Jiangsu Yanghe Distillery Co., Ltd.
2021 Annual Report
April 2022
1
Section I Important Statements, Contents and Definitions
The board of directors, board of supervisors, directors, supervisors and senior management of Jiangsu Yanghe
Distillery 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 11.Outlook
for the Future Development of the Company in Section III Management 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 2021 Annual Report was publicly disclosed on the Shenzhen Stock Exchange
and www.cninfo.com.cn on 29 April 2022. If there are any differences between the English version and
the Chinese one, please refer to the latter.
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Contents
Section I Important Statements, Contents and Definitions……………………………….2
Section II Company Profile and Key Financial Results……………………………………….5
Section Ⅲ Management Discussion and Analysis…………………………………………..10
Section Ⅳ Corporate Governance…………………………………………………………………..33
Section Ⅴ Environment andSocial Responsibility………………………………………….67
Section Ⅵ Significant Events…………………………………………………………………………71
Section Ⅶ Changes in Shares and Information about Shareholders………………..94
Section Ⅷ Information about Preference Shares……………………………………………103
Section Ⅸ Information about Bonds…………………………………………………………….104
Section Ⅹ Financial Report……………………………………………………………………………105
3
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. 2021 to 31 Dec. 2021
The report Refer to 2021 Annual Report
Yuan, Ten thousand yuan, A hundred million yuan Refer to CNY 0.00, CNY 10,000.00, CNY 100,000,000.00
The shareholders' meeting, the board of directors, The shareholders'meeting, the board of directors and
Refer to
the board of supervisors the board of supervisors of the Company
Articles of incorporation of Jiangsu Yanghe Distillery
Articles of incorporation Refer to
Co., Ltd.
SSE Refer to Shenzhen Stock Exchange
SRC,CSRC Refer to China Securities Regulatory Commission
State-owned Assets Supervision and Administration
SAC of Suqian, SASAC of Suqian Refer to
Commission of Suqian
Suya Jincheng, Accounting firm Refer to Suya Jincheng CPA LLP
Blue Alliance Refer to Jiangsu Blue Alliance Co., Ltd.
Yanghe Branch of the Company Refer to Jiangsu Yanghe Distillery Co., Ltd. Yanghe Branch
Siyang Branch of the Company Refer to Jiangsu Yanghe Distillery Co., Ltd. Siyang Branch
Shuanggou Distillery Refer to Jiangsu Shuanggou Distillery Stock Co.,Ltd.
Guijiu Comapny Refer to Guizhou Guijiu Co., Ltd.
Lihuacun Distillery Refer to Hubei Lihuacun Distillery Co., Ltd.
Inside and outside the province Refer to Inside and outside Jiangsu Province
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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 in
江苏洋河酒厂股份有限公司
Chinese
Abbr. of the Company
洋河股份
name in Chinese
Name of the Company in
Jiangsu Yanghe Distillery Co., Ltd.
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 registered
223800
address
Historical changes of the
company's registered N/A
address
Business address No. 118, Jiudu Avenue, Yanghe District, Suqian City, Jiangsu Province, China
Postal code of business
223800
address
Company website http://www.chinayanghe.com
E-mail yanghe002304@chinayanghe.com
2. Contact us
Company secretary Representative for securities affairs
Name Lu Hongzhen Sun Dali
No. 118, Jiudu Avenue, Yanghe District, No. 118, Jiudu Avenue, Yanghe District,
Address
Suqian City, Jiangsu Province. Suqian City, Jiangsu Province.
Tels. 0527-84938128 0527-84938128
Fax 0527-84938128 0527-84938128
E-mail yanghe002304@chinayanghe.com yanghe002304@chinayanghe.com
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3. Information disclosure and place where the annual report is kept
The website of the stock exchange where Securities Times, Shanghai Securities Times, China Securities
the company discloses the annual report Journal, Securities Daily
Media name and website of the annual
http://www. cninfo.com.cn
report disclosed by the company
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
Organization code 9132000074557990XP
Changes in main business activities
since the Company was listed (if None
any)
Changes of controlling shareholders
None
of the Company (if any)
5. Other relevant information
Accounting firm engaged by the Company
Name of the accounting firm Suya Jincheng CPA LLP
Business address of the 14-16/F., Block A, Zhengtai Center, No.159 Taishan Road, Jianye District, Nanjing,
accounting firm Jiangsu Province
Name of accountants for
Li Laimin, Li Yan
writing signature
Sponsors engaged by the Company to continuously perform its supervisory function during the reporting period
□Applicable √ N/A
Financial adviser engaged by the Company to continuously perform its supervisory function during the reporting
period
□Applicable √ N/A
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6. Key accounting data and financial indicators
Whether the Company performed a retroactive adjustment or restatement of accounting data
2021 2020 YoY Change 2019
Operating revenues (CNY) 25,350,178,204.45 21,101,051,131.79 20.14% 23,126,476,885.07
Net profits attributable to
shareholders of the Company 7,507,682,797.40 7,482,228,633.63 0.34% 7,382,822,726.87
(CNY)
Net profits attributable to
shareholdersof the Company
7,372,758,257.29 5,652,068,941.98 30.44% 6,555,890,029.81
before non-recurring gains
and losses (CNY)
Net cash flows from
15,318,165,480.53 3,978,790,835.80 285.00% 6,797,891,871.41
operating activities (CNY)
Basic earnings per share
5.0141 4.9843 0.60% 4.8991
(CNY/share)
Diluted earnings per share
5.0141 4.9843 0.60% 4.8991
(CNY/share)
Weighted average ROE 18.55% 20.20% -1.65% 21.21%
At the end of 2021 At the end of 2020 YoY Change At the end of 2019
Total assets (CNY) 67,798,704,193.76 53,866,259,306.59 25.86% 53,455,037,840.98
Net assets attributable to
shareholders of the Company 42,486,209,789.59 38,484,583,983.54 10.40% 36,508,835,491.47
(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
□Applicable √ N/A
The net profit before or after deducting non-recurring profits and losses is negative
□Applicable √ N/A
7. Differences in accounting data under domestic and overseas
accounting standards
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 during this period.
2. Differences in the net profits and net assets disclosed in the financial reports prepared under the outbound
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and China accounting standards
□Applicable √ N/A
No such differences during this period.
8. Key financial results by quarter
Unit: CNY
Q1 Q2 Q3 Q4
Operating revenues 10,520,001,017.41 5,023,263,888.13 6,398,931,341.75 3,407,981,957.16
Net profits attributable to
3,862,525,751.53 1,798,920,060.49 1,551,077,792.96 295,159,192.42
shareholders of the Company
Net profits attributable to
shareholders of the Company
before 3,810,668,717.54 1,357,214,536.05 1,682,026,888.45 522,848,115.25
deductingnon-recurring
profits and losses
Net cash flows from
2,919,559,010.60 -826,313,876.01 3,380,809,975.07 9,844,110,370.87
operating activities
Whether there are any material differences between the financial indicators above or their summations and
those which have been disclosed in quarterly or semi-annual reports.
□Applicable √ N/A
9. Non-recurring profits and losses
Unit: CNY
Item 2021 2020 2019 Note
Profit or loss from disposal of non-current
assets (including the write-off portion of the -10,687,905.76 -4,735,638.66 13,797,266.00
impairment provision)
Government grants included in the profit or
loss for the current period (except those
closely related to the normal business of the
company, in line with the provisions of 87,366,302.47 98,175,595.19 85,605,383.19
national policies, and continuously enjoyed
according to a certain standard quota or
quantity)
Except for the effective hedging business
related to the normal business of the
company, profits and losses from changes in 153,349,470.08 2,356,818,184.75 973,456,912.43
fair value arising from holding trading financial
assets and trading financial liabilities, as well
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as the investment income obtained from the
disposal of trading financial assets, trading
financial liabilities and financial assets
available for sale
Impairment provision reversal of the accounts
receivables on which the impairment test is 12,009,031.70
carried out individually
Other non-operating income and expenditure
-31,556,128.88 -11,429,697.22 12,845,147.02
except above-mentioned items
Other profit and loss items that conform to the
3,484,445.51 818,031.70 1,670,388.78
definition of non-recurring profits and losses
Less: Corporate income tax 79,096,331.61 609,395,883.18 260,122,467.95
Minority interests (after tax) -55,656.60 90,900.93 319,932.41
Total 134,924,540.11 1,830,159,691.65 826,932,697.06 --
Details of other profit and loss items that meet the definition of non-recurring profit and loss：
□Applicable √ N/A
The company has no specific circumstances of other profit and loss items that meet the definition of
non-recurring profit and loss.
Description of defining non-recurring profit and loss items listed in the Explanatory Announcement No. 1 on
Information Disclosure for Listed Companies -Non-recurring Profits and Losses as recurring profit and loss items
□Applicable √ N/A
There is no such situation that the company classifies the non-recurring profit and loss items listed in the
Explanatory Announcement No. 1 on Information Disclosure for Listed Companies -Non-recurring Profits and
Losses as recurring profit and loss items.
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Section Ⅲ Management Discussion and Analysis
1. Industry conditions faced by the company during the reporting period
According to the data of the National Bureau of Statistics, there were 965 baijiu enterprises above designated
size nationwide in 2021, a decrease of 75 compared with the previous year; the output of Chinese Baijiu was
7,156,300.00 kiloliters, a year-on-year decrease of 0.59%; The operating revenue was CNY603.348 billion, a
year-on-year increase of 18.69%; the total profit was CNY170.194 billion, a year-on-year increase of 32.95%. The
total production and sales volume of Chinese Baijiu industry were stable, and the competitions among famous
liquor producing areas, regional markets and price segments intensified, the trend of consolidation, branding and
premiumization became more prominent. The development quality of Chinese Baijiu industry was further
improved.
Yanghe is a large Chinese baijiu production enterprise enjoying high brand awareness and reputation nationwide.
It is the only enterprise in the Chinese baijiu industry that owns two famous Chinese Baijiu, Yanghe and
Shuanggou, two time-honored Chinese brands and six well-known Chinese trademarks. The company's leading
products are Dream Blue, Sky Blue, Ocean Blue, Sujiu, Zhenbaofang, Yanghe Daqu, Shuanggou Daqu and so on.
During the reporting period, the company complied with the development trend of the industry, actively
responded to market competition, and achieved an operating revenue of CNY25.35 billion, a year-on-year
increase of 20.14%; the company realized a net profit attributable to shareholders of listed companies of
CNY7.508 billion, a year-on-year increase of 0.34%; it realized a net profit of CNY7.373 billion excluding
non-recurring profits and losses attributable to shareholders of listed companies, with a year-on-year increase of
30.44%. The sales scale of the company ranked among the top three in the industry.
2. Main Businesses of the Company During the Reporting Period
The company shall comply with the disclosure requirements of food and wine manufacturing industries in
Self-regulatory Guidelines for Listed Companies in Shenzhen Stock Exchange No. 3 - Industry Information
Disclosure
The main business of the company is the production and sales of Chinese Baijiu, it is produced by solid-state
fermentation and it sales mainly adopt two modes: wholesale distribution and online direct sales.The company's
main business and business model did not change during the reporting period.According to the Industry
Classification Guidelines for Listed Companies (revised in 2012) issued by the CSRC, the company belongs to the
"C15 wine, beverage and refined tea manufacturing industry".
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 groups 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 craft class, Dream Blue M9,
Dream Blue M6 +, Dream Blue Crystal version, Su wine, Sky Blue, Zhenbaofang (Difang, Shengfang), Ocean Blue
and so on. Ordinary products refer to those with ex-factory price ＜CNY 100 / 500ml, mainly including Yanghe
Daqu and Shuanggou Daqu.
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The revenue of various products is as follows:
Unit: CNY
Products Operating revenue
2021 YoY change
Mid/high end products 21,520,732,572.97 21.95%
Ordinary products 3,117,941,516.60 16.05%
Main sales model
The Company sells its products mainly through distributors. Its sales models include wholesale distribution and
online direct selling, among which wholesale distribution is the main sales model.
□Applicable √ N/A
1. Disclosure of main business composition by different types
Unit：CNY
Types Operating revenue YoY change Operating cost YoY change Gross margin YoY change
By sales model
Wholesale 24,274,039,992.27 21.32% 5,650,652,950.90 8.71% 76.72% 5.31%
distribution
Online 364,634,097.30 11.85% 52,210,097.57 14.00% 85.68% 8.98%
direct selling
Subtotal 24,638,674,089.57 21.17% 5,702,863,048.47 8.76% 76.85% 2.64%
By geographical segment
Jiangsu 11,555,538,148.01 20.87% 2,936,974,469.96 7.46% 74.58% 3.17%
Ex-Jiangsu 13,083,135,941.56 21.43% 2,765,888,578.51 10.18% 78.86% 2.16%
Subtotal 24,638,674,089.57 21.17% 5,702,863,048.47 8.76% 76.85% 2.64%
By product
Mid/high 21,520,732,572.97 21.95% 4,029,165,777.86 13.31% 81.28% 1.43%
end
products
Ordinary 3,117,941,516.60 16.05% 1,673,697,270.61 -0.82% 46.32% 9.13%
products
Subtotal 24,638,674,089.57 21.17% 5,702,863,048.47 8.76% 76.85% 2.64%
The company's main products are classified according to the price range standard of ex-factory price, including
medium/high end products ≥ 100 CNY / 500ml and ordinary products < 100 CNY / 500ml.
2. Disclose the number of distributors according to regional classification
Geographical segment Distributor number at the end Increase number during the Decrease number during
of the reporting period reporting period the reporting period
Jiangsu 2,950 314 480
Ex-Jiangsu 5,192 1,377 2,120
Total 8,142 1,691 2,600
During the reporting period, the change in the number of distributors was mainly due to the company's focus on
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building strategic leading products and optimizing the structure and layout of distributors around the principle of
being close to distributors, stablizing distributors, supporting distributors and enriching distributors.
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
In 2021, the total sales amount of the top five distributors was CNY 1083.7888 million, accounting for 4.28% 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 was zero.
Retail stores accounted for more than 10%.
□Applicable √ N/A
Online direct selling
√Applicable □ N/A
Unit：CNY
Online direct selling Sales amount in 2021 Sales amount in 2020 YoY change
T-mall, JD.COM and other platforms 364,634,097.30 326,000,641.26 11.85%
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
raw materials and packaging
Market bidding 6,333,451,743.89
materials
Marketing purchase Energy 393,687,292.50
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
2021 2020 YoY change
Types Cost item As a percentage of As a percentage of
Amount Amount
operating cost operating cost
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Direct
4,033,119,166.37 64.47% 3,735,886,638.99 63.84% 7.96%
Chinece materials
Baijiu Direct labor 1,083,148,551.48 17.32% 900,387,427.26 15.39% 20.30%
Fuels and
234,523,774.33 3.75% 211,348,204.70 3.61% 10.97%
energy
Manufacturin
252,473,495.64 4.04% 297,087,576.41 5.08% -15.02%
g overhead
Output and inventory
1. Production volume, sales volume and inventory of major products
Types Item Unit 2021 2020 YoY change
Sales Ton 184,001.07 155,757.37 18.13%
Chinese Baijiu Production Ton 204,331.95 161,498.22 26.52%
Inventory Ton 44,228.48 23,897.60 85.08%
2. Inventory of finished and semi-finished Baijiu at the end of the period
Inventory of finished Baijiu (ton) Inventory of semi-finished Baijiu (including raw liquor)
(ton)
44,857.61 619,449.64
3. Capacity of the Company
Name of production entity Design capacity of finished Actual capacity in 2021 (ton)
products (ton)
Yanghe (including Yanghe branch and Siyang branch) 222,545 149,518.69
Shuanggou Distillery 97,040 52,588.63
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.
1. Natural environment advantage
The Company is located in Suqian, the capital of Chinese Baijiu with '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 distillery originated 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 the 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.
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 Baijiu based on taste and
emphasizes the value of taste. The Company strengthens the mellowness of Baijiu, puts forward the new style of
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the mellow Baijiu quality, and deeply meets core demand of target consumers. It has successfully established
new craft of mellow Baijiu production and system 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). In October,
2019, the company formulated the group standard named "Mellow Baijiu" (i.e. t/cbj2104-2019), which further
enriched and improved the relevant standards of mellow Baijiu.
3. Talent advantage
The Company has 39 Masters of Chinese Baijiu, 78 provincial Baijiu tasting committee members and 1926
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 2020, 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". In 2021, the
project of "key technology and industrialization of efficient and safe production of traditional brewing food" won
the second prize of "science and technology progress award of the Ministry of education". The company won the
second to fifth champion of the national liquor taster contest sponsored by China Alcoholic Drinks Association,
and the representatives of the company won the top ten of the fifth national liquor taster contest, which fully
demonstrated the strong talent advantage of the company.
4. Brand advantage
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.
With a brand value of $7.09 billion, the company was selected into the "2021 Top 50 Global Spirits Brand Values”
released by a world-renowned brand value research institution called Brand Finance, ranking third in the world.
In 2021, the company ranked 95th in the "China's 500 Most Valuable Brands" released by World Brand Lab with a
brand value of CNY64.21 billion. In 2022, the company's brand value ranked 342 in the list of "2022 Global Top
500 Brand Values" released by Brand Finance.
5. Marketing network advantage
The company has a marketing team with the largest number of personnel, the latest ideas and the strongest
execution. Its marketing network has penetrated into all counties and regions in China; the high-speed channel
for distribution has been basically built, laying a solid foundation for future market expansion and category
extension.
4. Analysis of main business
1. Overview
During the reporting period, guided by the "14th five year plan" strategic plan and closely focusing on the
"12345" strategic system, the company took the initiative to seize the "Benefits" of industry structure adjustment,
actively responded to the "Challenges" of competition among leading enterprises, fully promoted the major
project of transforming old and new kinetic energy, fully implemented the key projects of improving operation
quality and efficiency, and promoted the company to achieve steady progress and steady development. In 2021,
the company achieved operating revenue of CNY 25.35 billion, a year-on-year increase of 20.14%; Net profit
attributable to shareholders of listed companies has reached CNY7.508 billion, a year-on-year increase of 0.34%;
Net profit attributable to shareholders of listed companies after deducting non-recurring profits and losses is
CNY 7.373 billion, a year-on-year increase of 30.44%.
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Accelerate the transformation and upgrading of marketing methods and condense the potential energy of
reform and innovation. Adhering to the market orientation and competition orientation, focusing on the
high-end and brand strategy, the company has built a "2 + 5 + 10" leading product layout, implemented the
"First-hand Project", and completed the termination of 715 SKUs, making the product planning clearer. By deeply
adjusting the marketing structure and promoting the downward compatibility of marketing organizations, all
brands of the company have realized independent operation. The company adhered to the concept of "Related
Distributors, Comfort Distributors, Support Distributors and Enrich Distributors", continued to improve the dealer
system, comprehensively carried out special inspections on the business environment, vigorously rectified the
market order and continuously optimized the business environment. During the reporting period, the product
prices increased steadily, the cost control was accurate and efficient, and the company's management was
standardized and orderly; Sales volume of leading products such as Dream Blue, Ocean Blue and Sky Blue
increased steadily, the national layout of Shuanggou brand achieved significant progress, and the growth of
Guijiu brand was significant.
Accelerate the optimization of the company's system and management mechanism and release the power
spontaneously generated within the company. The company adhered to the guidance of "market-oriented and
efficiency-oriented"，promoted institutional reform guided by encouraging aspirants,launches “the first phase of
shareholding plan” for core backbone and “14th five year-profit increment sharing plan” for employees, which
improved the salary of employees, built a reward and punishment mechanism of "strengthening growth,
incentive and binding force", strengthened the accountability mechanism based on "position, stage and
assessment results", and promoted the selection mechanism of "youth, knowledge and specialization". This not
only improved the employee incentive system and welfare system, but also created a fair competition
environment and ignited the struggle passion of all employees for "secondary entrepreneurship".
Strengthen product quality and activate the potential of product matrix. The company adhered to the concept
of "quality first and consumer first" and spared no effort to promote the revolution of taste quality, which has
significantly enhanced the taste of the raw liquor and successfully refreshed a variety of good products such as
Sky Blue, Dream Blue Crystal version and Shuanggou Zhenbaofang. The company's technical team won the top
ten in the fifth national liquor taster contest, and won the third place in the light industry brand and the third
place in the Baijiu brand reputation index, which promoted the improvement of both product strength and brand
strength. The company continued to speed up smart production and it has realized linkage and interworking in
the four fields of brewing, taste, quality and logistics. The company successfully launched financial sharing
platform and initially set up a "human effect model" on marketing, brewing and packaging. It also achieved
substantial results in increasing revenue and reducing expenditure, encouraging all employees to participate in
improvement activities related to improving operation quality, product quality and economic benefits, so as to
further improve the operation efficiency of the company.
Strengthen social responsibility and consolidate industrial ecological efficiency. The company adhered to the
concept of altruism and ecological supremacy, vigorously implemented the "Dream Culture" project, and actively
assumed social responsibility while realizing its own development. The company further fulfilled its responsibility
to protect the environment by adhering to energy conservation, emission reduction, recycling and green
development; It continued to build a manufacturer relationship that treats manufacturers sincerely and ensures
that transactions are fair, honest and pure, so as to further consolidate the manufacturer entrepreneurship
community and business community; It strengthened communication with shareholders, investors and medias,
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further enhancing mutual understanding and trust; "Yanghe Baijiu Brewing Technology" was selected into the
National Intangible Cultural Heritage List, and its intellectual property such as Fengcang Ceremony, Guyu forum
and the Toupai Liquor Kaijiao Festival were deeply rooted in the hearts of the people, further expanding the
influence of the liquor city; The company actively supported China's aerospace industry, vigorously supported
the fight against floods and epidemics, and fully promoted the revitalization of rural areas. Public benefit
activities such as "I love Sky Blue" and "Support learning and Interpret dream public benefit activities " have
entered hundreds of cities, further enabling the company to promote the development of China and all ethnic
groups.
2. Revenues and cost of sales
(1) Breakdown of operating revenues
Unit：CNY
2021 2020
As a percentage As a percentage
YoY change
Amount of operating Amount of operating
revenues revenues
Total 25,350,178,204.45 100% 21,101,051,131.79 100% 20.14%
By business segment
Liquor 24,638,674,089.57 97.19% 20,334,282,442.98 96.37% 21.17%
Other 711,504,114.88 2.81% 766,768,688.81 3.63% -7.21%
By product
Baijiu 24,440,221,392.60 96.41% 20,152,435,029.41 95.50% 21.28%
Wine 198,452,696.97 0.78% 181,847,413.57 0.86% 9.13%
Other 711,504,114.88 2.81% 766,768,688.81 3.63% -7.21%
By geographical segment
Jiangsu 11,800,507,954.17 46.55% 9,990,396,422.72 47.35% 18.12%
Ex-Jiangsu 13,549,670,250.28 53.45% 11,110,654,709.07 52.65% 21.95%
By sales model
Wholesale
24,274,039,992.27 95.75% 20,008,281,801.72 94.82% 21.32%
distribution
Online direct
364,634,097.30 1.44% 326,000,641.26 1.55% 11.85%
selling
Other 711,504,114.88 2.81% 766,768,688.81 3.63% -7.21%
(2) Business segment, products, geographical segments or sales models contributing over 10% of the
operating revenues or profits
√Applicable □N/A
Unit：CNY
Gross YoY change of YoY change of
Operating YoY change of
Cost of sales profit operating gross profit
revenues cost of sales
margin revenue margin
By business segment
Liquor 24,638,674,089.57 5,702,863,048.47 76.85% 21.17% 8.76% 2.64%
By product
16
Baijiu 24,440,221,392.60 5,603,264,987.82 77.07% 21.28% 8.91% 2.60%
By geographical segment
Jiangsu 11,555,538,148.01 2,936,974,469.96 74.58% 20.87% 7.46% 3.17%
Ex-Jiangsu 13,083,135,941.56 2,765,888,578.51 78.86% 21.43% 10.18% 2.16%
By sales mode
Wholesale
24,274,039,992.27 5,650,652,950.90 76.72% 21.32% 8.71% 5.31%
distribution
Online
direct 364,634,097.30 52,210,097.57 85.68% 11.85% 14.00% 8.98%
selling
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
(3) Whether revenue from physical sales is higher than service revenue
√Applicable □ N/A
By business
Item Unit 2021 2020 YoY change
segment
Sales volume Ton 184,001.07 155,757.37 18.13%
Production
Baijiu Ton 204,331.95 161,498.22 26.52%
volume
Inventory volume Ton 44,228.48 23,897.6 85.08%
Sales volume Ton 2,654.55 3,202.27 -17.10%
Production
Wine Ton 2,856.66 2,985.04 -4.30%
volume
Inventory volume ton 629.13 427.02 47.33%
Reasons for any over 30% YoY changes in the data above.
√ Applicable□N/A
At the end of the reporting period, the inventory of Baijiu and red wine increased significantly, mainly due to the
increase of the dealer's order plan at the end of the year, which led the company to increase its inventory to
meet the market demand.
(4) Execution of significant sales contracts and significant purchase contracts in the reporting period
□Applicable √ N/A
(5) Breakdown of cost of sales
By business and product segment
Unit：CNY
2021 2020
By business As a As a
Item YoY change
segment Amount percentage of Amount percentage of
cost of sales cost of sales
5,702,863,048. 5,243,536,119.
Liquor 91.17% 89.60% 8.76%
47 11
17
Unit：CNY
2021 2020
By product As a As a
Item YoY change
segment Amount percentage of Amount percentage of
cost of sales cost of sales
Direct 4,128,993,712. 3,831,187,362.
Liquor 66.01% 65.47% 7.77%
materials 95 53
1,085,084,143. 902,098,885.0
Liquor Direct labor 17.35% 15.42% 20.28%
74 5
Fuels and 235,359,439.0 212,167,471.3
Liquor 3.76% 3.63% 10.93%
energy 8 4
Manufacturing 253,425,752.7 298,082,400.1
Liquor 4.05% 5.09% -14.98%
overhead 0 9
Note: Nil
(6) Changes in the scope of the consolidated financial statements for the reporting period
√Applicable □ N/A
Establishment of subsidiaries
(1) In March 2021, Jiangsu Shuanggou Liquor Co., Ltd., a holding subsidiary, invested CNY 100 million to
establish Jiangsu Shuanggou Liquor Sales Co., Ltd., accounting for 100% of its registered capital. It was
included in the consolidated financial statements from March 2021.
(2) In April 2021, the company and Suqian Industrial Development Group Co., Ltd. jointly invested 20 million
yuan to establish Jiangsu jiushang Internet Technology Co., Ltd., of which the company invested CNY
10.2 million, accounting for 51% of its registered capital; Suqian Industrial Development Group Co., Ltd.
invested CNY 9.8 million, accounting for 49% of its registered capital. It was included in the consolidated
financial statements from April 2021.
(3) In July 2021, the company subscribed CNY 50 million to establish Jiangsu Yanghe Cultural Tourism Co.,
Ltd., accounting for 100% of its registered capital. It was included the consolidation scope of the
consolidated financial statements from July 2021.
(4) In July 2021, the holding subsidiary Jiangsu Yanghe Cultural Tourism Co., Ltd. and Suqian Cultural
Tourism Development Group Co., Ltd. jointly invested 20 million yuan to establish Jiangsu Yanghe
Cultural Tourism Operation Co., Ltd., of which Jiangsu Yanghe Cultural Tourism Co., Ltd. invested CNY 16
million, accounting for 80.00% of its registered capital; Suqian Cultural Tourism Development Group Co.,
Ltd. invested CNY 4 million, accounting for 20.00% of its registered capital. It was included in the
consolidated financial statements from July 2021.
(5) In November 2021, the company subscribed CNY 24 million to establish Siyang Tianlan Packaging Service
Co., Ltd., accounting for 100% of its registered capital. It was included in the consolidated financial
statements from November 2021.
(7) Major changes in the business, products or services in the reporting period
□Applicable √ N/A
(8) Main customers and suppliers
Sales to major customers of the Company
Total sales from top five customers（CNY） 1,083,788,758.68
18
Total sales from top five customers as a
4.28%
percentage of the total sales
Total sales from related parties among top five
0.00%
customers as a 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 391,560,636.83 1.54%
2 Customer B 226,967,130.43 0.90%
3 Customer C 158,525,736.01 0.63%
4 Customer D 156,335,302.56 0.62%
5 Customer E 150,399,952.85 0.59%
Total -- 1,083,788,758.68 4.28%
Other information on major customers
□Applicable √ N/A
Major suppliers of the Company
Total purchasefrom top five suppliers（CNY） 1,575,004,211.01
Total purchasefrom top five suppliers as a
23.41%
percentage of the total sales
Total purchasefrom related parties among top
five suppliers as a percentage of the total 0.00%
purchase
Information on top five suppliers
As a percentage of the total
No. Supplier Purchases(CNY)
purchase for the year
1 Supplier A 572,738,355.02 8.51%
2 Supplier B 299,940,289.47 4.46%
3 Supplier C 253,742,730.34 3.77%
4 Supplier D 229,629,656.86 3.41%
5 Supplier E 218,953,179.32 3.26%
Total -- 1,575,004,211.01 23.41%
Other information on major suppliers
□Applicable √ N/A
3. Expense
Unit：CNY
2021 2020 YoY change Reason for any significant change
The sales revenue increased in
Selling and the current period, the salary of
3,544,364,889.54 2,603,804,157.78 36.12%
distribution expenses sales staff increased, and the
sales expenses such as payroll,
19
promotion expenses and travel
expenses increased accordingly.
General and
administrative 1,830,080,139.18 1,729,080,201.93 5.84%
expenses
The amount of current deposits
increased significantly, which led
Finance expenses -399,145,509.96 -87,234,764.39 -357.55% to the increase of interest
income and the decrease of
financial expenses.
R&D expenses 258,458,102.63 260,094,291.03 -0.63%
The company shall comply with the disclosure requirements of food and wine manufacturing businesses in Self
Regulatory Guidelines for Listed Companies in Shenzhen Stock Exchange No. 3 - Industry Information Disclosure
The composition of selling and distribution expenses
Unit：CNY 10,000
As a percentage of As a percentage of
Current period Previous period
Item selling and selling and YoY change
amount amount
distribution expenses distribution expenses
Advertising and
promotion 191,182.70 53.94% 141,109.00 54.19% 35.49%
expense
Payroll 106,584.47 30.07% 64,627.10 24.82% 64.92%
Travel expense 39,043.27 11.02% 35,343.47 13.57% 10.47%
Labor expense 8,872.30 2.50% 11,797.58 4.53% -24.80%
E-commerce
3,780.13 1.07% 2,413.08 0.93% 56.65%
expense
Other expense 4,973.62 1.40% 5,090.17 1.95% -2.29%
Subtotal 354,436.49 100.00% 260,380.42 100.00% 36.12%
Analysis of changes:
(1) Advertising and promotion expenses in this period increased by 35.49% over the same period of last year,
mainly due to the growth of sales revenue and the corresponding increase of promotion expenses.
(2) Payroll in this period increased by 64.92% over the same period of last year, mainly due to the increase in
sales revenue in this period, the increase in the salary of employees in the sales department and the
increase in the number of employees, resulting in the increase in payroll.
(3) The amount of E-commerce expenses in this period increased by 56.65% over the same period of last year,
mainly due to the increase in online sales in this period and the corresponding increase in E-commerce
expenses.
4. R&D input
√Applicable □ N/A
Name of main R Expected impact on
Purpose Progress Objectives to be achieved
& D projects future development
20
1. Make the production
1. To build
process standardized and
industry-leading digital
accurate, and make the
Establish a and automatic
The output and product quality more
standardized production workshops; 2.
efficiency have stable. 2. Greatly improve
Intelligent production system to To realize the data tracing
reached the production efficiency and
Brewing Project realize digital and of the whole brewing
standard in work efficiency, so as to
intelligent process, and make the
September 2021 achieve energy
production. brewing production more
conservation and
visible, controllable and
emission reduction more
analyzable.
effectively
1. To deeply study the
biochemical functions of
yeast, produce biological
functional yeast with the Constantly enrich the
functions of scarification, application results of
Research on Improving the Successfully fermentation, aroma microorganisms in the
functional yeast application of popularized and generation or flavor brewing process, which
based on flavor functional yeast in applied in production. 2. To clarify has reference significance
orientation brewing September 2021 the influence of yeast on for the further research
the flavor of Mianrou and application of Baijiu
Baijiu, and to construct flavor.
functional microbial
community related to the
flavor system.
Research on the
Establish a
classification To formulate the
market-oriented raw Make the quality of all
method of raw classification standards of
liquor classification Successfully grades of raw liquor and
liquor based on various types of raw
model and a model established in the quality of all series of
consumption liquor and the calculation
for matching the May 2021 Baijiu better match the
and research on standards and models of
taste demand of market demand.
the matching of resource demand.
Baijiu
taste
Information about R&D personnel
2021 2020 YoY change
Number of R&D personnel 575 549 4.74%
R&D personnel as a
percentage in total 3.20% 3.47% -0.27%
employees
Educational background of
—— —— ——
R & D personnel
Bachelor degree 156 159 -1.89%
Master degree 54 57 -5.26%
Age of R & D personnel —— —— ——
21
Under 30 58 77 -24.68%
Between 30 and 40 340 333 2.10%
Information about R&D input
2021 2020 YoY change
R&D input (CNY) 270,723,001.71 269,360,145.63 0.51%
R&D input as a percentage
1.07% 1.28% -0.21%
in operating revenues
Capitalized R&D input (CNY 12,264,899.08 9,265,854.60 32.37%
Capitalized R&D input
percentage in total R&D 4.53% 3.44% 1.09%
input
Reasons and effects of YoY change in the composition of R & D personnel.
□Applicable √ N/A
Reasons for any significant YoY change in the ratio of the R&D input to the operating revenues.
□Applicable √ N/A
Reasons for any significant YoY change in the ratio of the R&D input to the operating revenues.
□Applicable √ N/A
5. Cash flow
Unit：CNY
Item 2021 2020 YoY change
Subtotal of cash inflows
37,538,099,673.95 21,900,973,449.03 71.40%
from operating activities
Subtotal of cash outflows
22,219,934,193.42 17,922,182,613.23 23.98%
from operating activities
Net cash flows from
15,318,165,480.53 3,978,790,835.80 285.00%
operating activities
Subtotal of cash inflows
28,170,298,911.57 30,896,999,982.51 -8.83%
from investing activities
Subtotal of cash outflows
26,333,634,597.28 26,424,165,197.95 -0.34%
from investing activities
Net cash flows from
1,836,664,314.29 4,472,834,784.56 -58.94%
investing activities
Subtotal of cash inflows
950,750,000.00
from financing activities
Subtotal of cash outflows
4,498,567,810.77 5,504,913,990.79 -18.28%
from financing activities
Net cash flows from
-3,547,817,810.77 -5,504,913,990.79 35.55%
financing activities
Net increase in cash and
13,603,817,188.08 2,943,041,513.62 362.24%
cash equivalents
Explanation of why the data above varied significantly.
√ Applicable □ N/A
(1) The cash inflow from operating activities in the current period increased by 71.40% over the previous period,
mainly due to the increase in sales revenue and advance on sales in the current period.
22
(2) The net cash flow from operating activities in the current period increased by 285.00% over the previous
period, mainly due to the increase of sales revenue and advance on sales in the current period, and the
increase of cash inflow from operating activities was greater than that of cash outflow from operating
activities.
(3) The net cash flow from investment activities in the current period decreased by 58.94% compared with the
previous period, mainly due to the decrease of cash inflow from investment activities in the current period.
(4) The net cash flow from financing activities in the current period increased by 35.55% over the previous
period, mainly due to the increase of cash inflow from financing activities and the decrease of cash outflow
from financing activities in the current period.
(5) The net increase in cash and cash equivalents in the current period increased by 362.24% over the previous
period, mainly due to the significant increase in the net cash flow from operating activities in the current
period.
The significant difference between the net cash flow and net profit from operating activities in the current period
is due to the substantial increase in contract liabilities at the end of the period
√Applicable □ N/A
5. Analysis of non-core business
√Applicable □ N/A
Unit：CNY
As a percentage
Amount Reasons Sustainability
of total profits
Mainly due to the
investment income
Investment
900,613,478.22 9.05% generated by wealth No
income
management products
and equity investment
Mainly due to changes
Changes in fair
-721,212,806.81 -7.25% in fair value of financial No
value
assets held for trading
Asset Mainly due to provision
-7,175,293.45 -0.07% No
impairment for stock obsolescence
Mainly due to
Non-operating compensation and
20,718,383.00 0.21% No
income liquidated damages
income
Mainly due to donation
Non-operating expenses and losses
63,220,053.35 0.64% No
expenses from retirement of fixed
assets
6. Analysis of assets and liabilities
1. Significant changes of asset items
23
Unit：CNY
As at the end of 2021 As at the beginning of 2021
As a As a Change
percen percenta In Explanation about any
Amount tage of Amount ge of percenta significant changes
total total ge
assets assets
The net cash flow
generated from operating
activities in the current
Cash and cash
20,955,831,010.12 30.91% 7,243,186,362.29 13.45% 17.46% period increased
equivalents
significantly, and the
deposits increased
accordingly.
Accounts
1,247,949.91 4,225,230.90 0.01% -0.01%
receivable
Inventories 16,803,093,441.81 24.78% 14,852,694,146.30 27.57% -2.79%
Long-term
equity 32,743,397.31 0.05% 29,528,377.16 0.05% 0.00%
investments
Fixed assets 6,276,466,308.05 9.26% 6,882,953,634.34 12.78% -3.52%
Construction in
525,497,000.26 0.78% 223,468,482.24 0.41% 0.37%
progress
Right-of-use
19,610,113.75 0.03% 8,610,167.63 0.02% 0.01%
asset
Contract
15,804,521,430.17 23.31% 8,801,346,891.32 16.34% 6.97%
liability
Long-term
36,360.00 0.00% 36,360.00 0.00% 0.00%
borrowings
Lease
10,729,824.19 0.02% 6,526,252.85 0.01% 0.01%
Liabilities
Due to the decrease of
Financial bank wealth management
assets held for 10,953,894,328.01 16.16% 14,301,978,905.17 26.55% -10.39% products and trust
trading products purchased in the
current period
Other
non-current 7,635,942,149.06 11.26% 6,366,958,225.81 11.82% -0.56%
financial assets
The proportion of overseas assets is relatively high.
□Applicable √ N/A
2. Assets and liabilities measured at fair value
√Applicable □ N/A
24
Unit：CNY
Changes in
Changes in
the
fair value Amount
Opening cumulative Provision for Amount of Other Closing
Item recognized of
balance fair value impairment sale change s balance
in profit or purchase
recorded
loss
into equity
Financial
Assets
1. Financial
assets held
for trading
20,668,937, -721,212,80 25,910,11 27,266,561, -1,436,94 18,589,83
(excluding
130.98 6.81 0,341.89 244.92 4.07 6,477.07
derivative
financial
assets)
20,668,937, -721,212,80 25,910,11 27,266,561, -1,436,94 18,589,83
Total
130.98 6.81 0,341.89 244.92 4.07 6,477.07
Financial
0.00 0.00
liabilities
Other changes
No
Whether measurement attribution of main assets changed significantly during this period
□Applicable √ N/A
3. Restricted asset rights as of the end of this reporting period
No
7. Investment
1. Total investment
√Applicable □ N/A
Investment made in the reporting Investment made in the prior year
YoY change
period (CNY) (CNY)
3,840,110,341.89 2,204,658,425.17 74.18%
2. Significant equity investment made in the reporting period
□Applicable √ N/A
3. Significant non-equity investment ongoing in the reporting period
□Applicable √ N/A
4. Investment in financial assets
√Applicable □ N/A
(1) Securities investment
Unit：CNY
25
Chang
Chang es in Profit
es in the and
Account
Openi fair cumul Amoun loss Cap
Initial ing Amoun Closing
Category of Stock Abbr. of ng value ative t of during Accounting ital
investme measur t of balanc
securities code securities balan recogn fair purcha the subject sou
nt cost ement sale e
ce ized in value se reporti rce
model
profit record ng
or loss ed into period
equity
Shanghai
Other Ow
Yunfeng 1,280, 27,768 1,252,
1,252,23 Fair Non-current ned
Other Nil Xincheng 000,00 ,236.0 231,76
1,763.94 value financial Fun
Investment 0.00 6 3.94
assets d
Center (L.P.)
Other Ow
Domestic 1,748, -686,3 1,061,
BOCI 300,000, Fair 7,581, Non-current ned
and foreign 601696 210,5 68,417 842,09
Securities 000.00 value 388.92 financial Fun
stocks 16.99 .39 9.60
assets d
CHINA Other Ow
-65,00 650,00 585,00
MINSHENG 650,000, Fair Non-current ned
Other Nil 0,000. 0,000. 0,000.
TRUST Co., 000.00 value financial Fun
00 00 00
Ltd. assets d
Pan Mao Other Ow
367,7 12,007 18,849 41,905 360,91
(Shanghai) 276,185, Fair Non-current ned
Other Nil 52,50 ,934.4 ,243.4 ,223.8 1,196.
Investment 376.22 value financial Fun
5.44 1 4 0 41
Center (L.P.) assets d
Lianchu Other Ow
222,1 107,85 330,00
Reserve 330,000, Fair Non-current ned
Other Nil 47,67 2,328. 0,000.
Securities Co., 000.00 value financial Fun
1.83 17 00
Ltd. assets d
CICC Jiatai
Phase II
(Tianjin) Other Ow
229,1 136,86 64,445 301,53
Equity 160,801, Fair Non-current ned
Other Nil 14,92 3,367. ,934.0 2,355.
Investment 819.08 value financial Fun
2.40 24 3 61
Fund assets d
Partnership
(L.P.)
Jinshi Other Ow
283,6 38,883 63,631 258,93
Kunxiang 236,368, Fair Non-current ned
Other Nil 77,41 ,912.3 ,225.7 0,097.
Equity 774.30 value financial Fun
0.32 9 0 01
Investment(H assets d
26
angzhou)Part
nership(L.P.)
Other Ow
Domestic 334,3 -96,98 21,609 237,41
Vina San 425,350, Fair Non-current ned
and foreign VSPT 93,92 1,815. ,851.2 2,110.
Pedro 132.53 value financial Fun
stocks 6.45 62 6 83
assets d
Suzhou
Danqing
Phase II
Other Ow
Innovative 197,1 54,167 18,404 232,90
181,595, Fair Non-current ned
Other Nil Pharmaceutic 43,80 ,201.7 ,062.6 6,944.
937.40 value financial Fun
al Industry 5.24 9 0 43
assets d
Investment
Partnership
(L.P.)
Chongqing
Trust Ow
200,4 15,599 200,42 Financial
Jinyang No.1 200,000, Fair -42,73 ned
Other Nil 70,13 ,999.9 7,397. assets held
Collective 000.00 value 9.73 Fun
6.99 9 26 for trading
Fund Trust d
Plan
13,61
-192,6 4,510, 14,511 611,63 3,421,
Other securities investments held 3,287,92 6,749,
-- 42,990 110,34 ,212,5 2,212. 567,82 -- --
at the end of this period 0,072.32 959.6
.21 1.89 43.09 87 4.20
8
17,19
-691,2 6,440, 14,704 698,32 8,242,
7,300,45 9,660,
Total -- 61,218 0.00 110,34 ,311,2 8,676. 761,78 -- --
3,875.79 855.3
.95 1.89 44.92 84 9.29
4
Disclosure date of the
announcement of the board of
April 27, 2021
directors for the approval of
securities investment
Disclosure date of announcement
of shareholders' committee for
May 27, 2021
approval of securities Investment
(if any)
(2) Derivative investments
□Applicable √ N/A
No such cases in the reporting period.
5. Use of fund-raising
□Applicable √ N/A
No such cases in the reporting period.
27
8. Sale of major assets and equity Interests
1. Sale of major Assets
□Applicable √ N/A
No such cases in the reporting period
2. Sale of major equity Interests.
□Applicable √ N/A
9.Analysis of major subsidiaries
√Applicable □ N/A
Main subsidiaries and joint companies with an over 10% influence on the Company’s net profit
Unit：CNY
Company Company Business Registered Operating Operating
Total assets Net assets Net profit
name type scope capital revenue profit
Su Wine Wholesalin
Trade g and
334,400,00 27,078,029 5,504,267, 24,024,388 6,041,282, 4,640,687,
Group Subsidiary retailing of
0.00 ,132.54 883.49 ,479.86 501.71 749.50
Limited by prepackage
Share Ltd. d food
Jiangsu
Shuanggou Production
110,000,00 8,356,051, 3,547,504, 1,787,018, 1,397,896, 1,463,226,
Distillery Subsidiary and sales
0.00 985.87 679.60 049.06 171.86 609.84
Stock Co., of Baijiu
Ltd.
Jiangsu Wholesalin
Shuanggou g and
5,000,000. 2,853,016, 1,492,438, 4,870,580, 1,988,941, 1,491,577,
Liquor Subsidiary retailing of
00 801.66 768.18 115.82 143.94 004.07
Operation prepackage
Co., Ltd. d food
Acquisition and disposal of subsidiaries during the reporting period
√Applicable □ N/A
How subsidiary was acquired or
Impact on overall operation and
Subsidiary name disposed during the reporting
results
period
Jiangsu Shuanggou Liquor Sales Co.,
Establishment Tiny
Ltd
Jiangsu Jiushang Internet
Establishment Tiny
Technology Co., Ltd
Jiangsu Yanghe Cultural Tourism Co.,
Establishment Tiny
Ltd
Jiangsu Yanghe Cultural Tourism
Establishment Tiny
Operation Co., Ltd
Siyang Tianlan Packaging Service Establishment Tiny
28
Co., Ltd
10. Structured entities controlled by the Company
□Applicable √ N/A
11. Outlook for the future development of the Company
(1) Development strategy
Looking into the 14th Five-Year Period, Yanghe will adhere to the central idea of focusing on costumers, two
famous brands and brand diversification, and take attaching importance to quality, brand, culture and innovation
as the leading ideology, to build the "12345" strategic system, to create a wave leading Yanghe and a surging
power Shuanggou. The company will build a leading Yanghe and an energetic Shuanggou, and achieves a more
balanced, high-quality and efficient development. Yanghe will become a Chinese flavor that Chinese are proud of
and a Chinese card that will be remembered by the world.
(2) Business plan
2022 is an important year for the company to accelerate development and make breakthroughs, and it is also a
key year to rise to the challenge. The company will comply with the new global situation and requirements,
adapt to the new normal and new challenges of the industry, create the "Second Stage" of "Secondary
Entrepreneurship" with "Product Driven, Marketing Driven, Brand Driven, Organization Driven and Cultural
Driven", and realize the development pattern of "Pursue high quality while ensuring stability, Pursue sustainable
development while keeping moving Forward, Pursue healthy development while maintaining good condition".
The company's business goal in 2022 is to achieve a year-on-year increase of more than 15% in operating
revenue.
1. Product driven. The company will closely follow the consumption upgrading and changes in market demand,
and strengthen the implementation of product life cycle management with the work goal of "making the
product line clearer, focusing on leading products, promoting high-end products and making new plans for
old brands"; the company will further promote the quality revolution, build a more systematic and
comprehensive technical system, speed up the operation of key construction projects such as high-end baijiu
storage, continue to promote the quality of raw liquor and spare no effort to improve product quality.
2. Marketing Driven. Focusing on "the marketing headquarters is responsible for the overall planning and the
business division is responsible for the specific implementation", and through the concept of driving the
organization through business, the marketing organization can carry out business more widely and
conveniently and continuously cultivate the market; The company will focus on the nationalization and
high-end of products, promote the optimization of Yanghe product structure, and expand the increment of
Shuanggou and expensive wine; the company will balance the volume and price in the Jiangsu market,
optimize the product mix in markets outside Jiangsu, and expand the revenue scale of key markets in other
areas outside of Jiangsu; the company plans to strengthen the construction of business environment,
improve the dealer management system, improve the operation and service level of consumers, and
promote higher quality marketing development.
3. Brand driven. The company will adhere to the "four high" principle, which means that the company occupies
a high position in terms of product occupancy, differentiation, resonance and reputation, systematically
study the brand construction path and operation mode, formulate the strategic direction, combat concept
and tactical measures of brand construction, achieve clear structure, clear objectives, reasonable division of
labor and accurate strategy, and effectively improve the brand influence and brand reputation. In addition,
29
the company will systematically study the best way and operation mode of brand construction, formulate
the strategic direction, combat concept and tactical measures of brand construction, achieve clear structure,
clear objectives, reasonable division of labor and accurate strategy, and effectively improve the brand
influence and brand reputation.
4. Organization driven. The company will strengthen the employment orientation of "survival of the fittest",
adhere to the selection orientation of "youth, knowledge, specialization and nationalization", adhere to the
education orientation of "young seedling type, afforestation type and shade type", build a "professional and
practical" organization, "learning and research" organization, "reform and innovation" organization and
"honest, diligent and thrifty" organization, and build a "secondary entrepreneurship" talent team with
courage, determination and ambition.
5. Cultural driven. Guided by the "dream culture", the company will upgrade its corporate culture and carry
forward the Yanghe cultural spirit with both traditional charm and contemporary value. Through the
continuous strengthening of the company, the development of public welfare undertakings will be more
detailed and refined, so as to realize the development dream and public welfare dream of Yanghe people;
the company will strengthen the sharing, integration and win-win with consumers, dealers, suppliers, media
and capital markets, and form a strong joint force with all sectors of society to build a common dream.
(3) Risks and challenges
1. Macroeconomic uncertainty risk. At present, although China's economy tends to be stable, gradually recovers
and develops in a good direction, the world economic growth continues to slow down and the international
economic and political environment is unpredictable; The great pressure of economic downturn has brought
certain risks to the development of Baijiu industry.
2. Risk of intensified market competition. At present, the overall competition in the Baijiu market is intensifying.
With the continuous improvement of market concentration, the industry will gradually enter the stage of
accelerated competition, and the competition among Baijiu enterprises will become increasingly fierce.
3. Risks caused by the outbreak of COVID-19. At present, the epidemic situation abroad has not been effectively
controlled, and the epidemic in China has also been breaking out in many places. There is still uncertainty risk in
the epidemic prevention and control, which will have a certain impact on the total demand and consumption
prospect of Baijiu, and then bring uncertainty to the growth of Baijiu industry.
12. Visits paid to the Company for research, communication, interview,
etc. during the reporting period.
√Applicable □ N/A
The main
contents of
the discussion Index to main
Date of visit Reception site Way of visit Type of visitor Visitor
and the inquiry information
information
provided
Nanjing Institutional Production, Log Sheet of
May 21, 2021 Other Other
operation and individual marketing, Investor Relations
30
center investors management Activities on 21 May
participating and finance of 2021 on
in the the company www.cninfo.com.c n
Company's （No：2021- 001）
2020
annual results
presentation
online
Shareholders The
and investors company's
who development
Log Sheet of
participated strategy,
Investor Relations
in the on-site brand
May 27, Activities on 27 May
Headquarter Field survey Institution communicatio planning,
2021 2021 on
n at the quality
www.cninfo.com.c n
Company's improvement,
（No：2021- 002）
2020 annual marketing
shareholders' transformatio
meeting n, etc
Basic
information of
102 investors
the
from Log Sheet of
enterprise,
domestic and Investor Relations
Telephone future
May 28, foreign Activities on 28 May
Headquarter communicatio Institution strategic
2021 institutions 2021 on
n planning,
such as UBS, E www.cninfo.com.c n
leading brand
Fund, Huaxia （No：2021- 003）
promotion,
Fund and
dividend
Genesis
strategy, etc
25 investors
from Shenwan
Hongyuan, Measures for
Log 002304
Huatai enterprise
Information on
Securities, transformatio
Research Activities
July 20, China n, advantages
Headquarter Field survey Institution of Yanghe Co., Ltd
2021 Merchants and problems
on
Securities, of enterprise
www.cninfo.com.c n
Guosheng development,
（No：2021- 004）
securities, etc
Huaxia Fund,
etc
September 9 investors Log 002304
Headquarter Field survey Institution
23, 2021 from Upgrading Information on
31
Zheshang and Research Activities
Securities, promotion of of Yanghe Co., Ltd
Orient Asset leading on
Management, products, www.cninfo.com.c n
etc sales during （No：2021- 005）
the
Mid-Autumn
Festival,
enterprise
transformatio
n and
adjustment,
etc
32
Section IV CORPORATE GOVERNANCE
1. Basic Situation of Corporate Governance
The company strictly follows the "Company Law", "Securities Law" and "Governance Guidelines for Listed
Companies", "Shenzhen Stock Exchange Listing Rules", "Shenzhen Stock Exchange Listed Companies
Standardized Operation Guidelines" and other relevant laws and regulations. Combining the actual development
of the company, the company further improves its modern enterprise system and corporate governance
structure. During the reporting period, the overall operation of the company was standardized, and the
corporate governance situation complied with the requirements of the normative documents of the China
Securities Regulatory Commission on the governance of listed companies.
1.1 Shareholders and shareholders’meetings
The responsibilities of the company's general meeting of shareholders are clear, with accurate rules of
procedure and practical implementation. The calling, convening and deliberation procedures of the company's
general meeting of shareholders comply with the relevant provisions of the Company Law, the Articles of
Association and the Rules of Procedure for the General Meeting of Shareholders of the Company. All
shareholders are treated equally, especially to ensure that small and medium shareholders enjoy equal status
and ensure that small and medium shareholders can sufficiently exercise its own rights. The board of directors of
the company earnestly implemented the resolutions of the general meeting of shareholders.
1.2 Directors and Board of directors
The responsibilities of the board of directors of the company are clear, and all directors can perform their
duties conscientiously and responsibly. The board of directors of the company elects directors in strict
accordance with the selection and appointment procedures stipulated in the Company Law and the Articles of
Association. The board of directors of the company currently consists of 10 directors, 4 of which are
independent directors. The composition of the board of directors conforms to the requirements of laws and
regulations. The board of directors of the company strictly complies with the "Company Law", "Articles of
Association" and other relevant regulations to regulate the deliberation and operation of the board of directors.
All directors of the company can attend the board of directors in accordance with the "Procedure Rules of the
Board of Directors", "Working System for Independent Directors" and other regulations, diligently and
conscientiously review each case, making scientific and reasonable decisions on major issues of the company,
and earnestly safeguarding the interests of the company and the legitimate rights and interests of all
shareholders. The company's board of directors consists of four professional committees, namely the strategy
committee, the nomination committee, the audit committee and the remuneration and appraisal committee.
Each committee has a clear division of labor, clear powers and responsibilities, effective operation, and gives full
play to their professional functions, providing scientific and professional opinion for the decision-making of the
board of directors.
1.3 Supervisors and Board of Supervisors
The company's board of supervisors has clear responsibilities, and all supervisors can conscientiously and
responsibly perform their duties. The board of Supervisors of the company election is in strict accordance with
the recruitment procedures stipulated in the Company Law and the Articles of Association and etc. The board of
33
supervisors of the company is composed of 5 supervisors, among which 2 are employees' representatives. The
composition of the members of the board of supervisors meets the requirements of laws and regulations. The
board of supervisors operates in strict accordance with the company law, the company's articles and other
regulations, the supervisors can attend the board requested bythe rules of procedure of the board of supervisors,
earnestly perform their duties, effectively supervising and expressing opinions on the major issues of the
company, financial status, and how the directors and President perform. Safeguarding the legitimate rights and
interests of the company and shareholders is also the duty of the board of supervisors.
1.4 Performance appraisal and incentive and restraint mechanism
The appointment of the company's directors, supervisors and senior management personnel is open and
transparent, in line with relevant laws and regulations, and a fair and transparent management performance
evaluation standard and incentive and restraint mechanism have been established. During the reporting period,
the company conducted a performance appraisal on the goals set by the executive suites in accordance with the
annual business plan, and all the executive suites have conscientiously performed their duties.
1.5 Performance appraisal and incentive and restraint mechanism
The controlling shareholder of the company shall exercise the rights of the investor and take the obligations in
strict accordance with the requirements of the Company Law. The company and the controlling shareholder
shall separate personnel, assets and finances, with independent organization and business, accounting
independently and taking responsibilities and risks independently. During the reporting period, the controlling
shareholder did not directly or indirectly interfere with the company's decision-making and business activities
beyond the company's general meeting of shareholders, and there was no situation where the controlling
shareholder harmed the legitimate rights and interests of other shareholders of the company. There is no major
related transaction between the company and its controlling shareholder, there is no phenomenon that the
controlling shareholder occupies the funds of the company, and the company does not provide guarantees for
the controlling shareholder and its subsidiaries.
1.6 Investor relations activities
The company pays great attention to the management of investor relations and actively safeguards the
legitimate rights and interests of the company's shareholders. In addition to performing information disclosure
obligations diligently and honestly, the chairman, president and secretary of the board of directors maintain
positive interactions with investors by receiving investor surveys, participating in online performance briefings
and brokerage strategy meetings, etc. The securities department acting as a specialized relationship
management agency, strengthens communication with investors through telephone, email, interactive and
other methods, fully guaranteeing the investors' right to know, and safeguarding their legitimate rights and
interests.
1.7 Stakeholders, environmental protection, social responsibility
The company fulfills its social responsibility obligations in accordance with the requirements of social
responsibility, fully respects and safeguards the legitimate rights and interests of relevant stakeholders, realizes
the coordination and balance of the interests of the society, government, shareholders, the company,
employees and other parties, and jointly promotes the harmonious and stable development of the company.
The company advocates the governance concept of ‘green brewing, ecological enterprise’, integrates ecological
and environmental protection requirements into the company's development strategy and corporate
governance process. The company maintaining its sustainable development, while it actively participates in
social welfare undertakings and practices social responsibilities.
1.8 Information disclosure and transparency
In strict accordance with the requirements of the regulatory authorities, the company earnestly implements
34
the "Information Disclosure Management System", "Investor Relations Management System" and others,
strengthens the management of information disclosure affairs, and earnestly fulfills its information disclosure
obligations in accordance with the law, and discloses truthfully, accurately, completely, timely and fairly.
information, ensuring that all shareholders have equal access to information.
1.9 Continue to improve the internal management system
The company has continuously improved its internal control system, further strengthened corporate
governance, and further promoted the company's governance level. The Company's Audit Committee conducts
a comprehensive review and supervision of the Company's financial reports, the effectiveness of internal
controls, and the rationality and effectiveness of corporate governance. As an internal audit department, the
company's audit center conducts regular and continuous supervision and inspection for the improvement and
implementation of the internal control system, timely discovering the deficiencies of internal control and making
improvements, ensuring the effectiveness of internal control, and improving the company's management level
and improving the risk prevention ability. Whether there is a material difference between the actual situation of
corporate governance and laws, administrative regulations and regulations on the governance of listed
companies issued by the China Securities Regulatory Commission9, improve and perfect the internal control
system construction and implementation measures
The company continues to improve the internal control system, further strengthen corporate governance, so
that the level of corporate governance has been further improved. The audit committee of the company
comprehensively reviews and supervises the effectiveness of the company's financial reporting, internal control
and corporate governance. As an internal audit unit, the company's audit center conducts routine and
continuous supervision and inspection for the improvement and implementation of the internal control system,
timely discovers and improves the deficiencies of internal control, ensures the effectiveness of internal control,
and improves the company's operation and management level and risk prevention ability.
□ Yes √ No
The actual situation of corporate governance is not significantly different from laws, administrative regulations
and regulations on listed company governance issued by the CSRC.
2. Company’s Independence in Assets, Personnel, Finances, Organizations and Businesses
from Controlling Shareholders and Actual Controller
2.1 For business aspect：The company's business structure is independent and complete, with the ability to
independently face the market and operate independently. There is no horizontal competition with the
controlling shareholder, and the controlling shareholder does not directly or indirectly interfere with the
company's operations.
2.2 For personnel aspect: The company has established an independent personnel and wage management
system, and signed a "labor contract" with employees. The chairman, president, vice president, chief financial
officer and secretary of the board of directors of the company receive remuneration from the company, but do
not receive remuneration from the controlling shareholder. The directors, supervisors and senior management
of the company do not hold positions prohibited by laws and regulations in other companies with the same or
similar business as the company.
2.3 For assets aspect: The company has a clear property relationship with the controlling shareholder, has
independent land use rights and housing property rights, and independently registers, builds accounts, accounts
and manages company assets. The controlling shareholder has not occupied or dominated the company's assets
or interfered with the company's operation and management of the assets.
35
2.4 For organization aspect: The company has a mature organizational system. The general meeting of
shareholders, the board of directors, the board of supervisors, the management and each functional department
operate independently, and a corresponding internal management and control system has been formulated, so
that the division of labor among each department is clear, and each department performs its own duties. The
cooperation with each other forms an organic whole, which ensures the legal operation of the company, and
there is no subordination relationship with the controlling shareholder's functional department.
2.5 For finance aspect: The company has a complete and independent financial institution, equipped with
sufficient full-time financial accounting personnel, established an independent accounting system and financial
management system, and independently opened bank accounts, paid taxes, and made financial decisions
independently. The controlling shareholder does not intervene in the financial management of the company.
3. Competition in the same industry
□ Applicable √ N/A
4. Annual general meeting and extraordinary general meeting held during the reporting
period
4.1Shareholders' general meeting during the reporting period
Investor
Meeting
Which Session Type Participation Open Date Disclose Date
Outcome
Ratio
For details, please
refer to the
"Announcement
on Resolutions of
the First
Extraordinary
The First
General Meeting
Extraordinary
February 23, February 24, of Shareholders
General Meeting EGM 75.55%
2021 2021 in 2021"
of Shareholders
(Announcement
in 2021
No.: 2021-008)
disclosed by the
company in the
statutory
information
disclosure media.
For details, please
refer to the
2020 Annual
"Announcement
General Meeting AGM 77.24% May 27, 2021 May 28, 2021
on Resolutions of
of Shareholders
the 2020 Annual
General Meeting
36
of Shareholders"
disclosed by the
company in the
statutory
information
disclosure media
(Announcement
No.: 2021-021)
For details, please
refer to the
"Announcement
on Resolutions of
the Second
Extraordinary
The Second
General Meeting
Extraordinary
of Shareholders
General Meeting EGM 61.28% August 2, 2021 August 3, 2021
in 2021"
of Shareholders
(Announcement
in 2021
No.: 2021-032)
disclosed by the
company in the
statutory
information
disclosure media.
For details, please
refer to the
"Announcement
on Resolutions of
the Third
Extraordinary
The Third
General Meeting
Extraordinary
November 15, November 16, of Shareholders
General Meeting EGM 67.68%
2021 2021 in 2021"
of Shareholders
(Announcement
in 2021
No.: 2021-042)
disclosed by the
company in the
statutory
information
disclosure media.
37
4.2 Preference shareholders with restored voting rights request to convene an extraordinary general
meeting
□ Applicable √ N/A
5.Directors, Supervisors and Senior Managers
5.1 Basic situation
Numbe
Numbe Numbe
r of Other Numbe
r of r of
shares Increas r of
Shares Shares
held at e or shares
Term Term increas decreas
Positio Service the decreas held at Reason
Name Gender Age Start End ed in ed in
n status beginni e the end s
Date Date current current
ng of change of the
period period
the s period
(Shares (Shares
period (shares) (shares)
) )
(shares)
Zhang Februar Februar
Chairm Incumb
Liando Male 54 y 23, y 23, 0 0 0 0 0
an ent
ng 2021 2024
Vice
Februar Februar
Zhong Chair, Incumb
Male 58 y 10, y 23, 0 0 0 0 0
Yu Preside ent
2015 2024
nt
May Februar
Wang Directo Incumb
Male 45 19, y 23, 2,400 0 0 0 2,400
Kai r ent
2017 2024
Director
,
Liu January Februar
Executi Incumb
Huashu Male 52 29, y 23, 0 0 0 0 0
ve ent
ang 2018 2024
Preside
nt
Cong Februar Februar
Directo Incumb 2,778,2 2,778,2
Xuenia Male 56 y 10, y 23, 0 0 0
r ent 91 91
n 2015 2024
Director
, Vice
Februar Februar
Zhou Preside Incumb 2,878,2 2,878,2
Male 60 y 10, y 23, 0 0 0
Xinhu nt, ent 91 91
2015 2024
Chief
Enginee
38
r
Indepe
Zhao Februar Februar
ndent Incumb
Shumin Male 70 y 23, y 23, 0 0 0 0 0
Directo ent
g 2021 2024
r
Indepe
Februar Februar
ndent Incumb
Nie Yao Male 45 y 23, y 23, 0 0 0 0 0
Directo ent
2021 2024
r
Indepe
Lu Februar Februar
ndent Incumb
Guopin Male 62 y 23, y 23, 0 0 0 0 0
Directo ent
g 2021 2024
r
Indepe
Mao Februar Februar
ndent Incumb
Lingxia Male 58 y 23, y 23, 0 0 0 0 0
Directo ent
o 2021 2024
r
Chairm
an of
Februar
Chen the Incumb July 13,
Male 57 y 23, 0 0 0 0 0
Taiqing Supervi ent 2020
2024
sory
Board
Xu May Februar
Supervi Incumb
Youhen Male 45 23, y 23, 0 0 0 0 0
sor ent
g 2019 2024
Februar Februar
Supervi Incumb
Xu Lili Female 43 y 23, y 23, 0 0 0 0 0
sor ent
2021 2024
Februar
Chen Supervi Incumb July 6,
Male 57 y 23, 0 0 0 0 0
Fuya sor ent 2020
2024
Februar Februar
Chen Supervi Incumb
Male 54 y 10, y 23, 0 0 0 0 0
Taisong sor ent
2015 2024
Vice Februar Februar
Lin Incumb
Preside Female 47 y 10, y 23, 0 0 0 0 0
Qing ent
nt 2015 2024
Vice Februar Februar
Zheng Incumb
Preside Male 55 y 10, y 23, 45,000 0 0 0 45,000
Bujun ent
nt 2015 2024
Yin Vice Februar
Incumb July 13,
Qiumin Preside Male 50 y 23, 0 0 0 0 0
ent 2020
g nt, CFO 2024
39
Vice Februar
Li Incumb July 13,
Preside Male 52 y 23, 0 0 0 0 0
Yuling ent 2020
nt 2024
Lu Board Februar Februar
Incumb
Hongzh Secreta Female 44 y 23, y 23, 0 0 0 0 0
ent
en ry 2021 2024
Februar Februar
Wang Chairm
Former Male 57 y 10, y 23, 30,002 0 0 0 30,002
Yao an
2015 2021
May Octobe
Li Directo
Former Male 48 22, r 18, 0 0 0 0 0
Minfu r
2020 2021
Indepe
Februar Februar
Xu ndent
Former Male 58 y 10, y 23, 0 0 0 0 0
Zhijian Directo
2015 2021
r
Indepe
Cai Februar Februar
ndent
Yunqin Former Female 70 y 10, y 23, 0 0 0 0 0
Directo
g 2015 2021
r
Indepe
Ji Februar Februar
ndent
Xueqin Former Male 51 y 10, y 23, 0 0 0 0 0
Directo
g 2015 2021
r
Indepe
Chen Februar Februar
ndent
Tonggu Former Male 56 y 10, y 23, 0 0 0 0 0
Directo
ang 2015 2021
r
Februar Februar
Zhou Supervi
Former Female 56 y 10, y 23, 0 0 0 0 0
Wenqi sor
2015 2021
Fu Vice January
January
Hongbi Preside Former Male 60 17, 0 0 0 0 0
8, 2022
ng nt 2020
5,733,9 5,733,9
Total -- -- -- -- -- -- 0 0 0 --
84 84
During the reporting period, is there any resignation of directors and supervisors and dismissal of senior
managers during their term of office
√ Applicable □N/A
During the reporting period, the board of directors and the board of supervisors of the company were re-elected,
and Mr. Wang Yao, Mr. Xu Zhijian, Ms. Cai Yunqing, Mr. Ji Xueqing, Mr. Chen Tongguang and Ms. Zhou Wenqi
resigned.
During the reporting period, Mr. Li Minfu resigned as a director due to job change.
40
Changes in directors, supervisors and senior management of the company
√ Applicable □ N/A
Name Position Type Date Reasons
Zhang February 23,
Chairman elected General election
Liandong 2021
Independent February 23,
Zhao Shuming elected General election
Director 2021
Independent February 23,
Nie Yao elected General election
Director 2021
Independent February 23,
Lu Guoping elected General election
Director 2021
Independent February 23,
Mao Lingxiao elected General election
Director 2021
February 23,
Xu Lili Supervisor elected General election
2021
Board February 23,
Lu Hongzhen Appointment Appointment after former term expires
Secretary 2021
Appointment February 23, General election, serving as a director, no longer
Cong Xuenian Director
and dismissal 2021 serving as a senior executive
February 23,
Wang Yao Chairman Expiry of term Term expires
2021
Independent February 23,
Xu Zhijian Expiry of term Term expires
Director 2021
Independent February 23,
Cai Yunqing Expiry of term Term expires
Director 2021
Independent February 23,
Ji Xueqing Expiry of term Term expires
Director 2021
Chen Independent February 23,
Expiry of term Term expires
Tongguang Director 2021
February 23,
Zhou Wenqi Supervisor Expiry of term Term expires
2021
October 18,
Li Minfu Director Outgoing Job changes
2021
January 8,
Fu Hongbing Vice President Decruitment Retirement
2022
5.2 Situation of Employers
The professional background, main work experience and main responsibilities of the current directors,
supervisors and senior management of the company
5.2.1Directors
Mr. Zhang Liandong, born in September 1968, master degree from the Party School. He successively served
as organizational officer and organizational member of the Party Committee of Zhikou Township, Suqian City,
organizational member and member of the Party Committee of Sucheng Town, Sucheng District, deputy
41
secretary of the Party Working Committee and secretary of the Disciplinary Work Committee of Xingfu Street,
Sucheng District,director of sub-district office, secretary of party Working Committee of Xiangli Street, Sucheng
District, director of the Management Committee and deputy secretary of the Party Working Committee of
Sucheng District Economic Development Zone, director of the Investment Promotion Bureau of Sucheng District,
deputy district chief of Sucheng District, and member of the Standing Committee of the Sucheng District
Committee, secretary of the Party Working Committee of Sucheng Economic Development Zone, deputy
secretary-general of the Suqian Municipal Government, director and deputy secretary of the Party Group of the
Suqian Urban Management Bureau, deputy secretary-general of the Suqian Municipal Government (section
level), secretary of the Party Working Committee of the Yanghe New District of Suqian City. He is currently the
company’s secretary and chairman of the party committee, chairman of Jiangsu Shuanggou Wine Co., Ltd.,
chairman of Sujiu Group Trading Co., Ltd., and executive director of Jiangsu Shuanggou Wine Sales Co., Ltd.
Mr. Zhong Yu, born in May 1964, master degree, a senior engineer, a master of Chinese liquor, and a
representative of the 13th Jiangsu Provincial People's Congress. He successively served as the director of the
technical department, the director of the environmental protection department, and the director of the
technology center of Jiangsu Shuanggou Winery; the deputy chief engineer, assistant to the general manager,
director of the production technology department, and director of the technology center of Jiangsu Shuanggou
Wine Co., Ltd., and deputy general manager of the Yanghe Co., Ltd. branch, brewing director, assistant to the
president, vice president, general manager of Yanghe Co., Ltd. Siyang branch. He is currently the deputy
secretary of the party committee, vice chairman and president of the company, and he is the general manager of
Yanghe Branch as well.
Mr. Wang Kai, born in August 1977, bachelor's degree, intermediate economist. He has served as the
manager of the brand department of the Marketing Center of Shanghai Tobacco Group Co., Ltd., and the
assistant to the general manager of Shanghai Haiyan Logistics Development Co., Ltd. He is currently the director
of the company and the deputy general manager of Shanghai Haiyan Logistics Development Co., Ltd.
Mr. Liu Huashuang, born in December 1970, MBA from Fudan University, accountant. He successively served
as director of marketing department, deputy general manager of Jiangsu Yanghe Wine Co., Ltd. and general
manager of Yanghe Blue Classic at the same time, general manager of Jiangsu Yanghe Wine Industry Co., Ltd.,
member of the Standing Committee of the company's party committee, director of strategic research, and
executive deputy general manager, deputy secretary of the Party Committee of Jiangsu Sujiu Industry Co., Ltd., ,
secretary of the Party Committee, vice chairman and chairman of Sujiu Group Trading Co., Ltd. He is currently a
member of the Standing Committee of the Party Committee, director and executive president of the company,
and secretary of the Party Committee of Sujiu Group Trading Co., Ltd.
Mr. Cong Xuenian, born in January 1966, master's degree, senior economist. He has successively served as
the general ledger accountant and financial director of Jiangsu Yanghe Winery, the financial director and chief
accountant of Yanghe Group, the company secretary of the board of directors, the person in charge of finance,
director and vice president. He is currently a director of the company and chairman of the Jiangsu Blue Alliance
Co., Ltd.
Mr. Zhou Xinhu, born in August 1962, master's degree, a senior engineer, a member of the expert group of
the Liquor Professional Committee of China Food Industry Association, China's chief sommelier, China's wine
critic, and a craftsman in China's light industry. He successively served as technician, quality inspection section
chief of Yanghe Group Co., Ltd, director of the company's storage department, deputy general manager of
Jiangsu Yanghe Wine Co., Ltd., deputy chief engineer, chief engineer and vice president of the company. He is
currently the company director, vice president, chief engineer, and chairman of Tibet Earth Third Pole Wine Co.,
Ltd.
42
Mr. Zhao Shuming, born in December 1952, Ph.D. He has served as staff member, deputy section chief,
section chief, deputy director (presiding over the work) of Nanjing University Foreign Affairs Office, assistant to
the president, then he worked as the associate professor, professor, distinguished professor, senior professor,
vice dean and dean of Nanjing University Business School, Nanjing Shenghe Pharmaceutical Co., Ltd.
Independent director of Industrial Co., Ltd. and independent director of JSTI Group Co., Ltd. He is currently an
independent director of the company, a senior professor/doctoral supervisor of Nanjing University, the honorary
dean of the Business School, the dean of the Xingzhi Academy, and concurrently serves as the vice chairman of
the Business Administration Professional Education Steering Committee of the Ministry of Education, the vice
chairman of the China Management Modernization Research Association, and the vice president of China
Human Resource Development Research Association, distinguished adjunct professor of Missouri-St. Louis
University, visiting professor of Drucker School of Management, Claremont Graduate University, California,
lifetime honorary president of Jiangsu Human Resources Society, Lianfa, independent director of Lianfa Co., Ltd.,
and Nanjing securities Co., Ltd.
Mr. Nie Yao, born in June 1977, Ph.D. He has served as a visiting scholar at the Advanced Biotechnology and
Medical Center of Rutgers University (State University of New Jersey), an associate professor at the School of
Bioengineering, Jiangnan University, and an independent director of Jinhui Liquor Co., Ltd. He is currently an
independent director of the company, subdean and professor of the School of Bioengineering, Jiangnan
University.
Mr. Lu Guoping, born in March 1960, bachelor degree, professor of accounting, CICPA, outstanding educator
in Jiangsu Province. He has successively served as lecturer, associate professor, director of teaching and research
section of the School of Engineering of Nanjing Agricultural University, and independent director of Langbo
Technology Co., Ltd. Currently he is the independent director of Yanghe Brewery, the deputy dean, professor
and master tutor of the National Wealth Auditing College of Nanjing Audit University, the lecturer of
"Accounting" for Jiangsu Province Certified Public Accountant Examination, the person in charge of the national
excellent online open course "Advanced Financial Accounting" and the national first-class Head of the
undergraduate course "Advanced Financial Accounting", part-time professor of the Online Teacher Training
Center of the Ministry of Education, director of Langbo Technology Co., Ltd, independent director of Huaxin New
Materials Co., Ltd and Baosheng Co., Ltd.
Mr. Mao Lingxiao, born in January 1964, bachelor’s degree, first-class lawyer (Senior professional title). He
has served as a staff member of the Jiangsu Provincial Department of Justice, 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, and a senior partner and director of Jiangsu Tianzhe Law Firm. Full-time lawyer, senior
partner and executive director of Beijing Zhongyin (Nanjing) Law Firm. He is currently an independent director of
the company, a full-time lawyer, senior partner and chairman of the partner meeting of Beijing Haotianxinhe
(Nanjing) Law Firm.
5.2.2Supervisors
Mr. Chen Taiqing, born in May 1965, holds a master degree, a senior political engineer, and a member of the
Communist Party of China. He successively served as member of the party committee, director of the company
office, member of the party committee of the company, director of the company office, director of the human
resources department, director of the general department, assistant to the president, and deputy general
manager of Yanghe Branch, deputy secretary of the party committee and secretary of the disciplinary committee
of the company , secretary of the party committee and general manager of Shuanggou Wine Industry. He is
currently the deputy secretary of the party committee, chairman of the supervisory committee and chairman of
the labor union.
43
Mr. Xu Youheng, born in March 1977, master’s degree, senior political engineer and member of Communist
Party of China. He successively served as the director of the organization department, the director of the cadre
supervision department, the director of the cadre education department, and the director of the office of the
Organization Department of the Suqian Municipal Party Committee, the deputy director of the office of the
party construction leading group of the Suqian Municipal Party Committee, and the deputy secretary and deputy
general manager of the party committee of Suqian Industrial Development Group Co., Ltd. He is currently a
supervisor of the company, deputy secretary of the party committee and chairman of the supervisory committee
of Suqian Industry Development Group Co., Ltd.
Ms. Xu Lili, born in March 1979, bachelor's degree. She has successively served as the secretary of the Youth
League Committee of Shanghai Jieqiang Tobacco Sugar and Wine (Group) Co., Ltd., deputy manager of the
marketing department of Shanghai Jieqiang tobacco, Sugar and Wine Group, deputy general manager of
Shanghai Qinzhou Trading Co., Ltd., assistant general manager of Shanghai Jieqiang Tobacco Sugar and Wine
Group Distribution Center, deputy General Manager, executive deputy general manager and general manager of
Shanghai Jieqiang Tobacco Sugar (Group) Chain Co., Ltd. Currently she is the company's supervisor, deputy
general manager of Shanghai Jieqiang tobacco Sugar (Group) Co., Ltd., general manager of Shanghai Jieqiang
Tobacco Sugar and Wine Group Dignation Co., Ltd., and general manager of Shanghai Jieqiang Food Sales Co.,
Ltd.
Mr. Chen Fuya, born in November 1965, bachelor's degree. He has successively served as the member of the
Standing Committee of the Discipline Inspection Commission of Suqian and the director of the party style and
clean government. He is currently the Deputy Secretary of the Party Committee, Secretary of the Discipline
Inspection Commission, and Supervisor.
Mr. Chen Taisong, born in January 1968, master’s degree. He has successively served as a member and
secretary of the Legislative Bureau of Siyang County Government, Secretary of the Office of the Siyang County
Government Office, Deputy Section Chief, Section Chief, Director Assistant, Deputy Director, Siyang County Chief
of Chuancheng Town, Secretary of the Party Committee, Jiangsu Sujiu Industrial Co., Ltd. Deputy Secretary,
Secretary of the Discipline Inspection Commission, Chairman of the Supervisory Board, Deputy Secretary of the
Discipline Inspection Commission, Standing Committee of the Party Committee and Organization Minister of the
company, Deputy Secretary of the Party Committee of Sujiu Group Trading Co., Ltd., Secretary of the Discipline
Inspection Commission, and Chairman of the Supervisory Board. He is currently a member of the Standing
Committee of the Party Committee, Supervisor, Chairman of Guijiu Co., Ltd.
5.2.3Executives
Mr. Zhong Yu, President of the company, the same resume as above.
Mr. Liu Huashuang, executive president of the company, the same resume as above.
Mr. Zhou Xinhu, Vice President of the Company, the same resume as above.
Ms. Lin Qing, born in May 1975, master's degree, senior accountant and certified public accountant. She
successively served as deputy director of the Enterprise Division of Suqian Finance Bureau of Jiangsu Province,
assistant to the director of the Municipal Price Bureau, member and deputy director of the Suqian Party
Committee of the Municipal Development and Reform Commission, member of the Standing Committee of the
Party Committee of the company, and vice president of the company. She is currently a member of the Standing
Committee of the company's party committee, vice president, head of the internal audit organization, and vice
chairman of Sujiu Group Trading Co., Ltd.
Mr. Zheng Bujun, born in January 1967, MBA's degree, senior engineer. He successively served as the
general manager of Jiangsu Yanghe Group Co., Ltd., the general manager of Suqian State-owned Investment Co.,
Ltd., the deputy general manager of Jiangsu Shuanggou Wine Co., Ltd., the procurement and logistics director of
44
Yanghe Co., Ltd., and the assistant to the president. He is currently a member of the standing committee of the
company's party committee, vice president, secretary of the party committee and general manager of the
company's Siyang branch.
Mr. Yin Qiuming, born in July 1972, college's degree, auditor. He successively served as Assistant to the
Director of Audit, Director of Audit, Deputy Secretary of the Disciplinary Committee 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, Party Committee Member, Financial Officer of Jiangsu Yanghe Wine Co., Ltd.
Minister, company supervisor, deputy secretary of the Disciplinary Committee, deputy general manager of the
company's Yanghe branch, finished product scheduling director, financial director, financial director, and general
manager of the financial center. He is currently the vice president and CFO of the company.
Mr.Li Yuling, born in December 1970, master's degree in MBA from Nanjing University, intermediate
economist. He successively served as the assistant to the director of the supply department, the assistant to the
director of the finance department, the deputy chief dispatcher of the general dispatching room, the director of
the supply department, the director of the company's supply department, the assistant to the general manager
of Yanghe Branch, the director of procurement and logistics, and the director of supply chain management in
Jiangsu Yanghe Group Co., Ltd. , Deputy Director and Office Director of the Procurement and Supply Logistics
Center. He is currently the vice president of the company, secretary of the party committee and general
manager of Jiangsu Shuanggou Wine Co., Ltd.
Ms. Lu Hongzhen, born in October 1978, bachelor's degree，the member of the China Association for the
Promotion of Democracy. She has obtained the qualification certificate for board secretary issued by Shenzhen
Stock Exchange. She joined Jiangsu Yanghe Group Co., Ltd. in September 2001 and served as the secretary of the
office, deputy director of the general department, deputy director of the company office, deputy director of the
securities department, and representative of securities affairs of Yanghe Co., Ltd. She is currently the secretary
of the company's board of directors and the general manager of the Human Resource Center, Director of
Securities Department.
Positions in shareholder corporations
√ Applicable □ N/A
Whether to
Position receive
Name of held in the Term start remuneration
Shareholder name Term end date
employee shareholde date allowance in the
r company shareholder
company
Cong March 31,
Jiangsu Blue Alliance Co., Ltd. Chairman YES
Xuenian 2021
Vice
Shanghai Haiyan Logistics March 1,
Wang Kai General YES
Development Co., Ltd. 2017
Manager
Vice
Shanghai Jieqiang Tobacco Sugar &
Xu Lili General April 1, 2021 YES
Wine (Group) Co., Ltd.
Manager
Employment in other corporations
√ Applicable □ N/A
Name of Other corporation name Positions Term start Term end date Whether to
45
employee held in date receive
other remuneration
companies allowances in
other
companies
Senior
Zhao Professor,
Nanjing University July 6, 2017 Yes
Shuming Doctoral
Supervisor
Zhao Nanjing Shenghe Pharmaceutical Co., Independen
May 11, 2015 May 10, 2021 Yes
Shuming Ltd. t Director
Zhao Independen April 24, September 29,
JSTI Group Co., Ltd. Yes
Shuming t Director 2015 2021
Zhao Independen November
Nanjing Securities Co., Ltd. Yes
Shuming t Director 15, 2018
Zhao Independen
Jiangsu Lianfa Textile Co., Ltd. May 13, 2020 Yes
Shuming t Director
Lifetime
Zhao September 1,
Jiangsu Human Resources Society Honorary No
Shuming 2021
President
Zhao China Human Resource Development Deputy September 1,
No
Shuming Research Association Chairman 2010
Professional Education Steering
Zhao Committee for Business Deputy September 1,
No
Shuming Administration Disciplines of the Minister 2013
Ministry of Education
Vice
Zhao China Management Modernization November
Director-ge No
Shuming Research Association 02, 2015
neral
Vice Dean
and
Professor of June 10,
Nie Yao Jiangnan University Yes
Bioengineer 2020
ing
Students
Deputy
Dean and
Professor of March 01,
Lu Guoping Nanjing Audit University Yes
Guofu 2020
Zhongxin
College
CHANGZHOU LANGBO SEALING February 22,
Lu Guoping Director Yes
TECHNOLOGY CO., LTD. 2022
Lu Guoping Jiangsu Huaxin New Materials Co., Independen March 1, Yes
46
Ltd. t Director 2016
Baosheng Technology Innovation Co., Independen
Lu Guoping May 9, 2019 Yes
Ltd. t Director
Changzhou Academy of Architecture Independen
Lu Guoping July 6, 2020 Yes
and Technology Co., Ltd. t Director
Chairman
Suqian Industry Development Group of the October 16,
Xu Youheng Yes
Co., Ltd. Supervisory 2021
Board
Shanghai Jieqiang Tobacco Sugar & General
Xu Lili July 14, 2020 No
Wine Group Distribution Co., Ltd. Manager
General
Xu Lili Shanghai Jieqiang Food Sales Co., Ltd. July 14, 2020 No
Manager
Full-time
lawyer,
senior
partner, January 1,
Mao Lingxiao Beijing Hylands (Nanjing) Law Firm Yes
chairman of 2021
the
partnership
meeting
Description
of
employment NO
in other
corporations
Penalties imposed by securities regulators on current and outgoing directors, supervisors and senior managers of
the company in the past three years
□ Applicable √ N/A
5.3 Remuneration of directors, supervisors and senior managers
Decision-making procedures, basis for determination and actual payment of remuneration for directors,
supervisors and senior managers
Decision procedure: The remuneration shall be implemented based on December 29, 2008, the company's ninth
meeting of the second Board of Directors, approved ‘general manager of the trial measures for it (amended)’,
January 18, 2009, the company’s first extraordinary shareholders' general meeting in 2009, approved on the
case of ‘trial measures for chairman of the board of directors of the company yearly salary (amended)’, on May
27, 2021, the company's annual general meeting of shareholders approved the case of ‘adjusting the allowance
of independent directors’.
Determination basis: According to the company's current business situation, reference to the regional economic
level, industry and market level.
Actual payment: Paid on time according to the corporate's performance and compensation institutions.
Remuneration of directors, supervisors and senior managers during the reporting period
47
In 10,000 CNY
Whether to
Total pre-tax obtain
Employed or compensation remuneration
Name Position Gender Age
not received from from related
the company parties of the
company
Zhang
Chairman Male 54 Incumbent 111.87 No
Liandong
Vice Chairman,
Zhong Yu Male 58 Incumbent 203.29 No
President
Wang Kai Board Director Male 45 Incumbent 0 Yes
Board Director,
Liu Huashuang Male 52 Incumbent 177.35 No
CEO
Cong Xuenian Board Director Male 56 Incumbent 78.39 Yes
Board
Director,Vice
Zhou Xinhu Male 60 Incumbent 151.16 No
President,Chief
Engineer
Independent
Zhao Shuming Male 70 Incumbent 10 No
Director
Independent
Nie Yao Male 45 Incumbent 10 No
Director
Independent
Lu Guoping Male 62 Incumbent 10 No
Director
Independent
Mao Lingxiao Male 58 Incumbent 10 No
Director
Chairman of
the
Chen Taiqing Male 57 Incumbent 149.23 No
Supervisory
Committee
Xu Youheng Supervisor Male 45 Incumbent 0 Yes
Xu Lili Supervisor Female 43 Incumbent 0 No
Chen Fuya Supervisor Male 57 Incumbent 150.04 No
Chen Taisong Supervisor Male 54 Incumbent 148.18 No
Lin Qing Vice President Female 47 Incumbent 148.95 No
Zheng Bujun Vice President Male 55 Incumbent 146.89 No
Vice
Yin Qiuming Male 50 Incumbent 147.62 No
President,CFO
Li Yuling Vice President Male 52 Incumbent 147.21 No
Secretary of
Lu Hongzhen Female 44 Incumbent 46.04 No
the Board
Wang Yao Chairman Male 57 Former 203.19 No
48
Li Minfu Board Director Male 48 Former 0 Yes
Independent
Xu Zhijian Male 58 Former 0 No
Director
Independent
Cai Yunqing Female 70 Former 0 No
Director
Independent
Ji Xueqing Male 51 Former 0 No
Director
Chen Independent
Male 56 Former 0 No
Tongguang Director
Zhou Wenqi Supervisor Female 56 Former 0 Yes
Fu Hongbing Vice President Male 60 Former 158.56 No
Total -- -- -- -- 2,207.97 --
6. Directors' performance of duties during the reporting period
6.1 The Board of Directors during the Reporting Period
Which Session Open Date Disclose Date 会议决议
The ‘Proposal on the
General Election of the
Board of Directors’ and the
‘Proposal on Holding the
First Extraordinary General
Meeting of Shareholders in
2021’ were reviewed and
approved. For details,
Seventeenth session of
please refer to the
sixth directors of board January 28, 2021 January 29, 2021
"Announcement on
resolution
Resolutions of the
Seventeenth Session of the
Sixth Board of Directors"
disclosed by the company
in the statutory
information disclosure
media (Announcement
No.: 2021-001)
Reviewed and approved
the ‘Proposal on Election
of the Chairman of the
First session of seventh
Company’, ‘Proposal on the
directors of board February 23, 2021 February 24, 2021
Election of the Vice
resolution
Chairman of the Company’,
‘Proposal on the Election
of Members of the Special
49
Committees of the Board
of Directors’, ‘Proposal on
the Election of Secretary of
Board’ , ‘Proposal on the
Appointment of the
Company's Senior
Management’, ‘Proposal
on the Appointment of the
Person in Charge of the
Company's Internal Audit
Institution’, ‘Proposal on
the Appointment of the
Company's Securities
Affairs Representative’. For
details, please refer to the
"Announcement on
Resolutions of the First
Session of the Seventh
Board of Directors’
disclosed by the company
in the statutory
information disclosure
media (Announcement
No.: 2021-010)
Reviewed and approved
the ‘2020 Annual Work
Report of the President’,
‘2020 Annual Work Report
of the Board of Directors’,
‘2020 Annual Report’ and
Summary, ‘2020 Annual
Financial Final Report’,
‘Internal Control
Second session of seventh
Self-Assessment Report’,
directors of board April 27, 2021 April 29, 2021
‘Proposal on Renewing the
resolution
Appointment of Suya
Jincheng Certified Public
Accountants (Special
General Partnership) as the
Company's Audit
Institution in 2021’, ‘2020
Social Responsibility
Report’, ‘Proposal on Daily
Connected Transactions’,
50
Full Text of the ‘First
Quarterly Report of 2021’,
‘Plan on Authorizing the
Company's Management
to Use Its Own Funds to
Purchase Financial
Products at Opportunities’,
‘Plan on Adjusting the
Allowance of Independent
Directors’, ‘Proposal on the
Establishment of Jiangsu
Jiushang Internet
Technology Co., Ltd. and
Related Party Transactions’,
‘Proposal on Holding the
2020 Annual General
Meeting of Shareholders’.
For details, please refer to
the "Announcement on
Resolutions of the Second
Session of the Seventh
Board of Directors"
disclosed by the company
in the statutory
information disclosure
media (Announcement
No.: 2021-013)
Reviewed and approved
the ‘Proposal on ‘Jiangsu
Yanghe Distillery Co., Ltd.
Phase 1 Core Key
Shareholding Plan (Draft)’
and its Summary’,
‘Proposal on the
Third session of seventh Management Measures for
directors of board July 15, 2021 July 16, 2021 the Share Plan’, ‘Proposal
resolution on Requesting the General
Meeting of Shareholders to
Authorize the Board of
Directors to Handle
Matters Related to the
Company's Phase 1 Core
Employees Shareholding
Plan’, ‘Proposal on the
51
Adjustment of Internal
Organizations’, ‘Proposal of
the Extraordinary General
Meeting of Shareholders’.
For details, please refer to
the "Announcement on
Resolutions of the Third
Session of the Seventh
Board of Directors"
disclosed by the company
in the statutory
information disclosure
media (Announcement
No.: 2021-027)
The Proposal on External
Donations to Support
Flood Control and Disaster
Relief in Henan Province
was reviewed and
approved. For details,
please refer to the
Forth session of seventh
"Announcement on
directors of board July 23, 2021 July 24, 2021
Resolutions of the Fourth
resolution
Meeting of the Seventh
Board of Directors"
disclosed by the company
in the statutory
information disclosure
media (Announcement No.
2021-030)
Reviewed and approved
the full text and abstract of
‘the 2021 Semi-annual
Report of the Company’.
Fifth session of seventh For details, please refer to
directors of board August 27, 2021 August 28, 2021 the full text and abstract of
resolution the "2021 Semi-annual
Report" disclosed by the
company in the statutory
information disclosure
media
Sixth session of seventh Reviewed and approved
directors of board October 26, 2021 October 27, 2021 the ‘Company 2021 Third
resolution Quarterly Report’, ‘Plan on
52
Changing the Company's
Business Scope and
Amending the ‘Articles of
Association’’, ‘Plan on
Formulating the
‘Management System for
Related-party
Transactions’, ‘Proposal on
the Management System
for the Shares Held by
Senior Management and
Changes in the Company’,
‘Proposal on Adjustment of
Internal Organizations’,
‘Proposal on Convening
the Third Extraordinary
General Meeting of
Shareholders in 2021’. For
details, please refer to the
‘Announcement on
Resolutions of the Sixth
Session of Seventh
Directors of Board’
disclosed by the company
in the statutory
information disclosure
media (Announcement
No.: 2021-038)
The ‘Proposal on External
Donations’ was passed. For
details, please refer to the
‘Announcement on
Resolutions of the Seventh
Seventh session of seventh Session of Seventh
directors of board November 15, 2021 November 16, 2021 Directors of Board
resolution Resolution’ disclosed by
the company in the
statutory information
disclosure media
(Announcement No.:
2021-041)
53
6.2 Attendance of Directors at Board of Directors and General Meetings of Shareholders
Attendance of Directors at Board of Directors and General Meetings of Shareholders
The number
of times Whether not
Number of
they should Number of Amounts of attended Amounts of
Number of board
attend the proxy absences two attendance
Name of on-site meetings by
board of attendance from the consecutive at
Directors board means of
directors at the board Board of board shareholder
attendance communicati
during the of directors Directors meetings in meetings
on
reporting person
period
Zhang Liandong 7 7 0 0 0 No 4
Zhong Yu 8 8 0 0 0 No 4
Wang Kai 8 3 3 2 0 No 1
Liu Huashuang 8 6 2 0 0 No 2
Cong Xuenian 8 7 1 0 0 No 3
Zhou Xinhu 8 4 2 2 0 No 3
Zhao Shuming 7 4 3 0 0 No 2
Nie Yao 7 4 2 1 0 No 2
Lu Guoping 7 5 1 1 0 No 3
Mao Lingxiao 7 3 2 2 0 No 2
Li Minfu 6 4 1 1 0 No 2
Wang Yao 1 1 0 0 0 No 1
Xu Zhijian 1 1 0 0 0 No 0
Cai Yunqing 1 1 0 0 0 No 0
Ji Xueqing 1 1 0 0 0 No 0
Chen
1 1 0 0 0 No 0
Tongguang
Explanation of two consecutive absences from attending the board of directors in person
6.3 Circumstances where directors raise objections to company-related matters
Were there any objections on related issues of the Company from directors?
□ Yes √ No
During the reporting period, there is no objections on related issues of the Company from directors.
6.4 Other instructions for directors to perform their duties
Were there any suggestions from directors accepted by the Company?
√ Yes □ No
The statement on whether the director's recommendation to the company's proposal has been adopted or not
54
N/A
7. The special committees under the board of directors during the reporting period
Specific
Important
Number of Other circumstance
Committee Opening Content of comments
Members meetings performance s of the
name date meeting and
held of duties objection (if
suggestions
any)
Pre-review
of the work
Zhang
report of the
Liandong, Li
board of
Minfu,
Strategy April 26, directors in
Zhong Yu, 1
Committee 2021 2020& the
Zhao
company's
Shuming, Liu
future
Huashuang
development
plan
Nominate
senior
Nie Yao,
management
Nomination Zhang February 23,
1 candidates
Committee Liandong, 2021
and conduct
Mao Lingxiao
qualification
review
Check the
performance
of directors,
Remuneratio Zhao supervisors
n and Shuming, Nie April 26, and senior
1
Appraisal Yao, Cong 2021 executives
Committee Xuenian and the
remuneratio
n system in
2020
2020 annual
report audit
Lu Guoping, kick-off
Audit Cong February 23, meeting&
5
Committee Xuenian, 2021 review the
Mao Lingxiao candidate for
the person in
charge of
55
internal
audit
Check the
internal
audit work in
the first
quarter of
2021& pass
the "2020
Annual
Internal
Control
Self-Assessm
April 23,
ent Report"&
2021
re-appoint
the audit
institution&
check the
preparation
of the 2020
annual
report and
the first
quarter of
2021 report
Check the
2021
semi-annual
internal
August 23, audit work&
2021 check the
preparation
of the 2021
semi-annual
report
Check the
internal
audit work
for the third
October 21,
quarter of
2021
2021& check
the
preparation
of the report
56
for the third
quarter of
2021
Check the
December internal
29, 2021 audit work in
2021
7. Performance of Duties by the Supervisory Committee
Were there any risks to the Company identified by Board of Supervisors when performing its
duties during the reporting period?
□ Yes √ No
The Supervisory Committee has no objection to the supervision matters during the reporting period.
9. Staff in the Company
9.1 Statistics of Employees, Professional Structure of the Staff, and Educational Background
Number of on-the-job employees of the parent
8,562
company at the end of the reporting period (person)
Number of on-the-job employees of major subsidiaries
9,394
at the end of the reporting period (person)
Total number of on-the-job employees at the end of
17,956
the reporting period (person)
The total number of employees receiving salary in the
17,956
current period (person)
Number of retired employees (persons) that the parent
0
company and major subsidiaries need to pay
Professional Composition
Professional Composition Category Professional composition number (person)
Production staff 7,347
Sales staff 6,087
Technical staff 1,926
Financial staff 230
Administration staff 2,186
Internal retirees 180
Total 17,956
Education Level
Educational level category Quantity (person)
Master 323
Bachelor 4,023
College 4,730
57
Senior High School and below 8,880
Total 17,956
9.2 Salary Policy
The salary of the company's employees is composed of basic salary, performance salary and profit increment
sharing award. All departments of the company implement a post-self-organization mechanism, and revised the
"Administrative Measures for Post-Self-organization" to further improve the quantity, quality, efficiency and
economic value of work. It has established quantifiable and assessable indicators to encourage employees to be
spontaneous, improve their work efficiency, and improve the company's management level in order to achieve a
win-win situation between the company and its employees. In 2021, the company has formulated the
"Broadband Remuneration Plan for Functional Departments" and the ‘14th Five-Year Plan’ Profit Increment
Sharing Plan to allow employees to share the achievements of corporate development.
9.3 Training Program
In 2021, the training work closely focused on the requirements of the company's annual meeting. Through the
combination of online and offline learning, special training will be carried out systematically, hierarchically and in
stages. Focusing on the training of cadre talent echelon, with the target of ‘millions’ talent training as the
starting point, orderly organize high and medium grassroots personnel to carry out training on related projects
such as political literacy, leadership, and management ability. Centering on the reserve of professional skills,
organize Yanghe Professional skills training for technical posts such as academy lecturers and wine tasting
technicians. Around the construction of an internal learning organization, the company continuous carries out
training activities such as reading activities and new apprenticeship training. A total of 895 training sessions were
organized throughout the year, involving 75,267 people, resulting in 828 after-school action plans and 407
results.
9.4 Labor outsourcing
□ Applicable √ N/A
10. Profit Distribution and Capitalization of Capital Reserves
Profit distribution policy in the reporting period, especially the formulation, implementation and adjustment of
cash dividend policy
√ Applicable □ N/A
On May 27, 2021, the company held the 2020 annual general meeting of shareholders, and reviewed and
approved the company's 2020 equity distribution plan. The specific plan is that based on the total equity on the
equity registration date when the profit distribution plan is implemented (excluding the repurchased shares held
in the company’s special securities account for repurchase), use undistributed profits to distribute cash
dividends of CNY30 (tax included) per 10 shares to all shareholders, no bonus shares, no conversion to paid-in
capital.
The company implements the 2020 annual equity distribution, with July 8, 2021 as the equity registration date,
July 9, 2021 as the ex-rights and ex-dividend date, and the company's total share capital after excluding the
9,661,310 repurchased shares of 1,497,326,690 shares as the base, to all the shareholders. Shareholders will
58
receive a cash dividend of CNY 30 (tax included) for every 10 shares, with a total cash dividend of CNY
4,491,980,070 (tax included).
At the same time, in 2020, the company used funds of CNY1,002,128,680.79 to implement share repurchase.
Special explanation of cash dividend policy
Whether it complies with the provisions of the
company's articles of association or the requirements Yes
of the resolution of the shareholders' meeting
Whether the dividend standard and ratio are explicit
Yes
and clear
Whether the relevant decision-making procedures and
Yes
mechanisms are complete
Whether the independent directors performed their
Yes
duties and played their roles
Whether minority shareholders have the opportunity
to fully express their opinions and demands, and
Yes
whether their legitimate rights and interests are fully
protected
If the cash dividend policy is adjusted or changed,
The company's cash dividend policy does not adjust or
whether the conditions and procedures are compliant
change
and transparent
The company was profitable during the reporting period and the parent company's profit available for
distribution to shareholders was positive, but no cash dividend distribution plan was proposed
□ Applicable √ N/A
Profit distribution and conversion of capital reserve into paid-in capital during the reporting period
√ Applicable □ N/A
Number of bonus shares for every 10
0
shares (shares)
Dividends per 10 shares (CNY) (tax
30.00
included)
Base of shares (shares) of the distribution
1,506,445,074
plan
Amount of cash dividends (CNY) (tax
4,519,335,222.00
included)
Amount of cash dividends in other ways
0.00
(such as share repurchase) (CNY)
Total cash dividends (including other
4,519,335,222
methods) (CNY)
Distributable profit (CNY) 27,801,336,778.06
Proportion of total cash dividends
(including other methods) to total profit 100%
distribution
Cash dividend situation
If the company's development stage is mature and there is no major capital expenditure arrangement when
making profit distribution, the proportion of cash dividends in this profit distribution should be at least 80%.
59
Detailed description of profit distribution or capital reserve conversion plan
As audited by Suya Jincheng Certified Public Accountants (Special General Partnership), the parent company
realized a net profit of CNY 4,013,668,130.41 in 2021, and the statutory surplus reserve for the year was CNY
0.00, plus the undistributed profit at the beginning of the year of CNY 28,279,648,717.65, so after deducting
the 2020 profit distribution of CNY 4,491,980,070, the profit available for distribution to shareholders this year
was CNY 27,801,336,778.06.
In line with the principle of not only taking into account the long-term development of the company, but also
giving appropriate returns to shareholders, the company plans to use the total share capital on the equity
registration date when the profit distribution plan is implemented (excluding the repurchased shares held in
the company's special securities account for repurchase) as the base , using undistributed profits to distribute
cash dividends of RMB 30 (tax included) for every 10 shares to all shareholders, no bonus shares, and no
conversion to share capital. The profit distribution plan complies with the cash dividend policy stipulated in the
Articles of Association.
Assuming that the company's existing total share capital of 1,506,988,000 shares is calculated based on the
1,506,445,074 shares after deducting the 542,926 shares currently held in the company's special securities
account for share repurchase, it is estimated that the company will distribute a cash dividend of CNY
4,519,335,222 (tax included).
11. Implementation of company equity incentive plans, employee stock ownership plans or
other employee incentives
√ Applicable □ N/A
11.1 Equity incentive
N/A
Equity incentives obtained by the directors and senior management of the company
□ Applicable √ N/A
Evaluation mechanism and incentives for senior managers
Since its establishment, the company has established an evaluation and incentive mechanism for senior
management personnel, and has made clear provisions in the "Trial Measures for the General Manager's Annual
Salary System (Revised Draft)". The company's evaluation and incentives for senior management are mainly
reflected in the annual remuneration. The board of directors mainly evaluates and motivates the company's
senior management according to financial indicators, safety, quality indicators, customer satisfaction, etc. Senior
managers implement an annual salary system. The basic part of the annual salary is paid on an average monthly
basis, and the rest is paid according to the assessment at the end of the year. If the assessment target is not met,
it will not be paid. In 2021, the company's remuneration and appraisal committee reviewed the performance of
the company's senior management in 2020 in accordance with the above system.
11.2 Implementation of employee stock ownership plans
√ Applicable □ N/A
All valid employee stock ownership plans during the reporting period
60
Proportion to the Funding sources
Range of Number of total share capital for the
Total shares held Changes
employees employees of listed implementation
companies plan
Company’s
directors
(excluding
independent
directors),
supervisors,
senior
management
personnel, and
middle-level and
above personnel Participants’ legal
and core remuneration,
backbones who self-financing and
4,738 9118384 N/A 0.61%
are determined other methods
by the board of permitted by laws
directors of the and regulations
company and
wholly-owned
subsidiaries to
play an important
role in the
company's overall
performance and
medium and
long-term
development
Shareholdings of Directors, Supervisors and Senior Management in the Employee Stock Ownership Plan during
the Reporting Period
Number of shares
Number of shares Proportion to the
held at the beginning
Name Title held at the end of the total share capital of
of the reporting
reporting period listed companies
period
Zhang Liandong Chiarman 0 96,404 0.01%
Vice Chairman,
Zhong Yu 0 96,404 0.01%
President
Director, Executive
Liu Huashuang 0 96,404 0.01%
President
Director,Vice
Zhou Xinhu President,Chief 0 48,202 0.00%
Engineer
61
Chairman of the
Chen Taiqing 0 48,202 0.00%
Supervisory Board
Chen Fuya Supervisor 0 48,202 0.00%
Chen Taisong Supervisor 0 48,202 0.00%
Lin Qing Vice President 0 48,202 0.00%
Zheng Bujun Vice President 0 48,202 0.00%
Yin Qiuming Vice President, CFO 0 48,202 0.00%
Li Yuling Vice President 0 48,202 0.00%
Lu Hongzhen Secretary of Board 0 19,281 0.00%
Vice President
Fu Hongbing 0 48,202 0.00%
(Former)
Changes in asset management institutions during the reporting period
□ Applicable √ N/A
Changes in equity due to disposal of shares by holders during the reporting period
□ Applicable √ N/A
The exercise of shareholders' rights during the reporting period
N/A
Other relevant situations and explanations of the employee stock ownership plan during the reporting period
□ Applicable √ N/A
Members of Employee Stock Ownership Plan Management Committee Change
□ Applicable √ N/A
The financial impact of the employee stock ownership plan on the listed company during the reporting period
and related accounting treatment
√ Applicable □ N/A
Termination of employee stock ownership plans during the reporting period
□ Applicable √ N/A
Other instructions
11.3 Other employee incentives
□ Applicable √ N/A
12. Construction and implementation of internal control system during the reporting period
12.1 Construction and implementation of internal control
Internal control construction: 1. Establish a standard internal control system. The company has mainly
formulated 15 categories and 260 systems for human resources, quality and food safety, financial and audit
management. 2. Optimize the internal control environment of the enterprise: (1) Standardize the establishment
of the organizational structure. According to the relevant laws and regulations of China, clarify the
responsibilities, authority, conditions, rules of procedure and work procedures of the board of directors, board
of supervisors and managers to ensure that decision-making, execution and supervision are separated from each
other and form checks and balances; (2) Improve human resources policies. ① Improve the staff training
mechanism. The company needs a strict assessment when hiring employees, select outstanding talents to join
62
the company, and form a system for employees on training, treatment, performance assessment and promotion;
② Improve the information and communication mechanism. The company establishes the technical platform of
the information system, establishes a sensitive information collection and feedback system, realizes the upward,
parallel or downward flow and communication of various information within the enterprise, and implements the
whole process of the entire internal control information from production, release to feedback modern
management; ③Establish an effective incentive mechanism. On the basis of following the fairness and relative
stability of incentives and constraints, the company formulates equity incentives and mechanisms for
spontaneous compensation incentives. (3) Pay attention to the construction of corporate culture: The company
continues to build a compliance culture, organizes various offline legal trainings, and regularly pushes legal
knowledge to employees through the online platform ‘Su Jiu Zhi Hui’. 3. Strengthen internal audit and internal
supervision of enterprise management. The company establishes a scientific view of internal audit culture, pays
great attention to the organization and team building of the audit department, sets up the internal audit
department in accordance with the relevant regulations of China, and allocates internal auditors with
professional competence, maintains the independence of internal audit, and makes the internal audit
department more independent. Besides, the internal audit has transformed from a single supervision function to
a comprehensive function of supervision, evaluation, control and consultation, and fully exerted the value-added
function.
Implementation: The Audit Committee of the company's Board of Directors comprehensively reviews and
supervises financial reports, audit plans, the effectiveness of internal controls, and the rationality and
effectiveness of corporate governance every year. It conducts self-evaluation of internal controls every year,
optimizing the system and management process according to the enterprise internal and external environment
and development requirements. Furthermore, the audit department conducts spot checks and audits on key
departments, important departments and general departments.
12.2 Details of major deficiencies in internal control discovered during the reporting period
□ Yes √ No
13. The company's management and control of subsidiaries during the reporting period
Name of the Combination Combination Resolve Follow-up
Issues Solutions
subsidiaries plan progress progress resolution plan
N/A N/A N/A N/A N/A N/A N/A
14. Internal control self-assessment report or internal control audit report
14.1 Self-evaluation Report on Internal Control
Date of disclosure of the full text of
the internal control evaluation April 29, 2022
report
Disclosure Index of the Full Text of
The full text of the "Self-assessment Report on Internal Control" will be
the Internal Control Evaluation
disclosed on http://www.cninfo.com.cn on April 29, 2022
Report
63
The ratio of the total assets of the
company included in the evaluation
scope to the total assets of the 99.43%
company's consolidated financial
statements
The ratio of the operating income of
the company included in the
evaluation scope to the operating 99.96%
income of the company's
consolidated financial statements
Defect identification standard
Type Financial report Non-financial report
(1) Signs of major deficiencies in
financial reports include: i. Fraudulent
conduct by the company’s directors,
supervisors or senior executives; ii.
Significant misstatements in the
The following circumstances could
current financial statements were
be identified as major defects, and
found, but the management failed to
other circumstances could be
detect them during the operation of
identified as major defects or
internal control; iii. As a result of
general defects according to the
internal control evaluation, major
degree of impact: (1) lack of
deficiencies have not been rectified;
democratic decision-making
iv. The audit committee and internal
procedures, unscientific
audit institution's supervision of
decision-making procedures,
internal control is invalid. (2) Signs of
major mistakes which resulting in
significant deficiencies in financial
major property losses to the
reporting include: i. Failure to select
Qualitative Criteria company; ( 2) Serious violation of
and apply accounting policies in
national laws and regulations; (3)
accordance with generally accepted
Lack of important business
accounting principles; ii. Failure to
management system or systemic
establish anti-fraud procedures and
failure of system operation; (4) The
control measures; iii. Failure to
company's major or important
establish corresponding accounting
internal control deficiencies
treatment for non-routine or special
cannot be rectified in a timely
transactions iv. There are one or more
manner; (5) The company
deficiencies in the control over the
continues or has a large number of
period-end financial reporting process
important internal control
and there is no reasonable assurance
deficiencies .
that the prepared financial
statements will achieve the true and
accurate objectives. (3) General
defects refer to other control defects
other than the above-mentioned
64
major defects and important defects.
Major defects: Misstatement > 3% of
total operating income;
Misstatement > 5% of total profit;
Misstatement > 2% of total assets.
Major defect: loss accounts for ≥
Important defects: 1% of total
1% of total assets. Important
operating income < misstatement ≤
defects: 0.5%≤losses account for
3% of total operating income; 3% of
Quantitative standard less than 1% of total assets.
total profit < misstatement ≤ 5% of
General defects: The proportion of
total profit; 1% of total assets <
loss to total assets is less than
misstatement ≤ 2% of total assets.
0.5%.
General defects: misstatement ≤
1% of total operating income;
misstatement ≤ 3% of total profit;
misstatement ≤ 1% of total assets.
Number of major deficiencies in
0
financial reports (pieces)
Number of major deficiencies in
0
non-financial reports (pieces)
Number of material deficiencies in
0
financial reports (pieces)
Number of material deficiencies in
0
non-financial reports (pieces)
14.2 Internal Control Audit Report
√ Applicable □ N/A
Deliberation Opinion Paragraph in Internal Control Audit Report
We believe that on December 31, 2021, Yanghe Co., Ltd. maintained effective internal control over financial
reporting in all material aspects in accordance with the Basic Norms for Corporate Internal Control and relevant
regulations.
Disclosure Situation of
Disclosured
Internal Control Audit Report
Disclosure date of the full text
of the internal control audit April 29, 2022
report
Full text disclosure index of
The full text will be disclosed on http://www.cninfo.com.cn on April 29, 2022
internal control audit report
Types of opinions on internal
Standard unqualified opinion
control audit reports
Whether there are material
deficiencies in non-financial No
reporting
Whether the accounting firm issued an internal control audit report with a non-standard opinion
65
□ Yes √No
Whether the internal control audit report issued by the accounting firm is consistent with the self-evaluation
report of the board of directors
√ Yes □ No
15. Special Rectification Actions for Self-inspected Problems of Listed Companies
According to the requirements of the China Securities Regulatory Commission, the company launched a special
self-inspection activity on corporate governance. During the self-inspection, it was found that some directors,
supervisors and senior executives of the company were unable to attend the general meeting of shareholders in
person due to business trips and other reasons. The company has made rectifications and urged the directors,
supervisors and senior executives to attend the meeting in a timely manner before the general meeting. If there
is a situation where it is impossible to attend the meeting in person, the company would promptly notify the
relevant personnel of the convening of the meeting and the deliberation of proposals after the meeting.
66
Section V Environmental and Social Responsibility
1. Significant environmental issues
Whether the listed company and its subsidiaries belong to the key pollutant discharge companies announced by
the environmental protection department
√ Yes □ No
Names of
major Implemen
Company Distributio
pollutants Emission ted Total
name or Emission Number n of Total Excessive
and concentra pollutant approved
subsidiary method of vents discharge emissions emissions
characteri tion discharge emissions
name outlets
stic standards
pollutants
Chemical
454.7 tons
Oxygen Longitude
79.12mg/ /year
Demand, : 118° 108.47
Jiangsu L 650mg/L 36 tons
Ammonia 22′ tons
Yanghe Indirect 1.85mg/L 40mg/L /year
Nitrogen, 1 33.74″& 2.54 tons None
Distillery emissions 1.29mg/L 5mg/L 2.07 tons
Total Latitude: 1.77 tons
Co., Ltd. 26.21mg/ 60mg/L /year
Phosphor 33°47′ 35.93 tons
L 37.35 tons
us, Total 26.74″
/year
Nitrogen
Chemical
400 tons
Oxygen Longitude
61.08mg/ /year
Jiangsu Demand, : 118°
L 500mg/L 47.66 tons 32 tons
Shuanggo Ammonia 12′07″
Indirect 2.41mg/L 40mg/L 1.76 tons /year
u Distillery Nitrogen, 1 & None
emissions 1.92mg/L 8mg/L 1.43 tons 6.4 tons
Stock Co., Total Latitude:
11.72mg/ 60mg/L 9.98 tons /year
Ltd. Phosphor 33°13′
L 48 tons
us, Total 45″
/year
Nitrogen
Chemical
Longitude 672 tons
Oxygen
Jiangsu : 118° /year
Demand, 101.82
Yanghe 45′ 112mg/L 500mg/L 42 tons
Ammonia tons
Distillery Indirect 33.08″ 3.2mg/L 60mg/L /year
Nitrogen, 1 2.49 tons None
Co., Ltd. emissions &Latitude 1.2mg/L 6mg/L 5 tons
Total 1.06 tons
Siyang : 33° 17mg/L ≤60mg/L /year
Phosphor 10.54 tons
Branch 42′ 58.5 tons
us, Total
25.70″ /year
Nitrogen
Guizhou Chemical Straight 1 Longitude 35.5mg/L 100mg/L 1.452 tons 2.057 tons None
67
Guijiu Oxygen emissions : 106° 1.986mg/ 10mg/L 0.174 tons /year
Group Demand, after 38′28″ L 20mg/L 0.024 tons 0.308 tons
Co., Ltd. Ammonia processin & 0.215mg/ 1mg/L 0.034 tons /year
Nitrogen, g Latitude: L 0.04 tons
Total 26°50′ 1.615mg/ /year
Phosphor 31″ L 0.8 tons
us, Total /year
Nitrogen
Construction and operation of pollution prevention facilities
Jiangsu Yanghe Distillery Co., Ltd.：The sewage treatment station in use was completed in 2012, with a total
investment of 96 million Chinese yuan, covering an area of 19,000 square meters, with a designed sewage
treatment capacity of 10,000 tons per day. The sewage treatment process adopts physical treatment method
plus chemical treatment method plus anaerobic biological treatment method plus aerobic biological treatment
method in order to reach the treatment of high-concentration wastewater of 250 tons per hour. The emission
implements the "Fermentation Alcohol and Liquor Industry Pollutant Emission Standard GB27631-2011" to
modify the list of indirect emission protocol standards. In 2021, CNY 30 million was invested in the operation
cost of sewage treatment, of which CNY 22 million was invested in the 48,000-ton brewing capacity
improvement sewage treatment supporting project. After the sewage treatment facilities are upgraded, the
removal rate of various pollutants in sewage has been greatly improved. At the same time, the utilization rate of
biogas resources in the anaerobic unit is more efficient. In 2021, a total of 1.3709 million tons of sewage were
treated, and the discharge concentrations of various pollutants are lower than the national discharge standards.
There is also a biogas boiler room, and the biogas produced by the anaerobic fermentation of sewage treatment
is all used for combustion in the biogas boiler.
Jiangsu Shuanggou Distillery Stock Co., Ltd.：The sewage treatment station in use was completed in 2013,
with a total investment of CNY 42.5 million, covering an area of 15,000 square meters, with a designed sewage
treatment capacity of 5,400 tons per day. Sewage treatment adopts anaerobic tower plus UASB plus AAO plus
secondary sedimentation tank plus phosphorus removal tank treatment process, in accordance with the revised
list of "Fermentation Alcohol and Liquor Industrial Pollutant Discharge Standard GB27631-2011", and implement
"Shuanggou Town Sewage Treatment Plant Takeover Standard". In 2021, CNY 16.03 million was invested, and a
total of 730,900 tons of wastewater was treated. All the discharge concentration of various pollutants is lower
than the national discharge standard. There is also a biogas boiler room, and the biogas produced by the
anaerobic fermentation of sewage treatment is all used for combustion in the biogas boiler.
Jiangsu Yanghe Distillery Co., Ltd. Siyang Branch：The sewage treatment station in use was completed in
2015, with a total investment of CNY 50 million, covering an area of about 15,000 square meters, with a
designed sewage treatment capacity of 6,000 tons per day. The sewage treatment process adopts EGSB plus
AAO plus advanced treatment technology, and implements the indirect discharge agreement standard of the
revised list of "Fermentation Alcohol and Liquor Industry Pollutant Discharge Standard GB27631-2011". In 2021,
a total investment of CNY 11.22 million was implemented to further improve the efficiency of environmental
protection governance through the implementation of projects such as the transformation of the phosphorus
removal and dosing system of the sewage treatment station, the improvement of aeration equipment, and the
transformation of the slag machine. In 2021, a total of 826,700 tons of wastewater was treated, and all the
discharge concentration of various pollutants is far lower than the takeover standard. There is also a biogas
boiler room, and the biogas produced by the anaerobic fermentation of sewage treatment is all used for
combustion in the biogas boiler.
68
Guizhou Guijiu Group Co., Ltd.：In 2021, a sewage treatment station with a daily processing capacity of 700
tons was built, with a total investment of CNY 11.5 million, covering an area of about 1,980 square meters, and a
400-cubic-meter sewage temporary storage tank was built with a remote-control system. The wastewater
produced by AAO plus MBR plus ozone decolorization and disinfection plus chemical phosphorus removal
treatment process shall comply with the direct discharge standard in Table 2 of the Discharge Standard for Water
Pollutants in Fermented Alcohol and Liquor Industry (GB27631-2011). The boiler adopts gas boiler, and its fuel is
natural gas.
Environmental impact assessment of construction projects and other environmental protection administrative
licenses
The company and each subsidiary company's construction project environmental impact report and
pollutant discharge permit and other materials are complete.
Emergency plan for environmental emergencies
The company and its subsidiaries have formulated contingency plans for environmental emergencies,
among which the company has filed with the Environmental Protection Department of Jiangsu Province,
Shuanggou Wine has filed with the Sihong Ecological Environment Bureau of Suqian City, the company's Siyang
Branch has filed with Siyang County Ecological Environment Bureau for the record, Guijiu Company has filed with
the Guiyang Environmental Emergency Response Center.
Environmental Self-Monitoring Program
The company and its subsidiaries have completed self-monitoring plans, among which the company, the
Shuanggou Liquor and the Siyang Branch have installed COD, ammonia nitrogen, total nitrogen, total
phosphorus, PH online monitoring instruments, and connected to the provincial and municipal data monitoring
platforms. The daily manual sampling and self-testing is conducted, and a sampling inspection by qualified
institutions is entrusted by a third party every month. Guijiu Company has installed COD, ammonia nitrogen,
total nitrogen, total phosphorus, PH, ss online monitoring instruments, and conducts real-time monitoring every
day, and entrusts a third-party qualified organization to take samples and spot checks every quarter.
Administrative penalties for environmental issues during the reporting period
The impact on
Company or Reason for Violation Punishment the production Rectification
subsidiary name punishment situation result and operation of measures
listed companies
None None None None None None
Other environmental information that should be disclosed
None
Measures taken to reduce carbon emissions during the reporting period and their effects
√ Applicable □ N/A
The company actively builds a green development system featuring energy conservation, emission reduction,
and low-carbon development. In 2021, the company continues to strengthen the use of clean energy, uses idle
roofs to implement photovoltaic power generation projects, and uses biogas in sewage to produce steam for
production. It also vigorously develops greening and afforestation in the plant area, which can effectively cover
loess, reduce dust, and beautify environment, and offsets the carbon dioxide emissions generated in the
operation process. It advocates low-carbon environmental protection, enhances the concept of green,
low-carbon and healthy life for employees, and vigorously promotes energy conservation, emission reduction
and green office. For other energy saving and carbon reduction content, please refer to the ‘2021 Social
Responsibility Report’ disclosed by the company.
69
Other environmental protection related information
None
2. Social responsibility
The company has disclosed the "2021 Social Responsibility Report", see www.cninfo.com.cn for details.
3. The Achievements of Poverty Alleviation and Rural Revitalization
The company has actively done a good job in consolidating and expanding the achievements of poverty
alleviation and effectively connecting with the rural revitalization. Through the ‘hanging villages and contracting
households’ link to help Qiuzhuang Village, Zhenglou District, Yanghe New District, Suqian. It is also responsible
for the two villages of Dagou Village and Taiping Village in Zhenglou District, a total of 177 low-income peasant
households are assisted. After continuous assistance, all the paired households have been lifted out of poverty.
Qiuzhuang Village, a linked village, has built public service facilities such as a convenience service center, library,
and village hospital under the assistance. The collective economic income has guaranteed stability. In 2021, in
order to further consolidate the achievements of poverty alleviation, the company continued to implement the
requirements of ‘one household, one policy’ in terms of paired assistance. Through the combination of the
Sunshine Poverty Alleviation APP and on-site visits, the company dynamically grasped the basic situation of
assisted farmers. It establishes and improves poverty alleviation Preventive mechanism, makes overall use of the
‘20 Suqian Policies for Benefiting the People’, develops new income channels through the double-level
assistance of "materials" and "wills", and enhances the internal motivation of low-income households. The
company donates materials and cash in total of CNY 79,000 during the year, 100% coverage of household
assistance. In terms of helping the linked villages, it assisted Qiuzhuang Village in fully mobilizing resources from
all parties, including people, property and goods, and invested another 200,000 Chinese yuan in assistance funds
to help Qiuzhuang Village expand its collective economy.
In 2021, the company will actively use its industrial advantages to promote the construction of the raw grain
base in Suqian, ensure the high quality of the company's raw grain supply and demand, drive the development
of local agriculture and vigorously promote rural revitalization at the same time. The company actively
participates in education and assistance, and participates in activity of Suqian City ‘making a dream come true,
letting poor students go to school’, donating CNY 1 million. So far a total of CNY 13 million was donated to help
poor students realize their dreams. The company was awarded the 2021 ‘Suqian Charity Award’ and ‘'Major
Actions. Dreams Aid for Students' and ‘Special Contribution Award’. In addition, the ‘Lasa Langre Wine Village’
project was launched to help local economic development in Tibet through industrial support.
In 2022, the company will continue to respond to the country's call for "rural revitalization", actively
implement the enterprise spirit of ‘serving the country, serving the people and serving the region’, and continue
to amplify the effectiveness of the village assistance work in accordance with the requirements of consolidating
and expanding the achievements of poverty alleviation and the effective connection of rural revitalization, and
take stronger actions to boost common prosperity and rural revitalization.
For other information, please refer to the ‘2021 Social Responsibility Report’ disclosed by the company.
70
Section VI Significant Events
I、Performance of commitments
1、Complete and incomplete commitments of the Company and its actual controller, shareholders, related
parties, acquirers, and other related parties for the commitments by the end of the reporting period
√ Applicable □ N/A
Giver of Date of Term of
Commitmen Details of Performanc
Commitments commitmen Commitmen Commitmen
t Type Commitment e
ts t t
Share reform commitment
Commitments made in the
acquisition report or equity
change report
Commitments made during
asset reorganization
1.
Commitment
to avoid
horizontal
competition:
(1) The
company is
not currently
engaged in
Commitmen
any business
ts on
that
Jiangsu horizontal
competes
Commitments made at IPO or Yanghe competition August 26, In normal
with the Long-term
refinancing Group Co. , related 2009 execution
joint-stock
Ltd. transactions
company. The
, and capital
company
occupation
promises to
maintain the
existing
business
structure, and
not to directly
or indirectly
operate with
the business
71
of the
joint-stock
company that
actually
constitutes
competition
or may
constitute
competition.
Any business,
or newly
established
subsidiaries
or affiliated
enterprises
engaged in
the
above-mentio
ned business.
(2) If the
company
violates the
above
commitments
, the
joint-stock
company has
the right to
request the
company to
immediately
terminate the
business of
horizontal
competition
and
compensate
the economic
loss caused to
the
joint-stock
company. At
the same
time, the
72
company
shall pay
liquidated
damages of
CNY 10
million to the
joint-stock
company. (3)
The company
promises not
to use its
status as the
controlling
shareholder
in the
joint-stock
company to
damage the
legitimate
rights and
interests of
the
joint-stock
company,
other
shareholders
of the
joint-stock
company and
creditors of
the
joint-stock
company. ⑷
This letter of
commitment
takes effect
from the date
of signing and
cannot be
revoked
without the
consent of
the
joint-stock
73
company. 2.
Commitment
to reduce
related-party
transactions:
The company
will strictly
abide by the
requirements
of relevant
laws,
regulations
and
normative
documents
such as the
Company
Law, the
Securities
Law, and the
Code of
Corporate
Governance
for Listed
Companies,
and further
reduce and
strictly
regulate the
relationship
with
joint-stock
companies.
All kinds of
related-party
transactions
between the
two
companies, to
ensure that
the status of
the
controlling
shareholder
74
and actual
controller will
not be used
to harm the
interests of
the
joint-stock
company and
other
shareholders
of the
joint-stock
company, and
that no new
occupation of
the
joint-stock
company will
occur.
Commitment
to avoid
horizontal
competition:
1. The
company is
mainly
engaged in
investment
Commitmen
management,
ts on
and does not
horizontal
Jiangsu Blue operate the
competition November In normal
Alliance Co., same or Long-term
, related 23, 2017 execution
Ltd. related
transactions
business as
, and capital
the issuer.
occupation
The company
will not
engage in the
same or
related
business as
the issuer's
business, and
will not harm
75
the issuer's
interests, nor
will it seek
illegitimate
benefits from
the issuer; 2.
If the
company
violates the
above
commitments
, the issuer
has the right
to demand
compensatio
n from it
owing to
economic
losses caused
to the issuer,
and pay
liquidated
damages of
CNY 5 million,
and have the
right to
request the
acquisition of
the business
project at the
market price
of the
business
project or the
establishment
cost price
(whichever is
lower); 3. This
commitment
The book will
take effect
from the date
of signing and
cannot be
76
revoked
without the
consent of
the issuer.
After the
issuer's
shares have
been listed
and traded on
the stock
exchange for
one year, the
shares
transferred
each year
shall not
Share
Jiangsu Blue exceed 25%
Reduction November In normal
Alliance Co., of the total Long-term
Commitmen 23, 2017 execution
Ltd. number of
t
the issuer's
shares held
by the issuer,
and the
issuer's
shares held
and their
changes shall
be reported
to the issuer
in a timely
manner.
As one of the
directors,
supervisors
and senior
managers of
Other the of Jiangsu
Cong November In normal
commitmen Blue Alliance Long-term
Xuenian 23, 2017 execution
ts Co., Ltd., I
promise: 1.
During the
term of office
of the issuer,
the annual
77
transfer of
Blue Alliance
equity shall
not exceed
25% of the
total equity
of Blue
Alliance held
by me 2. If I
resign from
the issuer, I
shall not
transfer the
shares of the
Blue Alliance
held by me
within six
months after
resignation;
3. If I resign
from the
issuer, the
number of
shares
transferred
shall not
exceed 50%
of the total
shares of the
Blue Alliance
held by me
within 12
months of six
months of
resignation
As one of the
directors,
supervisors
Other and senior
November January 8, In normal
Feng Pantai commitmen managers of
23, 2017 2022 execution
ts the of Jiangsu
Blue Alliance
Co., Ltd., I
promise: 1.
78
During the
term of office
of the issuer,
the annual
transfer of
Blue Alliance
equity shall
not exceed
25% of the
total equity
of Blue
Alliance held
by me 2. If I
resign from
the issuer, I
shall not
transfer the
shares of the
Blue Alliance
held by me
within six
months after
resignation;
3. If I resign
from the
issuer, the
number of
shares
transferred
shall not
exceed 50%
of the total
shares of the
Blue Alliance
held by me
within 12
months of six
months of
resignation
Equity Incentive Commitment
Other commitments made to
the company's minority
shareholders
Whether the promise is fulfilled Yes
79
on time
If the commitment is overdue
and not fulfilled, the specific
reasons for the failure to fulfill N/A
and the next work plan shall be
explained in detail
2、Where any profit forecast was made for any of the Company’s assets or projects and the current
reporting period is still within the forecast period, the Company shall explain whether the performance of
the asset or project reaches the profit forecast and why:
□ Applicable √ N/A
II、Non-operating capital occupation of listed companies by controlling shareholders and
other related parties
□ Applicable √ N/A
No such case during the current reporting period.
III、Illegal Provision of Guarantees for External Parties
□ Applicable √ N/A
No such case during the current reporting period.
IV、Explanation of the board of directors on the latest ‘non-standard audit report’
□ Applicable √ N/A
V、Explanation Given by the Board of Directors, Supervisory Committee and Independent
Directors (if applicable) regarding the “Non-standard Auditor’s Report” Issued by the CPA
Firm for the Current Reporting Period
□ Applicable √ N/A
VI、For Changes in Accounting Policies, Accounting Estimates or Correction of Significant
Accounting Errors Compared with the Financial Report for the Prior Year
√ Applicable □ N/A
Since January 1st 2021 (the “First Adoption Date”), the Company has implemented the Accounting
Standards for Business Enterprises No. 21 – Leases revised by the Ministry of Finance in 2018 (hereinafter
referred to as the“New Lease Standards”).The companydisclosed the related amount based on the cumulative
impact of the first adoption of the New Lease Standards, without adjusting data for the comparative period.
80
VII、Explanation of changes in the scope of consolidated statements compared with the
financial report of the previous year
√ Applicable □ N/A
Set up subsidiaries
（1）In March 2021, the holding subsidiary Jiangsu Shuanggou Wine Industry Co., Ltd. invested 100 million
Chinese yuan to establish Jiangsu Shuanggou Wine Sales Co., Ltd., accounting for 100% of its registered capital. It
will be included in the scope of consolidation in the consolidated financial statements from March 2021.
（2）In April 2021, the company and Suqian Industry Development Group Co., Ltd. jointly invested 20
million Chinese yuan to establish Jiangsu Jiushang Internet Technology Co., Ltd., of which the company
contributed 10.20 million Chinese yuan, accounting for 51% of its registered capital, Suqian Industry
Development Group Co., Ltd. contributed 9.800 million Chinese yuan, accounting for 49% of its registered capital.
It will be included in the scope of consolidation in the consolidated financial statements from April 2021.
（3）In July 2021, the company subscribed to invest 50 million Chinese yuan to establish Jiangsu Yanghe
Cultural Tourism Co., Ltd., accounting for 100% of its registered capital. It will be included in the consolidation
scope of the consolidated financial statements from July 2021.
（4）In July 2021, the holding subsidiary Jiangsu Yanghe Cultural Tourism Co., Ltd. and Suqian Cultural
Tourism Development Group Co., Ltd. jointly invested 20 million Chinese yuan to establish Jiangsu Yanghe
Cultural Tourism Operation Co., Ltd., of which Jiangsu Yanghe Cultural Tourism Co., Ltd. invested 16 million
Chinese yuan, accounting for 80.00% of its registered capital, Suqian Cultural Tourism Development Group Co.,
Ltd. invested 4,000,000 Chinese yuan, accounting for 20.00% of its registered capital. It will be included in the
consolidation scope of the consolidated financial statements from July 2021.
（5）In November 2021, the company subscribed for 24 million Chinese yuan to set up Siyang Tianlan
Packaging Service Co., Ltd., accounting for 100% of its registered capital. It will be included in the scope of
consolidation in the consolidated financial statements from November 2021.
VIII、Engagement and Disengagement of the CPA firm
CPA firm engaged at present
Name of domestic accounting firm Suya Jincheng CPA LLP.
Remuneration of domestic accounting firm (10,000
190.8
Chinese yuan)
Consecutive years of audit services of domestic
15
accounting firms
The name of the certified public accountant of the
Li Laimin, Li Yan
domestic accounting firm
Consecutive years of auditing services by certified
Li Laimin: 2 years，Li Yan: 3years
public accountants of domestic accounting firms
Whether to change the CPA firm in the current period
□ Yes √ No
Engagement of internal control audit CPA firm, financial advisor or sponsor
81
√ Applicable □ N/A
During the reporting period, the Company hired Suya Jincheng CPA LLP. as the internal control audit accounting
firm, and paid a total of RMB 530,000 of financial consulting fees during the period.
IX、Facing delisting after annual report disclosure
□ Applicable √ N/A
X、Bankruptcy and Restructuring
□ Applicable √ N/A
No such case during the reporting period.
XI、Material Litigations and Arbitration
□ Applicable √ N/A
The Company had no material litigation or arbitration during the current reporting period.
XII、Punishment and rectification
□ Applicable √ N/A
No such case during the reporting period.
XIII、The integrity of the company and its controlling shareholders and actual controllers
□ Applicable √ N/A
XIV、Significant Related-party Transactions
1.Related-party Transactions Arising from Routine Daily Operations
□ Applicable √ N/A
No such case during the reporting period.
2.Related-party Transactions regarding Purchase and Disposal of Assets or Equity
□ Applicable √ N/A
No such case during the reporting period.
3. Significant Related-party Transactions Arising from Joint Investments on External Parties
□ Applicable √ N/A
No such case during the reporting period.
82
4. Related Credit and Debt Transactions
□ Applicable √ N/A
No such case during the reporting period.
5. Transactions with related financial companies
□ Applicable √ N/A
No such case during the reporting period.
6. Transactions between the financial company controlled by the company and related parties
□ Applicable √ N/A
There is no deposit, loan, credit or other financial business between the financial company controlled by the
Company and its related parties.
7. Other significant related-party transactions
□ Applicable √ N/A
The company has no other significant related transactions during the reporting period.
XV、Significant Contracts and Their Execution
1. Trusteeship, Contracting and Leasing
（1）Trusteeship
□ Applicable √ N/A
No such case in the reporting period.
（2）Contracting
□ Applicable √ N/A
No such case in the reporting period.
（3）Leasing
□ Applicable √ N/A
No such case in the reporting period.
2、Significant Guarantees
□ Applicable √ N/A
No such case in the reporting period.
83
3、Entrusting Others to Manage Cash Assets
（1）Entrusted financial management
√ Applicable □ N/A
Overview of entrusted wealth management during the reporting period
Unit: CNY10, 000
Amount of
Amount not impairment
Outstanding
Product types Source of funds Amount collected after accrued owing to
balance
the due date overdue financial
management
Bank wealth
management Private funds 1,032,000 1,032,000 0 0
products
Trust wealth
management Private funds 1,273,368 208,285.29 6,879.48 3,625.67
products
Total 2,305,368 1,240,285.29 6,879.48 3,625.67
Specific circumstances of high-risk entrusted wealth management with a single large amount or low security and
low liquidity√ Applicable □ N/A
Unit: CNY10, 000
An
The overv
Actua
actua Is iew
l
l Amo there of
profit Whet
Remu Refer recov unt any the
and her it
Type nerati ence Expec ery of of entru matt
Inves loss has
of on annu ted profit provi sted er
Trust Sourc tmen amou gone
Truste Amou Start End deter alized earni and sion finan and
ee Type es of t nt throu
e (or nt date date minat rate ngs loss for cial an
name funds direct durin gh
Truste ion of (if durin impai plan index
ion g the legal
e) meth retur any) g the rmen in of
repor proce
od n repor t (if the relat
ting dures
ting any) futur ed
perio
perio e queri
d
d es (if
any)
CITIC The
Trust Nove trust
Privat May Debt
CITIC mber 7.60 1,085 526.1 3,625 finan
Trust 9,500 e 29, asset Cash 722 Yes Yes
Trust Jiahe 29, % .97 7 .67 cing
funds 2020 s
No. 2021 expir
118 es,
84
Evergr and
ande part
Guiya of
ng the
New princi
World pal
Accu and
mulati inco
ve me
Fund are
Trust defer
Plan red.
For
detail
s,
pleas
e
refer
to
the
"Ann
ounc
eme
nt on
the
Defer
red
Paym
ent
of
the
Expir
ed
Princi
pal
and
Inco
me
of
Entru
sted
Weal
th
Man
85
agem
ent"
discl
osed
by
the
comp
any
on
Dece
mber
4,
2021
(Ann
ounc
eme
nt
No.
2021
-044)
FOTIC
Furon
g No.
203
Sunac
Meijia
Privat April April Debt
FOTIC ng 13,00 7.70 696.5 666.4
Trust e 21, 21, asset Cash 1,001 Yes Yes
Trust Phase 0 % 92
funds 2021 2022 s
II
Collec
tive
Fund
Trust
Plan
CITIC
Trust
Count Nove
Privat May Debt
CITIC ry mber 6.70 587.4 572.7
Trust 8,000 e 25, asset Cash 268 Yes Yes
Trust Garde 25, % 79
funds 2022 s
n 2020
Suyun
No. 4
Finan
86
cing
Collec
tive
Fund
Trust
Plan
AVIC
Trust
Tianqi
[2020
] No.
12
Pan'a
n Lake
Privat June June Debt
AVIC Ecolo 14,32 8.70 2,491 1,297 1,263
Trust e 19, 19, asset Cash 2,148 Yes Yes
Trust gical 0 % .68 .28 .14
funds 2020 2022 s
Town
Projec
t Loan
Collec
tive
Fund
Trust
Plan
Minm
etals
Trust
Hengx
in
Gongz
hu
No.32
6-Cha
Minm Privat Febru Augu Debt
ngli 10,00 8.00 1,196 710.1 688.2
etals Trust e ary 9, st 9, asset Cash Yes Yes
Stable 0 % .71 42
Trust funds 2021 2022 s
Zeng
No.12
3
Accu
mulati
ve
Fund
Trust
Plan
87
China
Minsh
eng
Trust
Zhixin
No.
1047
Baone
ng
Mins Privat Augu Augu Debt
Invest 20,00 8.90 887.5 10,00
heng Trust e st 21, st 21, asset Cash 3,560 1,780 Yes Yes
ment 0 % 6 0
Trust funds 2020 2022 s
and
Finan
cing
Projec
t
Collec
tive
Fund
Trust
Plan
AVIC
Trust
Tianqi
[2020
] No.
408
Nanji
Septe Septe Equit
ng Privat
AVIC mber mber y 8.50 1,018 255.7
Trust Shiba 6,000 e Cash 510 1,800 Yes Yes
Trust 25, 24, asset % .6 0
nqiao funds
2020 2022 s
Projec
t
Equity
Invest
ment
Trust
Plan
Shaa Shaan
Septe Septe
nxi xi Privat Debt
mber mber 7.00 291.5 283.8
State Trust State 4,000 e asset Cash 560 Yes Yes
24, 24, % 69
Invest Invest funds s
2020 2022
ment ment
88
You
Bond
No.
28
Nanto
ng
Haian
Collec
tive
Fund
Trust
Plan
AVIC
Trust
Tianqi
[2019
] No.
116
Kunmi
ng
Evergr Nove Nove
Privat Debt
AVIC ande 15,00 mber mber 8.00 1,216 1,216
Trust e asset Cash 2,400 4,500 Yes Yes
Trust Yunxi 0 06, 06, % .67 .67
funds s
Mansi 2020 2022
on
Trust
Loan
Collec
tive
Fund
Trust
Plan
Minm
etals
Trust
Hengx
in Nove
Minm Privat May Debt
Gongz 20,00 mber 7.50 2,256 945.2 904.1
etals Trust e 14, asset Cash 3,000 Yes Yes
hu 0 14, % .16 11
Trust funds 2021 s
No.43 2022
1-Fen
gli
No.22
3
89
Accu
mulati
ve
Fund
Trust
Plan
Jiangs
u
Trust
Fuju
No. Dece
Jiangs Privat Janua Debt
11 4,393 mber 7.50 1,415 580.1 571.1
u Trust e ry 11, asset Cash Yes Yes
Accu .94 01, % .75 85
Trust funds 2021 s
mulati 2022
ve
Fund
Trust
Plan
FOTIC
Furon
g No.
203
Sunac
Dece
Meijia Privat June Debt
mber 8.00 840.7 303.7 286.9
FOTIC Trust ng 7,000 e 16, asset Cash Yes Yes
16, % 7 80
Phase funds 2021 s
2022
II
Projec
t
Phase
3-4
AVIC
Trust
Tianxi
n Bay
Febru Febru Equit
Area Privat
AVIC 10,00 ary ary y 8.50 714.9 691.6
Trust Rene e Cash 1,700 Yes Yes
Trust 0 26, 26, asset % 34
wal funds
2021 2023 s
No.
10
Collec
tive
Fund
90
Trust
Plan
Phase
1
AVIC
Trust
Tianxi
n Bay
Area
Updat
e No. Privat Marc Marc Debt
AVIC 10,00 8.50 707.9 684.6
Trust 10 e h 01, h 01, asset Cash 1,700 Yes Yes
Trust 0 % 56
Collec funds 2021 2023 s
tive
Fund
Trust
Plan
Phase
2
Shang
hai
Trust
Hiya
Debt
Shan Privat Marc Marc Debt
Invest 7.00 407.0 261.8
ghai Trust 7,500 e h 23, h 23, asset Cash 1,050 Yes Yes
ment % 55
Trust funds 2021 2023 s
Collec
tive
Fund
Trust
Plan
158,7 22,54 11,47 25,07
Total -- -- -- -- -- -- -- -- -- --
13.94 4.64 0.81 3.67
Entrust finance expected to be failed to recover principle or other situation leading to impairment
√ Applicable □ N/A
The “CITIC Trust Jiahe No. 118 Evergrande Guiyang New World Collective Fund Trust Plan” purchased by the
company expired, and part of the principal and income were deferred. The company announced it on Deferred
Payment of Income (Announcement No.: 2021-044). Based on the principle of prudence, the company handles
changes in fair value and accrues CNY 36.2567 million for impairment. After sorting out, based on the principle
of prudence, the company made a change in fair value, and accrued a depreciation amount of 214.48 million
Chinese yuan, totaling CNY250.7367 million.
91
（2）Entrusted loan management
□ Applicable √ N/A
No such case during the reporting period
4、Other major contracts
□ Applicable √ N/A
No such case during the reporting period
XVI、Explanation of other significant matters
√ Applicable □ N/A
1、 The company indirectly holds the partnership shares of Jiangsu Jiequan Emerging Industry Development
Fund (Limited Partnership) by investing in Jiangsu Xinghe Investment Management Co., Ltd. and Nanjing
Xingnahe Venture Capital Partnership (Limited Partnership). Xingnahe Partnership and Jiequan Fund have
completed the Raised and completed the filing with the Asset Management Association of China, the filing codes
are SCF515 and SCL005 respectively. For details, please refer to the "Announcement on Cooperative Investment
with Professional Investment Institutions" (Announcement No.: 2017-021) and "Progress Announcement on
Cooperative Investment with Professional Investment Institutions" disclosed by the company on December 30,
2017 and April 12, 2018 (Announcement No.: 2018-011).
2、Sujiu Group Jiangsu Wealth Management Co., Ltd. subscribed for the partnership shares of Suzhou Danqing
Phase II Innovative Pharmaceutical Industry Investment Partnership (Limited Partnership). Danqing Phase II has
completed the fundraising and completed the filing with the China Securities Investment Fund Industry
Association, the filing code is SED720. For details, please refer to the "Announcement on Cooperative Investment
with Professional Investment Institutions" (Announcement No.: 2018-021), "About Announcement on the
Progress of Cooperative Investment with Investment Institutions (Announcement No.: 2018-030),
"Announcement on the Progress of Cooperative Investment with Professional Investment Institutions"
(Announcement No.: 2019-004).
3、Jiangsu Yanghe Investment Management Co., Ltd. subscribed for the partnership share of Panmao (Shanghai)
Investment Center (Limited Partnership). Panmao Investment has completed the fundraising and completed the
filing with the Asset Management Association of China, the filing code is SED720. For details, please refer to the
"Announcement on Cooperative Investment with Professional Investment Institutions" disclosed by the company
on June 22, 2018 (announcement number: 2018-025).
4、Jiangsu Yanghe Investment Management Co., Ltd. subscribed for the partnership shares of Jiangsu Zijin
Hongyun Health Industry Investment Partnership (Limited Partnership), Suqian Yida Industrial Venture Capital
Fund (Limited Partnership), and Hunan Huaye Tiancheng Venture Capital Partnership (Limited Partnership). Zijin
Hongyun, Suqian Yida and Huaye Tiancheng have completed the fundraising and completed the filing with the
Asset Management Association of China. The filing codes are SGA436, SGV275 and SGW727 respectively. For
details, please refer to the "Announcement on Cooperative Investment with Professional Investment
Institutions" (Announcement No.: 2019-002) disclosed by the company on March 28, 2019, and "About
Participating in Investment in Suqian Yida Industrial Venture Capital" disclosed on April 30, 2019 Announcement
on Funds and Related Party Transactions” (Announcement No.: 2019-012), and “Announcement on Subscription
of Hunan Huaye Tiancheng Venture Capital Fund” disclosed on September 6, 2019 (Announcement No.:
2019-021).
92
5、Jiangsu Yanghe Investment Management Co., Ltd. indirectly holds the partnership share of Nanjing
Xingnaheyuan Venture Capital Partnership (Limited Partnership) by subscribing to Nanjing Xingnahai Equity
Investment Partnership (Limited Partnership), and Jiangsu Yanghe Investment Management Co., Ltd. subscribes
for Suzhou The partnership shares of Zhongxing Fushuzhi Venture Capital Partnership (Limited Partnership) and
Nanjing Hongyang Equity Investment Partnership (Limited Partnership), Xingna Heyuan, Suzhou Xingfu and
Nanjing Hongyang have completed the fundraising and invested in China Securities Investment Fund The
industry association has completed the filing, and the filing codes are SLR472, SNC111, and SNF086. For details,
please refer to the "Announcement on Cooperative Investment with Professional Investment Institutions"
(Announcement No.: 2020-031) disclosed by the company on August 12, 2020, and the "About Subscription of
Suzhou Zhongxin Fushuzhi Entrepreneurship" disclosed on October 19, 2020 Investment Fund Announcement
(Announcement No.: 2020-035), and the Announcement on Subscription of Nanjing Hongyang Equity Investment
Fund (Announcement No.: 2020-038) disclosed on November 4, 2020.
6、Jiangsu Yanghe Investment Management Co., Ltd. subscribed for the partnership share of Zhuhai Hengqin
Huaye Tiancheng Phase IV Venture Capital Partnership (Limited Partnership), Xiamen Yuanfeng Equity Investment
Fund Partnership (Limited Partnership), and Shanghai Yunfeng Xincheng Investment Center (Limited Partnership).
Huaye Phase IV, Xiamen Yuanfeng and Yunfeng Xincheng have completed the filing with the Asset Management
Association of China. The filing codes are SQB769, SLX842 and SH1000 respectively. For details, please refer to
the "Announcement on Subscribing Zhuhai Hengqin Huaye Tiancheng Phase IV Venture Capital Fund" disclosed
by the company on February 10, 2021 (Announcement No.: 2021-007), and the "About Subscription to Xiamen"
disclosed on April 13, 2021 Yuanfeng Equity Investment Fund Announcement (Announcement No.: 2021-012),
and the Announcement on Cooperative Investment with Professional Investment Institutions disclosed on
August 6, 2021 (Announcement No.: 2021-033).
XVII、Significant Events of the Company's Subsidiaries
□ Applicable √ N/A
93
Section VII Changes in Shares and Shareholders
I、Changes in shares
1、Table of Changes in Share Capital
Unit：share
Before the change Changes in the period (+, -) After the change
Share
transferr
New
Bonus ed Sub-tota
Shares Ratio Shares Others Shares Ratio
issue from l
Issued
capital
reserve
1. Shares subject to 259,469, -5,711,7 -5,711,7 253,757
17.22% 0 0 0 16.84%
conditional restriction(s) 723 37 37 ,986
1.1State holdings 0 0.00% 0 0 0 0 0 0 0.00%
1.2Shares held by
0 0.00% 0 0 0 0 0 0 0.00%
State-owned orporate
1.3.Other domestic 259,469, -5,711,7 -5,711,7 253,757
17.22% 0 0 0 16.84%
holdings 723 37 37 ,986
Including: held by 249,480, 249,480
16.55% 0 0 0 0 0 16.55%
domestic corporates 000 ,000
held by domestic 9,989,72 -5,711,7 -5,711,7 4,277,9
0.67% 0 0 0 0.28%
natural persons 3 37 37 86
4.Foreign shares 0 0.00% 0 0 0 0 0 0 0.00%
Including: held by
0 0.00% 0 0 0 0 0 0 0.00%
overseas corporates
held by
0 0.00% 0 0 0 0 0 0 0.00%
overseas natural person
2.Shares without 1,247,51 5,711,73 5,711,73 1,253,2
82.78% 0 0 0 83.16%
restriction 8,277 7 7 30,014
2.1RMB ordinary 1,247,51 5,711,73 5,711,73 1,253,2
82.78% 0 0 0 83.16%
shares 8,277 7 7 30,014
2.2Domestically listed
0 0.00% 0 0 0 0 0 0 0.00%
foreign shares
2.3Foreign shares
0 0.00% 0 0 0 0 0 0 0.00%
listed overseas
2.4Others 0 0.00% 0 0 0 0 0 0 0.00%
1,506,98 1,506,9
3.Total shares 100.00% 0 0 0 0 0 100.00%
8,000 88,000
94
Reason for share changes
√ Applicable □ N/A
Changes in shares were mainly due to changes in the shares locked by the current and outgoing directors,
supervisors and senior managers of the company.
Approval for changes in share capital
□ Applicable √ N/A
Transfer for changes in share capital
□ Applicable √ N/A
Effects of changes in share capital on the basic earnings per share ("EPS"), diluted EPS, net assets per share
attributable to common shareholders of the Company, and other financial indexes over the last year and last
period
□ Applicable √ N/A
Other contents that the Company considers necessary or required by the securities regulatory authorities to
disclose
□ Applicable √ N/A
2、Changes in Restricted Shares
√ Applicable □ N/A
Unit：share
Opening Closing Note for
Name of Increased in Vested in Date of
restricted restricted restricted
shareholder current period current period unlocking
shares shares shares
Lock-up period
for directors,
supervisors
Feng Pantai 5,677,986 0 5,677,986 0 and senior July 28, 2021
executives to
leave office
expires
Directors,
supervisors
and senior
Zheng Bujun 45,000 0 11,250 33,750 N/A
executives are
currently
locked
Lock-up period
for directors,
supervisors
August 23,
Wang Yao 22,501 0 22,501 0 and senior
2021
executives to
leave office
expires
Total 5,745,487 0 5,711,737 33,750 -- --
95
II.Issuance and Listing of Securities
1. Securities (exclude Preferred Share) Issued during the Reporting Period
□ Applicable √ N/A
2.Explanation on Changes in Share Capital & the Structure of Shareholders, the Structure of Assets and
Liabilities
□Applicable √ N/A
3.Existent Shares Held by Internal Staff of the Company
□ Applicable √ N/A
III、Particulars about the Shareholders and Actual Controller
1.Total Number of Shareholders and Their Shareholdings
Unit：share
The total
number of
The total preference
Total number
number of shareholders
of common
preferred whose voting
Total number shareholders
shareholders rights have
of common at the end of
whose voting been restored
shareholders the previous
186,749 154,216 rights have 0 at the end of 0
at the end of month prior to
been restored the previous
the reporting the annual
at the end of month before
period report
the reporting the disclosure
disclosure
period (if any) date of the
date
(see Note 8) annual report
(if any) (see
Note 8)
Shareholders who hold more than 5% of total shares or the top 10 shareholders
Total Pledge, marking or freezing
Increase
commo Number
/decrea Number
Share-h n shares of
se of
Name of Nature of olding held at unrestric
during restricte
Shareholders shareholders percent the end ted Status Amount
the d shares
age (%) of the shares
reportin held
reportin held
g period
g period
96
Jiangsu Yanghe State-owned 514,858 514,858,
34.16% 0 0
Group Co., Ltd. legal person ,939 939
Domestic
Jiangsu Blue 264,991 -296000 249,480 15,511,9
Non-state-own 17.58%
Alliance Co., Ltd. ,926 00 ,000 26
ed legal person
Shanghai Haiyan
Logistics State-owned 145,708 145,708,
9.67% 0 0
Development legal person ,137 137
Co., Ltd.
Shanghai
Jieqiang
State-owned 59,744, 59,744,0
Tobacco Sugar & 3.96% 0 0
legal person 099 99
Wine (Group)
Co., Ltd.
Bank of China
Limited - China
Merchants CSI
Baijiu Index 50,237, 213553 50,237,4
Others 3.33% 0
Classified 459 52 59
Securities
Investment
Fund
Bank of China
Limited - E Fund
Blue Chip
37,700, 105000 37,700,0
Selected Mixed Others 2.50% 0
000 00 00
Securities
Investment
Fund
Hong Kong
Securities
Overseas legal 33,426, -126213 33,426,9
Clearing 2.22% 0
persons 973 81 73
Company
Limited
China Securities
Domestic
Finance 13,790, 13,790,0
Non-state-own 0.92% 0 0
Corporation 044 44
ed legal person
Limited
Bank of China
Limited - E Fund
Premium 10,000, 10,000,0
Others 0.66% -- 0
Selected Hybrid 070 70
Securities
Investment
97
Fund
Jiangsu Yanghe
Distillery Co.,
Ltd.－The first
9,118,3 911838 9,118,38
phase of the Others 0.61% 0
84 4 4
core backbone
shareholding
plan
Strategic investors or general
legal persons becoming the top
10 shareholders due to NO
placement of new shares (if any)
(see Note 3)
Explanation of the related
relationship or concerted action NO
of the above shareholders
Explanation of the
above-mentioned shareholders
involving entrusted/entrusted NO
voting rights and abstention
from voting rights
Special instructions for the
existence of a special repurchase
account among the top 10 NO
shareholders (if any) (see Note
10)
Shareholdings of the top 10 shareholders without restrictions on sales
Number of unrestricted shares held at the Type of shares
Name of shareholders
end of the reporting period Type Amount
RMB common
Jiangsu Yanghe Group Co., Ltd. 514,858,939 514,858,939
shares
Shanghai Haiyan Logistics RMB common
145,708,137 145,708,137
Development Co., Ltd. shares
Shanghai Jieqiang Tobacco Sugar RMB common
59,744,099 59,744,099
& Wine (Group) Co., Ltd. shares
Bank of China Limited－China RMB common
Merchants CSI Liquor Index shares
50,237,459 50,237,459
Graded Securities Investment
Fund
Bank of China Limited－E Fund RMB common
Blue Chip Selected Mixed 37,700,000 shares 37,700,000
Securities Investment Fund
Hong Kong Securities Clearing RMB common
33,426,973 33,426,973
Co., Ltd shares
98
RMB common
Jiangsu Blue Alliance Co., Ltd. 15,511,926 15,511,926
shares
RMB common
China Securities Finance Co., LTD 13,790,044 13,790,044
shares
Bank of China Limited－E Fund RMB common
Premium Selected Hybrid 10,000,070 shares 10,000,070
Securities Investment Fund
Jiangsu Yanghe Distillery Co., Ltd. RMB common
－The first phase of the core 9,118,384 shares 9,118,384
backbone shareholding plan
Description of the connected
relationship or concerted action
among the top 10 shareholders
of unrestricted tradable shares,
NO
and between the top 10
shareholders of unrestricted
tradable shares and the top 10
shareholders
Explanation on the participation
of the top 10 ordinary
shareholders in the securities NO
margin trading (if any) (see Note
4)
Any of the Company’s top 10 common shareholders or top 10 non-restricted common shareholders conducted
any agreed buy-back in the reporting period?
□ Yes √ No
No such case during the current reporting period.
2. Particulars about Controlling Shareholder of the Company
Nature of controlling shareholder: local state-owned holding
Type of controlling shareholder: Corporation
Legal
Name of Controlling Date of
representative/ Organization Code Business scope
Shareholder establishment
People in charge
Sales of brewing
machinery and
equipment, various raw
and auxiliary materials,
Jiangsu Yanghe Group 91321300142334989
Yang Weiguo 8 May, 1997 equipment and parts
Co., LTD Y
required for wine
export and import
production, industrial
investment; municipal
99
public works, housing
construction projects,
tourism and cultural
industry investment.
Change of controlling shareholder during the reporting period
□ Applicable √ N/A
The Company's controlling shareholder has not changed during the reporting period.
3. Particulars about the Company’s Actual Controller & Concerted Parties
Nature of actual controller: local state-owned assets management organization
Actual controller type: Corporation
Legal
representative/ Date
Name of Actual Controller Organization Code Business scope
People in ofestablishment
charge
On behalf of suqian
Municipal people's
Government to execute the
Suqian SASAC(State-owned responsibilities of
Assets Supervision October 22, state-owned enterprise
Zhao Xiaoli N/A
and Administration 2005 investors, implementing
Commission) the supervision and
management of
state-owned assets and
state-owned enterprises.
The equity of other
domestic and foreign listed
companies controlled by N/A
the actual controller during
the reporting period
Change of the actual controller during the reporting period
□ Applicable √ N/A
No such change during the reporting period.
The ownership and controlling relationship between the actual controller of the Company and the Company is
detailed as follows:
100
The actual controller controls the company through trust or other asset management methods
□ Applicable √ N/A
4. The Company's Controlling Shareholder or the Largest Shareholder and its Concerted Action Person's
Cumulative Pledged Shares Account for 80% of the Company's Shares Held by Them
□ Applicable √ N/A
5. Particulars about Other Corporate Shareholders with Shareholding Proportion over 10%
√ Applicable □ N/A
Legal Date
Name of Actual Controller representative/ ofestablishmen Organization Code Business scope
People in charge t
Sales of daily
necessities,
biotechnology research
and development,
Jiangsu Blue Alliance Co., LTD Cong Xuenian 28 July, 2016 CNY 105.6 million furniture production,
business management
consulting services,
fruit tree planting,
pre-packaged food
101
sales.
6. Particulars on Shareholding Decrease Restrictions for the Controlling Shareholders, Actual Controller,
Restructurer or Other Committing Parties
□ Applicable √ N/A
IV. The specific implementation of share repurchases during the reporting period
The implementation progress of share repurchases
□ Applicable √ N/A
The implementation progress of reducing repurchased shares by centralized bidding
□ Applicable √ N/A
102
Section VIII Information about Preference Shares
□ Applicable √ N/A
There are no preferred shares in the company during the reporting period.
103
Section IX Information about Bonds
□ Applicable √ N/A
104
105
Section X Financial Report
I. Auditor’s report
Type ofauditreport Standard and unqualified opinion
Date of signature 27 April 2022
NameofAudit Suya Jincheng CPALLP.
No. of auditor’sreport Suya Audit [2022] No.737
Names of auditors Li Laimin ,LiYan
Auditor’s Report
To all 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 2021, consolidated income statement and income statement,
consolidated cash flow statement and cash flow statement, consolidated statement of changes in
owners' equity and statement of changes in owners' equity for the year then ended and notes to
the financial statements.
In our opinion, the attached financial statements are prepared, in all material respects, in
accordance with Accounting Standards for Business Enterprises and present fairly the financial
position of the company as at 31 December 2021 and its operating results and cash flow for the
year then ended.
Basis for opinion
We conducted our audit in accordance with China Standards on Auditing (“CSAs”) for Certified
Public Accountants. Our responsibilities under those standards are further described in the
Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are
independent of the Company in accordance with the Code of professional ethics for Certified
Public Accountants in China (“the Code”), and we have fulfilled our other ethical responsibilities
in accordance with the Code. We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance
in our audit of the consolidated financial statements of the current period. These matters were
addressed in the 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.
106
1.Recognition of revenue
Please refer to note 27, “Accounting Policies” in Note III, "Significant Accounting Policies
and Estimates" and note 37 in Note V, "main Items of the Consolidated Financial Statements".
How our audit addressed the key audit
Key aud itmatters
matter
The Company’s specific condition of Our procedures in relation to revenue recognition
revenue recognition is that revenue is included:
recognized after customer acceptance (1)Understood, tested and evaluated the
based on transfer of control. In 2021, the effectiveness of internal control of sales and cash
Company’s annual operating revenue was receipts cycle designed and executed by the
CNY25.35 billion. The amount substantial management.
and operating revenue is an important (2)Through sampling inspection of the sales
component of income statement. Therefore, contract, identified the contractual rights and
we identified operating revenue as a key obligations, evaluated the point of time of
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 note 11, “Accounting Policies” in Note III, "Significant Accounting Policies and
Estimates" and note 8 in Note V, "main Items of the Consolidated Financial Statements".
Key aud itmatters How our audit addressed the key audit
matter
As at 31 December 2021, the book value of Our procedures in relation to existence,
inventory is CNY 16.803 billion, accounting for valuation, allocation of inventories included:
24.78% of the total assets and 33.77% of all
(1) Understood, tested and evaluated the
current assets. The book value of the
effectiveness of management's design and
inventories at year end is relatively large and
implementation of inventory-related internal
accounts for a relatively large proportion of the
control.
total assets at the year end. Therefore, the
(2)Carried out the inventory analysis review
107
existence, valuation and allocation of procedure.
inventories are identified as a key audit matter. (3)Supervised the inventory at the end of the
period.
(4)Sample check of production cost calculation
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.
Those charged with governance are responsible for overseeing the Company’ 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
108
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 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’ 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 CPA LLP
Nanjing, China
109
Li Laimin
CPA of China
Li Yan,
CPA of China
27 April 2022
II. Financialstatements
Preparedby: Jiangsu Yanghe Distillery Co., Ltd.
Consolidated balance sheet
As at 31 December 2021
Unit: CNY
Item On December 31st 2021 On December 31st 2020
Current assets:
Cash and bank balances 20,955,831,010.12 7,243,186,362.29
Settlement reserves
Lending funds
Held-for-trading financial assets 10,953,894,328.01 14,301,978,905.17
Derivative financial assets
Notes receivables 663,849,328.28 613,496,333.71
Accounts receivables 1,247,949.91 4,225,230.90
Receivables for Financing 222,793,060.40
Prepayment 9,408,768.12 9,358,846.48
Premiums receivable
Reinsurance accounts receivable
Reinsurance contract reserve
Other receivables 11,520,008.85 30,318,938.67
Including: Interests receivable
Dividends receivable
Buying back the sale of financial
assets
Inventories 16,803,093,441.81 14,852,694,146.30
Contractassets
Assetsheld for sale
Non-current assets due within one
110
year
Other current assets 143,005,191.58 182,837,070.99
Total current assets 49,764,643,087.08 37,238,095,834.51
Non-current assets:
Disbursement of loans and
advances
Investment in debt instruments
Investment in other debt instruments
Long-term receivables
Long-term equity investments 32,743,397.31 29,528,377.16
Investment in other equity
instruments
Other non-current financial assets 7,635,942,149.06 6,366,958,225.81
Investment property
Fixed assets 6,276,466,308.05 6,882,953,634.34
Construction in progress 525,497,000.26 223,468,482.24
Productive biological assets
Oil and gas assets
Right-of-use Assets 19,610,113.75
Intangible assets 1,679,597,933.06 1,713,526,693.10
Development expenses
Goodwill 276,001,989.95 276,001,989.95
Long-term prepaid expenses 16,104,679.68 127,071.76
Deferred tax assets 1,385,956,896.18 925,921,403.51
Other non-current assets 186,140,639.38 209,677,594.21
Total non-current assets 18,034,061,106.68 16,628,163,472.08
Total assets 67,798,704,193.76 53,866,259,306.59
Current liabilities:
Short-term loans
Borrowings from the central bank
Loans from other banks
Financial liabilities held for trading
Derivative financial liabilities
Notes payable 30,000,000.00
Accounts payable 1,444,175,262.08 1,151,871,136.29
Advance from customer
Contract liabilities 15,804,521,430.17 8,801,346,891.32
Financial assets sold for repurchase
Customer brokerage deposits
Securities underwriting brokerage
deposits
111
Receivings from vicariously sold
securities
Employee benefits payable 536,717,129.16 196,241,487.31
Taxes payables 3,061,385,171.71 2,152,806,156.43
Other payables 1,808,838,882.26 1,556,699,290.45
Including: Interests payable
Dividends payable
Handling charges and commissions
payable
Reinsurance accounts payable
Liabilities held for sale
Non-current liabilities due within one
8,405,846.77
year
Other current liabilities 2,039,264,937.72 798,216,651.49
Total current liabilities 24,733,308,659.87 14,657,181,613.29
Non-current liabilities:
Insurance contract reserves
Long-term loans 36,360.00 36,360.00
Bonds payable
Including: Preference shares
Perpetual bonds
Lease liabilities 10,729,824.19
Long-term payable 196,694,194.53 197,049,341.93
Long-term payroll payable
Accrued liabilities
Deferred incomes 77,242,500.00 85,999,500.00
Deferred tax liabilities 299,382,397.38 456,339,414.38
Other non-current liabilities
Total non-current liabilities 584,085,276.10 739,424,616.31
Total liabilities 25,317,393,935.97 15,396,606,229.60
Shareholders'equity
Share capital 1,506,988,000.00 1,506,988,000.00
Other equity instruments
Including: preference shares
Perpetual bonds
Capital reserves 782,236,370.14 741,532,550.13
Less: Treasury shares 56,278,680.79 1,002,128,680.79
Other comprehensive incomes -5,843,990.29 -5,213,248.93
Special reserves
Surplus reserves 753,494,000.00 753,494,000.00
112
General risk reserve
Retained Earnings 39,505,614,090.53 36,489,911,363.13
Total equity attributable to
42,486,209,789.59 38,484,583,983.54
owners of the parent company
Non-controlling interests -4,899,531.80 -14,930,906.55
Total owners' equity 42,481,310,257.79 38,469,653,076.99
Total liabilities and owners'
67,798,704,193.76 53,866,259,306.59
equity
Legal representative: Zhang Liandong
Person incharge of accounting affairs: Yin Qiuming
Person in charge of accounting department: Zhao Qike
Balance sheet of parent company
As at 31 December 2021
Unit: CNY
Item Balance as at December 31 Balance as at December 31
2021 2020
Current assets:
Cash and bank balance 19,908,620,924.68 5,713,353,085.92
Held-for-trading financial assets 8,090,978,413.80 2,096,497,598.93
Derivative financial assets
Notes receivables 601,826,328.28 74,100,000.00
Accounts receivables 424,595,684.45 387,657,700.12
Receivables for Financing 10,760,000.00
Pre-payment 76,366,400.75 84,206,238.58
Other receivables 2,211,826,118.30 10,403,769,305.69
Including: Interestsreceivables
Dividends receivables 1,812,736,853.55 1,775,818,203.33
Inventories 11,289,319,403.65 10,343,443,087.16
Contract assets
Assets held for sale
Non-current assets due within one
year
Other current assets
Total current assets 42,614,293,273.91 29,103,027,016.40
Non-current assets:
Investment in debt instruments
Investment in other debt instruments
Long-term receivables
Long-term equity investments 7,994,556,728.17 7,964,291,378.23
113
Investment in other equity
instruments
Other non-current financial assets 3,598,974,759.45 2,480,599,923.11
Investment property
Fixed assets 3,990,650,393.37 4,416,370,356.00
Construction in progress 183,491,743.37 58,004,537.10
Productive biological assets
Oil and gas assets
Right-of-use assets 1,431,936.19
Intangible assets 1,181,546,201.25 1,208,261,829.54
Development expenses
Goodwill
Long-term prepaid expenses 16,104,679.68
Deferred tax assets 12,941,142.63 8,032,095.76
Other non-current assets 164,332,861.20 173,867,010.21
Total Non-current Assets 17,144,030,445.31 16,309,427,129.95
Total Assets 59,758,323,719.22 45,412,454,146.35
Current liabilities:
Short-term loans
Financial liabilities held for trading
Derivative financial liabilities
Notes payable
Accounts payables 985,248,728.21 839,199,956.37
Advance from customer
Contract liabilities 21,199,823,390.34 10,764,681,770.37
Employee benefits payable
Taxes payable 643,076,598.44 809,734,252.60
Other payables 1,842,392,622.94 186,265,132.79
Including: Interests payable
Dividends payable
Liabilities held for sale
Non-current liabilities due within one
441,857.83
year
Other current liabilities 3,300,680,288.13 1,396,504,456.42
Total current liabilities 27,971,663,485.89 13,996,385,568.55
Non-current liabilities:
Long-term loans 36,360.00 36,360.00
Bonds payable
Including: preference shares
Perpetual bonds
114
Lease liabilities 820,816.63
Long-term payables 144,104,709.73 144,254,229.73
Long-term payroll payables
Provisions
Deferred incomes 5,000,000.00 5,000,000.00
Deferred tax liabilities 248,825,948.76 387,147,470.28
Other non-currentliabilities
Totalnon-current liabilities 398,787,835.12 536,438,060.01
Total liabilities 28,370,451,321.01 14,532,823,628.56
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 1,382,332,300.94 1,341,628,480.93
Less: Treasury shares 56,278,680.79 1,002,128,680.79
Other comprehensive incomes
Special reserves
Surplus reserves 753,494,000.00 753,494,000.00
Retained Earnings 27,801,336,778.06 28,279,648,717.65
Total owners' equity 31,387,872,398.21 30,879,630,517.79
Total liabilities and owners'
59,758,323,719.22 45,412,454,146.35
equity
Consolidated Income Statement
For the year ended 31 December 2021
Unit: CNY
Item Year2021 Year2020
1.Total operating revenue 25,350,178,204.45 21,101,051,131.79
Including: Operating revenue 25,350,178,204.45 21,101,051,131.79
Interest income
Earned premium
Fee and commission income
2.Total operating costs 15,637,137,313.61 13,773,294,252.09
Including: cost of sales 6,255,397,564.10 5,851,904,596.71
Interest expense
Handling charges and commission
expenses
115
Refunded premiums
Net payments for insurance claims
Net provision for insurance contracts
Bond insurance expense
Reinsurance expenses
Taxes and surcharges 4,147,982,128.12 3,415,645,769.03
Selling and distribution expenses 3,544,364,889.54 2,603,804,157.78
General and administrative expenses 1,830,080,139.18 1,729,080,201.93
Research and Development expenses 258,458,102.63 260,094,291.03
Financial expenses -399,145,509.96 -87,234,764.39
Including: Interest expenses 603,755.58 1,964.00
Interest income 433,923,395.67 104,495,154.37
Plus: Other income 90,850,747.98 98,969,626.89
Investment income ("-" forlosses) 900,613,478.22 1,206,683,362.49
Including: income from investment in
2,948,720.95 3,940,820.47
associates and joint ventures
Disposal of financial instruments at
a mortised cost ("-" for losses)
Foreign exchange gains ("-" for
losses)
Net exposure to hedging gains ("-"for
losses)
Gains of changes in fair value (“-“ for
-721,212,806.81 1,267,682,598.52
losses)
Credit Impairment Loss (“-“ for losses) 12,627,487.28 246,482.45
Losses from asset impairment (“-“ for
-7,175,293.45 -6,196,876.85
losses)
Gains from disposal of assets ("-" for
184,684.97 45,438.89
losses)
3.Operating profits ("-" for losses) 9,988,929,189.03 9,895,187,512.09
Plus: non-operating income 20,718,383.00 25,039,870.29
Less: non-operating expenses 63,220,053.35 41,325,490.38
4.Total profits before tax ("-" for
9,946,427,518.68 9,878,901,892.00
total losses)
Less: income tax expenses 2,433,610,121.20 2,394,295,578.08
5.Net profit ("-" for net loss) 7,512,817,397.48 7,484,606,313.92
Classification by operating continuity
Net profit from continuing operation
7,512,817,397.48 7,484,606,313.92
("-" for losses)
Net profit from discontinued operation
("-" for losses)
116
Classification by owners
Attributable to owners of the parent
7,507,682,797.40 7,482,228,633.63
company
Attributable to non-controlling interests 5,134,600.08 2,377,680.29
6.Net of tax from other comprehensive
-633,966.69 -1,630,142.86
income
Net of tax from other comprehensive
income to the owner of the parent -630,741.36 -1,604,477.77
company
Other comprehensive income cannot
be re-classified into the profit and
loss:
Including: Changes in remeasured
defined benefit obligations
Share in other comprehensive income
that cannot be classified into profit and
loss under equity method
Changes in the fair value of other
equity instruments
Fair value changesin enterprise's own
creditrisk
Others
Other comprehensive income that will
-630,741.36 -1,604,477.77
be reclassified into the profit and loss
Including: Share in other
comprehensive income that will be
10,293.63 -342,416.50
classified into profit and loss under
equity method
Net gain on debt instruments at fair
value through other comprehensive
income
The amount of financial assets
reclassified into other comprehensive
income
Other debt investment credit
impairment provision
Cash flow hedging reserve
Balance arising from the translation of
-641,034.99 -1,262,061.27
foreign currency financial statements
Others
Net of tax from other comprehensive
-3,225.33 -25,665.09
income to non-controlling interests
7.Total comprehensive income 7,512,183,430.79 7,482,976,171.06
117
Total comprehensive income
attributable to owners of the parent 7,507,052,056.04 7,480,624,155.86
company
Total comprehensive income
attributable to non-controlling 5,131,374.75 2,352,015.20
interests
8.Earnings per share
(1) Basic earnings per share 5.0141 4.9843
(2) Diluted earnings per share 5.0141 4.9843
Where an enterprise is merged under the same control in the current period, the net profit
realized by the merged party before the mergeris 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 2021
Unit: CNY
Item Year 2021 Year 2020
1.Operating revenue 10,476,842,189.83 9,815,174,332.42
Less: Cost of sales 5,692,899,268.72 4,803,282,641.30
Taxes and surcharges 3,418,193,216.10 2,935,628,072.08
Selling and distribution expenses 4,350,000.19 3,062,752.15
General and administrative
953,846,877.96 886,635,671.06
expenses
Research and Development
255,876,693.41 244,483,533.34
expenses
Financial expenses -360,797,750.83 -61,151,383.38
Including: Interest expenses 80,013.55 1,964.00
Interest income 392,282,831.40 75,649,553.46
Plus: Other income 35,355,375.48 16,130,425.67
Investment income ("-" for losses) 4,025,167,004.11 6,468,741,332.69
Including: income from investment in
associates and joint ventures
Disposal of financial instruments at a
mortised cost ("-" for losses)
Net exposure to hedging gains ("-
"for loss)
Gains of changes in fair value(“-“ for
-553,286,086.09 1,350,425,088.90
losses)
118
Credit Impairment Loss( “ - “ for
1,133,079.28 1,891,472.97
losses)
Losses from asset impairment ("-" for
-6,671,650.31 -6,196,876.85
losses)
Gains from disposal of assets ("-" for
10,672.49
losses)
2. Operating profits ("-" For
4,014,182,279.24 8,834,224,489.25
Losses)
Plus: non-operating income 2,129,227.09 10,689,415.40
Less: non-operating expenses 26,922,264.60 32,071,726.22
3.Total profits before tax ("-" For
3,989,389,241.73 8,812,842,178.43
Total Losses)
Less: income tax expenses -24,278,888.68 587,325,094.40
4.Net profit ("-" For Net Loss) 4,013,668,130.41 8,225,517,084.03
Net profit from continuing operation
4,013,668,130.41 8,225,517,084.03
("-" for losses)
Net profit from discontinued
operation ("-" for losses)
5.Net of tax from other
comprehensive income
Other comprehensive income cannot
be re-classified 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
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
119
income
The amount of financial assets
reclassified into other
comprehensive income
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 4,013,668,130.41 8,225,517,084.03
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 2021
Unit: CNY
Item Year 2021 Year 2020
1.Cash flows from operating
activities
Cash received from sale of goods
36,809,670,762.29 21,527,429,733.96
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
120
Net capital increase in repurchase
business
Net cash received for the sale of
securities
Refunds of taxes and surcharges 3,754,079.47
Cash received from other operating
728,428,911.66 369,789,635.60
activities
Sub-total of cash inflows from
37,538,099,673.95 21,900,973,449.03
operating activities
Cash paid for goods purchased and
7,772,357,695.47 6,286,561,510.66
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
2,639,141,713.39 2,154,721,871.26
employees
Cash paid for taxes and surcharges 8,805,477,883.69 7,194,164,716.07
Cash paid for other operating
3,002,956,900.87 2,286,734,515.24
activities
Sub-total of cash outflows from
22,219,934,193.42 17,922,182,613.23
operating activities
Net cash flows from activities
15,318,165,480.53 3,978,790,835.80
operating
2. Cash flows from investing
activities
Cash received from disposal of
27,266,561,244.92 29,694,068,687.78
investments
Cash received from returns on
897,664,757.27 1,202,721,025.76
investments
Net cash received from disposal of
fixed assets, intangible assets and 6,072,909.38 210,268.97
other long-term assets
Net cash received from disposal of
subsidiaries and other business units
Cash received from other investing
121
activities
Sub-total of cash inflows from
28,170,298,911.57 30,896,999,982.51
investing activities
Cash paid to acquire and construct
fixed assets, intangible assets and 423,524,255.39 353,104,399.72
other long-term assets
Cash paid for investments 25,910,110,341.89 26,071,060,798.23
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
26,333,634,597.28 26,424,165,197.95
investing activities
Net cash flows from investing
1,836,664,314.29 4,472,834,784.56
activities
3. Cash flows from financing
activities
Cash received from investors 4,900,000.00
Including: cash received by
subsidiaries from investments by 4,900,000.00
minority shareholders
Cash received from borrowings
Cash received from other financing
945,850,000.00
activities
Sub-total of cash inflows from
950,750,000.00
financing activities
Cash paid for debt repayments 36,363.00
Cash paid for distribution of dividends
4,491,980,070.00 4,502,748,947.00
and profits or payment of interest
Including: dividends and profits paid
to minority shareholders by
subsidiaries
Cash paid for other financing
6,587,740.77 1,002,128,680.79
activities
Sub-total of cash outflows from
4,498,567,810.77 5,504,913,990.79
financing activities
Net cash flows from financing
-3,547,817,810.77 -5,504,913,990.79
activities
4. Effect of fluctuation in exchange
-3,194,795.97 -3,670,115.95
rate on cash and cash equivalents
5. Net increase in cash and cash
13,603,817,188.08 2,943,041,513.62
equivalents
122
Plus: balance of cash and cash
equivalents at the beginning of the 7,243,186,362.29 4,300,144,848.67
period
6. Balance of cash and cash
equivalents at the end of the 20,847,003,550.37 7,243,186,362.29
period
Cash flow statements of the parent company
For the year ended 31 December 2021
Unit: CNY
Item Year2021 Year2020
1. Cash flows from operating
activities
Cash received from sale of goods
23,589,835,408.72 7,298,161,290.23
and rendering of services
Refunds of taxes and surcharges 3,748,884.67
Cash received from other
10,226,189,295.58 115,821,893.81
operating activities
Sub-total of cash inflows from
33,816,024,704.30 7,417,732,068.71
operating activities
Cash paid for goods purchased
6,502,601,435.75 4,754,965,644.22
and services received
Cash paid to and on behalf of
1,219,405,817.53 976,080,459.90
employees
Cash paid for taxes and
4,301,849,478.48 3,310,811,322.45
surcharges
Cash paid for other operating
287,132,938.87 658,812,311.64
activities
Sub-total of cash outflows from
12,310,989,670.63 9,700,669,738.21
operating activities
Net cash flows from activities
21,505,035,033.67 -2,282,937,669.50
operating
2. Cash flows from investing
activities
Cash received from disposal of
10,753,858,262.70 14,332,925,799.75
investments
Cash received from returns on
3,988,248,353.89 4,692,923,129.36
investments
Net cash received from disposal of
fixed assets, intangible assets and 2,464,467.97 53,146.71
other long-term assets
123
Net cash received from disposal of
subsidiaries and other business
units
Cash received from other investing
activities
Sub-total of cash inflows from
14,744,571,084.56 19,025,902,075.82
investing activities
Cash paid to acquire and construct
fixed assets, intangible assets and 189,141,129.66 165,081,329.81
other long-term assets
Cash paid for investments 18,425,100,000.00 9,100,000,000.00
Net cash paid to acquire
subsidiaries and other business
units
Cash paid for other investing
activities
Sub-total of cash outflows from
18,614,241,129.66 9,265,081,329.81
investing activities
Net cash flows from investing
-3,869,670,045.10 9,760,820,746.01
activities
3. Cash flows from financing
activities
Cash received from investors
Cash received from loans
Cash received from other
945,850,000.00
financing activities
Sub-total of cash inflows from
945,850,000.00
financing activities
Cash paid for debt repayments 36,363.00
Cash paid for distribution of
dividends and profits or payment 4,491,980,070.00 4,502,748,947.00
of interest
Cash paid for other financing
703,669.72 1,002,128,680.79
activities
Sub-total of cash outflows from
4,492,683,739.72 5,504,913,990.79
financing activities
Net cash flows from financing
-3,546,833,739.72 -5,504,913,990.79
activities
4. Effect of fluctuation in exchange
-1,036,905.61 -1,292,596.02
rate on cash and cash equivalents
5. Net increase in cash and cash
14,087,494,343.24 1,971,676,489.70
equivalents
Plus: balance of cash and cash 5,713,353,085.92 3,741,676,596.22
124
equivalents at the beginning of the
period
6. Balance of cash and cash
equivalents at the end of the 19,800,847,429.16 5,713,353,085.92
period
125
Consolidated statement of changes in shareholders' equity
For the year ended 31 December 2021
Unit: CNY
Year 2021
Equity attributable to owners of the parent company Non- Total
Item Other equity Other Genera controllin sharehold
Less ： g ers'
Share capital instruments Capital Comprehen Special Surplus l risk Undistribute Others Subtota
Treasur interest equity
Preferred Perp reserve sive reserve reserve reserve d profit l
Other y stock
stock etual Income s
s
bond
1. Balance as
38,484,5
at 31 1,506,988,000 741,532,55 1,002,12 -5,213,248.9 753,494,0 36,489,911,3 -14,930,90 38,469,653
83,983.5
December of .00 0.13 8,680.79 3 00.00 63.13 6.55 ,076.99
4
last year
Plus:
adjustments for
changes in
accounting
policies
Adjustments
for correction
of accounting
errors in prior
year
Business
combinations
under
common
control
126
Others
2.Balance as at 38,484,5
1,506,988,000 741,532,55 1,002,12 -5,213,248.9 753,494,0 36,489,911,3 -14,930,90 38,469,653
January 1 of 83,983.5
.00 0.13 8,680.79 3 00.00 63.13 6.55 ,076.99
the current year 4
3.Increases/de
creases in the
40,703,820 -945,850 3,015,702,72 4,001,62 10,031,37 4,011,657,
current year -630,741.36
.01 ,000.00 7.40 5,806.05 4.75 180.80
( “ - ” for
decreases)
(1) Total
7,507,682,79 7,507,05 5,131,374. 7,512,183,
comprehensiv -630,741.36
7.40 2,056.04 75 430.79
e income
(2) Capital
contributed or 40,703,820 -945,850 986,553, 4,900,000. 991,453,82
reduced by .01 ,000.00 820.01 00 0.01
owners
Capital
4,900,000. 4,900,000.
contributions
00 00
by owners
Capital
contributions
by other
equity
instruments
holders
Amounts of
share-based
40,703,820 -945,850 986,553, 986,553,82
payments
.01 ,000.00 820.01 0.01
recognized in
owners' equity
127
Others
(3) Profit -4,491,9
-4,491,980,0 -4,491,980,
distribution 80,070.0
70.00 070.00
0
Withdrawal of
surplus
reserves
Withdrawal of
general risk
reserve
Profit
-4,491,9
distributed to -4,491,980,0 -4,491,980,
80,070.0
owners (or 70.00 070.00
0
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
128
Surplus
reserves
offsetting
losses
Amounts of
Changes in
setting benefit
plan transfer
to retained
earnings
Other
comprehensiv
e income
transferred to
retained
earnings
Others
(5) Special
reserves
Withdrawal for
the period
Use for the
period
Others
4. Balance as 1,506,988,000 782,236,37 56,278,6 -5,843,990.2 753,494,0 39,505,614,0 42,486,2 -4,899,531 42,481,310
at 31 .00 0.14 80.79 9 00.00 90.53 09,789.5 .80 ,257.79
129
December of 9
the current year
Year 2020
Equity attributable to owners of the parent company Non- Total
Item Other equity Gener controlli sharehol
Less ： Other a ng ders'
Share capital instruments Capital Special Surplus Undistribut Other Subtotal
Treasur Comprehen
Perpe reserve reserve reserve l risk ed profit s interest equity
Preferre Other y stock sive Income
tual reserv s
d stock s
bond e
1. Balance as
at 31 1,506,988,000.0 741,532,55 -3,608,771.1 753,494,0 33,510,429,7 36,508,835, -17,282,9 36,491,55
December of 0 0.13 6 00.00 12.50 491.47 21.75 2,569.72
last year
Plus:
adjustments
for changes
in
accounting
policies
Adjustments
for
correction of
accounting
errors in
prior year
Business
combination
s under
130
common
control
Others
2. Balance as
at January 1 1,506,988,000.0 741,532,55 -3,608,771.1 753,494,0 33,510,429,7 36,508,835, -17,282,9 36,491,55
of the current 0 0.13 6 00.00 12.50 491.47 21.75 2,569.72
year
3.Increases/
decreases in
1,002,12 -1,604,477.7 2,979,481,65 1,975,748,4 2,352,01 1,978,100
the current
8,680.79 7 0.63 92.07 5.20 ,507.27
year ( “ - ” for
decreases)
(1) Total
-1,604,477.7 7,482,228,63 7,480,624,1 2,352,01 7,482,976
comprehens
7 3.63 55.86 5.20 ,171.06
ive income
(2) Capital
contributed 1,002,12 -1,002,128, -1,002,12
or reduced 8,680.79 680.79 8,680.79
by owners
Capital
contribution
s by owners
Capital
contribution
s by other
equity
Instruments
holders
131
Amounts of
share-based
payments
recognized
in owners'
equity
Others 1,002,12 -1,002,128, -1,002,12
8,680.79 680.79 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 surplus
reserves
Withdrawal
of general
risk reserve
Profit
distributed
to owners -4,502,746,9 -4,502,746, -4,502,74
(or 83.00 983.00 6,983.00
shareholder
s)
Others
(4) Internal
carry-forwar
d of owners'
equity
132
Conversion
of capital
reserves
into paid-in
capital
Conversion
of surplus
reserves
into paid-in
capital
Surplus
reserves
offsetting
losses
Carry-forwa
rd of
retained
earnings
from
changes in
defined
benefit
plans
Other
comprehens
ive income
transferred
to retained
earnings
133
Others
(5) Special
reserves
Withdrawal
for the
period
Use for the
period
(6) Others
4. Balance as
at 31
1,506,988,000.0 741,532,55 1,002,12 -5,213,248.9 753,494,0 36,489,911,3 38,484,583, -14,930,9 38,469,65
December of
0 0.13 8,680.79 3 00.00 63.13 983.54 06.55 3,076.99
the current
year
Statement of changes in shareholders' equity of parent company
For the year ended 31 December 2021
Unit: CNY
Year2021
Item Other equity instruments
Share Capital Less ： Other Special Total
Surplus Undistributed Other
capital Preferred Perpetual reserve Treasury Comprehe reserve shareholder
Others reserve profit s
stock bond stock nsive
s' equity
Income
1. Balance as at 31 1,506,988,0 1,341,628,480 1,002,128, 753,494,000. 28,279,648,717 30,879,630,51
134
December of last year 00.00 .93 680.79 00 .65 7.79
Plus: adjustments for
changes in accounting
policies
adjustments for
correction of accounting
errors in prior year
Others
2. Balance as at
1,506,988,0 1,341,628,480 1,002,128, 753,494,000. 28,279,648,717 30,879,630,51
January 1 of the current
00.00 .93 680.79 00 .65 7.79
year
3.Increases/ decreases
-945,850,0 -478,311,939.5 508,241,880.4
in the current year (“ -” 40,703,820.01
00.00 9 2
for decreases)
(1) Total comprehensive 4,013,668,130. 4,013,668,130
income 41 .41
(2) Capital contributed -945,850,0 986,553,820.0
40,703,820.01
or reduced by owners 00.00 1
Capital contributions by
owners (common stock)
Capital contributions by
other equity instruments
holders
Amounts of share-based
-945,850,0 986,553,820.0
payments recognized in 40,703,820.01
00.00 1
owners' equity
Others
135
(3) Profit distribution -4,491,980,070. -4,491,980,07
00 0.00
Withdrawal of surplus
reserves
Profit distributed to
-4,491,980,070. -4,491,980,07
owners (or
00 0.00
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
Amounts of Changes in
setting benefit plan
transfer to retained
earnings
Other comprehensive
income transferred to
retained earnings
Others
(5) Special reserves
136
Withdrawal for the
period
Use for the period
(6) Others
4. Balance as at 31
1,506,988,0 1,382,332,300 56,278,680 753,494,000. 27,801,336,778 31,387,872,39
December of the current
00.00 .94 .79 00 .06 8.21
year
Statement of Changes in Shareholders' Equity
For the year ended 31 December 2020
Unit: CNY
Year 2020
Item Share Other equity instruments Capital Less： Other Special Surplus Undistributed Other Total
capital reserve Treasury Comprehen reserv reserve profit s shareholder
Preferred Perpetual
Others stock sive e
stock bond s' equity
Income
1. Balance as at 31 1,506,988,0 1,341,628,480 753,494,000. 24,556,878,616 28,158,989,09
December of last year 00.00 .93 00 .62 7.55
Plus: adjustments for
changes in accounting
policies
adjustments for
correction of accounting
errors in prior year
Others
137
2. Balance as at January 1,506,988,0 1,341,628,480 753,494,000. 24,556,878,616 28,158,989,09
1 of the current year 00.00 .93 00 .62 7.55
3.Increases/ decreases
1,002,128,6 3,722,770,101. 2,720,641,420
in the current year (“ -”
80.79 03 .24
for decreases)
(1) Total comprehensive 8,225,517,084. 8,225,517,084
income 03 .03
(2) Capital contributed 1,002,128,6 -1,002,128,68
or reduced by owners 80.79 0.79
Capital contributions by
owners (common stock)
Capital contributions by
other equity instruments
holders
Amounts of share-based
payments recognized in
owners' equity
Others 1,002,128,6 -1,002,128,68
80.79 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
00 3.00
shareholders)
Others
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(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
Amounts of Changes in
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
139
4. Balance as at 31
1,506,988,0 1,341,628,480 1,002,128,6 753,494,000. 28,279,648,717 30,879,630,51
December of the current
00.00 .93 80.79 00 .65 7.79
year
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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 13 October 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 27October 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.
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 beapproved by law must be
approved according to related departments )
Parent company of the Company:JiangsuYanghe 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
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Jiangsu Shuanggou Wine Sales Co., Ltd Newly establishment
Jiangsu Jiushang Internet Technology Co., LTD Newly establishment
Jiangsu Yanghe Cultural Tourism Co., Ltd Newly establishment
Jiangsu Yanghe Cultural Tourism Operation Co., LTD Newly establishment
Siyang Blue Sky Packaging Service Co., Ltd Newly establishment
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”.
I. 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.
II. Significant accounting policies and accounting estimates
The disclosure requirements of food and wine manufacturing-related industries in the
Guidelines for Self-regulation NO.3 of Listed Companies of Shenzhen Stock Exchange -Industry
Information Disclosure shall be observed
(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.
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.
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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 involvingenterprises 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 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.
c) 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.
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
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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.
d)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.
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.
144
(3) Reflection of excess losses incurred to a subsidiary in the consolidated financialstatements
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.
(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 incomes, 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 incomes, 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 accountingtreatment 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 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.
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(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.
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.
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:
146
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 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 amortized 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 recognized in profit or loss for
the period. For other categories of financial assets, relevant transaction costs are included in the
amount initially recognized. 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 recognized based on the amount of
consideration expected to be entitled to receive according to Accounting Standard for Business
147
Enterprises No. 14 - Revenue.
①Financial assets measured at amortized cost
These assets are subsequently measured at amortized cost using the effective interest
method after initial recognition. Gains/losses on financial assets that are measured at amortized
cost and are not a part of any hedging relationship shall be recognized in profit or loss when the
financial asset is derecognised or reclassification or amortized using the effective interest method
or recognized the impairment allowance.
②Financial 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 recognized in profit or loss; other gains and losses are recognized 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 recognize
the relevant dividend income of such financial assets into the current profit and loss, and
recognize 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 recognized 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.
①Financial liabilities measured at fair value through profit or loss
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 recognized 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
148
Company retains substantially all the risks and rewards of ownership of the financial asset, it
continues to recognize 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 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 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
149
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 recognize 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 receivable, contract assets, lease receivables and Income-related notes
receivable that do not contain significant financing components or do not consider the financing
components in the contracts for no more than one year old, the company adopts simplified
approach and shall always measure the loss allowance at anamount equal to lifetime expected
credit losses
For accounts receivable, contract assets and lease receivables are defined by the Accounting
Standards for Business Enterprises No. 21-Leasing that include significant financing components,
the company recognizes a loss allowance equal to the lifetime expected credit losses.
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, contract assets, lease receivables and other receivables
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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 bill For notes receivable divideds into portfolio, the bank acceptance bill and
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.
For accounts receivable divideds into risk portfolio, the Company refers to the
historical credit loss experience, and combines the current situation and the forecast of
Risk Portfolio future economic situation and prepares a comparison table between overdue ages of
accounts receivable and expected credit loss rate of the whole duration to calculate the
expected credit loss.
The Company classifies items without significant recovery risk receivables as other
Other Portfolio 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.
For Lease receivables classified into combinations, the expected credit loss is
Lease receivable calculated through the default risk exposure and the expected credit loss rate of
the whole duration according to the historical credit loss experience, the current
situation and the forecast of the future economic situation
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
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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.
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.
For the determination method and accounting treatment method of expected credit loss of
contract assets, refer to "Impairment of Financial Assets" in Note 10 (8).
13. Contract costs
Assets related to contract costs include contract acquisition costs and contract performance
costs.
The cost of contract fulfillment incurred by the company to perform the contract shall be
recognized as an asset if the following conditions are met:
(1) The cost is directly related to a current or anticipated contract.
(2) The cost increases the company's resources for future performance obligations.
(3) The cost is expected to be recovered.
The incremental cost incurred by the company in obtaining the contract is expected to be
recovered shall be recognized as an asset as the cost of obtaining the contract.
The Company amortizes the asset related to the contract cost on the same basis as the
recognition of the revenue of the goods or services related to the asset, and includes it inthe
profit or cost for the current period.
If the book value of the assets related to the contract cost is higher than the difference
between the following two items, the Company will make an impairment provision for the excess
part and confirm it as the impairment loss of the assets:
(1) The transfer of the goods or services related to the asset less the estimated cost;
(2) Estimated impending costs for the transfer of the related goods or services.
If the impairment provision of the above asset is subsequently reversed, the book value of
the asset after reversal shall not exceed the carrying amount the asset would have reached on the
date of reversal had the provision for impairment been not made.
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14. Assets held for sale
Assets held for sale
a) Scope of a non-current asset held 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-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.
b) Recognition criteria of a non-current asset held 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:
i. The assets or disposal group must be available for immediate sale in its presentcondition
subject only to terms that are usual and customary for sales of such assets or disposal groups;
ii. Its sale must be highly probable. The Company has already made a decision todispose 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.
c) Accounting treatment and presentation of a non-current asset held for sale and adisposal
group
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.
When the Company measure a non-current asset or disposal group held for saleinitially 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.
No matter the asset is classified as individual asset held for sale or assetbelonging 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.
The Company is committed to a sale plan involving loss of control of subsidiaryshall 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.
Termination of business operations
Termination means any separate part which satisfies one of the following conditions and
which has been disposed of or classified as being held for sale:
a) The component represents a separate principal business or a separate principal area of
operation;
b) The component is part of an associated plan to dispose of a separate principal business or
a separate principal operating area;
c) The component is a subsidiary acquired specifically for resale.
15. Long-term equity investment
(1) Recognition of the initial investment costs of long-term equity investments
a) For long-term equity investments from business combinations, the initial investment cost
shall be recognized in accordance with the provisions mentioned in Notes 3(5). Accounting
Method for Long-term Equity Investment from Business Combinations under Common Control
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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 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
i. If accompany can control an investee, namely investment in subsidiary, the long-term equity
investment shall be measured under the cost method.
ii. 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
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book value of the long-term equity investments. When recognizing the net profits and losses and
other comprehensive income of the investee that the Company shall enjoy or bear, the Company
shall make a recognition and calculation based on the net book profits and losses of the investee
after appropriate adjustments. However, where the Company is unable to obtain the relevant
information due to failure to reasonably determine the fair value of the investee’s identifiable
assets, minor difference between the investee’s identifiable assets and the book value thereof or
other reasons, the profits or losses on the investments shall be directly calculated and recognized
based on the net book profits and losses of the investee. The Company shall calculate the part
distributed from cash dividends or profits declared by the investee and correspondingly reduce
the book value of the long-term equity investments.
When recognizing the income from investments in associates and joint ventures, the
Company shall write off the part of incomes from internal unrealized transactions between the
Company and associates and joint ventures which are attributable to the Company and recognize
the profit and loss on investments on such basis. Where the losses on internal transactions
between the Company and the investee 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 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.
b) 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.
16. 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;
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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
(Yrs) rate (%) rate (%)
Buildings Straight-linemethod 5
20 ~25 3.80 ~4.75
And constructions
Machinery equipments Straight-linemethod 10 5 9.50
Transportation 10
Straight-linemethod 5 9.50
equipments
Other equipments Straight-linemethod 8 5 11.88
17. 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 fixedassets
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.
18. 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.
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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
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.
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.
19.Right-of-use assets
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An asset that represents a lessee’s right to use an underlying asset for the lease term.
At the commencement date of the lease term, the company recognizes the right-of-use assets
and lease liabilities of all leases except for short-term leases and leases of low-value assets, and
confirm the depreciation and interest expenses respectively during the lease term.The Company
charges the lease payment of the short-term lease and the low-value asset lease as the current
loss and profit or the relevant asset costs on a straight-line basis over each period during the lease
term.
(1) Initial measurement
At the commencement date, a lessee shall measure the right-of-use asset at cost. The cost of
the right-of-use asset shall comprise:
① the amount of the initial measurement of the lease liability,
② any lease payments made at or before the commencement date, less any lease incentives
received, which is the incremental cost for the lease
③ any initial direct costs incurred by the lessee;
④ an estimate of costs to be incurred by the lessee in dismantling and removing the
underlying asset, restoring the site on which it is located or restoring the underlying asset tothe
condition required by the terms and conditions of the lease, unless those costs are incurredto
produce inventories
(2) Subsequent measurement
a) Measurement basis
After the commencement date, a lessee shall measure the right-of-use asset applying a
costmodel. To apply a cost model, a lessee shall measure the right of use asset at cost less
anyaccumulated depreciation and any accumulated impairment losses; and adjusted for
anyremeasurement of the lease liability specified in the lease term.
b) Depreciation of the right-of-use assets
Since the commencement date, the Company shall depreciate the right-of-use asset.
Depreciation shall be made in the month of lease commencement and shall be accounted inthe
cost of related asset or profit and loss. When determining the depreciation method, straight line
method is used for depreciationbased on the expected way of consuming of economic benefit
related to the right-of-use asset. The Company shall depreciate the right-of-use
assetsubsequently based on the book valueafter impairment loss deduction if impairment is
applicable.
20. Intangible assets
(1) Measurement, useful life and impairment test
a) Initial measurement of intangible assets
i. 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.
ii. 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 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.
b) Subsequent measurement of intangible assets
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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.
i. 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 Annual amortization
Estimated useful life (Yrs)
assets residualvalue 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.
ii. 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.
c) Estimates of useful lives of intangible assets
i. 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.
ii. 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.
iii. 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 forcapitalization
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:
i. It is technically feasible to finish intangible assets for use or sale;
ii.It is intended to finish and use or sell the intangible assets;
iii. The usefulness of 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
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or the intangible assets will be used internally;
iv.It is able to finish the development of the intangible assets, and able to use or sell the
intangible assets, with the support of sufficient technologies, financial resources and other
resources;
v.The expenditure attributable to the intangible asset during its development phase can be
measured reliably.
21. 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, right-of-use assets, 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.
22. 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.
23. 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
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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.
24. 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 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 includes 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 costs;
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.
25. Lease liabilities
(1) Initial measurement
At the commencement date, a lessee shall measure the lease liability at the present value
ofthe lease payments that are not paid at that
a) Lease payment
The lease payments included in the measurement of the lease liability comprise the
followingpayments for the right to use the underlying asset during the lease term that are not
paid at thecommencement date:
i. fixed payments (including in-substance fixed payments) less anylease incentives receivable;
ii. variable lease payments that depend on an index or a rate, initially measured using the
index or rate as at the commence date;
iii. The exercise price of the purchase option, if the Company is reasonably certain to exercise
that option;
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iv. Payments of penaltiesfor terminating the lease, if the lease term reflects the lessee
exercising an option to terminate the lease;
v. The amount expected to be paid based on the residual value of the guarantee provided by
the company.
b)The discount rate
When calculating the present value of lease payments, the interest rate in the lease is
determined as the discount rate. If the rate cannot be readily determined, the Company shall use
the lessee’s incremental borrowing rate, which is the rate of interest that a lessee wouldhave to
pay to borrow over a similar term, and with a similar security, the funds necessary toobtain an
asset of a similar value to the right-of-use asset in a similar economic environment. The
incremental borrowing rate is based on the bank lending rate and adjusted by the Company
considering relevant factors.
(2) Subsequent measurement
After the commencement date, the Company shall measure the lease liability by:
① increasing the carrying amount to reflect interest on the lease liability;
② reducing the carrying amount to reflect the lease payments made;
③ remeasuring the carrying amount to reflect any reassessment or lease modifications
After the lease commencement date, lease payment shall be remeasured if the
followingcircumstances incurred, and the lease liability shall be remeasured at the present value
whichis based on the revised lease payment and revised discounting rate. The Company
shallremeasure the lease liability to reflect changes to the lease payments. A lessee shall
recognizethe amount of the remeasurement of the lease liability as an adjustment to the
right-of-useasset. However, if the carrying amount of the right-of-use asset is reduced to zero and
there isa further reduction in the measurement of the lease liability, a lessee shall recognize any
remaining amount of the remeasurement in profit or loss.
① change of in-substance fixed payments (subject to original discounting rate)
②change of amounts expected to be payable under residual value guarantees
③ change of an index or a rate used for future lease payments
④ change in assessment of a buy option
The interest expense during each period of the lease term shall be included in the current
profit and loss, except for those that should be capitalized.
26.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:
a) This obligation is a present obligation of the Company;
b) The settlement of such obligation is likely to result in outflow of economic benefitsfrom 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 ofoccurrence 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 bedetermined
according to all the possible outcomes with their relevant probabilities.
27. Share-based payment
Share-based payment is classified as equity-settled share-based payment and cash- settled
share-based payment.
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(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 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 be exercised, 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).
28.Revenue
Accounting policies adopted in revenue recognition and measurement
(1) Principle and measurement method of revenue recognition
a) 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.
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b) 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 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.
(2) Specific revenue recognition policies
a) 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.
b) 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.
29. 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;
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 ofthe received
or receivable amount.
b) If a government grant is a non-monetary asset, it shall be measured at its fairvalue; 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).
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(4) Accounting treatment method of government grants
a) The government grants related to assets shall be set off of the book value ofthe 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 accordingto 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.
c) Government grants related to assets and related to income are receivedtogether, shall be
treated separately. If it is hard to separate, government grants shall be treated as related to
income as a whole.
d) Government grants related to daily operation shall be recoded in otherincome 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.
e) Government grants already recognized required to be refunded shall behandled according
to the following circumstances:
i. If the grants have written down the book value of assets, the book valueshall be adjusted.
ii. If there is related deferred income, the book value of relevant deferredincome is written
down and the exceeding part is recorded in the currentprofit and loss.
iii. If there is no related deferred income, the exceeding part is directly included in the current
profit and loss.
30. 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
165
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.
(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.
31. Lease
(1) Accounting treatment for operating lease
According to the nature of the assets, the company will include the assets used as operating
lease in the relevant items of the balance sheet. The Company shall add initial direct costs
incurred in obtaining an operating lease to thecarrying amount of the underlying asset and
recognize those costs as an expense over thelease term on the same basis as the lease income.
Lease payment received shall be recognized as lease income on a straight-line basis within
theperiod. The depreciation policy for depreciable underlying fixed assets subject to operating
leasesshall be consistent with the lessor ’ s normal depreciation policy for similar assets.
Amortization for other underlying assets subject to operating lease shall be on
reasonablesystematic basis. The variable lease payments obtained by the company related to
operating leases, which arenot included in the lease payment received, shall be included in the
current profit and losswhen actually incurred.
A lessor shall account for a modification to an operating lease as a new lease from
theeffective date of the modification, considering any prepaid or accrued lease payments
relatingto the original lease as part of the lease payments for the new lease.
(2) Accounting treatment for finance lease
At the commencement date of the lease term, the Company recognizes the finance lease
receivable at the net value of leaseinvestment (the sum of the unguaranteed residual value and
the present value of the lease receipts not yet received at thecommencement date of the lease
term that are discounted at the interest rate in the lease) and derecognizes the finance lease
asset. Over the term of the relevant lease, the Company calculates and recognizes interest income
based on the interest rate in the lease.
The company shall account for a finance lease modification as a separate lease if both
condition are satisfied: ① the modification increases the scope of the lease by adding the right
to use one or more underlying assets or extending the contractual lease term. ② the
consideration for the lease increases by an amount commensurate with the stand-alone pricefor
the increase in scope or the contractual lease term extension and any appropriateadjustments to
that stand-alone price to reflect the circumstances of the particular contract.
32. Changes in significant accounting policies and accounting estimates
(1) Changes in significant accounting policies
√ Applicable N/A
Contentandreasonofchangesin Procedure for examination
Notes
accountingpolicies and approval
166
Since January 1, 2021 (the “First Adoption
Date”), the Company has implemented the According to the
Accounting Standards for Business Enterprises requirements of the new
No. 21 – Leases revised by the Ministry of leasing standards, the
Finance in December ,2018 (hereinafter referred comparative financial
to as the “New Lease Standards,” and the Lease
Standards before the revision referred to as the
statements do not be
“Original Lease Standards”). retroactively adjusted.
(2) Changes in significant accounting estimates.
Applicable √ N/A
(3) Since 2021, the first implementation of new leasing standards will be adjusted to
implement the items related to financial statements at the beginning of the year.
√ Applicable N/A
Whether it is needed to adjust the balance sheet accounts at the beginning of the year.
√ Yes □No
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Consolidated Balance Sheet
Unit: CNY
Balance as at 31 Balance as at 1
Assets Adjustment
December 2020 January 2021
Current assets:
Cash and Bank Balances 7,243,186,362.29 7,243,186,362.29
Settlementreserves
Lending funds
Held-for-trading financial
14,301,978,905.17 14,301,978,905.17
assets
Derivative financialassets
Notes receivables 613,496,333.71 613,496,333.71
Accountsreceivables 4,225,230.90 4,225,230.90
Account receivables financing
Prepayment 9,358,846.48 9,358,846.48
Premiums receivable
Reinsurance accounts
receivable
Reinsurance contract reserve
Other receivables 30,318,938.67 30,318,938.67
Including:Interests receivable
Dividends receivable
Buying back the sale of
financial assets
Inventories 14,852,694,146.30 14,852,694,146.30
Contractassets
Assetsheld for sale
Non-current assetsdue
withinone year
Other currentassets 182,837,070.99 182,837,070.99
Total current assets 37,238,095,834.51 37,238,095,834.51
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 29,528,377.16
Investment in other equity
instruments
Other non-current financial 6,366,958,225.81 6,366,958,225.81
assets
Investment property
Fixedassets 6,882,953,634.34 6,882,953,634.34
Construction in progress 223,468,482.24 223,468,482.24
Productive biological assets
Oil andgasassets
Right-of-use Assets 8,610,167.63 8,610,167.63
Intangible assets 1,713,526,693.10 1,713,526,693.10
Development expenses
Goodwill 276,001,989.95 276,001,989.95
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Long-term prepaid expenses 127,071.76 127,071.76
Deferred tax assets 925,921,403.51 925,921,403.51
Other non-currentassets 209,677,594.21 209,677,594.21
Totalnon-current assets 16,628,163,472.08 16,636,773,639.71 8,610,167.63
Total assets 53,866,259,306.59 53,874,869,474.22 8,610,167.63
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 1,151,871,136.29
Advance from customer
Contract liabilities 8,801,346,891.32 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 196,241,487.31 196,241,487.31
Taxes payable 2,152,806,156.43 2,152,806,156.43
Other payables 1,556,699,290.45 1,556,699,290.45
Including: Interests payable
Dividends payable
Handling charges and
commissions payable
Reinsurance accounts
payable
Liabilities held for sale
Non-current liabilities due 2,083,914.78 2,083,914.78
within one year
Other current liabilities 798,216,651.49 798,216,651.49
Total current liabilities 14,657,181,613.29 14,659,265,528.07 2,083,914.78
Non-current liabilities:
Insurance contract reserves
Long-term loans 36,360.00 36,360.00
Bonds payable
Including: Preference
shares
Perpetual bonds
Lease liabilities 6,526,252.85 6,526,252.85
Long-term payables 197,049,341.93 197,049,341.93
Long-term payroll payables
Accrued liabilities
Deferred incomes 85,999,500.00 85,999,500.00
Deferred tax liabilities 456,339,414.38 456,339,414.38
Other non-current liabilities
Totalnon-currentliabilities 739,424,616.31 745,950,869.16 6,526,252.85
Total liabilities 15,396,606,229.60 15,405,216,397.23 8,610,167.63
Shareholders' equity
Sharecapital 1,506,988,000.00 1,506,988,000.00
Other equity instruments
Including: preference shares
Perpetual bonds
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Capital reserves 741,532,550.13 741,532,550.13
Less: Treasury shares 1,002,128,680.79 1,002,128,680.79
Other comprehensive incomes -5,213,248.93 -5,213,248.93
Special reserves
Surplus reserves 753,494,000.00 753,494,000.00
General riskreserve
Retained Earnings 36,489,911,363.13 36,489,911,363.13
Total equity attributable
to owners of the parent 38,484,583,983.54
company
Non-controlling interests -14,930,906.55 -14,930,906.55
Total owners' equity 38,469,653,076.99 38,469,653,076.99
Total liabilities and owners' 53,866,259,306.59 53,874,869,474.22 8,610,167.63
equity
Adjustmentstatement
Balance Sheet of Parent Company
Unit: CNY
Balanceasat31Decem
Assets Balanceasat1January2021 Adjustment
ber2020
Currentassets:
Cash and Bank balances 5,713,353,085.92 5,713,353,085.92
Held-for-trading financial
2,096,497,598.93 2,096,497,598.93
assets
Derivative financial assets
Notes receivable 74,100,000.00 74,100,000.00
Accounts receivable 387,657,700.12 387,657,700.12
Receivables for Financing
Prepayment 84,206,238.58 84,206,238.58
Other receivables 10,403,769,305.69 10,403,769,305.69
Including: Interests receivable
Dividends receivable 1,775,818,203.33 1,775,818,203.33
Inventories 10,343,443,087.16 10,343,443,087.16
Contract assets
Assets held for sale
Non-current assets due within
one year
Other current assets
Total current assets 29,103,027,016.40 29,103,027,016.40
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 2,480,599,923.11 2,480,599,923.11
assets
Investment property
Fixed assets 4,416,370,356.00 4,416,370,356.00
Construction in progress 58,004,537.10 58,004,537.10
Productive biological assets
170
Oil and gas assets
Right-of-use assets 1,886,330.63 1,886,330.63
Intangible assets 1,208,261,829.54 1,208,261,829.54
Development expenses
Goodwill
Long-term deferred expenses
Deferred tax assets 8,032,095.76 8,032,095.76
Other non-currentassets 173,867,010.21 173,867,010.21
Total Non-current Assets 16,309,427,129.95 16,311,313,460.58 1,886,330.63
Total Assets 45,412,454,146.35 45,414,340,476.98 1,886,330.63
Current liabilities:
Short-termloans
Financial liabilities held for
trading
Derivative financial liabilities
Notes payable
Accounts payable 839,199,956.37 839,199,956.37
Advance from customer
Contract liabilities 10,764,681,770.37 10,764,681,770.37
Employee benefits payable
Taxes payable 809,734,252.60 809,734,252.60
Other payables 186,265,132.79 186,265,132.79
Including: Interests payable
Dividends payable
Liabilities held for sale
Non-current liabilities due 421,821.31 421,821.31
within one year
Other current liabilities 1,396,504,456.42 1,396,504,456.42
Total current liabilities 13,996,385,568.55 13,996,807,389.86 421,821.31
Non-current liabilities:
Long-term loans 36,360.00 36,360.00
Bonds payable
Including: preference shares
Perpetual bonds
Lease liabilities 1,464,509.32 1,464,509.32
Long-term payables 144,254,229.73 144,254,229.73
171
Long-term payroll payables
Provisions
Deferred incomes 5,000,000.00 5,000,000.00
Deferred tax liabilities 387,147,470.28 387,147,470.28
Other non-current liabilities
Totalnon-current liabilities 536,438,060.01 536,438,060.01
Total liabilities 14,532,823,628.56 537,902,569.33 1,886,330.63
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 shares 1,002,128,680.79 1,002,128,680.79
Other comprehensive
incomes
Special reserves
Surplus reserves 753,494,000.00 753,494,000.00
Retained earnings 28,279,648,717.65 28,279,648,717.65
Total owners' equity 30,879,630,517.79 30,879,630,517.79
Total liabilities and owners' 45,412,454,146.35 45,414,340,476.98 1,886,330.63
equity
Adjustment statement
For operating lease prior to the date of initial adoption, the company measured the lease liability
on the date of initial adoption based on the current value of the remaining lease payments
discounted according to the lessee's incremental borrowing rate on the date of initial adoption
and measured the right-of-use asset at an amount equal to the lease liability. The weighted
average of the incremental borrowing rate adopted was 4.75%.
III. Taxes
1. Major tax types and rates
Tax type Taxation basis Tax rate
Value-added tax (VAT) Output tax-deductible input tax 13%、9%、6%、19%
Sales revenue or composite assessable
Consumption tax
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
172
Companyname Applicabletax rate
JSSJ Industry (HK) Holdings Co., Ltd. 16.50%
HongKong Zhaiugou International Trade Co., Ltd. 16.50%
ZYGE-Commerce HK Limited 16.50%
Yanghe HongKong Distillery Co., Ltd. 16.50%
Yanghe CHILE SPA 27%
Yanghe International Investment Ltd. 0%
ZYG LTD. 0%
ZYG TECHNOLOGY INVESTMENT LTD 0%
2. Other information
(1) Ad valorem taxation: liquor consumption tax shall be calculated and 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 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 1
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.
IV. Notes to items in the consolidated financial Statements (all currency unit
is CNY, except other statements)
1. Cash and Bank Balance
Unit: CNY
Itemes Closing balance Opening balance
Cash 3,549.27 4,434.27
Bank deposit 20,894,755,169.16 7,201,133,719.50
Other cash and cash equivalent 61,072,291.69 42,048,208.52
Total 20,955,831,010.12 7,243,186,362.29
Including: total deposit outbound 80,215,579.77 67,157,360.95
Other notes
On December 31st, 2021, the interest receivable for time deposit is CNY 108,827,459.75. The
ending balance of other currency funds is mainly the funds deposited in Tenpay, Alipay and other
platforms.
Liquor manufacturing enterprises should disclose in detail whether there is any special
interestarrangement such as the establishment of capital co-management accounts with relevant
parties.
√ Applicable □ N/A
The disclosure requirements of food and wine manufacturing-related industries in the Guidelines
for Self-regulation NO.3 of Listed Companies of Shenzhen Stock Exchange -Industry Information
Disclosure shall be observed.
N/A
2. Held-for-trading financial assets
Unit: CNY
Item Closing balance Opening balance
Financial asset at fair value through
10,953,894,328.01 14,301,978,905.17
profit and loss
Including:
173
Equity instrument 47,300,000.00
Debt instrument 10,906,594,328.01 14,301,978,905.17
Including:
Total 10,953,894,328.01 14,301,978,905.17
Other notes
Debt instruments are bank financial products and trust financial products that mature within one
year
3. Notes receivable
(1) Classification of notes receivable
Unit: CNY
Item Closing balance Opening balance
Bank acceptance bill 663,849,328.28 613,496,333.71
Total 663,849,328.28 613,496,333.71
174
Unit: CNY
Closing balance Opening balance
Item Book balance Provision for baddebt 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
663,849,328.28 100.00% 663,849,328.28 613,496,333.71 100.00% 613,496,333.71
receivable by portfolio
Including:
Bank acceptance bill portfolio 663,849,328.28 100.00% 663,849,328.28 613,496,333.71 100.00% 613,496,333.71
Total 663,849,328.28 100.00% 663,849,328.28 613,496,333.71 100.00% 613,496,333.71
Provision for bad debt by individual: 0.00
Unit: CNY
Closing balance
Item
Book balance Provision for baddebt Proportion Reason
Provision for bad debt by portfolio:
Unit: CNY
Closing balance
Item
Book balance Provision for bad debt Proportion
Bank acceptance bill portfolio 663,849,328.28
Total 663,849,328.28
Notes to determine provision for bad debt by portfolio:
Provision for bad debt by portfolio:
Unit: CNY
Closing balance
Item Book balance Provision for baddebt 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 about provision for bad debt:
□ Applicable √ N/A
(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
balance Provision Recovered or reversed Write-off Others balance
175
(3) 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 547,802,328.28
Total 547,802,328.28
4. Accounts receivable
(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
4,082,161.80 100.00% 2,834,211.89 69.43% 1,247,949.91 6,902,858.86 100.00% 2,677,627.96 38.79% 4,225,230.90
portfolio
Including:
Risk portfolio 4,082,161.80 100.00% 2,834,211.89 69.43% 1,247,949.91 6,902,858.86 100.00% 2,677,627.96 38.79% 4,225,230.90
Other portfolio
Total 4,082,161.80 100.00% 2,834,211.89 69.43% 1,247,949.91 6,902,858.86 100.00% 2,677,627.96 38.79% 4,225,230.90
176
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:
Unit: CNY
Closing balance
Overdue years
Accounts receivables Provision for bad debt Proportion of provision
Risk portfolio 4,082,161.80 2,834,211.89 69.43%
Notes to determine provision for bad debt by portfolio:
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 accounts receivables 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 about provision for bad debt:
□ Applicable √ N/A
Disclosed by aging
Unit: CNY
Aging Book value
Within 1 year (including 1 year) 960,932.36
1-2 years 123,460.80
2-3 years 27,021.00
Over 3 years 2,970,747.64
3-4 years 21,003.29
4-5 years 863,061.77
Over 5 years 2,086,682.58
Total 4,082,161.80
The disclosure requirements of food and wine manufacturing-related industries in the
Guidelines for Self-regulation NO.3 of Listed Companies of Shenzhen Stock Exchange -Industry
Information Disclosure shall be observed
(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
Category Opening balance Recovered Closing balance
Provision Write-off Others
or reversed
Provision for bad
debt of accounts 2,677,627.96 174,467.73 17,883.80 2,834,211.89
receivable
Total 2,677,627.96 174,467.73 17,883.80 2,834,211.89
Significant amount of reversal or recovery during this period
Unit: CNY
Company name Amount recovered or reversed Method
(3) Provision for bad debt that is actually written off during this period
Item Write-off amount
Accounts receivable 17,883.80
177
Significant amount of write off during this period
Whether the
Write-off
Nature of accounts Reason for amount arises from
Entity Write-off amount procedures
receivable write-off related-party
performed
transactions
(4) Top five entities with the largest balance of the accounts receivable
Unit: CNY
Proportion in the total
Company's name Closing balance Provision amount
accounts receivable
First 600,000.00 14.70% 600,000.00
Second 454,356.93 11.13% 454,356.93
Third 411,676.78 10.08% 12,350.30
Fourth 135,824.00 3.33% 4,074.72
Fifth 118,052.00 2.89% 118,052.00
Total 1,719,909.71 42.13%
5. Receivables for Financing
Item Closing Balance Opening Balance
Bank acceptance bill 222,793,060.40
Total 222,793,060.40
Increase or decrease of receivable financing for the current period and changes in its fair value.
□ Applicable √N/A
If a provision for impairment is made for receivable financing in accordance with the general
model of expected credit losses, please disclose relevant information on the provisions for
impairment with reference to the disclosure method of other receivables.
□ Applicable √N/A
6. Prepayment
(1) Analysis by aging
Unit: CNY
Closing balance Opening balance
Aging
Amount Proportion Amount Proportion
Within 1 year 8,077,156.80 85.85% 7,941,357.88 84.85%
1-2 years 154,508.03 1.64% 847,516.09 9.06%
2-3 years 757,130.80 8.05% 272,564.91 2.91%
Over 3 years 419,972.49 4.46% 297,407.60 3.18%
Total 9,408,768.12 -- 9,358,846.48 --
Significant prepayment aging over 1 year without settlement on time:
No significant prepayment aging over 1 year are recorded in the ending balance.
(2) Top five entities with the largest balances of prepayment
Company’sname Closing balance Proportion in the total prepayment (%)
First 2,145,098.45 22.80
Second 1,415,824.05 15.05
Third 1,250,222.55 13.29
Fourth 304,804.68 3.24
Fifth 300,000.00 3.19
Total 5,415,949.73 57.56
7.Other receivables
178
Unit: CNY
Item Closing balance Opening balance
Other receivables 11,520,008.85 30,318,938.67
Total 11,520,008.85 30,318,938.67
(1) Other receivables
a) Other receivables by nature
Unit: CNY
Nature of other receivables Closing balance Opening balance
Savings deposits (infringement dispute) 22,839,924.27 65,747,048.93
Deposit 18,258,461.27 16,298,680.14
Cooperation 3,910,000.00 3,910,000.00
Business loans, petty cash and others 21,280,921.11 19,800,887.50
Total 66,289,306.65 105,756,616.57
b) Provision for bad debt
Unit: CNY
Stage 1 Stage 2 Stage 3
Expected credit Expected credit
Bad debt Expected credit Total
losses for lifetime losses for lifetime
losses in the next
(No credit loss (Credit loss
12 months
occurred) occurred)
Balance as at 1 January 2021 245,645.15 75,192,032.75 75,437,677.90
Change of opening balance as
at 1 January 2021 in current —— —— —— ——
period
Provision in 2021 160,762.49 160,762.49
Recovery in 2021 12,962,717.50 12,962,717.50
Write-off in 2021 7,866,105.70 7,866,105.70
Other changes -319.39 -319.39
Balance as at 31 December
406,088.25 54,363,209.55 54,769,297.80
2021
Significant changes of loss provision in the book balance during this period.
□ Applicable √ No applicable
Disclosure by aging
Unit: CNY
Aging Book value
Within 1 year (including 1 year) 8,907,613.86
1-2 years 1,986,347.51
2-3 years 429,783.06
Over 3 years 54,965,562.22
3-4 years 3,048,137.40
4-5 years 2,726,619.68
Over 5 years 49,190,805.14
Total 66,289,306.65
c) Provision for bad debt that is accrued, recovered or reversed during this period
Provision for bad debts during this period:
Unit: CNY
Category Opening balance Changes in current period Closing balance
179
Recoveredor Otherchang
Provision Write-off
reversed es
Other receivables
75,437,677.90 160,762.49 12,962,717.50 7,866,105.70 -319.39 54,769,297.80
bad debt provision
Total 75,437,677.90 160,762.49 12,962,717.50 7,866,105.70 -319.39 54,769,297.80
Significant amount of reversal or recovery during this period:
Unit: CNY
Amount of reversal or
Entity Method
recover
Industrial and Commercial Bank of China Ltd, Henan Branch 12,009,031.70 Recovery of judgment
Total 12,009,031.70--
d) Provision for bad debt that is actually written off during this period
Item Write-off amount
Other receivables 7,866,105.70
Significant amount of write-off during this period
Verification
Nature of accounts Write-off Cause of Related party
Company name procedures
receivable amount write-off transactions
performed
Industrial and CommercialSavings deposits
Bank of China Ltd., Henan(infringement 7,863,105.70 Judgments No
Branch dispute)
e) Top five entities with the largest balances of other receivables
Unit: CNY
Provisioning
Proportion in
Company’s name Category Closing balance Aging amount at period
total receivable
end
Savings
Industrial Commercial
deposit
Bank of China Ltd., 22,839,924.27 Over 5 years 34.45% 22,839,924.27
(Infringement
Kaifeng Haode branch
dispute)
Bankruptcy administrator
of JiangsuJuntai Properties
Deposit 15,000,000.00 Over 5 years 22.63% 15,000,000.00
Co., Ltd., Suqian Guotai
Department Store Co., Ltd.
Nanjing Peilong Sports
Cooperation 3,910,000.00 Over 5 years 5.90% 3,910,000.00
Culture Co., Ltd.
Advance
Advance money for
money for 2,379,354.55 4-5 years 3.59% 2,379,354.55
another
another
Advance
Advance money for
money for 1,317,920.66 Over 5 years 1.99% 1,317,920.66
another
another
Total -- 45,447,199.48 -- 68.56% 45,447,199.48
8. Inventories
Did the Company need to comply with the disclosure requirements on the period
No
(1) Categories of Inventories
Unit: CNY
Closing balance Opening balance
Provision
Provision for
Category for stock
Book balance stock Bookvalue Book balance Book value
obsolescenc
obsolescence
e
180
9,565,908.5 316,724,047.9
Raw material 438,692,292.37 15,300,348.33 423,391,944.04 326,289,956.43
1 2
557,314,618.1
Working progress 661,614,981.98 661,614,981.98 557,314,618.19
9
2,632,674,836. 1,582,637,195.
Stock goods 2,632,674,836.85 1,582,637,195.62
85 62
Semi-finished 13,085,411,678 13,085,411,678.9 12,396,018,284.5 12,396,018,28
goods .94 4 7 4.57
16,818,393,790 16,803,093,441.8 14,862,260,054.8 9,565,908.5 14,852,694,14
Total 15,300,348.33
.14 1 1 1 6.30
The disclosure requirements of food and wine manufacturing-related industries in the
Guidelines for Self-regulation NO.3 of Listed Companies of Shenzhen Stock Exchange -Industry
Information Disclosure shall be observed.
(2) Provision for stock obsolescence and impairment provision of contract cost
Unit: CNY
Decreases in current
Increases in currentperiod
Opening book period Closing book
Category
balance Recovery or balance
Provision Other Other
reversal
Raw material 9,565,908.51 7,175,293.45 1,440,853.63 15,300,348.33
Total 9,565,908.51 7,175,293.45 1,440,853.63 15,300,348.33
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.
181
9. Other current assets
Unit: CNY
Item Closing balance Opening balance
VATto be deducted 131,525,820.12 168,810,154.82
Consumption tax to be deducted 6,575,730.95 6,483,646.87
Advance payment of income tax 4,903,640.51 7,543,269.30
Total 143,005,191.58 182,837,070.99
10. Long-term equity investments
Unit: CNY
Changes in current period
Adjustments Closing balance
Opening Profit or loss Cash divided
Investee of other Other changes Provision for Closing balance of provision for
balance Increase Decrease recognized under or profit Other
comprehensi in equity impairment impairment
equity method declared
ve income
Joint venture
Diageo
International
Spirits 10,261,147.01 -2,562,964.31 10,293.63 464,960.20 8,173,436.53
Company
Limited
Subtotal 10,261,147.01 -2,562,964.31 10,293.63 464,960.20 8,173,436.53
Associatedenterprise
JiangsuSu
Wine
Culture
4,527,209.85 742,014.54 530,400.00 321,445.37 5,060,269.76
Transmissio
n onCo,
Ltd.
Nanjing
Hesong
Culture 3,854,437.79 -2,085.06 3,852,352.73
Technology
Co., Ltd.
Jiangsu
Xinghe 10,885,582.51 4,771,755.78 15,657,338.29
Investment
182
Managemen
tCo., Ltd.
Subtotal 19,267,230.15 5,511,685.26 530,400.00 321,445.37 24,569,960.78
Total 29,528,377.16 2,948,720.95 10,293.63 530,400.00 786,405.57 32,743,397.31
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 salesprofit of downstream transactions and exchange rate changes.
11.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 6,358,903,792.90 4,519,967,688.33
Debt instrument investment 1,277,038,356.16 1,846,990,537.48
Total 7,635,942,149.06 6,366,958,225.81
12.Fixed assets
Unit: CNY
Item Closing balance Opening balance
Fixed Assets 6,276,466,308.05 6,882,953,634.34
Total 6,276,466,308.05 6,882,953,634.34
(1)Details of fixed assets
Unit: CNY
Item Buildings and constructions Machinery equipment Transportation equipment Other equipment Total
Original cost of fixed assets
1.Opening Balance 8,169,474,047.45 3,217,850,290.13 69,597,255.79 420,401,169.28 11,877,322,762.65
2.Increase incurrent period 17,621,033.19 66,976,766.21 544,141.53 17,689,492.30 102,831,433.23
(1) External purchase 7,094,232.94 544,141.53 17,689,492.30 25,327,866.77
(2) Transfer from construction in progress 17,621,033.19 59,882,533.27 77,503,566.46
(3) Increase from business combination
183
3.Decrease in current period 16,101,579.69 27,513,021.87 1,583,901.12 7,058,584.73 52,257,087.41
(1) Disposal or retirement 16,101,579.69 27,513,021.87 1,583,901.12 7,058,584.73 52,257,087.41
(2) Decrease from business combination
4.Closing Balance 8,170,993,500.95 3,257,314,034.47 68,557,496.20 431,032,076.85 11,927,897,108.47
Accumulated depreciation
1.Opening Balance 2,654,250,125.55 1,927,915,277.17 55,259,614.83 356,944,110.76 4,994,369,128.31
2.Increase in current period 386,432,739.83 276,405,380.96 5,739,693.64 24,471,682.69 693,049,497.12
(1) Provision 386,432,739.83 276,405,380.96 5,739,693.64 24,471,682.69 693,049,497.12
3.Decrease in current period 9,731,141.86 19,638,278.82 1,505,895.98 5,112,508.35 35,987,825.01
(1) Disposal or retirement 9,731,141.86 19,638,278.82 1,505,895.98 5,112,508.35 35,987,825.01
4.Closing Balance 3,030,951,723.52 2,184,682,379.31 59,493,412.49 376,303,285.10 5,651,430,800.42
Provisionforfixedassetimpairment
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 5,140,041,777.43 1,072,631,655.16 9,064,083.71 54,728,791.75 6,276,466,308.05
2.Opening 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) Investment properties without certification of rights
Item Book value Reason for not having the certification of rights
Yanghe Blue-collar workers apartment 31,100,054.23 In process
Yanghe 40,000-ton pottery jar warehouse 166,631,404.46 In process
Yanghe workshop, etc. 103,540,807.93 In process
Property of the subsidiary, etc 15,709,603.48 In process
Total 316,981,870.10
184
13.Construction in progress
Unit: CNY
Item Closing balance Opening balance
Construction in progress 525,497,000.26 223,468,482.24
Total 525,497,000.26 223,468,482.24
(1) Details of the construction in progress
Unit: CNY
Closing balance Opening balance
Item Provision for Provision for Book value
Book Balance Bookvalue Book Balance
impairment impairment
Shuanggou packaging production line 17,191,907.04 17,191,907.04 10,610,699.88 10,610,699.88
Intelligent brewing (Mellowness 125 workshop) project 18,611,596.70 18,611,596.70
Siyang base three-dimensional warehouse, packaging production line project 1,100,810.08 1,100,810.08 1,090,909.09 1,090,909.09
40,000 tons of pottery jar warehouse project 11,494,210.42 11,494,210.42 12,714,991.93 12,714,991.93
Nanjing operationcenterbuildingproject 226,554,154.35 226,554,154.35 114,003,278.26 114,003,278.26
Sesame Fragrant Intelligent brewing Project (Workshop 115, District 3) 51,649,644.39 51,649,644.39
20,000 tons of pottery jar warehouse project 23,661,457.42 23,661,457.42
sewage treatment capacity expansion and reconstruction project 14,832,564.56 14,832,564.56
80,000 tons of pottery jar warehouse project 7,146,540.68 7,146,540.68
Comprehensive brewing plant 4,798,126.18 4,798,126.18
Phase II of Gui wine project 43,619,689.76 43,619,689.76
Other projects 123,447,895.38 123,447,895.38 66,437,006.38 66,437,006.38
Total 525,497,000.26 525,497,000.26 223,468,482.24 223,468,482.24
(2) Significant changes in construction in progress
Unit: CNY
Proportion of Include:
Budget Increase in Interest Capitalizati
Opening Transfer into Otherdecre Closing accumulative Capitalized Source
Item current Progress capitalizati on rate for
（CNY 10,000） balance fixed assets ases balance project inputing interest for of funds
period onrate the period
budget (%) the period
Shuanggou packaging 10,610,699 6,581,207. Other
12,000.00 17,191,907.04 95.01% Latestage
production line .88 16
Intelligent brewing Other
18,611,596 8,007,528. 26,619,124.
(Mellowness 125 4,500.00 86.64% Latestage
.70 20 90
workshop) project
185
Siyang base
three-dimensional warehouse, 1,090,909.
4,100.00 9,900.99 1,100,810.08 64.97% Latestage Other
packaging production line 09
project
40,000 tons of pottery Jar 12,714,991 1,472,246. 2,693,027.8
36,000.00 11,494,210.42 55.91% Latestage Other
warehouse project .93 32 3
Nanjing operationcenter 114,003,27 112,550,8 226,554,154.3
80,000.00 35.81% Middle stage Other
building project 8.26 76.09 5
Sesame Fragrant Intelligent
52,499,20
brewing Project (Workshop 6,884.28 849,557.54 51,649,644.39 82.64% Latestage Other
1.93
115, District 3)
20,000 tons of pottery jar 23,661,45
4,200.00 23,661,457.42 57.89% Middle stage Other
warehouse project 7.42
sewage treatment capacity
14,832,56
expansion and reconstruction 2,300.00 14,832,564.56 64.49% Middle stage Other
4.56
project
80,000 tons of pottery jar 7,146,540.
24,000.00 7,146,540.68 2.98% Early stage Other
warehouse project 68
4,798,126.
Comprehensive brewing plant 4,000.00 4,798,126.18 12.00% Early stage Other
18
43,619,68
Phase II of Gui wine project 13,954.02 43,619,689.76 31.26% Middle stage Other
9.76
157,031,47 275,179,3 30,161,710. 402,049,104.8
Total 191,938.30 -- -- --
5.86 39.29 27 8
14.Right-of-use Assets
Unit: CNY
Items Building and construction total
Total original carrying amount
1. Opening balance (restated) 8,610,167.63 8,610,167.63
2. Increased 16,509,488.52 16,509,488.52
(1) New Lease 16,509,488.52 16,509,488.52
3. Decreased
4. Closing balance 25,119,656.15 25,119,656.15
Accumulated depreciation
1.Opening balance (restated) -
2. Increased 5,509,542.40 5,509,542.40
186
(1) Provisions 5,509,542.40 5,509,542.40
3. Decreased
(1) The lease contract expires or terminates early
4.Closing balance 5,509,542.40 5,509,542.40
Provision for right-of-use assets impairment
1.OpeningBalance
2.Increase in current period
(1) Provision
3.Decrease in current period
(1) Disposal or retirement
4. Closing balance
Total book value
1. Closing balance on book value 19,610,113.75 19,610,113.75
2. Opening balance on book value (restated) 8,610,167.63 8,610,167.63
15.Intangible assets
(1) Details of intangible assets
Unit: CNY
Item Land use right Patent right No-patent righttechnology Trademarkright Computer software Total
Original cost of intangible assets
Opening balance 1,957,318,411.98 399,851,465.43 134,198,677.78 2,491,368,555.19
Increase in current period 84,905.66 23,019,590.02 23,104,495.68
Including: Acquired 84,905.66 23,019,590.02 23,104,495.68
Internally developed
Business combination
Decrease in current period 615,723.68 140,943.39 756,667.07
Including: Disposal 615,723.68 140,943.39 756,667.07
187
Closingbalance 1,956,702,688.30 399,936,371.09 157,077,324.41 2,513,716,383.80
Accumulated amortization of intangible
assets
Opening balance 327,364,801.67 388,999,828.48 61,477,231.94 777,841,862.09
Increase in currentperiod 40,068,462.55 2,241,357.80 14,231,882.63 56,541,702.98
Including: Provision 40,068,462.55 2,241,357.80 14,231,882.63 56,541,702.98
Decrease in currentperiod 124,170.94 140,943.39 265,114.33
Including: Disposal 124,170.94 140,943.39 265,114.33
Closingbalance 367,309,093.28 391,241,186.28 75,568,171.18 834,118,450.74
Provision for impairment
Opening balance
Increase in current period
Including: Provision
Decrease in current period
Including: Disposal
Closing balance
Book value of intangible assets
Closing book value 1,589,393,595.02 8,695,184.81 81,509,153.23 1,679,597,933.06
Opening book value 1,629,953,610.31 10,851,636.95 72,721,445.84 1,713,526,693.10
The proportion of intangible assets formed through internal research and development of the Company in the balance of intangible assets at the endof this
period is 0.00%.
16.Goodwill
(1) Goodwill book value
Unit: CNY
Increase in current period Decrease in current period
Investor’s name oritemsresultingingoodwill 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
188
Guizhou Welcome Drink Stock Co., Ltd. 11,333,195.25 11,333,195.25
Total 339,408,809.99 339,408,809.99
(2) Goodwill impairment provision
Unit: CNY
Increasein currentperiod Decrease incurrentperiod
Investee’s name oritemsresultingingoodwill Opening balance Closing balance
Provision Disposal
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
Related information of asset groups or asset group portfolio containing goodwill
The recoverable amount of asset group containing apportioned goodwill is determined according to the present value of the estimated future cash flow of the
relevant asset group. Its future cash flows are determined based on the 3-year financial budget, with a certain discount rate. Cash flow over 3 years is calculated on
the basis of 18.94% growth rate. 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 notes
189
17.Long-term prepaid expenses
Unit: CNY
Increase in the Amortization for the Other
Item Opening balance Closing balance
current period current period decreases
Renovation costs
127,071.76 127,071.76
of rentedhouse
Wine city night view
15,020,580.57 3,004,116.11 12,016,464.46
identification project
Brighten old factory
and packaging
2,180,484.25 436,096.85 1,744,387.40
logistics center
project
Decoration expenses
2,929,784.78 585,956.96 2,343,827.82
of hotel
Total 127,071.76 20,130,849.60 4,153,241.68 16,104,679.68
18.Deferred tax assets/ deferred tax liabilities
(1) Deferred tax assets before offset
Unit: CNY
Closing balance Opening balance
Item Deductible temporary Deferred tax Deductible temporary Deferred tax
differences assets differences assets
Provision for asset
69,755,972.71 17,438,816.79 84,810,902.34 21,202,543.99
impairment
Unrealized profit from
57,053,878.39 14,263,469.60 35,903,134.07 8,975,783.52
internal transaction
Deductible losses 1,005,233,098.74 251,308,274.69 787,092,991.66 196,773,247.91
The difference
between book value of 4,371,081,520.39 1,092,770,380.10 2,795,879,312.35 698,969,828.09
debt and tax base
ESOP 40,703,820.01 10,175,955.00
Total 5,543,828,290.24 1,385,956,896.18 3,703,686,340.42 925,921,403.51
(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 41,727,391.07 10,431,847.77 44,387,767.84 11,096,941.96
assets not under
common control
Changes in fair value of
financial assets held for 1,157,320,622.97 288,950,549.61 1,781,604,966.78 445,242,472.42
trading
Total 1,199,048,014.04 299,382,397.38 1,825,992,734.62 456,339,414.38
(3)Deferred tax assets or liabilities presented as net value after offset
Unit: CNY
Offset amount of Closing balance of Opening offset amount Opening balance of
deferred tax assets deferred tax assets or of deferred tax assets deferred tax assets or
Item
and deferred tax deferred tax and deferred tax deferred tax liabilities
liabilities liabilities after offset liabilities after offset
Deferred tax assets 1,385,956,896.18 925,921,403.51
Deferred tax liabilities 299,382,397.38 456,339,414.38
190
(4) Details of unrecognized deferred tax assets
Unit: CNY
Item Closing balance Opening balance
Deductible temporary differences 192,033,907.02 88,933,255.36
Deductible losses 56,117,773.36 105,350,440.90
Total 248,151,680.38 194,283,696.26
(5) Deductible losses from unrecognized deferred tax assets will be due on the following
years
Unit: CNY
Year Closing balance Opening balance Note
2022 53,837,061.59
2023 3,336,993.92 32,435,218.31
2024 5,217,042.38 5,217,042.38
2025 13,861,118.62 13,861,118.62
2026 33,702,618.44
Total 56,117,773.36 105,350,440.90 --
19.Other non-current assets
Unit: CNY
Closing balance Opening balance
Item
Provision Provision
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
27,533,814.44 27,533,814.44 51,070,769.27 51,070,769.27
equipment
and house
purchase
Total 186,140,639.38 186,140,639.38 209,677,594.21 209,677,594.21
20. Notes Payable
Unit: CNY
Item Closing balance Opening balance
Bank acceptance bill 30,000,000.00
Total 30,000,000.00
As of December 31st 2021, the company did not have any unpaid matured notes payable.
21.Accounts payable
(1) Presentation of accounts payable
Unit: CNY
Item Closing balance Opening balance
Payments for goods 1,364,515,734.82 1,073,245,695.34
Payables on equipments 79,659,527.26 78,625,440.95
Total 1,444,175,262.08 1,151,871,136.29
(2) Significant accounts payable aging over one year
No significant accounts payable aging over 1 year are recorded in the ending balance.
22.Contract liabilities
Unit: CNY
191
Item Closingbalance Opening balance
Advance from customers 11,645,306,829.55 6,191,149,791.32
Discounts and allowances payable to the
4,159,214,600.62 2,610,197,100.00
distributors that have not yet been settled
Total 15,804,521,430.17 8,801,346,891.32
The amount and reason for any significant change in book value during the reporting period
Item Amount Reason
Advance from customers 5,454,157,038.23 sales revenue increased
Discounts and allowances payable to the
1,549,017,500.62 sales revenue increased
distributors that have not yet been settled
Total 7,003,174,538.85
23.Employee benefits payable
(1) Employee benefits payable shown as follows:
Unit: CNY
Increase in current Decrease incurrent
Item Opening balance Closing balance
period period
Short-termbenefits 196,049,280.00 2,821,100,835.70 2,480,625,193.85 536,524,921.85
Post-employment
benefits-defined 192,207.31 158,458,746.31 158,458,746.31 192,207.31
contribution plans
Termination benefits 57,773.22 57,773.22
Total 196,241,487.31 2,979,617,355.23 2,639,141,713.38 536,717,129.16
(2) Short-term employee benefits payable shown as follows:
Unit: CNY
Increase in current Decrease incurrent
Item Opening balance Closing balance
period period
Wages, bonuses,
allowances and 195,969,775.98 2,540,634,112.04 2,200,220,570.90 536,383,317.12
grants
Employees’ welfare 90,234,437.31 90,234,437.31
Social insurance
14,860.09 84,080,450.63 84,080,450.63 14,860.09
premiums
Including:
7,972.00 70,092,528.76 70,092,528.76 7,972.00
MedicalInsurance
Work-related injury
6,875.34 4,780,462.33 4,780,462.33 6,875.34
insurance
Maternity insurance
12.75 9,207,459.54 9,207,459.54 12.75
premium
Housing funds 59,967.80 92,347,092.00 92,286,430.00 120,629.80
Labor union
expenditures and
4,676.13 13,804,743.72 13,803,305.01 6,114.84
employee
education funds
Total 196,049,280.00 2,821,100,835.70 2,480,625,193.85 536,524,921.85
(3) Defined Contribution Plan shown as follows:
Unit: CNY
Increase in current Decrease incurrent
Item Opening balance Closing balance
period period
Basic endowment
191,323.23 153,607,027.27 153,607,027.27 191,323.23
insurance premium
192
Unemployment
884.08 4,851,719.04 4,851,719.04 884.08
insurance premium
Total 192,207.31 158,458,746.31 158,458,746.31 192,207.31
24.Taxes payable
Unit: CNY
Item Closing balance Opening balance
Value-added tax 175,920,362.08 150,194,783.11
Consumption tax 554,560,829.94 533,945,998.98
Enterprise income tax 2,200,631,701.75 1,333,112,088.00
Individual Income Tax 30,310,775.71 20,265,903.93
Urban maintenance and construction tax 26,222,879.17 45,918,790.94
Land use tax 6,464,914.93 6,456,687.93
Property tax 23,861,228.61 22,210,815.89
Education Surcharge and Local Education
39,516,421.27 37,359,708.11
Surcharge
Stamp tax 1,556,153.30 1,005,142.70
Integrated funds 6,505.75 2,545.99
Other tax 2,333,399.20 2,333,690.85
Total 3,061,385,171.71 2,152,806,156.43
25.Other payables
Unit: CNY
Item Closing balance Opening balance
Other payables 1,808,838,882.26 1,556,699,290.45
Total 1,808,838,882.26 1,556,699,290.45
(1) Other payables
a) Categories by nature
Unit: CNY
Item Closing balance Opening balance
Dealer deposit 538,078,762.11 279,298,081.55
Dealer risk pledged deposit 685,270,708.36 681,336,068.47
Accrued expenses 351,345,770.61 303,563,123.81
Quality guarantee deposit and performance
131,196,540.43 195,028,352.99
deposit
Other payables 102,947,100.75 97,473,663.63
Total 1,808,838,882.26 1,556,699,290.45
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 and
631,509,861.72
deposit dealer deposit not yet due
Total 631,509,861.72 --
26.Non-current Liabilities Due within One Year
Unit: CNY
Item Closing balance Opening balance (restated)
Lease liabilities due within one year 8,405,846.77 2,083,914.78
Total 8,405,846.77 2,083,914.78
27.Other current liabilities
Item Closing balance Opening balance
Output VAT to be
1,491,462,609.44 798,216,651.49
transferred
193
Notes endorsed but not
547,802,328.28
derecognized
Total 2,039,264,937.72 798,216,651.49
28.Long-term loans
(1) Long-term loans by category
Unit: CNY
Item Closing balance Opening balance
Credit loans 36,360.00 36,360.00
Total 36,360.00 36,360.00
29.Lease Liabilities
Unit: CNY
Item Closing balance Opening balance
Lease liabilities 10,729,824.19 6,526,252.85
Total 10,729,824.19 6,526,252.85
30.Long-term payables
Unit: CNY
Item Closing balance Opening balance
Special accounts payables 196,694,194.53 197,049,341.93
Total 196,694,194.53 197,049,341.93
(1) Special accounts payables
Unit: CNY
Decrease in
Increase in current
Item Opening balance current Closing balance Reason
period
period
Compensation for
replacement of 197,049,341.93 355,147.40 196,694,194.53
employee status
Total 197,049,341.93 355,147.40 196,694,194.53 --
31.Deferred incomes
Unit: CNY
Increase in Decrease in
Item Opening balance Closing balance Reason
current period current period
Government grants 85,999,500.00 8,757,000.00 77,242,500.00
Total 85,999,500.00 8,757,000.00 77,242,500.00 --
194
Projects involving government grants:
Unit: CNY
Non-operating
Opening Increase in Other income in Cost reduction in
Liability item incomein current Other changes Closing balance Relevant to asset or income
balance current period current period current period
period
Hubei Lihuacun liquor
industry liquor brewing,
filling project supporting 21,796,600.00 4,257,000.00 17,539,600.00 Asset
facilities construction
subsidies
Special fund for packaging
logistics project in 12,000,000.00 3,000,000.00 9,000,000.00 Asset
Shuanggou new area
Special fund for Harbin
Binzhou brewery 41,202,900.00 41,202,900.00 Asset
construction project
Shuanggou sewage treatment
6,000,000.00 1,500,000.00 4,500,000.00 Asset
project
The second batch of
provincial-level industrial
and information industry 5,000,000.00 5,000,000.00 Asset
transformation and upgrading
special funds in 2020
Total 85,999,500.00 8,757,000.00 77,242,500.00
195
32.Share capital
Unit: Share
Increases/ decreases in the current period (+, -)
Conversion
Opening balance Issuance of Share of reserves Closing balance
donati Others Subtotal
new shares funds into
on
shares
Total shares 1,506,988,000.00 1,506,988,000.00
33.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 40,703,820.01 40,733,820.01
Total 741,532,550.13 40,703,820.01 782,236,370.14
Other notes, including the changes in the current period, the reasons for the changes:
The company confirms the ESOP plan fee to increase the capital reserves-other capital reserves of
RMB 40,703,820.01.
34. Treasury shares
Increase in Decrease in
Item Opening balance Closing balance
current period current period
Share repurchase 1,002,128,680.79 945,850,000.00 56,278,680.79
Total 1,002,128,680.79 945,850,000.00 56,278,680.79
Other notes, including the changes in the current period, the reasons for the changes
According to the proposal on Jiangsu Yanghe Distillery co., LTD. Phase I Core Backbone
Shareholding Plan (Draft) deliberated and approved by the company's extraordinary General
Meeting of Shareholders on August 2, 2021, the employees of this employee shareholding plan
have subscribed for 9,118,384 shares at the average price of 103.73 yuan per share. The total
amount of subscription was 945,850,000.00 yuan, which reduced the company's treasury stocks.
196
35.Other comprehensive incomes
Unit: CNY
Currentperiod
Less: Previously Less: previously
Amount in Amount Amount attributes to
Item Opening balance current period recognized in other recognized in other Closing balance
Less: income attributes to non-controlling
comprehensive income comprehensive income
before income tax parent company shareholders after
transferredto profit or transferred to retained
tax after tax tax
loss earnings
II. Other comprehensive income
that will be reclassified to profit or -5,213,248.93 -633,966.69 -630,741.36 -3,225.33 -5,843,990.29
loss
Including: other comprehensive
income will be re-classified into
-163,797.21 10,293.63 10,293.63 -153,503.58
profits or losses under the equity
method
Effect on conversion of financial
statements denominated in -5,049,451.72 -644,260.32 -641,034.99 -3,225.33 -5,690,486.71
foreign currencies
Total other comprehensive
-5,213,248.93 -633,966.69 -630,741.36 -3,225.33 -5,843,990.29
income
Other notes, including adjustments for valid portion of the gains and or losses from cash flow hedging transferring to initial recognition amount of projects hedged.
36.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
Notes for surplus reserves including increase or decrease changes and change reasons this period:
197
37.Retained Earnings
Unit: CNY
Item Current period Previous period
Retained Earnings before adjustment at the end of the last year 36,489,911,363.13 33,510,429,712.50
Retained Earnings after adjustment at the beginning of year 36,489,911,363.13 33,510,429,712.50
Add: net profit attributable to owners of the parent
7,507,682,797.40 7,482,228,633.63
company for the current period
Less: Dividends payable on common shares 4,491,980,070.00 4,502,746,983.00
Retained earnings at the end of the current reporting period 39,505,614,090.53 36,489,911,363.13
Notes for adjusting undistributed profits at the beginning of the period:
(1) Retained Earnings at the beginning of the period were affected by CNY0.00 due to the
retrospective adjustment under the Accounting Standards for Business Enterprises and related
new regulations.
(2) Retained Earnings at the beginning of the period were affected by CNY0.00 due to changes in
accounting policies.
(3) Undistributed profits at the beginning of the period were affected by CNY0.00 due to the
correction of significant accounting errors.
(4) Retained Earnings s at the beginning of the period were affected by CNY0.00 due to changes in
the scope of consolidation resultingfrom business combination involving enterprises under
common control.
(5) Retained Earnings at the beginning of the period were affected by CNY0.00B in total due to
other adjustments
38.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
Operating incomes 24,638,674,089.57 5,702,863,048.47 20,334,282,442.98 5,243,536,119.11
Other operating
711,504,114.88 552,534,515.63 766,768,688.81 608,368,477.60
income
Total 25,350,178,204.45 6,255,397,564.10 21,101,051,131.79 5,851,904,596.71
Whether the net profit is negative or not after deducting non-recurring profits and losses by audit,
□ Yes √ No
Information on revenue:
Unit: CNY
Category of Contra Segment 1 Segment 2 Total
Commodity type
Including:
By operating regions
Including:
Type of market or customer
Including:
Type of contract
Including:
By the time of commodity
transfer
Including:
By the contract t
Including:
198
By the selling channel
Including:
Total
Information regarding 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 11,645,306,829.55, of which
CNY11,645,306,829.55 is expected to be recognized in 2022, and CNY 0.00 is expected to be
recognized in 2023
Other notes
39.Taxes and surcharges
Unit: CNY
Item Current period amount Previous period amount
Consumption tax 3,445,365,868.93 2,847,452,319.78
Urban maintenance and
300,870,065.44 241,392,653.40
construction tax
Educational surcharge 298,966,722.11 239,859,725.86
Property tax 70,430,075.52 60,808,511.65
Land use tax 18,361,571.79 18,164,433.97
Stamp tax 13,969,946.24 7,942,227.94
Environmental protection tax 9,370.09 11,898.43
Others 8,508.00 13,998.00
Total 4,147,982,128.12 3,415,645,769.03
40.Selling and distribution expenses
Unit: CNY
Item Current period amount Previous period amount
Advertising and promotion expense 1,911,827,032.90 1,411,090,022.81
Payroll 1,065,844,674.57 646,271,019.11
Travel expense 390,432,690.88 353,434,744.65
Labor expense 88,722,961.18 117,975,847.08
E-commerce expenses 37,801,331.20 24,130,806.14
Other expense 49,736,198.81 50,901,717.99
Total 3,544,364,889.54 2,603,804,157.78
41.General and administrative expenses
Unit: CNY
Item Current period amount Previous period amount
Payroll 738,382,078.49 665,991,755.03
Travel expense 35,607,123.11 34,612,481.35
Office allowance 7,389,752.82 6,667,982.75
Water, electric and steam expense 57,175,472.37 56,946,078.23
Business entertainment expense 25,674,580.41 18,533,811.47
Depreciation cost 430,504,129.04 463,503,047.71
Repaircharge 43,706,934.03 40,899,196.47
Amortization of intangible assets 56,541,702.98 55,171,822.38
Vehicle use expense 21,827,557.47 17,742,719.25
Shipping and handling cost 31,039,417.23 43,948,370.23
ESOP plan fee 39,741,779.13
Other expense 342,489,612.10 325,062,937.06
Total 1,830,080,139.18 1,729,080,201.93
199
42.Research & Development expenses
Unit: CNY
Item Current period amount Previous period amount
Material expenses 126,609,051.53 144,095,917.84
Payroll 84,819,165.34 77,975,559.20
Other expense 47,029,885.76 38,022,813.99
Total 258,458,102.63 260,094,291.03
43.Financial expenses
Unit: CNY
Item Current period amount Previous period amount
Interest expense 603,755.58 1,964.00
Bill discount expense 28,742,496.43 11,719,069.54
Less: Interest income 433,923,395.67 104,495,154.37
Plus: Losses from currency exchange
3,194,795.97 3,670,115.95
(Less: income)
Plus: Bank charges 2,236,837.73 1,869,240.49
Total -399,145,509.96 -87,234,764.39
44.Other incomes
Unit: CNY
Sources of other incomes Current period Previous period
Government grants received 87,366,302.47 98,151,595.19
Withholding personal tax commission 3,484,445.51 818,031.70
Total 90,850,747.98 98,969,626.89
45.Investment income
Unit: CNY
Item Current period amount Previous period amount
Investment income from long-term equity
2,948,720.95 3,940,820.47
investments under the equity method
Investment income from disposing long-
21,516.26
term equity investments
Investment income from financial assets
23,102,480.38 113,585,439.53
held for trading during the holding period
Investment income from disposal of
874,562,276.89 1,089,135,586.23
financial assets held for trading
Total 900,613,478.22 1,206,683,362.49
46.Gains/losses of changes in fair value
Unit: CNY
Gains/ losses of changes in fair value Current period amount Previous period amount
Held-for-trading financial assets -721,212,806.81 1,267,682,598.52
Total -721,212,806.81 1,267,682,598.52
47.Credit Impairment Loss
Unit: CNY
Item Current period amount Previous period amount
Credit impairment losses of other receivables 12,801,955.01 152,069.92
Credit impairment losses of accounts receivable -174,467.73 94,412.53
Total 12,627,487.28 246,482.45
48.Losses from asset impairment
Unit: CNY
Item Current period amount Previous period amount
200
Losses on inventory devaluation and
-7,175,293.45 -6,196,876.85
Contract assets impairment loss
Total -7,175,293.45 -6,196,876.85
49.Gains from disposal of assets
Unit: CNY
Gains from disposal of assets Current period amount Previous period amount
Gains from disposal of fixed assets 224,432.51 45,438.89
Gains from disposal of intangible assets -39,747.54
Total 184,684.97 45,438.89
50.Non-operating income
Unit: CNY
Amount including
Item Current period amount Previous period amount non-recurring profit and loss
in current period
Donations acceptance 9,120,063.00
Government grants 24,000.00
Liquidated damages income 7,192,792.01 4,475,586.24 7,192,792.01
Compensation payment 11,339,388.88 8,475,059.72 11,339,388.88
Accounts payable that are
20,610.00 64,118.24 20,610.00
unable to pay
Others 2,165,592.11 2,881,043.09 2,165,592.11
Total 20,718,383.00 25,039,870.29 20,718,383.00
Government grants included in current profits and losses:
Unit: CNY
Whether the grants Previous Related to
Whether it is Current period
Item Body Reason Type affect current year period assets/ related
special grant amount
profit and loss amount to earnings
51.Non-operating expenses
Unit: CNY
The amount booked into
current period
Item Current period amount Previous period amount
non-recurring profits and
looses
Donation expenses 42,083,802.00 35,400,000.00 42,083,802.00
Losses from disposal of
10,872,590.73 4,802,593.81 10,872,590.73
fixed asset
Integrated fund 72,950.74 77,328.11
Reparations 3,971,839.00 422,169.33 3,971,839.00
Others 6,218,870.88 623,399.13 6,218,870.88
Total 63,220,053.35 41,325,490.38 63,147,102.61
52.Income tax expense
(1) Details of income tax expense
Unit: CNY
Item Current period amount Previous period amount
Income tax for the current reporting period 3,050,593,837.76 2,178,072,592.80
Deferred income tax expenses -616,983,716.56 216,222,985.28
Total 2,433,610,121.20 2,394,295,578.08
(2) Adjustment for accounting profit and income tax expense
Unit: CNY
Item Current period amount
201
Total profit 9,946,427,518.68
Income tax expenses determined by statutory/ applicable tax
2,486,606,879.67
rate
Impact from subsidiaries’ different tax rates 2,291,895.48
Adjustfor impact from income tax expense in previous
-3,041,806.60
period
Tax effect of non-taxable income -6,512,800.33
Impact of non-deductible costs, expenses and losses 5,987,935.77
Deductible from deferred tax assets in previous period -20,733,821.50
Impact of deductible temporary differences or deductible
losses for which no deferred income tax assets is recognized 32,740,501.84
for the current period
Impact of additional deduction of R&D expenses -63,728,663.13
Income tax expense 2,433,610,121.20
53.Net other comprehensive income
Refer to note for details.
54.Consolidated cash flow items
(1) Cash received from other operation activities
Unit: CNY
Item Current period amount Previous period amount
Risk deposit 3,934,639.89 60,255,818.13
Dealer deposit 193,381,207.42 56,575,865.80
Interest income 325,095,935.92 104,495,154.37
Liquidated damages income 7,192,792.01 4,475,586.24
Government grants 78,609,302.47 94,418,595.19
Commission for with holding tax 3,484,445.51 818,031.70
Others 116,730,588.44 48,750,584.17
Total 728,428,911.66 369,789,635.60
Notes 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 32,454,361.50 45,592,659.35
Advertising promotion expense 1,875,126,011.49 1,216,976,623.15
Repair charge 40,144,581.28 40,913,095.81
Travel expense 431,546,399.27 408,411,257.95
Entertainment expense 25,897,841.15 20,161,922.58
Labor expense 135,250,366.93 149,569,041.84
Others 462,537,339.25 405,109,914.56
Total 3,002,956,900.87 2,286,734,515.24
Notes for cash paid for other operating activities:
(3) Cash received from other financing activities
Unit: CNY
Item Current period amount Previous period amount
Repurchase of ESOP shares 945,850,000.00
Total 945,850,000.00
Notes for Cash received from other financing activities:
(4) Cash paid for other financing activities
Unit: CNY
Item Current period amount Previous period amount
Repurchase of shares 1,002,128,680.79
Lease payment 6,587,740.77
Total 6,587,740.77 1,002,128,680.79
202
Notes for cash paid for other financing activities:
55.Supplementary Information about Cash Flow Statement
(1) Supplementary information about of cash flowstatement
Unit: CNY
Item Current period amount Previous period amount
Reconciliation of net profit to -- --
cashflow from operating activities
Net profit 7,512,817,397.48 7,484,606,313.92
Add: Impairment of assets -5,452,193.83 5,950,394.40
Fixed assets depreciation 693,049,497.12 727,550,847.83
Right-of-use assets depreciation 5,509,542.40
Amortization of intangible assets 56,541,702.98 55,171,822.38
Amortization of long-term
4,153,241.68 127,071.84
deferred expenses
Gains on disposal of fixed assets,
intangible assets and other -184,684.97 -45,438.89
long-term assets
Fixed asset scrapping losses 10,872,590.73 4,669,390.54
Losses (gains) from changes in fair value 721,212,806.81 -1,267,682,598.52
Financial expense 3,798,551.55 3,672,079.95
Investment income -900,613,478.22 -1,206,683,362.49
Decrease in deferred tax asset -460,035,492.67 -100,857,345.94
Increase in deferred tax liabilities -156,957,017.00 317,080,331.22
Decrease in inventory -1,956,133,735.33 -422,305,228.21
Decrease in operation receivable -230,907,969.63 255,853,105.64
Increase in operation payable 10,090,059,214.80 -1,878,449,751.14
Others -69,564,493.37 133,203.27
Net cash flow from operating activities 15,318,165,480.53 3,978,790,835.80
Significant investing and financing -- --
activities not Involving cashflow:
-- --
Net change in cash &cash equivalents
Closing balance of cash 20,847,003,550.37 7,243,186,362.29
Less: Opening balance of cash 7,243,186,362.29 4,300,144,848.67
Add: Closing balance of cash equivalents
Less: Opening balance of cash equivalents
Net Increase (decrease) in cash and
13,603,817,188.08 2,943,041,513.62
cash equivalents
203
(2) Composition of cash and cash equivalents
Unit: CNY
Item Closing balance Opening balance
Cash 20,847,003,550.37 7,243,186,362.29
Including: cash onhand 3,549.27 4,434.27
Unrestricted bank deposit 20,785,927,709.41 7,201,133,719.50
Cash equivalents 61,072,291.69 42,048,208.52
Closing balance of cash and cash
20,847,003,550.37 7,243,186,362.29
Equivalents
56.Foreign currency transactions
(1) Foreign currency balance
Unit: CNY
Balance of CNY
Balance in foreign currency at
Item Exchange rate converted at the end of
the end of the reporting period
the reporting period
Cash and cash equivalents -- -- 77,228,299.86
Including：USD 10,263,661.09 6.3757 65,438,024.01
EUR
HKD 4,177,908.36 0.8176 3,415,857.87
CLP 1,119,093,451.00 0.007483 8,374,417.98
Accounts receivable
Including：USD
EUR
HKD
Other receivables 100,711.28
Including：HKD 123,179.16 0.8176 100,711.28
Long-term loans -- --
Including：USD
EUR
HKD
Accounts payable 5,983,344.71
Including：USD 938,460.83 6.3757 5,983,344.71
Other payables 371,103.79
Including：HKD 448,590.73 0.8176 366,767.78
CLP 579,431.00 0.007483 4,336.01
(2) Description of the overseas business entity, including the important foreignbusiness entity,
which shall disclose its main foreign business place, bookkeeping standard currency and selection
basis, and shall also disclose the reason for thechange 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 Co., Hong Kong, China HKD
environment of business operations
Ltd.
ZYG E-Commerce Currency in the main economic
Hong Kong, China HKD
HK Limited environment of business operations
Currency in the main economic
ZYG LTD. Cayman Islands USD
environment of business operations
Yanghe International Currency in the main economic
British VirginIslands USD
Investment Ltd. environment of business operations
204
ZYG Technology Currency in the main economic
British VirginIslands USD
Investment Ltd. environment of business operations
Currency in the main economic
Yanghe Chile SPA Santiago, Chile CLP
environment of business operations
YangheHong Kong Currency in the main economic
Hong Kong, China HKD
Distillery Co., Ltd. environment of business operations
57.Government grants
(1) Details of government grants
Unit: CNY
Financial Report Amount booked in
Category Amount
Items current profit and loss
Industrial development guidance funds 46,644,851.20 Other income 46,644,851.20
Supporting subsidies 9,461,611.09 Other income 9,461,611.09
Steadypostsubsidy 2,894,026.61 Other income 2,894,026.61
trainingsubsidy 2,284,880.00 Other income 2,284,880.00
Tax incentives in 2020 1,963,778.72 Other income 1,963,778.72
Support funds for industrial chain construction
1,960,000.00 Other income 1,960,000.00
enterprises
award fund for Provincial governor quality award
1,800,000.00 Other income 1,800,000.00
certificate enterprise
municipal Industrial Development Guide Fund
(Industrial Agglomeration) project award and Subsidy 1,600,000.00 Other income 1,600,000.00
funds in 2020
The second batchofspecialfundsfortheintroduction
ofurgentlyneededtalents for the development of 1,032,000.00 Other income 1,032,000.00
NorthernJiangsuin 2019
Special funds for the revitalization of high-quality
1,800,000.00 Other income 1,800,000.00
tobacco and alcohol industry in 2020
exhibition hall projectconstructionsubsidyfunds 1,000,000.00 Other income 1,000,000.00
The incentive fund for increasing production in 2020 680,600.00 Other income 680,600.00
Suqian tourism commodity guidance funds in 2020 550,000.00 Other income 550,000.00
Comprehensive award and subsidy fund for
technological transformation of industrial enterprises 500,000.00 Other income 500,000.00
in Jiangsu Province in 2020
Wine country imagepublicitysubsidy 500,000.00 Other income 500,000.00
Provincial Geographical Indication Promotion and
500,000.00 Other income 500,000.00
Protection Project funding in 2021
Financial incentives for enterprise R & D investment in
500,000.00 Other income 500,000.00
2021
Provincial green factory incentive funds 440,000.00 Other income 440,000.00
Municipal intellectual property award and Subsidy
427,000.00 Other income 427,000.00
funds in 2021
Awards and subsidies for legal protection of
256,400.00 Other income 256,400.00
intellectual property rights
incentive funds for "Suqian Boutique" brand 400,000.00 Other income 400,000.00
Special funds for promoting production, stabilizing
127,100.00 Other income 127,100.00
employment and ensuring growth in 2020
Others 1,287,054.85 Other income 1,287,054.85
Transferofcurrentdeferredearnings 8,757,000.00 Other income 8,757,000.00
Total 87,366,302.47 87,366,302.47
(2) The return of government subsidies
□ Applicable √ Not applicable
V. Changes in consolidated scope
1. Changes of Consolidation Scope due to Other Causes
Explain the change of merger scope caused by other reasons (such as new subsidiary, liquidation
subsidiary, etc.) and the relevant situation:
(1) In March 2021, Jiangsu Shuanggou Wine Industry Co., LTD., a holding subsidiary, invested
100 million yuan to set up Jiangsu Shuanggou Wine Sales Co., LTD., accounting for 100% of its
205
registered capital. It will be included in the consolidated scope of consolidated financial
statements from March 2021.
(2) In April 2021, the Company and Suqian Industrial Development Group Co., Ltd. jointly
invested RMB 20 million to establish Jiangsu Jiushang Internet Technology Co., LTD., of which the
company invested RMB 10.2 million, accounting for 51% of the registered capital; Suqian Industrial
Development Group Co., Ltd. invested CNY 9.80 million, accounting for 49%. It will be included in
the consolidated scope of consolidated financial statements from April 2021.
(3) In July 2021, the company subscribed RMB 50 million to set up Jiangsu Yanghe Cultural
Tourism Co., LTD., accounting for 100% of its registered capital. It will be included in the
consolidated scope of consolidated financial statements from July 2021.
(4) In July 2021, its holding subsidiaries Jiangsu Yanghe Cultural Tourism Co., Ltd. and Suqian
Cultural Tourism Development Group Co., Ltd. jointly invested 20 million yuan to establish Jiangsu
Yanghe Cultural Tourism Operation Co., LTD., of which jiangsu Yanghe Cultural Tourism Co., Ltd.
invested CNY 16 million, accounting for 80% of its registered capital; Suqian Cultural Tourism
Development Group Co., Ltd. invested CNY 4 million, accounting for 20%. It will be included in the
consolidated scope of consolidated financial statements from July 2021.
(5) In November 2021, the company subscribed 24 million yuan to set up Siyang Blue Sky
Packaging Service Co., LTD., accounting for 100% of its registered capital. It will be included in the
consolidated scope of consolidated financial statements from November 2021.
206
VI. Interests in other entities
1. Interests in subsidiaries
(1) Group composition:
Major business Shareholding
Name of subsidiaries Place of registration Nature of business Acquisition method
location Direct Indirect
Nanjing, Jiangsu
Nanjing Yanghe Blue Classic Co., Ltd Nanjing, Jiangsu province Commerce 100.00% Establishment
province
Beijing Yanghe Commerce and Trade Co., Ltd. Fengtai, Beijing Fengtai, Beijing Commerce 100.00% Establishment
Nanjing, Jiangsu
Jiangsu Huaqu Wine Group Co., Ltd. Nanjing, Jiangsu province Commerce 97.00% Establishment
province
Suqian, Jiangsu
Suqian Tianhai Commerce and Trade Co., Ltd. Suqian, Jiangsu province Commerce 100.00% Establishment
province
Suqian, Jiangsu
Suqian Yanghe Guibinguan Co., Ltd. Suqian, Jiangsu province Hotel industry 100.00% Establishment
province
Suqian, Jiangsu
Su Wine Group Trade Co., Ltd Suqian, Jiangsu province Commerce 83.63% 16.37% Establishment
province
Jiangsu Yanghe Liquor Operation Management Suqian, Jiangsu
Suqian, Jiangsu province Commerce 100.00% Establishment
Co., Ltd. province
Sihong, Jiangsu
Jiangsu Shuanggou Liquor Operation Co., Ltd. Sihong, Jiangsu province Commerce 100.00% Establishment
province
Jiangsu Dongdi Union International Trade Co., Suqian, Jiangsu
Suqian, Jiangsu province Commerce 100.00% Establishment
Ltd. province
Jiangsu Dongdixinghui International Trade Co., Suqian, Jiangsu
Suqian, Jiangsu province Commerce 100.00% Establishment
Ltd. province
207
Suqian, Jiangsu
Suqian Blue Dream Trade Co., Ltd. Suqian, Jiangsu province Commerce 100.00% Establishment
province
Siyang, Jiangsu
Siyang Lantu Liquor Operation Co., Ltd. Siyang, Jiangsu province Commerce 100.00% Establishment
province
JSSJ Industry (HK) Holdings Co., Limited Hong Kong, China Hong Kong，China CORP 100.00% Establishment
Shiyan, Hubei
Hubei Lihuacun Trade Co., Ltd. Yunxian, Hubei province Commerce 100.00% Establishment
province
Business combinations involving
Sihong, Jiangsu Liquor manufacture and
Jiangsu Shuanggou Distillery Stock Co., Ltd. Sihong, Jiangsu province 99.99% 0.01% enterprises not under common
province sales
control
Business combinations involving
Sihong Shuanggou Antai Waste Recycling Co., Sihong, Jiangsu
Sihong, Jiangsu province Waste material recycle 100.00% enterprises not under common
Ltd. province
control
Business combinations involving
Shiyan, Hubei Process liquor, wine and
Hubei Lihuacun Liquor Industry Co., Ltd. Yunxian, Hubei province 100.00% enterprises not under common
province fruit wine
control
Business combinations involving
Ningxiang, Hunan Manufacture and sale of
Ningxiang Miluochun Liquor Industry Co., Ltd. Ningxiang, Hunan province 100.00% enterprises not under common
province liquor and compound wine
control
Business combinations involving
Binxian, Heilongjiang Binxian, Heilongjiang
Harbin Binzhou Brewery Co., Ltd. Liquor-making 100.00% enterprises not under common
province province
control
Assets/investment
Su Wine Group Jiangsu Wealth Management Co., Nanjing, Jiangsu
Nanjing, Jiangsu province management, information 100.00% Establishment
Ltd. province
consultation
Ningxiang, Hunan
Ningxiang Miluochun Trade Co., Ltd. Ningxiang, Hunan province Commerce 100.00% Establishment
province
Biological engineering
Jinagsu Kelite Biology Technology Research Suqian, Jiangsu research, enzyme
Suqian, Jiangsu province 100.00% Establishment
Institute Co., Ltd. province preparation research and
technology transfer
Suqian, Jiangsu
Suqian Blue Sky Trade Co., Ltd. Suqian, Jiangsu province Commerce 100.00% Establishment
province
208
Liquor, compound wine,
Shiyan Yunyang Lihuacun Package Service Shiyan, Hubei
Shiyan, Hubei province health wine packaging 100.00% Establishment
Co.,Ltd. province
service
Network technology
development, technical
Jiangsu Lion and Sheep Network Technology Nanjing, Jiangsu
Nanjing, Jiangsu province consultation, technical 100.00% Establishment
Co.,Ltd. province
services; Software
development
Business combinations involving
Nanjing, Jiangsu
Jiangsu Zhaiugou E-commerce Co., Ltd Nanjing, Jiangsu province Commerce 100.00% enterprises not under common
province
control
Business combinations involving
Nanjing, Jiangsu Freight Transport,
NanjingTongmeng City Logistics Co., Ltd. Nanjing, Jiangsu province 99.99% enterprises not under common
province Warehouse service
control
Business combinations involving
Nanjing, Jiangsu Freight Transport,
Nanjing Jinling Tongmeng City Logistics Co., Ltd. Nanjing, Jiangsu province 51.00% enterprises not under common
province Warehouse service
control
Business combinations involving
Huaian, Jiangsu Freight Transport,
Huaian Tongmeng City Logistics Co., Ltd. Huaian, Jiangsu province 51.00% enterprises not under common
province Warehouse service
control
Business Combinations involving
Changzhou Jiezzhong Tongmeng City Logistics Changzhou, Jiangsu Freight Transport,
Changzhou, Jiangsu province 51.00% enterprises not under common
Co., Ltd. province Warehouse service
control
Business combinations involving
Nantong, Jiangsu Freight Transport,
Nantong Tongmeng City Logistics Co., Ltd. Nantong, Jiangsu province 51.00% enterprises not under common
province Warehouse service
control
Business combinations involving
Suzhou, Jiangsu Freight Transport,
Suzhou Tongmeng City Logistics Co., Ltd. Suzhou, Jiangsu province 51.00% enterprises not under common
province Warehouse service
control
Business combinations involving
Taizhou, Jiangsu Freight Transport,
Taizhou Tongmeng City Logistics Co., Ltd. Taizhou, Jiangsu province 51.00% enterprises not under common
province Warehouse service
control
Business combinations involving
Wuxi, Jiangsu Freight Transport,
Wuxi Tongmeng City Logistics Co., Ltd. Wuxi, Jiangsu province 51.00% enterprises not under common
province Warehouse service
control
Business combinations involving
Yancheng, Jiangsu Freight Transport,
Yancheng Tongmeng City Logistics Co., Ltd. Yancheng, Jiangsu province 51.00% enterprises not under common
province Warehouse service
control
209
Business combinations involving
Zhenjiang, Jiangsu Freight Transport,
Zhenjiang Tongmeng City Logistics Co., Ltd. Zhenjiang, Jiangsu province 51.00% enterprises not under common
province Warehouse service
control
Business combinations involving
Yangzhou, Jiangsu Freight Transport,
Yangzhou Tongmeng City Logistics Co., Ltd. Yangzhou, Jiangsu province 53.00% enterprises not under common
province Warehouse service
control
Business combinations involving
Suqian, Jiangsu Freight Transport,
Suqian Tongmeng City Logistics Co., Ltd. Suqian, Jiangsu province 51.00% enterprises not under common
province Warehouse service
control
Business combinations involving
Xuzhou, Jiangsu Freight Transport,
Pizhou Tongmeng City Logistics Co., Ltd. Xuzhou, Jiangsu province 51.00% enterprises not under common
province Warehouse service
control
Business combinations involving
Lianyungang Huaxing Tongmeng City Logistics Lianyungang, Jiangsu Lianyungang, JiangsuFreight Transport,
51.00% enterprises not under common
Co., Ltd. province province Warehouse service
control
Business combinations involving
Nanjing, Jiangsu
Jiangsu Zhaibianli E-commerce Co., Ltd Nanjing, Jiangsu province Commerce 100.00% enterprises not under common
province
control
Business combinations involving
Hongkong Zhaiugou International Trade Co., Ltd Hong Kong, China Hong Kong, China Commerce 100.00% enterprises not under common
control
Business combinations involving
Guiyang, Guizhou Liquor production; Liquor
Guizhou Guijiu Co., Ltd. Guiyang, Guizhou province 100.00% enterprises not under common
province and alcohol sales
control
Guizhou Guijiu Liquor Operation Management Guiyang, Guizhou
Guiyang, Guizhou province Commerce 100.00% Establishment
Co., Ltd. province
Guiyang, Guizhou
Guizhou Guijiu Trade Co., Ltd. Guiyang, Guizhou province Commerce 100.00% Establishment
province
Business combinations involving
ZYG E-Commerce HK Limited Hong Kong, China Hong Kong, China Industrial investment 100.00% enterprises not under common
control
Business combinations involving
ZYG LTD Cayman Islands Cayman Islands Industrial investment 69.08% enterprises not under common
control
Yang He International Investment Ltd British Virgin Islands British Virgin Islands Industrial investment 100.00% Establishment
210
Healthy wine, nutrition
Jiangsu Shuanggou Healthy Liquor Research Suqian, Jiangsu
Suqian, Jiangsu province and health food research 100.00% Establishment
institute Co., Ltd. province
and development
Business combinations involving
ZYG Technology Investment Ltd British Virgin Islands British Virgin Islands Industrial investment 71.03% enterprises not under common
control
Suqian, Jiangsu
Jiangsu Blue Dream E- commerce Co., Ltd. Suqian, Jiangsu province Commerce 100.00% Establishment
province
Network technology
Jiangsu Yanghe Weiketang Network Technology Nanjing, Jiangsu development, technical
Nanjing, Jiangsu province 100.00% Establishment
Co., Ltd. province consultation, technical
service
Business combinations involving
Renhuai, Guizhou Liquor manufacture and
Guizhou Welcome Drink Stock Co., Ltd. Renhuai, Guizhou province 100.00% enterprises not under common
province sales
control
Road general cargo
Suqian,Jiangsu transport, cargo
Suqian Su Wine Logistics Co., Ltd. Suqian, Jiangsu province 100.00% Establishment
province distribution, freight
forwarder
Movable and real estate
investment services,
Yang He Chile SPA Santiago, Chile Santiago, Chile 100.00% Establishment
building construction
services
Foreign investment, Asset
Suqian, Jiangsu
Jiangsu Yanghe Investment Management Co., Ltd. Suqian, Jiangsu province management, Investment 50.00% 50.00% Establishment
province
consulting
Enterprise management
consulting; Industrial
Su Wine Group Nanjing Operation Management Nanjing, Jiangsu
Nanjing, Jiangsu province investment; Food sales; 100.00% Establishment
Co., Ltd. province
Gift sales; House lease;
Hotel management
Nanjing, Jiangsu
Jiangsu Zhongshiji liquor Co., Ltd. Nanjing, Jiangsu province Food sales, Gift sales 100.00% Establishment
province
Yanghe Hong Kong Distillery Co., Ltd. HongKong, China Hong Kong,China Industrial investment 100.00% Establishment
211
Painting and calligraphy
creation, exhibition;
Academic research; Public
Jiangsu Yanghe Calligraphy and Painting Nanjing, Jiangsu
Nanjing, Jiangsu province art education; Cultural and 100.00% Establishment
Academy province
creative products
development and
promotion
Sihong, Jiangsu
Jiangsu Shuanggou Wine Sales Co., Ltd Sihong, Jiangsu Province Commerce 100.00% Establishment
Province
Suqian, Jiangsu Internet information
Jiangsu Jiushang Internet Technology Co., LTD Suqian, Jiangsu Province 51.00% Establishment
Province service, alcohol sales
Tobacco retail, catering,
Suqian, Jiangsu
Jiangsu Yanghe Cultural Tourism Co., LTD Suqian, Jiangsu Province accommodation, tourism 100.00% Establishment
Province
business
Tobacco retail, catering,
Jiangsu Yanghe Cultural Tourism Operation Co., Suqian, Jiangsu
Suqian, Jiangsu Province accommodation, tourism 80.00% Establishment
LTD. Province
business
Sihong , Jiangsu Wine production and
Siyang Blue Sky Packaging Service Co., Ltd Sihong, Jiangsu Province 100.00% Establishment
Province packaging services
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 notes:
212
2. Interests in joint ventures and associates
(1) Summary of financial information of insignificant joint ventures and associates
Summarized information is as follows:
Unit: CNY
Closing balance/ amount for Opening balance/ amount for the
the current period prior period
Associates: -- --
Total carrying amount of investment 8,173,436.53 10,261,147.01
The aggregate amount of the following
items calculated based on the Company’s -- --
equity share percentage of the associates
--Netprofit -2,562,964.31 -658,669.17
--Other comprehensive income 10,293.63 -342,416.50
-- Total comprehensive income -2,552,670.68 -1,001,085.67
Joint ventures: -- --
Total carrying amount of investment 24,569,960.78 19,267,230.15
The sum of the following items calculated
-- --
according to the shareholding ratio
--Netprofit 5,511,685.26 4,599,489.64
-- Total comprehensive income 5,511,685.26 4,599,489.64
VII. Risks related to financial instruments
The Group is exposed to various financial risks in the ordinary course of business, mainly
includes 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 2021. 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
213
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.
The maturity of the financial liabilities held by the Company according to theundiscounted
remaining contractual obligations is analyzed as follows:
Closing balance
Item
Within 1 year 1-2 years 2-3 years Over 3 years Total
Accounts
1,444,175,262.08 1,444,175,262.08
payable
Other payables 1,808,838,882.26 1,808,838,882.26
Long-term loan 36,360.00 36,360.00
Long-term
196,694,194.53 196,694,194.53
payables
(Continued)
Opening balance
Item
Within 1 year 1-2 years 2-3 years Over 3 years Total
Accounts
1,151,871,136.29 1,151,871,136.29
payable
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
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:
Closing balance Opening balance
Item Balance in
Exchange Balance in Balance in Exchange
foreign Balance in CNY
rate CNY foreign currency rate
currency
Cash and
cash
equivalents
Include: USD 10,263,661.09 6.3757 65,438,024.01 1,470,471.60 6.5249 9,594,680.17
HKD 4,177,908.36 0.8176 3,415,857.87 46,702.46 0.84164 39,306.66
1,119,093,451.
CLP 0.007483 8,374,417.98 60,178,014.00 0.009181 552,494.35
00
Other
receivables
214
HKD 123,179.16 0.8176 100,711.28 125,679.16 0.84164 105,776.61
Accounts
payable
Include: USD 938,460.83 6.3757 5,983,344.71 499,163.86 6.5249 3,256,994.27
CLP 35,950.00 0.009181 330.06
Other payables
Include: HKD 448,590.73 0.8176 366,767.78 1,542,853.06 0.84164 1,298,526.85
CLP 579,431.00 0.007483 4,336.01 14,000.00 0.009181 128.53
Net amount 70,974,562.64 5,736,278.08
The amount of foreign currency financial assets and financial liabilities of the company is small,
and exchange rate fluctuations have little impact on the company's business performance.
VIII. Fair value disclosure
1.The Financial Assets and Financial Liabilities Measured at Fair Value at
the end of the Reporting Period
Unit: CNY
Closing fair value
Item
Level 1 Level2 Level3 Total
Continuous fair value
-- -- -- --
measurement
(1) Debt instrument investment 12,183,632,684.17 12,183,632,684.17
(2) Equity instrument
1,299,254,210.43 5,106,949,582.47 6,406,203,792.90
investment
Receivables Financing 222,793,060.40 222,793,060.40
Bank acceptance bill 222,793,060.40 222,793,060.40
Total assets continuously
measured at fair value 1,299,254,210.43 17,513,375,327.04 18,812,629,537.47
Non-Continuous fair -- -- -- --
value measurement
2. Basis for determining the market price of continuous and
non-continuous level 1 fair value measurementitems
Local open market closing price
3.Valuation techniques and qualitative and quantitative information of key
parameters adopted forcontinuous and non-continuous level 3 fair value
measurement it
Debt instrument investment: the expected rate of return is taken as an important reference to
215
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
Receivables for Financing：the par value is taken as an important reference to evaluateits fair
value
4.In case of transfers among levels for the current period, explain the
transfer reasons and policies fordetermining transfer time point for
continuous fair value measurement items
Restricted shares of listed companies held in equity instrument investment are changed to
tradable shares in the current period, and the fair value measurement of the current period is
changed from the second level to the first level, and the closing price of the open market is used
as the basis of its fair value measurement.
IX. Related parties and related party transactions
1. The parent company of the Company
Voting
Shareholding
Name of parent Registered Ratio by
Registration place Business nature ratio by the parent
company capital the parent
company
company
Sales of brewing
machinery
equipment, export
ofliquor, import of
various raw and
Jiangsu Yanghe
Suqian, Jiangsu auxiliary materials, CNY 1 billion 34.16% 34.16%
Group Co., Ltd.
equipment and
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.
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
JiangsuSu 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
216
Joint stock company, holding 12.50%
VSPT, Via San Pedro TarapacáS.A.
shares
Controlled by Diageo International Spirits
Jiangsu Diageo Wine Co. LTD Company Limited, joint venture of the
Company
Suqian Industrial Development Group Actual controller
5. Related party transactions
(1) Related party transactions regarding sales and purchases of goods, provision of services
and receiving services
Statement of purchase of goods / Receipt of labor services
Unit: CNY
Approved Whether exceeding
Transaction Amount for the Amount for the
Related Party transaction the approved
Content current period prior period
amount transaction amount
VSPT, Via San
Red wine 21,169,155.61 6,235,323.42
Pedro Tarapacá S.A
Nanjing Hesong Advertising and
Culture Technology general publicity 303,276.09 8,416,890.42
Co., Ltd. expense
Jiangsu Diageo
Liquor 10,129,543.56 5,308,792.27
Wine Co. LTD.
Statement of sales of goods/ rendering of labor services
Unit: CNY
Amountfor the Amount for the prior
Related party Transaction content
currentperiod period
Shanghai Haiyan Logistics
Sales of liquor 5,067,075.48 4,354,544.40
Development Co., Ltd.
Jiangsu SuWine Cultural
Sales of liquor 46,448,093.82 30,058,725.66
Transmission Co., Ltd.
Jiangsu Diageo Wine Co. Ltd. Sales of liquor 3,820,908.96 4,097,463.51
Jiangsu
Consulting fee income 967,085.23
DiageoWineCo.LTD
Nanjing Hesong Culture
Consulting fee income 673,267.32
Technology Co., Ltd.
Jiangsu Xinghe Investment
Consulting fee income 2,443,396.23 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 party lease
The Company as a 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 201,834.86 201,834.86
Co., Ltd.
(3) Compensation for key managers
Item Amount for the current period Amount for the prior period
217
(4) Other related party transactions
In April 2021, the Company and Suqian Industrial Development Group Co., Ltd. jointly
established Jiangsu Jiushang Internet Technology Co., Ltd., including RMB 10.20 million,
accounting for 51% of the registered capital; Suqian Industrial Development Group Co., Ltd.
contributed RMB 9.80 million, accounting for 49%.
6. Receivables from and payables to related parties
(1) Payables
Unit: CNY
Closing
Item Related party Opening balance
balance
Shanghai Haiyan Logistics Development
Contract liabilities 6,010,270.99 6,396,586.54
Co., Ltd.
Contract liabilities Jiangsu SuWine Cultural Transmission Co., Ltd. 26,791,306.31 7,523,939.23
Accounts payable Jiangsu Diageo WineCo. Ltd. 2,195,373.19 255,806.65
Shanghai Haiyan Logistics Development
Other Payables 151,531.60 83,531.60
Co., Ltd.
Other Payables Jiangsu SuWine Cultural Transmission Co., Ltd. 1,000,451.00 940,228.00
X. Share-based payment
1. Others
According to Phase I Core Backbone Shareholding Plan (Draft) of Jiangsu Yanghe Distillery Co.,
Ltd., deliberated and approved at the second Extraordinary Shareholders' Meeting of 2021 held on
August 2, 2021, The shareholding scale of the shareholding plan does not exceed 9,661,310 shares,
accounting for about 0.64% of the total 1,506,988,000 shares of the Company on the
announcement date of the draft shareholding plan; This Shareholding plan takes "shares" as the
subscribed units, each share is CNY 1.00, and the total subscribed shares shall not exceed CNY
1,002,167,686.30. The total capital to be raised shall be capped at CNY 1,002,167,686.30, and the
specific shares shall be determined according to the actual amount of capital contribution. The
stock in this stock plan is derived from the company's A-share ordinary shares repurchased by the
special account. The duration of the shareholding plan is 36 months, and the lock-up period of the
acquired shares is 24 months, which shall be calculated from the date when the draft shareholding
plan is approved by the Shareholders' Meeting and the company announces the last transfer of
the underlying shares to the shareholding plan. Upon expiration of the shareholding plan, the
shareholding plan shall terminate automatically, and it may be extended upon the consent of
more than half of the members of the management Committee and the approval of the board of
directors. Upon expiration of the lock-up period, the stock rights and interests held in the stock
holding plan will be disposed according to the assessment results of the company's performance
objectives. The performance assessment of the shareholding plan requires that the operating
revenue in 2021 should increase by no less than 15% compared with 2020 and the operating
revenue in 2022 should increase by no less than 15% compared with 2021. If the performance
assessment indicators are not reached, all the underlying stock rights and interests held in the
shareholding plan shall be recovered by the management Committee and sold at an appropriate
time after the expiration of the lock-up period and shall be returned to the holder on the basis of
the lower investment amount and the sold amount (after deducting relevant expenses), and the
remaining profits shall be enjoyed by the Company.
A total of 9,118,384 shares were subscribed in the ESOP at an average price of CNY 103.73 per
share, The total subscription amount was CNY 945,850,000.00, which was written off from the
company's inventory shares, and the transfer registration were completed on September 10, 2021.
The fair value of the repurchased shares subscribed in the ESOP is determined to be CNY
130.58 per share, and the total amount of expenses recognized in the current period is CNY
40,703,820.01, which is included in capital reserve - Other capital reserve
218
XI. Commitments and contingencies
1. Significant commitments
Significant commitments as of the balance sheet date
By the end of 31 December 2021, there were no significant commitments needed to be
disclosed.
2. Contingencies
(1) Significant contingencies as of the balance sheet date:
By the end of 31 December 2021, there were no significant commitments needed to be
disclosed.
(2) If no contingencies that need to be disclosed, statement should be made.
The Company has no significantl contingencies to disclose.
XII. Post balance sheet event
1. Profit distribution
Unit: CNY
Profits or dividends to be distributed 27,801,336,778.06
Profits or dividends declared for distribution after being approved 4,519,335,222.00
2.Descriptions of other events subsequent to 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. ,CNY22,942,500.00 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 71.7430 million is calculated from 8 September 2017 to 12
December 2017; CNY 32.7750 million is calculated from 13 December2017to the date of actual
payment. The sum of the interest calculated above is multiplied by 70%.) 2020 Annual Report of
Jiangsu Yanghe Distillery Su Wine Group Trade Co., Ltd. dissatisfied with the above judgment and
has appealed to the Jiangsu Provincial Higher People's Court. On 9 July 2021, Jiangsu Provincial
Higher People's Court (2019) Su Min Zhong No. 1157 "Notice of Acceptance of the Case" was
received. The judgment is as follows: Dismissing the appeal and the original judgment is affirmed.
This judgment is a final judgment.
On September 10, 2021, Su Wine Group Trade Co., Ltd. received the above compensation and
interest (RMB 35,044,018.96) transferred from the Industrial and Commercial Bank of China
Henan Branch.
ICBC Zhengzhou Jiefang Road Branch refused to accept the final judgment of Jiangsu Provincial
High People's Court, Apply to the Supreme People's Court of the People's Republic of China for a
retrial. On March 18, 2022,Su Wine Group Trade Co., Ltd. received the Notice of Supreme Court Of
the People's Republic of China (2022) Supreme Court Minshen 309.As of April 27, 2022, the case is
in the process of retrial.
As of April 27, 2022, the Company has no other post-balance sheet events that need to be
disclosed except the above.
219
XIII. Notes to major items of financial statements of parent company
1. Accounts receivable
(1) Disclosure of accounts receivable by categories
Unit: CNY
Provision for bad debts by individual
Unit: CNY
Closing balance Opening balance
Carrying balance Credit loss provision Carrying balance Credit loss provision
Type
Percentage Proportion of Book value Percentage Proportion of Book value
Amount Amount Amount Amount
(%) provision (%) provision
Including:
Provision for bad debts
424,595,684.45 100.00% 424,595,684.45 387,657,700.12 100.00% 387,657,700.12
by portfolio
Including:
Risk portfolio
Other portfolio 424,595,684.45 100.00% 424,595,684.45 387,657,700.12 100.00% 387,657,700.12
Total 424,595,684.45 100.00% 424,595,684.45 387,657,700.12 100.00% 387,657,700.12
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
Other portfolio 424,595,684.45
Total 424,595,684.45 --
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 consolidationscope, tax
refunds receivable, collection and withholding of funds. By referring to the historical credit loss experience and combining the current situation and the forecast of
the future economic situation, the company compiled a comparison table between the overdue age of receivables and the expected credit loss rate of the whole
duration to calculate the expected credit loss.
220
Provision for bad debts by portfolio ：
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
221
Analysis by aging
Unit: CNY
Aging Closing balance
Within 1 year (including 1 year) 424,595,684.45
Total 424,595,684.45
(2) Top five entities with the largest balances of the accounts receivables
Unit: CNY
Proportion in the total accounts
Company’sname Closing balance Provision amount
receivables (%)
Siyang Lantu Liquor Operation
315,543,651.44 74.32%
Co., Ltd.
Hubei Lihuacun Liquor Industry
103,684,944.60 24.42%
Co., Ltd.
Ningxiang Miluochun Trade
5,183,266.40 1.22%
Co., Ltd.
Jiangsu Shuanggou Liquor
183,822.01 0.04%
Operation Co., Ltd.
Total 424,595,684.45 100.00%
2.Other receivables
Unit: CNY
Item Closing balance Opening balance
Dividend receivable 1,812,736,853.55 1,775,818,203.33
Other receivables 399,089,264.75 8,627,951,102.36
Total 2,211,826,118.30 10,403,769,305.69
(1) Dividend receivable
Unit: CNY
Item Closing balance Opening balance
Jiangsu Shuanggou Distillery Stock Co., Ltd. 1,775,818,203.33 1,775,818,203.33
Suqian Su Wine Logistics Co., Ltd. 35,000,000.00
Jiangsu Yanghe Weiketang Network Technology
1,918,650.22
Co. , Ltd.
Total 1,812,736,853.55 1,775,818,203.33
(2) Significant dividend receivable for more than 1 year
Unit: CNY
Reasons for impairment and its
Project Closing balance aging
non-recovery judgment basis
Jiangsu Shuanggou Distillery Stock not recovered
1,775,818,203.33 1-2years No
Co., Ltd. Temporarily
Total 1,775,818,203.33 -- -- --
3 Other receivables
(1) Disclosure of other receivable by nature
Unit: CNY
Nature of other receivables Closing balance Opening balance
Payments by related parties within the
397,751,387.98 8,625,917,478.43
Group
Guarantee deposit 15,060,000.00 15,020,000.00
Business loans and petty cash 575,275.71 1,203,377.75
Other receivables 2,527,992.51 3,768,716.91
222
Total 415,914,656.20 8,645,909,573.09
(2) Provision for bad debt
Unit: CNY
Phase 1 Phase2 Phase 3
Provisions fordebts Total
Future 12-month Lifetime ECL (without Lifetime ECL (with
ECL credit impairment) credit impairment)
Balance as at 1 January
83,005.77 17,875,464.96 17,958,470.73
2021
Change of opening
balance as at 1
January 2021 in
current period
Provisionin 2021
Reverse in 2021 25,079.28 1,108,000.00 1,133,079.28
Balance as at 31
57,926.49 16,767,464.96 16,825,391.45
December 2021
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) 377,596,054.74
1-2 years 7,764,186.25
2-3 years 8,830,032.00
Over 3 years 21,724,383.21
3-4 years 848,000.00
4-5 years 291,400.00
Over 5 years 20,584,983.21
Total 415,914,656.20
(3) Provision, recovery or reversal for bad debt during this period
Provision for bad debt during this period ：
Unit: CNY
Changes in the current period
Opening
Category Recovered or Closing balance
balance Provision Writeoff Other changes
reversed
Provision for other
17,958,470.73 1,133,079.28 16,825,391.45
receivables bad debt
Total 17,958,470.73 1,133,079.28 16,825,391.45
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
223
Provisioning
Proportion in total
Company’s Name Category Closing balance Aging amount at
receivables
period end
Guizhou Guijiu Co.,
Loan 351,151,923.52Within 1 year 84.43%
Ltd.
Siyang County Blue
Sale of fixed
Sky Packaging 20,210,379.40Within 1 year 4.86%
assets
Service Co., Ltd
Jiangsu Juntai
Properties Co., Lt.,
Suqian Guotai Deposit 15,000,000.00Over 5 years 3.61% 15,000,000.00
Department Store
Co., Ltd.
Within 1 year
400,000.00, 1-2
years 460,000.00,
Harbin Binzhou 2-3 years
Loan 14,577,100.00 3.50%
Brewery Co., Ltd. 8,830,000.00, 3-4
years 848,000.00,
Over 3 years
4,039,100.00
Within 1 year
Suqian Su Wine
Loan 7,505,495.46 211,309.21, 1-2 1.80%
Logistics Co., Ltd.
years 7,294,186.25
Total -- 408,444,898.38 -- 98.20% 15,000,000.00
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 7,994,556,728.
7,994,556,728.17 7,964,291,378.23 7,964,291,378.23
subsidiaries 17
7,994,556,728.
Total 7,994,556,728.17 7,964,291,378.23 7,964,291,378.23
17
(1) Investment in subsidiaries
Unit: CNY
Increase in the current period
Closing
Provision Closing balanceof
Investee Opening balance
Increase Decrease for Others balance provision for
impairment impairment
Suqian Yanghe
Guibinguan Co., 700,000.00 700,000.00
Ltd.
Jiangsu
Shuanggou 4,147,560. 1,717,299,880.
1,713,152,320.00
Distillery Stock 97 97
Co., Ltd.
Su Wine Trade 21,017,788 306,242,867.2
285,225,078.23
Group Co., Ltd. .97 0
Jiangsu Yanghe
10,983,280.00 10,983,280.00
Liquor Operation
224
Management 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 WineGroup
Jiangsu Wealth 3,000,000,000.
3,000,000,000.00
Management 00
Co., Ltd.
Jinagsu Kelite
Biology
Technology 10,000,000.00 10,000,000.00
Research Institute
Co., Ltd.
Jiangsu Lionand
Sheep Network
5,460,000.00 5,460,000.00
Technology Co.,
Ltd.
Guizhou Guijiu 943,300,000.0
943,300,000.00
Co., Ltd. 0
Jiangsu Yanghe
Weiketang
Network 300,000.00 300,000.00
Technology Co.,
Ltd.
456,880,000.0
Yanghe Chile SPA 456,880,000.00
0
Jiangsu Yanghe
Investment 1,500,000,000.
1,500,000,000.00
Management Co., 00
Ltd.
Yanghe Hong
Kong Liquor Co., 18,000,000.00 18,000,000.00
Ltd.
Jiangsu Jiushang
Internet 5,100,0
5,100,000.00
Technology Co., 00.00
LTD.
5,100,0 25,165,349 7,994,556,728.
Total 7,964,291,378.23
00.00 .94 17
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 9,855,981,149.71 5,134,136,876.95 9,161,576,332.09 4,195,871,188.04
Other business 620,861,040.12 558,762,391.77 653,598,000.33 607,411,453.26
Total 10,476,842,189.83 5,692,899,268.72 9,815,174,332.42 4,803,282,641.30
Information relating to revenue
225
Unit: CNY
Category of Contract Segment 1 Segment 2 Total
Commodity type
Including:
By operating region
Including:
Type of market or customer
Including:
Type of contract
Including:
By the time of commodity
transfer
Including:
By contract term
Including:
By Selling channel
Including:
Total
Information relating to performance obligations
None
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 21,199,823,390.34, of
which CNY 12,048,368,518.30 is expected to be recognized in 2022, and CNY 9,151,454,872.04 is
expected to be recognized in 2023. 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
3,816,035,295.48 6,249,926,000.50
investments under the equity method
Investment income from disposing long-
term equity investments
Investment income from financial assets
10,199,080.04 6,204,748.21
held for trading during the holding period
Investment income from disposal of
198,932,628.59 212,610,583.98
financial assets held for trading
Total 4,025,167,004.11 6,468,741,332.69
XIV. Supplementary information
1. Detailed statement of non-recurring profits and losses
Applicable √ N/A
Unit: CNY
Item Amount Notes
226
Profit or loss from disposal of
-10,687,905.76
non-current assets
Government grants accounted for, in the
profit or loss for the current period (except
for the government grants closely related to
87,366,302.47
the business of the Company and given 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
153,349,470.08
value changes, and 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
Reversal of the impairment provision for
receivables subject to separate 12,009,031.70
impairment test
Other non-operating income and expense
-31,556,128.88
except the items mentioned above
Other profit and loss items that conform to
the definition of non-recurring profits and 3,484,445.51
losses
Less: Effect of income tax 79,096,331.61
Effect of minority equity -55,656.60
Total 134,924,540.11 --
Specific details of other profit and loss items that conform to the definition of non-recurring
profits and losses
Applicable √ N/A
The Company does not have any Specific details of other profit and loss items that conform to the
definition of non-recurring profits and losses
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
227
Net profits attributable to
ordinary shareholders of the 18.55% 5.0141 5.0141
Company
Net profits attributable to
ordinary shareholders of the
18.22% 4.9239 4.9239
Company after deduction of
extraordinary gain and loss
3. Other
228
