common shareholders participating in securities
N/A
margin trading(if any)(see Notes 4)
Whether 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
No such cases in the reporting period.
103
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
3.2 Controlling shareholder
Nature of controlling shareholder：Local state-owned
Type of controlling shareholder：Corporation
Legal
Name of
representative/ Date of Organization
controlling Main business
Company establishment code
shareholder
principal
Sales of brewing mechanical
equipment, Liquor Export, Import
of various raw and auxiliary
material used for production,
Jiangsu Yanghe 91321300142
Li Minfu 8 May 1997 equipment and accessories,
Group Co.,Ltd. 334989Y
Industrial investment; municipal
public engineering, building
engineering, tourism cultural
industry investment.
Shareholdings of
the controlling
shareholder in
other listed
N/A
companies at
home or abroad
during the
reporting period
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 representativ Date of Organization
Main business
controller e/Company establishment code
principal
Execution of duty of state-
owned enterprise's investor on
State-owned Assets
behalf of the People's
Supervision and
22 October Government of Suqian and
Administration Zhao Xiaoli N/A
2005 implementation of supervision
Commission of
managementonstate-owned
Suqian
assets and state-owned
enterprises.
Share holdings of
the controlling
shareholder in other
listed companies at N/A
home or abroad
during the reporting
period.
104
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Change of the actual controller during the reporting period
Applicable √N/A
No such cases in the reporting period.
Ownership and control relations between the actual controller and the Company
The actual controller control the company via trust or other ways of assets management
Applicable √ N/A
3.4 Other corporate shareholders with a shareholding proportionover
10%
√Applicable N/A
Legal
representative/ Date of
Name of actual controller Registered capital Main business
Company establishment
principal
Sales of daily
products, research
and development of
biology technology,
furniture production,
Jiangsu Blue Alliance Co.,
Cong Xuenian 28 July 2016 CNY 105,600,000.00 Business
Ltd.
management
consulting service,
fruit tree planting,
Sales of
prepackaging food.
3.5 Limits on the Company’s shares held by its controlling shareholder,
actual controller, restructuring party and other commitment entities.
Applicable √ N/A
105
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Section VII Information about Preference Shares
Applicable √ N/A
No such cases in the reporting period
106
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Section VIIIInformation about Convertible Bonds
Applicable √ N/A
No such cases in the reporting period
107
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Section IX Profiles of Directors, Supervisory, Senior Management and Employees
1. Change in shares owned by directors, members of supervisory committee, senior management and
employees
Shares
Shares Other
Shares held decreas Shares
increased at increas
Incumbent Start date of Termination at the ed at the held at the
Name Office title Gender Age the reporting e/decre
/ Former term date of term period-begin reporting period-end
period ase
(share) period (share)
(share) (share)
(share)
23
23 February
Zhang February202
Chairman of the board Incumbent Male 53 2021 0 0 0 0 0
Liandong 4
10 February 23 February
ViceChairman of the
Zhong Yu Incumbent Male 57 2015 2024 0 0 0 0 0
board,President
23 February
22May 2020
Li Minfu Director Incumbent Male 47 2024 0 0 0 0 0
23 February
19May 2017
Wang Kai Director Incumbent Male 44 2024 0 2,400 0 0 2,400
29 January 23 February
Liu
Director,Vice President Incumbent Male 51 2018 2024 0 0 0 0 0
Huashuang
10 February 23 February
Cong
Director Incumbent Male 55 2015 2024 2,778,291 0 0 0 2,778,291
xuenian
10 February 23 February
Director,Vice President,
Zhou xinhu Incumbent Male 59 2015 2024 2,878,291 0 0 0 2,878,291
Chief engineer
Zhao 23 February 23 February
Non-executiveDirector Incumbent Male 69 0 0 0 0 0
Shuming
108
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Shares
Shares Other
Shares held decreas Shares
increased at increas
Incumbent Start date of Termination at the ed at the held at the
Name Office title Gender Age the reporting e/decre
/ Former term date of term period-begin reporting period-end
period ase
(share) period (share)
(share) (share)
(share)
2021 2024
23 February 23 February
Nie Yao Non-executiveDirector Incumbent Male 44 2021 2024 0 0 0 0 0
23 February 23 February
Lu Guoping Non-executiveDirector Incumbent Male 61 2021 2024 0 0 0 0 0
23 February 23 February
Mao
Non-executiveDirector Incumbent Male 57 2021 2024 0 0 0 0 0
Lingxiao
23
Chen Chairman of 13July2020 February202
Incumbent Male 56 0 0 0 0 0
Taiqing supervisory committee 4
23 February
Xu 23May 2019
Supervisor Incumbent Male 44 2024 0 0 0 0 0
Youheng
23 February 23 February
Xu Lili Supervisor Incumbent Female 42 2021 2024 0 0 0 0 0
23 February
6July 2020
Chen Fuya Supervisor Incumbent Male 56 2024 0 0 0 0 0
10 February 23 February
Chen
Supervisor Incumbent Male 53 2015 2024 0 0 0 0 0
Taisong
10 February 23 February
Lin Qing Vice President Incumbent Female 46 2015 2024 0 0 0 0 0
109
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Shares
Shares Other
Shares held decreas Shares
increased at increas
Incumbent Start date of Termination at the ed at the held at the
Name Office title Gender Age the reporting e/decre
/ Former term date of term period-begin reporting period-end
period ase
(share) period (share)
(share) (share)
(share)
10 February 23 February
Zheng
Vice President Incumbent Male 54 2015 2024 60,000 0 15,000 0 45,000
Bujun
17January 23 February
Fu
Vice President Male 59 2020 2024 0 0 0 0 0
Hongbing Incumbent
Vice President, 23 February
Yin 13July 2020
responsible person for Incumbent Male 49 2024 0 0 0 0 0
Qiuming
accounting affairs
23 February
13July 2020
Li Yuling Vice President Incumbent Male 51 2024 0 0 0 0 0
23February 23 February
Lu
Secretary of the board Incumbent Female 43 2021 2024 0 0 0 0 0
Hongzhen
10 February 23 February
Wang Yao Chairman of the board Former Male 56 2015 2021 30,002 0 0 0 30,002
10 February
24April 2020
Han Feng Director Former Male 59 2015 0 0 0 0 0
10 February 23 February
Xu Zhijian Non-executiveDirector Former Male 57 2015 2021 0 0 0 0 0
10 February 23 February
Cai
Non-executiveDirector Former Female 69 2015 2021 0 0 0 0 0
Yunqing
10 February 23 February
Ji Xueqing Non-executiveDirector Former Male 50 2015 2021 0 0 0 0 0
110
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Shares
Shares Other
Shares held decreas Shares
increased at increas
Incumbent Start date of Termination at the ed at the held at the
Name Office title Gender Age the reporting e/decre
/ Former term date of term period-begin reporting period-end
period ase
(share) period (share)
(share) (share)
(share)
10 February 23 February
Chen
Non-executiveDirector Former Male 55 2015 2021 0 0 0 0 0
Tongguang
10 February
Feng Chairman of 8July 2020
Former Male 61 2015 5,677,986 0 0 0 5,677,986
Pantai supervisory committee
10 February 23 February
Zhou
Supervisor Former Female 55 2015 2021 0 0 0 0 0
Wenqi
10 February 18 January
Zhu Wei Vice President Former Male 44 2015 2020 0 0 0 0 0
Total 11,424,570 2,400 15,000 0 11,411,970
2. Changes in directors,supervisors, senior management and employees
√Applicable N/A
Name Office title Type Date Reason
Han Feng Director Former 24 April 2020 Job transfer
Chairman of supervisory
Feng Pantai Former 8 July 2020 Job change
committee
Zhu Wei Vice President Former 18 January 2020 Personal reason
3. Employment information
Professional background, work experience and major duties of directors, supervisors and senior management
3.1 Directors
111
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Mr. Zhang Liandong, born in September 1968, a Party school postgraduate. He was a Party organization committee member ofZhikouVillage,
Suqian,aParty organization committee member of Sucheng Town, Sucheng District, a vice secretary of Party working committee and a secretary of
discipline working committee,an office director in Xingfu Street, Sucheng District, an office director and a secretary of Party working committee in
Xiangli Street, Sucheng District, a management committee director of economic development zone, a vice secretary of Party working committee, a
director of Suqian Direct Merchants Bureau,a deputy district head of Sucheng Direct, a member of Standing Committee of Sucheng District
Committee, a secretary of Party working committee of Sucheng economic development zone, a deputy secretary of Suqian Municipal Government, a
director of Suqian Urban Management Bureau, a deputy secretary of the Party leadership group, a deputy general secretary of Suqian Municipal
Government (department level), a secretary of the Party working committee of Yanghe New District, Suqian.At present, he is the chairman and deputy
secretary of Party committee of the Company, the chairman of Shuanggou Distillery, and the executive director of Jiangsu Shuanggou Distillery Sales
Co., Ltd.
Mr. Zhong Yu, born in May 1964, Master degree, senior engineer, Master of Chinese Liquor and Jiangsu 13th NPC member. He was adirector of
technology and environmental protection department inShuanggou Distillery; a vice chief engineer, a president assistant and a director of production
and technology center of Shuanggou Distillery;a vicegeneral manager of Yanghe Branch of the Company;a brewing director, a president assistant, a
vice president of the Company, a general manager of Siyang Branch of the Company. At present, he is a vicechairman of the board, the president, the
vice secretary of the party committee, the general manager of Yanghe Branch of the Company.
Mr.Li Minfu, born in October 1974, Master degree. He was a member of the standing committee of the Sucheng District Committee, a secretary of the
Party working committee of the Sucheng Economic Development Zone, an executive deputy district head, a member of the standing committee of
Siyang County Committee, an executive deputy county chief, etc. At present, he is the director of the Company, the secretary of Party committee and
chairman of Suqian Industrial Development Group Co., Ltd., the chairman of Jiangsu Yanghe Group Co., Ltd., and the chairman of Jiangsu
Shuanggou Group Co., Ltd.
Mr. Wang Kai, born in August 1977, Bachelor degree, Intermediate Economist. He is a brand department manager of marketing center of Shanghai
Tobacco Group Co., Ltd., a general manager assistant of Shanghai Haiyan Logistics Development Co., Ltd.. At present, he is the director of the
Company and the vice general manager of Shanghai Haiyan Logistics Development Co., Ltd..
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Mr. Liu Huashuang, born in December 1970, MBA from Fudan University, accountant. He
was a director of marketing department and a deputy general manager of Jiangsu
Yanghe Distillery, a general manager of Yanghe Blue Classic, a general manager of
Jiangsu Yanghe Distillery, a member of the standing party committee of Company, a
director of strategic studies, a vice executive general manager and a vice secretary of
party committee of Jiangsu Su Wine Industrial Co., Ltd., a secretary of party committee
and a vice chairman of the board of Su Wine Trade Group. At present, he is the director,
the vice executive president and a member of the standing party committee and the
secretary of the party committee and the chairman of Su Wine Trade Group.
Mr. Cong Xuenian, born in January 1966, Master degree, senior economist. He was a
chief accountant and finance director of Yanghe Distillery, a finance minister of Yanghe
Group, a chief accountant, a secretary of the board, a responsible person for accounting
affairs,a director and vice president of the Company. At present, he is the director, and
the chairman of the board of Blue Alliance.
Mr. Zhou Xinhu, born in August 1962, Master degree, senior engineer, a member of the
expert group of Baijiu professional committee of China Food Industry Association, and
chief liquor taster of China, master of Chinese liquor critic and China craftsman of light
industry. He was a technician of Yanghe Group,a director of quality inspection
department and blending and storage department, a vice general manager of Yanghe
Distillery, a vice chief engineer, a chief engineer and a vice president of the Company. At
present, he is the director, the vice president and the chief engineer of the Company.
Mr. Zhao Shuming, born in December 1952, Doctor. He was an officer, deputy chief,
chief and deputy director of foreign affairs office in Nanjing University, an assistant to the
President, associate professor, professor, senior professor, vice dean, dean of the
Business School of Nanjing University. At present, he is the non-executive director of the
Company, senior professor/doctoral advisor in Nanjing University, honorary president of
Business School, at the same time as an vice president of Ministry of Education of MBA
discipline education guiding committee, vice president of Chinese Research Council of
Modern Management and China Society of Human Resource Development, excellent
part-time professor of University of Missouri-St. Louis, USA, visiting professor of Drucker
School of Management, Claremont Graduate University, California, USA, president of
Jiangsu Human Resources Association; non-executive director of Jiangsu Lianfa Textile
Co., Ltd., Jsti Group Co., Ltd. and Nanjing Securities Co., Ltd.
Mr. Nie Yao, born in June 1977, doctoral candidate. He was a visiting scholar of
Advanced Biotechnology and Medicine Center of Rutgers University (State University of
New Jersey), an associate professor of Bioengineering College of Jiangnan University,
and a non-executive director of Jinhui Liquor. At present, he is the non-executive director
of the Company and professor and deputy dean of Bioengineering School of Jiangnan
University.
113
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Mr.Lu Guoping, born in March 1960, Bachelor degree, Professor of accounting, CPA,
Excellent educator in Jiangsu province. He was a lecturer, an associate professor and a
director of teaching and research office in Nanjing Agricultural University. At present, he
is the deputy dean, professor and master tutor of Guofu Zhongshen College in Nanjing
Audit University, an accounting lecturer of CPA exam counseling in Jiangsu province,
course director of advanced financial accounting in national-level MOOCs, course
director of advanced financial accounting in national first-class undergraduate courses,
part-time professor of Network Teacher Training Center of the Ministry of Education, the
non-executive director of Langbo Technology, Huaxin New Materials, Baosheng
Technology and other companies.
Mr.Mao Lingxiao, born in January 1964, Bachelor degree, First-Grade Lawyer (Senior).
He was an officer of Justice Department of Jiangsu Province, a full-time lawyer of
Jiangsu International Economic and Trade Law Firm, a senior partner of Jiangsu Lingxiao
Law Firm, a senior partner of Jiangsu Jinding Law Firm, a senior partner and director of
Jiangsu Tianzhe Law Firm, a full-time lawyer, senior partner, executive director of Beijing
Zhongyin (Nanjing) Law Firm. At present, he is the non-executive director of the
Company and a full-time lawyer, senior partner and chairman of partners' meeting of
Beijing Haotian Xinhe (Nanjing) Law Firm.
3.2 Supervisors
Mr. Chen Taiqing, born in May 1965, Master degree, Senior political engineer, member of
communist party of China. He was a member of the party committee of Yanghe Group,
office director, member of the Company’s party committee, director of human resource
department, director of integrated department, president assistant, vicegeneral manager
of Yanghe Branch of the Company, vice general secretary of the Company’s party
committee and discipline inspection committee of the Company, general secretary and
general manger of Shuanggou Distillery's party committee. At present, he is the chairman
of supervisory committee, vice secretary of the party committee, chairman of the labor
union .
Mr.Xu Youheng, born in March 1977, Master degree. He was a director of organization
department, a director of cadre supervision department, a director of cadre education
department, an officedirector,a vice officedirector of leading group for party construction
of Suqian municipal party committee. At present, he is the supervisor of the Company,
the vice secretary of the party committee and vice general manager of Suqian Industrial
Development Group Co., Ltd.
Ms.Xu Lili, born in March 1979, Bachelor degree. She was a secretary of the communist
youth league of Shanghai Jieqiang Tobacco Sugar & Wine (Group) Co.,Ltd., a marketing
department deputy manager of Shanghai Jieqiang Tobacco Sugar & Wine Group
Distribution Center, a deputy general manager of Shanghai Qinzhou Trade Co., Ltd., a
general manager assistant of Shanghai Jieqiang Tobacco Sugar & Wine Group
Distribution Center, a deputy general manager, executive deputy general manager and
general manager of Shanghai Jieqiang Tobacco Sugar & Wine (Group) Chain Co.,Ltd. At
present, she is the supervisor of the Company, the general manager of Shanghai
114
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Jieqiang Tobacco Sugar & Wine Group Distribution Co., Ltd., and Shanghai Jieqiang
Food Sales Co.,Ltd..
Mr.Chen Fuya, born in November 1965, Bachelor degree. He was a member of the
standing committee of the discipline inspection commission of Suqian, a office director of
Party conduct and government integrity, a departmental-level discipline inspection
supervisor of the discipline inspection commission of Suqian, a deputy secretary of the
Party committee and a secretary of the discipline inspection commission of the Company.
At present, he is the supervisor, deputy secretary of the party committee and secretary of
the discipline inspection commission of the Company.
Mr. Chen Taisong, born in January 1968, Master degree. He was a officer andsecretary
of Siyang Legal Bureau, and an office secretary,deputychief, chief, director assistant,
deputydirector of Siyang government, alcalde and secretary of the party committee of
Chuancheng Town in Siyang country, deputysecretary of the party committee and
secretary of discipline inspection commission and chairman of the supervisory committee
of Su Wine Industrial Co., Ltd., deputysecretary of discipline inspection committee of the
Company. At present, he is the supervisor, a member of standing committee, director of
organization department of the Company;deputysecretary of the party committee and
secretary of discipline inspection committee and chairman of the supervisory committee
of Su Wine Trade Group.
3.3 Senior management
Mr. Zhong Yu, President of the Company, resume as above.
Mr. Liu Huashuang, Executive president of the Company, resume as above.
Mr. Zhou Xinhu, vice president of the Company, resume as above.
Ms. Lin Qing, born in May 1975, Master degree, senior accountant, CPA. She was a
vicedirector of enterprise department of Suqian Finance Bureau, a director assistant of
Suqian Price Bureau, a member and a vice director of the party committee of National
Development and Reform Commission, a member of the standing committee of the
Company, a vice president of the Company. At present, she is thevice president of the
Company and director of the internal audit institution, a member of the standing
committee of the Company, and vice chairman of the board of Su Wine Trade Co.,Ltd.
Mr. Zhen Bujun, born in January 1967, MBA, senior engineer. He was ageneral manager
of Yanghe Group, general manager of Suqian State-owned Investment Co., Ltd.,
vicegeneral manager of Shuanggou Distillery, director and president assistant of logistics
andpurchasing department of the Company. At present, he is a vice president, a member
of the standing committee of the Company, general manager and secretary of the party
committee of Siyang Branch of the Company.
Mr. Fu Hongbing, born in January 1962, Chinese liquor craft master, senior winemaker.
He has won many honors, such as "National May Day Labor Medal", "Jiangsu Province
May Day Labor Medal" and "Advanced Science and Technology Leader" of China Food
115
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Industry Science and Technology Progress. He wasa director of management and quality
department of Jiangsu Yanghe Group Co., Ltd., a vice chief engineer of the Company,
director of the quality department, a general manager assistant of Yanghe Branch, a
director of the quality department, a vice general manager, a president assistant of the
Company, and the chairman of the board of Guizhou Guijiu Group Co., Ltd. At present,
he is the vice president of the Company, the chairman of the board and secretary of the
party committee of Guizhou Guijiu Group Co., Ltd.
Mr.Yin Qiuming, born in July 1972, College degree, auditor. He was an assistant director
of audit, director of audit, deputy secretary of discipline inspection commission of Jiangsu
Yanghe Group Co., Ltd., director of the Company’s management department, deputy
general manager of Jiangsu Yanghe Sales Co., Ltd., deputy general manager of Jiangsu
Yanghe Liquor Co., Ltd., a member of Party committee, director of Finance, supervisor of
the Company and deputy secretary of discipline inspection commission, deputy general
manager, finished product dispatching director, the responsible person for accounting
affairs, CFO, general manager of finance center of Yanghe Branch. At present, he is the
vice president of the Company, a member of the Party committee and the responsible
person for accounting affairs.
Mr. Li Yuling, born in December 1980, Nanjing University MBA, Intermediate economist.
He was a assistant director of supply department, assistant director of finance
department, deputy chief dispatcher of general dispatching office, director of supply
department, assistant general manager of Yanghe branch, director of procurement and
supply logistics, supply chain management director, deputy director of procurement and
supply logistics center and office director. At present, he is the vice president of the
Company, a member of the Party committee, the secretary of the Party committee and
general manager of Shuanggou Distillery.
Ms. Lu Hongzhen, born in October 1978, Bachelor degree, a member of China
Association for the Promotion of Democracy and has obtained the Board Secretary
Qualification Certificate issued by Shenzhen Stock Exchange. On September 2001, she
joined Jiangsu Yanghe Group Co., Ltd., serving successively as office secretary, deputy
director of the comprehensive department, deputy office, deputy director of the securities
department and representative of securities affairs. At present, she is a secretary of the
board and director of the securities department of the Company.
Position in shareholder-holding companies
√ Applicable N/A
Anyremuneration
Positionin
Beginning Ending sreceivedfrom
Name of shareholder shareholder
Name date of office date of shareholder
holding companies holding
term office term holding
companies
companies
Cong Xuenian Jiangsu Blue Alliance Co., Chairman of 31March2021 Yes
Ltd. the board
Wang Kai Shanghai Haiyan Logistics Vicegeneral 1 March 2017 Yes
Development Co.,Ltd. manager
116
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Anyremuneration
Positionin
Beginning Ending sreceivedfrom
Name of shareholder shareholder
Name date of office date of shareholder
holding companies holding
term office term holding
companies
companies
Description of
position in the
Nil
shareholders’
unit
Position in other companies
√ Applicable N/A
Anyremuneratio
Name of other Position in other Ending
Name Beginning date nsreceivedfrom
companies companies date
other companies
Nanjing Shenghe Yes
Non-
Zhao Shuming Pharmaceutical Co., 11 May2015
executivedirector
Ltd.
Non- Yes
Zhao Shuming Jsti GroupCo., Ltd. 24April2015
executivedirector
Nanjing Securities Non- Yes
Zhao Shuming 15November2018
Co., Ltd. executivedirector
Jiangsu Lianfa Non- Yes
Zhao Shuming 13 May 2020
Textile Co., Ltd. executivedirector
Jiangsu Human No
Zhao Shuming Resources President 1 September2016
Association
China Society of
Zhao Shuming Human Resource Vice president 1 September2010 No
Development
Education of MBA
Zhao Shuming discipline education Vice president 1 September2013 No
guiding committee
Chinese Research
Zhao Shuming Council of Modern Vice president 2November2015 No
Management
Changzhou Langbo
Non-
Lu Guoping Sealing Technology 12October2015 Yes
executivedirector
Co., Ltd.
Jiangsu Huaxin New Non-
Lu Guoping 1March2016 Yes
Materials Co., Ltd. executivedirector
Baosheng
Non-
Lu Guoping Technology 9 May 2019 Yes
executivedirector
Innovation Co., Ltd.
Changzhou Academy
Non-
Lu Guoping of Architectural 28 June 2020 Yes
executivedirector
Sciences Co., Ltd.
Shanghai Jieqiang
Tobacco Sugar &
Xu Lili General manager 14 July 2020 Yes
WineGroup
Distribution Co., Ltd.
Shanghai Jieqiang
Xu Lili General manager 14 July 2020 Yes
Food Sales Co., Ltd.
117
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Description of
position in the
Nil
shareholders’
unit
Punishments imposed in the recent three years by the securities regulators on the
incumbent directors, supervisors and senior management as well as those who left in the
reporting period
Applicable √ N/A
4. Remuneration of directors, supervisors and senior
management
Thedecision-making procedures, decision basis and actual remuneration payment of
directors, supervisors and senior management.
Decision-making procedures: Implementation is based on the "Trial Implementation
Measures for the Annual Salary of General Manager (Revision)” approved by the 9th
meeting of the second board of directors on 29 December 2008 and "Trial
Implementation Measures for the Annual Salary of Chairman of the Board (Revision)”
approved by the first extraordinary general meeting of shareholders on 18 January 2009.
Decision basis: Based on the Company's operating conditions and considering the
standard of regional economic, industry and market.
Actual remuneration payment: Based on the performance and payment on time
according to the salary system.
Remuneration of directors, supervisors and senior management during the reporting
period
Unit: CNY0,000
Total before-tax Remuneration
Incumbent/ remuneration from related
Name Position Gender Age
Former from the parties of the
Company Company
Zhang Liandong Chairman of the board Male 53 Incumbent 0 No
Vice Chairman of the
Zhong Yu Male 57 Incumbent 135.15 No
board,President
Li Minfu Director Male 47 Incumbent 0 Yes
Wang Kai Director Male 44 Incumbent 0 Yes
Director,executivePresi
Liu Huashaung Male 51 Incumbent 104.37 No
dent
Cong Xuenian Director Male 55 Incumbent 105.94 No
Director, Vice President,
Zhou xinhu Male 59 Incumbent 105.64 No
Chief Engineering
Zhao Shuming Non-executive Director Male 69 Incumbent 0 No
Nie Yao Non-executive Director Male 44 Incumbent 0 No
Lu Guoping Non-executive Director Male 61 Incumbent 0 No
Mao Lingxiao Non-executive Director Male 57 Incumbent 0 No
Chairman of
Chen Taiqing supervisory committee, Male 56 Incumbent 103.01 No
Chairman of labor union
Xu Youheng Supervisor Male 44 Incumbent 0 Yes
Xu Lili Supervisor Female 42 Incumbent 0 Yes
Chen Fuya Supervisor Male 56 104.57 No
118
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Total before-tax Remuneration
Incumbent/ remuneration from related
Name Position Gender Age
Former from the parties of the
Company Company
Chen Taisong Supervisor Male 53 Incumbent 99.97 No
Lin Qing Vice President Female 46 Incumbent 108.59 No
Zhen Bujun Vice President Male 54 Incumbent 104.77 No
Fu Hongbing Vice President Male 59 Incumbent 105.8 Yes
Vice President,
Yin Qiuming responsible person for Male 49 Incumbent 98.23 No
accounting affairs
Li Yuling VicePresident Male 51 Incumbent 96.89 No
Lu Hongzhen Secretary of the board Female 43 Incumbent 17.36 No
Wang Yao Chairman of the board Male 56 Former 135.09 No
Han Feng Director Male 59 Former 0 Yes
Xu Zhijian Non-executive Director Male 57 Former 6 No
Cai Yunqing Non-executive Director Female 69 Former 6 No
Ji Xueqing Non-executive Director Male 50 Former 6 No
Chen Tongguang Non-executive Director Male 55 Former 6 No
Chairman of
Feng Pantai Male 61 Former 96.91 No
supervisory committee
Zhou Wenqi Supervisor Female 55 Former 0 Yes
Zhu Wei VicePresident Male 44 Former 55.63 No
Total 1,601.92
Share incentives for directors, supervisors and senior executives in the reporting period
Applicable √N/A
5. Staff in the Company
5.1 Number, functions and educational backgrounds of the staff
Number of in-service staff of the Company 7,116
Number of in-service staff of main subsidiaries 8,715
Total number of in-service staff 15,831
Total number of staff with remuneration during this period 15,831
Number of retirees to whom the Company or its main subsidiaries need to pay retirement pension 0
Functions
Function by category Number of staff
Production personnel 6,073
Sales personnel 5,644
R&D personnel 1,854
Financial personnel 226
Administrative personnel 1,821
Inner retired personnel 213
Total 15,831
Educational backgrounds
Educational background by category Number of staff
Master 284
Bachelor 3,843
Junior college 4,380
Senior high school and below 7,324
Total 15,831
5.2 Staff remuneration policy
The remuneration consists of basic payments, performance-related payments and benefit
float award. The Company implemented the mechanism of position self-promotion, and
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prepared the Management Measures for Position Self-promotion. In respect of quantity,
quality, efficiency and economic value of the work, the Company furtherimproveda
quantified and assessable quantitative and qualitative indicators. It encourages
employees to be spontaneous and to improve their work efficiency. It further improves
the Company's management level, and achieves a win-win situation between the
Company and employees
5.3 Staff training plans
In 2020, the training work closely around the Company's annual meeting, in the form of
project scheme,were carry out for senior and middle-level mangers, strategic reserve
talents, Geshibai talents, Yanghe university lecturers, to improve leadership of senior and
middle-level management personnel and strategic reserve talent capacity, ability to
enhance performance and improve performanceincrease, professional knowledge
learning of Geshibai technical personnel,the course development and teaching ability of
the lecturers of Yanghe University.The Company innovatively organized training activities
such as reading activities, teacher-led apprentices, and new employee induction. A total
of 846 training sessions were organized throughout the year, with 62,670 participants,
and 381 action results, among which 37 first-prize projects, 35 second-prize projects and
34 third-prize projects were evaluated for the improvement of all staff.
5.4 Labor outsourcing
Applicable √ N/A
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Section X Corporate Governance
1. Basic situation of corporate governance
The Company constantly optimizes themodern enterprise system and corporate
governance structurewith actual development of the Company, strictly in accordance
withthe Corporate Law, the Securities Law, The Listed Company Governance Standards,
Rules Governing Listing of Stocks on Shenzhen Stock Exchange and Guidelines on
Standard Operation of SME Board Listed Companies on Shenzhen Stock Exchange and
other relevant laws and regulations. During the reporting period, the Company operates
normatively with sound corporate governance. The situation of corporate governance of
the Company meets the requirements of authority files of listed company corporate
governance by CSRC.
1.1. Shareholders and shareholders’ general meeting
The shareholders' meeting of the Company has clear responsibilities, clear rules of
procedure and effective implementation. According to the regulations such as Articles of
IncorporationandCompany Rules of Procedure of The Shareholders’ General Meeting,the
Company convenes and holds the shareholders’ general meeting and discusses
business affairs in the meeting normatively.The Company can treat all shareholders
equally, and especially makes minority shareholders have equal status and fully exercise
their own power. The board carried out all the decisions made by the annual meeting of
shareholders carefully.
1.2. Directors and board of directors
The responsibilities of the board of directors are clear and all the directors can perform
their duties conscientiously and responsibly. The directors are elected carefully under the
regulations of the Corporate Law and Articles of Incorporation. The board of the
Company consists of 11 directors including 4 non-executive directors. The structure of
the board of directors satisfies the requirements of laws and regulations. The board
discusses business affairs according to Corporate Law and Articles of Incorporation. All
the directors are able to attend the meeting and take responsibilities diligently according
to the Discussion Rules of the Board of Directors, The Working System of Non-executive
Directors, and other rules. All the directors seriously consider proposals and make
scientific and reasonable decisions for significant events. They also protect the legal
interests of the Company and all shareholders. Strategy Committee, Nomination
Committee, Audit Committee, Remuneration and Appraisal Committee are four
professional committees set under the board. The Committees have clear division of
work and responsibilities and fully play professional role to offer scientific and
professional suggestions for the decision-making of the board.
1.3. Supervisors and board of supervisors
The duties of the board of supervisors are clear and all the supervisors can perform their
duties conscientiously and responsibly. The supervisors are elected according to the
Corporate Law and the Articles of Incorporation. The board of supervisors of the
Company consists of 5 supervisors, including 2 staff representative supervisors. The
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structure of the board of supervisors satisfies the requirements of laws and regulations.
The board of supervisors discusses business affairs according to corporate law and
articles of incorporation. Supervisors can attend the meeting according to the
requirements of Rules of Discussion Rules of the Board of Supervisors. They takes their
own responsibilities seriously, supervises and makes independent suggestions for the
Company’s significant events, financial conditions and the duties of directors and
president, thereby, protecting legal interests of the Company and shareholders.
1.4. Mechanism of evaluation and motivation
The appointment of directors, supervisor and senior managers is open and transparent,
which satisfies the requirements of relevant regulations and laws. The fair and
transparent evaluation mechanism of the management has been built. During the
reporting period, the management carried out the performance assessment according to
the goal of annual operation plan. The management takes their responsibilities seriously
and fulfills the duties.
1.5. Relationship between controlling shareholders and listed company
According to the requirement of the Company Law, the controlling shareholders take
duties and rights of sponsor. The Company and the controlling shareholders implement
independent accounting of personnel, assets, finance, organizations and business. They
take responsibilities and risks separately.During the reporting period, controlling
shareholders have no priority beyond the rights of shareholders’ general meeting to
directly and indirectly affect the decision-marking and operation of the Company. There is
no situation that controlling shareholders damage the legal interests of other
shareholders. There is no significant related party transaction between the Company and
the controlling shareholders. There is no situation that controlling shareholders occupy
the funds of the listed company and the listed company tenders guarantee for controlling
shareholders and the subsidiaries.
1.6. Investors relationship management
The Company focuses on the management of investors relationship to protect legal rights
of investors. Except for the duties like diligence or honesty, the chairman of the board,
the president, the board secretary has good communications and interactions with
investors through reception of investor investigation and participating in performance
explanation session and broker strategy meeting online. As the professional organization
for investor relationship management, the securities department strengthens the
communication with investors through telephone, email and irm.cninfo.com.cn. It fully
makes sure that investors have right to know and protects their legal interests.
1.7. Stakeholders, environmental protection and social responsibility
The Company fully respects and protects legal interests of stakeholders and fulfills the
duties of social responsibility. The Company strengthens the awareness of social
responsibility and achieves the interest balance among society, government,
shareholders, company, employees,etc. They jointly promote the harmonious and steady
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development of the Company. The Company advocates the governance concept of
"green brewery and ecological enterprise", and integrates ecological and environmental
protection requirements into the Company's development strategy and corporate
governance process. While maintaining the sustainable development, the Company
actively participates in social public welfare and takes social responsibilities.
1.8. Information disclosure and transparency
The information disclosure of the Company is implemented according to the
requirements of supervision departments. The Company seriously implements the rules
including Information Disclosure Management Rule and Investors Relationship
Management Rule. The Company enhances the management of information disclosure
affairs and takes responsibility of information disclosure legally and carefully, achieving
the accuracy, integrity, fairness, timeliness of information disclosure. The information can
be equally obtained by all shareholders.
1.9. Methods of improving internal control system construction
The Company keeps on enhancing the corporate governance and the internal control
system, which improves the management to a higher level. The Audit Committee fully
examines and supervises the financial condition,the efficiency of internal control,the
efficiency and rationality of corporate governance. The audit department of the Company,
as an internal audit unit, carries out regular and continuous examination on perfection
and implement situation of internal control system. It finds the Internal control defects and
improves deficiencies timely, thus the effectiveness of internal control can be guaranteed.
The operation management and anti-risk capacity are enhanced.
Any significant variancesbetween the normative documents issued by the CSRC
supervising the corporate governance of listed companies and the actual state of the
Company’s corporate governance.
Yes√ No
No such cases in the reporting period.
2. Independency of businesses, personnel, assets,
organizations and finance which are separate from the
controlling shareholder
2.1. In the aspect of business
The Company has independent and integrated business structure and the ability to
operate independently in the market. There is no peer competition between controlling
shareholders and the Company. Besides, there is no such kind of situation that
controlling shareholders intervene with operation of the Company directly or indirectly.
2.2 In the aspect of personnel
The Company has built independent personnel management system and salary
management system. Furthermore, the Company signed labor contracts with
employees,chairman of the board, the president, vicepresident, the board secretary and
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the responsible person for the Company’s financial affairs obtain compensation from the
Company rather than the controlling shareholders. The directors, senior managers and
supervisors do not have positions illegally in other companies that have the same or
similar business.
2.3 In the aspect of assets
There are clear property relations between the Company and controlling shareholders.
The Company owns the independent land usage right and ownership of buildings. The
Company independently registers and manages the properties with setting up accounts
and accounting treatment for them. There is no situation that the controlling shareholders
occupy and control the assets of the Company or intervene the operation management of
the assets.
2.4 In the aspect of organization
The Company has well-structured organization system, including the shareholders’
general meeting, the board of directors, supervisory committee, the management and
functional departments. Related internal management and control system is established
for clear division of function and interaction with each other. It forms an organic whole
that ensures the legal operation.There is no affiliation with functional departments of
controlling shareholders.
2.5 In the aspect of finance
Our company has completed and independent organization with professional financial
employees. Independent accounting system and financial management are established.
The Company sets bank accountants, pays taxes and makes financial decisions
separately. There is no situation that controlling shareholders intervene with the financial
management of the Company.
3. Horizontal competition
Applicable √N/A
4. Annual meeting of shareholders and special meetings of
shareholders convened during the reporting period
4.1. Meetings of shareholders convened during the reporting period
Investor
Meeting Type participation Convened date Disclosure date Disclosure index
ratio
2019 Annual General meeting Announcement No. 2020-
general meeting of shareholders 78.61% 22May 2020 23May 2020 021, disclosed on
of shareholders www.cninfo.com.cn
4.2. Special meetings of shareholders convened at the request of
preference shareholders with resumed voting rights
Applicable √ N/A
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5. Performance of non-executive directors during the
reporting period
5.1. Attendance of non-executive directors in board meeting and
meeting of shareholders
Attendance of non-executive directors in board meeting
Presence due Presence Presence by Presence
Non-executive Absence(time Absence for two Presence
in the reporting on telecommunic through a
director s) consecutive times (times)
period(times) site(times) ation(times) proxy(times)
Xu Zhijian 6 4 2 0 0 No 1
Cai Yunqing 6 4 2 0 0 No 1
Ji Xueqing 6 4 2 0 0 No 1
Chen
6 4 2 0 0 No 1
Tongguang
Explanation of absence of non-executive directors in meetings of the board for twice
N/A
5.2. Objections from non-executive directors in related issues of the
company
Whether there are any objections on related issues of the Company from non-executive
directors
Yes √ No
No such cases in the reporting period.
5.3. Other details about the performance of duties by non-executive
directors
Whether there are any suggestions from non-executive directors adopted by the
Company?
√ Yes No
Explanation about suggestions of non-executive directors is adopted by the Company or
not
Company adopted the reasonable suggestionsbynon-executive directors.
6. Performance of duties by special committees under the
broad during the reporting period
1).During the reporting period, the Strategic Committee held 1 meeting. It investigated
2019 the board work report in advance, made the 2020 annual work plan, offered
scientific and reasonable suggestions and fulfilled the duties.
2).During the reporting period, the Nominations Committee held 3 meeting. It examined
the qualification of Candidates nominatedfordirectors and senior management to be
appointed. The committee fulfilled the duties.
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3).During the reporting period, the Audit Committee held 4 meetings. It earnestly urged
the internal audit department to carry out daily audit and special audit, strictly examined
the implementation of internal control system related to financial report and daily
operation, and actively coordinated and supervised the audit and reappointment of
accountants. The committee fulfilled the duties.
4).During the reporting period, the Remuneration and Appraisal Committee held 1
meeting. It examinedand supervised the salary of directors, senior managers and
remuneration performance in 2019.The information disclosure of the Company about the
salary of directors and senior managers is correct and true and as the same as the
examination in 2019.The committee fulfilled the duties.
7. Performance of duties by the supervisory committee
Whether there are any risks to the Company identified by supervisory committee when
performing its duties during the reporting period.
Yes √ No
No such cases in the reporting period.
8. Evaluation and motivation mechanism for the senior management
At the beginning of the establishment of the evaluation and motivation mechanism, it was
explicitly illustrated in Trial Implementation Measures for the Annual Salary of General
Manager (Revision). The evaluation and motivation of senior managers are mainly
reflected in annual salary system. The board of directors evaluates and motivates the
senior managers mainly according to the satisfaction of clients, safety index, quality index
and financial index. The management implements the annual salary system. The basic
part of annual salary is paid monthly on average and the remaining part will be paid at
the end of the year according to the results of evaluation. If it does not reach the
evaluation index, the remaining parts will not be paid. In 2020, based on the above rules,
the Remuneration and Appraisal Committee examined the situation of the management’s
performance in 2019.
9. Internal control
9.1. Significant internal control deficiencies found in the reporting
period
Yes √ No
9.2. Internal control self-assessment report
Disclosure date of the internal
29 April 2021
control self-assessment report
Disclosure index of the internal The internal control self-assessment report disclosed on www.cninfo.com.cn on 29
control self-assessment report April 2021
Ratio of the total assets of the
appraised entitles to the 99.27%
consolidated total assets
Ratio of the operating revenues
100.00%
of the appraised entitles to the
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consolidated operating revenue
Defect identification standard
Type Financial-report related Non-financial-report related
(1) The indicators of significantdeficiencies of
financial report including ：i. Corrupt
transaction of directors,senior managers and
supervisors；ii. The management cannot
If condition below appears, it can be
figure out the significant misstatement during considered as
the operation process of operation, but these significantdeficiencies, others can
misstatements are found by others ；iii. Based be divided into material defect or
on the results of evaluation of internal control, general defect according to impact
the significantdeficienciesare not rectified；iv. extent.：(1) The Company suffer
Audit Committee and Internal Audit Agency from serious mistakes and major
are not effective in supervising the internal property loss due to lake of
control.(2) The indicators democratic decision-making
procedures or unscientific
Qualitative standard ofmaterialdeficiencies including：i. Accounting
procedures；(2) Violate national
policy has not been chosen or used under the
general accepted accounting principles；ii. regulations and laws seriously；(3)
The anti-fraud program and control measures Lake of important management
have not been built；iii. The controlling system system or it doesn’t work；(4)
or compensation system of accounting Significant or materialdeficiencies of
treatment of irregular or special trade has not internal control cannot be regulated
formed；iv. The control of the process of in time；(5)Materialdeficiencies of
financial reporting at the period end exist the internal control appear continuously
situation that one or more deficiencies are or in quantity.
found and the veracity and accuracy cannot be
proved.(3) general control deficiencies refer to
the other control defects except for significant
defects and important defects above.
Significantdeficiencies:Misstatement> 3% of
total operating revenue;Misstatement > 5% of
gross profits;Misstatement > 2% of total
Significantdeficiencies:ratio of loss
assets.
of total assets≥1%.
Materialdeficiencies:1% of total operating
Materialdeficiencies: 0.5%≤ratio of
revenue < Misstatement≤3% of total operating
Quantitative standard loss of total assets＜1%
revenue;3% of gross profits<
Misstatement≤5% of gross profits; 1% of total Generaldeficiencies:ratio of loss of
assets< Misstatement≤2% of total assets. total assets＜0.5%
Generaldeficiencies: Misstatement≤1% of total
operating revenue; Misstatement≤3% of net
profits;Misstatement≤1% of total assets
Number of financial-report
0
significant defects
Number of non-financial-report
0
significant defects
Number of important financial-
0
report related defects
Number of important Non-
0
financial-report related defects
10. Auditor’s report on internal control
N/A
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Section XI Information about Corporate Bond
Whether there exists a public issue and listing of corporate bond that is not yet due or
failed to be redeemed at the date of the financial report authorized.
No
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Section XII Financial Report
I.Auditor’s report
Type of audit report Standard and unqualified opinion
Date of signature 27 April 2021
Name of Audit Suya Jincheng Certified Public Accountants LLP
No. of auditor’s report Suya Audit [2021] No.735
Names of auditors Li Laimin, Li Yan
Auditor’s Report
To the shareholders of Jiangsu Yanghe Distillery Co., Ltd.:
Opinion
We have audited the financial statements of Jiangsu Yanghe Distillery Co., Ltd.
(hereinafter referred to as the “Company”), which comprise the consolidated balance
sheet and balance sheet as at 31 December 2020, consolidated income statement and
income statement, consolidated cash flow statement and cash flow statement,
consolidated statement of changes in owners' equity and statement of changes in
owners' equity for the year then ended and notes to the financial statements.
In our opinion, the attached financial statements are prepared, in all material respects, in
accordance with Accounting Standards for Business Enterprises and present fairly the
financial position of the company as at 31 December 2020 and its operating results and
cash flow for the year then ended.
Basis for opinion
We conducted our audit in accordance with China Standards on Auditing (“CSAs”) for
Certified Public Accountants. Our responsibilities under those standards are further
described in the Auditor's Responsibilities for the Audit of the Financial Statements
section of our report. We are independent of the Company in accordance with the Code
of professional ethics for Certified Public Accountants in China (“the Code”), and we have
fulfilled our other ethical responsibilities in accordance with the Code. We believe that the
audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most
significance in our 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.
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1.Recognition of revenue
Please refer to Significant accounting policies and accounting estimates, and Notes to
the main items of the consolidated financial statements.
How our audit addressed the key audit
Key audit matters
matter
The Company’s specific condition of Our procedures in relation to revenue
revenue recognition is that revenue is recognition included:
recognized after customer acceptance (1)Understood, tested and evaluated the
based on transfer of control. In 2020, the effectiveness of internal control of sales and
Company’s annual operating revenue cash receipts cycle designed and executed by
was CNY21.101 billion. The amount the management.
substantial and operating revenue is an (2)Through sampling inspection of the sales
important component of income contract, identified the contractual rights and
statement. Therefore, we identified obligations, evaluated the point of time of
operating revenue as a key audit matter. performance obligations and evaluated
whether the judgment of the transfer of control
related to revenue recognition conforms to the
Company's accounting policies and Accounting
Standards for Business Enterprises.
(3)Judged whether there is an abnormal
fluctuation of revenue in the reporting period
with the analytic review of revenue and gross
profit margin in combination with product
category.
(4)Sampling inspection of supporting
documents related to revenue recognition
including sales contracts or orders, invoices,
delivery lists or receiving reports, shipping lists
and bank slips.
(5)Implemented the external confirmation of
selected major franchisers and inspected the
payback of account receivables after the
reporting period in combination with audit of
accounts receivable and contract liabilities.
(6)Sampling inspection of calculation and
accounting treatment of sales discount and
sales allowance
(7)Chose samples from sales revenue records
before and after the balance sheet date,
inspected related supporting documents and
evaluated whether the revenue recorded in the
appropriate accounting period.
2. Existence, valuation and allocation of inventories
Please refer to Significant accounting policies and accounting estimates and Notes to the
Main Items of the Consolidated Financial Statements.
How our audit addressed the key audit
Key audit matters
matter
As at 31 December 2020, the book value Our procedures in relation to existence,
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
of inventory is CNY 14.853 billion, valuation, allocation of inventories included:
accounting for 27.57% of the total assets (1)Understood and evaluated the effectiveness
and 39.89% of all current assets. The of management's design and implementation
book value of the inventories at year end of inventory-related internal control.
is relatively large and accounts for a (2)Carried out the inventory analysis review
relatively large proportion of the total procedure.
assets at year end. Therefore, the (3)Implement stock-taking procedures at the
existence, valuation and apportionment end of the period.
of inventories are identified as a key audit (4)Sample check of production cost calculation
matter. table and other cost accounting data, and
conducted valuation test on inventory, and
evaluated the accuracy of closing balance of
inventory.
(5)Obtained the calculation table of provision
for stock obsolescence, conduct the inventory
impairment test, reviewed the inventory
impairment test process, and checked whether
the provision for stock obsolescence is made
sufficiently.
Other information
The directors of the Company are responsible for the other information. The other
information comprises the information included in the annual report, but does not include
the financial statements and our auditor’s report thereon.
Our opinion on the financial statements does not cover the other information and we do
not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the
other information and, in doing so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge obtained in the audit or
otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material
misstatement of this other information; we are required to report that fact. We have
nothing to report in this regard.
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.
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Those charged with governance are responsible for overseeing the Company’s financial
reporting process.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to fraud or error,
and to issue an auditor’s report that includes our opinion. Reasonable assurance is a
high level of assurance, but is not a guarantee that an audit conducted in accordance
with CSAs will always detect a material misstatement when it exists. Misstatements can
arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements.
As part of an audit in accordance with CSAs, we exercise professional judgment and
maintain professional skepticism throughout the audit. We also:
(1)Identify and assess the risks of material misstatement of the financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those
risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for
our opinion. The risk of not detecting a material misstatement resulting from fraud is
higher than for one resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal control.
(2)Obtain an understanding of internal control relevant to the audit in order to design
audit procedures that are appropriate in the circumstances.
(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,
including the disclosures, 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
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relationships and other matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.
From the matters communicated with the governance, we determine those matters that
were of most significance in the audit of the consolidated financial statements of the
current period and are therefore the key audit matters. We describe these matters in our
auditor’s report unless law or regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
Suya Jincheng Certified Public Accountants LLP
Nanjing, China
Li Laimin
Certified Public Accountant of China
Li Yan,
Certified Public Accountant of China
27 April 2021
II.Financial statements
The unit of statement in financial notes is: CNY
Prepared by: Jiangsu Yanghe Distillery Co., Ltd.
Consolidated balance sheet
As at 31 December 2020
Unit: CNY
Item Balance as at 31 December, Balance as at 31 December,
2020 2019
Current assets:
Cash and cash equivalents 7,243,186,362.29 4,300,144,848.67
Settlement reserves
Lending funds
Financial assets held for trading 14,301,978,905.17 17,976,767,209.45
Derivative financial assets
Notes receivables 613,496,333.71 659,266,780.81
Accounts receivables 4,225,230.90 16,080,618.65
Account receivables financing
Prepayment 9,358,846.48 200,115,325.19
Premiums receivable
Reinsurance accounts receivable
Reinsurance contract reserve
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Other receivables 30,318,938.67 37,521,590.52
Including:Interests receivable
Dividends receivable
Buying back the sale of financial
assets
Inventories 14,852,694,146.30 14,433,244,696.27
Contract assets
Assets held for sale
Non-current assets due within one
year
Other current assets 182,837,070.99 183,119,654.47
Total current assets 37,238,095,834.51 37,806,260,724.03
Non-current assets:
Disbursement of loans and
advances
Investment in debt instruments
Investment in other debt
instruments
Long-term receivables
Long-term equity investments 29,528,377.16 25,361,651.38
Investment in other equity
instruments
Other non-current financial assets 6,366,958,225.81 5,050,851,671.16
Investment property
Fixed assets 6,882,953,634.34 7,256,557,503.85
Construction in progress 223,468,482.24 263,153,505.12
Productive biological assets
Oil and gas assets
Right-of-use asset
Intangible assets 1,713,526,693.10 1,747,134,144.14
Development expenses
Goodwill 276,001,989.95 276,001,989.95
Long-term deferred expenses 127,071.76 254,143.60
Deferred tax assets 925,921,403.51 825,064,057.57
Other non-current assets 209,677,594.21 204,398,450.18
Total non-current assets 16,628,163,472.08 15,648,777,116.95
Total assets 53,866,259,306.59 53,455,037,840.98
Current liabilities:
Short-term loans
Borrowings from the central bank
Loans from other banks
Financial liabilities held for trading
Derivative financial liabilities
Notes payable
Accounts payables 1,151,871,136.29 1,330,649,116.82
Advance from customer 6,753,595,187.64
Contract liabilities 8,801,346,891.32
Financial assets sold for repurchase
Customer brokerage deposits
Securities underwriting brokerage
deposits
Receivings from vicariously sold
securities
Employee benefits payable 196,241,487.31 116,094,163.25
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Taxes payable 2,152,806,156.43 1,815,288,006.47
Other payables 1,556,699,290.45 6,521,146,762.07
Including:Interests payable
Dividends payable
Handling charges and commissions
payable
Reinsurance accounts payables
Liabilities held for sale
Non-current liabilities due within one
year
Other current liabilities 798,216,651.49
Total current liabilities 14,657,181,613.29 16,536,773,236.25
Non-current liabilities:
Insurance contract reserves
Long-term loans 36,360.00 72,723.00
Bonds payable
Including: Preference shares
Perpetual bonds
Lease liabilities
Long-term payables 197,049,341.93 197,623,728.85
Long-term payroll payables
Accrued liabilities
Deferred income 85,999,500.00 89,756,500.00
Deferred tax liabilities 456,339,414.38 139,259,083.16
Other non-current liabilities
Total non-current liabilities 739,424,616.31 426,712,035.01
Total liabilities 15,396,606,229.60 16,963,485,271.26
Shareholders' equity
Share capital 1,506,988,000.00 1,506,988,000.00
Other equity instruments
Including: preference shares
Perpetual bonds
Capital reserves 741,532,550.13 741,532,550.13
Less: treasury stock 1,002,128,680.79
Other comprehensive income -5,213,248.93 -3,608,771.16
Special reserves
Surplus reserves 753,494,000.00 753,494,000.00
General risk reserve
Undistributed profits 36,489,911,363.13 33,510,429,712.50
Total equity attributable to
38,484,583,983.54 36,508,835,491.47
owners of the parent company
Non-controlling interests -14,930,906.55 -17,282,921.75
Total owners' equity 38,469,653,076.99 36,491,552,569.72
Total liabilities and owners'
53,866,259,306.59 53,455,037,840.98
equity
Legal representative: Zhang Liandong
Person in charge of accounting affairs: Yin Qiuming
Person in charge of accounting department: Zhao Qike
Balance sheet of parent company
As at 31 December 2020
Unit: CNY
Item Balance as at 31 December Balance as at 31 December
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
2020 2019
Current assets:
Cash and cash equivalents 5,713,353,085.92 3,741,676,596.22
Financial assets held for trading 2,096,497,598.93 6,991,814,305.98
Derivative financial assets
Notes receivables 74,100,000.00 493,500.00
Accounts receivables 387,657,700.12 900,252,229.11
Account receivables financing
Prepayment 84,206,238.58 110,564,280.51
Other receivables 10,403,769,305.69 8,154,899,373.55
Including:Interests receivable
Dividends receivable 1,775,818,203.33
Inventories 10,343,443,087.16 10,476,945,420.09
Contract assets
Assets held for sale
Non-current assets due within one
year
Other current assets 303,163.88
Total current assets 29,103,027,016.40 30,376,948,869.34
Non-current assets:
Investment in debt instruments
Investment in other debt
instruments
Long-term receivables
Long-term equity investments 7,964,291,378.23 7,964,291,378.23
Investment in other equity
instruments
Other non-current financial assets 2,480,599,923.11 1,467,783,926.91
Investment property
Fixed assets 4,416,370,356.00 4,641,909,489.16
Construction in progress 58,004,537.10 183,652,813.42
Productive biological assets
Oil and gas assets
Right-of-use asset
Intangible assets 1,208,261,829.54 1,230,216,202.93
Development expenses
Goodwill
Long-term deferred expenses
Deferred tax assets 8,032,095.76 6,181,509.39
Other non-current assets 173,867,010.21 170,318,838.68
Total Non-current Assets 16,309,427,129.95 15,664,354,158.72
Total Assets 45,412,454,146.35 46,041,303,028.06
Current liabilities:
Short-term loans
Financial liabilities held for trading
Derivative financial liabilities
Notes payable
Accounts payables 839,199,956.37 1,066,947,279.95
Advance from customer 16,238,064,053.40
Contract liabilities 10,764,681,770.37
Employee benefits payable
Taxes payable 809,734,252.60 202,771,495.61
Other payables 186,265,132.79 180,236,563.85
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Including:Interests payable
Dividends payable
Liabilities held for sale
Non-current liabilities due within one
year
Other current liabilities 1,396,504,456.42
Total current liabilities 13,996,385,568.55 17,688,019,392.81
Non-current liabilities:
Long-term loans 36,360.00 72,723.00
Bonds payable
Including：preference shares
Perpetual bonds
Lease liabilities
Long-term payables 144,254,229.73 144,680,616.65
Long-term payroll payables
Provisions
Deferred income 5,000,000.00
Deferred tax liabilities 387,147,470.28 49,541,198.05
Other non-current liabilities
Total non-current liabilities 536,438,060.01 194,294,537.70
Total liabilities 14,532,823,628.56 17,882,313,930.51
Owners' equity (or shareholders'
equity)
Share capital 1,506,988,000.00 1,506,988,000.00
Other equity instruments
Including: preference shares
Perpetual bonds
Capital reserves 1,341,628,480.93 1,341,628,480.93
Less: treasury stock 1,002,128,680.79
Other comprehensive income
Special reserves
Surplus reserves 753,494,000.00 753,494,000.00
Undistributed profits 28,279,648,717.65 24,556,878,616.62
Total owners' equity 30,879,630,517.79 28,158,989,097.55
Total liabilities and owners'
45,412,454,146.35 46,041,303,028.06
equity
Consolidated Income Statement
For the year ended 31 December 2020
Unit: CNY
Item Year 2020 Year 2019
1. Total operating revenue 21,101,051,131.79 23,126,476,885.07
Including:Operating revenue 21,101,051,131.79 23,126,476,885.07
Interest income
Earned premium
Fee and commission income
2. Total operating costs 13,773,294,252.09 14,457,584,017.39
Including: cost of sales 5,851,904,596.71 6,626,362,251.24
Interest expense
Handling charges and commission
expenses
Refunded premiums
Net payments for insurance claims
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Net provision for insurance contracts
Bond insurance expense
Reinsurance expenses
Taxes and surcharges 3,415,645,769.03 3,201,479,826.09
Selling and distribution expenses 2,603,804,157.78 2,691,711,170.59
General and administrative expenses 1,729,080,201.93 1,856,491,727.00
Research and Development
260,094,291.03 159,965,593.88
expenses
Financial expenses -87,234,764.39 -78,426,551.41
Including:Interest expenses 1,964.00 2,618.00
Interest income 104,495,154.37 77,589,503.94
Plus: Other income 98,969,626.89 84,977,755.15
Investment income ("-" for losses) 1,206,683,362.49 850,554,207.62
Including: income from investment in
3,940,820.47 -4,447,288.34
associates and joint ventures
Disposal of financial instruments at
amortised cost ("-" for losses)
Foreign exchange gains ("-" for
losses)
Net exposure to hedging gains("-"for
loss)
Gains from the changes in fair values
1,267,682,598.52 158,679,505.33
(“-“ for losses)
Losses from credit impairment ("-" for
246,482.45 -18,956,346.26
losses)
Losses from asset impairment ("-" for
-6,196,876.85 -2,248,496.85
losses)
Gains from disposal of assets ("-" for
45,438.89 19,983,101.67
losses)
3. Operating profits ("-" for losses) 9,895,187,512.09 9,761,882,594.34
Plus: non-operating income 25,039,870.29 22,245,954.37
Less: non-operating expenses 41,325,490.38 13,324,291.70
4. Total profits before tax ("-" for
9,878,901,892.00 9,770,804,257.01
total losses)
Less: income tax expenses 2,394,295,578.08 2,384,713,341.80
5. Net profit ("-" for net loss) 7,484,606,313.92 7,386,090,915.21
Classification by operating continuity
Net profit from continuing operation
7,484,606,313.92 7,386,090,915.21
("-" for losses)
Net profit from discontinued operation
("-" for losses)
Classification by owners
Attributable to owners of the parent
7,482,228,633.63 7,382,822,726.87
company
Attributable to non-controlling
2,377,680.29 3,268,188.34
interests
6.Net of tax from other
-1,630,142.86 -2,228,748.45
comprehensive income
Net of tax from other comprehensive
income to the owner of the parent -1,604,477.77 -2,238,030.31
company
Other comprehensive income cannot
reclassified into the profit and loss:
Including: Changes in remeasured
defined benefit obligations
Share in other comprehensive
138
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
income that cannot be classified into
profit and loss under equity method
Changes in the fair value of other
equity instruments
Fair value changes in enterprise's
own credit risk
Others
Other comprehensive income that will
-1,604,477.77 -2,238,030.31
be reclassified into the profit and loss
Including: Share in other
comprehensive income that will be
-342,416.50 178,619.29
classified into profit and loss under
equity method
Net gain on debt instruments at fair
value through other comprehensive
income
Profit and loss of fair value changes
of financial assets available for sale
The amount of financial assets
reclassified into other comprehensive
income
Hold-to-maturity investments are
reclassified as gains and losses on
financial assets available for sal
Other debt investment credit
impairment provision
Cash flow hedging reserve
Balance arising from the translation of
-1,262,061.27 -2,416,649.60
foreign currency financial statements
Others
Net of tax from other comprehensive
-25,665.09 9,281.86
income to non-controlling interests
7. Total comprehensive income 7,482,976,171.06 7,383,862,166.76
Total comprehensive income
attributable to owners of the parent 7,480,624,155.86 7,380,584,696.56
company
Total comprehensive income
attributable to non-controlling 2,352,015.20 3,277,470.20
interests
8. Earnings per share
(1) Basic earnings per share 4.9843 4.8991
(2) Diluted earnings per share 4.9843 4.8991
Where an enterprise is merged under the same control in the current period, the net profit
realized by the merged party before the merger is: CNY 0.00, and the net profit realized
by the merged party in the previous period is: CNY 0.00.
Legal representative: Zhang Liandong
Person in charge of accounting affairs: Yin Qiuming
Person in charge of accounting department: Zhao Qike
Income statement of parent company
For the year ended 31 December 2020
Unit: CNY
Item Year 2020 Year 2019
1. Operating revenue 9,815,174,332.42 9,617,136,329.14
Less:Cost of sales 4,803,282,641.30 5,300,856,882.21
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Taxes and surcharges 2,935,628,072.08 2,584,040,346.46
Selling and distribution expenses 3,062,752.15 6,153,145.12
General and administrative
886,635,671.06 981,489,516.86
expenses
Research and Development
244,483,533.34 157,807,557.00
expenses
Financial expenses -61,151,383.38 -56,610,787.22
Including: Interest expenses 1,964.00 2,618.00
Interest income 75,649,553.46 58,715,233.69
Plus: Other income 16,130,425.67 15,964,590.12
Investment income ("-" for losses) 6,468,741,332.69 6,858,473,174.64
Including: income from investment
in associates and joint ventures
Disposal of financial instruments at
amortised cost ("-" for losses)
Net exposure to hedging gains ("-
"for loss)
Gains from the changes in fair
1,350,425,088.90 -106,912,987.67
values (“-“ for losses)
Losses from credit impairment ("-"
1,891,472.97 -3,495,447.82
for losses)
Losses from asset impairment ("-"
-6,196,876.85 -2,248,496.85
for losses)
Gains from disposal of assets ("-"
9,155,544.78
for losses)
2. Operating profits ("-" For
8,834,224,489.25 7,414,336,045.91
Losses)
Plus: non-operating income 10,689,415.40 3,926,021.74
Less: non-operating expenses 32,071,726.22 4,260,647.57
3. Total profits before tax ("-" For
8,812,842,178.43 7,414,001,420.08
Total Losses)
Less: income tax expenses 587,325,094.40 207,035,832.38
4. Net profit ("-" For Net Loss) 8,225,517,084.03 7,206,965,587.70
Net profit from continuing operation
8,225,517,084.03 7,206,965,587.70
("-" for losses)
Net profit from discontinued
operation ("-" for losses)
5.Net of tax from other
comprehensive income
Other comprehensive income
cannot reclassified into the profit
and loss:
Including: Changes in remeasured
defined benefit obligations
Other comprehensive income that
cannot be transferred under the
equity method
Net gain on equity instrument at fair
value through other comprehensive
income
Fair value changes in enterprise's
own credit risk
Others
Other comprehensive income that
will be reclassified into the profit and
loss
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Including: Share in other
comprehensive income that will be
classified into profit and loss under
equity method
Net gain on debt instruments at fair
value through other comprehensive
income
Profit and loss of fair value changes
of financial assets available for sale
The amount of financial assets
reclassified into other
comprehensive income
Hold-to-maturity investments are
reclassified as gains and losses on
financial assets available for sale
Other debt investment credit
impairment provision
Cash flow hedging reserve
Balance arising from the translation
of foreign currency financial
statements
others
6. Total comprehensive income 8,225,517,084.03 7,206,965,587.70
7. Earnings per share
(1)Basic earnings per share
(2)Diluted earnings per share
Consolidated Statement of Cash Flows
For the year ended 31 December 2020
Unit: CNY
Item Year 2020 Year 2019
1. Cash flows from operating
activities
Cash received from sale of goods
21,527,429,733.96 28,157,803,517.41
and rendering of services
Net increase in customer bank
deposits and placement from banks
and other financial institutions
Net increase in loans from central
bank
Net increase in loans from other
financial institutions
Premiums received from original
insurance contracts
Net cash received from reinsurance
business
Net increase in deposits and
investments from policyholders
Cash received from interest,
handling charges and commissions
Net increase in placements from
other financial institutions
Net capital increase in repurchase
business
Net cash received for the sale of
141
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
securities
Refunds of taxes and surcharges 3,754,079.47
Cash received from other operating
369,789,635.60 260,350,164.67
activities
Sub-total of cash inflows from
21,900,973,449.03 28,418,153,682.08
operating activities
Cash paid for goods purchased and
6,286,561,510.66 6,764,469,880.73
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
A net increase in divested funds
Cash paid for interests, handling
charges and commissions
Cash paid for policy dividends
Cash paid to and on behalf of
2,154,721,871.26 2,248,376,328.48
employees
Cash paid for taxes and surcharges 7,194,164,716.07 9,642,918,810.91
Cash paid for other operating
2,286,734,515.24 2,964,496,790.55
activities
Sub-total of cash outflows from
17,922,182,613.23 21,620,261,810.67
operating activities
Net cash flows from operating
3,978,790,835.80 6,797,891,871.41
activities
2. Cash flows from investing
activities
Cash received from disposal of
29,694,068,687.78 39,845,997,675.65
investments
Cash received from returns on
1,202,721,025.76 828,033,083.69
investments
Net cash received from disposal of
fixed assets, intangible assets and 210,268.97 24,075,082.94
other long-term assets
Net cash received from disposal of
subsidiaries and other business
units
Cash received from other investing
activities
Sub-total of cash inflows from
30,896,999,982.51 40,698,105,842.28
investing activities
Cash paid to acquire and construct
fixed assets, intangible assets and 353,104,399.72 317,159,366.30
other long-term assets
Cash paid for investments 26,071,060,798.23 41,674,161,609.88
Net increase in pledge loans
Net cash paid to acquire
subsidiaries and other business
units
Cash paid for other investing
activities
Sub-total of cash outflows from
26,424,165,197.95 41,991,320,976.18
investing activities
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Net cash flows from investing
4,472,834,784.56 -1,293,215,133.90
activities
3. Cash flows from financing
activities
Cash received from investors
Including: cash received by
subsidiaries from investments by
minority shareholders
Cash received from borrowings
Cash received from other financing
activities
Sub-total of cash inflows from
financing activities
Cash paid for debt repayments 36,363.00 36,365.00
Cash paid for distribution of
dividends and profits or payment of 4,502,748,947.00 4,822,364,218.00
interest
Including: dividends and profits paid
to minority shareholders by
subsidiaries
Cash paid for other financing
1,002,128,680.79 750,000.00
activities
Sub-total of cash outflows from
5,504,913,990.79 4,823,150,583.00
financing activities
Net cash flows from financing
-5,504,913,990.79 -4,823,150,583.00
activities
4. Effect of fluctuation in
exchange rate on cash and cash -3,670,115.95 3,270,386.19
equivalents
5. Net increase in cash and cash
2,943,041,513.62 684,796,540.70
equivalents
Plus: balance of cash and cash
equivalents at the beginning of the 4,300,144,848.67 3,615,348,307.97
period
6. Balance of cash and cash
equivalents at the end of the 7,243,186,362.29 4,300,144,848.67
period
Cash flow statements of parent company
For the year ended 31 December 2020
Unit: CNY
Item Year 2020 Year 2019
1. Cash flows from operating
activities
Cash received from sale of goods
7,298,161,290.23 12,584,198,907.24
and rendering of services
Refunds of taxes and surcharges 3,748,884.67
Cash received from other operating
115,821,893.81 132,079,899.80
activities
Sub-total of cash inflows from
7,417,732,068.71 12,716,278,807.04
operating activities
Cash paid for goods purchased and
4,754,965,644.22 4,836,044,878.55
services received
Cash paid to and on behalf of
976,080,459.90 1,068,195,037.31
employees
Cash paid for taxes and surcharges 3,310,811,322.45 4,436,521,595.18
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Cash paid for other operating
658,812,311.64 7,532,523,407.67
activities
Sub-total of cash outflows from
9,700,669,738.21 17,873,284,918.71
operating activities
Net cash flows from operating
-2,282,937,669.50 -5,157,006,111.67
activities
2. Cash flows from investing
activities
Cash received from disposal of
14,332,925,799.75 22,661,938,083.48
investments
Cash received from returns on
4,692,923,129.36 6,816,504,503.68
investments
Net cash received from disposal of
fixed assets, intangible assets and 53,146.71 11,230,158.55
other long-term assets
Net cash received from disposal of
subsidiaries and other business
units
Cash received from other investing
activities
Sub-total of cash inflows from
19,025,902,075.82 29,489,672,745.71
investing activities
Cash paid to acquire and construct
fixed assets, intangible assets and 165,081,329.81 218,187,673.01
other long-term assets
Cash paid for investments 9,100,000,000.00 17,400,106,712.99
Net cash paid to acquire
subsidiaries and other business
units
Cash paid for other investing
activities
Sub-total of cash outflows from
9,265,081,329.81 17,618,294,386.00
investing activities
Net cash flows from investing
9,760,820,746.01 11,871,378,359.71
activities
3. Cash flows from financing
activities
Cash received from investors
Cash received from loans
Cash received from other financing
activities
Sub-total of cash inflows from
financing activities
Cash paid for debt repayments 36,363.00 36,365.00
Cash paid for distribution of
dividends and profits or payment of 4,502,748,947.00 4,822,364,218.00
interest
Cash paid for other financing
1,002,128,680.79
activities
Sub-total of cash outflows from
5,504,913,990.79 4,822,400,583.00
financing activities
Net cash flows from financing
-5,504,913,990.79 -4,822,400,583.00
activities
4. Effect of fluctuation in
exchange rate on cash and cash -1,292,596.02 130,761.11
equivalents
5. Net increase in cash and cash 1,971,676,489.70 1,892,102,426.15
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
equivalents
Plus: balance of cash and cash
equivalents at the beginning of the 3,741,676,596.22 1,849,574,170.07
period
6. Balance of cash and cash
equivalents at the end of the 5,713,353,085.92 3,741,676,596.22
period
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Consolidated statement of changes in shareholders' equity
For the year ended 31 December 2020
Unit: CNY
Year 2020
Equity attributable to owners of the parent company Non- Total
Other equity controlli sharehol
Other
Item instruments Less： Genera ng ders'
Capital Comprehen Special Surplus Undistribut
Share capital Perpe l risk Others Subtotal interest equity
Preferre Other reserve Treasur sive reserve reserve ed profit
tual y stock reserve s
d stock s Income
bond
1. Balance as
- - 36,491,5
at 31 1,506,988,000. 741,532,5 753,494, 33,510,429, 36,508,835
3,608,771.1 17,282,9 52,569.7
December of 00 50.13 000.00 712.50 ,491.47
6 21.75 2
last year
Plus:
adjustments
for changes in
accounting
policies
Adjustments
for correction
of accounting
errors in prior
year
Business
combinations
under
common
control
Others
2. Balance as - - 36,491,5
1,506,988,000. 741,532,5 753,494, 33,510,429, 36,508,835
at January 1 3,608,771.1 17,282,9 52,569.7
00 50.13 000.00 712.50 ,491.47
of the current 6 21.75 2
146
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
year
3.Increases/d
ecreases in 1,002,1 -
2,979,481,6 1,975,748, 2,352,01 1,978,10
the current 28,680. 1,604,477.7
50.63 492.07 5.20 0,507.27
year (“-” for 79 7
decreases)
(1) Total -
7,482,228,6 7,480,624, 2,352,01 7,482,97
comprehensiv 1,604,477.7
33.63 155.86 5.20 6,171.06
e income 7
(2) Capital
1,002,1 - -
contributed or
28,680. 1,002,128, 1,002,12
reduced by
79 680.79 8,680.79
owners
Capital
contributions
by owners
Capital
contributions
by other equity
instruments
holders
Amounts of
share-based
payments
recognized in
owners' equity
1,002,1 - -
Others 28,680. 1,002,128, 1,002,12
79 680.79 8,680.79
- - -
(3) Profit
4,502,746,9 4,502,746, 4,502,74
distribution
83.00 983.00 6,983.00
Withdrawal of
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
surplus
reserves
Withdrawal of
general risk
reserve
Profit - - -
distributed to 4,502,746,9 4,502,746, 4,502,74
owners (or 83.00 983.00 6,983.00
shareholders)
Others
(4) Internal
carry-forward
of owners'
equity
Conversion of
capital
reserves into
paid-in capital
Conversion of
surplus
reserves into
paid-in capital
Surplus
reserves
offsetting
losses
Amount of
Changes in
setting benefit
plan transfer
to retained
earnings
Other
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
comprehensiv
e income
transferred to
retained
earnings
Others
(5) Special
reserves
Withdrawal for
the period
Use for the
period
Others
4. Balance as
1,002,1 - - 38,469,6
at 31 1,506,988,000. 741,532,5 753,494, 36,489,911, 38,484,583
28,680. 5,213,248.9 14,930,9 53,076.9
December of 00 50.13 000.00 363.13 ,983.54
the current 79 3 06.55 9
year
Year 2019
Equity attributable to owners of the parent company
Non-
Other equity Total
controlli
Item instruments Less： Other Genera sharehol
Capital Special Surplus Undistribut ng
Share capital Perpe Treasur Comprehen reserve reserve l risk Others Subtotal ders'
Preferre Other reserve ed profit interest
tual y stock sive Income reserve equity
d stock s s
bond
1. Balance as - - 33,624,5
1,506,988,000. 741,704,0 753,494, 30,784,308, 33,644,530
at 31 141,964,710 20,011,7 18,530.3
00 76.44 000.00 899.94 ,266.23
December of .15 35.87 6
last year
Plus: 140,593,969 165,659,685 306,253,65 29,817.6 306,283,
adjustments .30 .69 4.99 2 472.61
for changes in
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
accounting
policies
Adjustments
for correction
of accounting
errors in prior
year
Business
combinations
under
common
control
Others
2. Balance as
- - 33,930,8
at January 1 1,506,988,000. 741,704,0 753,494, 30,949,968, 33,950,783
1,370,740.8 19,981,9 02,002.9
of the 00 76.44 000.00 585.63 ,921.22
5 18.25 7
current year
3.Increases/d
ecreases in - -
2,560,461,1 2,558,051, 2,698,99 2,560,75
the current 171,526.3 2,238,030.3
26.87 570.25 6.50 0,566.75
year (“-” for 1 1
decreases)
(1) Total -
7,382,822,7 7,380,584, 3,277,47 7,383,86
comprehensiv 2,238,030.3
26.87 696.56 0.20 2,166.76
e income 1
(2) Capital
- - -
contributed or -
171,526.3 578,473. 750,000.
reduced by 171,526.31
1 70 01
owners
Capital
contributions
by owners
Capital
contributions
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
by other
equity
instruments
holders
Amounts of
share-based
payments
recognized in
owners' equity
- - -
-
Others 171,526.3 578,473. 750,000.
171,526.31
1 70 01
- - -
(3) Profit
4,822,361,6 4,822,361, 4,822,36
distribution
00.00 600.00 1,600.00
Withdrawal of
surplus
reserves
Withdrawal of
general risk
reserve
Profit - - -
distributed to 4,822,361,6 4,822,361, 4,822,36
owners (or 00.00 600.00 1,600.00
shareholders)
Others
(4) Internal
carry-forward
of owners'
equity
Conversion of
capital
reserves into
paid-in capital
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Conversion of
surplus
reserves into
paid-in capital
Surplus
reserves
offsetting
losses
Carry-forward
of retained
earnings from
changes in
defined
benefit plans
Other
comprehensiv
e income
transferred to
retained
earnings
Others
(5) Special
reserves
Withdrawal for
the period
Use for the
period
(6) Others
4. Balance as
at 31 - - 36,491,5
1,506,988,000. 741,532,5 753,494, 33,510,429, 36,508,835
December of 3,608,771.1 17,282,9 52,569.7
00 50.13 000.00 712.50 ,491.47
the current 6 21.75 2
year
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Statement of changes in shareholders' equity of parent company
For the year ended 31 December 2020
Unit: CNY
Year 2020
Other equity instruments Other
Less： Special Total
Item Share Capital Comprehen Surplus Undistributed Other
Preferred Perpetual Treasury reserv shareholder
capital Others reserve sive reserve profit s
stock bond stock e s' equity
Income
1. Balance as at 31 1,506,988,0 1,341,628,48 753,494,000 24,556,878,61 28,158,989,0
December of last year 00.00 0.93 .00 6.62 97.55
Plus: adjustments for
changes in accounting
policies
adjustments for correction
of accounting errors in
prior year
Others
2. Balance as at January 1,506,988,0 1,341,628,48 753,494,000 24,556,878,61 28,158,989,0
1 of the current year 00.00 0.93 .00 6.62 97.55
3.Increases/decreases
1,002,128, 3,722,770,101. 2,720,641,42
in the current year (“-”
680.79 03 0.24
for decreases)
(1) Total comprehensive 8,225,517,084. 8,225,517,08
income 03 4.03
-
(2) Capital contributed or 1,002,128,
1,002,128,68
reduced by owners 680.79
0.79
Capital contributions by
owners (common stock)
Capital contributions by
other equity instruments
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
holders
Amounts of share-based
payments recognized in
owners' equity
-
1,002,128,
Others 1,002,128,68
680.79
0.79
- -
(3)Profit distribution 4,502,746,983. 4,502,746,98
00 3.00
Withdrawal of surplus
reserves
- -
Profit distributed to
4,502,746,983. 4,502,746,98
owners (or shareholders)
00 3.00
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
Amount of Changes in
setting benefit plan
transfer to retained
earnings
Other comprehensive
income transferred to
retained earnings
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Others
(5) Special reserves
Withdrawal for the period
Use for the period
(6) Others
4. Balance as at 31
1,506,988,0 1,341,628,48 1,002,128, 753,494,000 28,279,648,71 30,879,630,5
December of the current
00.00 0.93 680.79 .00 7.65 17.79
year
Statement of Changes in Shareholders' Equity
For the year ended 31 December 2020
Unit: CNY
Year 2019
Other equity instruments Other
Less： Special Total
Item Share Capital Comprehen Surplus Undistributed Other
Preferred Perpetual Treasury reserv shareholder
capital Others reserve sive reserve profit s
stock bond stock e s' equity
Income
1. Balance as at 31 1,506,988,0 1,341,628,48 753,494,000 21,942,516,69 25,544,627,1
December of last year 00.00 0.93 .00 5.42 76.35
Plus: adjustments for
229,757,933.5 229,757,933.
changes in accounting
0 50
policies
adjustments for correction
of accounting errors in
prior year
Others
2. Balance as at January 1,506,988,0 1,341,628,48 753,494,000 22,172,274,62 25,774,385,1
1 of the current year 00.00 0.93 .00 8.92 09.85
3.Increases/decreases
2,384,603,987. 2,384,603,98
in the current year (“-”
70 7.70
for decreases)
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
(1) Total comprehensive 7,206,965,587. 7,206,965,58
income 70 7.70
(2) Capital contributed or
reduced by owners
Capital contributions by
owners (common stock)
Capital contributions by
other equity instruments
holders
Amounts of share-based
payments recognized in
owners' equity
Others
- -
(3)Profit distribution 4,822,361,600. 4,822,361,60
00 0.00
Withdrawal of surplus
reserves
- -
Profit distributed to
4,822,361,600. 4,822,361,60
owners (or shareholders)
00 0.00
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
Amount of Changes in
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
setting benefit plan
transfer to retained
earnings
Other comprehensive
income transferred to
retained earnings
Others
(5) Special reserves
Withdrawal for the period
Use for the period
(6) Others
4. Balance as at 31
1,506,988,0 1,341,628,48 753,494,000 24,556,878,61 28,158,989,0
December of the current
00.00 0.93 .00 6.62 97.55
year
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
III. Company profile
Jiangsu Yanghe Distillery Co., Ltd.(hereinafter referred to as “the Company”)was
established on 26 December 2002, verified by the Government of Jiangsu Province,
details referred to Reply on The approval of Establishment of Jiangsu Yanghe Distillery
Co., Ltd. by the provincial government (SuZhengFu [2002]No.155), and it was a company
founded by Jiangsu Yanghe Group Co.,Ltd., Shanghai Haiyan Logistics Development
Co.,Ltd., Nantong Zongyi Investment Co.,Ltd.,Shanghai Jieqiang Tobacco Sugar & Wine
(Group) Co.,Ltd., Jiangsu Venture Capital Co.,Ltd., China National Research Institute of
Food and Fermentation Industries Co. Ltd., Nantong Shengfu Industrial Trade Co., Ltd.
and Yang Yandong and other totally 14 nature persons. On 27 December, the Compamy
obtained the unified social credit code (91460000201357188U) issued by Jiangsu
Provincial Administration for Industry and Commerce. The registered capital was CNY 68
million and the share capital was 68,000,000 (CNY 1 per share). According to the
documents verified by Jiangsu Provincial Department of Finance (Su Cai Guo Zi [2002]
No.178), all the fund capital converts into share capital according to the ratio
1:0.65561,among which, Jiangsu Yanghe Group Co.,Ltd contributed CNY 52,264,100 of
evaluated physical assets and CNY 735,900 of currency, covered into 34,747,330 shares,
accounting for 51.099% of the total share capital; Shanghai Haiyan Logistics
Development Co.,Ltd contributed CNY 15,000,000 of currency, convered into 9,834,150
shares, accounting for the 14.462% of the total share capital; Nantong Zongyi Investment
Co.,Ltd. contributed CNY 15,000,000 of currency, converted into 9,834,150 shares,
accounting for 14.462% of the total share capital; ShangHai Jieqiang Tobacco Sugar &
Wine (Group) Co.,Ltd. contributed CNY 7,000,000 of currency converted into 4,589,270
shares, accounting for 6.749% of the total share capital; Jiangsu Venture Capital Co.,Ltd.
contributed CNY 3,000,000 of currency concerted into 1,966,830 shares, accounting for
2.892% of the total share capital; China National Research Institute of Food and
Fermentation Industries Co. Ltd. contributed CNY 1,000,000 of currency, converted into
655,611 shares, accounting for 0.964% of the total share capital; Nantong Shengfu
Industrial Trade Co., Ltd. contributed CNY 1,000,000 of currency, converted into 655,611
shares, accounting for 0.964% of the total share capital; Yang Yandong and other totally
14 nature persons contributed CNY 8,720,200 of currency, converted into 5,717,050
shares, accounting for 8.408% of the total share capital.
On 13 September 2009, the Company was verified by China Securities Regulatory
Commission, according to the document Reply on Approving Initial Public Offering of
Jiangsu Yanghe Distillery Co., Ltd. （ Zheng Jian Approval [2009] No.1077 ） .The
Company announced the initial public offering of 45,000,000 common shares on 27
February 2009 and was listed for transactions in SZSE since 6 November 2009.
According to the decisions of 2010 Shareholders’ General Meeting on 23 April 2011,
based on the total capital of 450,000,000 shares on 31 December 2010, the capital
reserves per 10 shares were converted into 10 shares. After the conversion, the total
share capital of the Company was 900,000,000 as well as registered capital of CNY
900,000,000.
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
According to the decision of 2011 Shareholders’ General Meeting on 17 May 2012,
based on the total capital of 900,000,000 shares on 31 December 2011, the capital
reserves per 10 shares were converted into 2 shares. After the conversion, the total
share capital of the Company was 1,080,000,000 as well as registered capital of CNY
108,000,000.
According to the Proposal of Initial Share Repurchase of Public Shares approved by
2012 Shareholders’ General Meeting on 17 May 2013, the Company used owned funds
to repurchase public shares and the price of public shares was no more than CNY 70.00
per share, as well as the total amount of repurchase shares was no more than CNY 10
billion. The form of repurchase was centralized competitive bidding approved by SZSE.
Until May 2014, the amount of repurchase shares was 3,580,000 and the total amount of
payment CNY 157,793,218.58. The shares repurchased had been canceled according to
the law with the procedure of capital reduction. After the repurchase, the registered
capital became CNY 1,076,420,000 and the total share capital of the Company became
1,076,420,000.
According to the decision of 2014 Shareholders’ General Meeting on 26 May 2015,
based on the total capital of 1,076,420,000 shares on 31 December 2014, the capital
reserves per 10 shares were converted into 4 shares. After the conversion, the total
share capital of the company was 1,506,988,000 as well as the registered capital of CNY
1,506,988,000.
Registered address of the Company: 118 Middle Avenue,Yanghe Town, Suqian City,
Jiangsu Province
Company type: Incorporated company (Listed)
Industry of the Company: Brewing food industry
Business scope of the Company:production and sale of liquor, wholesaling and retailing
of prepackaged food,grain purchase, self-operating and agency of import and export of
various types of merchandise and technology excluding merchandise and technology
limited or prohibited by the state for import and export, domestic trade, construction of e-
commerce platform and online sales.( Business activities of projects needed to be
approved by law must be approved according to related departments）
Parent company of the Company:Jiangsu Yanghe Group Co.,Ltd.
The scope of the Company's consolidated financial statements is based on control, and
all subsidiaries are included in the consolidation scope of the consolidated financial
statements.
Changes of the scope of consolidation are as follows:
Subsidiaries that are newly incorporated into the scope of consolidation are
shown in the following table:
Name Measure of acquisition
Jiangsu Yanghe Painting and Calligraphy Newly establishment
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Academy
Subsidiaries that are no longer incorporated into the scope of consolidation are
shown in the following table:
Name Reason
Huaian Huaqu Wine Development Co.,Ltd. Liquidation and cancellation
Jiangsu Huaqu Wine Group Nanjing Co.,Ltd. Liquidation and cancellation
Jiangsu Huaqu Wine Group Nantong Co., Liquidation and cancellation
Ltd.
Jiangsu Huaqu Wine Group Suzhou Co., Ltd. Liquidation and cancellation
Taizhou Huaqu Wine Development Co.,Ltd. Liquidation and cancellation
Jiangsu Huaqu Wine Group Wuxi Co., Ltd. Liquidation and cancellation
Jiangsu Huaqu Wine Group Yancheng Co., Liquidation and cancellation
Ltd.
Guizhou Guijiu Package Co.,Ltd. Liquidation and cancellation
Details of the subsidiaries incorporated into the consolidated financial statements show
on “Note 9. 1.Interests in subsidiaries”, Changes in the scope of consolidation show on
“Note 8. Change in consolidated scope”.
IV.Basis of preparation of financial statements
1. Basis of preparation
The Company has prepared its financial statements on a going concern basis, and
recognized and measured its accounting items in compliance with the Accounting
Standards for Business Enterprises—Basic Standards and various concrete accounting
standards, and other relevant provisions on the basis of actual transactions and events.
2. Going concern
The Company has sustainable operation ability for at least 12 months from the end of the
reporting period. In addition, there is no significant event affecting going concern.
V. Significant accounting policies and accounting estimates
(1) Sales contract
The Company's sales products, promotional products and other goods belong to the
performance obligations performed at a certain point.
The Company recognizes the sales revenue when the goods are delivered to the
customer and the control of the goods is transferred. For export sales business, the
Company recognizes the revenue after the goods are delivered and the customs
clearance procedures are completed.
According to the marketing policy, and the dealer sales of final product, the Company
gives the dealer a percentage discount, and regularly or irregularly settles with dealers.
At the time of settlement, the discounts are recorded in a sales invoice issued. The net
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
amount of invoice value after the deduction of the discount sales income is recognized as
revenue according to the accrual principle. The discounts that have occurred and have
not yet been settled at the end of the current period shall be taken provision from the
sales revenue and recorded into the contract liabilities.
(2) Service Contract
The service contract provided by the Company contains the performance obligation of
the lease service provided. Since the customer obtains and consumes the economic
benefits brought by the performance of the contract at the same time, it is regarded as
the performance obligation performed within a certain period of time and is equally
apportioned and confirmed during the service provision.
1. Statement of compliance with the ASBE
The financial statements of the Company have been prepared in accordance with ASBE,
and present truly and completely, the group’s financial position, the Company’s and
results of operations, and changes in shareholders' equity, cash flows and other related
information for the reporting period.
2. Accounting period
The Company’s accounting period is calendar year as its accounting year, i.e. from 1
January to 31 December.
3. Operating cycle
The Company’s accounting period is 12 months.
4. Functional currency
The Company has adopted China Yuan (CNY) as functional currency.
5. The accounting treatment of business combinations involving
enterprises under common control and not under common control
(1) Accounting treatment method for business combination under common control
Business combination under common control is accounted for under pooling of
interest method.
Assets and liabilities obtained by the Company through business combination under
common control shall be measured at the book value as stated in the combine’s
accounting record on 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
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
statements. The capital reserve (stock premium or capital premium) is adjusted
according to the difference between the book value of net asset acquired through
combination and the book value of consideration paid for the combination (or total
par value of shares issued). If the capital reserve (stock premium or capital premium)
is insufficient to offset, the retained earnings shall be adjusted.
(2) Accounting treatment method of business combination not under common control
The Company accounts for business combination not under common control under
purchase method.
a) All the net identifiable assets, liabilities or contingent liabilities obtained by the
Company through business combination not under common control shall be
measured at fair value. Assets paid, liabilities incurred or assumed and the equity
securities issued as consideration for combination are generally measured at fair
value on the acquisition date, and differences between their fair values and book
values shall be included in the current profit and loss.
b) The cost of acquisition shall be respectively determined for the following
conditions;
i.Business combination of a transaction implementation, the combination cost
shall be the sum of the fair value of the assets given, the liabilities incurred or
assumed and the equity securities issued by the Company in exchange for the
control on the acquisition date, and contingent considerations meeting the
recognition conditions. The combination cost is the initial investment costs of
long-term equity investments in individual financial statements.
ii.Business combination through multiple transactions step by step to realized,
the combination cost shall be the sum of the fair value measurement on the
acquisition of the equity investment that holding before the acquisition date and
cost of all the new investment on the acquisition date. Long-term equity
investment cost in individual financial statements shall be the sum of the book
value of the equity investment that holding before the acquisition date and cost
of all the new investment on the acquisition date. A package deal is excluded.
The Company, on the acquisition date, allocates the combination costs between the
identifiable assets and liabilities acquired
i.All assets of the acquiree obtained by the Company through business
combination(not limited to those that have been recognized by the acquiree),
other than intangible assets, shall be separately recognized and measured at
fair value when the future economic benefits arising thereafter are expected to
flow into the Company and the fair value can be reliably measured.
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
ii.Intangible assets of the acquiree obtained by the Company through business
combination shall be separately recognized and measured at fair value when
their fair values can be reliably measured.
iii. All liabilities of the acquiree obtained by the Company through business
combination, other than contingent liabilities, shall be separately recognized
and measured at fair value when fulfillment of relevant obligations are expected
to bring future economic benefits to the Company and the fair value can be
reliably measured.
iv.Contingent liabilities of the acquiree obtained by the Company through
business combination shall be separately recognized as liabilities and
measured at fair value when their fair values can be reliably measured.
v.When the Company allocates the cost of business combination and
recognizes the identifiable assets and liabilities acquired through combination, it
shall not include any goodwill and deferred income taxes that have been
recognized by the acquiree before the business combination.
c) Treatment of the difference between the business combination costs and the fair
value of net identifiable asset acquired from the acquiree through combination
i.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.
ii.The Company shall recognize the difference of the combination costs in short
of the fair value of the net identifiable asset acquired from the acquiree through
combination according to the following provisions:
Review the measurement of fair values of all the identifiable assets, liabilities
and contingent liabilities acquired from the acquiree and the combination costs;
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.
(3)Treatment of relevant expenses arising from the Company’s business combination
a) Relevant expenses directly arising from the business combination of the
Company (including the expenses for audit, legal services, evaluation and
consultation or other intermediary costs for business combination) shall be included
in the current profit and loss when they are incurred.
b) Commissions, fees and other expenses paid on issuance of bonds and
undertaking of other debts for the business combination shall be included in the
initial measurement amount of debt securities.
i.Where the bonds are issued at discount or par value, that part of expenses will
increase the amount of the discount;
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
ii.Where the bonds are issued at premium, that part of expenses will decrease
the amount of the premium.
c) 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.
i.Where the equity securities are issued at premium, that part of expenses shall
be deducted from capital reserves (stock premium);
ii.Where the equity securities are issued at par value or discount, that part of
expenses shall be deducted from the retained earnings.
6. Preparation of consolidated financial statements
(1) Consistency of accounting policies and accounting period
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 adjusted according to the accounting
policies and accounting periods of the Company.
(2) Preparation method of consolidated financial statements
The consolidated financial statements are based on the financial statements of the
Company and its subsidiaries, and are prepared by the parent company according to
other relevant information after the adjustment to long-term equity investments in
subsidiaries under the equity method and the elimination of effects of the internal
transactions between the Company and its subsidiaries and between the subsidiaries on
the consolidated financial statement.
(3) Reflection of excess losses incurred to a subsidiary in the consolidated financial
statements
In the consolidated financial statements, where the current losses undertaken by the
parent company are in excess of its share of owners’ equity in the subsidiary at the
beginning of the period, the balance shall reduce the owners’ equity (retained earnings)
of the parent company; where the current losses undertaken by a subsidiary’s non-
controlling shareholders excess those non-controlling shareholders’ share of owners’
equity in the subsidiary at the beginning of the period, the balance shall reduce the non-
controlling interests.
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
(4) Changes in number of subsidiaries during the reporting period
a) Acquisition of subsidiaries during the reporting period
i. Treatment of acquiring subsidiaries from business combination under
common control during the reporting period
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.
ii. Treatment of acquiring subsidiaries from business combination not under
common control during the reporting period
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.
b) Treatment of disposing subsidiaries during the reporting period
During the reporting period, if the Company disposes subsidiaries, the opening
balance in the consolidated balance sheet shall not be adjusted. The income,
expenses and profits of the newly disposed sub diaries 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.
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. A joint
operation is a joint arrangement whereby the joint operators have rights to the assets,
and obligations for the liabilities, relating to the arrangement. A joint venture is a joint
arrangement whereby the joint ventures only have the rights to the net assets under this
arrangement.
A joint arrangement that is not structured through a separate vehicle shall be classified
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
as a joint operation. A separate vehicle refers to a separately identifiable financial
structure, including separate legal entities or entities without a legal personality but
recognized by statute.
A joint arrangement that is structured through a separate vehicle is usually classified as a
joint venture. However, when a joint arrangement provides clear evidence that it meets
any of the following requirements and complies with applicable laws and regulations as a
joint operation:
a) The legal form of the joint arrangement indicates that the parties that have joint
control have rights to the assets, and obligations for the liabilities, relating to the
arrangement.
b) The terms of the joint arrangement specify that the parties that have joint control
have the rights to the assets, and the obligations for the liabilities, relating to the
arrangement.
c) Other facts and circumstances indicate that the parties that have joint control
have rights to the assets, and the obligations for the liabilities, relating to the
arrangement---for example, 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 treatment of a joint operation
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.
8. Cash and cash equivalents
Cash comprises cash on hand and deposits that can be readily withdrawn on demand.
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.
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
9. Foreign currency transactions and translation of foreign currency
statements
(1) Accounting method of foreign currency transactions
a) Initial recognition of foreign currency transactions
For foreign currency transactions incurred, the Company converts the amount in
foreign currency into the amount in functional currency at the spot exchange rate
(middle rate) announced by the People’s Bank of China on the transaction date.
Among them, for foreign currency exchange occurred or transaction involving
foreign currency exchange, the Company converts at the exchange rate actually
adopted on the transaction date.
b) Adjustment or settlement on the balance sheet date or settlement date
On the balance sheet date or the settlement date, the Company handles foreign
currency monetary items and foreign currency non-monetary items separately in
accordance with the following methods:
i. Accounting principles for handling foreign currency monetary items
For foreign currency monetary items, on the balance sheet date or the
settlement date, the Company converts them by using the spot exchange rate
(middle rate) prevailing on the balance sheet date or settlement date, and
adjusts the amount in functional currency of foreign currency monetary items in
respect of the difference arising from exchange rate fluctuations, which shall be
treated as exchange difference at the same time. Among them, the exchange
differences arising from foreign currency loans relating to the acquisition,
construction or production of assets eligible for capitalization shall be included
in the costs of assets eligible for capitalization; other exchange differences shall
be included in the current financial expenses.
ii. Accounting principles for handling foreign currency non-monetary items
For foreign currency non-monetary items measured at historical cost, the
Company shall convert them at the spot exchange rate (middle rate) prevailing
on the transaction date, with their amounts in functional currency remaining
unchanged and no exchange differences incurred.
For an inventory that is measured at the lower of its costs or its net realizable
values, if the net realizable value is determined in foreign currency, the
Company, when determining the value of the inventory at the end of the period,
shall firstly convert the net realizable value into functional currency and then
compare it with the inventory cost reflected in functional currency.
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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.
(2) Accounting treatment method for translation of foreign currency statements
a) The Company shall translate the financial statements of foreign operations in
accordance with the following methods:
i. 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.
ii. 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.
The translation of comparative financial statements is handled by reference to
the above approach.
b) The Company shall translate the financial statements of foreign operations that
are in virulent inflation economy in accordance with the following methods:
i. The Company restates the items in the balance sheet by using the general
price index, and restates the items in the income statement by using the
changes in general price index, and then converts those items at the spot
exchange rate on the latest balance sheet date.
ii. Where the foreign operations are no longer in virulent inflation economy, the
Company ceases to restate the financial statements and converts the financial
statements restated according to the price level on such cease.
c) Where the Company disposes of an overseas business, it shall transfer the
foreign currency financial statements exchange difference, which relates to the
business disposed of and is presented under the items of the other comprehensive
income in the balance sheet, from the other comprehensive income item to the gain
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or loss on disposal for the current period. 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.
10. Financial Instruments
Financial instruments are the financial asset, financial liability or (equity) instrument
will be recognised when the Company became one of the parties under a contract.
(1) Classification of financial instruments
(a) Classification of financial assets
According to the company's business model of managing financial
assets and the characteristics of contract cash flow of financial assets,
financial assets are classified into the following three categories:
financial assets measured at amortised cost; financial assets measured
at fair value through other comprehensive income (including financial
assets directly designated to be measured at fair value through other
comprehensive income); and financial assets measured at fair value
through the current profit or loss.
(b) Classification of financial liabilities
The Company classifies the financial liabilities into the following two
categories: financial liabilities measured at fair value through current
profit and loss (including financial liabilities held for trading and financial
liabilities directly designated to be at fair value through current profit and
loss); and financial liabilities measured at amortized cost.
(2) Recognition basis and measurement method of financial instruments
(a) Recognition basis of financial instruments
When the Company becomes a party to a financial instrument, it shall
recognize a financial asset or financial liability.
(b) Measurement method of financial instruments
i.Financial assets
Financial assets are measured at fair value upon initial recognition. For
financial assets at fair value through profit or loss, relevant transaction
costs are directly recognised in profit or loss for the period. For other
categories of financial assets, relevant transaction costs are included in
the amount initially recognised. Accounts receivable or notes receivable
arising from sales of goods or rendering services and without significant
financing component or the company decided not to consider financing
elements for less than one year are initially recognised based on the
amount of consideration expected to be entitled to receive according to
Accounting Standard for Business Enterprises No. 14 - Revenue.
① Financial assets measured at amortised cost
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These assets are subsequently measured at amortised cost using the
effective interest method after initial recognition. Gains/losses on
financial assets that are measured at amortised cost and are not a part of
any hedging relationship shall be recognised in profit or loss when the
financial asset is derecognised or reclassification or amortised using the
effective interest method or recognized the impairment allowance.
② Financial assets measured at fair value through other
comprehensive income
These assets are subsequently measured at fair value after initial
recognition. Except impairment, foreign exchange gains and losses,
interest income calculated using the effective interest method are
recognised in profit or loss; other gains and losses are recognised in
other comprehensive income. On derecognition, gains and losses
accumulated in other comprehensive income are transferred to profit or
loss.
In addition, the company designated some non-tradable equity
instruments as financial assets measured at fair value through other
comprehensive income; the company shall recognise the relevant
dividend income of such financial assets into the current profit and loss,
and recognise the change of fair value in other comprehensive income.
On derecognition, the accumulated gains/losses previously recognized in
other comprehensive income shall be transferred to retained earnings
and not be recognised in current profit and loss.
③ Financial assets measured at fair value through profit or loss
The Company classifies the financial assets, except for financial assets
measured at amortized cost or at fair value through other comprehensive
income as mentioned above, into the financial assets measured at fair
value through profit or loss for the current period. In addition, the
company may designate some financial assets as financial assets
measured at fair value through profit or loss for the current period upon
the initial recognition to eliminate or significantly reduce accounting
mismatch. For such financial assets, the company adopts the fair value
for subsequent measurement, and changes in fair value are recognized
in the profit or loss for the current period.
ii.Financial liabilities
Financial liabilities shall be classified into financial liabilities measured at
fair value through profit or loss for the current period upon initial
recognition and other financial liabilities. For financial liabilities measured
at fair value through profit or loss, relevant transaction costs are directly
recognized in the current profit and loss, and the relevant transaction
costs of other financial liabilities are recognized in the initial recognition
amount.
① Financial liabilities measured at fair value through profit or loss
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Financial liabilities held for trading (including derivatives of financial
liabilities) shall be subsequently measured at the fair value. Except for
those related to hedge accounting, changes in the fair value shall be
recognized in the profit or loss of the current period. For financial
liabilities designated to be at fair value through profit or loss, fair value
changes caused by the Company's own credit risk changes which is
recognised in other comprehensive income, when the liability is
derecognition, the accumulated change in its fair value caused by the
change in its own credit risk recognized in other comprehensive income
is transferred to retained earnings, the remaining changes of fair value is
record in profit of loss. If the above treatment of the impact of the change
in the credit risk of such financial liabilities will cause or expand the
accounting mismatch in the profit and loss, the company will record all
the gains/losses of such financial liabilities (including the amount affected
by fair value changes in enterprise's own credit risk) into the current profit
and loss.
② Financial liabilities measured at amortized cost
Except financial liabilities that arise when a transfer of a financial assets
does not qualify for derecognition or when the continuing involvement
approach applies security contract are classified as financial liabilities
measured by amortized cost, or financial subsequently measurement at
amortized cost, and record the profits or losses guarantee contracts
recognition or amortization into the current profit and loss.
(3) Financial assets transfer
If the Company transfers substantially all the risks and rewards of
ownership of the financial asset to the transferee, the Company
derecognises the financial asset, the rights and obligations arising or
retained in the transfer shall be separately recognized as its assets or
liabilities; if the Company retains substantially all the risks and rewards of
ownership of the financial asset, it continues to recognise the transferred
financial assets. If the Company neither transfers nor retains substantially
all the risks and rewards of ownership of the financial asset, it is
accounted for as follows: if the Company has not retained control, it
derecognises the financial asset, the rights and obligations arising or
retained in the transfer shall be separately recognized as its assets or
liabilities; and if the Company has retained control, it continues to
recognize the financial asset to the extent of its continuing involvement in
the transferred financial asset and recognizes the relevant liability.
Where transfer of financial assets qualify for derecognition entirety, the
difference between the following two amounts will be included into
current profit or loss: The book value measured at the date of
derecognition; and The sum of the consideration for the derecognition
part and the portion of derecognition corresponding to the accumulated
amount of the changes in fair value originally and directly included in OCI
(involving the situation where the financial asset transferred is a debt
instrument investment measured at fair value and recognized in other
comprehensive income). The Company transferred the partial transfer of
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financial assets which qualify for derecognition, the overall carrying
amount of the transferred financial asset shall be apportioned according
to their respective relative fair value between the portion of derecognition
and the remaining.
(4) Derecognition of financial liabilities
If the current obligation of the financial liability (or part thereof) has been
discharged, the company shall remove financial liability (or part thereof),
and the company shall recognize the difference between its book value
and the consideration paid (including any non-cash assets transferred or
liabilities assumed) in the current profit and loss.
(5) Offsetting of financial assets and liabilities
Financial assets and financial liabilities shall be shown separately in the
balance sheet and shall not be offset against each other. If the following
conditions are met at the same time, the net value offset each other after
amount listed in the balance sheet:
The company has offset the confirmed amount of legal rights of financial
assets and financial liabilities, and this kind of legal rights is the
executable; and
The company plans to net or cash at the same time when the financial
assets and liquidation of the financial liability.
If the transfer of financial assets does not meet the conditions for
derecognition, the transferor shall not offset the transferred financial
assets and related liabilities.
(6) Equity instruments
Equity instruments are contracts that prove ownership of the residual
interest in the company’s assets after deducting all liabilities. The
issuance (including refinancing), repurchase, sale or cancellation of the
equity instruments of the company shall be treated as changes in the
equity. The company does not recognize changes in the fair value of
equity instruments, and the transaction fees related to the equity
transactions shall be deducted from the equity. Where the equity
instrument of the company distributes dividends during the term of its
existence, it shall be treated as profit distribution, and the total amount of
shareholders' equity will not be affected by the stock dividends issued.
(7) Method for determining the fair value of financial assets and financial liabilities
Where there is an active market for a financial instrument, the company
shall determine its fair value by quoting in the active market. Where there
is no active market for the financial instrument, the company shall
determine its fair value by means of valuation technology. In valuation,
the company uses valuation techniques applicable in the current situation
and supported by sufficient available data and other information to select
input values consistent with the characteristics of assets or liabilities
considered by market participants in transactions of related assets or
liabilities, and gives priority to relevant observable input values as far as
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possible. Use unobservable inputs only when relevant observable inputs
cannot be obtained or are impracticable to obtain.
Upon initial recognition, the fair value of financial assets or financial
liabilities is determined by the quoted price of the same assets or
liabilities in the active market or other valuation technology that only uses
observable market data, the Company defers the difference between the
fair value and the transaction price. After initial recognition, the Company
recognizes the deferred difference as gain or loss in the corresponding
accounting period according to the changes of a certain factor in the
corresponding accounting period.
(8) Impairment of Financial Assets
Based on the expected credit loss, the Company shall recognise the
impairment loss on financial assets measured at amortized cost, debt
instrument investment at fair value through other comprehensive income.
(a) The approach of recognition loss allowance for expected credit losses
Considering the reasonable and valid information such as past events,
current conditions and forecast of future economic conditions, and
weighted by the risk of default, the Company calculates the probability
weighted amount of the present value of the difference between the cash
flow receivable under the contract and the expected cash flow to be
received, and confirms the expected credit loss.
i. General approach
The Company assess whether the credit risk of financial instruments in
different stages at each reporting date has increased significantly. If the
financial instruments' credit risk have not increased significantly after
initial recognition, it will be included in phase 1, and the Company
measures the loss allowance for those instruments at an amount equal to
12-month expected credit losses; if the financial instruments' credit risk
have increased significantly but without objective evidence for
impairment after initial recognition, it will be included in phase 2, and the
Company measures the loss allowance of those instruments at an
amount equal to lifetime expected credit losses; if the financial asset that
is evidently credit-impaired after initial recognition, it will be included in
phase 3, and the Company measures the loss allowance of those
financial instruments at an amount equal to lifetime expected credit
losses. For financial instruments with low credit risk on the balance sheet
date (e.g.fixed deposits in commercial banks with higher credit rating,
financial instruments with external credit rating above "investment
grade"), the Company assumes that the credit risk has not increased
significantly since the initial recognition and chooses to measure the loss
provision according to the expected credit loss in the next 12 months.
ii. Simplified approach
For accounts receivables and notes receivables related to revenues, the
Company does not include the significant financing component or does
not consider the financing components in contracts less than one year, it
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will measure the loss allowance according to the expected credit loss of
the whole duration.
(b) Criteria for determining whether credit risk has increased significantly
subsequent to the initial recognition
If the probability of default of a financial asset in lifetime as determined
on the balance sheet date is significantly higher than the probability of
default in lifetime as determined at the initial recognition, the credit risk of
the financial asset increases significantly.
No matter what method the Company is applied to evaluate whether
credit risk has increased significantly, it usually inferred that the credit
risk of the financial instrument has increased significantly if the contract
payment delay exceeds 30 days, unless the Company can get the
reasonable and valid information at reasonable cost to evidence that the
credit risk of the financial instrument has not increased significantly since
the initial recognition.
Except in special cases, the Company shall use the change of default
risk in the next 12 months as a reasonable estimate of the change of
default risk in lifetime to determine whether the credit risk has increased
significantly to the initial recognition
(c) Approach of assessing expected credit risk on a portfolio basis and
determine basis
The company evaluates credit risk individually for the credit risk of
significantly different notes receivables, accounts receivables and other
receivables with the following characteristics. Such as: accounts
receivables in dispute with the other party or involving litigation or
arbitration; notes receivables, accounts receivables that have shown
clear signs that the debtor is likely to be unable to meet repayment
obligations.
When it is impossible to evaluate the expected credit loss information of
an individual financial asset at a reasonable cost, the Company divides
the receivables into several portfolio according to the credit risk
characteristics, and calculates the expected credit loss on collective
basis. The basis for determining the portfolio is as following:
Name Approach of assessing expected credit risk
Bank acceptance For notes receivables divided into portfolio, the bank acceptance bill and
bill Portfolio; commercial acceptance bill refer to the historical credit loss experience, and
Commercial combines the current situation and the forecast of future economic situation
acceptance bill respectively.The Company calculates the expected credit loss based on the
Portfolio default risk exposure and the expected credit loss rate of the whole duration.
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For accounts receivables divided into risk portfolio, the Company refers to the
Risk Portfolio historical credit loss experience, and combines the current situation and the
forecast of future economic situation, andprepares a comparison table between
overdue ages of accounts receivables and expected credit loss rate of the whole
duration to calculate the expected credit loss.
The Company classifies items without significant recovery riskreceivables as
other portfolio such as items from subsidiaries in the consolidation scope, tax
Other Portfolio
refunds receivable, collection and withholding of funds. There is no provision for
bad debt for them.
The Company shall take the provision or transfer the loss into the current profit and loss.
For the debt instrument investment measured at fair value through other comprehensive
income, the Company shall adjust other comprehensive income while recording the
impairment loss or gain into the current profit and loss.
11. Inventory
(1) Classification of inventory
Inventories are classified as: raw materials, semi-finished goods, stock commodities,
consigned processing materials, goods in progress and revolving materials (including
low-cost consumables), etc.
Measurement method of dispatched inventories
Dispatched materials and stock commodities are accounted for by using the weighted
average method.
(2) Basis to determine net realizable values of inventories and method of provision for
stock obsolescence
a) Determination basis of net realizable values of inventories
i. In normal operation process, for merchandise inventories held directly for sale,
including stock commodities (finished goods) and materials for sale, their net
realizable values are determined at their estimated selling prices minus their
estimated selling expenses and relevant taxes and surcharges.
ii. In normal operation process, for material inventories that need further
processing, their net realizable values are determined at the estimated selling
prices of finished goods minus estimated costs to completion, estimated selling
expenses and relevant taxes and surcharges.
iii. For inventories held to execute sales contract or service contract, their net
realizable values are calculated on the basis of contract price. If the quantities
of inventories specified in the sales contracts are less than the quantities held
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by the Company, the net realizable value of the excess portion of inventories
shall be based on general selling prices.
iv. 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.
b) Provision for stock obsolescence
i.Provisions for stock obsolescence are made at the lower of costs or net realizable
values on a single basis.
ii.For inventories with large quantity and relatively low unit prices, the provision for
stock obsolescence shall be made on the ground of the categories of inventories.
(3) Inventory system
The Company adopts perpetual inventory system and takes physical inventory counts on
a regular basis.
(4) Amortization method of revolving materials
A.Amortization method of low-cost consumables:
Low-cost consumables are amortized in full at once.
B.Amortization method of packaging materials
Packing materials are amortized in full at once when fetched for use by the Company.
12. Contract assets
A contract asset is a company's right to receive consideration for goods transferred to a
customer, and this right depends on factors other than the passage of time.The
company's contract assets mainly include completed and unsettled assets and quality
guarantee deposit.The contract assets and contract liabilities under the same contract
shall be shown on a net basis, and the contract assets and contract liabilities under
different contracts shall not be set off.
13. Assets held for sale
(1) Scope of a non-current assetheld for sale and a disposal group
A non-current asset or disposal group is classified as held for sale when a company
recovers its carrying value primarily through the sale (including the exchange of non-
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monetary assets of a commercial nature) rather than through the continuous use of such
a group.
A disposal group is a group of assets that are disposed as a whole through sales or other
ways in one transaction and liabilities directly related to these assets delivered in the
transaction.
(2) Recognition criteria of a non-current assetheld for sale and a disposal group
The Company recognizes its component (or non-current asset) that satisfies the following
conditions as assets held for sale:
a)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;
b) 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. If it requires shareholders’ approval or supervisors’
approval according to regulations, it has already received approval from the general
meeting of stockholders or relative authority institution.
(3) Accounting treatment andpresentation of a non-current asset heldforsale and a
disposal group
a) The non-current asset or disposal group is first classified as held for sale, the
Company should measure the non-current assets or assets and liabilities made up
of disposal group in accordance with relevant accounting standards.
b) 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 valueless 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 impairment of disposal
group, 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.
c) No matter the asset is classified as individual asset held for sale or asset
belonging to disposal group, the asset is presented as current assets under “assets
held for sale” item; liabilities related to the asset transferred in the disposal group
held for sale is presented as current liabilities under “liabilities held for sale” item in
the balance sheet.
d) The Company is committed to a sale plan involving loss of control of subsidiary
shall classify all the assets and liabilities of that subsidiary held for sale in
consolidated balance sheets when the above criteria are met, regardless of whether
the Company retain a non–controlling interests in its former subsidiary after the sale.
In the balance sheets of parent company the investment should be classified as held
for sale in full.In the consolidated financial statements, all assets and liabilities of the
subsidiaries are classified as held for sale.
14. Long-term equity investment
(1) Recognition of the initial investment costs of long-term equity investments
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a) For long-term equity investments from business combinations, the initial
investment cost shall be recognized in accordance with the provisions mentioned in
Notes V.5. Accounting Method for Long-term Equity Investment from Business
Combinations under Common Control and Business Combination not under
Common Control.
b) Except for the long-term equity investments arising from business combinations,
those obtained by other means shall recognize their initial investment costs in
accordance with the following provisions:
i.For the long-term equity investments obtained by cash paid, the Company
recognizes the actual purchase price as the initial investment costs. The initial
investment costs include directly related expense, taxes and other necessary
expenses of obtaining long-term equity investments.
ii.For the long-term equity investments acquired by the issue of equity securities
(equity instrument), the initial investment cost shall be the fair value of the
equity securities (equity instrument) issued. If the fair value of the long-term
equity investment obtained is more reliable than equity securities issued, the
initial investment cost shall be the fair value of the long-term equity investment
made by the investors. The cost directly attributable to the issue of equity
securities (equity instrument), including fees, commissions, etc., write-downs
premium price of the issue, if premium price of the issue is insufficient, write-
downs surplus reserve and undistributed profit in turn. For the long-term equity
investments acquired by the issue of debt securities (debt instrument) ,
reference through the issuance of equity securities (equity instrument).
iii. 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.
iv.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.
Expenses, taxes and other necessary expenses incurred to the Company and
that are directly related to the obtainment of long-term equity investments shall
be recognized as the initial investment costs of long-term equity investments.
For long-term equity investments obtained by the Company by any means,
cash dividends or profits declared but not yet distributed in the actual payments
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or the consideration actually paid for the investment shall be separately
accounted as dividends receivable and shall not constitute the costs of long-
term equity investments.
(2) Subsequent measurement and recognition of gains and losses of long-term equity
investments
a) Long-term equity investment measured under cost method
If acompany can control an investee, namely investment in subsidiary, the long-term
equity investment shall be 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
i. For the long-term equity investment which has joint control or significant
influence over the investee, the equity method is adopted for accounting.
ii.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 and at the same time the adjustment will be made to the initial costs of the
long-term equity investments.
iii.After obtaining the long-term equity investments, the Company shall,
according to the shares of net profits and other comprehensive income realized
by the investee that shall be enjoyed or borne by the Company, recognize the
profit and loss on the investments and adjust the book value of the long-term
equity investments. When recognizing the net profits and losses and other
comprehensive income of the investee that the Company shall enjoy or bear,
the Company shall make a recognition and calculation based on the net book
profits and losses of the investee after appropriate adjustments. However,
where the Company is unable to obtain the relevant information due to failure to
reasonably determine the fair value of the investee’s identifiable assets, minor
difference between the investee’s identifiable assets and the book value thereof
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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 fall into the scope of losses on assets impairment, 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.
(3) Basis for judgment of common control or significant influence over the investee
a)Basis for judgment of common control over investee
Common control is the contractually agreed sharing of control of an arrangement,
which exists only when decisions about the relevant activities require the unanimous
consent of the parties sharing control. Relevant activities of an arrangement usually
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include selling and purchasing of goods or services, managing financial assets,
acquiring or disposing of assets, researching and developing activities and financing
activities. A joint venture is a joint arrangement whereby the joint ventures have
rights to the net assets of the arrangement. The parties have rights to the assets,
and obligations for the liabilities, relating to the arrangement, which is a joint
operation, but not a joint venture.
c) Basis for judgment of significant influence over investee
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. Where the Company is able to exert
significant influence over the investee, the investee is its associate.
15. 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:
a) It is probable that the economic benefits relating to the fixed assets will flow into
the Company;
b) The cost of the fixed assets can be measured reliably.
(2) Depreciation of fixed assets
Estimated Estimated
Annual depreciation
Category Depreciation method useful life residual value
rate (%)
(Yr) rate (%)
Buildings
Straight-line method 20～25 5 3.80～4.75
andconstructions
Machinery equipments Straight-line method 10 5 9.50
Transportation
Straight-line method 10 5 9.50
equipments
Other equipments Straight-line method 8 5 11.88
(3) Recognition standard, valuation method and depreciation method for fixed assets
acquired under financing lease
a) At the inception of the lease, the Company recognizes the leased fixed assets
meeting the standards for financial leases as fixed assets acquired under financing
leases
b) At the inception of the lease, the Company shall state the assets acquired under
financing lease at the lower of the fair value of the leased assets or the present
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value of the minimum lease payments, as well as the initial and direct expenses
occurred, recognize a long-term payable at the amount of the minimum lease
payments, and shall charge the difference of the lower of the fair value of the leased
assets or the present value of the minimum lease payments and the minimum lease
payments to unrecognized finance expenses. Unrecognized finance expenses shall
be amortized at the effective interest rate method in each period during the lease
term.
c) Adapt the same depreciation method as the one used on other fixed assets
owned by the company. If there is reasonable assurance that the Company will
obtain the ownership of the leased assets when the lease term expires, the leased
assets should be depreciated over its useful life; if there is no reasonable assurance
that the Company will obtain the ownership of the leased assets when the lease
term expires, the leased assets should be depreciated over the shorter of the lease
term or the useful life of the leased assets.
16. Construction in progress
(1) Categories of constructions in progress
Constructions in progress are accounted on individual project basis.
(2) Criteria and commencement of conversion of constructions in progress into fixed
assets
The book entry values of the fixed assets are stated at total expenditures incurred before
construction in progress reaches the working condition for their intended use. For self-
operating projects, total expenditures are measured according to the expenditures of
direct materials, direct labor, direct measurement mechanical construction costs and
other expenditures; for contracting projects, total expenditures are measured according
to project costs payable and other expenditures. Borrowing costs incurred before the
projects that are undertaking with borrowing costs reach working condition for their
intended use and meeting the condition for capitalization shall be capitalized and
included into the costs of construction in progress.
For construction in progress that has reached working condition for intended use but for
which the completion of settlement has not been handled, it shall be transferred into fixed
assets at the estimated value according to the project budget, construction price or actual
cost, etc. from the date when it reaches the working condition for intended use and the
fixed assets shall be depreciated in accordance with the Company’s policy on fixed asset
depreciation; adjustment shall be made to the estimated value based on the actual cost
after the completion of settlement is handled, but depreciation already provided will not
be adjusted.
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17. Borrowing costs
(1) Scope of borrowing costs
The Company’s borrowing costs include interest thereon, amortization of discounts or
premiums, ancillary expenses and exchange differences incurred from foreign currency
loan, etc.
(2) Recognition principles of capitalization of borrowing costs
The borrowing costs incurred to the Company and directly attributable to the acquisition
and construction or production of assets eligible for capitalization should be capitalized
and recorded into relevant asset costs; other borrowing costs should be recognized as
costs according to the amount incurred and be included into the current profit and loss.
Assets eligible for capitalization include fixed assets, investment properties, inventories
and other assets which may reach the working condition for their intended use or sale by
acquisition and construction or production activities for quite long time.
(3) Recognition of capitalization period of borrowing costs
a) Recognition of commencement of capitalization of borrowing costs
Borrowing costs may be capitalized when asset disbursements have already been
incurred, borrowing costs have already been incurred and the acquisition and
construction or production activities which are necessary to prepare the assets for
their intended use or sale have already been started. Among which, asset
disbursements include those incurred by cash payment, the transfer of non-cash
assets or the undertaking of interest-bearing debts for acquiring and constructing or
producing assets eligible for capitalization.
b) Recognition of period of 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. If the interruption is
necessary for the acquisition and construction or production to prepare the assets
for their intended use or sale, the capitalization of borrowing costs should continue.
c) Recognition of period of 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 all parts of the acquired and constructed or produced assets are completed, each
part may be used or sold externally in the process of continuous construction of
other parts and the necessary acquisition or production activities have been
substantially completed to make the part of assets reach the working condition for
their intended use or sale, the capitalization of borrowing costs related to the part of
assets should be ceased; if all parts of the acquired and constructed or produced
assets are completed 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.
(4) Recognition of capitalized amounts of borrowing costs
a) Recognition of capitalized amounts of interest on borrowing costs
During the period of capitalization, capitalized amount of the interest of each
accounting period (including amortization of discounts or premiums) shall be
recognized according to the following provisions:
i.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.
ii.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. The capitalization rate is calculated by
weighted average interest rate of general loans.
iii. 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.
iv.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.
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b) Recognition of capitalized amounts of auxiliary expenses of loans
i.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.
ii. Auxiliary expenses incurred from general loans shall be recognized as costs
according to the amounts incurred when they occur and included in the current
profit and loss.
c) Recognition of capitalized amount of exchange differences
During the period of capitalization, exchange differences incurred from the principal
and interest of special foreign currency loans should be capitalized and included in
the costs of the assets eligible for capitalization.
18. Intangible assets
(1) Measurement, useful life and impairment test
Initial measurement of intangible assets
Initial measurement of outsourcing intangible assets
Costs of outsourcing intangible assets shall be recognized according to the purchase
price, related taxes and other expenses directly attributed to reaching the working
condition for their intended use. The cost of intangible assets shall be recognized based
on present value of purchase price when deferred payment over normal credit conditions
with financial nature. The difference between actual payment and purchase price, expect
for capitalized amount, shall be included into the current profit and loss in the period of
credit.
Initial measurement of internally researched and developed intangible assets
Costs of internally researched and developed intangible assets shall be recognized
according to the total expenses during the period after the assets are eligible for
capitalization and before they reach the intended purpose and the expenses that have
been included in the previous periods shall no longer be adjusted.
Expenses on the research phase of internally researched and developed intangible
assets shall be included in the current profit and loss when they incur; those on the
development phase ineligible for capitalization shall be included in the current profit and
loss; those eligible for capitalization shall be recognized as intangible assets. If it is
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unable to distinguish expenditure on the research phase and expenditure on
development phase, the research and development expenditures shall be all included in
the current profit and loss.
Subsequent measurement of intangible assets
The useful lives of intangible assets are analyzed on acquisition. Intangible assets
obtained by the Company are divided into intangible assets with limited useful lives and
intangible assets with indefinite useful lives.
Subsequent measurement of intangible assets with limited useful lives
The intangible assets with limited useful lives are amortized on a straight-line basis when
they reach intended use over their useful lives with no residual value reserved.
Amortizations of intangible assets are usually recorded into the current profit and loss;
where the economic benefits of an intangible asset are realized by the products or other
assets produced thereafter, the amortizations are recorded into the costs of the relevant
assets.
Category, estimated useful life, estimated net residual value rate and annual amortization
rate of intangible assets are shown below:
Category of intangible Estimated net residual Annual amortization
Estimated useful life (years)
assets value rate (%) rate (%)
Land use right 50 0 2.00
Trademark 7-10 0 14.29-10.00
Computer software 10 0 10.00
The useful lives and amortization methods of intangible assets with limited useful lives on
the balance sheet date shall be reviewed.
Subsequent measurement of intangible assets with indefinite useful lives
Intangible assets with indefinite useful lives are not amortized in the holding period, but
impairment tests are performed at the end of each year.
Estimates of useful lives of intangible assets
a) For intangible assets from any contractual right or other statutory rights, their
useful lives shall be recognized according to the period no more than that of the
contractual or other statutory rights; when the contractual right or other statutory
rights contract is extended due to renewal of contracts and there is evidence that the
renewal of the Company does not need large costs, the renewal period shall be
included into the useful lives.
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b) Where the contract or the law fails to specify the useful lives, the Company
integrates situations in all aspects and determine the period of intangible assets that
can bring economic benefits for the Company by hiring the relevant experts to
demonstrate or comparing with the situation of the industry as well as referring to the
Company’s historical experience or otherwise.
c) If it is still unable to reasonably determine that intangible assets may bring
economic benefits for the Company according to the above methods, the intangible
assets are taken as intangible assets with indefinite useful lives.
(2) Accounting policies of internal research and development expenditure
According to the actual situation of the research and development, the Company
classifies the research and development project into that on the research phase and that
on the development phase.
a) Research stage
Research stage is the stage when creative and planned investigations and research
activities are conducted to acquire and understand new scientific or technological
knowledge.
b) Development stage
Development stage is the stage when the research achievements or other
knowledge are applied to a plan or design, prior to the commercial production or use,
so as to produce any new or substantially improved material, device or product.
Expenditure of an internal research and development project on the research phase
shall be included in current profit and loss when it occurs.
Specific criteria for qualifying expenditure on the development phase for
capitalization
Expenditure on the development phase of an internal research and development
project shall be recognized as intangible assets only when the following conditions
are simultaneously satisfied:
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 intangible assets to generate economic benefits shall be proved,
including being able to prove that there is a potential market for the products
manufactured by applying the intangible assets or there is a potential market for the
intangible assets themselves or the intangible assets will be used internally;
d) It is able to finish the development of the intangible assets, and able to use or sell
the intangible assets, with the support of sufficient technologies, financial resources
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and other resources;
e) The expenditure attributable to the intangible asset during its development phase
can be measured reliably.
19.Non-current assets impairment
If there are impairment indicators of long-term equity investment, investment property
measured at cost model, fixed assets, construction in progress, intangible assets with
indefinite useful lives and other long-term assets at balance sheet date, impairment test
should be performed. If the result of impairment test shows that recoverable amount is
less than its book value, the difference should be provided for impairment and recorded
into impairment loss. 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. Provision for impairment is calculated and recognized on the basis of 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. Asset group is the minimum asset group which can generate cash inflow
separately.
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.
When the Company performs impairment test, book value of goodwill arising from
business combination should be amortized to relevant asset group using the reasonable
method from the date of purchase. If it is difficult to amortize it to relevant asset group,
amortize it to relevant asset group portfolio. Apportion book value of goodwill to relevant
asset group or asset group portfolio according to the proportion of fair value of asset
group or asset group portfolio accounting for total amount of relevant asset group or
asset group portfolio. If fair value is difficult to be measured reliably, amortize according
to the proportion of book value of asset group or asset group portfolio accounting for total
amount of relevant asset group or asset group portfolio. When perform impairment test
for asset group or asset group portfolio including goodwill, if there is impairment indicator
of asset group or asset group portfolio relevant to goodwill, perform impairment test for
asset group or asset group portfolio without goodwill firstly, calculate its recoverable
amount, compare with relevant book value and recognize impairment loss. Then perform
impairment test for asset group or asset group portfolio including goodwill, compare book
value of the asset group or asset group portfolio (including proportional book value of
goodwill) and its recoverable amount, if recoverable amount of relevant asset group or
asset group portfolio is less than its book value, recognize impairment loss of goodwill.
Once impairment loss stated above is recognized, reversal is not allowed in the
subsequent accounting periods.
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20. Long-term deferred expenses
(1) Scope of long-term deferred expenses
Long-term deferred expenses refer to various expenses which have been already
incurred but will be born in this period and in the future with an amortization period of
over 1 year (exclusive).
(2) Initial measurement of long-term deferred expenses
Long-term deferred expenses shall be initially measured according to the actual costs
incurred.
(3) Amortization of long-term deferred expenses
Long-term deferred expenses are amortized using the straight-line method over the
beneficial period.
21. Contract liability
Contract liabilities refer to the obligation of a company to transfer commodities to
customers for consideration received or receivable from customers.If the customer has
paid the contract consideration or the company has obtained an unconditional right to
receive the goods prior to the company's transfer of the goods to the customer, the
company will show the amount received or receivable as a contractual liability in which
earlier the customer actually pays the amount or the amount becomes due.The contract
assets and contract liabilities under the same contract shall be shown on a net basis, and
the contract assets and contract liabilities under different contracts shall not be set off.
22. Employee benefits
(1) Accounting treatment of short-term benefits
Short-term benefits are the benefits that the Company expect to pay in full within 12
months after the reporting period in which the employee provided relevant services,
excluding the compensation for employment termination.
Short-term benefits include: wage, bonus, allowance and subsidy; employee welfare,
social securities including health insurance and work injury insurance; housing common
reserve fund; union expenditure and employee training expenditure; short-term paid
leave; short-term profit-sharing; non-monetary welfare and other short-term benefits.
Actual 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
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included in the current profits and losses or the cost relevant assets.
(2) Accounting treatment of post-employment benefits
The defined contribution plan of the Company include payments of basic pension,
unemployment insurance, annuity, etc. that accord to relevant provisions. The amount
which the Company deposit on balance sheet date in exchange for the service of the
employee during the accounting period will be recognized as employee benefits liability
and shall be included into the profit or loss for the current period.
(3) Accounting treatment of termination benefits
Termination benefits are the benefits the Company provide to the employee when the
Company terminates the employment before labor contract expires or encourages
voluntary resignation. 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.
(4) Accounting treatment 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. At the end of reporting
period, the company will recognize the employee benefits cost from other long-term
employee benefits as the following components:
a) Service cost;
b) Net amount of interest from other long-term employee benefits net liabilities or
assets;
c) Changes from recalculation of the net liabilities or assets from other long-term
employee benefits.
In order to simplify related accounting procedure, the net amount of the above subjects
shall be included into current profit or loss or the cost of relevant assets.
23. Provisions
(1) Recognition principles of provision
When obligations related to external guarantees, pending actions or arbitration, product
quality assurance, onerous contracts, reorganization and contingencies satisfy the
following three conditions, they shall be recognized as provision:
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a) This obligation is a present obligation of the Company;
b) The settlement of such obligation is likely to result in outflow of economic benefits
from the Company; and
c) The amount of the obligation can be measured reliably.
(2) Measurement method of provision
The amount of provision is measured at the best estimate of expenses required for
contingencies.
a) If there is continuous range for the necessary expenses, and probabilities of
occurrence of all the outcomes within this range are equal, the best estimate shall
be determined at the median of the range.
b) The best estimate shall be accounted as follows in other cases:
i.If the contingency involves a single item, the best estimate shall be determined at
the most likely outcome.
ii.If the contingency involves two or more items, the best estimate should be
determined according to all the possible outcomes with their relevant probabilities.
24. Share-based payment
Share-based payment is classified as equity-settled share-based payment and cash-
settled share-based payment.
1) Accounting treatment on the date of granting
The Company does not make any accounting treatment on the date of granting, neither
for equity-settled share-based payment nor for cash-settled share-based payment,
except that the right of the share-based payment can be exercised immediately.
2) Accounting treatment on each balance sheet date within vesting period
On each balance sheet date within vesting period, the Company records the service
provided by employees or other party as cost and expense, and recognizes equity or
liability at the same time.
For the share-based payment attached with market conditions, once employees satisfy
all conditions except market conditions, the service acquired can be recognized. If the
performance condition is not market condition, the estimate for previous periods can be
revised when the vesting period is determined and subsequent information shows that
the estimate for conditions of exercising rights requires adjustments.
For equity-settled share-based payment related with employees, charge the service into
costs, expenses and capital reserve (other capital reserve), using the fair value of the
equity instrument on the date of granting. The subsequent changes of fair value should
not be recognized. For cash-settled share-based payment related with employees,
recalculate fair value of the equity instrument at each balance sheet date and recognize
related costs, expenses and employee benefit payable.
At each balance sheet date within vesting period, the Company makes the best estimate
and revises the number of equity instrument that can be exercised according to the latest
subsequent information such as change of number of employees who can exercise rights.
Use fair value and the number of of equity instrument stated above to calculate
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cumulative amount of costs and expenses that should be recognized by this period and
then deduct the cumulative amount already recognized in the previous period. The
balance is the amount of cost and expense that should be recognized in the current
period.
3) Accounting treatment after the date when rights can be exercised
For equity-settled share-based payment, after the date when rights can beexercised, no
adjustment shall be made to the total amount of the cost expense and equity already
recognized. The Company recognizes share capital and capital premium, and carry
forward the capital reserve (other capital reserve) recognized within vesting period at the
he date when rights can be exercised.
For cash-settled share-based payment, the Company shall not recognize costs and
expenses. The change of fair value of liability (employee benefit payable) should be
recorded into current profit or loss (profit or loss arising from fair value changes) after the
date when rights can be exercised.
4) Accounting treatment for repurchasing shares regarding employee option incentive.
When the Company encourages employees in the form of repurchasing shares, total
expenditure of repurchasing shares is regarded as treasury stock and registered for
check. At each balance sheet date within vesting period, charge the employee service
acquired into costs and expenses, and meanwhile increase capital reserve (other capital
reserve), using fair value of the equity instrument at the date of granting. When the
employee exercises the right to buy the Company’s shares and receives the amount,
write off the cost of treasury stock delivered to the employee and the cumulative amount
of capital reserve (other capital reserve) recognized within the vesting period, meanwhile
the balance adjusting capital reserve (share capital premium).
25.Revenue
Accounting policies adopted in revenue recognition and measurement
25.1 Principle and measurement method of revenue recognition
(1) Revenue recognition
The Company has fulfilled its contractual performance obligation to recognize revenue
when the customer acquires control of the relevant goods. On the beginning date of the
contract, the Company evaluates the contract, identifies the individual performance
obligations contained in the contract, and determines whether the individual performance
obligations are performed within a certain period of time or at a certain point. Then, the
Company recognizes the revenue when the individual performance obligations are
fulfilled.
(2) Revenue measurement
If the contract contains two or more performance obligations, the Company shall, on the
commencement date of the contract, apportion the transaction price to each single
performance obligation according to the relative proportion of the separate selling price of
the commodity or service committed by each single performance obligation, and measure
the revenue according to the transaction price apportioned to each single performance
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obligation.In determining the transaction price, the Company will take into account the
impact of variable consideration, material financing elements existing in the contract,
non-cash consideration and customer consideration payable, and it is assumed that the
goods will be transferred to the customer in accordance with the provisions of the existing
contract and that the contract will not be canceled, renewed or changed.
25.2 Specific revenue recognition policies
(1) Sales contract
The Company's sales products, promotional products and other goods belong to the
performance obligations performed at a certain point.
The Company recognizes the sales revenue when the goods are delivered to the
customer and the control of the goods is transferred. For export sales business, the
Company recognizes the revenue after the goods are delivered and the customs
clearance procedures are completed.
According to the marketing policy, and the dealer sales of final product, the Company
gives the dealer a percentage discount, and regularly or irregularly settles with dealers.
At the time of settlement, the discounts are recorded in a sales invoice issued. The net
amount of invoice value after the deduction of the discount sales income is recognized as
revenue according to the accrual principle. The discounts that have occurred and have
not yet been settled at the end of the current period shall be taken provision from the
sales revenue and recorded into the contract liabilities.
(2) Service Contract
The service contract provided by the Company contains the performance obligation of
the lease service provided. Since the customer obtains and consumes the economic
benefits brought by the performance of the contract at the same time, it is regarded as
the performance obligation performed within a certain period of time and is equally
apportioned and confirmed during the service provision.
23. Government grants
(1) Types of government grants
Government grants are monetary assets and non-monetary assets acquired free of
charge by the Company from the government, including government grants related
to assets and government grants related to income.
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.
Government grants related to income are government grants other than government
grants related to assets.
(2) Recognition principles of government grants
Government grants are recognized when both of the following conditions are met:
a) The Company can meet the attached conditions for the government grants;
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b) The Company can receive the grants.
(3) Measurement of government grants
a) If a government grant is a monetary asset, it shall be measured in the light of
the received or receivable amount.
b) 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 (a nominal amount is CNY 1).
(4) Accounting treatment method of government grants
a) The government grants related to assets shall be set off of the book value of
the related assets or recognized as deferred income at the actual entry amount
on acquisition. Government grants recognized as deferred income shall be
allocated evenly over the useful lives of the relevant assets, and included in the
current profit or loss. Government grants measured at the nominal amount shall
be directly included in current profit and loss.
b) Government grants related to income shall be separately handled according
to the following circumstances:
i.If government grants related to income are used to compensate the
Company’s relevant expenses or losses in future periods, such
government grants should be recognized as deferred income on
acquisition and be included into the current profit and loss or written off
of the related costs when the relevant expenses, losses are recognized.
ii.If government grants related to income are used to compensate the
Company’s relevant expenses or losses incurred, such government
grants are directly included into the current profit and loss on acquisition
or written off of the related costs.
b) Government grants related to assets and related to income are received
together, shall be treated separately. If it is hard to separate, government grants
shall be treated as related to income as a whole.
c) Government grants related to daily operation shall be recoded in other
income or written off relevant expenses, costs. Government grants unrelated to
daily operation shall be recorded in non-operating income. Financial subsidy
funds directly allocated to the company shall be offset the relevant borrowing
costs.
d) Government grants already recognized required to be refunded shall be
handled according to the following circumstances:
i. If the grants have written down the book value of assets, the book value
shall be adjusted.
ii. If there is related deferred income, the book value of relevant deferred
income is written down and the exceeding part is recorded in the current
profit and loss.
iii. If there is no related deferred income, the exceeding part is directly
included in the current profit and loss.
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24. Deferred tax assets and deferred tax liabilities
The Company adopts the balance sheet liability method to account for income tax.
(1) Recognition of deferred tax assets or deferred tax liabilities
a) The Company recognizes its tax base on acquisition of assets and liabilities. On
the balance sheet date, the Company analyzes and compares the book value of the
assets and liabilities and the tax base. If there are temporary differences in book
value of the assets and liabilities and the tax base, under the circumstance that the
temporary differences incur in the current period and meet the recognition criteria,
the Company shall respectively recognize taxable temporary differences or
deductible temporary differences as deferred tax liability or deferred tax assets.
b) Recognition basis of deferred tax assets
i. Deferred tax assets incurred from deductible temporary differences are
recognized to the extent that they shall not exceed the taxable income probably
obtained in future periods to be against the deductible temporary difference. In
determining the taxable income probably obtained in future periods, including
the taxable income from normal production and operation activities in future
periods and the increase of taxable income due to the reversal of taxable
temporary differences during the period of reversal of deductible temporary
differences.
ii.For deductible losses and tax credits that can be carried forward to the next
years, the Company is likely to recognize the corresponding deferred tax assets
to the extent that the assets shall not exceed the taxable income in the future
for deducting deductible losses and tax credits and that are probably obtained
by the Company.
iii. On the balance sheet date, the Company reviews the book value of deferred
tax assets. If it is probably unable to obtain sufficient taxable income in the
future period to offset the benefits of the deferred tax assets, the Company shall
write down the book value of the deferred tax assets; when it is probable to
obtain sufficient taxable income, the write-downs shall be reversed.
c) Recognition basis of deferred tax liabilities
The Company recognizes the current and previous taxable temporary differences
payable but unpaid as deferred tax liabilities. But they exclude temporary differences
arising from goodwill; transactions which are formed other than from business
combinations and neither affect the accounting profits nor affect taxable income at
the time of occurrence.
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(2) Measurement of deferred tax assets or deferred tax liabilities
a) On the balance sheet date, the deferred tax assets and deferred tax liabilities are
measured at the applicable tax rate during the period of expected recovery of the
assets or liquidation of the liabilities in accordance with the provisions of the tax law.
b) Where the applicable tax rate changes, the Company remeasures deferred tax
assets and deferred tax liabilities recognized, except for those incurred in
transactions or events directly recognized in the owner’s equity, of which the effect
shall be included in the income tax expenses in the current period when the rate
changes.
c) When the Company measures the deferred tax assets and deferred tax liabilities,
the tax rate and tax base in consistent with the expected recovery of assets or
liquidation of liabilities shall be adopted.
d) Deferred tax assets and deferred tax liabilities of the Company shall not be
discounted.
25. Lease
(1) Accounting treatment method of operating lease
Lessee records rents of operating lease into cost of related assets or current profit or loss
using straight line method in each period of the lease term. Initial direct expenses
incurred are recorded into current profit or loss. Contingent rents are recorded into
current profit or loss when occur.
Lessor includes assets used for operating lease in the related items of financial
statements. Rent of operating lease is recognized into current profit or loss using straight
line method in the various period of the lease term. Initial direct expenses are recorded
into current profit or loss. Depreciate fixed asset in the operating lease using depreciation
policy of the similar assets. Amortize other operating lease assets using systematic
reasonable method. Contingent rent is recorded into current profit or loss when occur.
(2) Accounting treatment method of financing lease
As the lessee, recognize the lower of fair value of lease asset and minimum lease
payment at the beginning day of the lease as the initial value of the asset leased in and
the minimum lease payment as long-term payable, the difference as unrealized finance
expense. Bank charges, lawyer fee, travel allowances, stamp taxes and other initial direct
expenses that can be attributable to lease project in the lease negotiation and signing the
lease contract are recorded into the asset leased in. Unrealized finance expense is
amortized in the period during the lease term and recognized as current finance
expenses using actual effective rate method. Contingent rent is recorded into current
profit or loss when actually occur.
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
As the lessor, recognize the total of minimum lease amount received and initial direct
expenses as the initial value of finance lease amount receivable and record the residual
amount not guaranteed at the same time. Recognize the difference between the total of
minimum lease amount received, initial direct expenses and residual amount not
guaranteed and present value of that as unrealized finance income. Amortize unrealized
finance income in the period during the lease term and use effective interest rate to
recognize current finance income. Contingent rent is recorded into current profit or loss
when actually occur.
26. Changes in significant accounting policies and accounting estimates
(1) Changes in significant accounting policies
√ Applicable N/A
Content and reason of changes in Procedure for examination
Notes
accounting policies and approval
The Company shall, from 1
January2020, implement the new
According to the requirements
revenue standards according to
of the new revenue standards,
Notificationof Accounting Standard for
N/A the comparative financial
Business Enterprises No.14 -
statements shall not be
Revenue(Caikuai [2018] No.22) revised
retroactively adjusted.
and published by Ministry of Finance in
July 2017.
The first implementation of new revenue standards will be adjusted to implement the items related to
financial statements at the beginning of the year
Consolidate Balance Sheet Items
Unit:CNY
Assets Balance as at 31 Balance as at 1 Adjustment
December 2019 January 2020
6,753,595,187.64 -6,753,595,187.64
Advance from customer
8,625,433,531.59 8,625,433,531.59
Contract liabilities
Other payables 6,521,146,762.07 3,962,515,639.56 -2,558,631,122.51
Other current liabilities 686,792,778.56 686,792,778.56
Balance Sheet of Parent Company
Unit:CNY
16,238,064,053.40 -16,238,064,053.40
Advance from customer
14,372,628,991.77 14,372,628,991.77
Contract liabilities
Other current liabilities 1,865,435,061.63 1,865,435,061.63
(2) Changes in significant accounting estimates
Applicable √ N/A
(3)Since 2020, the first implementation of new revenue standards or new leasing
standards will be adjusted to implement the items related to financial statements at
the beginning of the year
Applicable
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Whether it is needed to adjust the balance sheet accounts at the beginning of the year
√ Yes No
Consolidated Balance Sheet
Unit: CNY
Assets Balance as at 31 Balance as at 1 Adjustment
December 2019 January 2020
Current assets:
Cash and cash
4,300,144,848.67 4,300,144,848.67
equivalents
Settlement reserves
Lending funds
Financial assets held for
17,976,767,209.45 17,976,767,209.45
trading
Derivative financial assets
Notes receivables 659,266,780.81 659,266,780.81
Accounts receivables 16,080,618.65 16,080,618.65
Account receivables
financing
Prepayment 200,115,325.19 200,115,325.19
Premiums receivable
Reinsurance accounts
receivable
Reinsurance contract
reserve
Other receivables 37,521,590.52 37,521,590.52
Including:Interests
receivable
Dividends receivable
Buying back the sale of
financial assets
Inventories 14,433,244,696.27 14,433,244,696.27
Contract assets
Assets held for sale
Non-current assets due
within one year
Other current assets 183,119,654.47 183,119,654.47
Total current assets 37,806,260,724.03 37,806,260,724.03
Non-current assets:
Disbursement of loans and
advances
Investment in debt
instruments
Investment in other debt
instruments
Long-term receivables
Long-term equity
25,361,651.38 25,361,651.38
investments
Investment in other equity
instruments
Other non-current financial
5,050,851,671.16 5,050,851,671.16
assets
Investment property
Fixed assets 7,256,557,503.85 7,256,557,503.85
Construction in progress 263,153,505.12 263,153,505.12
Productive biological
assets
Oil and gas assets
Right-of-use asset
Intangible assets 1,747,134,144.14 1,747,134,144.14
Development expenses
Goodwill 276,001,989.95 276,001,989.95
Long-term deferred 254,143.60 254,143.60
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
expenses
Deferred tax assets 825,064,057.57 825,064,057.57
Other non-current assets 204,398,450.18 204,398,450.18
Total non-current assets 15,648,777,116.95 15,648,777,116.95
Total assets 53,455,037,840.98 53,455,037,840.98
Current liabilities:
Short-term loans
Borrowings from the
central bank
Loans from other banks
Financial liabilities held for
trading
Derivative financial
liabilities
Notes payable
Accounts payables 1,330,649,116.82 1,330,649,116.82
Advance from customer 6,753,595,187.64 -6,753,595,187.64
Contract liabilities 8,625,433,531.59 8,625,433,531.59
Financial assets sold for
repurchase
Customer brokerage
deposits
Securities underwriting
brokerage deposits
Receivings from
vicariously sold securities
Employee benefits
116,094,163.25 116,094,163.25
payable
Taxes payable 1,815,288,006.47 1,815,288,006.47
Other payables 6,521,146,762.07 3,962,515,639.56 -2,558,631,122.51
Including:Interests payable
Dividends payable
Handling charges and
commissions payable
Reinsurance accounts
payable
Liabilities held for sale
Non-current liabilities due
within one year
Other current liabilities 686,792,778.56 686,792,778.56
Total current liabilities 16,536,773,236.25 16,536,773,236.25
Non-current liabilities:
Insurance contract
reserves
Long-term loans 72,723.00 72,723.00
Bonds payable
Including: Preference
shares
Perpetual bonds
Lease liabilities
Long-term payables 197,623,728.85 197,623,728.85
Long-term payroll
payables
Accrued liabilities
Deferred income 89,756,500.00 89,756,500.00
Deferred tax liabilities 139,259,083.16 139,259,083.16
Other non-current
liabilities
Total non-current liabilities 426,712,035.01 426,712,035.01
Total liabilities 16,963,485,271.26 16,963,485,271.26
Shareholders' equity
Share capital 1,506,988,000.00 1,506,988,000.00
Other equity instruments
Including: preference
shares
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Perpetual bonds
Capital reserves 741,532,550.13 741,532,550.13
Less: treasury stock
Other comprehensive
-3,608,771.16 -3,608,771.16
income
Special reserves
Surplus reserves 753,494,000.00 753,494,000.00
General risk reserve
Undistributed profits 33,510,429,712.50 33,510,429,712.50
Total equity attributable
to owners of the parent 36,508,835,491.47 36,508,835,491.47
company
Non-controlling interests -17,282,921.75 -17,282,921.75
Total owners' equity 36,491,552,569.72 36,491,552,569.72
Total liabilities and
53,455,037,840.98 53,455,037,840.98
owners' equity
Adjustment statement
The Company shall, from 1 January 2020, implement the new revenue standards
according toNotification of Accounting Standard for Business Enterprises No.14-
Revenue (Caikuai [2018] No.22) revised and published by Ministry of Finance in July
2017.According to the requirements of the new revenue standards, the comparative
financial statements shall not be retroactively adjusted.
Balance Sheet of Parent Company
Unit: CNY
Balance as at 31 Balance as at 1 January
Assets Adjustment
December 2019 2020
Current assets:
Cash and cash
3,741,676,596.22 3,741,676,596.22
equivalents
Financial assets held for
6,991,814,305.98 6,991,814,305.98
trading
Derivative financial assets
Notes receivables 493,500.00 493,500.00
Accounts receivables 900,252,229.11 900,252,229.11
Account receivables
financing
Prepayment 110,564,280.51 110,564,280.51
Other receivables 8,154,899,373.55 8,154,899,373.55
Including:Interests
receivable
Dividends receivable
Inventories 10,476,945,420.09 10,476,945,420.09
Contract assets
Assets held for sale
Non-current assets due
within one year
Other current assets 303,163.88 303,163.88
Total current assets 30,376,948,869.34 30,376,948,869.34
Non-current assets:
Investment in debt
instruments
Investment in other debt
instruments
Long-term receivables
Long-term equity
7,964,291,378.23 7,964,291,378.23
investments
Investment in other equity
instruments
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Other non-current financial
1,467,783,926.91 1,467,783,926.91
assets
Investment property
Fixed assets 4,641,909,489.16 4,641,909,489.16
Construction in progress 183,652,813.42 183,652,813.42
Productive biological
assets
Oil and gas assets
Right-of-use asset
Intangible assets 1,230,216,202.93 1,230,216,202.93
Development expenses
Goodwill
Long-term deferred
expenses
Deferred tax assets 6,181,509.39 6,181,509.39
Other non-current assets 170,318,838.68 170,318,838.68
Total Non-current
15,664,354,158.72 15,664,354,158.72
Assets
Total Assets 46,041,303,028.06 46,041,303,028.06
Current liabilities:
Short-term loans
Financial liabilities held for
trading
Derivative financial
liabilities
Notes payable
Accounts payables 1,066,947,279.95 1,066,947,279.95
Advance from customer 16,238,064,053.40 -16,238,064,053.40
Contract liabilities 14,372,628,991.77 14,372,628,991.77
Employee benefits
payable
Taxes payable 202,771,495.61 202,771,495.61
Other payables 180,236,563.85 180,236,563.85
Including:Interests payable
Dividends payable
Liabilities held for sale
Non-current liabilities due
within one year
Other current liabilities 1,865,435,061.63 1,865,435,061.63
Total current liabilities 17,688,019,392.81 17,688,019,392.81
Non-current liabilities:
Long-term loans 72,723.00 72,723.00
Bonds payable
Including:preference
shares
Perpetual bonds
Lease liabilities
Long-term payables 144,680,616.65 144,680,616.65
Long-term payroll
payables
Provisions
Deferred income
Deferred tax liabilities 49,541,198.05 49,541,198.05
Other non-current
liabilities
Total non-current
194,294,537.70 194,294,537.70
liabilities
Total liabilities 17,882,313,930.51 17,882,313,930.51
Owners' equity (or
shareholders' equity)
Share capital 1,506,988,000.00 1,506,988,000.00
Other equity instruments
Including: preference
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
shares
Perpetual bonds
Capital reserves 1,341,628,480.93 1,341,628,480.93
Less: treasury stock
Other comprehensive
income
Special reserves
Surplus reserves 753,494,000.00 753,494,000.00
Undistributed profits 24,556,878,616.62 24,556,878,616.62
Total owners' equity 28,158,989,097.55 28,158,989,097.55
Total liabilities and
46,041,303,028.06 46,041,303,028.06
owners' equity
Adjustment statement
The Company shall, from 1 January 2020, implement the new revenue standards
according to Notification of Accounting Standard for Business Enterprises No.14 -
Revenue (Caikuai [2018] No.22) revised and published by Ministry of Finance in July
2017. According to the requirements of the new revenue standards, the comparative
financial statements shall not be retroactively adjusted.
(4)Since 2020, the first implementation of new revenue standards or new leasing
standards will be retroactivelyadjusted to the comparative financial statements
Applicable √ N/A
VI.Taxes
1. Major tax types and rates
Tax type Taxation basis Tax rate
Value-added tax (VAT) Output tax-deductible input tax 13%、10%、6%、19%
Sales revenue or or composite
Consumption tax
assessable price
Urban maintenance and construction tax Applicable turnover tax amount 7%、5%
Applicable income tax rate
Corporate income tax 25%、16.5%、0%、27%
Taxable income
Disclosure statement if there are various taxpaying bodies with different corporate
income tax rates
Company name Applicable tax rate
JSSJ Industry (HK) Holdings Co., Ltd. 16.50%
ZYG E-Commerce HK Limited 16.50%
Yanghe Hong Kong DistilleryCo., Ltd. 16.50%
Hong Kong Zhaiugou International Trade Co.,Ltd. 16.50%
Yanghe Chile SPA 27%
YangHe International Investment Ltd, ZYG Ltd 0
ZYG Technology Investment Ltd 0
2. Other information
1. Ad valorem taxation: liquor consumption tax shall be calculatedand paid according to
20% of the approved sales amount.The taxable liquor commissioned for processing shall
be taxed according to the sales price of similar liquor of the entrusted party, and if there
is no sales price of similar liquor, the taxable liquor shall be computed according to the
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
composition assessable price.Consumption tax on red wine (wine) is calculated at 10%
of sales.
2. Quantity-based taxation: liquor consumption tax is calculated and paid according to
CNY 0.50 per kg.
3. The corporate income tax is calculated and paid at 25% of the taxable income amount.
The profits tax rate applicable to JSSJ Industry (HK) Holdings Co., Ltd.,Hong Kong
Zhaiugou International Trade Co.,Ltd., ZYG E-Commerce HK Limited and Yanghe Hong
Kong Distillery Co., Ltd. is 16.50%, and the income tax rate applicable to Yanghe Chile
SPA is 27%.YangHe International Investment Ltd, ZYG Ltd and ZYG Technology
Investment Ltd are not required to pay any taxes to the government according to local
laws.
VII. Notes to the main items of the consolidated financial
statements (all currency unit is CNY, except other
statements)
1. Cash and cash equivalents
Unit: CNY
Item Closing balance Opening balance
Cash 4,434.27 4,067.27
Bank deposit 7,201,133,719.50 4,282,803,604.61
Other cash and cash equivalents 42,048,208.52 17,337,176.79
Total 7,243,186,362.29 4,300,144,848.67
Including: total deposit outbound 67,157,360.95 62,676,784.36
Other notes
Liquor manufacturing enterprises should disclose in detail whether there is any special interest
arrangement such as the establishment of capital co-management accounts with relevant parties
√ Applicable □ N/A
The Company shall comply with the disclosure requirements of the Shenzhen Stock Exchange Industry
Information Disclosure Guidelines No. 14 - Listed Companies Engage in Food and Liquor Manufacturing
Related Businesses
The Company does not have any special interest arrangement such as establishing fund co-
management account with relevant parties.
2. Financial assets held for trading
Unit: CNY
Item Closing balance Opening balance
Financial asset at fair value through
14,301,978,905.17 17,976,767,209.45
profit and loss
Including:
Equity instrument 2,012,500.00
Debt instrument 14,301,978,905.17 17,974,754,709.45
Including:
Total 14,301,978,905.17 17,976,767,209.45
3. Notes receivables
1）Classification of notes receivables
Unit: CNY
Item Closing balance Opening balance
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Bank acceptance bill 613,496,333.71 659,266,780.81
Total 613,496,333.71 659,266,780.81
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Unit: CNY
Closing balance Opening balance
Item Book balance Provision for bad debt Book balance Provision for bad debt
Book value Book value
amount proportion amount proportion amount proportion amount proportion
Including:
Provision for bad debt of notes
613,496,333.71 100.00% 613,496,333.71 659,266,780.81 100.00% 659,266,780.81
receivablesby portfolio
Including:
Bank acceptance bill portfolio 613,496,333.71 100.00% 613,496,333.71 659,266,780.81 100.00% 659,266,780.81
Total 613,496,333.71 100.00% 613,496,333.71 659,266,780.81 100.00% 659,266,780.81
Provision for bad debt by individual: 0.00
Unit: CNY
Closing balance
Item
Book balance Provision for bad debt Proportion Reason
Provision for bad debt by individual: 0.00
Unit: CNY
Closing balance
Item
Book balance Provision for bad debt Proportion Reason
Provision for bad debt by individual: 0.00
Unit: CNY
Closing balance
Item
Book balance Provision for bad debt Proportion Reason
Provision for bad debt by portfolio:
Unit: CNY
Closing balance
Item
Book balance Provision for bad debt Proportion
Bank acceptance bill portfolio 613,496,333.71 0.00
Notes to determine provision for bad debt by portfolio:
Provision for bad debt by portfolio:
Unit: CNY
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Closing balance
Item
Book balance Provision for bad debt Proportion
Notes to determine provision for bad debt by portfolio:
If provision for bad debt of notes receivable is calculated according to the general model of expected credit loss, please refer to the disclosure method
of other receivables to disclose the relevant information aboutprovision for bad debt:
□ Applicable √ Not applicable
2) Notes receivable that have been endorsed to other parties by the Company but have not expired at the end of year
Unit: CNY
Item Derecognition at period end Not derecognition at period end
Bank acceptance bill 397,528,853.18
Total 397,528,853.18
4. Accounts receivables
(1) Disclosed by categories
Unit: CNY
Closing balance Opening balance
Category Book balance Provision for bad debt Book balance Provision for bad debt
Book value Book value
Amount Proportion Amount Proportion Amount Proportion Amount Proportion
Including:
Provision for bad debt by
6,902,858.86 100.00% 2,677,627.96 38.79% 4,225,230.90 18,852,659.14 100.00% 2,772,040.49 14.70% 16,080,618.65
portfolio
Including:
Risk portfolio 6,902,858.86 100.00% 2,677,627.96 38.79% 4,225,230.90 18,852,659.14 100.00% 2,772,040.49 14.70% 16,080,618.65
Other portfolio
Total 6,902,858.86 100.00% 2,677,627.96 38.79% 4,225,230.90 18,852,659.14 100.00% 2,772,040.49 14.70% 16,080,618.65
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Provision for bad debt by individual:
Unit: CNY
Closing balance
Name of client
Book balance Provision for bad debt Proportion Reason
Provision for bad debts by portfolio: Risk portfolio
Unit: CNY
Closing balance
Overdue years
Accounts receivables Provision for bad debt Proportion of provision
Overdue within 1 year 3,767,292.61 113,018.78 3.00%
Overdue 1-2 years 88,718.59 8,871.86 10.00%
Overdue 2-3 years 31,993.58 6,398.72 20.00%
Overdue more than 3
3,014,854.08 2,549,338.60 84.56%
years
Total 6,902,858.86 2,677,627.96 --
Notes to determine provision for bad debt by portfolio:
For accounts receivables divided into risk portfolio, the Company refers to the historical
credit loss experience, and combines the current situation and the forecast of future
economic situation, and prepares a comparison table between overdue ages of accounts
receivables and expected credit loss rate of the whole duration to calculate the expected
credit loss.
Provision for bad debt by portfolio:
Unit: CNY
Closing balance
Item
Book Balance Provision for bad debt Proportion
Notes to determine provision for bad debt by portfolio:
If provision for bad debt of notes receivable is calculated according to the general model
of expected credit loss, please refer to the disclosure method of other receivables to
disclose the relevant information aboutprovision for bad debt:
□ Applicable √ Not applicable
Disclosed by aging
Unit: CNY
Aging Book value
Within 1 year (including 1 year) 3,767,292.61
1-2 years 88,718.59
2-3 years 31,993.58
Over 3 years 3,014,854.08
3-4 years 891,788.77
4-5 years 98,105.45
Over 5 years 2,024,959.86
Total 6,902,858.86
The Company shall comply with the disclosure requirements of Shenzhen Stock
Exchange Industry Information Disclosure Guidelines No. 14 - Listed Companies
Engaging in Food and Liquor Manufacturing Related Businesses.
(2) Provision for bad debt that is accrued, recovered or reversed during this period
Provision for bad debts during this period:
Unit: CNY
Changes in the current period
Opening Closing
Category Recovered
balance Provision Write off Others balance
or reversed
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Provision for
bad debt of
2,772,040.49 94,412.53 2,677,627.96
accounts
receivables
Total 2,772,040.49 94,412.53 2,677,627.96
Significant amount of reversal or recovery duringthis period
Unit: CNY
Company name Amount recovered or reversed Method
(3)Top five entities with the largest balances of the accounts receivables
Unit: CNY
Proportion in the total
Company's name Closing balance accounts Provision amount
receivables
First 973,744.36 14.11% 29,212.33
Second 600,066.00 8.69% 18,001.98
Third 600,000.00 8.69% 600,000.00
Fourth 454,356.93 6.58% 454,356.93
Fifth 434,565.07 6.30% 13,036.95
Total 3,062,732.36 44.37%
5. Prepayment
（1）Analysis by aging
Unit: CNY
Closing balance Opening balance
Aging
Amount Proportion Amount Proportion
Within 1 year 7,941,357.88 84.85% 198,626,119.93 99.26%
1-2 years 847,516.09 9.06% 972,506.99 0.48%
2-3 years 272,564.91 2.91% 413,485.27 0.21%
Over 3 years 297,407.60 3.18% 103,213.00 0.05%
Total 9,358,846.48 -- 200,115,325.19 --
Significant prepayment aging over 1 year without settlement on time :
No significant prepaymentaging over 1 year are recorded in the ending balance.
（2）Top five entities with the largest balances of prepayment
Company’s name Closing balance Proportion in the total prepayment (%)
First 1,952,540.69 20.86
Second 1,231,817.00 13.16
Third 616,680.27 6.59
Fourth 688,310.00 7.36
Fifth 485,555.44 5.19
Total 4,974,903.40 53.16
6. Other receivables
Unit: CNY
Item Closing balance Opening balance
Other receivables 30,318,938.67 37,521,590.52
Total 30,318,938.67 37,521,590.52
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
（1）Other receivables
a) Other receivables by nature
Unit: CNY
Nature of other receivables Closing balance Opening balance
Savings deposits (infringement dispute) 65,747,048.93 65,747,048.93
Deposit 16,298,680.14 15,338,991.78
Cooperation 3,910,000.00 3,910,000.00
Business loans, petty cash and others 19,800,887.50 28,136,955.41
Total 105,756,616.57 113,132,996.12
b）Provision for bad debt
Unit: CNY
Phase 1 Phase 2 Phase 3
Bad debt Expected credit Expected credit loss Expected credit loss
Total
losses in the next for lifetime (No credit for lifetime (Credit
12 months loss occurred) loss occurred)
Balance as at 1
485,801.96 75,125,603.64 75,611,405.60
January 2020
Change of opening
balance as at 1
—— —— —— ——
January 2020 in
current period
Provision in 2020 66,429.11 66,429.11
Write-off in 2020 218,499.03 218,499.03
Other changes -21,657.78 -21,657.78
Balance as at 31
245,645.15 75,192,032.75 75,437,677.90
December 2020
Significant changes of loss provision in the book balance during this period.
□ Applicable √ Not applicable
Disclosure by aging
Unit: CNY
Aging Book value
Within 1 year(including 1 year) 6,046,860.37
1-2 years 587,785.71
2-3 years 3,082,251.10
Over 3 years 96,039,719.39
3-4 years 3,646,132.27
4-5 years 115,065.49
Over 5 years 92,278,521.63
Total 105,756,616.57
c）Provision for bad debt that is accrued, recovered or reversed during this period
Provision for bad debts during this period:
Unit: CNY
Changes in current period
Opening Closing
Category Recovered Other
balance Provision Write off balance
or reversed changes
Other 75,611,405.60 152,069.92 -21,657.78 75,437,677.90
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
receivables bad
debt provision
Total 75,611,405.60 152,069.92 -21,657.78 75,437,677.90
Significant amount of reversal or recovery during this period:
Unit: CNY
Company Name Recovery amount Method
d）Top five entities with the largest balances of other receivables
Unit: CNY
Proportion in Provisioning
Closing
Company’sname Category Aging total amount at period
balance
receivables end
Industrial
Savings deposit
Commercial Bank
of China Ltd. （Infringement 42,907,124.66 Over 5 years 40.57% 19,872,137.40
Zhengzhou Jiefang dispute）
Road branch.
Industrial
Savings deposit
Commercial Bank
of China Ltd. （Infringement 22,839,924.27 Over 5 years 21.60% 22,839,924.27
Kaifeng Haode dispute）
branch
Bankruptcy
administrator of
Jiangsu Juntai
Properties Deposit 15,000,000.00 Over 5 years 14.18% 15,000,000.00
Co.,Ltd., Suqian
Guotai Department
Store Co.,Ltd.
Nanjing Peilong
Sports Culture Co., Cooperation 3,910,000.00 Over 5 years 3.70% 3,910,000.00
Ltd.
Advance money Advance money
2,379,354.55 3-4 year 2.25% 2,379,354.55
for another for another
Total -- 87,036,403.48 -- 82.30% 64,001,416.22
7. Inventories
Whether the Company needs to comply with the disclosure requirement of real estate
industry.
No
(1)Categories of Inventories
Unit: CNY
Closing balance Opening balance
Provision
Category Provision for
for stock
Book balance stock Book value Book balance Book value
obsolesce
obsolescence
nce
326,289,956. 394,844,178.6 6,710,130. 388,134,048.
Raw material 9,565,908.51 316,724,047.92
43 1 33 28
Work in 557,314,618. 551,503,829.4 551,503,829.
557,314,618.19
progress 19 1 41
1,582,637,19 1,582,637,195. 1,704,339,664. 1,704,339,66
Stocks
5.62 62 69 4.69
semi-finished 12,396,018,2 12,396,018,284 11,789,267,15 11,789,267,1
goods 84.57 .57 3.89 53.89
14,862,260,0 14,852,694,146 14,439,954,82 6,710,130. 14,433,244,6
Total 9,565,908.51
54.81 .30 6.60 33 96.27
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
The Company shall comply with the disclosure requirements of Shenzhen Stock
Exchange Industry Information Disclosure Guidelines No. 14 - Listed Companies
Engaging in Food and Liquor Manufacturing Related Businesses.
(2)Provision for stock obsolescence
Unit: CNY
Decreases in current
Increases in current period
Opening book period Closing book
Category
balance Recovery or balance
Provision Other Other
reversal
Raw material 6,710,130.33 6,196,876.85 3,341,098.67 9,565,908.51
Total 6,710,130.33 6,196,876.85 3,341,098.67 9,565,908.51
Determination basis of net realizable values of inventories
i. In normal operation process, for merchandise inventories held directly for sale,
including stock commodities (finished goods) and materials for sale, their net realizable
values are determined at their estimated selling prices minus their estimated selling
expenses and relevant taxes and surcharges.
ii. In normal operation process, for material inventories that need further processing, their
net realizable values are determined at the estimated selling prices of finished goods
minus estimated costs to completion, estimated selling expenses and relevant taxes and
surcharges.
iii. For inventories held to execute sales contract or service contract, their net realizable
values are calculated on the basis of contract price. If the quantities of inventories
specified in the sales contracts are less than the quantities held by the Company, the net
realizable value of the excess portion of inventories shall be based on general selling
prices.
iv. 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.
The recovery or reversal of stock obsolescence in the current period is the provision of
stock obsolescence for raw materials consumed in the current period.
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
8. Other current assets
Unit: CNY
Item Closing balance Opening balance
VAT to be deducted 168,810,154.82 159,457,511.39
Consumption tax to be deducted 6,483,646.87 7,020,885.09
Advance payment of income tax 7,543,269.30 16,641,257.99
Total 182,837,070.99 183,119,654.47
9. Long-term equity investments
Unit: CNY
Changes in current period
Adjustment
Profit or loss Closing balance
Opening s of other Other Cash divided Provision Closing
Investee recognized of provision for
balance Increase Decrease comprehen changes in or profit for Other balance
under equity impairment
sive equity declared impairment
method
income
Joint venture
Diageo
Internation
10,521,622.1 -
al Spirits -658,669.17 740,610.50 10,261,147.01
8 342,416.50
Company
Limited
10,521,622.1 -
Subtotal -658,669.17 740,610.50 10,261,147.01
8 342,416.50
Associated enterprise
Jiangsu Su
Wine
Culture 4,141,514.81 557,983.73 -172,288.69 4,527,209.85
Transmissi
on Co,Ltd.
Nanjing
Hesong 4,045,488.86 -191,051.07 3,854,437.79
Culture
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Technology
Co.,Ltd.
Jiangsu
Xinghe
Investment 6,653,025.53 4,232,556.98 10,885,582.51
Manageme
nt Co.,Ltd.
14,840,029.2
Subtotal 4,599,489.64 -172,288.69 19,267,230.15
0
25,361,651.3 -
Total 3,940,820.47 568,321.81 29,528,377.16
8 342,416.50
Other notes:
Other changes in the increase or decrease of long-term equity investment in the current period are the impact of adjusted long-term equity investment due to unrealized sales
profit of downstream transactionsand exchange rate changes.
10. Other non-current financial assets
Unit: CNY
Item Closing balance Opening balance
Classified as financial assets at fair value through
profit and loss
Including: equity instrument investment 4,519,967,688.33 3,353,861,013.63
Debt instrument investment 1,846,990,537.48 1,696,990,657.53
Total 6,366,958,225.81 5,050,851,671.16
11. Fixed assets
Unit: CNY
Item Closing balance Opening balance
Fixed Assets 6,882,953,634.34 7,256,557,503.85
Total 6,882,953,634.34 7,256,557,503.85
(1)Details of fixed assets
Unit: CNY
Item Buildings and constructions Machinery equipment Transportation equipment Other equipment Total
Original cost of fixed assets
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
1.Opening Balance 7,910,068,298.24 3,154,532,441.81 66,546,449.77 410,383,454.75 11,541,530,644.57
2.Increase in current period 268,503,489.45 71,957,131.32 3,621,457.60 14,699,120.57 358,781,198.94
(1)External purchase 22,078,140.26 71,957,131.32 3,621,457.60 14,699,120.57 112,355,849.75
(2)Transfer from construction in progress 246,425,349.19 246,425,349.19
(3) Increase from business combination
3.Decrease in current period 9,097,740.24 8,639,283.00 570,651.58 4,681,406.04 22,989,080.86
(1)Disposal or retirement 9,097,740.24 8,639,283.00 570,651.58 4,681,406.04 22,989,080.86
(2)Decrease from business combination
4.Closing Balance 8,169,474,047.45 3,217,850,290.13 69,597,255.79 420,401,169.28 11,877,322,762.65
Accumulated depreciation
1.Opening Balance 2,277,433,792.29 1,654,577,077.62 50,326,402.03 302,635,868.78 4,284,973,140.72
2.Increase in current period 383,086,384.69 280,314,176.23 5,850,072.07 58,300,214.84 727,550,847.83
(1)Provision 383,086,384.69 280,314,176.23 5,850,072.07 58,300,214.84 727,550,847.83
3.Decrease in current period 6,270,051.43 6,975,976.68 916,859.27 3,991,972.86 18,154,860.24
(1) Disposal or retirement 6,270,051.43 6,975,976.68 916,859.27 3,991,972.86 18,154,860.24
4.Closing Balance 2,654,250,125.55 1,927,915,277.17 55,259,614.83 356,944,110.76 4,994,369,128.31
Provision for fixed asset impairment
1.Opening Balance
2.Increase in current period
(1)Provision
3.Decrease in current period
(1)Disposal or retirement
4.Closing Balance
Book value
1.Closing book value 5,515,223,921.90 1,289,935,012.96 14,337,640.96 63,457,058.52 6,882,953,634.34
2.Opening book value 5,632,634,505.95 1,499,955,364.19 16,220,047.74 107,747,585.97 7,256,557,503.85
(2)Investment properties without certification of right
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Unit: CNY
Item Book value Reason for not having the certification of right
Yanghe Blue-collar workers apartment 136,256,140.84 In process
Yanghe 40,000-ton pottery jar warehouse 175,790,462.04 In process
Yanghe workshop etc. 111,059,271.04 In process
Total 423,105,873.92
12. Construction in progress
Unit: CNY
Item Closing balance Opening balance
Construction in progress 223,468,482.24 263,153,505.12
Total 223,468,482.24 263,153,505.12
(1)Details of the construction in progress
Unit: CNY
Closing balance Opening balance
Item Provision for Provision for
Book Balance Book value Book Balance Book value
impairment impairment
R&D Center Building project 330,097.09 330,097.09 330,097.09 330,097.09
Packaging logistics project of Shuanggou Distillery industry park 3,457,949.57 3,457,949.57 3,145,312.97 3,145,312.97
Shuanggou new area brewing project 13,132,641.22 13,132,641.22
Shuanggou new area supporting project 492,307.69 492,307.69 492,307.69 492,307.69
Shuanggou packaging production line 10,610,699.88 10,610,699.88 10,610,699.88 10,610,699.88
Intelligent brewing (Mellowness 125 workshop) project 18,611,596.70 18,611,596.70 26,209,114.57 26,209,114.57
Siyang base three-dimensional warehouse, packaging production line
1,090,909.09 1,090,909.09 14,449,560.37 14,449,560.37
project
Qu-making third workshop sesame qu expansion phase II project 5,955,626.39 5,955,626.39
40,000 tons of pottery jar warehouse project 12,714,991.93 12,714,991.93 82,205,504.93 82,205,504.93
Nanjing operation center building project 114,003,278.26 114,003,278.26 40,644,198.33 40,644,198.33
Other projects 62,156,652.03 62,156,652.03 65,978,441.68 65,978,441.68
Total 223,468,482.24 223,468,482.24 263,153,505.12 263,153,505.12
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
(2)Significant changes in construction in progress
Unit: CNY
Increase Proportion of Include:Ca
Transfer Other Interest Capitalizati Source
in Closing accumulative pitalized
Item Budget Opening into fixed decreases Progress capitaliza on rate for of
balance current balance project input in interest for
assets tion rate the period funds
period budget (%) the period
260,510,00 330,097.
R&D Center Building project 330,097.09 197.87% Late stage Other
0.00 09
Shuanggou new area bottle Other
495,000,00 3,145,31 312,636. 3,457,949.5
storage and packaging 207.18% Late stage
0.00 2.97 60 7
relocation project
Shuanggou new area brewing 528,180,00 13,132,6 13,132,64 Late stage Other
162.55%
project 0.00 41.22 1.22
Shuanggou new area 70,000,000 492,307. Late stage Other
492,307.69 173.17%
supporting project .00 69
Shuanggou packaging 120,000,00 10,610,6 10,610,699. Late stage Other
89.53%
production line 0.00 99.88 88
Intelligent brewing Other
45,000,000 26,209,1 4,114,72 11,712,24 18,611,596.
(Mellowness 125 workshop) 67.38% Late stage
.00 14.57 8.24 6.11 70
project
Siyang base three-dimensional Other
41,000,000 14,449,5 5,739,25 19,097,90 1,090,909.0
warehouse, packaging 64.93% Late stage
.00 60.37 4.40 5.68 9
production line project
Qu-making third workshop Other
9,800,000. 5,955,62 1,763,37 7,719,001.
sesame qu expansion phase II 78.76% Late stage
00 6.39 4.94 33
project
40,000 tons of pottery 360,000,00 82,205,5 116,132, 185,623,1 12,714,991. Other
55.09% Late stage
jarwarehouse project 0.00 04.93 677.14 90.14 93
Nanjing operation center 800,000,00 40,644,1 73,359,0 114,003,278 Other
14.25% Early stage
building project 0.00 98.33 79.93 .26
Total 2,729,490, 197,175, 201,421, 237,284,9 161,311,830 -- -- --
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
000.00 063.44 751.25 84.48 .21
13. Intangible assets
(1)Details of intangible assets
Unit: CNY
Computer
Item Land use right Patent right No-patent right technology Trademark right Total
software
Original cost of intangible assets
Opening balance 1,951,504,148.14 399,851,465.43 118,448,570.28 2,469,804,183.85
Increase in current period 5,814,263.84 15,750,107.50 21,564,371.34
Including: Acquired 5,814,263.84 15,750,107.50 21,564,371.34
Internally developed
Business combination
Decrease in current period
Including: Disposal
Closing balance 1,957,318,411.98 399,851,465.43 134,198,677.78 2,491,368,555.19
Accumulated amortization of intangible
assets
Opening balance 287,051,471.16 387,109,803.02 48,508,765.53 722,670,039.71
Increase in current period 40,313,330.51 1,890,025.46 12,968,466.41 55,171,822.38
Including: Provision 40,313,330.51 1,890,025.46 12,968,466.41 55,171,822.38
Decrease in current period
Including: Disposal
Closing balance 327,364,801.67 388,999,828.48 61,477,231.94 777,841,862.09
Provision for impairment
Opening balance
Increase in current period
Including: Provision
Decrease in current period
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Including: Disposal
Closing balance
Book value of intangible assets
Closing book value 1,629,953,610.31 10,851,636.95 72,721,445.84 1,713,526,693.10
Opening book value 1,664,452,676.98 12,741,662.41 69,939,804.75 1,747,134,144.14
The proportion of intangible assets formed through internal research and development of the Company in the balance of intangible assets at the end
of this period is 0.00%.
14. Goodwill
(1)Original cost of goodwill
Unit: CNY
Increasein current period Decrease incurrent period
Investee’s name or items resulting in goodwill Opening balance Closing balance
Business combination Disposal
Jiangsu Shuanggou Distillery Stock Co.,Ltd. 276,001,989.95 276,001,989.95
Jiangsu Zhaiugou E-commerce Co.,Ltd 6,940,018.79 6,940,018.79
Jiangsu Zhaibianli E-commerce Co.,Ltd 21,250,284.80 21,250,284.80
Guizhou Guijiu Co.,Ltd. 18,826,210.01 18,826,210.01
ZYG TECHNOLOGY INVESTMENT LTD 5,057,111.19 5,057,111.19
Guizhou Welcome Drink Stock Co.,Ltd 11,333,195.25 11,333,195.25
Total 339,408,809.99 339,408,809.99
(2)Provision for impairment of goodwill
Unit: CNY
Increasein current period Decrease incurrent period Closing
Investee’s name or items resulting in goodwill Opening balance
Provision Disposal balance
Jiangsu Zhaiugou E-commerce Co.,Ltd 6,940,018.79 6,940,018.79
Jiangsu Zhaibianli E-commerce Co.,Ltd 21,250,284.80 21,250,284.80
Guizhou Guijiu Co.,Ltd. 18,826,210.01 18,826,210.01
ZYG TECHNOLOGY INVESTMENT LTD 5,057,111.19 5,057,111.19
Guizhou Welcome Drink Stock Co.,Ltd 11,333,195.25 11,333,195.25
Total 63,406,820.04 63,406,820.04
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Related information of asset groups or asset group portfolio containing goodwill
Goodwill impairment test according to the present value of the expected future cash flow
of the asset groups, group assets of recent three years based on the actual operation
situation and the future operation of the expectations, the estimated future cash flow of
the asset group, and according to the pre-tax discount rate of 19.93% discount after
calculating the recoverable amount of an asset group. After the test, there is no goodwill
impairment resulting from the acquisition of Jiangsu Shuanggou Distillery Stock Co., Ltd.
Statement of testing process of impairment of goodwill, key parameters (e.g. the forecast
growth rate at present value of future cash flows; the growth rate in stable period; profit
margin; the discount rate; predictive period and etc.) and determination methods of
recognizing goodwill impairment loss.
Effect of goodwill impairment test
Other statements
15. Long-term prepaid expenses
Unit: CNY
Opening Increase in the Amortization for Other Closing
Item
balance current period the current period decreases balance
Renovation costs
254,143.60 127,071.84 127,071.76
of rented house
Total 254,143.60 127,071.84 127,071.76
16. Deferred tax assets/ deferred tax liabilities
(1)Deferred tax assets before offset
Unit: CNY
Closing balance Opening balance
Item Deductible
Deferred tax Deductible temporary Deferred tax
temporary
assets differences assets
differences
Provision for asset
84,810,902.34 21,202,543.99 81,682,220.18 20,415,104.69
impairment
Unrealized profit from
35,903,134.07 8,975,783.52 41,036,182.10 10,259,045.53
internal transaction
Deductible losses 787,092,991.66 196,773,247.91 456,081,306.89 114,020,326.72
The difference
between book value 2,795,879,312.35 698,969,828.09 2,721,478,322.51 680,369,580.63
of debt and tax base
Total 3,703,686,340.42 925,921,403.51 3,300,278,031.68 825,064,057.57
(2)Deferred tax liabilities before offset
Unit: CNY
Closing balance Opening balance
Item Taxable temporary Deferred tax Taxable temporary Deferred tax
differences liabilities differences liabilities
Valuation of
appreciation of
business combination 44,387,767.84 11,096,941.96 47,048,144.60 11,762,036.15
assets not under
common control
Changesinfair value of
financial assets held 1,781,604,966.78 445,242,472.42 516,851,327.69 127,497,047.01
for trading
Total 1,825,992,734.62 456,339,414.38 563,899,472.29 139,259,083.16
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
(3)Deferred tax assets or liabilities presented as net value after offset
Unit: CNY
Offset amount of Closing balance Opening balance
Opening offset
deferred tax ofdeferred tax ofdeferred tax
amount of deferred
Item assets and assets or deferred assets or deferred
tax assets and
deferred tax tax liabilities after tax liabilities after
deferred tax liabilities
liabilities offset offset
Deferred tax assets 925,921,403.51 825,064,057.57
Deferred tax liabilities 456,339,414.38 139,259,083.16
(4)Details of unrecognized deferred tax assets
Unit: CNY
Item Closing balance Opening balance
Deductible temporary differences 88,933,255.36 97,994,641.66
Deductible losses 105,350,440.90 155,606,254.87
Total 194,283,696.26 253,600,896.53
(5)Deductible losses from unrecognized deferred tax assets will due on the
following years
Unit: CNY
Year Closing balance Opening balance Note
2021 50,282,695.77
2022 53,837,061.59 67,671,298.41
2023 32,435,218.31 32,435,218.31
2024 5,217,042.38 5,217,042.38
2025 13,861,118.62
Total 105,350,440.90 155,606,254.87 --
17. Other non-current assets
Unit: CNY
Provision Provision
Item Book Balance for Book value Book Balance for Book value
impairment impairment
Compensation
for land 158,606,824.94 158,606,824.94 158,606,824.94 158,606,824.94
demolition
Prepayment
of
construction
51,070,769.27 51,070,769.27 45,791,625.24 45,791,625.24
equipment
and house
purchase
Total 209,677,594.21 209,677,594.21 204,398,450.18 204,398,450.18
18. Accounts payables
(1)Presentation of accounts payables
Unit: CNY
Item Closing balance Opening balance
Material purchase 1,073,245,695.34 1,263,490,446.81
Construction and equipment payment 78,625,440.95 67,158,670.01
Total 1,151,871,136.29 1,330,649,116.82
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
(2) Significant accounts payables agingover one year
No significant accounts payables aging over 1 year are recorded in the ending balance.
19. Contract liabilities
Item Closing balance Opening balance
Advance from customers 6,191,149,791.32 6,066,802,409.08
Discounts and allowances payable to
the distributors that have not yet been 2,610,197,100.00 2,558,631,122.51
settled
Total 8,801,346,891.32 8,625,433,531.59
20. Employee benefits payable
(1)Employee benefits payable shown as follows:
Unit: CNY
Increase in current Decrease in current
Item Opening balance period period Closing balance
Short-term benefits 115,901,955.94 2,133,071,155.75 2,052,923,831.69 196,049,280.00
Post-employment
benefits-defined 192,207.31 101,619,932.92 101,619,932.92 192,207.31
contribution plans
Termination benefits 178,106.65 178,106.65
Total 116,094,163.25 2,234,869,195.32 2,154,721,871.26 196,241,487.31
(2)Short-term employee benefits payable shown as follows:
Unit: CNY
Increase in current Decrease in current
Item Opening balance period period Closing balance
Wages, bonuses,
allowances and 115,829,721.23 1,894,760,493.20 1,814,620,438.45 195,969,775.98
grants
Employees’
90,855,372.73 90,855,372.73
welfare
Social insurance
14,860.08 59,562,248.28 59,562,248.27 14,860.09
premiums
Including: Medical
7,972.00 48,484,584.65 48,484,584.65 7,972.00
Insurance
Work-related injury
6,875.33 3,094,322.99 3,094,322.98 6,875.34
insurance
Maternity
12.75 7,983,340.64 7,983,340.64 12.75
insurance premium
Housing funds 52,659.80 80,588,403.00 80,581,095.00 59,967.80
Labor union
expenditures and
4,714.83 7,304,638.54 7,304,677.24 4,676.13
employee
education funds
Total 115,901,955.94 2,133,071,155.75 2,052,923,831.69 196,049,280.00
(3)Defined Contribution Plan shown as follows:
Unit: CNY
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Increase in current Decrease in current
Item Opening balance period period Closing balance
Basic endowment
191,323.23 98,535,581.57 98,535,581.57 191,323.23
insurance premium
Unemployment
884.08 3,084,351.35 3,084,351.35 884.08
insurance premium
Total 192,207.31 101,619,932.92 101,619,932.92 192,207.31
21. Taxes payable
Unit: CNY
Item Closing balance Opening balance
Value-added tax 150,194,783.11 27,126,012.81
Consumption tax 533,945,998.98 184,097,543.52
Enterprise income tax 1,333,112,088.00 1,548,461,975.77
Individual Income Tax 20,265,903.93 11,273,828.79
Urban maintenance and construction tax 45,918,790.94 11,574,124.18
Land use tax 6,456,687.93 4,322,610.74
Property tax 22,210,815.89 14,349,066.89
Education Surcharge and Local Education
37,359,708.11 11,016,464.11
Surcharge
Stamp tax 1,005,142.70 731,524.41
Integrated funds 2,545.99 2,954.09
Other tax 2,333,690.85 2,331,901.16
Total 2,152,806,156.43 1,815,288,006.47
22. Other payables
Unit: CNY
Item Closing balance Opening balance
Other payables 1,556,699,290.45 3,962,515,639.56
Total 1,556,699,290.45 3,962,515,639.56
(1) Other payables
(a)Categories by nature
Unit: CNY
Item Closing balance Opening balance
Dealer deposit 279,298,081.55 2,668,012,523.41
Dealer risk pledged deposit 681,336,068.47 718,922,266.50
Accrued expenses 303,563,123.81 306,270,802.86
Quality guarantee deposit and
195,028,352.99 180,729,458.44
performance deposit
Other payables 97,473,663.63 88,580,588.35
Total 1,556,699,290.45 3,962,515,639.56
(b) Other important payables aging more than 1 year
Unit: CNY
Reasons for being unpaid or
Item Closing balance
written-off
Dealer risk pledged deposit and dealer Dealer risk pledged deposit
741,568,207.73
deposit and dealer deposit not yet due
Total 741,568,207.73 --
23. Other current liabilities
Item Closing balance Opening balance
Output tax has not yet
798,216,651.49 686,792,778.56
received
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Total 798,216,651.49 686,792,778.56
24. Long-term loans
(1)Long-term loans by category
Unit: CNY
Item Closing balance Opening balance
Credit loans 36,360.00 72,723.00
Total 36,360.00 72,723.00
25. Long-term payables
Unit: CNY
Item Closing balance Opening balance
Special accounts payables 197,049,341.93 197,623,728.85
Total 197,049,341.93 197,623,728.85
(1)Special accounts payables
Unit: CNY
Decrease in
Increase in current
Item Opening balance current Closing balance Reason
period
period
Compensation for
replacement of 197,623,728.85 574,386.92 197,049,341.93
employee status
Total 197,623,728.85 574,386.92 197,049,341.93 --
26. Deferred incomes
Unit: CNY
Increase in Decrease in Closing
Item Opening balance Reason
current period current period balance
Government Government
89,756,500.00 5,000,000.00 8,757,000.00 85,999,500.00
grants grants
Total 89,756,500.00 5,000,000.00 8,757,000.00 85,999,500.00 --
Projects involving government grants:
Unit: CNY
Non- Other Cost Relevant
Increase
Liability Opening operating income reduction in Other Closing to asset
in current
item balance income in in current current changes balance or
period
current period period period income
Hubei
Lihuacun
liquor
industry
liquor
26,053,60 4,257,00 21,796,60
brewing,
filling 0.00 0.00 0.00 Asset
project
supporting
facilities
constructio
n subsidies
Special
fund for 15,000,00 3,000,00 12,000,00
packaging 0.00 0.00 0.00 Asset
logistics
project in
223
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Shuanggou
new area
Special
fund for
Harbin 41,202,90 41,202,90
Binzhou 0.00 0.00 Asset
brewery
constructio
n project
Shuanggou
7,500,000. 1,500,00 6,000,000
sewage
treatment 00 0.00 .00 Asset
project
The second
batch of
provincial-
level
industrial
and
5,000,000. 5,000,000
information
industry 00 .00 Asset
transformati
on and
upgrading
special
funds in
2020
89,756,50 5,000,000. 8,757,00 85,999,50
Total 0.00 00 0.00 0.00
27. Share capital
Unit: Share
Increases/decreases in the current period (+, -)
Opening Conversion Closing
balance Issuance of Share of reserves balance
Others Subtotal
new shares donation funds into
shares
Total number 1,506,988,00 1,506,988,000
of shares 0.00 .00
28. Capital reserves
Unit: CNY
Increase in Decrease in
Item Opening balance Closing balance
current period current period
Share premium 741,502,550.13 741,502,550.13
Other capital reserves 30,000.00 30,000.00
Total 741,532,550.13 741,532,550.13
29. Treasury stock
Increase in Decrease in
Item Opening balance Closing balance
current period current period
Share repurchase 1,002,128,680.79 1,002,128,680.79
Total 1,002,128,680.79 1,002,128,680.79
Other notes, including the changes in the current period, the reasons for the changes
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
On 29 October 2019, the sixth session of the ninth meeting of the board of directors was
held. It reviewed and approved the plan about repurchasing part of the social public
shares, and agreed to use its own funds to repurchase shares through centralized
bidding. The total amount of repurchase is not less than CNY 1 billion (inclusive) and not
more than CNY 1.5 billion (inclusive). The repurchase price is not more than CNY 135.00
per share (inclusive). The period of repurchases is within 12 months since the
repurchase plan is reviewed and approved by the sixth session of the ninth meeting of
the board of directors. The Company's 2019 annual equity distribution plan has been
implemented on 24 June 2020. According to the Company's repurchase plan, the upper
limit of the price of repurchased shares has been adjusted from no more than RMB 135 /
share (inclusive) to no more than RMB 132.01 / share (inclusive). This share
repurchased is used to implement equity incentive or employee stock ownership plan for
core key employees of the Company. The Company has repurchased 9,661,310 shares
of the Company. The total amount of funds used is CNY 1,002,128,680.79. The highest
purchase price is CNY 131.99 per share, and the lowest is CNY 80.37 per share. The
repurchase amount of the Company has reached the lower limit of the total amount of
repurchase funds in the repurchase plan and not exceeded the upper limit of the total
amount of repurchase funds, and the repurchase plan has been completed.The
company's equity incentive or employee stock ownership plan has not been implemented,
and the Company's share capital structure has not changed.
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
30. Other comprehensive incomes
Unit: CNY
Current period
Less: Previously Less: previously Amount
Opening Amount in Amount attribute to Closing
Item recognized in other recognized in other attribute to
balance current period Less: non-controlling balance
comprehensive comprehensive income parent
before income income tax shareholders after
income transferred to transferred to retained company after
tax tax
profit or loss earnings tax
2.Other consolidate incomes
-3,608,771.16 -1,630,142.86 -1,604,477.77 -25,665.09 -5,213,248.93
that will be reclassified into profit
and loss
Including: other comprehensive
income will be reclassified into 178,619.29 -342,416.50 -342,416.50 -163,797.21
profits or losses under the
equity method
Difference from translation of
-3,787,390.45 -1,287,726.36 -1,262,061.27 -25,665.09 -5,049,451.72
financial statements in foreign
currency
Total other comprehensive -3,608,771.16 -1,630,142.86 -1,604,477.77 -25,665.09 -5,213,248.93
income
Other statements, including adjustments for valid portion of the gains and or losses from cash flow hedging transferring to initial recognition amount of
projects hedged.
31. Surplus reserves
Unit: CNY
Item Opening balance Increase in current period Decrease in current period Closing balance
Statutory surplus reserves 753,494,000.00 753,494,000.00
Total 753,494,000.00 753,494,000.00
Statements for surplus reserves including increase or decrease changes and change reasons this period:
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
32. Undistributed profits
Unit: CNY
Item Current period Previous period
Undistributed profit before adjustment at the end of the last
33,510,429,712.50 30,784,308,899.94
year
Adjustment in the total undistributed profits at the
165,659,685.69
beginning of year
Undistributed profit after adjustment at the beginning of
33,510,429,712.50 30,949,968,585.63
year
Plus: net profit attributable to owners of the parent
7,482,228,633.63 7,382,822,726.87
company for the current period
Ordinary share dividends payable 4,502,746,983.00 4,822,361,600.00
Undistributed profits at the end of the period 36,489,911,363.13 33,510,429,712.50
Statements for adjusting undistributed profits at the beginning of the period:
(1)Due to retrospective adjustment according to Accounting Standards for Business
Enterprises and related new rules, undistributed profit at the
beginningincreases/decreases by CNY 0.00.
(2)Due to changes of accounting policies, undistributed profit at the beginning
increases/decreases by CNY 0.00.
(3)Due to correction of accounting errors, undistributed profit at the beginning
increases/decreases by CNY 0.00.
(4)Due to change of the consolidation scopeunder common control, undistributed profit at
the beginning of the period increases/decreases by CNY 0.00.
(5)Due to other influences, undistributed profit at the beginning totally
increases/decreases by CNY 0.00.
33. Operating revenue and cost of sales
Unit: CNY
Current period amount Previous period amount
Item
Operating revenue Cost of sales Operating revenue Cost of sales
Primary business 22,161,278,307.05 5,772,779,588.18 23,186,902,149.00 5,527,417,445.92
Other business 965,198,578.02 853,582,663.06 972,899,845.68 825,824,752.35
Total 23,126,476,885.07 6,626,362,251.24 24,159,801,994.68 6,353,242,198.27
whether the net profit is negative or not after deducting non-recurring profits and losses
by audit,
□ Yes √ No
Information relating to revenue
Unit: CNY
Contract type Division 1 Division 2 Total
Including:
Including:
Information relating to performance obligations
N/A
Information relating to the transaction price apportioned to the remaining performance
obligations:
At the end of this report, the amount of revenue corresponding to the performance
obligations with the contracts signed but not performed or not performed is CNY
6,191,149,791.32, of which CNY 6,191,149,791.32 is expected to be recognized in 2021,
and CNY 0.00 is expected to be recognized in 2022
Other notes
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
34. Taxes and surcharges
Unit: CNY
Item Current period amount Previous period amount
Consumption tax 2,847,452,319.78 2,605,319,409.77
Urban maintenance and
241,392,653.40 254,046,554.00
construction tax
Educational surcharge 239,859,725.86 252,226,373.49
Property tax 60,808,511.65 61,403,035.90
Land use tax 18,164,433.97 17,976,049.12
Stamp tax 7,942,227.94 8,809,094.29
Increment tax on land value 1,567,679.81
Environmental protection tax 11,898.43 126,776.37
Others 13,998.00 4,853.34
Total 3,415,645,769.03 3,201,479,826.09
35. Selling and distribution expenses
Unit: CNY
Item Current period amount Previous period amount
Advertising and promotion expense 1,411,090,022.81 1,566,903,873.47
Payroll 646,271,019.11 502,836,431.55
Cargo charge 5,184,987.92 10,327,005.41
Labor expense 117,975,847.08 156,239,051.28
Travel expense 353,434,744.65 365,735,100.77
Business entertainment expense 1,628,111.11 3,809,795.16
Other expense 68,219,425.10 85,859,912.95
Total 2,603,804,157.78 2,691,711,170.59
36. General and administrative expenses
Unit: CNY
Item Current period amount Previous period amount
Payroll 665,991,755.03 727,031,403.39
Travel expense 34,612,481.35 60,829,942.03
Office allowance 6,667,982.75 7,528,872.00
Wate, electric and steam expense 56,946,078.23 64,916,608.02
Business entertainment expense 18,533,811.47 18,999,148.74
Depreciation cost 463,503,047.71 489,966,400.69
Rental expense 7,926,700.20 2,562,113.84
Repair charge 40,899,196.47 54,009,927.49
Amortization of intangible assets 55,171,822.38 53,008,955.54
Vehicle use expense 17,742,719.25 20,175,918.19
Shipping and handling cost 43,948,370.23 41,141,371.90
Other expense 317,136,236.86 316,321,065.17
Total 1,729,080,201.93 1,856,491,727.00
37. Research & Development expenses
Unit: CNY
Item Current period amount Previous period amount
Material expenses 144,095,917.84 85,700,940.30
Payroll 77,975,559.20 54,476,101.25
Other expense 38,022,813.99 19,788,552.33
Total 260,094,291.03 159,965,593.88
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
38. Financial expenses
Unit: CNY
Item Current period amount Previous period amount
Interest expense 1,964.00 2,618.00
Bill discount expense 11,719,069.54 633,304.85
Less: Interest income 104,495,154.37 77,589,503.94
Plus: Losses from currency exchange
3,670,115.95 -3,270,386.19
(Less: income)
Plus: Bank charges 1,869,240.49 1,797,415.87
Total -87,234,764.39 -78,426,551.41
39. Other income
Unit: CNY
Sources of other income Current period Previous period
Government grants received 98,151,595.19 83,307,366.37
Withholding personal tax commission 818,031.70 1,670,388.78
Total 98,969,626.89 84,977,755.15
40. Investment income
Unit: CNY
Item Current period amount Previous period amount
Investment income from long-term equity
3,940,820.47 -4,447,288.34
investments under the equity method
Investment income from disposing long-
21,516.26 -43,877.59
term equity investments
Investment income from financial assets
113,585,439.53 40,267,966.45
held for trading during the holding period
Investment income from disposal of
1,089,135,586.23 814,777,407.10
financial assets held for trading
Total 1,206,683,362.49 850,554,207.62
41. Gains/losses of changes in fair value
Unit: CNY
Gains/losses of changes in fair value Current period amount Previous period amount
Financial assets held for trading 1,267,682,598.52 158,679,505.33
Total 1,267,682,598.52 158,679,505.33
42. Losses from credit impairment
Unit: CNY
Item Current period amount Previous period amount
Bad debt losses of other receivables 152,069.92 -18,373,057.36
Bad debt losses of accounts receivables 94,412.53 -583,288.90
Total 246,482.45 -18,956,346.26
43. Losses from asset impairment
Unit: CNY
Item Current period amount Previous period amount
Losses from provision for stock
obsolescence and contract -6,196,876.85 -2,248,496.85
performance cost
Total -6,196,876.85 -2,248,496.85
44. Gains from disposal of assets
Unit: CNY
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Gains from disposal of assets Current period amount Previous period amount
Gains from disposal of fixed assets 45,438.89 19,983,101.67
45. Non-operating income
Unit: CNY
Amount included in non-
Item Current period amount Previous period amount recurring profit and loss in
current period
Donations acceptance 9,120,063.00 9,120,063.00
Government grants 24,000.00 2,298,016.82 24,000.00
Liquidated damages income 4,475,586.24 11,254,294.46 4,475,586.24
Compensation payment 8,475,059.72 7,819,571.36 8,475,059.72
Account payables that are
64,118.24 185,947.97 64,118.24
unable to pay
Others 2,881,043.09 688,123.76 2,881,043.09
Total 25,039,870.29 22,245,954.37 25,039,870.29
Government grants included in current profits and losses:
Unit: CNY
Whether the
Current Previous Related to
grants affects Whether it is
Item Body Reason Type period period assets/related
current year profit special grant
amount amount to earnings
and loss
46. Non-operating expenses
Unit: CNY
Amount included in
Item Current period amount Previous period amount non-recurring profit and
loss in current period
Donation expenses 35,400,000.00 5,546,180.00 35,400,000.00
Losses from retirement of
4,802,593.81 6,141,958.08 4,802,593.81
fixed asset
Integrated fund 77,328.11 79,543.09
Reparations 422,169.33 1,442,510.50 422,169.33
Others 623,399.13 114,100.03 623,399.13
Total 41,325,490.38 13,324,291.70 41,248,162.27
47. Income tax expense
(1)Statement of income tax expense
Unit: CNY
Item Current period amount Previous period amount
Current period income tax 2,178,072,592.80 2,472,964,546.78
Deferred income tax 216,222,985.28 -88,251,204.98
Total 2,394,295,578.08 2,384,713,341.80
(2)Adjustment for accounting profit and income tax expense
Unit: CNY
Item Current period amount
Total profit 9,878,901,892.00
Income tax expenses determined by statutory/applicable
2,469,725,473.00
tax rate
Impact from subsidiaries’ different tax rates -340,473.91
Adjust for impact from income tax expense in previous
-16,387,934.87
period
Impact from non-taxable income -5,537,829.51
230
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Non-deductible costs, expenses and losses 4,703,997.41
Deductible from deferred tax assets in previous period -16,029,233.15
Temporary differences due to unrecognized deferred tax
4,002,241.61
asset during current period
Add the effect of the deduction -45,840,662.50
Income tax expense 2,394,295,578.08
48. Net other comprehensive income
Please refer to Note VII-30. for details.
49. Consolidated cash flow items
(1)Cash received from other operation activities
Unit: CNY
Item Current period amount Previous period amount
Risk deposit 60,255,818.13 59,275,520.22
Dealer deposit 56,575,865.80 2,602,491.66
Interest income 104,495,154.37 77,589,503.94
Liquidated damages income 4,475,586.24 11,254,294.46
Government grants 94,418,595.19 76,848,383.19
Commission for withholding tax 818,031.70 1,670,388.78
Others 48,750,584.17 31,109,582.42
Total 369,789,635.60 260,350,164.67
Statements for cash received from other operation activities:
(2)Cash paid for other operating activities
Unit: CNY
Item Current period amount Previous period amount
Transportation fee 45,592,659.35 51,468,377.31
Advertising promotion expense 1,216,976,623.15 1,751,245,676.57
Rental expense 11,606,602.30 10,604,573.95
Repair charge 40,913,095.81 54,113,100.25
Travel expense 408,411,257.95 450,385,225.31
Entertainment expense 20,161,922.58 22,808,943.90
Insurance expense 4,473,210.69 5,386,711.21
Labor expense 149,569,041.84 183,149,910.74
Others 389,030,101.57 435,334,271.31
Total 2,286,734,515.24 2,964,496,790.55
Statements for cash paid for other operating activities:
(3)Cash paid for other financing activities
Unit: CNY
Item Current period amount Previous period amount
A cash payment by minority shareholder 750,000.00
Share repurchase 1,002,128,680.79
Total 1,002,128,680.79 750,000.00
Statements for cash paid for other financing activities:
50. Supplementary information to consolidated statement of cash flow
(1)Supplementary information to consolidated statement of cash flow
Unit: CNY
Item Current period amount Previous period amount
Reconciliation of net profit to cash
-- --
flow from operating activities
231
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Net profit 7,484,606,313.92 7,386,090,915.21
Add: Provision for asset impairment 5,950,394.40 21,204,843.11
Depreciation of fixed asset, oil &gas
727,550,847.83 722,009,265.90
assets and productive biological assets
Depreciation of right-of-use asset
Amortization of intangible assets 55,171,822.38 53,058,955.54
Amortization of long-term deferred
127,071.84 1,034,707.84
expenses
Losses from disposal of fixed assets,
intangible assets and other long-term -45,438.89 -19,983,101.67
Assets
Losses on retirement of fixed assets 4,669,390.54 6,141,958.08
Losses from changes in fair value -1,267,682,598.52 -158,679,505.33
Financial expense 3,672,079.95 -3,267,768.19
Losses on investments -1,206,683,362.49 -850,554,207.62
Decrease in deferred tax asset -100,857,345.94 -111,976,025.37
Increase in deferred tax liabilities 317,080,331.22 23,677,944.98
Decrease in inventory -422,305,228.21 -537,439,892.94
Decrease in operation receivables 255,853,105.64 -612,187,011.25
Increase in operation payables -1,878,449,751.14 878,760,793.12
Other 133,203.27
Net cash flow from operating activities 3,978,790,835.80 6,797,891,871.41
Significant investing and financing
-- --
activities not Involving cash flow:
Net change in cash &cash
-- --
equivalents
Closing balance of cash 7,243,186,362.29 4,300,144,848.67
Less:opening balance of cash
4,300,144,848.67 3,615,348,307.97
equivalents
Net change in cash and cash
2,943,041,513.62 684,796,540.70
equivalents
(2)Composition of cash and cash equivalents
Unit: CNY
Item Closing balance Opening balance
Cash 7,243,186,362.29 4,300,144,848.67
Including:cash on hand 4,434.27 4,067.27
Unrestricted bank deposit 7,201,133,719.50 4,282,803,604.61
Other unrestricted cash & cash
42,048,208.52 17,337,176.79
equivalents
Closing balance of cash and cash
7,243,186,362.29 4,300,144,848.67
Equivalents
51. Foreign currency transactions
(1)Foreign currency balance
Unit: CNY
Closing balance in foreign Closing balance in
Item Exchange rate
currency CNY
Cash and cash equivalents -- --
Including：USD 1,470,471.60 6.52490 9,594,680.17
EUR
HKD 46,702.46 0.84164 39,306.66
CLP 60,178,014.00 0.009181 552,494.35
232
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Other receivables -- --
Including：HKD 125,679.16 0.84164 105,776.61
Accounts receivables
Including：USD
EUR
HKD
Accounts payables
Including：USD 499,163.86 6.5249 3,256,994.27
CLP 35,950.00 0.009181 330.06
Other payables
Including：HKD 1,542,853.06 0.84164 1,298,526.85
CLP 14,000.00 0.009181 128.53
Long-term loans -- --
Including：USD
EUR
HKD
(2) Description of the overseas business entity, including the important foreign
business entity, which 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
Foreign business Functional
Operation site Choosing reason
entities currency
JSSJ Industry （HK） Currency in the main economic
Hong Kong, China HKD
Holdings Co., Limited environment of business operations
Hong Kong Zhaiugo
Currency in the main economic
International Trade Hong Kong, China HKD
environment of business operations
Co.,Ltd.
ZYG E-Commerce HK Currency in the main economic
Hong Kong, China HKD
Limited environment of business operations
ZYG LTD Currency in the main economic
Cayman Islands USD
environment of business operations
YangHe International Currency in the main economic
British Virgin Islands USD
Investment Ltd environment of business operations
ZYG Currency in the main economic
TechnologyInvestment British Virgin Islands USD environment of business operations
Ltd
YangheChile SPA Currency in the main economic
Santiago, Chile CLP
environment of business operations
Yanghe Hong Kong Currency in the main economic
Hong Kong, China HKD
Distillery Co., Ltd. environment of business operations
52. Government grants
(1)Details of government grants
Unit: CNY
Amount included
Item Amount Presentation
in profit or loss
Local industry support fund subsidy 46,253,370.32 Other income 46,253,370.32
Steady post subsidy 8,112,604.33 Other income 8,112,604.33
The first batch of subsidy funds for enterprise 5,413,141.00 Other income 5,413,141.00
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
transformation and upgrading in 2020
Financial return of small-scale taxpayers in Other income
5,081,341.70 5,081,341.70
Nanjing
Subsidy of supporting stable employment by Other income
4,431,885.00 4,431,885.00
working instead of training
Pollution dischargesubsidy 3,000,000.00 Other income 3,000,000.00
The second batch of provincial special funds for Other income
industrial and information industry transformation 2,300,000.00 2,300,000.00
and upgrading in 2019
Tax incentives 2,300,000.00 Other income 2,300,000.00
2019 Suqian City high-skilled personnel shortage Other income
1,223,000.00 1,223,000.00
type occupation (job) training subsidy
VAT exemption 1,106,351.92 Other income 1,106,351.92
The first batch of special funds for the introduction Other income
of urgently needed talents for the development of 1,086,000.00 1,086,000.00
Northern Jiangsu in 2019
2019 provincial modern service industry (culture) Other income
development special fund and provincial tourism 900,000.00 900,000.00
development special fund projects and funds
2019 municipal development guiding fund Other income
880,000.00 880,000.00
(industrial development) project
2019 provincial business development special Other income
528,300.00 528,300.00
block fund
“Yincai Yongcai” effective units recommendation Other income
500,000.00 500,000.00
awards
Company brand image promotion subsidy 500,000.00 Other income 500,000.00
Jiangsu service-oriented manufacturing Other income
500,000.00 500,000.00
demonstration enterprise award funds in 2019
2020 annual enterprise research and development Other income
500,000.00 500,000.00
incentive funds
The third batch of provincial professional and Other income
technical personnel continuing education bases 500,000.00 500,000.00
funds
Provincial intellectual property award and subsidy Other income
400,000.00 400,000.00
funds in 2020
2018 Suqian high-level talents salary award funds 386,400.00 Other income 386,400.00
Subsidy of working instead of training 373,725.00 Other income 373,725.00
2020 annual provincial research and development Other income
institution construction and performance award 300,000.00 300,000.00
funds
Tourism toilet project construction subsidy funds 204,000.00 Other income 204,000.00
Fire-fighting subsidy 200,000.00 Other income 200,000.00
Economic contribution reward 182,640.00 Other income 182,640.00
Government bailout funds 150,000.00 Other income 150,000.00
Jiangsu provincial tourism development special Other income
148,000.00 148,000.00
funds in 2018
2019 municipal intellectual property award and Other income
100,000.00 100,000.00
subsidy funds
Reward funds for Suqian's top 50 industrial Other income
100,000.00 100,000.00
enterprises in 2019
2020 provincial high-skilled talents and key Other income
100,000.00 100,000.00
construction project subsidy funds
Other income /
Others 1,657,835.92 Non-operating 1,657,835.92
income
Transfer of current deferred earnings 8,757,000.00 Other income 8,757,000.00
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Total 98,175,595.19 98,175,595.19
VIII. Changes in consolidated scope
1. Others
Explain the change of merger scope caused by other reasons (such as new subsidiary,
liquidation subsidiary, etc.) and the relevant situation:
Establishment of subsidiaries
Su Wine Group Co.,Ltd. ,the Company’s holding subsidiary,invested CNY 2 million to
establishJiangsu Yanghe Painting and Calligraphy Academy. On 6 July 2020, the
Registration Certificate of Private Non-Enterprise Unit (Legal Person) issued by the Civil
Affairs Department of Jiangsu Province was obtained. It was included in the consolidated
financial statements from July 2020.
Cancellation of subsidiaries
(1) Huaian Huaqu Wine Development Co.,Ltd., Jiangsu Huaqu Wine Group Nanjing
Co.,Ltd., Taizhou Huaqu Wine Development Co.,Ltd.,Guizhou Guijiu Package Co.,Ltd.,
the holding subsidiaries, were liquidated and terminated onJanuary 2020.FromFebruary
2020, theyare no longer included in the consolidated scope of the consolidated financial
statements.
(2) Jiangsu Huaqu Wine Group Suzhou Co., Ltd., Jiangsu Huaqu Wine Group Yancheng
Co., Ltd., the holding subsidiaries, were liquidated and terminatedonMarch 2020.
FromApril 2020, theyare no longer included in the consolidated scope of the consolidated
financial statements.
(3) Jiangsu Huaqu Wine Group Nantong Co., Ltd., Jiangsu Huaqu Wine Group Wuxi Co.,
Ltd., the holding subsidiaries, were liquidated and terminated on April 2020. From May
2020, they are no longer included in the consolidated scope of the consolidated financial
statements.
IX. Interests in other entities
1. Interests in subsidiaries
(1) Group composition:
Major Shareholding
Name of Place of Nature of Acquisition
business
subsidiaries registration business Direct Indirect method
location
Nanjing Yanghe Nanjing,
Nanjing, Jiangsu
Blue Classic Jiangsu Commerce 100.00% Establishment
province
Co.,Ltd. province
Beijing Yanghe
Fengtai,Beijin
Commerce and Fengtai,Beijing Commerce 100.00% Establishment
g
Trade Co.,Ltd.
Jiangsu Huaqu Nanjing,
Nanjing, Jiangsu
Wine Group Jiangsu Commerce 97.00% Establishment
province
Co.,Ltd. province
Suqian Tianhai Suqian,
Suqian, Jiangsu
Commerce and Jiangsu Commerce 100.00% Establishment
province
Trade Co.,Ltd. province
HuaianHuaqu Wine Huaian,
Huaian, Jiangsu
Development Jiangsu Commerce 100.00% Establishment
province
Co.,Ltd. province
235
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Suqian Yanghe Suqian,
Suqian, Jiangsu
Guibinguan Jiangsu Hotel industry 100.00% Establishment
province
Co.,Ltd. province
Jiangsu Huaqu Nanjing,
Nanjing, Jiangsu
Wine Group Jiangsu Commerce 100.00% Establishment
province
Nanjing Co.,Ltd. province
Suqian,
Su Wine Group Suqian, Jiangsu
Jiangsu Commerce 83.63% 16.37% Establishment
Trade Co.,Ltd. province
province
Wuxi Huaqu Wine
Wuxi, Jiangsu Wuxi, Jiangsu
Development Commerce 100.00% Establishment
province province
Co.,Ltd.
Taizhou Huaqu Taizhou,
Taizhou, Jiangsu
Wine Development Jiangsu Commerce 100.00% Establishment
province
Co.,Ltd. province
Jiangsu Huaqu Nantong,
Nantong, Jiangsu
Wine Group Jiangsu Commerce 100.00% Establishment
province
Nantong Co.,Ltd. province
Jiangsu Huaqu Suzhou,
Suzhou, Jiangsu
Wine Group Jiangsu Commerce 100.00% Establishment
province
Suzhou Co.,Ltd. province
Jiangsu Huaqu Yancheng,
Yancheng,
Wine Group Jiangsu Commerce 100.00% Establishment
Jiangsu province
Yancheng Co.,Ltd. province
Jiangsu Yanghe
Suqian,
Liquor Operation Suqian, Jiangsu
Jiangsu Commerce 100.00% Establishment
Mangement province
province
Co.,Ltd.
Jiangsu Sihong,
Sihong, Jiangsu
Shuanggou Liquor Jiangsu Commerce 100.00% Establishment
province
OperationCo.,Ltd. province
Jiangsu Dongdi Suqian,
Suqian, Jiangsu
Union International Jiangsu Commerce 100.00% Establishment
province
Trade Co.,Ltd. province
Jiangsu
Suqian,
Dongdixinghui Suqian, Jiangsu
Jiangsu Commerce 100.00% Establishment
International Trade province
province
Co.,Ltd.
Suqian,
Suqian Blue Dream Suqian, Jiangsu
Jiangsu Commerce 100.00% Establishment
Trade Co.,Ltd. province
province
Siyang Lantu Siyang,
Siyang, Jiangsu
Liquor Jiangsu Commerce 100.00% Establishment
province
OperationCo.,Ltd. province
JSSJ Industry
Hong Kong, Hong Kong,
（HK） Holdings CORP 100.00% Establishment
China China
Co., Limited
Hubei Lihuacun Shiyan, Hubei Yunxian, Hubei
Commerce 100.00% Establishment
Trade Co.,Ltd. province province
Business
Jiangsu combinations
Sihong, Liquor
Shuanggou Sihong, Jiangsu involving
Jiangsu manufacture 99.99% 0.01%
Distillery Stock Co., province enterprises not
province and sales
Ltd. under common
control
Business
combinations
Sihong Shuanggou Sihong,
Sihong, Jiangsu Waste material involving
Antai Waste Jiangsu 100.00%
province recycle enterprises not
Recycling Co.,Ltd. province
under common
control
Business
combinations
Hubei Lihuacun Process liquor,
Shiyan, Hubei Yunxian, Hubei involving
Liquor Industry wine and fruit 100.00%
province province enterprises not
Co.,Ltd. wine
under common
control
Ningxiang Ningxiang, Ningxiang, Hunan Manufacture 100.00% Business
236
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Miluochun Liquor Hunan province and sale of combinations
Industry Co.,Ltd. province liquor and involving
compound wine enterprises not
under common
control
Business
combinations
Binxian, Binxian,
Harbin Binzhou involving
Heilongjiang Heilongjiang Liquor-making 100.00%
Brewery Co.,Ltd. enterprises not
province province
under common
control
Su Wine Group Assets/investme
Nanjing,
Jiangsu Wealth Nanjing, Jiangsu nt management,
Jiangsu 100.00% Establishment
Management province information
province
Co.,Ltd. consultation
Ningxiang Ningxiang,
Ningxiang, Hunan
Miluochun Trade Hunan Commerce 100.00% Establishment
province
Co.,Ltd. province
Biological
engineering
Jinagsu Kelite research,
Suqian,
Biology Technology Suqian, Jiangsu enzyme
Jiangsu 100.00% Establishment
Research Institute province preparation
province
Co.,Ltd. research and
technology
transfer
Suqian,
Suqian Sky Blue Suqian, Jiangsu
Jiangsu Commerce 100.00% Establishment
Trade Co.,Ltd. province
province
Liquor,
Shiyan Yunyang compound wine,
Shiyan, Hubei Shiyan, Hubei
Lihuacun Package health wine 100.00% Establishment
province province
Service Co.,Ltd. packaging
service
Network
technology
development,
Jiangsu Lion and
Nanjing, technical
Sheep Network Nanjing, Jiangsu
Jiangsu consultation, 100.00% Establishment
Technology province
province technical
Co.,Ltd.
services;
Software
development
Business
combinations
Jiangsu Zhaiugou Nanjing,
Nanjing, Jiangsu involving
E-commerce Jiangsu Commerce 100.00%
province enterprises not
Co.,Ltd province
under common
control
Business
Freight combinations
NanjingTongmeng Nanjing,
Nanjing, Jiangsu Transport, involving
City Logistics Jiangsu 99.99%
province Warehouse enterprises not
Co.,Ltd. province
service under common
control
Business
Freight combinations
Nanjing Jinling Nanjing,
Nanjing, Jiangsu Transport, involving
Tongmeng City Jiangsu 51.00%
province Warehouse enterprises not
Logistics Co.,Ltd. province
service under common
control
Business
Freight combinations
Huaian Tongmeng Huaian,
Huaian, Jiangsu Transport, involving
City Logistics Jiangsu 51.00%
province Warehouse enterprises not
Co.,Ltd. province
service under common
control
Changzhou Changzhou, Changzhou, Freight Business
51.00%
Jiezzhong Jiangsu Jiangsu province Transport, combinations
237
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Tongmeng City province Warehouse involving
Logistics Co.,Ltd. service enterprises not
under common
control
Business
Freight combinations
Nantong Nantong,
Nantong, Jiangsu Transport, involving
Tongmeng City Jiangsu 51.00%
province Warehouse enterprises not
Logistics Co.,Ltd. province
service under common
control
Business
Freight combinations
Suzhou Tongmeng Suzhou,
Suzhou, Jiangsu Transport, involving
City Logistics Jiangsu 51.00%
province Warehouse enterprises not
Co.,Ltd. province
service under common
control
Business
Freight combinations
Taizhou Tongmeng Taizhou,
Taizhou, Jiangsu Transport, involving
City Logistics Jiangsu 51.00%
province Warehouse enterprises not
Co.,Ltd. province
service under common
control
Business
Freight combinations
Wuxi Tongmeng
Wuxi, Jiangsu Wuxi, Jiangsu Transport, involving
City Logistics 51.00%
province province Warehouse enterprises not
Co.,Ltd.
service under common
control
Business
Freight combinations
Yancheng Yancheng,
Yancheng, Transport, involving
Tongmeng City Jiangsu 51.00%
Jiangsu province Warehouse enterprises not
Logistics Co.,Ltd. province
service under common
control
Business
Freight combinations
Zhenjiang Zhenjiang,
Zhenjiang, Transport, involving
Tongmeng City Jiangsu 51.00%
Jiangsu province Warehouse enterprises not
Logistics Co.,Ltd. province
service under common
control
Business
Freight combinations
Yangzhou Yangzhou,
Yangzhou, Transport, involving
Tongmeng City Jiangsu 53.00%
Jiangsu province Warehouse enterprises not
Logistics Co.,Ltd. province
service under common
control
Business
Freight combinations
Suqian Tongmeng Suqian,
Suqian, Jiangsu Transport, involving
City Logistics Jiangsu 51.00%
province Warehouse enterprises not
Co.,Ltd. province
service under common
control
Business
Freight combinations
Pizhou Tongmeng Xuzhou,
Xuzhou, Jiangsu Transport, involving
City Logistics Jiangsu 51.00%
province Warehouse enterprises not
Co.,Ltd. province
service under common
control
Business
Lianyungang Freight combinations
Lianyungang,
Huaxing Tongmeng Lianyungang, Transport, involving
Jiangsu 51.00%
City Logistics Jiangsu province Warehouse enterprises not
province
Co.,Ltd. service under common
control
Business
Jiangsu Zhaibianli Nanjing, combinations
Nanjing, Jiangsu
E-commerce Jiangsu Commerce 100.00% involving
province
Co.,Ltd province enterprises not
under common
238
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
control
Business
Hongkong combinations
Zhaiugou Hong involving
Hong Kong,China Commerce 100.00%
International Trade Kong,China enterprises not
Co.,Ltd under common
control
Business
Liquor combinations
Guiyang,
Guizhou Guijiu Guiyang, Guizhou production; involving
Guizhou 100.00%
Co.,Ltd. province Liquor and enterprises not
province
alcohol sales under common
control
Guizhou Guijiu
Guiyang,
Liquor Operation Guiyang, Guizhou
Guizhou Commerce 100.00% Establishment
Management province
province
Co.,Ltd.
Guiyang,
Guizhou Guijiu Guiyang, Guizhou
Guizhou Commerce 100.00% Establishment
Trade Co.,Ltd. province
province
Guijiu series
Guiyang, liquor,
Guizhou Guijiu Guiyang, Guizhou
Guizhou compound wine, 100.00% Establishment
Package Co.,Ltd. province
province health care wine
packaging
Business
combinations
ZYG E-Commerce Hong Industrial involving
Hong Kong,China 100.00%
HK Limited Kong,China investment enterprises not
under common
control
Business
combinations
Cayman Industrial involving
ZYG LTD Cayman Islands 69.08%
Islands investment enterprises not
under common
control
YangHe
British Virgin British Virgin Industrial
International 100.00% Establishment
Islands Islands investment
Investment Ltd
Jiangsu Healthy wine,
Shuanggou Suqian, nutrition and
Suqian, Jiangsu
Healthy Liquor Jiangsu health food 100.00% Establishment
province
Research institute province research and
Co.,Ltd. development
Business
combinations
ZYG Technology British Virgin British Virgin Industrial involving
71.03%
Investment Ltd Islands Islands investment enterprises not
under common
control
Jiangsu Blue Suqian,
Suqian, Jiangsu
Dream E- Jiangsu Commerce 100.00% Establishment
province
commerce Co.,Ltd. province
Network
Jiangsu Yanghe technology
Nanjing,
Weiketang Network Nanjing, Jiangsu development,
Jiangsu 100.00% Establishment
Technology province technical
province
Co.,Ltd. consultation,
technical servic
Business
combinations
Guizhou Welcome Renhuai, Liquor
Renhuai, Guizhou involving
Drink Stock Co., Guizhou manufacture 100.00%
province enterprises not
Ltd. province and sales
under common
control
Suqian, Road general
Suqian Su Wine Suqian, Jiangsu
Jiangsu cargo transport, 100.00% Establishment
Logistics Co.,Ltd. province
province cargo
239
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
distribution,
freight forwarder
Movable and
real estate
investment
Yanghe Chile SPA Santiago,
Santiago, Chile services, 100.00% Establishment
Chile
building
construction
services
Foreign
Jiangsu Yanghe investment,
Suqian,
Investment Suqian, Jiangsu Asset
Jiangsu 50.00% 50.00% Establishment
Management province management,
province
Co.,Ltd. Investment
consulting
Enterprise
management
consulting;
Su Wine Group
Nanjing, Industrial
Nanjing Operation Nanjing, Jiangsu
Jiangsu investment; 100.00% Establishment
Management province
province Food sales; Gift
Co.,Ltd.
sales; House
lease; Hotel
management
Nanjing,
Jiangsu Zhongshiji Nanjing, Jiangsu Food sales, Gift
Jiangsu 100.00% Establishment
liquor Co.,Ltd. province sales
province
Yanghe Hong Kong Hong Industrial invest
Hong Kong,China 100.00% Establishment
DistilleryCo., Ltd. Kong,China ment
Painting and
calligraphy
creation,
exhibition;Acade
mic
iangsu Yanghe Nanjing,
Nanjing, Jiangsu research;Public
Calligraphy and Jiangsu 100.00% Establishment
province art
Painting Academy province
education;Cultur
al and creative
products
development
and promotion
The shareholding ratio in the subsidiary is different from the voting ratio:
The basis for holding half or less of the voting rights but still controlling the invested entity,
and for holding more than half of the voting rights but not controlling the invested entity:
For important structural subjects included in the scope of merging, the basis of control:
Basis for determining whether the company is an agent or a principal:
Other statements:
2. Interests in associates and a joint venture
(1) The impact of the Group’s associates on the Group is not significant.
Summarized information is as follows:
Unit: CNY
Closing balance/amount in Opening balance/amount in
current period previous period
Associates: -- --
Aggregated carrying amount of
10,261,147.01 10,521,622.18
investments
Aggregate of the following items
-- --
calculated in proportion to shareholding
--Net profit -658,669.17 -6,220,574.92
--Other comprehensive income -342,416.50 178,619.29
-- Total comprehensive income -1,001,085.67 -6,041,955.63
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Joint ventures: -- --
Aggregated carrying amount of
19,267,230.15 14,840,029.20
investments
Aggregate of the following items
-- --
calculated in proportion to shareholding
--Net profit 4,599,489.64 1,773,286.58
-- Total comprehensive income 4,599,489.64 1,773,286.58
X. Risks related to financial instruments
The Group is exposed to various financial risks in the ordinary course of business, mainly
including: credit risk, liquidity risk, market risk, etc. The Company's management is fully
responsible for the formulation of risk management objectives and policies, and takes
responsibility for risk management objectives and policies. The objective of the
Company’s risk management is to identify and analysis risk, minimizing the adverse
impact of financial risks without excessive influence on the company's competitiveness
and resilience.
1. Credit risks
Credit risk refers to the risk that one party of the financial instruments fails to perform its
obligations and causes the financial losses of the other party. Credit risk mainly related to
notes receivables and accounts receivable, in order to control the risk, the Company
takes the following measures:
(1)Bank deposit
The company's bank deposits are mainly deposited in state-owned holding banks, large
and medium-sized listed banks and other commercial banks with high credit. There is no
significant credit risk and no significant loss caused by default.
(2)Notes receivables and accounts receivables
The Company mainly trades with dealers, according to company credit policy,and adopts
the way of delivery after the payments finished. For some group purchase business, it
only deals with the reputable group clients, and continuously monitors the balance of
notes receivables and accounts receivables, as a result, there is no collateral required,
and credit risk management concentrates on the clients. The balance of notes
receivables and accounts receivables are small till 31 December 2020. The Company
does not hold any collateral or other credit enhancement for the balance of accounts
receivables.
(3) Other receivable
The other receivables are mainly saving deposits involving infringement dispute, deposits
and petty cash, employee business loan and so on. The Company manages other
receivables and continuously monitors its balance, to ensure the Company not to face
significant bad debt risks.
2. Liquidity risk
Liquidity risk refers to the risk of capital shortage when enterprise performs its obligations
related to financial liabilities. The Company uses various financing methods such as bill
clearing and bank loan to optimize the financing structure and maintain the balance
between financing continuity and flexibility.
241
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
The maturity of the financial liabilities held by the Company according to the
undiscounted remaining contractual obligations is analyzed as follows:
Item Closingbalance
Within 1 year 1-2 years 2-3 years Over 3 years Total
Account 1,151,871,136.29 1,151,871,136.29
payables
Other payables 1,556,699,290.45 1,556,699,290.45
Long-term loan 36,360.00 36,360.00
Long-term 197,049,341.93 197,049,341.93
payables
(Continued)
Item Openingbalance
Within 1 year 1-2 years 2-3 years Over 3 years Total
Account 1,330,649,116.82 1,330,649,116.82
payables
Other payables 3,962,515,639.56 3,962,515,639.56
Long-term loan 72,723.00 72,723.00
Long-term 197,623,728.85 197,623,728.85
payables
3. Market risk
Market risk is the fair value of financial instrument or future cash flow fluctuates due to
the fluctuation of market price, and it mainly includes: interest rate risk, foreign exchange
risk, etc.
(1) Interest rate risk
Interest rate risk refers to the fair value of financial instrument or future cash flow
fluctuates due to the fluctuation of interest rate. The Company faces the risk of market
interest rate change mainly related to the Company's borrowing limit.
(2) Foreign exchange risk
Foreign exchange risk arises from fluctuation in exchange rate, relevant to the assets
and liabilities in foreign currency. The less import and export business happened, the
lower impact of exchange rate fluctuation on company's operation.
The amount in CNY of the Company’s assets and liabilities shown in foreign currencies
as follows:
Item Closing balance Opening balance
Balance in Balance in
Exchange Balance in Exchange
foreign foreign Balance in CNY
rate CNY rate
currency currency
Cash and
cash
equivalents
Include: USD 1,470,471.60 6.5249 9,594,680.17 5,851,102.50 6.9762 40,818,461.26
HKD 46,702.46 0.84164 39,306.66 2,267,649.63 0.89578 2,031,315.19
CLP 60,178,014.00 0.009181 552,494.35 2,259,388,389. 0.0092599 20,921,642.76
00
242
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Other
receivables
Include: USD
HKD 125,679.16 0.84164 105,776.61 472,381.42 0.89578 423,149.83
Account
payables
Include: USD 499,163.86 6.5249 3,256,994.27
CLP 35,950.00 0.009181 330.06
Other
payables
Include: HKD 1,542,853.06 0.84164 1,298,526.85 1,465,427.84 0.89578 1,312,700.95
CLP 14,000.00 0.009181 128.53 14,000.00 0.0092599 129.64
Net amount 5,736,278.08 62,881,738.45
XI.Fair value disclosure
1.Fair value of assets and liabilities measured at fair value as
at the end of the period
Unit: CNY
Closing fair value
Item Within Level 1 of Within Level 2 of Within Level 3 of
the fair value the fair value the fair value Total
hierarchy hierarchy hierarchy
Disclosure of
continuous
-- -- -- --
measurement at fair
value
(1)Debt instrument
16,148,969,442.65 16,148,969,442.65
investment
(2)Equity instrument 1,748,210,516.9
334,393,926.45 2,437,363,244.89 4,519,967,688.33
investment 9
Total assets
1,748,210,516.9
continuously measured 334,393,926.45 18,586,332,687.54 20,668,937,130.98
9
at fair value
Disclosure of
discontinuous
-- -- -- --
measurement at fair
value
2.Determination basis of the market value of items measured
continuously and discontinuously within Level 1 of the fair value
hierarchy
Local open market closing price
3.Items measured continuously and discontinuously within Level 2 of
the fair value hierarchy, valuation technique adopted and quantitative
and qualitative information of important parameters
The fair value is assessed on the basis of open market transaction prices and taking into account
liquidity
243
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
4.Items measured continuously and discontinuously within Level 3 of
the fair value hierarchy, valuation technique adopted and quantitative
and qualitative information of important parameters
Debt instrument investment:the expected rate of return is taken as an important reference to evaluate
its fair value
Equity instrument investment: the cost or the ending net assets of the invested entity is taken as an
important reference to evaluate its fair value
XII. Related parties and related party transactions
1. The parent company of the Company
Voting
Name of parent Registered Shareholding Ratio by
Registration place Business nature ratio by the
company capital the parent
parent company
company
Sales of brewing
machinery
equipment, export
of liquor, import of
various raw and
Jiangsu Yanghe auxiliary materials, CNY 500
Suqian, Jiangsu 34.16% 34.16%
Group Co.,Ltd. equipment and million
accessories
required for
production,
industrial
investment.
Information about the Company’s parent company
The final control party of the Company is State-owned Assets Supervision and
Administration Commission of Suqian.
Other statements:
2. Subsidiaries of the Company:
The information about the subsidiaries of the Company refers to Note IX.1 Interests in
Subsidiaries.
3. Joint venture and associate of the Company
The information about the joint venture and associate of the Company refers to the Note
IX.2
Other joint ventures and associates whose related party transactions with the Company
in the current period or balance formed from related party transactions with the Company
in the prior period as follows:
Name of joint venture and associate Relationship with the Company
Diageo International Spirits Company Limited Joint Venture
Jiangsu Su Wine Cultural Transmission Co.,Ltd. Associate
Nanjing Hesong Culture Technology Co.,Ltd. Associate
Jiangsu Xinghe Investment Management Co.,Ltd. Associate
Other statements:
4. Other related party
Name of other related party Relationship with the Company
Shanghai Haiyan Logistics Development Co.,Ltd. Holding 9.67% shares
244
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Joint stock company, holding 12.50%
VSPT, Via San Pedro Tarapacá S.A.
shares
Controlled by Diageo International Spirits
Jiangsu Diageo Wine Co. LTD
Company Limited, joint venture of Company
5. Related party transactions
(1) Related transactions of purchase of goods / supply and receipt of labor
services
Table of purchase of goods / Receipt of labor services
Unit: CNY
Approved Whether it is
Transaction Amount in Amount in
Related Party transaction over transaction
Content current period previous period
amount amount or not
VSPT, Via San
22,491,676.
Pedro Tarapacá Red wine 6,235,323.42 No 22,491,676.84
84
S.A
Nanjing Hesong No
Advertising and
Culture 26,877,500.
general publicity 8,416,890.42 26,877,500.00
Technology 00
expense
Co.,Ltd.
Jiangsu Diageo 9,426,504.9 No
Liquor 5,308,792.27 9,426,504.96
Wine Co. LTD 6
Table of sales of goods/ rendering of labor services
Unit: CNY
Amount in current Amount in previous
Related party Transaction content
period period
Shanghai Haiyan Logistics
Sales of liquor 4,354,544.40 21,940,314.79
Development Co.,Ltd.
Jiangsu Su Wine Cultural
Sales of liquor 30,058,725.66 27,033,928.43
Transmission Co.,Ltd.
Jiangsu Diageo Wine Co. Ltd Sales of liquor 4,097,463.51 11,451,243.61
Nanjing Hesong Culture
Consulting fee income 967,085.23
Technology Co.,Ltd.
Jiangsu Diageo Wine Co.
Consulting fee income 673,267.32 165,048.55
LTD
Jiangsu Xinghe Investment
Consulting fee income 2,184,466.02
Management Co.,Ltd.
Description of related transactions in the purchase and sale of goods, provision and
receipt of services
(2) Related partylease
The Company asa lessor
Unit: CNY
Amount in current Amount in previous
Related party Types of Leased Assets
period period
The Company as a lessee
Unit: CNY
Amount in current Amount in previous
Related party Types of Leased Assets
period period
Jiangsu Yanghe Group
House 201,834.86
Co.,Ltd.
245
2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
(3) Compensation for key managers
Item Amount in current period Amount in previous period
6. Receivables and payables of related parties
(1) Receivables
Unit: CNY
Closing balance Opening balance
Item Related party Provision for bad Provision for bad
Book balance Book balance
debt debt
Jiangsu Diageo
Receivables 8,231,298.10 246,938.94
Wine Co. Ltd.
(2)Payables
Unit: CNY
Closing Opening
Item Related party
balance balance
Shanghai Haiyan Logistics Development
Contract liabilities 6,396,586.54 3,057,658.65
Co.,Ltd.
Contract liabilities Jiangsu Su Wine Cultural Transmission Co.,Ltd. 7,523,939.23 7,078,584.07
Accounts payables Jiangsu Diageo Wine Co. Ltd. 255,806.65
Shanghai Haiyan Logistics Development
Other Payables 83,531.60 83,709.60
Co.,Ltd.
Other Payables Jiangsu Su Wine Cultural Transmission Co.,Ltd. 940,228.00 900,000.00
XIII. Commitments and contingencies
1. Significant commitments
Significant commitments existing on the balance sheet date
By the end of 31 December 2020, there were no significant commitments needed to be
disclosed.
2. Contingencies
(1)Significant contingencies at the balance sheet date:
Regarding the tort liability dispute case of ICBC Zhengzhou Jiefang Road Branch, Su
Wine Group Trade Co., Ltd. applied for a claim, requesting the defendant to jointly and
severally compensate the plaintiff with CNY 46,025,000.00 of principal and interest loss
during the deposit period (The interest loss is based on CNY 103,250,000.00 and it is
calculated from 21 May 2014 according to the loan interest rate of the People's Bank of
China in the same period and the same file. Among those, CNY 18,257,000.00 is
calculated till 8 September 2017, CNY 38,968,000.00 is calculated till 13 December 2017,
and CNY 46,025,000.00 is calculated till the actual date of payment).
According to the Civil Judgment of Suqian Intermediate People's Court of Jiangsu
Province, the defendant was liable for compensation of 70% of the total loss, and the
defendant was ordered to pay the plaintiff Su Wine Group Trade Co., Ltd. loss of interest
(the calculation method of interest: the interest rate standard is calculated according to
the one-year fixed deposit interest rate on the day of 21 May 2013 of the Industrial and
Commercial Bank of China Zhengzhou Jiefang Road Branch, where CNY 90 million is
the principal from 21 May 2013 to 7 September 2017; CNY 71.7433 million is calculated
from 8 September 2017 to 12 December 2017; CNY 32.7775 million is calculated from 13
December2017to the date of actual payment. The sum of the interest calculated above is
multiplied by 70%.)
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Su Wine Group Trade Co., Ltd. dissatisfied with the above judgment and has appealed to
the Jiangsu Provincial Higher People's Court. On 25 July 2019, Jiangsu Provincial Higher
People's Court (2019) Su Min Zhong No. 1157 "Notice of Acceptance of the Case" was
received. The case is in the process.
Except for the above event, by the end of 31 December 2020, the Company had no other
significant contingencies required to be disclosed.
(2)If no contingencies that need to be disclosed, statement should be made.
The Company has no material contingencies to disclose.
XIV. Post balance sheet event
1.The distribution of profits
Unit: CNY
Profits or dividends planed to be distributed 28,279,648,717.65
Profits or dividends declared to be paid after
4,491,980,070.00
examination and approval
2.Other notes to post balance sheet event
On 11 March 2021, Guizhou GuijiuGroup Co., Ltd., a Company’s subsidiary, (hereinafter
referred to as GuijiuCompany) received court summonsissued by the people's court from
Xiuwen County in Guizhou province. The case number is(2021) Qian 0123 No.949 and
the civil complaint is about Guizhou Construction Engineering Group Eighth Construction
Engineering Co., Ltd. suing Guizhou GuijiuGroup Co., Ltd.. The claims: (1) request that
the defendant be ordered to pay the plaintiff the construction cost amount of RMB
9,537,780.74 immediately and bear the overdue payment interest until the date of the
actual payment (the interest is based on RMB 9,537,780.74 and calculated according to
the standard interest rate of similar loans issued by the People's Bank of China for the
same period from 8 October 2018.The estimated amount is CNY 1,395,695.25 since
prosecution).(2) The litigation costs of this case shall be borne by the defendant.
On June 2016, according to the acquisition agreement sigened by the Company(Party A)
and Guizhou Huixian Investment Management Co., Ltd. (Party B), Guijiu company (Party
C), Wang Xiaochun (Party D) , any liabilities not included in the "List of Liabilities" arising
out of the facts prior to completion after the equity acquisition shall be borne by Party B. If
Party A and Party C bear the liabilities in advance, Party B shall fully compensate for the
liabilities, and Party D agrees to undertake joint and several liability for the
responsibilities and obligations that should be borne by Party B as mentioned above.The
matters involved in the above litigation are liabilities not included in the "List of Liabilities"
caused by the facts before the completion and shall be borne by Party B.
As of 27 April 2021, the Company has no other post balance sheet event that need to be
disclosed other than the above.
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
XV. Notes to main items of parent company financial statements
1. Accounts receivable
(1) Disclosure of accounts receivable by categories
Unit: CNY
Closing balance Opening balance
Book balance Provision for bad debt Book balance Provision for bad debt
Type
Proportion Book value Proportion Book value
Amount Proportion Amount Amount Proportion Amount
of provision of provision
Including:
Provision for bad debts
387,657,700.12 100.00% 387,657,700.12 900,499,168.05 100.00% 246,938.94 0.03% 900,252,229.11
by portfolio
Including:
Risk portfolio 8,231,298.10 0.91% 246,938.94 3.00% 7,984,359.16
Otherportfolio 387,657,700.12 100.00% 387,657,700.12 892,267,869.95 99.09% 892,267,869.95
Total 387,657,700.12 100.00% 387,657,700.12 900,499,168.05 100.00% 246,938.94 0.03% 900,252,229.11
Provision for bad debts by individual
Unit: CNY
Closing balance
Name of client
Book balance Provision for bad debts Proportion Reason
Provision for bad debts by portfolio：other portfolio
Unit: CNY
Closing balance
Name of portfolio
Accounts receivables Provision for bad debt Proportion
Otherportfolio 387,657,700.12
Total 387,657,700.12 --
Notes to determine provision for bad debt by portfolio:
The Company classifies items without significant recovery risk receivables as other portfolio such as items from subsidiaries in the consolidation
scope, tax refunds receivable, collection and withholding of funds. There is no provision for bad debt for them.
Provision for bad debts by portfolio：
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Unit: CNY
Closing balance
Name of portfolio
Accounts receivables Provision for bad debt Proportion
Notes to determine provision for bad debt by portfolio:
If the Company uses the accounts receivable provision for bad debts according to the general model of expected credit loss, please disclose the
relevant information of provision for bad debt by referring to the disclosure method of other receivables：
Applicable √ N/A
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Analysis by aging
Unit: CNY
Aging Closing balance
Within 1 year (including 1 year) 387,657,700.12
Total 387,657,700.12
(2)Provision for bad debts that is accrued, recovered or reversed during this period
Provision for bad debts during current period
Unit: CNY
Changes in the current period
Opening Closing
Category Recovered or
balance Provision Write off Others balance
reversed
Provision for
bad debt for
246,938.94 246,938.94
Accounts
receivables
Total 246,938.94 246,938.94
Significant amount of reversal or recovery in current period:
Unit: CNY
Company name Amount recovered or reversed Ways of recovery
(3)Top five entities with the largest balances of the accounts receivables
Unit: CNY
Proportion in the total
Company’s name Closing balance Provision amount
accounts’ receivables (%)
Jiangsu Shuanggou Distillery
132,516,166.33 34.18%
Stock Co.,Ltd.
Hubei Lihuacun Liquor
127,597,734.21 32.92%
Industry Co.,Ltd.
Siyang Lantu Liquor
71,494,537.45 18.44%
Operation Co.,Ltd.
Jiangsu Yanghe Liquor
Operation Management 46,231,563.47 11.93%
Co.,Ltd.
Ningxiang Miluochun Trade
9,817,698.66 2.53%
Co.,Ltd.
Total 387,657,700.12 100.00%
2.Other receivables
Unit: CNY
Item Closing balance Opening balance
Dividend receivable 1,775,818,203.33
Other receivables 8,627,951,102.36 8,154,899,373.55
Total 10,403,769,305.69 8,154,899,373.55
(1) Dividend receivable
Unit: CNY
Item Closing balance Opening balance
Jiangsu Shuanggou Distillery Stock Co.,Ltd. 1,775,818,203.33
Total 1,775,818,203.33
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
(2) Other receivables
1) Disclosure of other receivable by categories
Unit: CNY
Nature of other receivables Closing balance Opening balance
Within the scope of consolidation the
8,625,917,478.43 8,153,014,458.45
subsidiary borrows
Cash deposit 15,020,000.00 15,020,000.00
Business loans and petty cash 1,203,377.75 3,429,429.04
Other receivables 3,768,716.91 3,038,490.82
Total 8,645,909,573.09 8,174,502,378.31
2) Provision for bad debt
Unit: CNY
Phase 1 Phase 2 Phase 3
Expected credit
Bad debts Expected credit Expected credit loss Total
loss for lifetime
losses in the next for lifetime (No credit
(Credit loss
12 months loss occurred)
occurred)
Balance as at 1
67,662.44 19,535,342.32 19,603,004.76
January 2020
Change of opening
balance as at 1
—— —— —— ——
January 2020 in
current period
Provision in 2020 15,343.33 15,343.33
Reverse in 2020 1,659,877.36 1,659,877.36
Balance as at 31
83,005.77 17,875,464.96 17,958,470.73
December 2020
Significant change of the book balance of provision during the period
Applicable √ N/A
Other receivables by aging
Unit: CNY
Aging Closing balance
Within 1 year(including 1 year) 8,614,193,810.38
1-2 years 8,834,302.50
2-3 years 1,828,000.00
Over 3 years 21,053,460.21
3-4 years 291,400.00
4-5 years 41,319.12
Over 5 years 20,720,741.09
Total 8,645,909,573.09
3) Provision, recovery or reversal for bad debt duringthis period
Provision for bad debtduring this period：
Unit: CNY
Changes in the current period
Opening
Category Recovered or Other Closing balance
balance Provision Write off
reversed changes
Provision for
other 19,603,004.76 15,343.33 1,659,877.36 17,958,470.73
receivables bad
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
debt
Total 19,603,004.76 15,343.33 1,659,877.36 17,958,470.73
Significant amount of reversal or recovery during this period:
Unit: CNY
Company name recovery or reversal Way of recovery
(4) Top five entities with the largest balances of the other receivables
Unit: CNY
Provisioning
Proportion in total
Company’s Name Category Closing balance Aging amount at
receivables
period end
Jiangsu Yanghe
Investment 7,640,976,249.1 88.38%
Loan With in 1 year
Management Co., 5
Ltd.
Su Wine Group
Jiangsu Wealth 9.25%
Loan 800,000,000.00 With in 1 year
Management
Co.,Ltd.
Guizhou Guijiu 1.89%
Loan 163,469,544.92 With in 1 year
Co.,Ltd.
Jiangsu Juntai
Properties Co.,Lt.,
0.17%
Suqian Guotai deposit 15,000,000.00 Over 5 years 15,000,000.00
Department Store
Co.,Ltd.
With in 1 year
460,000.00,1-2
years
Hubei Lihuacun
8,830,000.00, 2-3 0.16%
Liquor Industry Loan 14,177,100.00
years
Co,Ltd.
848,000.00,Over
3 years
4,039,100.00
8,633,622,894.0 99.85%
Total -- -- 15,000,000.00
7
3. Long-term equity investments
Unit: CNY
Closing balance Opening balance
Item Impairment Impairment
Book balance Book value Book balance Book value
provision provision
Investment in 7,964,291,378 7,964,291,378. 7,964,291,37 7,964,291,3
subsidiaries .23 23 8.23 78.23
7,964,291,378 7,964,291,378. 7,964,291,37 7,964,291,3
Total
.23 23 8.23 78.23
(1) Investment in subsidiaries
Unit: CNY
Increase in the current period Closing
Provision balance of
Opening Closing
Investee for provision
balance Increase Decrease Others balance
impairme for
nt impairment
Suqian Yanghe
700,000.00 700,000.00
Guibinguan
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Co.,Ltd.
Jiangsu
Shuanggou 1,713,152,320 1,713,152,32
Distillery Stock .00 0.00
Co.,Ltd.
Su Wine Trade 285,225,078.2 285,225,078.
Group Co.,Ltd. 3 23
Jiangsu Yanghe
Liquor Operation 10,983,280.0
10,983,280.00
Managment 0
Co.,Ltd
Jiangsu Dongdi
Union
5,000,000.00 5,000,000.00
International
Trade Co.,Ltd.
Jiangsu
Dongdixinghui
5,000,000.00 5,000,000.00
International
Trade Co.,Ltd
Siyang Lantu
Liquor Operation 3,161,700.00 3,161,700.00
Co.,Ltd.
Hubei Lihuacun
Liquor Industry 3,000,000.00 3,000,000.00
Co.,Ltd.
Ningxiang
Miluochun
2,129,000.00 2,129,000.00
Liquor Industry
Co.,Ltd.
Harbin Binzhou
2,000,000.00 2,000,000.00
Brewery Co.,Ltd.
Su Wine Group
Jiangsu Wealth 3,000,000,000 3,000,000,00
Management .00 0.00
Co.,Ltd.
Jinagsu Kelite
Biology
10,000,000.0
Technology 10,000,000.00
0
Research
Institute Co.,Ltd.
Jiangsu Lion and
Sheep Network
5,460,000.00 5,460,000.00
Technology
Co.,Ltd.
Guizhou Guijiu 943,300,000.0 943,300,000.
Co.,Ltd. 0 00
Jiangsu Yanghe
Weiketang
Network 300,000.00 300,000.00
Technology
Co.,Ltd.
Yanghe Chile 456,880,000.0 456,880,000.
SPA 0 00
Jiangsu Yanghe
Investment 1,500,000,000 1,500,000,00
Management .00 0.00
Co., Ltd.
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Yanghe Hong
18,000,000.0
Kong Liquor Co., 18,000,000.00
0
Ltd.
7,964,291,378 7,964,291,37
Total
.23 8.23
4. Operating revenue and cost of sales
Unit: CNY
Current period Previous period
Item
Operating revenue Cost of sales Operating revenue Cost of sales
Primary business 9,161,576,332.09 4,195,871,188.04 8,802,985,205.67 4,522,356,318.57
Other business 653,598,000.33 607,411,453.26 814,151,123.47 778,500,563.64
Total 9,815,174,332.42 4,803,282,641.30 9,617,136,329.14 5,300,856,882.21
Information relating to revenue
Unit: CNY
Contract type Division 1 Division 2 Total
Including:
Including:
Information relating to performance obligations
N/A
Information relating to the transaction price apportioned to the remaining performance
obligations:
At the end of this report, the amount of revenue corresponding to the performance
obligations with the contracts signed but not performed or not performed is CNY
12,161,186,226.79, of which CNY 10,305,933,049.04 is expected to be recognized in
2021, and CNY 1,855,253,177.75 is expected to be recognized in 2022. CNY 0.00 is
expected to be recognized as revenue in the year.
5. Investment income
Unit: CNY
Item Current period Previous period
Investment income from long-term equity
6,249,926,000.50 6,416,968,211.24
investments under the equity method
Investment income from disposing long-
27,117,336.74
term equity investments
Investment income from financial assets
6,204,748.21 6,946,070.62
held for trading during the holding period
Investment income from disposal of
212,610,583.98 407,441,556.04
financial assets held for trading
Total 6,468,741,332.69 6,858,473,174.64
XVI. Supplementary information
1. Detailed statement of non-recurring profits and losses
Applicable √ N/A
Unit: CNY
Item Amount Notes
Profit or loss from disposal of non-
-4,735,638.66
current assets
Government grants accounted for, in the
profit or loss for the current period
98,175,595.19
(except for the government grants
closely related to the business of the
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Company and given at a fixed amount or
quantity in accordance with the state's
uniform standards)
In addition to the effective hedging
business related to the company's
normal business operations, changes in
fair value from holding financial assets
held for trading, derivative financial
assets, financial liabilities held for
trading, fair value changes, and 2,356,818,184.75
investment income from disposal of
financial assets held for trading and
derivative financial assets, financial
liabilities held for trading, derivative
financial liabilities and other debt
investments
Other non-operating income and
expenditure except above-mentioned -11,429,697.22
items
Other profit and loss items that conform
to the definition of non-recurring profits 818,031.70
and losses
Less: Effect of income tax 609,395,883.18
Effect of minority equity 90,900.93
Total 1,830,159,691.65 --
Statement for extraordinary gain and loss items that the Company defines according to
the definition in “Explanatory Announcement of Information Disclosure of Company that
Issues Securities publicly No.1- Extraordinary Gain and Loss” and definition of recurrent
gain and loss items that are listed as extraordinary gain and loss in the “Explanatory
Announcement of Information Disclosure of Company that Issues Securities publicly
NO.1- Extraordinary Gain and Loss”:
Applicable √ N/A
2. Return on equity and earnings per share
EPS(CNY/Share)
Profit during reporting period Weighted average ROE
Basic EPS Diluted EPS
Net profits attributable to
ordinary shareholders of the 20.20% 4.9843 4.9843
Company
Net profits attributable to
ordinary shareholders of the
15.26% 3.7651 3.7651
Company after deduction of
extraordinary gain and loss
3.Differences in accounting data under domestic and overseas
accounting standards
3.1. Differences in the net profits and net assets disclosed in the
financial reports prepared under the international and China accounting
standards
Applicable √ N/A
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
3.2. Differences in the net profits and net assets disclosed in the
financial reports prepared under the outbound and China accounting
standards
Applicable √ N/A
3.3. Explain the reasons for the differences in accounting data under
domestic and foreign accounting standards, and indicate the name of
the overseas institution if the differences are adjusted for the data
audited by the overseas audit institution
4. Others
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2020 Annual Report of Jiangsu Yanghe Distillery Co., Ltd.
Section XIIIDocuments Available for Preference
1. Financial statements signed and stamped by the legal representative, the person in
charge of accounting affairs and the person in charge of accounting department;
2. The original of the auditor’s report with the seal of the accounting firm, and signed and
stamped by CPAs;
3. The originals of all company documents and announcements that are disclosed to the
public via media designated by CSRC during the reporting period;
4. The original of 2020 annual report signed by chairman.
257