Jiangsu Yanghe Distillery Co., Ltd.
2022 Annual Report
April 2023
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 37.40
(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 2022 Annual Report was publicly disclosed on the Shenzhen Stock Exchange and
www.cninfo.com.cn on 26 April 2023. If there are any differences between the English version and the Chinese
one, please refer to the latter.
2
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 Ⅲ Corporate Governance…………………………………………………………………..35
Section Ⅲ Environment and Social Responsibility…………………………………………..71
Section Ⅲ Significant Events…………………………………………………………………………..78
Section Ⅲ Changes in Shares and Information about Shareholders………………..99
Section Ⅲ Information about Preference Shares…………………………………………….109
Section Ⅲ Information about Bonds……………………………………………………………...110
SectionⅩ Financial Report…………………………………………………………………………….111
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. 2022 to 31 Dec. 2022
The report Refer to 2022 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.
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 Company Shenzhen Stock Exchange
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 Joint-Stock 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 Town, 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 Town, No.118 Jiudu Avenue, Yanghe Town,
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
6. Key accounting data and financial indicators
Whether the Company performed a retroactive adjustment or restatement of accounting data
□Yes No
6
2022 2021 YoY Change 2020
Operating revenues (CNY) 30,104,896,186.70 25,350,178,204.45 18.76% 21,101,051,131.79
Net profits attributable to
shareholders of the Company 9,377,832,429.08 7,507,682,797.40 24.91% 7,482,228,633.63
(CNY)
Net profits attributable to
shareholders of the Company
9,276,644,831.29 7,372,758,257.29 25.82% 5,652,068,941.98
before non-recurring gains
and losses (CNY)
Net cash flows from
3,647,623,952.19 15,318,165,480.53 -76.19% 3,978,790,835.80
operating activities (CNY)
Basic earnings per share
6.2251 5.0141 24.15% 4.9843
(CNY/share)
Diluted earnings per share
6.2251 5.0141 24.15% 4.9843
(CNY/share)
Weighted average ROE 21.03% 18.55% 2.48% 20.20%
At the end of 2022 At the end of 2021 YoY Change At the end of 2020
Total assets (CNY) 67,964,247,134.43 67,798,704,193.76 0.24% 53,866,259,306.59
Net assets attributable to
shareholders of the Company 47,474,946,974.68 42,486,209,789.59 11.74% 38,484,583,983.54
(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
□Yes No
The net profit before or after deducting non-recurring profits and losses is negative
□Yes No
7. Differences in accounting data under domestic and overseas accounting standards
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
and China accounting standards
□Applicable √ N/A
No such differences during this period.
8. Key financial results by quarter
Unit: CNY
7
Q1 Q2 Q3 Q4
Operating revenues 13,026,004,652.73 5,881,994,189.67 7,574,626,286.45 3,622,271,057.85
Net profits attributable to
4,985,243,733.48 1,908,128,487.64 2,178,470,980.32 305,989,227.64
shareholders of the Company
Net profits attributable to
shareholders of the Company
before deducting 4,897,883,633.65 1,744,789,237.61 2,200,554,186.42 433,417,773.61
non-recurring profits and
losses
Net cash flows from
-3,061,792,273.86 -1,391,962,784.13 3,497,754,845.22 4,603,624,164.96
operating activities
Whether there are any material differences between the financial indicators above or their summations and
those which have been disclosed in quarterly or semi-annual reports.
□Yes No
9. Non-recurring profits and losses
√Applicable □N/A
Unit: CNY
Item 2022 2021 2020 Note
Profit or loss from disposal of non-current
assets (including the write-off portion of the -5,887,909.75 -10,687,905.76 -4,735,638.66
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 60,162,525.57 87,366,302.47 98,175,595.19
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
fair value arising from holding trading
financial assets and trading financial 77,907,331.60 153,349,470.08 2,356,818,184.75
liabilities, as well 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 12,009,031.70
impairment test is carried out individually
Other non-operating income and
827,476.72 -31,556,128.88 -11,429,697.22
expenditure except above-mentioned items
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Other profit and loss items that conform to
the definition of non-recurring profits and 3,610,292.93 3,484,445.51 818,031.70
losses
Less: Corporate income tax 34,647,176.78 79,096,331.61 609,395,883.18
Minority interests (after tax) 784,942.50 -55,656.60 90,900.93
Total 101,187,597.79 134,924,540.11 1,830,159,691.65 --
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 963 Chinese Baijiu enterprises above
designated size nationwide in 2022, a decrease of 2 compared with the previous year; The output of Chinese
Baijiu was 6,712,400.00 kiloliters, a year-on-year decrease of 5.58%; The operating revenue was CNY662.645
billion, a year-on-year increase of 9.64%; The total profit was CNY220.172 billion, a year-on-year increase of
29.36%. 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 of Chinese Baijiu
industry has shown a steady upward trend in the fierce competition.
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 brands, Yanghe and
Shuanggou, two time-honored Chinese brands, six well-known Chinese trademarks, and two 4A level scenic
spots. 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, in the face of complex international and domestic
situations and fierce market competition, the company overcame pressure and maintained a healthy
development trend of "steady progress" and achieved an operating revenue of CNY30.105 billion, a year-on-year
increase of 18.76%; The company realized a net profit attributable to shareholders of listed companies of
CNY9.378 billion, a year-on-year increase of 24.91%. According to the report of Chinese Baijiu listed companies in
the first three quarters of 2022, 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 engaged
The main business of the company is the production and sales of Chinese Baijiu, which is produced by solid-state
fermentation and sold mainly through 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 Jiu, 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.
The revenue of various products is as follows:
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Unit: CNY
Operating revenue
Products
2022 YoY change
Mid/high end products 26,226,828,574.84 21.87%
Ordinary products 3,273,034,492.80 4.97%
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
Gross
Types Operating revenue YoY change Operating cost YoY change YoY change
margin
By sales model
Wholesale
29,107,238,759.97 19.91% 7,130,879,687.09 26.20% 75.50% -1.22%
distribution
Online
392,624,307.67 7.68% 84,037,614.45 60.96% 78.60% -7.08%
direct selling
Subtotal 29,499,863,067.64 19.73% 7,214,917,301.54 26.51% 75.54% -1.31%
By geographical segment
Jiangsu 13,321,057,010.40 15.28% 3,659,281,374.24 24.59% 72.53% -2.05%
Ex-Jiangsu 16,178,806,057.24 23.66% 3,555,635,927.30 28.55% 78.02% -0.84%
Subtotal 29,499,863,067.64 19.73% 7,214,917,301.54 26.51% 75.54% -1.31%
By product
Mid/high
end 26,226,828,574.84 21.87% 5,171,156,593.59 28.34% 80.28% -1.00%
products
Ordinary
3,273,034,492.80 4.97% 2,043,760,707.95 22.11% 37.56% -8.76%
products
Subtotal 29,499,863,067.64 19.73% 7,214,917,301.54 26.51% 75.54% -1.31%
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 2977 325 298
Ex-Jiangsu 5261 1570 1501
Total 8238 1895 1799
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During the reporting period, the change in the number of distributors was mainly due to the company's
optimization of distribution structure and in-depth national layout, and further adjustment of the distribution
system.
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 2022, the total sales amount of the top five distributors was CNY 1,540.4580 million, accounting for 5.12% 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 sales accounted for more than 10%.
□Applicable √ N/A
Online direct selling
√ Applicable □N/A
Unit: CNY
Online direct
Product Sales amount in 2022 Sales amount in 2021 YoY change
selling
E-commerce
Liquor 392,624,307.67 364,634,097.30 7.68%
platforms
The sales price of the main products accounting for more than 10% of the total operating revenue of the
current period changed by more than 30% compared with the previous reporting period
□Applicable √ N/A
Procurement mode and content
Unit: CNY
Procurement mode Procurement content Amount
Raw materials and packaging
Market bidding 6,277,275,721.68
materials
Marketing purchase Energy 413,914,303.34
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, with major parts including raw material crushing,
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fermentation, distillation, grade storage, liquor body design and combination, product packaging, etc.
Commissioned production
□Applicable √ N/A
The main components of operating costs
Unit:CNY
2022 2021
As a
Types Cost item percentage As a percentage YoY change
Amount Amount
of operating of operating cost
cost
Direct materials 5,316,873,839.12 69.54% 4,033,119,166.37 64.47% 31.83%
Direct labor 1,238,729,841.81 16.20% 1,083,148,551.48 17.32% 14.36%
Fuels and
Chinese 288,045,390.08 3.77% 234,523,774.33 3.75% 22.82%
energy
Baijiu
Manufacturing
283,314,445.64 3.71% 252,473,495.64 4.04% 12.22%
overhead
Output and inventory
1. Production volume, sales volume and inventory of major products
Types Item Unit 2022 2021 YoY change
Sales Ton 195,322.68 184,001.07 6.15%
Chinese Baijiu Production Ton 197,590.68 204,331.95 -3.30%
Inventory Ton 46,496.48 44,228.48 5.13%
2. Inventory of finished and semi-finished Baijiu at the end of the period
Inventory of finished products (in tons, including Inventory of semi-finished Baijiu (including raw liquor)
baijiu and wine) (ton)
47,335.63 623,356.32
3. Capacity of the Company
Name of production entity Design capacity of finished Actual capacity in 2022 (ton)
products (ton)
Yanghe (including Yanghe branch and Siyang branch) 222,545 149,275
Shuanggou Distillery 97,040 44,143
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
13
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 made Yanghe
rank first place in Jianghuai area'. Shuanggou alongside Yanghe was 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
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 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. In 2022, the company formulated the standards of "Baijiu
Wetland Real Estate Area" (T/CBJ2305-2022) and "Wetland Baijiu" (T/CBJ2110-2022), which promoted the
specification of technical quality standards for wetland liquor.
3. Talent advantage
The Company has 39 Masters of Chinese Baijiu, 78 provincial Baijiu tasting committee members and 1975
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 2022, the company's three scientific and technological achievements, "Research and Application
of Targeted Flavor Song of Mianrou Baijiu", "Integrated Research and Industrial Application of Digital Technology
for Solid Liquor Brewing", and "Research on Autophagy and Antioxidant Effects of Mianrou Baijiu" were
identified by the China Light Industry Federation. In the 6th National Sommelier Competition sponsored by the
China Alcoholic Drinks Association, the company won the championship for five consecutive times, and 6
representatives entered the top ten of the lists, fully demonstrating the company's talent advantages.
4. Brand advantage
The Company, as one of the eight traditional well-known Baijiu enterprises, is the only one in China's liquor
industry that has two Chinese famous wines, Yanghe and Shuanggou, two Chinese time-honored brands, six
well-known Chinese trademarks such as Yanghe, Shuanggou, Blue Classic, Zhenbao Fang, Dream Blue, Su, two
national 4A scenic spots, two national industrial heritages, and a national key cultural relics protection unit. In
2022, in the "2022 World's Top 50 Most Valuable Spirits Brand Value" released by Brand Finance, a
world-renowned brand value research institution, the company ranked fourth in the world with a brand value of
USD6.446 billion and ranked 102nd in the "China's 500 Most Valuable Brands" released by World Brand Lab, with
a brand value of CNY75.545 billion.
5. Marketing network advantage
The company has a marketing team with the latest ideas and the strongest execution. Its marketing network has
14
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. Meanwhile, as a traditional
enterprise, Yanghe has consistently optimized new sales model and advanced digital transformation. The sales
digitalization of Yanghe has become a case study for Tsinghua University, showcasing the leading position of
Yanghe in internet application.
4. Analysis of main business
1. Overview
During the reporting period, the company closely focused on the main line of high-quality development,
efficiently implemented annual work deployment and planning, and maintained the development trend of
"seeking progress in stability and excellence in progress", accumulating strength for writing a new chapter of
"stable high quality, sustainable in progress, and healthier in good life". In 2022, the company achieved an
operating income of CNY30.105 billion, a year-on-year increase of 18.76%; The net profit attributable to
shareholders of the listed company was CNY9.378 billion, a year-on-year increase of 24.91%; The net profit
attributable to shareholders of the listed company after deducting non-recurring profits and losses was CNY9.277
billion, a year-on-year increase of 25.82%.
Solid strengths and supports are deeply integrated, and products are upgraded on the basis of improving
quality. Continue to explore the research and application of the mechanism of Mianrou, three innovative
scientific and technological achievements have been identified, and the yield and quality of winemaking have
achieved a double harvest. In the National Sommelier Competition sponsored by the China Alcoholic Drinks
Association, the company's technical team won the championship for five consecutive times, which further
highlighted the talent advantage. Continue to optimize the storage structure of raw wine, and orderly promote
the construction of key projects such as high-end wine storage, which provides strong support for the ultimate
softness. Focusing on the concept of "product refinement, structural optimization, and scale expansion", Dream
Blue handmade class (master) was launched, upgraded Haizhi Blue, Ecological Sujiu, Difang and other products,
sorted out and eliminated 218 SKUs, consolidated the position of Meng6+ strategic subject, strengthened the
cultivation of crystal version of Dream Blue consumers, and continuously expanded the scale of Ocean Blue, and
further optimized the product matrix.
The deep integration of cohesion and combat effectiveness promotes the development of the company and
accumulates advantages. Continue to build a "strategic community, value community, interest community, and
destiny community" for manufacturers, focus on the structural optimization of distributors, and improve the
cultivation system for distributors around "attracting large enterprises, supporting excellent enterprises, and
strengthening good enterprises ", and further improve the quality of distributors’ teams. Strengthen channel
construction, adapt measures to local conditions in the regional market, comprehensively enhance the
competitiveness of the market in Jiangsu province, steadily promote the sales market outside the province, and
effectively break through the cultivation market outside Jiangsu province. To help market construction with
digitalization, digital marketing tools were utilized in main products were to achieve monitoring, analysis and
traceability of the whole process, and jointly help the marketing.
The organizational force and the driving force are deeply integrated, and the forward momentum is
continuously gathered. Focusing on "the marketing headquarters formulates the strategy and the business
department is responsible for the implementation", it promotes the adjustment of the marketing organizational
15
structure, realizes the sinking of the organizational structure, effectively stimulates the potential of the team, and
improves the organizational efficiency. Guided by the "Nine Persistence," the company trains cadres, discovers
cadres, selects and promotes cadres, and appoints cadres on the front line, so as to deeply stimulates and
mobilizes the enthusiasm of cadres. Continue to build a collaborative supervision system and make every effort
to purify the market business environment. Improve the incentive mechanism of "efficient growth, efficient
incentive and efficient constraint" of the marketing system, improve the "communication, assistance,
emergency" mechanism and the welfare system of "activities, treatment and service" to stimulate the
high-quality development of the company.
The leading power and the appeal are deeply integrated, and the highlights of the brand continue to appear.
With dream culture as the link, broaden the brand communication matrix, and actively spread Chinese wine
culture with the help of international events such as the SCO Summit and the 51st anniversary of China-US table
tennis diplomacy; Together with the Space Foundation to fully support the launch of the Wentian Experimental
Module, Mengtian Experimental Module and the 14th China Aerospace Expo; Innovative publicity methods, the
Mid-Autumn Festival live broadcast has reached tens of millions of viewers, and the new version of Ocean Blue is
efficiently spread with the help of the power of science and technology; Actively promote the construction of the
"Dream Blue Brand Experience Center", and improve the consumer operation system through online consumer
operation and offline consumer attraction. Continuously practicing social responsibility, poverty alleviation and
rural revitalization have been deepened, and the "Chinese Craftsmanship, Light of Dreams" sealing ceremony
was successfully held, and the "National Harmonious Labor Relations Creation Demonstration Enterprise" was
obtained, realizing the effective linkage between the dream of enterprise development and the dream of
employee growth, the dream of partners, and the dream of home.
2. Revenues and cost of sales
(1) Breakdown of operating revenues
Unit：CNY
2022 2021
As a percentage As a percentage
YoY change
Amount of operating Amount of operating
revenues revenues
Total 30,104,896,186.70 100% 25,350,178,204.45 100% 18.76%
By business segment
Liquor 29,499,863,067.64 97.99% 24,638,674,089.57 97.19% 19.73%
Other 605,033,119.06 2.01% 711,504,114.88 2.81% -14.96%
By product
Baijiu 29,338,843,747.26 97.46% 24,440,221,392.60 96.41% 20.04%
Wine 161,019,320.38 0.53% 198,452,696.97 0.78% -18.86%
Other 605,033,119.06 2.01% 711,504,114.88 2.81% -14.96%
By geographical segment
Jiangsu 13,594,267,792.89 45.16% 11,800,507,954.17 46.55% 15.20%
Ex-Jiangsu 16,510,628,393.81 54.84% 13,549,670,250.28 53.45% 21.85%
By sales model
Wholesale
29,107,238,759.97 96.69% 24,274,039,992.27 95.75% 19.91%
distribution
16
Online direct
392,624,307.67 1.30% 364,634,097.30 1.44% 7.68%
selling
Other 605,033,119.06 2.01% 711,504,114.88 2.81% -14.96%
(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 29,499,863,067.64 7,214,917,301.54 75.54% 19.73% 26.51% -1.31%
By product
Baijiu 29,338,843,747.26 7,126,963,516.65 75.71% 20.04% 27.19% -1.36%
By geographical segment
Jiangsu 13,321,057,010.40 3,659,281,374.24 72.53% 15.28% 24.59% -2.05%
Ex-Jiangsu 16,178,806,057.24 3,555,635,927.30 78.02% 23.66% 28.55% -0.84%
By sales mode
Wholesale
29,107,238,759.97 7,130,879,687.09 75.50% 19.91% 26.20% -1.22%
distribution
Online
direct 392,624,307.67 84,037,614.45 78.60% 7.68% 60.96% -7.08%
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 2022 2021 YoY change
segment
Sales volume Ton 195,322.68 184,001.07 6.15%
Production
Baijiu Ton 197,590.68 204,331.95 -3.30%
volume
Inventory volume Ton 46,496.48 44,228.48 5.13%
Sales volume Ton 2,406.64 2,654.55 -9.34%
Production
Wine Ton 2,616.66 2,856.66 -8.40%
volume
Inventory volume Ton 839.15 629.13 33.38%
Reasons for any over 30% YoY changes in the data above.
√ Applicable □N/A
17
The inventory of red wine increased by 33.38% year-on-year, mainly due to the increase in stocking at the end of
the year.
(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
2022 2021
By business As a
Item As a percentage YoY change
segment Amount Amount percentage of
of cost of sales
cost of sales
Liquor 7,214,917,301.54 94.37% 5,702,863,048.47 91.17% 26.51%
Unit：CNY
2022 2021
By product As a As a
Item YoY change
segment Amount percentage of Amount percentage of
cost of sales cost of sales
Liquor Direct materials 5,402,139,505.20 70.66% 4,128,993,712.95 66.01% 30.83%
Liquor Direct labor 1,240,006,256.85 16.22% 1,085,084,143.74 17.35% 14.28%
Liquor Fuels and energy 288,774,712.57 3.78% 235,359,439.08 3.76% 22.70%
Manufacturing
Liquor 283,996,826.92 3.71% 253,425,752.70 4.05% 12.06%
overhead
Note: Nil
(6) Changes in the scope of the consolidated financial statements for the reporting period
√ Applicable □ N/A
Establishment of subsidiaries
In March 2022, the company jointly invested CNY400 million with Tibet Earth Third Pole Industry Development
Co., Ltd., Lhasa Pure Land Industry Investment and Development Group Co., Ltd. and Shenzhen Baoneng Food
Technology Group Co., Ltd. to establish Tibet Earth Third Pole Wine Co., Ltd., of which the company contributed
CNY204 million, accounting for 51% of its registered capital; Tibet Earth Third Pole Industry Development Co., Ltd.
invested CNY72 million, accounting for 18% of its registered capital; Lhasa Pure Land Industry Investment and
Development Group Co., Ltd. invested CNY64 million, accounting for 16% of its registered capital; Shenzhen
Baoneng Food Technology Group Co., Ltd. invested CNY60 million, accounting for 15% of its registered capital. It
will be included in the consolidated financial statements as of March 2022.
In August 2022, Guizhou Maotai Town Guijiu Liquor Co., Ltd., a holding subsidiary, invested CNY500,000 to
establish Guizhou Guijiu Liquor Operation Co., Ltd., accounting for 100% of its registered capital. It has been
included in the consolidated financial statements since August 2022.
18
In August 2022, the company subscribed to contribute CNY10 million to establish Jiangsu Azure Beverage
Catering Management Co., Ltd., accounting for 100% of its registered capital. It has been included in the
consolidated scope of consolidated financial statements since August 2022.
In August 2022, the company subscribed to contribute CNY300,000 to establish Jiangsu Yanghe Dream
Investment Management Co., Ltd., accounting for 100% of its registered capital. It has been included in the
consolidated scope of consolidated financial statements since August 2022.
In September 2022, Jiangsu Yanghe Dream Investment Management Co., Ltd., a holding subsidiary, invested
CNY10 million to establish Jiangsu Yanghe Blue Investment Management Co., Ltd., accounting for 100% of its
registered capital. It has been included in the consolidated scope of the consolidated financial statements since
September 2022.
Subsidiary deregistration
In September 2022, Jiangsu Collite Biotechnology Research Institute Co., Ltd., a holding subsidiary, was cancelled
and no longer be included in the consolidated scope of the consolidated financial statements from October 2022.
In November 2022, Guizhou Guijiu Liquor Operation Management Co., Ltd., a holding subsidiary, was liquidated
and cancelled, and it was no longer be included in the consolidated scope of consolidated financial statements
from December 2022.
(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） 1,540,457,955.89
Total sales from top five customers as a percentage of
5.12%
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 588,069,044.59 1.95%
2 Customer B 402,484,131.99 1.34%
3 Customer C 206,297,498.54 0.69%
4 Customer D 186,249,231.90 0.62%
5 Customer E 157,358,048.87 0.52%
Total -- 1,540,457,955.89 5.12%
19
Other information on major customers
□Applicable √ N/A
Major suppliers of the Company
Total purchase from top five suppliers（CNY） 1,229,265,656.40
Total purchase from top five suppliers as a
17.53%
percentage of the total sales
Total purchase from 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 318,985,299.80 4.55%
2 Supplier B 299,114,671.69 4.27%
3 Supplier C 241,445,673.66 3.44%
4 Supplier D 191,627,795.08 2.73%
5 Supplier E 178,092,216.17 2.54%
Total -- 1,229,265,656.40 17.53%
Other information on major suppliers
□Applicable √ N/A
3. Expense
Unit：CNY
2021 2020 YoY change Reason for any significant change
Selling and
4,179,140,807.85 3,544,364,889.54 17.91%
distribution expenses
General and
administrative 1,935,673,295.75 1,830,080,139.18 5.77%
expenses
The increase in time deposits
was due to a corresponding
Finance expenses -636,470,105.91 -399,145,509.96 -59.46%
increase in interest income on
deposits.
R&D expenses 253,574,976.39 258,458,102.63 -1.89%
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
20
The composition of selling and distribution expenses
Unit：CNY
As a percentage of As a percentage of
Current period selling and Previous period selling and
Item YoY change
amount distribution amount distribution
expenses expenses
Advertising and
promotion 2,414,204,544.39 57.77% 1,911,827,032.90 53.94% 26.28%
expense
Payroll 1,177,066,920.45 28.17% 1,065,844,674.57 30.07% 10.44%
Travel expense 433,273,104.21 10.37% 390,432,690.88 11.02% 10.97%
Labor expense 47,961,453.63 1.15% 88,722,961.18 2.50% -45.94%
E-commerce
33,851,096.47 0.81% 37,801,331.20 1.07% -10.45%
expense
Other expense 72,783,688.70 1.74% 49,736,198.81 1.40% 46.34%
Subtotal 4,179,140,807.85 100.00% 3,544,364,889.54 100.00% 17.91%
Composition of advertising costs:
Unit：CNY
As a percentage of advertising
Item Current period amount
expense
Nationwide advertising expense 1,079,779,124.66 84.07%
Regional advertising expense 204,531,402.15 15.93%
Total 1,284,310,526.81 100%
4. R&D input
√ Applicable □ N/A
Name of main R & Objectives to be Expected impact on
Purpose Progress
D projects achieved future development
1. Clarify the 1. The production
characteristic flavor process is
system of Daqu and continuously
its microecological optimized to meet
Research and
formation the demand for
application of
mechanism; 2. high quality; 2.
microecological
Optimize Successfully Optimize the Continuously enrich
regulation
production promoted and fermentation the application
technology based
processes and applied in factors of key flora results of
on flavor
flavor profiles. September 2022. growth and microorganisms in
enhancement of
metabolism; 3. winemaking
Daqu
Build a targeted production, and
characteristics
regulation improve the
technology for adaptability of
microbiota Daqu and
optimization and winemaking
21
flavor production.
improvement.
1. Determine
product positioning
according to the
Complete the
consumption trend
technical reserve of
Provide young of young
new tasting drinks
Research on young, consumers with consumers; 2.
Successfully other than liquor,
personalized and fashionable, Develop 2 kinds of
developed in providing support
fashionable healthy and fashionable and
November 2022. and assistance for
products personalized new personalized fruit
the company's
wine products. wine and 2 kinds of
diversification
healthy and healthy
strategy.
dew wine, and form
a supporting
process.
The output of raw
wine with different
1. Build a taste characteristics
The milestone
Research on the comprehensive is controlled from
Analyze the reasons target will be
quality differences information the perspective of
for the difference in completed in
of raw wine and the database; 2. production, which
taste between December 2022
key ingredients of Analyze the taste provides an
different original and is expected to
typical differences of important
sake. be completed in
characteristics different types of theoretical basis for
November 2023.
original wine. the precision of
auxiliary production
process.
1. Analyze the
composition and
In order to analyze
evolution of the
the composition of
brewing
the brewing
environment and It provides support
environment
brewing process for the analysis of
microecology in the
The phased target microbial the microecological
summer and
Interaction study of will be completed community in the structure of the
autumn production
brewing in December 2022 summer and liquor brewing
areas, and to
environment and is expected to autumn production environment and
elaborate the
micro-ecosystem be completed in area; 2. Clarify the the formation
interaction
December 2023. interaction mechanism of
between
between summer brewing in the
environmental
and autumn production area.
microecology and
brewing
winemaking
microecology and
production.
brewing
production.
Information about R&D personnel
2022 2021 YoY change
Number of R&D personnel 587 575 2.09%
R&D personnel as a
percentage in total 2.99% 3.20% -0.21%
employees
Educational background of R & D personnel
Bachelor degree 155 156 -0.64%
22
Master degree 59 54 9.26%
Age of R & D personnel
Under 30 51 58 -12.07%
Between 30 and 40 343 340 0.88%
Information about R&D input
2022 2021 YoY change
R&D input (CNY) 260,555,532.15 270,723,001.71 -3.76%
R&D input as a percentage
0.87% 1.07% -0.20%
in operating revenues
Capitalized R&D input
6,980,555.76 12,264,899.08 -43.09%
(CNY)
Capitalized R&D input
percentage in total R&D 2.68% 4.53% -1.85%
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
The capitalized amount of R&D investment in the reporting period decreased by 43.09% compared with the
same period of the previous year, mainly due to the decrease in technology R&D equipment purchased in the
current period.
5. Cash flow
Unit：CNY
Item 2022 2021 YoY change
Subtotal of cash inflows
31,441,857,596.11 37,538,099,673.95 -16.24%
from operating activities
Subtotal of cash outflows
27,794,233,643.92 22,219,934,193.42 25.09%
from operating activities
Net cash flows from
3,647,623,952.19 15,318,165,480.53 -76.19%
operating activities
Subtotal of cash inflows
17,687,441,703.96 28,170,298,911.57 -37.21%
from investing activities
Subtotal of cash outflows
13,670,939,240.42 26,333,634,597.28 -48.09%
from investing activities
Net cash flows from
4,016,502,463.54 1,836,664,314.29 118.68%
investing activities
Subtotal of cash inflows
42,800,000.00 950,750,000.00 -95.50%
from financing activities
Subtotal of cash outflows 4,534,576,978.60 4,498,567,810.77 0.80%
23
from financing activities
Net cash flows from
-4,491,776,978.60 -3,547,817,810.77 -26.61%
financing activities
Net increase in cash and
3,172,012,990.35 13,603,817,188.08 -76.68%
cash equivalents
Explanation of why the data above varied significantly.
√Applicable □ N/A
Net cash flow from operating activities decreased by 76.19% in the current period compared with the same
period of the previous year, mainly due to the decrease in cash received from the sale of goods and services in
the current period, as well as the increase in various taxes and fees paid in the current period.
The net cash flow generated by investment activities increased by 118.68% over the previous period, mainly due
to the decrease in cash paid for investment due to the increase or decrease of wealth management products in
the current period, which was greater than the decrease in cash received from investment recovery, resulting in
an increase in net cash flow from investment activities.
The net increase in cash and cash equivalents decreased by 76.68% in the current period compared with the
same period of the previous year, mainly due to the decrease in net cash flow from operating activities in the
current period compared with the same period of the previous year.
An explanation of the reasons for the significant difference between the net cash flow generated by the
Company's operating activities and the net profit for the year during the reporting period
√ Applicable □ N/A
The reasons for the large difference between net cash flow and net profit from operating activities was mainly
due to the reduction in contractual liabilities and taxes payable, resulting in a larger decrease in operating
payables.
5. Analysis of non-core business
√ Applicable □ N/A
Unit：CNY
As a percentage
Amount Reasons Sustainability
of total profits
It is mainly the wealth
management income
Investment and the investment
425,865,631.53 3.41% No
income income of trading
financial assets during
the holding period
Mainly due to changes
Changes in fair
-318,331,123.43 -2.55% in fair value of financial No
value
assets held for trading
24
Asset provision for stock
-2,333,823.54 -0.02% No
impairment obsolescence
compensation and
Non-operating
25,586,332.71 0.20% liquidated damages No
income
income
Mainly due to donation
Non-operating expenses and losses
31,507,701.73 0.25% No
expenses from retirement of fixed
assets
6. Analysis of assets and liabilities
1. Significant changes of asset items
Unit：CNY
As at the end of 2022 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
Cash and cash
24,375,449,432.33 35.87% 20,955,831,010.12 30.91% 4.96%
equivalents
Accounts
45,142,892.78 0.07% 1,247,949.91 0.00% 0.07%
receivable
Inventories 17,729,258,966.54 26.09% 16,803,093,441.81 24.78% 1.31%
Long-term
equity 32,979,630.21 0.05% 32,743,397.31 0.05%
investments
Fixed assets 5,794,773,069.53 8.53% 6,276,466,308.05 9.26% -0.73%
Construction in
757,145,492.90 1.11% 525,497,000.26 0.78% 0.33%
progress
Right-of-use
34,115,602.27 0.05% 19,610,113.75 0.03% 0.02%
asset
Contract
13,741,547,677.99 20.22% 15,804,521,430.17 23.31% -3.09%
liability
Long-term
36,360.00
borrowings
Lease
3,715,300.93 0.01% 10,729,824.19 0.02% -0.01%
Liabilities
The proportion of overseas assets is relatively high.
□Applicable √ N/A
2. Assets and liabilities measured at fair value
25
√ Applicable □ N/A
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
18,589,836, -318,331,12 13,124,80 17,253,028, 3,501,214. 14,146,784
(excluding
477.07 3.43 6,086.81 374.72 21 ,279.94
derivative
financial
assets)
18,589,836, -318,331,12 13,124,86 17,253,028, 3,501,214. 14,146,784
Total
477.07 3.43 9,941.95 374.72 21 ,279.94
Financial
0.00 0.00 0.00 0.00 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)
431,849,941.95 3,840,110,341.89 -88.75%
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
26
4. Investment in financial assets
√ Applicable □ N/A
(1) Securities investment
Unit：CNY
27
Changes
in the
Accoun Changes in Profit and
cumulati
Initial ting fair value loss during
Category of Stock Abbr. of Opening ve fair Amount of Amount of Closing Accounting Capital
investment measur recognized the
securities code securities balance value purchase sale balance subject source
cost ement in profit or reporting
recorded
model loss period
into
equity
Shanghai Yunfeng Other
Xincheng 1,176,435,004. Fair 1,176,435,004.Non-current Owned
Other Nil 1,252,231,763.94 75,796,759.92
Investment Center 02 value 02 financial Fund
(L.P.) assets
Other
Domestic and Fair -227,368,419.8 Non-current Owned
601696 BOCI Securities LLC 300,000,000.00 1,061,842,099.60 2,842,105.25 834,473,679.76
foreign stocks value 4 financial Fund
assets
Pan Mao Other
(Shanghai) Fair Non-current Owned
Other Nil 276,185,376.22 360,911,196.41 33,762,373.80 3,226,340.17 394,673,570.21
Investment Center value financial Fund
(L.P.) assets
Other
CHINA MINSHENG Fair -247,000,000.0 Non-current Owned
Other Nil 650,000,000.00 585,000,000.00 338,000,000.00
TRUST Co., Ltd. value 0 financial Fund
assets
Other
Lianchu Reserve Fair Owned
Other Nil 330,000,000.00 330,000,000.00 330,000,000.00 Non-current
Securities Co., Ltd. value Fund
financial
28
assets
Jinshi Kunxiang Other
Equity Fair Non-current Owned
Other Nil 208,695,182.50 258,930,097.01 17,596,365.46 27,673,591.80 248,852,870.67
Investment(Hangzh value financial Fund
ou)Partnership(L.P.) assets
Suzhou Danqing
Phase II Innovative Other
Pharmaceutical Fair Non-current Owned
Other Nil 173,710,818.17 232,906,944.43 15,086,057.90 7,885,119.23 240,107,883.10
Industry value financial Fund
Investment assets
Partnership (L.P.)
Other
Domestic and Fair Non-current Owned
VSPT Vina San Pedro 425,350,132.53 237,412,110.83 2,284,386.60 16,081,193.22 239,696,497.43
foreign stocks value financial Fund
assets
Nanjing Xingnahe
Other
Venture Capital
Fair Non-current Owned
Other Nil Partnership 205,027,500.00 162,490,000.00 50,000,000.00 7,462,500.00 205,027,500.00
value financial Fund
(Limited
assets
Partnership)
CICC Jiatai Phase II Other
(Tianjin) Equity Fair Non-current Owned
Other Nil 119,096,307.39 301,532,355.61 -59,286,322.18 41,705,511.69 200,540,521.74
Investment Fund value financial Fund
Partnership (L.P.) assets
Other securities investments held at the end of this 1,630,818,987. 1,772,504,892. 1,838,146,936.
-- 3,459,505,221.46 72,839,306.39 0.00 74,806,086.81 128,595,994.95 -- --
period 17 08 79
5,495,319,308. -392,086,251.8 1,933,028,374. 6,045,954,463.
Total -- 8,242,761,789.29 0.00 124,806,086.81 150,745,633.59 -- --
00 7 72 72
(2) Derivative investments
□Applicable √ N/A
29
No such cases in the reporting period.
5. Use of fund-raising
□Applicable √ N/A
No such cases in the reporting period.
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
Group Subsidiary retailing of 334,400,000.00 24,356,255,484.58 6,551,117,577.66 25,742,788,677.28 7,333,596,391.79 5,625,339,043.93
Limited by prepackage
Share Ltd. d food
Jiangsu
Shuanggou Production
Distillery Subsidiary and sales 110,000,000.00 8,605,549,762.72 5,646,892,673.28 2,181,426,315.65 2,103,043,324.29 2,092,249,046.41
Stock Co., of Baijiu
Ltd.
Jiangsu Wholesalin
Shuanggou g and
Liquor Subsidiary retailing of 5,000,000.00 3,906,483,280.76 1,431,143,783.08 5,022,586,319.41 1,890,756,493.83 1,418,052,154.87
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
30
Tibet Earth Third Pole Wine
Establishment minor
Industry Co., Ltd
Guizhou Guijiu Wine Industry
Establishment minor
Operation Co., Ltd
Jiangsu Azure Drink Catering
Establishment Tiny
Management Co., Ltd
Jiangsu Yanghe Dream Investment
Establishment minor
Management Co., Ltd
Jiangsu Yanghe Blue Investment
Establishment minor
Management Co., Ltd
Jiangsu Collite Biotechnology
Deregistration Tiny
Research Institute Co., Ltd
Guizhou Guijiu Wine Operation
Deregistration Tiny
Management Co., Ltd
10. Structured entities controlled by the Company
□Applicable √ N/A
11. Outlook for the future development of the Company
Industry situation analysis
1. Industry concentration has been further improved. With the intensification of industry competition and the
enhancement of consumer brand awareness, the trend of liquor market share concentration to the head
brand is becoming more and more obvious, and the industry differentiation continues to intensify. Leading
enterprises with "brand advantages, management advantages, channel advantages, and talent advantages"
are more likely to win in the future liquor market competition and seize more market share.
2. The industry competition pattern has gradually formed. In 2022, the competition in the liquor industry
intensified, and all liquor companies will continue to innovate and optimize in terms of "products, brands,
channels, and marketing models", the development pattern and competition situation of the liquor industry
are gradually taking shape, and the competitive advantage of the head brand will continue to be enlarged,
and will be further strengthened in the future market competition.
3. The trend of consumption upgrading has become more obvious. In 2022, the liquor output of enterprises
above designated size was 6.7124 million kiloliters, down 5.58% from the same period of the previous year,
and the sales revenue in the same period has steadily increased, and the trend of consumption upgrading is
obvious. Consumers pay more attention to brands, the industry has entered the era of "long-term lack of
wine, long-term shortage of good wine", wine companies with strong "brand power and product power" will
enjoy more consumption upgrade dividends.
The company's development strategy and business plan
1. Development strategy
During the "14th Five-Year Plan" period, the company adheres to the consumer-centered, double-famous
baijiu as the main body, multi-brand as the pillar, quality-oriented, brand-based, culture as the soul,
innovation as the key, builds the "12345" strategic system, creates the Yanghe leading the wave and the
surging power of the double ditch, promotes the continuous growth of the quantity and the steady
31
improvement of the quality of the enterprise at a higher level, achieves a fuller, more balanced, more
high-quality and efficient development, Yanghe becomes a Chinese taste that Chinese are proud of and the
Chinese business card remembered by the world.
2. Business plan for 2023
In 2023, the company will promote the company to achieve higher quality, more sustainable and healthier
development with stronger confidence, and strive to achieve a year-on-year increase in operating income of
15%.
(1) Focus on high quality and promote enterprise party building. Adhere to the leadership position of party
building, promote the common development of party building business, strengthen the party's overall
leadership, fully clarify the leading role of party building, and take high-level party building as a powerful
driving force for the high-quality development of enterprises. Adhere to the construction of party style
and clean government as the fundamental guarantee for enterprise development, and continue to
create a good ecology of "secondary entrepreneurship".
(2) Focus on a high starting point and make another breakthrough to promote the continuous improvement
of market construction. Seize the opportunity of brand centralized development, promote the
optimization of regional structure and product structure, vigorously expand leading brands such as
Haitian Dream and Zhenbao Fang, and promote the reshaping of brand value of famous wines to achieve
in-depth coverage of sales channels and consumption scenarios. Based on the integrated construction of
manufacturers, implement the "1320" strategy, promote the strong business project, rich business
project, and business support project, improve the operation level of the core distributor market, and lay
a solid foundation for full market expansion. Strengthen business capabilities and basic management,
improve the conference battle and graded training system, pay attention to the assessment of process
indicators, and realize the improvement of team, market and distributor management.
(3) Focus on high positioning and re-excellence, and continue to promote brand building. Make full use of
the company's brand advantages, closely focus on the company's brand development strategy, further
build a hierarchical brand system, establish a clearer brand path, strengthen systematic brand publicity,
strengthen market services, and realize the effective linkage of brand communication and marketing
expansion. The company aims to tell the story of brand identity, focus on improving communication
efficiency, expand the high-end media matrix, deepen the expression of quality value, achieve more
efficient brand communication, and promote the vigorous development of the company's brand.
(4) Focus on high requirements and secondary upgrades, and continue to promote product construction.
Improve the dynamic product management system, continuously optimize the product structure, realize
the management of the product life cycle through digital technology, and further shape a product line
with clear levels and comprehensive price coverage. Adhere to the original heart, continue to do a good
job in product quality improvement, characteristic product creation, key topic research, to ensure quality
upgrade. Adhere to market awareness, responsibility awareness, service awareness, continue to improve
product guarantee level, operation control capabilities, and provide strong guarantee for the market.
(5) Focus on high standards and continue to promote cultural construction. With "dream culture" as the
core and "five dreams linkage" as the connotation, create the humanistic feelings and spiritual beliefs of
Yanghe, display the new style of culture, carry out the construction of wine capital in depth with more
pragmatic measures, and promote the combination of wine and the city. To further stimulate the vitality
of the organization, with "improving the organizational operation ability and strengthening the
organizational operation level" as the key, build a higher quality and stronger talent team, and at the
same time focus on improving the quality and efficiency of basic management to comprehensively
32
contribute to the construction of culture.
Possible risks
1. Macroeconomic fluctuation risk. At present, China's economy is recovering in an orderly manner, but
the pressure still exists, coupled with the multiple challenges facing the world economy, liquor
consumption is easily affected by economic fluctuations, which brings greater uncertainty to the
development of the liquor industry.
2. The risk of intensifying market competition. At present, the Matthew effect of the liquor industry is
becoming more and more obvious, the market share continues to be concentrated in famous wine
enterprises and head wine enterprises, and the liquor industry has gradually entered a stage of
accelerated competition, and market competition, especially between famous wine enterprises, will be
further intensified.
3. Risk of changes in market demand. At present, residents' consumption concepts and consumption
behaviors have undergone great changes, and the upgrading of health concepts, the prominence of
brand consumption, the growth of online consumption, and the improvement of quality demand have
gradually become new consumption trends, which may have a certain impact on the consumption
demand and consumption of liquor.
12. Visits paid to the Company for research, communication, interview,
etc. during the reporting period.
√ Applicable □ N/A
The main
contents of
the Index to
Reception Type of
Date of visit Way of visit Visitor discussion main inquiry
site visitor
and the information
information
provided
Investors Log Sheet of
who Investor
The
participated Relations
company's
in the online Activities on
Panorama.co production,
2022-05-23 Other Other briefing on 22May 2022
m marketing,
the on
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company's www.cninfo.c
, finance, etc
2021 annual om.c n（No：
results 2022- 001
Shareholders
The
and investors Log Sheet of
company's
who Investor
development
participated Relations
strategy,
in the on-site Activities on
management
2022-05-30 Headquarter Field survey Other communicati 30May 2022
reform,
on of the on
marketing
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layout,
2021 annual om.c n（No：
product
general 2022- 002
planning, etc
meeting
33
Log Sheet of
5 investors The
Investor
from CITIC company's
Relations
Securities, leading
Activities on
Ruiquan product
2022-06-29 Headquarter Field survey Institution 29June 2022
Capital, market
on
WTAM and performance,
www.cninfo.c
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om.c n（No：
Investment strategy, etc
2022- 003
The
company's
product
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Relations
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2022-09-27 Headquarter Field survey Institution 27 Sep 2022
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building,
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long-term
development
planning, etc
34
Section IV CORPORATE GOVERNANCE
1. Basic Situation of Corporate Governance
The company strictly follows the "Company Law", "Securities Law", "Governance Guidelines for Listed
Companies", "Shenzhen Stock Exchange Listing Rules" and other laws, administrative regulations, departmental
rules and normative documents. Combining the actual development of the company, the company constantly
improves its modern enterprise system and corporate governance structure. During the reporting period, the
overall operation of the company was standardized and complied line with the governance requirements 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. 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 8 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, powers and responsibilities, and gives full play to its 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
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
35
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 by the 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. While maintaining the sustainable development, the company actively participates in social welfare
undertakings and practices social responsibility.
36
1.8 Information disclosure and transparency
In strict accordance with the requirements of the regulatory authorities, the company earnestly implements
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 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.
Is the actual situation of corporate governance significantly different from laws, administrative regulations and
regulations on listed company governance issued by the CSRC？
□ 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
The company has a complete independent production and management system, and independent
decision-making management ability, covering business, personnel, assets, organizations and finance five
aspects.
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
37
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.
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
4.1 Shareholders' general meeting during the reporting period
Investor
Which Session Type Open Date Disclose Date Meeting Outcome
Participation Ratio
For details, please
refer to the
"Announcement
on Resolutions of
the 2021 Annual
Annual
2021 Annual General Meeting
General
General of Shareholders"
Meeting of 76.47% May 30, 2022 June 2, 2022
Meeting of disclosed by the
Shareholde
Shareholders company in the
rs
statutory
information
disclosure media
(Announcement
No.: 2022-013)
38
4.2 Preference shareholders with restored voting rights request to convene an extraordinary general meeting
□ Applicable √ N/A
39
5. Directors, Supervisors and Senior Managers
5.1 Basic situation
Number of Number of Number of Other Number of
shares held Shares Shares Increase shares held
Service Term Term End at the increased in decreased or at the end
Name Position Gender Age Reasons
status Start Date Date beginning of current in current decrease of the
the period period period changes period
(shares) (Shares) (Shares) (shares) (shares)
Zhang Incum February February
chairman Male 55 0 0 0 0 0
Liandong bent 23, 2021 23, 2024
Vice
Incum February February
Zhong Yu chairman, Male 59 0 0 0 0 0
bent 10, 2015 23, 2024
President
Yang Incum May 30, February
Director Male 49 0 0 0 0 0
Weiguo bent 2022 23, 2024
Incum May 19, February
Wang Kai Director Male 46 2,400 0 0 0 2,400
bent 2017 23, 2024
40
Zhao Independe Incum February February
Male 71 0 0 0 0 0
Shuming nt Director bent 23, 2021 23, 2024
Independe Incum February February
Nie Yao Male 46 0 0 0 0 0
nt Director bent 23, 2021 23, 2024
Lu Independe Incum February February
Male 63 0 0 0 0 0
Guoping nt Director bent 23, 2021 23, 2024
Independe Incum February February
Male 59 0 0 0 0 0
nt Director bent 23, 2021 23, 2024
Mao
Lingxiao
Chairman
Chen of the Incum July 13, February
Male 58 0 0 0 0 0
Taiqing Supervisor bent 2020 23, 2024
y Board
Xu Incum May 23, February
Supervisor Male 46 0 0 0 0 0
Youheng bent 2019 23, 2024
41
Incum February February
Xu Lili Supervisor Female 44 0 0 0 0 0
bent 23, 2021 23, 2024
Chen Incum July 6, February
Supervisor Male 58 0 0 0 0 0
Fuya bent 2020 23, 2024
Chen Incum February February
Supervisor Male 55 0 0 0 0 0
Taisong bent 10, 2015 23, 2024
Vice Incum February February
Lin Qing Female 48 0 0 0 0 0
President bent 10, 2015 23, 2024
Zheng Vice Incum February February
Male 56 45,000 0 0 0 45,000
Bujun President bent 10, 2015 23, 2024
Vice
Yin Incum July 13, February
President, Male 51 0 0 0 0 0
Qiuming bent 2020 23, 2024
CFO
Vice Incum July 13, February
Li Yuling Male 53 0 0 0 0 0
President bent 2020 23, 2024
42
Lu
Board Incum February February
Hongzhe Female 45 0 0 0 0 0
Secretary bent 23, 2021 23, 2024
n
Liu Director,
Leavin January February
Huashua Executive Male 53 0 0 0 0 0
g office 29, 2018 24, 2023
ng President
Cong Leavin February Septembe
Director Male 57 2,778,291 0 0 0 2,778,291
Xuenian g office 10, 2015 r 30, 2022
Director,
Leavin February Septembe
Vice Male 61 2,878,291 0 0 0 2,878,291
Zhou g office 10, 2015 r 7, 2022
President,
Xinhu
Fu
Vice Leavin January January 8,
Hongbin Male 61 0 0 0 0 0
President, g office 17, 2020 2022
g
43
Total -- -- -- -- -- -- 5,703,982 0 0 0 5,703,982 --
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, Mr. Cong Xuenian resigned as a director for personal reasons.
Mr. Zhou Xinhu and Mr. Fu Hongbing retired.
44
Changes in directors, supervisors and senior management of the company
√ Applicable □ N/A
Name Position Type Date Reasons
Yang Weiguo Director Elected May 30, 2022 General election
September 30, Voluntary
Cong Xuenian Director Leaving office
2022 resignation
Director, Vice
Zhou Xinhu Leaving office September 7, 2022 Retirement
President
Fu Hongbing Vice President Decruitment January 8, 2022 Retirement
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
5.2.1 Directors
Mr. Zhang Liandong, born in September 1968, master degree from the Party School, deputy to the National
People's Congress. 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 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, Chinese Brewmaster, a master of Chinese liquor, a senior
engineer, and a representative of the 14th 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, 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. Yang Weiguo, born in February 1974, bachelor degree and master degree. He has served as Standing
Committee member of Siyang County Party Committee, Minister of Publicity Department, member of Party
Leading Group of County government, deputy county head, deputy secretary-general of Suqian Municipal Party
Committee, deputy director of Suqian Reform Office, Party Secretary and President of Suqian Daily. He is
currently secretary of the party committee and chairman of Suqian Industrial Development Group Co., LTD.,
chairman of Jiangsu Yanghe Group Co., LTD., and chairman of Jiangsu Shuanggou Group Co., LTD.
45
Mr. Wang Kai, born in August 1977, bachelor 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. 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 Longbo
Sealing Technology Co., Ltd., Huaxin New Materials Co., Ltd. Currently he is the independent director of Yanghe
Distillery, the deputy dean, professor and master tutor of the National Wealth Auditing College of Nanjing Audit
University, 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", director of
Langbo Sealing 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 and director 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.
5.2.2 Supervisors
46
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.
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.
5.2.3 Executives
Mr. Zhong Yu, President of the company, the same resume as above.
47
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
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
Name of Position held in the Term
Shareholder name Term start date receive
employee shareholder company end date
remuneration
48
allowance in
the shareholder
company
Jiangsu Yanghe January 18,
Yang Weiguo Chairman NO
Group Co., Ltd 2022
Shanghai Haiyan
Logistics
Wang Kai Vice General Manager March 1, 2017 YES
Development Co.,
Ltd.
Jiangsu Yanghe
Xu Youheng Supervisor May 25, 2020 NO
Group Co., Ltd
Shanghai Jieqiang
Tobacco Sugar &
Xu Lili Vice General Manager April 1, 2021 YES
Wine (Group) Co.,
Ltd.
Descriptions
of Positions
in
None
shareholder
corporations
Employments in other corporations
√ Applicable □ N/A
Whether to
receive
Name of Other corporation Positions held in Term start Term end remuneration
employee name other companies date date allowances in
other
companies
Suqian Industry Secretary of the
January
Yang Weiguo Development Group Party Committee, YES
18,2022
Co., Ltd. Chairman
Jiangsu Shuanggou January
Yang Weiguo Chairman NO
Group Co., Ltd. 18,2022
Senior Professor,
Zhao Shuming Nanjing University July 6, 2017 YES
Doctoral Supervisor
Nanjing Securities Independent November 15,
Zhao Shuming YES
Co., Ltd. Director 2018
Jiangsu Lianfa Independent
Zhao Shuming May 13, 2020 YES
Textile Co., Ltd. Director
Jiangsu Human Lifetime Honorary September 1,
Zhao Shuming NO
Resources Society President 2021
China Human
Resource
September 1,
Zhao Shuming Development Deputy Chairman NO
2010
Research
Association
Professional September 1,
Zhao Shuming Deputy Minister NO
Education Steering 2013
49
Committee for
Business
Administration
Disciplines of the
Ministry of
Education
China Management
Modernization Vice November 02,
Zhao Shuming NO
Research Director-general 2015
Association
Vice Dean and
Professor of
Nie Yao Jiangnan University June 10, 2020 YES
Bioengineering
Students
Deputy Dean and
Nanjing Audit March 01,
Lu Guoping Professor of Guofu YES
University 2020
Zhongxin College
Changzhou Langbo
February 22,
Lu Guoping Sealing Technology Director YES
2022
Co., Ltd.
Baosheng
Independent
Lu Guoping Technology May 9, 2019 YES
Director
Innovation Co., Ltd.
Changzhou
Academy of Independent
Lu Guoping July 6, 2020 YES
Architecture and Director
Technology Co., Ltd.
Suzhou Lianxun Independent December 1,
Lu Guoping YES
Instrument Co., Ltd. Director 2022
Suzhou Tiejin
Independent December 1,
Electromechanical YES
Lu Guoping Director 2022
Technology Co., Led.
Deputy Secretary of
Suqian Industry
Party Committee, October 16,
Xu Youheng Development Group YES
Chairman of the 2021
Co., Ltd.
Supervisory Board
Suqian City Citizen
Xu Youheng Executive Director April 19, 2021 NO
Card Co., Ltd.
Suqian International
Xu Youheng Executive Director April 14, 2021 NO
Hotel Co., Ltd.
Suqian Chufeng
Xu Youheng Hotel Management Executive Director July 23, 2021 NO
Co., Ltd.
Jiangsu Jingshi Big
Xu Youheng Data Management Chairman June 22, 2022 NO
Co., Ltd.
Suqian Talent Group November 17,
Xu Youheng Executive Director NO
Co., Ltd. 2022
Suqian Human
November 30,
Xu Youheng Resources Service Executive Director NO
2022
Co., Ltd.
Shanghai Jieqiang
Tobacco Sugar &
Xu Lili Wine Group General Manager July 14, 2020 NO
Distribution Co.,
Ltd.
Xu Lili Shanghai Jieqiang General Manager July 14, 2020 NO
50
Food Sales Co., Ltd.
Full-time lawyer,
Beijing Hylands senior partner, January 1,
Mao Lingxiao YES
(Nanjing) Law Firm chairman of the 2021
partnership meeting
Descriptions of
Employments
in other None
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 the cases “Adjusting the Allowance
of Independent Directors” approved by the Company's 2020 Annual General Meeting of Shareholders and
‘Compensation and Assessment Management Measures for Members of Management Team’ approved by the
Company's 2021 Annual General Meeting of Shareholders.
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
Unit: CNY10, 000
Whethe
Total
r to obtain
pre-tax
remuneratio
Employed or compensatio
Name Position Gender Age n from
not n received
related
from the
parties of the
company
company
Zhang
Chairman Male 55 Incumbent 191.65 NO
Liandong
Vice
Zhong Yu Chairman, Male 59 Incumbent 197.17 NO
President
Board
Yang Weiguo Male 49 Incumbent 0 YES
Director
Board
Wang Kai Male 46 Incumbent 0 YES
Director
51
Zhao Independent
Male 71 Incumbent 10 NO
Shuming Director
Independent
Nie Yao Male 46 Incumbent 10 NO
Director
Independent
Lu Guoping Male 63 Incumbent 10 NO
Director
Independent
Mao Lingxiao Male 59 Incumbent 10 NO
Director
Chairman of
the
Chen Taiqing Male 58 Incumbent 143.19 NO
Supervisory
Committee
Xu Youheng Supervisor Male 46 Incumbent 0 YES
Xu Lili Supervisor Female 44 Incumbent 0 YES
Chen Fuya Supervisor Male 58 Incumbent 144.58 NO
Chen Taisong Supervisor Male 55 Incumbent 141.63 NO
Vice
Lin Qing Female 48 Incumbent 142.15 NO
President
Vice
Zheng Bujun Male 56 Incumbent 143.18 NO
President
Vice
Yin Qiuming President, Male 51 Incumbent 143.9 NO
CFO
Vice
Li Yuling Male 53 Incumbent 143.06 NO
President
Secretary of
Lu Hongzhen Female 45 Incumbent 66.14 NO
the Board
Liu Board
Male 53 Former 187.35 NO
Huashuang Director, CEO
Cong Board
Male 57 Former 12.25 YES
Xuenian Director
Board
Zhou Xinhu Director, Vice Male 61 Former 115.18 NO
President
Vice
Fu Hongbing Male 61 Former 65.55 NO
President
Total -- -- -- -- 1,876.98 --
52
6. Directors' performance of duties during the reporting period
6.1 The Board of Directors during the Reporting Period
Session Open Date Disclose Date Resolution
Reviewed and approved
the “Proposal on
Adjustment of Internal
Organizations”. For
details, please refer to
the “Announcement on
The Eighth Session of the
Resolutions of the Eighth
Seventh Board of April 07,2022 April 08,2022
Session of the Seventh
Directors
Board of Directors”
disclosed by the
company in the statutory
information disclosure
media.( Announcement
No.: 2022-003)
Reviewed and approved
the “2021 Annual Work
Report of the President”,
“2021 Annual Work
Report of the Board of
Directors”, “2021 Annual
Report and Summary”,
“ 2021 Annual Financial
Final Report”, “ Internal
Control Self-Assessment
Report”, “Proposal on
Renewing the
Appointment of Suya
Jincheng Certified Public
Accountants (Special
General Partnership) as
the Company's Audit
The Ninth Session of the Institution in 2022”,
Seventh Board of April 27,2022 April 29,2022 “ 2021 Social
Directors Responsibility Report”,
“ Proposal on Daily
Connected Transactions”,
Full Text of the “First
Quarterly Report of
2022”, “Plan on
Authorizing the
Company's Management
to Use Its Own Funds to
Purchase Financial
Products at
Opportunities”, “Plan on
Formulating
Management Measures
for Compensation and
Assessment of
Management Team
Members”, “Plan on
53
nominating Mr. Yang
Weiguo as the
non-independent
director candidate for the
seventh Board of
Directors of the
Company” and “Proposal
on holding 2021 Annual
General Meeting of
Shareholders”. For
details, please refer to
the “Announcement on
Resolutions of the Ninth
Session of the Seventh
Board of Directors”
disclosed by the
company in the statutory
information disclosure
media. ( Announcement
No.: 2022-005）
Reviewed and approved
the “Proposal on the
Establishment of
wholly-owned
Subsidiaries and Joint
Investment with
Professional Investment
Institutions”. For details,
The Tenth Session of the
please refer to the
Seventh Board of August 08,2022 August 10,2022
“Announcement on
Directors
Resolutions of the Tenth
Session of the Seventh
Board of Directors”
disclosed by the
company in the statutory
information disclosure
media. ( Announcement
No.: 2022-016）
Reviewed and approved
The Eleventh Session of
the full text and abstract
the Seventh Board of August 25,2022 August 27,2022
of the “2022 Semi-annual
Directors
Report of the Company”.
Reviewed and approved
The Twelfth Session of the full text and abstract
the Seventh Board of October 27,2022 October 28,2022 of “the 2022 Third
Directors Quarterly Report of the
Company”.
Reviewed and approved
the “Proposal on
Donation to China
Aerospace Foundation”
The Thirteenth Session of and the “Proposal on
the 7th Board of December 20,2022 December 21,2022 Donation to Jiangxi Youth
Directors Development
Foundation”. For details,
please refer to the
“Announcement on
Resolutions of the
54
Thirteenth Session of the
Seventh Board of
Directors” disclosed by
the company in the
statutory information
disclosure media.
( Announcement No.:
2022-025）
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 Whether
Number of
times they Number of Amounts not Amounts
board
should Number of proxy of attended of
meetings
Name of attend the on-site attendance absences two attendance
by means
Directors board of board at the from the consecutiv at
of
directors attendance board of Board of e board shareholde
communica
during the directors Directors meetings r meetings
tion
reporting in person
period
Zhang
6 5 1 0 0 NO 1
Liandong
Zhong Yu 6 5 1 0 0 NO 1
Liu
6 1 5 0 0 NO 0
Huashuang
Wang Kai 6 0 5 1 0 NO 0
Yang
4 1 2 1 0 NO 1
Weiguo
Zhao
6 1 5 0 0 NO 0
Shuming
Nie Yao 6 1 5 0 0 NO 0
Mao
6 0 5 1 0 NO 0
Lingxiao
Lu Guoping 6 1 5 0 0 NO 0
Cong
4 1 3 0 0 NO 0
Xuenian
Zhou Xinhu 4 3 1 0 0 NO 1
Explanation of two consecutive absences from attending the board of directors in person
N/A
6.3 Circumstances where directors raise objections to company-related matters
Were there any objections on related issues of the Company from directors?
55
□ 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
During the reporting period, the directors of the Company in accordance with the relevant requirements of
“the Company Law”, “the Securities Law”, “the Articles of Association” and other laws, regulations and rules,
carried out various work diligently and responsibly, provided reasonable opinions and suggestions for the
company's business decisions, and effectively safeguarded the interests of the company and all shareholders.
7. The special committees under the board of directors during the reporting period
Specific
Number Important Other
circumstan
Committee of Opening Content of comments performa
Members ces of the
name meetings date meeting and nce of
objection
held suggestions duties
(if any)
Reviewe
d and
approved
the “2021
Zhang
Report on
Liandong,
the Work
Zhong Yu,
Strategy April of the
Zhao 1
Committee 26,2022 Board of
Shuming,
Directors”
Liu
Planned
Huashuang
the future
developme
nt of the
company
Reviewed
Nie Yao, and
Zhang approved
Nomination April
Liandong, 1 the
Committee 25,2022
Mao “Proposal
Lingxiao on the
nomination
56
of Mr. Yang
Weiguo as
the
non-indepe
ndent
Director of
the
seventh
Board of
Directors
of the
Company”
and
qualificatio
n review
Reviewe
d the
performan
ce of the
company's
manageme
nt team
members
Zhao
and the
Shuming,
implement
Nie Yao,
ation of
Cong
the salary
Xuenian
Remunerati system in
(Cong
on and April 2021
Xuenian 1
Appraisal 25,2022 Reviewe
resigned
Committee d and
from the
approved
committee
the
on
“Managem
September
ent
30, 2022)
Measures
for Salary
and
Assessmen
t of
Manageme
nt Team
Members”
Audit Lu 4 February Reviewe
57
Committee Guoping, 22,2022 d
Cong accounting
Xuenian, firm's audit
Mao plan and
Lingxiao entry
(Cong arrangeme
Xuenian nt for 2021
resigned Annual
from the Report,202
committee 1 internal
on audit work
September and 2022
30, 2022) work plan
Reviewe
d and
approved
the
“Proposal
on
Renewing
the
Appointme
nt of Suya
Jincheng
Certified
Public
Accountant
s (Special
General
Partnership
) as the
Company's
Audit
Institution
in 2022”
Reviewe
d the
implement
ation of
April
the audit
25,2022
work of the
2021
annual
report.
58
Reviewe
d and
approved
the “2021
Internal
Control
Self-Assess
ment
Report”,
“2021
Audit
Report”,
“Financial
Final
Accounts
Report of
2021”,
“Financial
and
accounting
statements
for the first
quarter of
2022”,
“Proposal
on Daily
Connected
Transaction
s”.
Reviewe
d the
implement
ation of
internal
audit work
in the first
quarter of
2022.
Reviewe
d the
August
implement
22,2022
ation of
internal
59
audit work
in the first
half of
2022.
Reviewe
d and
approved
the “2022
semi-annu
al Financial
Report”
Reviewe
d the
implement
ation of
internal
audit work
in the third
quarter of
2022.
October
Reviewe
25,2022
d and
approved
the
“Financial
Statements
for the
third
quarter of
2022”
8. 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
9,705
company at the end of the reporting period (person)
60
Number of on-the-job employees of major
subsidiaries at the end of the reporting period 9,911
(person)
Total number of on-the-job employees at the end of
19,616
the reporting period (person)
The total number of employees receiving salary in the
19,616
current period (person)
Number of retired employees (persons) that the
0
parent company and major subsidiaries need to pay
Professional Composition
Professional Composition Category Professional composition number (person)
Production staff 8,442
Sales staff 6,614
Technical staff 1,975
Financial staff 229
Administration staff 2,229
Internal retirees 127
Total 19,616
Education Level
Educational level category Quantity (person)
Master 391
Bachelor 4,616
College 4,741
Senior High School and below 9,868
Total 19,616
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.
9.3 Training Program
During the reporting period, centering on the goal of improving the "professional and practical organization" and
"learning and research organization", the company adhered to the combination of internal resource integration
and external resource cooperation and carried out three-level training composed of company level,
branch/subsidiary level and department level. The company has hired 262 internal lecturers, carried out 1240
training sessions, and developed 36 high-quality courses and 15 micro courses.
61
(1) Strengthening the construction of cadre echelons. In order to train new middle management personnel, the
company has carried out in-depth cooperation with Yangzhou University and set up special training courses.
In addition, the company cooperates with external organizations to set up excellent manager training camp
to train middle managers.
(2) Enriching the course content. For the training of marketing talents, the company organized and invited
outstanding marketing talents to live broadcast 11 events on the platform of marketing lecture hall to share
successful marketing cases. In addition, the company has developed 9 "Quality Belief Winemaker courses" to
help marketers master efficient business skills and improve the efficiency of solving marketing problems. In
terms of the promotion of skilled talents, the company carries out independent training and appraisal of
vocational skills to support the promotion of skilled talents. The company undertakes the "skill upgrading
training for senior technicians of provincial winemakers", carries out the "junior college to bachelor degree"
degree-upgrading project, and carries out new apprenticeship and special types of work certificate renewal
and certification training to promote the skill level of works.
This measure provides human resources guarantee for the company to build the "second stage" of "second
entrepreneurship", and effectively promotes the company's transformation and upgrading and the promotion
and implementation of strategic goals. The company carries out talent training with the characteristic concept of
"hierarchical, classified and sub-field" and the promotion method of "whole process, all aspects and full
coverage", and strengthens the construction of talent team.
9.4 Outsourcing of labor service
□ 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 30, 2022, the company held the 2021 annual general meeting of shareholders, and reviewed and
approved the company's 2021 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 2021 annual equity distribution, with June 21, 2022 as the equity registration date,
June 22, 2022 as the ex-rights and ex-dividend date, and the company's total share capital after excluding the
542,926 repurchased shares of 1,506,445,07 shares as the base, to all the shareholders. Shareholders will receive
a cash dividend of CNY 30 (tax included) for every 10 shares, with a total cash dividend of CNY 4,519,335,222 (tax
included).
Special explanation of cash dividend policy
Whether it complies with the provisions of the YES
62
company's articles of association or the requirements
of the resolution of the shareholders' meeting
Whether the dividend standard and ratio are explicit
YES
and clear
Whether the relevant decision-making procedures
YES
and 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
whether the conditions and procedures are compliant
or 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 shares (shares) 0
Dividends per 10 shares (CNY) (tax included) 37.4
Base of shares (shares) of the distribution plan 1,506,445,074
Amount of cash dividends (CNY) (tax included) 0.00
Amount of cash dividends in other ways (such as
0.00
share repurchase) (CNY)
Total cash dividends (including other methods) (CNY) 5,634,104,576.76
Distributable profit (CNY) 29,676,346,187.62
Proportion of total cash dividends (including other
100%
methods) to total profit 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%.
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 6,394,344,631.56 in 2022, and the statutory surplus reserve for the year was CNY
0.00, plus the undistributed profit at the beginning of the year of CNY 27,801,336,778.06, so after deducting
the 2021 profit distribution of CNY 4,519,335,222.00, the profit available for distribution to shareholders this
year was CNY 29,676,346,187.62.
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 37.4 (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
63
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
5,634,104,576.76 (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
The company continues to establish and improve the assessment and traction mechanism based on business
performance and the compensation and incentive mechanism for management team members oriented by value
contribution that are compatible with the market economy system and modern enterprise system. The 2021
Annual General Meeting of shareholders of the Company reviewed and approved the “Management Measures
for Compensation and Assessment of Management Team Member”, which stipulates that the annual
remuneration of the members of the management team of the Company consists of basic annual salary,
performance-based annual salary, tenure incentive and other income, the basic annual salary is paid monthly,
the performance-based annual salary is implemented according to the annual performance appraisal results, and
the tenure incentive is linked to the operating performance appraisal during the term of office.
11.2 Implementation of employee stock ownership plans
√ Applicable □ N/A
All valid employee stock ownership plans during the reporting period
Proportion to Funding sources
Range of Number of Total shares the total share for the
Changes
employees employees held capital of listed implementation
companies plan
Company’s Participants’
directors legal
(excluding 4,738 9,118,384 N/A 0.61% remuneration,
independent self-financing
directors), and other
64
supervisors, methods
senior permitted by
management laws and
personnel, and regulations
middle-level
and above
personnel and
core backbones
who are
determined by
the board of
directors of the
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 held at the end of
Name Title total share capital
beginning of the the reporting
of listed companies
reporting period period
Zhang Liandong Chairman 96,404 96,404 0.01%
Deputy chairman,
Zhong Yu 96,404 96,404 0.01%
President
Director,
Liu Huashuang 96,404 96,404 0.01%
CEO (Leaving office)
Director,
Zhou Xinhu Vice president 48,202 48,202 0.00%
(Leaving office)
Chairman of the
Chen Taiqing Board of 48,202 48,202 0.00%
Supervisors
Chen Fuya Supervisor 48,202 48,202 0.00%
Chen Taisong Supervisor 48,202 48,202 0.00%
Lin Qing Vice president 48,202 48,202 0.00%
Zheng Bujun Vice president 48,202 48,202 0.00%
Vice president,
Yin Qiuming 48,202 48,202 0.00%
CFO
Li Yuling Vice president 48,202 48,202 0.00%
Lu Hongzhen Secretary of the 19,281 19,281 0.00%
65
Board
Vice president
Fu Hongbing 48,202 48,202 0.00%
(Leaving office)
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
In this period, the company confirmed that the cost increase of "capital reserves-other capital reserves" was
CNY 122,414,308.77.
Termination of employee stock ownership plans during the reporting period
□ Applicable √ N/A
Other instructions: none
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
12.1.1 Internal control system 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. Clarify the internal division of labor of
the board of directors, and set up special committees including strategy committee, nomination committee,
66
remuneration and appraisal committee, and audit committee.
(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 the company, and form a system for employees on training, treatment,
performance assessment and promotion. For employees in different positions, the company provides channels
to improve their comprehensive quality to cultivate high-quality talents. ② Establish 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 which is
conducive to stimulating employees' subjective initiative, giving full play to their potential, safeguarding
corporate interests and achieving corporate goals.
3. Establish a risk assessment firewall. The company has formulated “Risk and Opportunity Management
Measures”, “Risk Management Responsibility Investigation System” and other systems to investigate risks from
the aspects of food safety and behavior safety, and make preparations for the occurrence and generation of risks.
At the same time, the company organizes the Guidance on Common Risks and Control of Contract Management,
Risk Management Training and other trainings, focusing on the risk management system, internal control system
and integrated risk management and control module, to discover and deal with risk points in time.
4. Implement effective internal control activities. With reference to the risk assessment level, the company
implements measures such as division of responsibilities control, authorization control, review and approval
control, budget control and performance evaluation control, to effectively safeguard the interests of the
enterprise and ensure the stable and orderly progress of various work.
5. 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.
6. 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. By sorting out the supervision content and matters, the company clarifies
the evaluation standards and audit methods of each department, and constantly improves the audit work plan.
In addition, the company needs to strengthen the construction of audit informatization, constantly strengthen
the thinking mode of big data audit, enhance the ability of big data audit, comprehensively use on-site audit and
off-site audit methods, and improve the efficiency of internal audit.
12.1.2 Internal control system implementation
The company continues to establish and improve the internal control system and can effectively implement
it. In the focus of audit, highlight the key supervision of key funds, important projects, important assets and
important positions responsible for the economic responsibility of personnel. In the content of audit, benefit
audit, responsibility audit and internal control system audit should be the main. In terms of audit methods, audit
and research should be combined, post-supervision should be transformed into pre-control, and comprehensive
audit should be strengthened. Audit means need to gradually transition to modern audit means. The audit
Committee of the Board of Directors of the Company annually reviews and supervises the financial report, the
effectiveness of internal control, and the reasonableness and effectiveness of corporate governance; Carry out
67
internal control self-evaluation every year; Optimize the system and management process every year according
to the internal and external environment and development requirements of the enterprise; Closely focus on the
key work of the company, carry out full coverage audit of all molecular companies and functional departments,
so as to achieve full coverage audit of key departments once a year; Conduct spot check and audit of important
departments, with a spot check rate of 50%, and audit with full coverage once every two years; Spot check and
audit of general departments, the spot check rate of 33%, to achieve full coverage of audit once every three
years.
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 26, 2023
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 26, 2023
Report
The ratio of the total assets of the
company included in the
evaluation scope to the total 99.48%
assets of the company's
consolidated financial statements
The ratio of the operating income
of the company included in the
evaluation scope to the operating 99.99%
income of the company's
consolidated financial statements
Defect identification standard
Type Financial report Non-financial report
68
(1) Signs of major deficiencies in
financial reports include: i.
Fraudulent conduct by the
company’s directors, supervisors (1) Signs of major deficiencies in
or senior executives; ii. Significant non-financial reports include: i.
misstatements in the current lack of democratic decision-making
financial statements were found, procedures, unscientific
but the management failed to decision-making procedures,
detect them during the operation major mistakes which resulting in
of internal control; iii. As a result of major property losses to the
internal control evaluation, major company; ii. Serious violation of
deficiencies have not been national laws and regulations;
rectified; iv. The audit committee iii.Lack of important business
and internal audit institution's management system or systemic
supervision of internal control is failure of system operation; iv. The
invalid. (2) Signs of significant company's major or important
deficiencies in financial reporting internal control deficiencies
include: i. Failure to select and cannot be rectified in a timely
apply accounting policies in manner; v. The company continues
Qualitative Criteria
accordance with generally or has a large number of important
accepted accounting principles; ii. internal control deficiencies . (2)
Failure to establish anti-fraud Signs of significant deficiencies in
procedures and control measures; non- financial reporting include: i.
iii. Failure to establish The business behavior violates
corresponding accounting relevant national laws; ii.
treatment for non-routine or Inadequate decision-making
special transactions iv. There are process leads to important errors
one or more deficiencies in the and large losses; iii. Serious loss of
control over the period-end business personnel in key
financial reporting process and positions; iv. Deficiencies in
there is no reasonable assurance important business systems or
that the prepared financial systems. (3) General deficiencies
statements will achieve the true refer to control deficiencies other
and accurate objectives. (3) than the above major deficiencies
General defects refer to other and significant deficiencies.
control defects other than the
above-mentioned major defects
and important defects.
Major defects: Misstatement > 3%
of total operating income;
Misstatement > 5% of total profit;
Misstatement > 2% of total assets.
Important defects: 1% of total
Major defect: loss accounts for ≥
operating income < misstatement
1% of total assets. Important
≤ 3% of total operating income;
defects: 0.5%≤losses account for
3% of total profit < misstatement
Quantitative standard less than 1% of total assets.
≤ 5% of total profit; 1% of total
General defects: The proportion of
assets < misstatement ≤ 2% of
loss to total assets is less than
total assets. General defects:
0.5%.
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
69
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, 2022, 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
Disclosed
Internal Control Audit Report
Disclosure date of the full text
of the internal control audit April 26, 2023
report
Full text disclosure index of
The full text will be disclosed on http://www.cninfo.com.cn on April 26, 2023
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
□ 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
During the self-inspection, 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 had
promptly notified the relevant personnel of the convening of the meeting and the deliberation of proposals after
the meeting.
70
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
Environmental protection related policies and industry standards
The company strictly complies with environmental protection related laws and regulations and industry
standards.
Relevant laws and regulations: “Environmental Protection Law of the People's Republic of China”, “Law of the
People's Republic of China on Water Pollution Prevention and Control”, “Law of the People's Republic of China on
the Prevention and Control of Environmental Pollution by Solid Waste”, “Law of the People's Republic of China on
Prevention and Control of Air Pollution”, “Law of the People's Republic of China on the Prevention of Noise
Pollution”, “Rules for Implementation of the Law on the Prevention and Control of Water Pollution”, “Measures
for administrative penalties on environmental protection”, “Rules for the Implementation of the Air Pollution
Prevention and Control Law”, “Regulations on the Safety Management of chemical dangerous Goods”,
“Regulations on discharge permit Administration”, “Regulations of Jiangsu Province on Environmental Protection”
and so on.
Relevant industry standards: “Emission of Odorous Pollutants” (GB14554-93) Table 1 Secondary Standards, “The
Integrated Emission Standard of Air Pollutants” (GB16297-1996) Table 2 Standard limits, “Industrial enterprise
boundary environmental noise emission standard” (GB12348-2008) Table 1 Class 2 standards, “Discharge
standard for water pollutants of fermented alcohol and liquor industry” （GB27631-2011）, “Discharge standard
of air pollutants from boilers” （DB32/ 4385—2022), “Classified Management List of Environmental Impact
Assessment of Construction Projects (2021 Edition)” and so on.
Environmental protection administrative permit
The company and its subsidiaries have complete materials such as environmental impact reports and pollutant
discharge permits for construction projects.
Jiangsu Yanghe Distillery Co., Ltd.：On July 18, 2022, the Company applied to Suqian Bureau of Ecological
Environment for the “Pollutant Discharge Permit of Yanghe Branch of Yanghe Stock Co., LTD.”, valid from July 18,
2022 to July 17, 2027.
Jiangsu Shuanggou Wine Co., Ltd.：The Company has obtained “Jiangsu Provincial Pollutant Discharge
License” issued by Suqian Municipal Bureau of Ecological Environment on August 12, 2021, valid from August 12,
2021 to August 11, 2026.
Jiangsu Yanghe Distillery Co., Ltd. Siyang Branch：On November 11, 2022, the Company obtained the
“Pollutant Discharge License of Siyang Branch of Yanghe Corporation” issued by Suqian Municipal Bureau of
Ecological Environment. The license is valid from November 11, 2022 to November 10, 2027.
71
Guizhou Guijiu Group Co., Ltd.：The company applied for the renewal of the pollutant discharge permit in
2022, which has been approved by Guiyang Bureau of Ecological Environment and is valid from October 18, 2022
to October 17, 2027.
Industrial discharge standards and details of the discharge of pollutants involved in production and business
activities
Names
Impleme
Types of
Compa of Distrib nted
major Num
ny major ution Emissio pollutan Exces
name polluta polluta ber Total Total
Emission of n t sive
or nts and nts and of emissi approved
subsidi charact method dischar concen discharg emis
charact vent ons emissions
ary eristic ge tration e sions
name polluta eristic s
outlets standard
nts polluta
s
nts
Oxygen
Deman
d, Longitu 57.95m 76.95 454.7
Ammo de： g/L tons tons/year
Jiangsu
nia 118°22′ 0.78mg 650mg/L 1.03 74.7
Yanghe
Waste Nitroge Indirect 33.74″ /L 40mg/L tons tons/year
Distiller 1 None
water n, Total emissions Latitud 0.81mg 5mg/L 1.07 2.07
y Co.,
Phosph e： /L 60mg/L tons tons/year
Ltd.
orus, 33°47′2 23.94m 31.79 37.3
Total 6.74 ″ g/L tons tons/year
Nitroge
n
Oxygen
Deman
d, Longitu 59.55m 39.12 400
Jiangsu Ammo de： g/L tons tons/year
Shuang nia 118°12′ 2.43mg 500mg/L 1.47 32
gou Waste Nitroge Indirect 07″ /L 40mg/L tons tons/year
1 None
Wine water n, Total emissions Latitud 1.64mg 8mg/L 1.01 6.4
Co., Phosph e： /L 60mg/L tons tons/year
Ltd. orus, 33°13′4 12.96m 8.60 48
Total 5″ g/L tons tons/year
Nitroge
n
Jiangsu Oxygen Longitu 119mg 94 600
Yanghe Deman de： /L 500mg/L tons tons/year
Distiller Waste d, Indirect 118°45′ 3.98mg 60mg/L 0.65 42
1 None
y Co., water Ammo emissions 33.08″ /L 6mg/L tons tons/year
Ltd. nia Latitud 1.7mg/ 60mg/L 1.76 5
Siyang Nitroge e： L tons tons/year
72
Branch n, Total 33°42′2 23mg/L 11.44 58.8
Phosph 5.70″ tons tons/year
orus,
Total
Nitroge
n
Oxygen
Deman
d, Longitu 42.73m 4.65 8.958
Ammo de： g/L tons tons/year
Guizho
nia Straight 106°35′ 1.18mg 100mg/L 0.13 0.898
u Guijiu
Waste Nitroge emissions 43″ /L 10mg/L tons tons/year
Group 1 None
water n, Total after Latitud 0.098m 1mg/L 0.01 0.0925
Co.,
Phosph processing e： g/L 20mg/L tons tons/year
Ltd.
orus, 25°50′5 8.66mg 0.94 1.85
Total 2″ /L tons tons/year
Nitroge
n
Longitu
de：
Guizho
106°35′
u Guijiu
exhaus Nitroge Straight 43″ 33.86m 200mg/ 2.47 6.199
Group 1 None
t gas n oxide emissions Latitud g/m m3 tons tons/year
Co.,
e：
Ltd.
25°50′5
2″
Treatments of pollutants
Jiangsu Yanghe Distillery Co., Ltd.：The sewage treatment station in use was completed in 2012, with a total
investment of CNY 96 million, 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 + chemical
treatment method + anaerobic biological treatment method + 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 2022, 1.328 million tons of wastewater were treated. COD reduction was
19,471.2 tons, ammonia nitrogen reduction was 223.6 tons, total phosphorus reduction was 138.81 tons, total
nitrogen reduction was 305.12 tons. The emission concentration of all pollutants is lower than the national
emission standard. There is a biogas boiler room equipped with 9 biogas boilers, and the biogas produced by
anaerobic fermentation of sewage treatment was all used for biogas boiler combustion. The steam produced by
the biogas boiler was used for brewing production, and the steam output was 135,000 tons in 2022. The sludge
and vinasse are mainly recycled by qualified third party units.
Jiangsu Shuanggou Wine Co., Ltd.：The sewage treatment station in use was completed in 2013, with a total
73
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 + UASB + AAO + secondary
sedimentation tank + phosphorus removal tank treatment process, in accordance with the revised list of
"Fermentation Alcohol and Liquor Industrial Pollutant Discharge Standard ( GB27631-2011)". In 2022, 597,600
tons of wastewater were treated. COD reduction was 6,538.24 tons, ammonia nitrogen reduction was 92.97 tons,
total phosphorus reduction was 42.65 tons, total nitrogen reduction was 162.58 tons. The emission
concentration of all pollutants is lower than the national emission standard. There is a biogas boiler room
equipped with 3 biogas boilers, and the biogas produced by anaerobic fermentation of sewage treatment was all
used for biogas boiler combustion. The steam produced by the biogas boiler was used for brewing production,
and the steam output was 31,700 tons in 2022. The sludge and vinasse are mainly recycled by qualified third
party units.
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 + AAO + 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 2022, 867,900 tons
of wastewater were treated. COD reduction was 9496.62 tons, ammonia nitrogen reduction was 93.5 tons, total
phosphorus reduction was 252.74 tons, total nitrogen reduction was 87.08 tons. The emission concentration of
all pollutants is lower than the national emission standard. There is a biogas boiler room equipped with 6 biogas
boilers, and the biogas produced by anaerobic fermentation of sewage treatment was all used for biogas boiler
combustion. The steam produced by the biogas boiler was used for brewing production, and the steam output
was 82,000 tons in 2022. The sludge and vinasse are mainly recycled by qualified third party units.
Guizhou Guijiu Group Co., Ltd.：The sewage treatment station in use was completed in 2021, with a total
investment of CNY 11.5 million, covering an area of about 1,980 square meters, with a designed sewage
treatment capacity of 700 tons per day. The wastewater produced by pretreatment + AAO + MBR + ozone
decolorization and disinfection + 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). In 2022, 108,600 tons of wastewater were treated. COD reduction was 746.89 tons,
ammonia nitrogen reduction was 19.55 tons, total phosphorus reduction was 34.67 tons, total nitrogen
reduction was 10.84 tons. The emission concentration of all pollutants is lower than the national emission
standard. The combustion equipment is gas-fired boilers with natural gas as fuel. The sludge and vinasse are
mainly recycled by qualified third party units.
Emergency plan for environmental emergencies
The company and its subsidiaries have formulated contingency plans for environmental emergencies. The
company has filed with the Bureau of Ecological Environment of Suqian City；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 Xiuwen County environmental
supervision brigade.
The company and its branches and subsidiaries actively organize employees to train and learn the plan, and
74
regularly carry out environmental emergency plan drills, to improve the environmental protection awareness and
emergency handling ability of all staff.
Environmental Self-Monitoring Program
The company and its subsidiaries have completed self-monitoring plans
Jiangsu Yanghe Distillery Co., Ltd. has installed COD, ammonia nitrogen, total nitrogen, total phosphorus, PH,
flow online monitoring instruments, whose data is connected to the automatic monitoring and basic database
system of key polluters and the Jiangsu Province pollution source "One enterprise, One station" management
system. The daily manual sampling and self-testing is conducted, and a periodical sampling inspection by
qualified institutions is entrusted by a third party. The environmental self-monitoring program has been filed
with the Jiangsu Province self-monitoring information release platform of key monitoring enterprises.
Jiangsu Shuanggou Wine Co., Ltd. has installed COD, ammonia nitrogen, total nitrogen, total phosphorus, PH,
flow online monitoring instruments and released the test results on the automatic monitoring and basic
database system of key pollutant discharge enterprises, the Jiangsu Province self-monitoring information release
platform of pollutant discharge enterprises, and the Suqian City Big Data Center of Ecological Environment. The
daily manual sampling and self-testing is conducted, and a sampling inspection by qualified institutions is
entrusted by a third party every month. The environmental self-monitoring program has been filed with the
Jiangsu pollutant discharging enterprises self-monitoring information release platform.
Jiangsu Yanghe Distillery Co., Ltd. Siyang Branch has installed COD, ammonia nitrogen, total nitrogen, total
phosphorus, PH, flow online monitoring instruments and released the test results on the automatic monitoring
and basic database system of key pollutant discharge enterprises, the Jiangsu Province self-monitoring
information release platform of pollutant discharge enterprises, and the Suqian City Big Data Center of Ecological
Environment. The daily manual sampling and self-testing is conducted, and a sampling inspection by qualified
institutions is entrusted by a third party every month. The environmental self-monitoring program has been filed
with the Jiangsu Province self-monitoring information release platform of key monitoring enterprises.
Guizhou Guijiu Group Co., Ltd. has installed COD, ammonia nitrogen, total nitrogen, total phosphorus, PH, ss,
flow online monitoring instruments released the test results on Guizhou Province Automatic monitoring and
management platform for key pollution sources. The daily manual sampling and self-testing is conducted, and a
sampling inspection by qualified institutions is entrusted by a third party every quarter. The environmental
self-monitoring program has been filed with the Xiuwen Branch of Guiyang Bureau of Ecology and Environment.
Input in environmental governance and protection and payment of environmental protection tax
The company, its branches and subsidiaries actively carry out environmental treatment and protection work. In
2022, the total investment of sewage operation and environmental management is about CNY 46.39 million, and
the environmental protection tax is about CNY 1.0808 million.
Measures taken to reduce carbon emissions during the reporting period and their effects
75
√ Applicable □ N/A
In 2022, the company actively responded to the Party and the state to implement the spirit requirements of the
national carbon peak carbon neutrality strategy, and cooperated with China Energy Conservation Group to carry
out enterprise carbon emission inventory and product carbon footprint accounting. The company started to
compile the Carbon Peak Carbon Neutrality Plan and Action Plan of Yanghe Stock to clarify the strategic goal and
action path of the company to achieve carbon peak carbon neutrality.
In 2022, the company is committed to spreading low-carbon concepts and improving energy utilization efficiency.
(1) Energy saving: All the biogas produced by anaerobic fermentation through sewage treatment was used for
boiler combustion to produce steam, with an annual steam output of 240,000 tons and a reduction of 75,000
tons of carbon dioxide emissions. By controlling the total air intake pressure and gas consumption loss, the
Siyang Branch of the company reduced the purchased steam by 57,500 tons and carbon emissions by 17,800
tons. Shuanggou implemented automatic slurry filling transformation of slurry tank, saving 2,586 tons of water
and 4,938 tons of steam annually. Siyang Branch of the company has promoted the watt reduction project of
solar projection lamp, solar street lamp and factory lamp. Up to now, it has completed the replacement of 125
solar projection lamp, 114 solar street lamp and 396-watt reduction lamp, reducing the state grid electricity
consumption by 976,400 KWH in total. Guizhou Guijiu Company adjusted boiler steam pressure according to
brewing demand to realize fine management of natural gas, and the consumption decreased by 3.5% compared
with the same period last year.
(2) Resource conservation: Shuanggou Wine Industry carried out the transformation of circulating water in
production, and realized the annual saving of 129,900 tons of water resources through the reuse of wastewater
and the optimization of circulating water equipment. In addition, the transformation of sludge pressure filter
equipment measures to achieve the annual pharmaceutical, electricity savings of CNY 245,000.
(3) Green energy use: The accumulative new photovoltaic during the reporting period is 14.4WM, including
8.4WM from Yanghe Branch and 6WM from Shuanggou Wine.
(4) Ecological protection: Shuanggou Wine implemented measures to improve the soil, optimized the green
space of about 500 square meters in the reporting period, and added more than 1200 green plants.
(5) Low-carbon concept: the company launched the initiative call of "Be a low-carbon master" and "low-carbon
life", and carried out activities such as Yanghe Top ten "Low-carbon Master" selection and energy conservation
Publicity week. A total of 16,800 people participated in these activities, which strengthened and spread the
concept of low-carbon, shaped the new wind of saving, and painted a green picture.
Administrative penalties for environmental issues during the reporting period
The impact on
Company or the production
Reason for Violation Punishment Rectification
subsidiary and operation
punishment situation result measures
name of listed
companies
None None None None None None
Other environmental information that should be disclosed
76
None
Other environmental protection related information
None
2.Social responsibility
The company has disclosed the “2022 Annual Social Responsibility Report and ESG Report” ， see
www.cninfo.com.cn for details.
3. The Achievements of Poverty Alleviation and Rural Revitalization
During the reporting period, the company adhered to the social responsibility concept of "feeding back the
country and the people", actively fulfilled its corporate social responsibility, and devoted itself to social welfare
and charity undertakings. On the road of promoting "common prosperity", the company has further built a green
raw grain planting base, driven the steady development of supporting enterprises in the upstream and
downstream industrial chains of planting industry, processing industry, packaging industry and so on to increase
employment opportunities, and become a pillar force in poverty alleviation. In promoting "rural revitalization",
the company has actively carried out assistance to poor villages, helping Taiping Village and Qiuzhuang Village in
Zhenglou Town to achieve poverty alleviation. In addition, the company and Zhang Du village cooperation to
carry out "love warm sunset, dream for love" for the golden wedding elderly collective wedding photos,
"weekend hairdressers" activities. The company also cooperated with Qiuzhuang Village to carry out the
Mid-Autumn Festival visit to the countryside.
Furthermore, The "Lasa Langrejiu Village" industrial aid project for Tibet has been successfully implemented,
driving rural revitalization through the construction of highland barley finishing industry, wine making industry
and characteristic cultural and tourism industry. In terms of "public welfare responsibility", the company donated
CNY2 million to Suqian Charity Federation to help nearly 10,000 poor students realize their dreams of university，
and donated CNY800,000 from online sales of co-branded products to China Veterans Employment and
Entrepreneurship Service Promotion Association, which was used to help veterans find jobs and start businesses,
and held online fundraising rallies for education and promoted the project of "Donate love for children's health".
Measures such as supporting the development of China's space industry and providing assistance to
earthquake-stricken areas have also been effectively implemented. Yanghe Group uses public welfare actions to
demonstrate its social responsibility and responsibility and pass on love.
In 2023, the company will continue to respond to the call of the state, thoroughly implement the policy of
consolidating and expanding the achievements of poverty alleviation and effectively linking them with rural
revitalization, and take stronger actions to boost common prosperity and rural revitalization.
For other information, please refer to the “2022 Annual Social Responsibility Report and ESG Report” disclosed
by the company.
77
Section VI Significant Events
1. Performance of commitments
1.1 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
Commitment Commitment Details of Date of Term of
commitment Performance
s Type Commitment Commitment Commitment
s
1.
Commitment
to avoid
horizontal
competition:
(1) The
company is
not currently
engaged in
any business
that
competes
with the
joint-stock
company.
The company
Commitment promises to
s on maintain the
Commitment Jiangsu horizontal existing
s made at Yanghe competition, business August 26, In normal
Long-term
IPO or Group Co. related structure, 2009 execution
refinancing Ltd. transactions, and not to
and capital directly or
occupation indirectly
operate with
the business
of the
joint-stock
company
that actually
constitutes
competition
or may
constitute
competition.
Any business,
or newly
established
subsidiaries
or affiliated
78
enterprises
engaged in
the
above-menti
oned
business. (2)
If the
company
violates the
above
commitment
s, 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
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
79
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
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
80
that the
status of the
controlling
shareholder
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
management
Commitment , and does
s on
not operate
horizontal
Jiangsu Blue the same or
competition, November In normal
Alliance Co., Long-term
related related 23, 2017 execution
Ltd.
transactions,
business as
and capital
occupation the issuer.
The company
will not
engage in the
same or
related
business as
the issuer's
business, and
will not harm
the issuer's
81
interests, nor
will it seek
illegitimate
benefits from
the issuer; 2.
If the
company
violates the
above
commitment
s, 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
establishmen
t cost price
(whichever is
lower); 3.
This
commitment
The book will
take effect
from the
82
date of
signing and
cannot be
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
Jiangsu Blue Share exceed 25%
November In normal
Alliance Co., Reduction of the total Long-term
Ltd. Commitment 23, 2017 execution
number of
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
Cong Other managers of November In normal
March 30,
commitment
Xuenian the of 23, 2017 2024 execution
s
Jiangsu Blue
Alliance Co.,
Ltd., I
promise: 1.
83
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
As one of the
Other
directors, November January 8, Execution
Feng Pantai commitment
supervisors 23, 2017 2022 completed
s
and senior
84
managers of
the of
Jiangsu Blue
Alliance Co.,
Ltd., I
promise: 1.
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
85
months of
resignation
Whether the
promise is
YES
fulfilled on
time
If the
commitment
is overdue
and not
fulfilled, the
specific
reasons for
the failure to
N/A
fulfill and the
next work
plan shall be
explained in
detail
1.2 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
2. 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.
3. Illegal Provision of Guarantees for External Parties
□ Applicable √ N/A
No such case during the current reporting period.
4. Explanation of the board of directors on the latest ‘non-standard audit report’
□ Applicable √ N/A
86
5. 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
6. 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
There was no change in accounting policies, accounting estimates or correction of significant accounting errors
during the reporting period of the Company.
7. Explanation of changes in the scope of consolidated statements compared with the financial
report of the previous year
√ Applicable □ N/A
1. Set up subsidiaries
(1) In March 2022, the company, Xizang Earth Third Pole Industry Development Co., Ltd., Lhasa Pure Land
Industry Investment and Development Group Co., Ltd., and Shenzhen Baoneng Food Technology Group Co., Ltd.,
jointly invested CNY 400.00 million to establish Xizang Earth Third Pole Wine Co., Ltd., of which the company
invested CNY 204.00 million. 51% of its registered capital; Xizang Earth Third Pole Industry Development Co., Ltd.
invested CNY 72.00 million, accounting for 18% of its registered capital; Lhasa Jingland Industry Investment and
Development Group Co., Ltd. invested CNY 64.00 million, accounting for 16% of its registered capital; Shenzhen
Baoneng Food Technology Group Co., Ltd. Invested CNY 60.00 million, accounting for 15% of its registered capital.
It will be included in the consolidated scope of the consolidated financial statements from March 2022.
(2) In August 2022, Guizhou Maotai Town Guijiu Wine Industry Co., Ltd., the holding subsidiary, invested
CNY 0.50 million to establish Guizhou Guijiu Wine Industry Operation Co., Ltd., accounting for 100% of its
registered capital. Since August 2022, the company has included Guizhou Guijiu Wine Operation Co., Ltd. in the
consolidated scope of the consolidated financial statements.
(3) In August 2022, the Company subscribed CNY 10 million to establish Jiangsu Blue Shangyin Catering
Management Co., Ltd., accounting for 100% of its registered capital. Since August 2022, the Company has
incorporated Jiangsu Azure Shangyin Catering Management Co., Ltd. into the consolidated scope of the
consolidated financial statements.
(4) In August 2022, the company subscribed capital of CNY 3.00 billion to establish Jiangsu Yanghe Dream
Investment Management Co., Ltd., accounting for 100% of its registered capital. Jiangsu Yanghe Dream
Investment Management Co., Ltd. has been included in the consolidated scope of the consolidated financial
statements since August 2022.
(5) In September 2022, Jiangsu Yanghe Dream Investment Management Co., LTD., the holding subsidiary,
invested CNY 10.00 million to establish Jiangsu Yanghe Blue Investment Management Co., Ltd., accounting for
100.00% of its registered capital. Since September 2022, the company has included Jiangsu Yanghe Blue
Investment Management Co., Ltd. in the consolidated scope of the consolidated financial statements.
2. Cancellation of subsidiaries
(1) In September 2022, the holding subsidiary Jiangsu Kelite Biotechnology Research Institute Co., Ltd. was
deregested and will no longer be included in the consolidated scope of the consolidated financial statements
from October 2022.
87
(2) In November 2022, Guizhou Guijiu Liquor Operation and Management Co., LTD., the holding subsidiary,
was liquidated and cancelled, and it will no longer be included in the consolidated scope of the consolidated
financial statements from December 2022.
8. 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
190.8
(CNY10,000)
Consecutive years of audit services of domestic
16
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: 3 years; Li Yan: 4 years
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
√ 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 CNY 530,000 of financial consulting fees during the period.
9. Facing delisting after annual report disclosure
□ Applicable √ N/A
10. Bankruptcy and Restructuring
□ Applicable √ N/A
No such case during the reporting period.
11. Material Litigations and Arbitration
□ Applicable √ N/A
The Company had no material litigation or arbitration during the current reporting period.
12. Punishment and rectification
□ Applicable √ N/A
No such case during the reporting period.
88
13. The integrity of the company and its controlling shareholders and actual controllers
□ Applicable √ N/A
14. Significant Related-party Transactions
14.1 Related-party Transactions Arising from Routine Daily Operations
□ Applicable √ N/A
No such case during the reporting period.
14.2 Related-party Transactions regarding Purchase and Disposal of Assets or Equity
□ Applicable √ N/A
No such case during the reporting period.
14.3 Significant Related-party Transactions Arising from Joint Investments on External Parties
□ Applicable √ N/A
No such case during the reporting period.
14.4 Related Credit and Debt Transactions
□ Applicable √ N/A
No such case during the reporting period.
14.5 Transactions with related financial companies
□ Applicable √ N/A
No such case during the reporting period.
14.6 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.
14.7 Other significant related-party transactions
□ Applicable √ N/A
The company has no other significant related transactions during the reporting period.
89
15. Significant Contracts and Their Execution
15.1 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.
15.2 Significant Guarantees
□ Applicable √ N/A
No such case in the reporting period.
15.3 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
impairment
Amount not
Outstanding accrued owing
Product types Source of funds Amount collected after
balance to overdue
the due date
financial
management
Bank wealth
management Private funds 1,192,000 800,000 0 0
products
Trust wealth
management Private funds 208,285.29 27,500 7,269.55 6,512.85
products
Total 1,400,285.29 827,500 7,269.55 6,512.85
Specific circumstances of high-risk entrusted wealth management with a single large amount or low security and
90
low liquidity
√ Applicable □ N/A
91
Unit: CNY10, 000
Ref
Typ
ere
e of Inv Actual The actual Whether An overview
Remun nce Is there
Tru A est Expect profit and recovery of Amount of it has of the
Star eration ann any
Truste ste m Sourc End me ed loss profit and provision gone matter and
Typ t determ uali entrusted
e e o es of dat nt earnin amount loss during for through an index of
e dat ination zed financial
name (or u funds e dire gs (if during the the impairme legal related
e metho rate plan in the
Tru nt ctio any) reporting reporting nt (if any) procedure queries (if
d of future
ste n period period s any)
ret
e)
urn
CITI The trust
C financing
Tru expires, and
st part of the
Jiah principal
e 6, Nov and income
Ma
No. 5 em Deb are
Privat y
CITIC Tru 118 1 ber t 7.6 1,085. deferred.
e 29, Cash 2,201.31 1341.14 6,512.85 Yes Yes
Trust st Eve 2. 29, ass 0% 97 For details,
funds 202
rgra 8 202 ets please refer
0
nde 5 1 to the
Gui "Announce
yan ment on the
g Deferred
Ne Payment of
w the Expired
92
Wo Principal
rld and Income
Acc of Entrusted
um Wealth
ulat Manageme
ive nt"
Fun disclosed by
d the
Tru company on
st December
Pla 4, 2021
n (Announce
ment No.
2021-044)
AVI The trust
C financing
Tru extends,
st and part of
Tia the
Feb Feb
nxi 1 principal
rua rua Equ
n 0, Privat and income
AVIC Tru ry ry ity 8.5
Bay 0 e Cash 1,700 1,567.26 691.64 5,000 Yes Yes are
Trust st 26, 26, ass 0%
Are 0 funds deferred.
202 202 ets
a 0 For details,
1 3
Ren please refer
ew to the
al "Announce
No. ment on the
10 Deferred
93
Coll Payment of
ecti the Expired
ve Principal
Fun and Income
d of Entrusted
Tru Wealth
st Manageme
Pla nt"
n disclosed by
Pha the
se 1 company on
March 18,
2023
(Announce
ment No.
2023-003)
AVI The trust
C financing
Tru extends,
st and part of
Tia 1 Mar Mar the
AVI Equ
nxi 0, Privat ch ch principal
AVIC C ity 8.5
n 0 e 1, 1, Cash 1,700 1,560.27 684.66 5,000 Yes Yes and income
Trust Tru ass 0%
Bay 0 funds 202 202 are
st ets
Are 0 1 3 deferred.
a For details,
Ren please refer
ew to the
al "Announce
94
No. ment on the
10 Deferred
Coll Payment of
ecti the Expired
ve Principal
Fun and Income
d of Entrusted
Tru Wealth
st Manageme
Pla nt"
n disclosed by
Pha the
se 2 company on
March 18,
2023
(Announce
ment No.
2023-003)
2
6,
5
Total 4,485.
1 -- -- -- -- -- -- 5,328.84 -- 16,512.85 -- -- --
97
2.
8
5
Entrust finance expected to be failed to recover principle or other situation leading to impairment
√ Applicable □ N/A
95
The “CITIC Trust Jiahe No. 118 Evergrande Guiyang New World Collective Fund Trust Plan” purchased by the company extended. Based on the principle of
prudence, the company handles changes in fair value. The amount of impairment accrued during the reporting period was CNY 28.8718 million, and the amount of
impairment accrued by the end of the reporting period was CNY 65.1285 million.
The “AVIC Trust Tianxin Bay Area Renewal No. 10 Collective Fund Trust Plan Phase 1”, “AVIC Trust Tianxin Bay Area Renewal No. 10 Collective Fund Trust Plan
Phase 2” purchased by the company extended. Based on the principle of prudence, the company handles changes in fair value. The amount of impairment accrued
during the reporting period was CNY 50 million, and the amount of impairment accrued by the end of the reporting period was CNY 100 million.
96
（2）Entrusted loan management
□ Applicable √ N/A
No such case during the reporting period
15.4 Other major contracts
□ Applicable √ N/A
No such case during the reporting period
16. 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、The wholly-owned subsidiary of the company, 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
97
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).
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. Suzhou Xingfu and Nanjing Hongyang
completed the fundraising scale of CNY 1.5 billion and CNY 230 million respectively.
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). Huaye Phase IV and Xiamen Yuanfeng completed the fundraising
scale of CNY 1.899 billion and CNY 20 billion respectively.
7. Jiangsu Yanghe Blue Investment Management Co., Ltd. and Jiangsu Yanghe Dream Investment
Management Co., Ltd. subscribe for the partnership shares of Nanjing Huatai Yanghe Equity Investment Mother
Fund (limited partnership). Huatai Yanghe Mother Fund has completed the filing in Asset Management
Association of China with the filing code of SXY168. For details, please refer to the "Announcement on the
establishment of wholly-owned subsidiaries and Cooperative Investment with Professional Investment
Institutions" disclosed by the company on August 10, 2022 (Announcement No.: 2022-017), and the "Progress
Announcement on the establishment of wholly-owned subsidiaries and Cooperative Investment with
Professional Investment Institutions" disclosed by the company on September 28, 2022 (Announcement No.:
2022-020), and the "Progress Announcement on the establishment of wholly-owned subsidiaries and
Cooperative Investment with Professional Investment Institutions" disclosed by the company on December 17,
2022 (Announcement No.: 2022-024).
17. Significant Events of the Company's Subsidiaries
□ Applicable √ N/A
98
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 253,757, -248,065 -248,065 5,692,1
16.84% 0 0 0 0.38%
conditional restriction(s) 986 ,854 ,854 32
1.1 State holdings 0 0.00% 0 0 0 0 0 0 0.00%
1.2 Shares held by
0 0.00% 0 0 0 0 0 0 0.00%
State-owned corporate
1.3. Other domestic 253,757, -248,065 -248,065 5,692,1
16.84% 0 0 0 0.38%
holdings 986 ,854 ,854 32
Including: held by 249,480, -249,480 -249,480 0
16.55% 0 0 0 0.00%
domestic corporates 000 ,000 ,000
held by domestic 4,277,98 1,414,14 1,414,14 5,692,1
0.28% 0 0 0 0.38%
natural persons 6 6 6 32
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 1,253,23 248,065, 248,065, 1,501,2
83.16% 0 0 0 99.62%
restriction 0,014 854 854 95,868
2.1 RMB ordinary 1,253,23 248,065, 248,065, 1,501,2
83.16% 0 0 0 99.62%
shares 0,014 854 854 95,868
2.2 Domestically listed
0 0.00% 0 0 0 0 0 0 0.00%
foreign shares
2.3 Foreign shares
0 0.00% 0 0 0 0 0 0 0.00%
listed overseas
2.4 Others 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
99
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
Sales
restrictions
were not lifted
during the
reporting
period. On
March 7, 2023,
Lock in upon 25% of the
Zhou Xinhu 2,158,718 719,573 0 2,878,291 director's shares held
departure were lifted
from
restrictions on
sale, and the
remaining
shares that
have not been
lifted from
100
restrictions on
sale will be
lifted in
accordance
with relevant
regulations.
Sales
restrictions
were not lifted
during the
reporting
period. On
March 30,
2023, 25% of
the shares
held were
Lock in upon lifted from
Cong Xuenian 2,083,718 694,573 0 2,778,291 director's restrictions on
departure sale, and the
remaining
shares that
have not been
lifted from
restrictions on
sale will be
lifted in
accordance
with relevant
regulations.
Previously
Jiangsu Blue issued shares
249,480,000 0 249,480,000 0 August 9, 2022
Alliance Co., Ltd before initial
public offering
Total 253,722,436 1,414,146 249,480,000 5,656,582 -- --
II.Issuance and Listing of Securities
1. Securities (exclude Preferred Share) Issued during the Reporting Period
□ Applicable √ N/A
101
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
124,744 118,381 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
Increa Pledge, marking or
se/de freezing
Total creas Numbe
Share-h common e r of
Number of
Name of Nature of olding shares held durin restrict
unrestricted
Shareholders shareholders percent at the end of g the ed
shares held Status Amount
age (%) the reporting report shares
period ing held
perio
d
Jiangsu Yanghe State-owned
34.16% 514,858,939 0 0 514,858,939
Group Co., Ltd. legal person
Jiangsu Blue Domestic
17.58% 264,991,926 0 0 264,991,926
Alliance Co., Ltd. Non-state-own
102
ed legal person
Shanghai Haiyan
Logistics State-owned
9.67% 145,708,137 0 0 145,708,137
Development legal person
Co., Ltd.
Shanghai
Jieqiang
State-owned
Tobacco Sugar & 3.96% 59,744,099 0 0 59,744,099
legal person
Wine (Group)
Co., Ltd.
Bank of China
Limited - China
Merchants CSI
Baijiu Index -6450
Others 2.91% 43,787,041 0 43,787,041
Classified 418
Securities
Investment
Fund
Hong Kong
Securities
Overseas legal 39407
Clearing 2.48% 37,367,730 0 37,367,730
persons 57
Company
Limited
Bank of China
Limited - E Fund
Blue Chip
-4500
Selected Mixed Others 2.20% 33,200,000 0 33,200,000
000
Securities
Investment
Fund
China Securities
Domestic
Finance
Non-state-own 0.92% 13,790,044 0 0 13,790,044
Corporation
ed legal person
Limited
Bank of China
Limited - E Fund
Premium
81993
Selected Hybrid Others 0.72% 10,820,000 0 10,820,000
0
Securities
Investment
Fund
Yanghe Distillery
91183
Co., LTD－The Others 0.61% 9,118,384 0 9,118,384
84
first phase of
103
the 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 end of Type of shares
Name of shareholders
the reporting period Type Amount
RMB
Jiangsu Yanghe Group Co., Ltd. 514,858,939 common 514,858,939
shares
RMB
Jiangsu Blue Alliance Co., Ltd 264,991,926 common 264,991,926
shares
RMB
Shanghai Haiyan Logistics
145,708,137 common 145,708,137
Development Co., Ltd.
shares
RMB
Shanghai Jieqiang Tobacco Sugar
59,744,099 common 59,744,099
& Wine (Group) Co., Ltd.
shares
Bank of China Limited－China RMB
Merchants CSI Liquor Index common
43,787,041 43,787,041
Graded Securities Investment shares
Fund
RMB
Hong Kong Securities Clearing
37,367,730 common 37,367,730
Co., Ltd
shares
104
Bank of China Limited－E Fund RMB
Blue Chip Selected Mixed 33,200,000 common 33,200,000
Securities Investment Fund shares
RMB
China Securities Finance Co., LTD 13,790,044 common 13,790,044
shares
Bank of China Limited－E Fund RMB
Premium Selected Hybrid 10,820,000 common 10,820,000
Securities Investment Fund shares
Yanghe Distillery Co., LTD－The RMB
first phase of the core backbone 9,118,384 common 9,118,384
shareholding plan shares
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
Jiangsu Yanghe Group
Yang Weiguo 8 May, 1997 91321300142334989Y and auxiliary materials,
Co., LTD
equipment and parts
required for wine
export and import
105
production, industrial
investment; municipal
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 of
Name of Actual Controller Organization Code Business scope
People in establishment
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:
106
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 of
Name of Actual Controller representative/ Organization Code Business scope
establishment
People in charge
Sales of daily
necessities,
biotechnology research
and development,
furniture production,
Jiangsu Blue Alliance Co., LTD Cong Xuenian 28 July, 2016 CNY 105.6 million
business management
consulting services,
fruit tree planting,
pre-packaged food
sales.
107
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
108
Section VIII Preferred Shares
□ Applicable √ N/A
There are no preferred shares in the company during the reporting period.
109
Section IX Bonds
□ Applicable √ N/A
110
Section X Financial Report
I. Auditor’s report
Type of audit report Standard and unqualified opinion
Date of signature 24 April 2023
Name of Audit Suya Jincheng CPA LLP.
No. of auditor’s report Suya Audit [2023] No.736
Names of auditors Li Laimin, Li Yan
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 2022, consolidated income statement and income statement,
consolidated cash flow statement and cash flow statement, consolidated statement of changes
in owners' equity and statement of changes in owners' equity for the year then ended and notes
to the financial statements.
In our opinion, the attached financial statements are prepared, in all material respects, in
accordance with Accounting Standards for Business Enterprises and present fairly the financial
position of the company as at 31 December 2022 and its operating results and cash flow for the
year then ended.
Basis for opinion
We conducted our audit in accordance with China Standards on Auditing “CSAs” for Certified
Public Accountants. Our responsibilities under those standards are further described in the
Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are
independent of the Company in accordance with the Code of professional ethics for Certified
Public Accountants in China “the Code”), and we have fulfilled our other ethical responsibilities in
accordance with the Code. We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Key audit matters
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.
1.Recognition of revenue
Please refer to note 28, “Accounting Policies” in NoteⅤ, "Significant Accounting Policies and Estimates" and
note 38 in Note Ⅶ, "main Items of the Consolidated Financial Statements".
Key audit matters How our audit addressed the key audit matter
111
The Company’s specific condition of Our procedures in relation to revenue recognition included:
revenue recognition is that revenue
is recognized after customer (1) Understood, tested and evaluated the effectiveness of internal
acceptance based on transfer of control of sales and cash receipts cycle designed and executed by the
control. In 2022, the Company’s management.
annual operating revenue was
(2) Through sampling inspection of the sales contract, identified the
CNY30.11 billion. The amount
substantial and operating revenue is contractual rights and obligations, evaluated the point of time of
an important component of income performance obligations and evaluated whether the judgment of the
statement. Therefore, we identified transfer of control related to revenue recognition conforms to the
operating revenue as a key audit Company's accounting policies and Accounting Standards for Business
matter.
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 Ⅴ, "Significant Accounting Policies and Estimates" and
note 8 in Note Ⅶ, "main Items of the Consolidated Financial Statements".
Key audit matters How our audit addressed the key audit matter
As at 31 December 2022, the book Our procedures in relation to existence, valuation, allocation of
value of inventory is CNY 17.73 inventories included:
billion, accounting for 26.09% of the
(1) Understood, tested and evaluated the effectiveness of management's
total assets and 34.42% of all
design and implementation of inventory-related internal control.
current assets. The book value of
(2) Carried out the inventory analysis review procedure.
the inventories at year end is
(3) Supervised the inventory at the end of the period.
relatively large and accounts for a
relatively large proportion of the (4) Sample check of production cost calculation table and other cost
total assets at the year end. accounting data, and conducted valuation test on inventory, and
Therefore, the existence, valuation evaluated the accuracy of closing balance of inventory.
and allocation of inventories are (5) Obtained the calculation table of provision for stock obsolescence,
identified as a key audit matter. conduct the inventory impairment test, reviewed the inventory
impairment test process, and checked whether the provision for stock
obsolescence is made sufficiently.
112
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 auditors 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’s financial
reporting process.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a
whole are free from material misstatement, whether due to fraud or error, and to issue an
auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is
not a guarantee that an audit conducted in accordance with CSAs will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with CSAs, we exercise professional judgment and
maintain professional skepticism throughout the audit. We also:
(1) Identify and assess the risks of material misstatement of the financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those risks,
and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.
113
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’s
report unless law or regulation precludes public disclosure about the matter or when, in
extremely rare circumstances, we determine that a matter should not be communicated in our
report because the adverse consequences of doing so would reasonably be expected to
outweigh the public interest benefits of such communication.
Suya Jincheng CPA LLP
CPA of China: Li Laimin
114
CPA of China: Li Yan
Nanjing, China 24 April 2023
II. Financial statements
Consolidated balance sheet
Prepared by: Jiangsu Yanghe Distillery Co., Ltd.
As at 31 December 2022
Unit: CNY
Item On December 31st 2022 On January 1st 2022
Current assets:
Cash and bank balances 24,375,449,432.33 20,955,831,010.12
Settlement reserves
Lending funds
Financial assets held for trading 7,998,150,119.16 10,953,894,328.01
Derivative financial assets
Notes receivables 526,004,730.00 663,849,328.28
Accounts receivables 45,142,892.78 1,247,949.91
Account receivables financing 623,098,310.00 222,793,060.40
Prepayment 11,019,093.60 9,408,768.12
Premiums receivable
Reinsurance accounts receivable
Reinsurance contract reserve
Other receivables 74,362,342.41 11,520,008.85
Including: Interests receivable
Dividends receivable
Buying back the sale of financial
assets
Inventories 17,729,258,966.54 16,803,093,441.81
Contract assets
Assets held for sale
Non-current assets due within one
year
Other current assets 129,687,990.26 143,005,191.58
Total current assets 51,512,173,877.08 49,764,643,087.08
Non-current assets:
Disbursement of loans and
advances
Investment in debt instruments
115
Investment in other debt
instruments
Long-term receivables
Long-term equity investments 32,979,630.21 32,743,397.31
Investment in other equity
instruments
Other non-current financial assets 6,148,634,160.78 7,635,942,149.06
Investment property
Fixed assets 5,794,773,069.53 6,276,466,308.05
Construction in progress 757,145,492.90 525,497,000.26
Productive biological assets
Oil and gas assets
Right-of-use asset 34,115,602.27 19,610,113.75
Intangible assets 1,714,381,075.43 1,679,597,933.06
Development expenses
Goodwill 276,001,989.95 276,001,989.95
Long-term deferred expenses 12,078,509.76 16,104,679.68
Deferred tax assets 1,498,116,524.68 1,385,956,896.18
Other non-current assets 183,847,201.84 186,140,639.38
Total non-current assets 16,452,073,257.35 18,034,061,106.68
Total assets 67,964,247,134.43 67,798,704,193.76
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 payables 1,376,209,527.01 1,444,175,262.08
Advance from customer
Contract liabilities 13,741,547,677.99 15,804,521,430.17
Financial assets sold for
repurchase
Customer brokerage deposits
Securities underwriting brokerage
deposits
Receivings from vicariously sold
securities
Employee benefits payable 482,991,738.73 536,717,129.16
Taxes payable 1,136,695,805.18 3,061,385,171.71
Other payables 1,854,922,517.23 1,808,838,882.26
Including: Interests payable
Dividends payable
Handling charges and commissions
116
payable
Reinsurance accounts payables
Liabilities held for sale
Non-current liabilities due within
23,684,406.75 8,405,846.77
one year
Other current liabilities 1,312,248,150.31 2,039,264,937.72
Total current liabilities 19,928,299,823.20 24,733,308,659.87
Non-current liabilities:
Insurance contract reserves
Long-term loans 36,360.00
Bonds payable
Including: Preference shares
Perpetual bonds
Lease liabilities 3,715,300.93 10,729,824.19
Long-term payables 196,459,834.53 196,694,194.53
Long-term payroll payables
Accrued liabilities
Deferred income 92,277,166.67 77,242,500.00
Deferred tax liabilities 219,046,405.35 299,382,397.38
Other non-current liabilities
Total non-current liabilities 511,498,707.48 584,085,276.10
Total liabilities 20,439,798,530.68 25,317,393,935.97
Shareholders' equity
Share capital 1,506,988,000.00 1,506,988,000.00
Other equity instruments
Including: preference shares
Perpetual bonds
Capital reserves 904,650,678.91 782,236,370.14
Less: treasury stock 56,278,680.79 56,278,680.79
Other comprehensive income 1,981,678.95 -5,843,990.29
Special reserves
Surplus reserves 753,494,000.00 753,494,000.00
General risk reserve
Undistributed profits 44,364,111,297.61 39,505,614,090.53
Total equity attributable to owners of
47,474,946,974.68 42,486,209,789.59
the parent company
Non-controlling interests 49,501,629.07 -4,899,531.80
Total owners' equity 47,524,448,603.75 42,481,310,257.79
Total liabilities and owners' equity 67,964,247,134.43 67,798,704,193.76
Legal representative: Zhang Liandong
Person in charge of accounting affairs: Yin Qiuming
Person in charge of accounting department: Zhao Qike
117
Balance sheet of parent company
As at 31 December 2022
Unit: CNY
Item On December 31st 2022 On January 1st 2022
Current assets:
Cash and bank balances 23,231,793,606.79 19,908,620,924.68
Financial assets held for trading 5,084,342,428.09 8,090,978,413.80
Derivative financial assets
Notes receivables 505,704,730.00 601,826,328.28
Accounts receivables 1,204,161,788.24 424,595,684.45
Account receivables financing 394,478,350.00 10,760,000.00
Prepayment 51,616,255.75 76,366,400.75
Other receivables 1,068,086,225.72 2,211,826,118.30
Including: Interests receivable
Dividends receivable 1,812,736,853.55
Inventories 11,550,551,319.29 11,289,319,403.65
Contract assets
Assets held for sale
Non-current assets due within one
year
Other current assets 40,571,905.54
Total current assets 43,131,306,609.42 42,614,293,273.91
Non-current assets:
Investment in debt instruments
Investment in other debt
instruments
Long-term receivables
Long-term equity investments 8,180,436,290.49 7,994,556,728.17
Investment in other equity
instruments
Other non-current financial assets 2,427,355,825.21 3,598,974,759.45
Investment property
Fixed assets 3,693,258,788.76 3,990,650,393.37
Construction in progress 251,750,887.23 183,491,743.37
Productive biological assets
118
Oil and gas assets
Right-of-use asset 1,161,853.86 1,431,936.19
Intangible assets 1,141,322,601.26 1,181,546,201.25
Development expenses
Goodwill
Long-term deferred expenses 12,078,509.76 16,104,679.68
Deferred tax assets 24,212,971.55 12,941,142.63
Other non-current assets 163,216,415.72 164,332,861.20
Total Non-current Assets 15,894,794,143.84 17,144,030,445.31
Total Assets 59,026,100,753.26 59,758,323,719.22
Current liabilities:
Short-term loans
Financial liabilities held for trading
Derivative financial liabilities
Notes payable
Accounts payables 1,041,176,754.20 985,248,728.21
Advance from customer
Contract liabilities 17,485,085,741.24 21,199,823,390.34
Employee benefits payable
Taxes payable 377,457,671.93 643,076,598.44
Other payables 3,762,682,905.35 1,842,392,622.94
Including: Interests payable
Dividends payable
Liabilities held for sale
Non-current liabilities due within
704,940.02 441,857.83
one year
Other current liabilities 2,688,940,410.36 3,300,680,288.13
Total current liabilities 25,356,048,423.10 27,971,663,485.89
Non-current liabilities:
Long-term loans 36,360.00
Bonds payable
Including：preference shares
Perpetual bonds
Lease liabilities 656,135.70 820,816.63
Long-term payables 143,950,749.73 144,104,709.73
Long-term payroll payables
Provisions
Deferred income 4,791,666.67 5,000,000.00
Deferred tax liabilities 135,357,661.52 248,825,948.76
Other non-current liabilities
Total non-current liabilities 284,756,213.62 398,787,835.12
Total liabilities 25,640,804,636.72 28,370,451,321.01
Owners' equity (or shareholders'
119
equity)
Share capital 1,506,988,000.00 1,506,988,000.00
Other equity instruments
Including: preference shares
Perpetual bonds
Capital reserves 1,504,746,609.71 1,382,332,300.94
Less: treasury stock 56,278,680.79 56,278,680.79
Other comprehensive income
Special reserves
Surplus reserves 753,494,000.00 753,494,000.00
Undistributed profits 29,676,346,187.62 27,801,336,778.06
Total owners' equity 33,385,296,116.54 31,387,872,398.21
Total liabilities and owners' equity 59,026,100,753.26 59,758,323,719.22
Consolidated Income Statement
For the year ended 31 December 2022
Unit: CNY
Item Year 2022 Year 2021
1. Total operating revenue 30,104,896,186.70 25,350,178,204.45
Including: Operating revenue 30,104,896,186.70 25,350,178,204.45
Interest income
Earned premium
Fee and commission income
2. Total operating costs 17,765,764,643.68 15,637,137,313.61
Including: cost of sales 7,645,533,264.72 6,255,397,564.10
Interest expense
Handling charges and commission
expenses
Refunded premiums
Net payments for insurance claims
Net provision for insurance
contracts
Bond insurance expense
Reinsurance expenses
Taxes and surcharges 4,388,312,404.88 4,147,982,128.12
Selling and distribution expenses 4,179,140,807.85 3,544,364,889.54
General and administrative
1,935,673,295.75 1,830,080,139.18
expenses
120
Research and Development
253,574,976.39 258,458,102.63
expenses
Financial expenses -636,470,105.91 -399,145,509.96
Including: Interest expenses 694,325.50 603,755.58
Interest income 645,806,427.40 433,923,395.67
Plus: Other income 63,772,818.50 90,850,747.98
Investment income ("-" for losses) 425,865,631.53 900,613,478.22
Including: income from investment
5,201,436.79 2,948,720.95
in associates and joint ventures
Disposal of financial instruments at
-13,584,025.11
a mortised cost ("-" for losses)
Foreign exchange gains ("-" for
losses)
Net exposure to hedging
gains("-"for loss)
Gains from the changes in fair
-318,331,123.43 -721,212,806.81
values (“-“ for losses)
Losses from credit impairment ("-"
-746,085.96 12,627,487.28
for losses)
Losses from asset impairment ("-"
-2,333,823.54 -7,175,293.45
for losses)
Gains from disposal of assets ("-"
1,846,300.27 184,684.97
for losses)
3. Operating profits ("-" for losses) 12,509,205,260.39 9,988,929,189.03
Plus: non-operating income 25,586,332.71 20,718,383.00
Less: non-operating expenses 31,507,701.73 63,220,053.35
4. Total profits before tax ("-" for total
12,503,283,891.37 9,946,427,518.68
losses)
Less: income tax expenses 3,113,885,719.88 2,433,610,121.20
5. Net profit ("-" for net loss) 9,389,398,171.49 7,512,817,397.48
Classification by operating
continuity
Net profit from continuing operation
9,389,398,171.49 7,512,817,397.48
("-" for losses)
Net profit from discontinued
operation ("-" for losses)
Classification by owners
Attributable to owners of the parent
9,377,832,429.08 7,507,682,797.40
company
Attributable to non-controlling
11,565,742.41 5,134,600.08
interests
6.Net of tax from other
7,861,087.70 -633,966.69
comprehensive income
Net of tax from other
comprehensive income to the owner 7,825,669.24 -630,741.36
of the parent company
Other comprehensive income
cannot reclassified into the profit and
121
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 changes in enterprise's
own credit risk
Others
Other comprehensive income that
will be reclassified into the profit and 7,825,669.24 -630,741.36
loss
Including: Share in other
comprehensive income that will be
153,503.58 10,293.63
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 foreign currency financial 7,672,165.66 -641,034.99
statements
Others
Net of tax from other
comprehensive income to 35,418.46 -3,225.33
non-controlling interests
7. Total comprehensive income 9,397,259,259.19 7,512,183,430.79
Total comprehensive income
attributable to owners of the parent 9,385,658,098.32 7,507,052,056.04
company
Total comprehensive income
attributable to non-controlling 11,601,160.87 5,131,374.75
interests
8. Earnings per share
(1) Basic earnings per share 6.2251 5.0141
(2) Diluted earnings per share 6.2251 5.0141
Where an enterprise is merged under the same control in the current period, the net profit realized by the
merged party before the merger is: CNY 0.00, and the net profit realized by the merged party in the previous
period is: CNY 0.00.
Legal representative: Zhang Liandong
122
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 2022
Unit: CNY
Item Year 2022 Year 2021
1. Operating revenue 11,492,807,889.95 10,476,842,189.83
Less: Cost of sales 5,980,220,225.56 5,692,899,268.72
Taxes and surcharges 3,545,342,923.46 3,418,193,216.10
Selling and distribution expenses 8,061,097.87 4,350,000.19
General and administrative
1,066,652,613.72 953,846,877.96
expenses
Research and Development
251,317,786.01 255,876,693.41
expenses
Financial expenses -599,586,816.00 -360,797,750.83
Including: Interest expenses 68,917.37 80,013.55
Interest income 601,536,203.50 392,282,831.40
Plus: Other income 12,864,187.98 35,355,375.48
Investment income ("-" for losses) 5,820,859,899.66 4,025,167,004.11
Including: income from investment
in associates and joint ventures
Disposal of financial instruments at
-11,790,752.31
a mortised cost ("-" for losses)
Net exposure to hedging gains ("-
"for loss)
Gains from the changes in fair
-453,873,148.94 -553,286,086.09
values (“-“ for losses)
Losses from credit impairment ("-"
-343,834.00 1,133,079.28
for losses)
Losses from asset impairment ("-"
-2,182,437.80 -6,671,650.31
for losses)
Gains from disposal of assets ("-"
204,782.75 10,672.49
for losses)
2. Operating profits ("-" For Losses) 6,618,329,508.98 4,014,182,279.24
Plus: non-operating income 5,673,709.03 2,129,227.09
Less: non-operating expenses 17,026,160.31 26,922,264.60
3. Total profits before tax ("-" For Total
6,606,977,057.70 3,989,389,241.73
Losses)
Less: income tax expenses 212,632,426.14 -24,278,888.68
123
4. Net profit ("-" For Net Loss) 6,394,344,631.56 4,013,668,130.41
Net profit from continuing operation
6,394,344,631.56 4,013,668,130.41
("-" for losses)
Net profit from discontinued
operation ("-" for losses)
5.Net of tax from other
comprehensive income
Other comprehensive income
cannot reclassified into the profit and
loss:
Including: Changes in remeasured
defined benefit obligations
Other comprehensive income that
cannot be transferred under the equity
method
Net gain on equity instrument at fair
value through other comprehensive
income
Fair value changes in enterprise's
own credit risk
Others
Other comprehensive income that
will be reclassified into the profit and
loss
Including: Share in other
comprehensive income that will be
classified into profit and loss under
equity method
Net gain on debt instruments at fair
value through other comprehensive
income
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 6,394,344,631.56 4,013,668,130.41
7. Earnings per share
(1)Basic earnings per share
(2)Diluted earnings per share
Consolidated Statement of Cash Flows
124
For the year ended 31 December 2022
Unit: CNY
Item Year 2022 Year 2021
1. Cash flows from operating activities
Cash received from sale of goods
30,888,040,308.39 36,809,670,762.29
and rendering of services
Net increase in customer bank
deposits and placement from banks
and other financial institutions
Net increase in loans from central
bank
Net increase in loans from other
financial institutions
Premiums received from original
insurance contracts
Net cash received from reinsurance
business
Net increase in deposits and
investments from policyholders
Cash received from interest,
handling charges and commissions
Net increase in placements from
other financial institutions
Net capital increase in repurchase
business
Net cash received for the sale of
securities
Refunds of taxes and surcharges 3,060,026.48
Cash received from other operating
550,757,261.24 728,428,911.66
activities
Sub-total of cash inflows from
31,441,857,596.11 37,538,099,673.95
operating activities
Cash paid for goods purchased and
7,975,641,881.57 7,772,357,695.47
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
125
Cash paid for policy dividends
Cash paid to and on behalf of
3,444,356,348.05 2,639,141,713.39
employees
Cash paid for taxes and surcharges 12,905,501,412.00 8,805,477,883.69
Cash paid for other operating
3,468,734,002.30 3,002,956,900.87
activities
Sub-total of cash outflows from
27,794,233,643.92 22,219,934,193.42
operating activities
Net cash flows from activities
3,647,623,952.19 15,318,165,480.53
operating
2. Cash flows from investing activities
Cash received from disposal of
17,261,152,475.37 27,266,561,244.92
investments
Cash received from returns on
420,664,194.74 897,664,757.27
investments
Net cash received from disposal of
fixed assets, intangible assets and 5,625,033.85 6,072,909.38
other long-term assets
Net cash received from disposal of
subsidiaries and other business units
Cash received from other investing
activities
Sub-total of cash inflows from
17,687,441,703.96 28,170,298,911.57
investing activities
Cash paid to acquire and construct
fixed assets, intangible assets and 539,153,153.61 423,524,255.39
other long-term assets
Cash paid for investments 13,131,786,086.81 25,910,110,341.89
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
13,670,939,240.42 26,333,634,597.28
investing activities
Net cash flows from investing
4,016,502,463.54 1,836,664,314.29
activities
3. Cash flows from financing activities
Cash received from investors 42,800,000.00 4,900,000.00
Including: cash received by
subsidiaries from investments by 42,800,000.00 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
42,800,000.00 950,750,000.00
financing activities
Cash paid for debt repayments 36,360.00
126
Cash paid for distribution of
dividends and profits or payment of 4,519,335,876.00 4,491,980,070.00
interest
Including: dividends and profits paid
to minority shareholders by
subsidiaries
Cash paid for other financing
15,204,742.60 6,587,740.77
activities
Sub-total of cash outflows from
4,534,576,978.60 4,498,567,810.77
financing activities
Net cash flows from financing
-4,491,776,978.60 -3,547,817,810.77
activities
4. Effect of fluctuation in exchange
-336,446.78 -3,194,795.97
rate on cash and cash equivalents
5. Net increase in cash and cash
3,172,012,990.35 13,603,817,188.08
equivalents
Plus: balance of cash and cash
equivalents at the beginning of the 20,847,003,550.37 7,243,186,362.29
period
6. Balance of cash and cash
24,019,016,540.72 20,847,003,550.37
equivalents at the end of the period
Cash flow statements of parent company
For the year ended 31 December 2022
Unit: CNY
Item Year 2022 Year 2021
1. Cash flows from operating activities
Cash received from sale of goods
7,611,553,357.29 23,589,835,408.72
and rendering of services
Refunds of taxes and surcharges 3,060,026.48
Cash received from other operating
2,314,707,779.42 10,226,189,295.58
activities
Sub-total of cash inflows from
9,929,321,163.19 33,816,024,704.30
operating activities
Cash paid for goods purchased and
6,064,059,385.00 6,502,601,435.75
services received
Cash paid to and on behalf of
1,368,615,850.49 1,219,405,817.53
employees
Cash paid for taxes and surcharges 4,939,845,815.65 4,301,849,478.48
Cash paid for other operating
967,712,898.60 287,132,938.87
activities
127
Sub-total of cash outflows from
13,340,233,949.74 12,310,989,670.63
operating activities
Net cash flows from activities
-3,410,912,786.55 21,505,035,033.67
operating
2. Cash flows from investing activities
Cash received from disposal of
11,784,381,771.01 10,753,858,262.70
investments
Cash received from returns on
7,633,596,753.21 3,988,248,353.89
investments
Net cash received from disposal of
fixed assets, intangible assets and 4,762,886.20 2,464,467.97
other long-term assets
Net cash received from disposal of
subsidiaries and other business units
Cash received from other investing
activities
Sub-total of cash inflows from
19,422,741,410.42 14,744,571,084.56
investing activities
Cash paid to acquire and construct
fixed assets, intangible assets and 241,687,386.76 189,141,129.66
other long-term assets
Cash paid for investments 8,172,000,000.00 18,425,100,000.00
Net cash paid to acquire
subsidiaries and other business units
Cash paid for other investing
activities
Sub-total of cash outflows from
8,413,687,386.76 18,614,241,129.66
investing activities
Net cash flows from investing
11,009,054,023.66 -3,869,670,045.10
activities
3. Cash flows from financing activities
Cash received from investors
Cash received from loans
Cash received from other financing
945,850,000.00
activities
Sub-total of cash inflows from
945,850,000.00
financing activities
Cash paid for debt repayments 36,360.00
Cash paid for distribution of
dividends and profits or payment of 4,519,404,139.37 4,491,980,070.00
interest
Cash paid for other financing
703,669.72
activities
Sub-total of cash outflows from
4,519,440,499.37 4,492,683,739.72
financing activities
Net cash flows from financing
-4,519,440,499.37 -3,546,833,739.72
activities
4. Effect of fluctuation in exchange 4,144,329.10 -1,036,905.61
128
rate on cash and cash equivalents
5. Net increase in cash and cash
3,082,845,066.84 14,087,494,343.24
equivalents
Plus: balance of cash and cash
equivalents at the beginning of the 19,800,847,429.16 5,713,353,085.92
period
6. Balance of cash and cash
22,883,692,496.00 19,800,847,429.16
equivalents at the end of the period
129
Consolidated statement of changes in shareholders' equity
For the year ended 31 December 2022
Unit: CNY
Year 2022
Equity attributable to owners of the parent company
Other equity Total
Non-con
Item instruments Genera Undistrib sharehold
Share Capital Less :Tre Other Special Surplus Oth Subto trolling
l risk uted ers'
Prefer Perpe Others asury Comprehens interests
capital reserve reserve reserve ers tal
red tual reserve profit equity
stock ive Income
stock bond
1. Balance as at 42,486,
1,506,988,0 782,236, 56,278,680 -5,843,990.2 753,494,00 39,505,614 -4,899,53 42,481,310
31 December of 209,789
00.00 370.14 .79 9 0.00 ,090.53 1.80 ,257.79
last year .59
Plus:
adjustments for
changes in
accounting
policies
Adjustments for
correction of
accounting errors
in prior year
Business
combinations
under common
control
Others
2. Balance as at 42,486,
1,506,988,0 782,236, 56,278,680 -5,843,990.2 753,494,00 39,505,614 -4,899,53 42,481,310
January 1 of the 209,789
00.00 370.14 .79 9 0.00 ,090.53 1.80 ,257.79
current year .59
3.Increases/decre 122,414, 4,858,497, 4,988,7 54,401,16 5,043,138,
7,825,669.24
ases in the current 308.77 207.08 37,185. 0.87 345.96
130
year (“ -” for 09
decreases)
(1) Total 9,385,6
9,377,832, 11,601,16 9,397,259,
comprehensive 7,825,669.24 58,098.
429.08 0.87 259.19
income 32
(2) Capital
contributed or 122,414, 122,414 42,800,00 165,214,30
reduced by 308.77 ,308.77 0.00 8.77
owners
Capital
42,800,00 42,800,000
contributions by
0.00 .00
owners
Capital
contributions by
other equity
instruments
holders
Amounts of
share-based
122,414, 122,414 122,414,30
payments
308.77 ,308.77 8.77
recognized in
owners' equity
Others
(3) Profit -4,519,335
-4,519,
-4,519,335
distribution ,222.00
335,222
,222.00
.00
Withdrawal of
surplus reserves
Withdrawal of
general risk
reserve
Profit distributed -4,519,
-4,519,335 -4,519,335
to owners (or 335,222
,222.00 ,222.00
shareholders) .00
Others
131
(4) Internal
carry-forward of
owners' equity
Conversion of
capital reserves
into paid-in capital
Conversion of
surplus reserves
into paid-in capital
Surplus
reserves offsetting
losses
Amount of
Changes in setting
benefit plan
transfer to
retained earnings
Other
comprehensive
income
transferred to
retained earnings
Others
(5) Special
reserves
Withdrawal for
the period
Use for the
period
Others
4. Balance as at 47,474,
1,506,988,0 904,650, 56,278,680 753,494,00 44,364,111 49,501,62 47,524,448
31 December of 1,981,678.95 946,974
00.00 678.91 .79 0.00 ,297.61 9.07 ,603.75
the current year .68
132
Year 2021
Equity attributable to owners of the parent company
Other equity
Non- Total
Item instruments
Other Genera controlling sharehold
Share Perpet Capital Less :Trea Special Surplus Undistribute Othe Subtot
Preferr Other s Comprehensi l risk interest ers'
capital reserve sury stock reserve reserve d profit rs al
ual ve Income reserve s equity
ed
bond
stock
1. Balance
38,484
as at 31 1,506,98 741,532,55 1,002,128, -5,213,248.9 753,494,0 36,489,911, -14,930,9 38,469,65
,583,9
December of 8,000.00 0.13 680.79 3 00.00 363.13 06.55 3,076.99
83.54
last year
Plus:
adjustments
for changes
in
accounting
policies
Adjustmen
ts for
correction of
accounting
errors in
prior year
Business
combination
s under
common
control
Others
2. Balance
38,484
as at 1,506,98 741,532,55 1,002,128, -5,213,248.9 753,494,0 36,489,911, -14,930,9 38,469,65
,583,9
January 1 of 8,000.00 0.13 680.79 3 00.00 363.13 06.55 3,076.99
83.54
the current
133
year
3.Increases/
decreases in 4,001,
40,703,820 -945,850,0 3,015,702,7 10,031,37 4,011,657
the current -630,741.36 625,80
.01 00.00 27.40 4.75 ,180.80
year (“ -” for 6.05
decreases)
(1) Total 7,507,
7,507,682,7 5,131,374 7,512,183
comprehensi -630,741.36 052,05
97.40 .75 ,430.79
ve income 6.04
(2) Capital
986,55
contributed 40,703,820 -945,850,0 4,900,000 991,453,8
3,820.
or reduced .01 00.00 .00 20.01
01
by owners
Capital
4,900,000 4,900,000
contributions
.00 .00
by owners
Capital
contributions
by other
equity
Instruments
holders
Amounts
of
share-based 986,55
40,703,820 -945,850,0 986,553,8
payments 3,820.
.01 00.00 20.01
recognized 01
in owners'
equity
Others
(3) Profit -4,491,980,
-4,491
-4,491,98
distribution 070.00
,980,0
0,070.00
70.00
Withdrawa
l of surplus
reserves
134
Withdrawa
l of general
risk reserve
Profit
distributed to -4,491
-4,491,980, -4,491,98
owners (or ,980,0
070.00 0,070.00
shareholder 70.00
s)
Others
(4)
Internal
carry-forwar
d of owners'
equity
Conversio
n of capital
reserves into
paid-in
capital
Conversio
n of surplus
reserves into
paid-in
capital
Surplus
reserves
offsetting
losses
Carry-forw
ard of
retained
earnings
from
changes in
defined
benefit plans
135
Other
comprehensi
ve income
transferred
to retained
earnings
Others
(5) Special
reserves
Withdrawa
l for the
period
Use for
the period
(6) Others
4. Balance
as at 31 42,486
1,506,98 782,236,37 56,278,680 -5,843,990.2 753,494,0 39,505,614, -4,899,53 42,481,31
December of ,209,7
8,000.00 0.14 .79 9 00.00 090.53 1.80 0,257.79
the current 89.59
year
Statement of changes in shareholders' equity of parent company
For the year ended 31 December 2022
Unit: CNY
136
Year 2022
Other equity instruments Other Total
Less：
Item Share Capital Compreh Special Surplus Undistributed shareholde
Preferred Perpetual Treasury Other s
capital Others reserve ensive reserve reserve profit r
stock
stock bond Income s' equity
1. Balance as at
1,506,988, 1,382,332,300. 56,278,680.7 31,387,872,39
31 December of 753,494,000.00 27,801,336,778.06
000.00 94 9 8.21
last year
Plus:
adjustments for
changes in
accounting
policies
adjustments
for correction of
accounting
errors in prior
year
Others
2. Balance as at
1,506,988, 1,382,332,300. 56,278,680.7 31,387,872,39
January 1 of the 753,494,000.00 27,801,336,778.06
000.00 94 9 8.21
current year
3.Increases/dec
reases in the
1,997,423,718
current year 122,414,308.77 1,875,009,409.56
.33
(“ -” for
decreases)
(1) Total
6,394,344,631
comprehensive 6,394,344,631.56
.56
income
(2) Capital
122,414,308.7
contributed or 122,414,308.77
7
reduced by
137
owners
Capital
contributions by
owners
(common stock)
Capital
contributions by
other equity
instruments
holders
Amounts of
share-based
122,414,308.7
payments 122,414,308.77
7
recognized in
owners' equity
Others
(3)Profit -4,519,335,22
-4,519,335,222.00
distribution 2.00
Withdrawal of
surplus reserves
Profit
distributed to -4,519,335,22
-4,519,335,222.00
owners (or 2.00
shareholders)
Others
(4) Internal
carry-forward of
owners' equity
Conversion of
capital reserves
into paid-in
capital
Conversion of
surplus reserves
into paid-in
138
capital
Surplus
reserves
offsetting losses
Amount 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
4. Balance as at
1,506,988, 1,504,746,609. 56,278,680.7 33,385,296,11
31 December of 753,494,000.00 29,676,346,187.62
000.00 71 9 6.54
the current year
139
Year 2021
Other equity instruments Other
Less： Total
Item Share Capital Comprehe Special Undistributed
Preferred Perpetua Treasury Surplus reserve Others shareholder
capital Others reserve nsive reserve profit
stock l bond stock s' equity
Income
1. Balance as at
1,506,988, 1,341,628, 1,002,128,68 28,279,648,717.6 30,879,630,517.7
31 December of 753,494,000.00
000.00 480.93 0.79 5 9
last year
Plus:
adjustments for
changes in
accounting
policies
adjustments for
correction of
accounting errors
in prior year
Others
2. Balance as at
1,506,988, 1,341,628, 1,002,128,68 28,279,648,717.6 30,879,630,517.7
January 1 of the 753,494,000.00
000.00 480.93 0.79 5 9
current year
3.Increases/decre
ases in the current 40,703,820 -945,850,000
-478,311,939.59 508,241,880.42
year (“ -” for .01 .00
decreases)
(1) Total
comprehensive 4,013,668,130.41 4,013,668,130.41
income
(2) Capital
contributed or 40,703,820 -945,850,000
986,553,820.01
reduced by .01 .00
owners
Capital
contributions by
owners (common
140
stock)
Capital
contributions by
other equity
instruments
holders
Amounts of
share-based
40,703,820 -945,850,000
payments 986,553,820.01
.01 .00
recognized in
owners' equity
Others
(3)Profit -4,491,980,070.0 -4,491,980,070.0
distribution 0 0
Withdrawal of
surplus reserves
Profit
distributed to -4,491,980,070.0 -4,491,980,070.0
owners (or 0 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
Surplus
reserves offsetting
losses
Amount of
Changes in
141
setting benefit
plan transfer to
retained earnings
Other
comprehensive
income
transferred to
retained earnings
Others
(5) Special
reserves
Withdrawal for
the period
Use for the
period
(6) Others
4. Balance as at
1,506,988, 1,382,332, 56,278,680.7 27,801,336,778.0 31,387,872,398.2
31 December of 753,494,000.00
000.00 300.94 9 6 1
the current year
142
III. Company profile
Jiangsu Yanghe Distillery Co., Ltd.(hereinafter referred to as “the Company”)was established on 26
December 2002, verified by the Government of Jiangsu Province, details referred to Reply on The approval of
Establishment of Jiangsu Yanghe Distillery Co., Ltd. by the provincial government (SuZhengFu [2002]No.155),
and it was a company founded by Jiangsu Yanghe Group Co., Ltd., Shanghai Haiyan Logistics Development Co.,
Ltd., Nantong Zongyi Investment Co., Ltd., Shanghai Jieqiang Tobacco Sugar & Wine (Group) Co., Ltd., Jiangsu
Venture Capital Co.,Ltd., China National Research Institute of Food and Fermentation Industries Co. Ltd.,
Nantong Shengfu Industrial Trade Co., Ltd. and Yang Yandong and other totally 14 nature persons. On 27
December, the Company obtained the unified social credit code (91460000201357188U) issued by Jiangsu
Provincial Administration for Industry and Commerce. The registered capital was CNY 68 million and the share
capital was 68,000,000 (CNY 1 per share). According to the documents verified by Jiangsu Provincial
Department of Finance (Su Cai Guo Zi [2002] No.178), all the fund capital converts into share capital according
to the ratio 1:0.65561,among which, Jiangsu Yanghe Group Co., Ltd contributed CNY 52,264,100 of evaluated
physical assets and CNY 735,900 of currency, covered into 34,747,330 shares, accounting for 51.099% of the
total share capital; Shanghai Haiyan Logistics Development Co., Ltd contributed CNY 15,000,000 of currency,
covered into 9,834,150 shares, accounting for the 14.462% of the total share capital; Nantong Zongyi
Investment Co., Ltd. contributed CNY 15,000,000 of currency, converted into 9,834,150 shares, accounting for
14.462% of the total share capital; Shanghai Jieqiang Tobacco Sugar & Wine (Group) Co., Ltd. contributed CNY
7,000,000 of currency converted into 4,589,270 shares, accounting for 6.749% of the total share capital;
Jiangsu Venture Capital Co., Ltd . contributed CNY 3,000,000 of currency concerted into 1,966,830 shares,
accounting for 2.892% of the total share capital; China National Research Institute of Food and Fermentation
Industries Co. Ltd. contributed CNY 1,000,000 of currency, converted into 655,611 shares, accounting for 0.964%
of the total share capital; Nantong Shengfu Industrial Trade Co., Ltd. contributed CNY 1,000,000 of currency,
converted into 655,611 shares, accounting for 0.964% of the total share capital; Yang Yandong and other
totally 14 nature persons contributed CNY 8,720,200 of currency, converted into 5,717,050 shares, accounting
for 8.408% of the total share capital.
On 13 September 2009, the Company was verified by China Securities Regulatory Commission, according
to the document Reply on Approving Initial Public Offering of Jiangsu Yanghe Distillery Co., Ltd. (Zheng Jian
Approval [2009] No.1077). The Company announced the initial public offering of 45,000,000 common shares
on 27 February 2009 and was listed for transactions in SZSE since 6 November 2009.
According to the decisions of 2010 Shareholders’ General Meeting on 23 April 2011, based on the total
capital of 450,000,000 shares on 31 December 2010, the capital reserves per 10 shares were converted into 10
shares. After the conversion, the total share capital of the Company was 900,000,000 as well as registered
capital of CNY 900,000,000.
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
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157,793,218.58. The shares repurchased had been canceled according to the law with the procedure of capital
reduction. After the repurchase, the registered capital became CNY 1,076,420,000 and the total share capital
of the Company became 1,076,420,000.
According to the decision of 2014 Shareholders’ General Meeting on 26 May 2015, based on the total
capital of 1,076,420,000 shares on 31 December 2014, the capital reserves per 10 shares were converted into
4 shares. After the conversion, the total share capital of the company was 1,506,988,000 as well as the
registered capital of CNY 1,506,988,000.
Registered address of the Company: 118 Middle Avenue, Yanghe Town, Suqian City, Jiangsu Province
Company type: Incorporated company (Listed)
Industry of the Company: Brewing food industry
Business scope of the Company: production and sale of liquor, wholesaling and retailing of prepackaged
food, grain purchase, self-operating and agency of import and export of various types of merchandise and
technology excluding merchandise and technology limited or prohibited by the state for import and export,
domestic trade, construction of e- commerce platform and online sales. ( Business activities of projects needed
to be approved by law must be approved according to related departments )
Parent company of the Company:Jiangsu Yanghe Group Co.,Ltd.
The scope of the Company's consolidated financial statements is based on control, and all subsidiaries are
included in the consolidation scope of the consolidated financial statements.
Changes of the scope of consolidation are as follows:
1. Subsidiaries that are newly incorporated into the scope of consolidation are shown in the following table:
Name Measure of acquisition
Tibet Earth Third Pole Liquor Industry Co., Ltd Newly establishment
Guizhou Guijiu Liquor Industry Operation Co., Ltd Newly establishment
Jiangsu Weilan Shangyin Catering Management Co., Ltd Newly establishment
Jiangsu Yanghe Dream Investment Management Co., Ltd Newly establishment
Jiangsu Yanghe Blue Investment Management Co., Ltd Newly establishment
2. Subsidiaries that are not incorporated into the scope of consolidation are shown in the following table:
Name
Change method
Jiangsu Kelite Biotechnology Research Institute Co., Ltd
deregistration
Guizhou Guijiu Liquor Operations Management Co., Ltd
deregistration
3. Details of the subsidiaries incorporated into the consolidated financial statements show on “Note 9.
1.Interests in subsidiaries”, Changes in the scope of consolidation show on “Note 8. Change in consolidated
scope”.
IV. Basis of preparation of financial statements
1. Basis of preparation
The Company has prepared its financial statements on a going concern basis, and recognized and
measured its accounting items in compliance with the Accounting Standards for Business Enterprises—Basic
Standards and various concrete accounting standards, and other relevant provisions on the basis of actual
transactions and events.
2. Going concern
144
The Company has sustainable operation ability for at least 12 months from the end of the reporting
period. In addition, there is no significant event affecting going concern.
V. Significant accounting policies and accounting estimates
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 distributor sales of final product, the Company gives the
distributor a percentage discount, and regularly or irregularly settles with distributors. 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.
3. Operating cycle
The Company’s accounting period is 12 months.
4. Functional currency
The Company has adopted China Yuan (CNY) as functional currency.
5. The accounting treatment of business combinations involving enterprises under common control and
not under common control
(1) Accounting treatment method for business combination under common control
Business combination under common control is accounted for under pooling of interest method.
Assets and liabilities obtained by the Company through business combination under common control shall
be measured at the book value as stated in the combine’s accounting record on the combination date. The
share of the book value of the merged party’s owner’s equity in the consolidated financial statements is taken
as the initial investment cost of long-term equity investments in individual financial statements. The capital
reserve (stock premium or capital premium) is adjusted according to the difference between the book value of
145
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 is expected to bring future economic benefits to the Company and the fair value can be reliably
measured.
iv. Contingent liabilities of the acquiree obtained by the Company through business combination shall be
separately recognized as liabilities and measured at fair value when their fair values can be reliably measured.
v. When the Company allocates the cost of business combination and recognizes the identifiable assets and
liabilities acquired through combination, it shall not include any goodwill and deferred income taxes that have
been recognized by the acquiree before the business combination.
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
146
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.
(3) Reflection of excess losses incurred to a subsidiary in the consolidated financial statements
In the consolidated financial statements, where the current losses undertaken by the parent company are
in excess of its share of owners’ equity in the subsidiary at the beginning of the period, the balance shall
reduce the owners’ equity (retained earnings) of the parent company; where the current losses undertaken by
a subsidiary’s non- controlling shareholders excess those non-controlling shareholders’ share of owners’ equity
in the subsidiary at the beginning of the period, the balance shall reduce the non- controlling interests.
(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
147
reporting period
During the reporting period, if the Company acquires subsidiaries from the business combination under
common control, the opening balance in the consolidated balance sheet shall be adjusted. The income,
expenses and profits of the newly acquired subsidiaries from the beginning to the end of the reporting period
shall be included in the consolidated income statement. The cash flows of the newly acquired subsidiaries
from the beginning to the end of the reporting period shall be included in the consolidated statement of cash
flows.
ii. Treatment of acquiring subsidiaries from business combination not under common control during the
reporting period
During the reporting period, if the Company acquires subsidiaries from the business combination not under
common control, the opening balance in the consolidated balance sheet shall not be adjusted. The income,
expenses and profits of the newly acquired subsidiaries from the acquisition date to the end of the reporting
period shall be included in the consolidated income statement. The cash flows of the newly acquired
subsidiaries from the acquisition date to the end of the reporting period shall be included in the consolidated
statement of cash flows.
b) Treatment of disposing subsidiaries during the reporting period
During the reporting period, if the Company disposes subsidiaries, the opening balance in the consolidated
balance sheet shall not be adjusted. The income, expenses and profits of the newly disposed sub diaries from
the beginning to the disposal date shall be included in the consolidated income statement. The cash flows
from the beginning to the disposal date shall be included in the consolidated statement of cash flows.
7. Classification of joint venture arrangements and the accounting treatment method of common
operation
(1) Classification of joint venture arrangements
A joint arrangement is classified as either a joint operation or a joint venture. A joint operation is a joint
arrangement whereby the joint operators have rights to the assets, and obligations for the liabilities, relating to
the arrangement. A joint venture is a joint arrangement whereby the joint ventures only have the rights to the
net assets under this arrangement.
A joint arrangement that is not structured through a separate vehicle shall be classified as a joint operation.
A separate vehicle refers to a separately identifiable financial structure, including separate legal entities or
entities without a legal personality but recognized by statute.
A joint arrangement that is structured through a separate vehicle is usually classified as a joint venture.
However, when a joint arrangement provides clear evidence that it meets any of the following requirements
and complies with applicable laws and regulations as a joint operation:
a) The legal form of the joint arrangement indicates that the parties that have joint control have rights to
the assets, and obligations for the liabilities, relating to the arrangement.
b) The terms of the joint arrangement specify that the parties that have joint control have the rights to the
assets, and the obligations for the liabilities, relating to the arrangement.
c) Other facts and circumstances indicate that the parties that have joint control have rights to the assets,
and the obligations for the liabilities, relating to the arrangement---for example, the parties that have joint
control have rights to substantially all of the output of the arrangement, and the arrangement depends on the
parties that have joint control on a continuous basis for settling the liabilities of the arrangement.
(2) Accounting treatment of a joint operation
A joint operator shall recognize the following items in relation to its interest in a joint operation, and
account for them in accordance with relevant accounting standards:
148
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
149
a) The Company shall translate the financial statements of foreign operations in accordance with the
following methods:
i. Assets and liabilities in the balance sheets shall be translated at the spot exchange rates on balance sheet
date. Shareholders’ equity items, except for the item of "undistributed profits", are translated at the spot
exchange rates on the dates when the transactions occur.
ii. Revenue and expense items in the income statement are translated at the spot exchange rates on the
dates when the transactions occur or at the exchange rate determined in a systematical and reasonable
method and similar to the spot exchange rate on the day when the transactions occur.
Differences arising from the above translations of foreign currency financial statements are separately
listed under ‘other comprehensive income’ in the consolidated balance sheet.
The translation of comparative financial statements is handled by reference to the above approach.
b) The Company shall translate the financial statements of foreign operations that are in virulent inflation
economy in accordance with the following methods:
i. The Company restates the items in the balance sheet by using the general price index, and restates the
items in the income statement by using the changes in general price index, and then converts those items at
the spot exchange rate on the latest balance sheet date.
ii. Where the foreign operations are no longer in virulent inflation economy, the Company ceases to restate
the financial statements and converts the financial statements restated according to the price level on such
cease.
c) Where the Company disposes of an overseas business, it shall transfer the foreign currency financial
statements exchange difference, which relates to the business disposed of and is presented under the items of
the other comprehensive income in the balance sheet, from the other comprehensive income item to the gain
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.
150
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 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
151
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 derecognizes the financial asset, the rights and obligations arising or retained in the
transfer shall be separately recognized as its assets or liabilities; if the Company retains substantially all the
risks and rewards of ownership of the financial asset, it continues to 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 derecognizes 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 number 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.
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(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 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 data (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.
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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 an amount 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 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 receivables divided 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 receivables divided 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 receivables and expected credit loss rate of the whole
duration to calculate the expected credit loss.
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The Company classifies items without significant recovery risk receivables as other
portfolio such as items from subsidiaries in the consolidation scope, tax refunds
Other Portfolio
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
calculated through the default risk exposure and the expected credit loss rate of
Lease receivables
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 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
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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 in the 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.
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
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assets held for sale:
i. The assets or disposal group must be available for immediate sale in its present condition subject only to
terms that are usual and customary for sales of such assets or disposal groups;
ii. Its sale must be highly probable. The Company has already made a decision to dispose the component
and has a commitment from the purchaser, the transfer will be completed within one year. If it requires
shareholders’ approval or supervisors’ approval according to regulations, it has already received approval from
the general meeting of stockholders or relative authority institution.
c) Accounting treatment and presentation of a non-current asset held for sale and a disposal 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 sale initially or re-measure at
balance sheet date subsequently, the impairment loss should be recognized if the book value is higher than fair
valueless costs to sell at the amount of the difference of these two in profit and loss, the provision for assets
held for sale need to be recognized at the same time. For the impairment of disposal group, should write off
goodwill if existing, and then write down the related assets proportionally. Depreciation or amortization should
cease for the non-current asset held for sale.
No matter the asset is classified as individual asset held for sale or asset belonging to disposal group, the
asset is presented as current assets under “assets held for sale” item; liabilities related to the asset transferred
in the disposal group held for sale is presented as current liabilities under “liabilities held for sale” item in the
balance sheet.
The Company is committed to a sale plan involving loss of control of subsidiary shall classify all the assets
and liabilities of that subsidiary held for sale in consolidated balance sheets when the above criteria are met,
regardless of whether the Company retain a non–controlling interests in its former subsidiary after the sale. In
the balance sheets of parent company, the investment should be classified as held for sale in full. In the
consolidated financial statements, all assets and liabilities of the subsidiaries are classified as held for sale.
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 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
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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
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profits and other comprehensive income realized by the investee that shall be enjoyed or borne by the
Company, recognize the profit and loss on the investments and adjust the book value of the long-term equity
investments. When recognizing the net profits and losses and other comprehensive income of the investee
that the Company shall enjoy or bear, the Company shall make a recognition and calculation based on the net
book profits and losses of the investee after appropriate adjustments. However, where the Company is unable
to obtain the relevant information due to failure to reasonably determine the fair value of the investee’s
identifiable assets, minor difference between the investee’s identifiable assets and the book value thereof or
other reasons, the profits or losses on the investments shall be directly calculated and recognized based on the
net book profits and losses of the investee. The Company shall calculate the part distributed from cash
dividends or profits declared by the investee and correspondingly reduce the book value of the long-term
equity investments.
When recognizing the income from investments in associates and joint ventures, the Company shall write
off the part of incomes from internal unrealized transactions between the Company and associates and joint
ventures which are attributable to the Company and recognize the profit and loss on investments on such basis.
Where the losses on internal transactions between the Company and the investee 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.
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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;
b) The cost of the fixed assets can be measured reliably.
(2) Depreciation of fixed assets
Estimated Estimated
Annual depreciation
useful life residual value
Category Depreciation method
rate (%)
(Yr) rate (%)
Buildings
Straight-line method 20 ~25 5 3.80 ~4.75
And constructions
Machinery equipments Straight-line method 10 5 9.50
Transportation
Straight-line method 10 5 9.50
equipments
Other equipments Straight-line method 8 5 11.88
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 fixed assets
The book entry values of the fixed assets are stated at total expenditures incurred before construction in
progress reaches the working condition for their intended use. For self- operating projects, total expenditures
are measured according to the expenditures of direct materials, direct labor, direct measurement mechanical
construction costs and other expenditures; for contracting projects, total expenditures are measured according
to project costs payable and other expenditures. Borrowing costs incurred before the projects that are
undertaking with borrowing costs reach working condition for their intended use and meeting the condition
for capitalization shall be capitalized and included into the costs of construction in progress.
For construction in progress that has reached working condition for intended use but for which the
completion of settlement has not been handled, it shall be transferred into fixed assets at the estimated value
according to the project budget, construction price or actual cost, etc. from the date when it reaches the
working condition for intended use and the fixed assets shall be depreciated in accordance with the Company’s
policy on fixed asset depreciation; adjustment shall be made to the estimated value based on the actual cost
after the completion of settlement is handled, but depreciation already provided will not be adjusted.
18. Borrowing costs
(1) Scope of borrowing costs
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The Company’s borrowing costs include interest thereon, amortization of discounts or premiums, ancillary
expenses and exchange differences incurred from foreign currency loan, etc.
(2) Recognition principles of capitalization of borrowing costs
The borrowing costs incurred to the Company and directly attributable to the acquisition and construction
or production of assets eligible for capitalization should be capitalized and recorded into relevant asset costs;
other borrowing costs should be recognized as costs according to the amount incurred and be included into
the current profit and loss.
Assets eligible for capitalization include fixed assets, investment properties, inventories and other assets
which may reach the working condition for their intended use or sale by acquisition and construction or
production activities for quite long time.
(3) Recognition of capitalization period of borrowing costs
a) Recognition of commencement of capitalization of borrowing costs
Borrowing costs may be capitalized when asset disbursements have already been incurred, borrowing costs
have already been incurred and the acquisition and construction or production activities which are necessary
to prepare the assets for their intended use or sale have already been started. Among which, asset
disbursements include those incurred by cash payment, the transfer of non-cash assets or the undertaking of
interest-bearing debts for acquiring and constructing or producing assets eligible for capitalization.
b) Recognition of period of capitalization suspension of borrowing costs
If the acquisition and construction or production activities of assets eligible for capitalization are
interrupted abnormally and this condition lasts for more than three months, the capitalization of borrowing
costs should be suspended. The borrowing costs incurred during interruption are charged to profit or loss for
the current period, and the capitalization of borrowing costs continues when the acquisition and construction
or production activities of the asset resume. If the interruption is necessary for the acquisition and
construction or production to prepare the assets for their intended use or sale, the capitalization of borrowing
costs should continue.
c) Recognition of period of capitalization cessation of borrowing costs
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
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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
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 to the condition required by the terms
and conditions of the lease, unless those costs are incurred to produce inventories
(2) Subsequent measurement
a) Measurement basis
After the commencement date, a lessee shall measure the right-of-use asset applying a cost model. To
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apply a cost model, a lessee shall measure the right of use asset at cost less any accumulated depreciation
and any accumulated impairment losses; and adjusted for any remeasurement 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 in the cost of related asset or profit and
loss. When determining the depreciation method, straight line method is used for depreciation based on the
expected way of consuming of economic benefit related to the right-of-use asset. The Company shall
depreciate the right-of-use asset subsequently based on the book value after 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
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 Estimated useful life Estimated net residual Annual amortization
intangible assets (years) value rate (%) rate (%)
Land use right 50 0 2.00
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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 for capitalization
Expenditure on the development phase of an internal research and development project shall be
recognized as intangible assets only when the following conditions are simultaneously satisfied:
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 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
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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
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the company has obtained an unconditional right to receive the goods prior to the company's transfer of the
goods to the customer, the company will show the amount received or receivable as a contractual liability in
which earlier the customer actually pays the amount or the amount becomes due. The contract assets and
contract liabilities under the same contract shall be shown on a net basis, and the contract assets and contract
liabilities under different contracts shall not be set off.
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 cost;
b) Net amount of interest from other long-term employee benefits net liabilities or assets;
c) Changes from recalculation of the net liabilities or assets from other long-term employee benefits.
In order to simplify related accounting procedure, the net amount of the above subjects shall be included
into current profit or loss or the cost of relevant assets.
25. Lease liabilities
(1) Initial measurement
At the commencement date, a lessee shall measure the lease liability at the present value of the lease
payments that are not paid at that
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a) Lease payment
The lease payments included in the measurement of the lease liability comprise the following payments for
the right to use the underlying asset during the lease term that are not paid at the commencement date:
i. fixed payments (including in-substance fixed payments) less any lease 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;
iv. Payments of penalties for 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 would have to pay to borrow over a similar term, and
with a similar security, the funds necessary to obtain 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:
①increasing 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 following circumstances
incurred, and the lease liability shall be remeasured at the present value which is based on the revised lease
payment and revised discounting rate. The Company shall remeasure the lease liability to reflect changes to
the lease payments. A lessee shall recognize the amount of the remeasurement of the lease liability as an
adjustment to the right-of-use asset. However, if the carrying amount of the right-of-use asset is reduced to
zero and there is a further reduction in the measurement of the lease liability, a lessee shall recognize any
remaining amount of the remeasurement in profit or loss.
①change of in-substance fixed payments (subject to original discounting rate)
②change of amounts expected to be payable under residual value guarantees
③change of an index or a rate used for future lease payments
④change 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 benefits from the Company;
and
c) The amount of the obligation can be measured reliably.
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(2) Measurement method of provision
The amount of provision is measured at the best estimate of expenses required for contingencies.
a) If there is continuous range for the necessary expenses, and probabilities of occurrence of all the
outcomes within this range are equal, the best estimate shall be determined at the median of the range.
b) The best estimate shall be accounted as follows in other cases:
i. If the contingency involves a single item, the best estimate shall be determined at the most likely
outcome.
ii. If the contingency involves two or more items, the best estimate should be determined according to all
the possible outcomes with their relevant probabilities.
27. Share-based payment
Share-based payment is classified as equity-settled share-based payment and cash- settled share-based
payment.
(1) Accounting treatment on the date of granting
The Company does not make any accounting treatment on the date of granting, neither for equity-settled
share-based payment nor for cash-settled share-based payment, except that the right of the share-based
payment can be exercised immediately.
(2) Accounting treatment on each balance sheet date within vesting period
On each balance sheet date within vesting period, the Company records the service provided by employees
or other party as cost and expense, and recognizes equity or liability at the same time.
For the share-based payment attached with market conditions, once employees satisfy all conditions
except market conditions, the service acquired can be recognized. If the performance condition is not market
condition, the estimate for previous periods can be revised when the vesting period is determined and
subsequent information shows that the estimate for conditions of exercising rights requires adjustments.
For equity-settled share-based payment related with employees, charge the service into costs, expenses
and capital reserve (other capital reserve), using the fair value of the equity instrument on the date of granting.
The subsequent changes of fair value should not be recognized. For cash-settled share-based payment related
with employees, recalculate fair value of the equity instrument at each balance sheet date and recognize
related costs, expenses and employee benefit payable.
At each balance sheet date within vesting period, the Company makes the best estimate and revises the
number of equity instrument that can be exercised according to the latest subsequent information such as
change of number of employees who can exercise rights.
Use fair value and the number of 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 dates 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.
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(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.
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 distributor sales of final product, the Company gives the
distributor a percentage discount, and regularly or irregularly settles with distributors. 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
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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 of the received or receivable
amount.
b) If a government grant is a non-monetary asset, it shall be measured at its fair value; and if its fair value
cannot be obtained in a reliable way, it shall be measured at a nominal amount (a nominal amount is CNY 1).
(4) Accounting treatment method of government grants
a) The government grants related to assets shall be set off of the book value of the related assets or
recognized as deferred income at the actual entry amount on acquisition. Government grants recognized as
deferred income shall be allocated evenly over the useful lives of the relevant assets, and included in the
current profit or loss. Government grants measured at the nominal amount shall be directly included in current
profit and loss.
b) Government grants related to income shall be separately handled according to the following
circumstances:
i. If government grants related to income are used to compensate the Company’s relevant expenses or
losses in future periods, such government grants should be recognized as deferred income on acquisition and
be included into the current profit and loss or written off of the related costs when the relevant expenses,
losses are recognized.
ii. If government grants related to income are used to compensate the
Company’s relevant expenses or losses incurred, such government grants are directly included into the
current profit and loss on acquisition or written off of the related costs.
c) Government grants related to assets and related to income are received together, shall be treated
separately. If it is hard to separate, government grants shall be treated as related to income as a whole.
d) Government grants related to daily operation shall be recoded in other income or written off relevant
expenses, costs. Government grants unrelated to daily operation shall be recorded in non-operating income.
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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 be handled according to the
following circumstances:
i. If the grants have written down the book value of assets, the book value shall be adjusted.
ii. If there is related deferred income, the book value of relevant deferred income is written down and the
exceeding part is recorded in the current profit and loss.
iii. If there is no related deferred income, the exceeding part is directly included in the current profit and
loss.
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 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
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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 the carrying amount of the underlying asset and recognize those costs as an expense over
the lease term on the same basis as the lease income. Lease payment received shall be recognized as lease
income on a straight-line basis within the period. The depreciation policy for depreciable underlying fixed
assets subject to operating leases shall be consistent with the lessor’ s normal depreciation policy for similar
assets. Amortization for other underlying assets subject to operating lease shall be on reasonable systematic
basis. The variable lease payments obtained by the company related to operating leases, which are not
included in the lease payment received, shall be included in the current profit and loss when actually incurred.
A lessor shall account for a modification to an operating lease as a new lease from the effective date of the
modification, considering any prepaid or accrued lease payments relating to 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 lease investment (the sum of the unguaranteed residual value and the present value of the lease
receipts not yet received at the commencement 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 conditions 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 price for the increase in scope or the contractual lease term
extension and any appropriate adjustments to that stand-alone price to reflect the circumstances of the
particular contract. 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
(2) Changes in significant accounting estimates
□Applicable N/A
33. Other
None.
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VI. 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 Taxable
Corporate income tax 25%、16.5%、0%、27%
income
Disclosure statement if there are various taxpaying bodies with different corporate income tax rates
Company name Applicable tax rate
JSSJ Industry (HK) Holdings Co., Ltd. 16.50%
Hong Kong Zhaiugou International Trade Co., Ltd. 16.50%
ZYG E-Commerce HK Limited 16.50%
Yanghe Hong Kong Distillery Co., Ltd. 16.50%
YANGHE CHILE SPA 27%
YangHe International Investment Ltd 0%
ZYG LTD and ZYG TECHNOLOGY INVESTMENT LTD 0%
2. Tax incentives
None.
3.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.
VII. Notes to items in the consolidated financial Statements (all currency unit is CNY,
except other statements)
1. Cash and Bank Balances
Unit: CNY
Item Closing balance Opening balance
Cash 3,549.27
Bank deposit 24,331,397,524.64 20,894,755,169.16
Other cash and cash equivalents 44,051,907.69 61,072,291.69
Total 24,375,449,432.33 20,955,831,010.12
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Including: total deposit outbound 49,598,745.91 80,215,579.77
Other notes
On December 31st 2022, the interest receivable for time deposit is RMB 356,432,891.61; 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 interest arrangement
such as the establishment of capital co-management accounts with relevant parties
□Applicable N/A
2. Held-for-trading financial assets
Unit: CNY
Item Closing balance Opening balance
Financial asset at fair value through
7,998,150,119.16 10,953,894,328.01
profit and loss
Including:
Equity instrument 47,300,000.00
Debt instruments 7,998,150,119.16 10,906,594,328.01
Including:
Total 7,998,150,119.16 10,953,894,328.01
Other notes
Debt instruments are bank financial products and trust financial products that mature within one year
3. Notes receivables
(1) Classification of notes receivables
Unit: CNY
Item Closing balance Opening balance
Bank acceptance bill 526,004,730.00 663,849,328.28
Total 526,004,730.00 663,849,328.28
Unit: CNY
Closing balance Opening balance
Provision for bad Provision for
Book balance Book balance
Item debt Book bad debt Book
amou propo proporti value proporti amou propo value
amount amount
nt rtion on on nt rtion
Including:
Provision for
bad debt of 526,00 663,84
526,004,73 663,849,
notes 4,730. 9,328.2
0.00 328.28
receivables by 00 8
portfolio
Including:
Bank acceptance 526,00 663,84
526,004,73 663,849,
4,730. 9,328.2
bill portfolio 0.00 328.28
00 8
526,00 526,004,73 663,849, 663,84
Total
4,730. 0.00 328.28 9,328.2
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00 8
Provision for bad debt by individual: 0.00
Unit: CNY
Closing balance
Item
Book balance Provision for bad debt Proportion
Bank acceptance bill portfolio 526,004,730.00
Total 526,004,730.00
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) 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 422,394,730.00
Total 422,394,730.00
4. Accounts receivables
(1) Disclosed by categories
Unit: CNY
Closing balance Opening balance
Provision for bad Provision for
Book balance Book balance
debt bad debt
Category Book Book
Prop
Propor Propor value Propor value
Amount Amount Amount Amount ortio
tion tion tion
n
Including:
Provision for bad 49,543,070.1 100.00 4,400,17 45,142,8 4,082,16 100.00 2,834,21 69.4 1,247,94
8.88%
debt by portfolio 4 % 7.36 92.78 1.80 % 1.89 3% 9.91
Including:：
49,543,070.1 100.00 4,400,17 45,142,8 4,082,16 100.00 2,834,21 69.4 1,247,94
Risk portfolio 8.88%
4 % 7.36 92.78 1.80 % 1.89 3% 9.91
49,543,070.1 100.00 4,400,17 45,142,8 4,082,16 100.00 2,834,21 69.4 1,247,94
Total 8.88%
4 % 7.36 92.78 1.80 % 1.89 3% 9.91
Provision for bad debts by portfolio:
Unit: CNY
Closing balance
Aging
Accounts receivables Provision for bad debt Proportion of provision
Within1 year (including 1
46,205,254.29 1,386,157.64 3.00%
year)
1-2 years 230,463.47 23,046.35 10.00%
2-3 years 123,334.80 24,666.96 20.00%
175
Over 3 years 2,984,017.58 2,966,306.41 99.41%
Total 49,543,070.14 4,400,177.36
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
Within1 year (including 1 year) 46,205,254.29
Within1 year 46,205,254.29
1-2 years 230,463.47
2-3 years 123,334.80
Over 3 years 2,984,017.58
3-4 years 27,021.00
4-5 years 21,003.29
Over 5 years 2,935,993.29
Total 49,543,070.14
(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
Category Recovered or Closing balance
balance Provision Write off Others
reversed
Provision for
bad debt of
2,834,211.89 1,565,965.47 4,400,177.36
accounts
receivables
Total 2,834,211.89 1,565,965.47 4,400,177.36
Significant amount of reversal or recovery during this period
Unit: CNY
Company name Amount recovered or reversed Method
(3) Top five entities with the largest balances of the accounts receivables
Unit: CNY
Proportion in the total
Company's name Closing balance Provision amount
accounts receivables
First 10,693,847.15 21.58% 320,815.41
Second 10,125,399.40 20.44% 303,761.98
Third 5,053,213.00 10.20% 151,596.39
Fourth 1,671,379.39 3.37% 50,141.38
176
Fifth 600,000.00 1.21% 600,000.00
Total 28,143,838.94 56.80%
5. Receivables for Financing
Unit: CNY
Item Closing Balance Opening Balance
Bank acceptance bill 623,098,310.00 222,793,060.40
Total 623,098,310.00 222,793,060.40
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 10,442,862.34 94.77% 8,077,156.80 85.85%
1-2 years 430,756.91 3.91% 154,508.03 1.64%
2-3 years 4,996.76 0.05% 757,130.80 8.05%
Over 3 years 140,477.59 1.27% 419,972.49 4.46%
Total 11,019,093.60 9,408,768.12
Significant prepayment aging over 1 year without settlement on time:
No significant prepayment aging over 1 year is recorded in the ending balance.
(2) Top five entities with the largest balances of prepayment
Company’s name Closing balance Proportion in the total prepayment (%)
First 2,481,010.08 22.52
Second 2,277,241.70 20.67
Third 1,575,000.00 14.29
Fourth 1,103,249.58 10.01
Fifth 1,097,068.44 9.96
Total 8,533,569.80 77.44
7. Other receivables
Unit: CNY
177
Item Closing balance Opening balance
Other receivables 74,362,342.41 11,520,008.85
Total 74,362,342.41 11,520,008.85
(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 22,839,924.27
Deposit 75,233,431.94 18,258,461.27
Cooperation 3,910,000.00 3,910,000.00
Business loans, petty cash and others 26,329,410.21 21,280,921.11
Total 128,312,766.42 66,289,306.65
b) Provision for bad debt
Unit: CNY
Stage 1 Stage 2 Stage 3
Expected credit loss for Expected credit loss
Bad debt Expected credit losses Total
lifetime (No credit loss for lifetime (Credit
in the next 12 months
occurred) loss occurred)
Balance as at 1 January 2022 406,088.25 54,363,209.55 54,769,297.80
Change of opening balance
as at 1 January 2022 in
current period
Provision in 2022 1,548,524.26 1,548,524.26
Recovery in 2022 2,368,403.77 2,368,403.77
Other changes 1,005.72 1,005.72
Balance as at 31
1,955,618.23 51,994,805.78 53,950,424.01
December 2022
Significant changes of loss provision in the book balance during this period.
□Applicable N/A
Disclosure by aging
Unit: CNY
Aging Book value
Within 1 year(including 1 year) 72,545,501.15
Within 1 year 72,545,501.15
1-2 years 1,932,940.66
2-3 years 1,147,887.40
Over 3 years 52,686,437.21
3-4 years 140,570.01
4-5 years 3,029,986.98
Over 5 years 49,515,880.22
Total 128,312,766.42
178
c) Provision for bad debt that is accrued, recovered or reversed during this period
Provision for bad debts during this period:
Unit: CNY
Changes in current period
Opening Changes in
Category Recovered or Other
balance Provision Write off current period
reversed changes
Other receivables 1,548,524.2 53,950,424.0
54,769,297.80 2,368,403.77 1,005.72
bad debt provision 6 1
1,548,524.2 53,950,424.0
Total 54,769,297.80 2,368,403.77 1,005.72
6 1
Significant amount of reversal or recovery during this period:
Unit: CNY
Entity Amount of reversal or recov Method
d) Top five entities with the largest balances of other receivables
Unit: CNY
Provisioning
Proportion in total
Company’s name Category Closing balance Aging amount at period
receivable
end
Xiuwen County
Investment Deposit 55,000,000.00 Within 1 year 42.86% 1,100,000.00
Promotion Bureau
Industrial
Commercial Bank Savings deposit
of China Ltd. (Infringement 22,839,924.27 Over 5 years 17.80% 22,839,924.27
Kaifeng Haode dispute)
branch
Bankruptcy
administrator of
Jiangsu Juntai
Properties Co., Deposit 15,000,000.00 Over 5 years 11.69% 15,000,000.00
Ltd., Suqian Guotai
Department Store
Co., Ltd
Nanjing Peilong
Sports Culture Co., Cooperation 3,910,000.00 Over 5 years 3.05% 3,910,000.00
Ltd.
Siyang County
Land Acquisition
Deposit 2,938,496.00 Within 1 year 2.29% 58,769.92
and Reserve
Center
Total 99,688,420.27 77.69% 42,908,694.19
8. Inventories
(1) Categories of Inventories
Unit: CNY
Closing balance Opening balance
Item
Book balance Provision Book value Book balance Provision for Book value
179
for stock stock
obsolesce obsolescence
nce
11,868,802
Raw material 426,227,182.05 414,358,379.43 438,692,292.37 15,300,348.33 423,391,944.04
.62
Work in
761,814,393.67 761,814,393.67 661,614,981.98 661,614,981.98
progress
2,632,674,836.8
Stock goods 2,971,329,097.21 2,971,329,097.21 2,632,674,836.85
5
semi-finished 13,085,411,678. 13,085,411,678.9
13,581,757,096.23 13,581,757,096.23
goods 94 4
11,868,802 16,818,393,790. 16,803,093,441.8
Total 17,741,127,769.16 17,729,258,966.54 15,300,348.33
.62 14 1
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
Increases in current period Decreases in current period
Closing
Item Opening balance Recovery or
Provision Other Other balance
reversal
Raw material 15,300,348.33 2,333,823.54 5,765,369.25 11,868,802.62
Total 15,300,348.33 2,333,823.54 5,765,369.25 11,868,802.62
9. Other current assets
Unit: CNY
Item Closing balance Opening balance
VAT to be deducted 113,102,451.80 131,525,820.12
Consumption tax to be deducted 6,734,883.21 6,575,730.95
Advance payment of income tax 9,850,655.25 4,903,640.51
Total 129,687,990.26 143,005,191.58
180
10. Long-term equity investments
Unit: CNY
Changes in current period
Closing
Profit or loss
Adjustment Cash Provisi balance of
Opening recognized Other Closing
Investee s of other divided on for provision
balance Increase Decrease under changes Other balance
comprehens or profit impair for
equity in equity
ive income declared ment impairment
method
1.Joint venture
Diageo
International Spirits 8,173,436.53 8,124,100.65 909,717.87 -865,007.06 -94,046.69
Company Limited
Subtotal 8,173,436.53 8,124,100.65 909,717.87 -865,007.06 -94,046.69
2.Associated enterprise
Jiangsu Su Wine
Culture
5,060,269.76 1,099,974.43 -2,862,049.49 3,298,194.70
Transmission on
Co, Ltd.
Nanjing Hesong
Culture Technology 3,852,352.73 -82,056.98 3,770,295.75
Co., Ltd.
Jiangsu Xinghe
Investment
15,657,338.29 3,273,240.06 18,930,578.35
Management nt
Co., Ltd.
Nanjing Huatai
Yanghe Equity
Investment Master 6,980,000.00 561.41 6,980,561.41
Fund (limited
partnership)
Subtotal 24,569,960.78 6,980,000.00 4,291,718.92 -2,862,049.49 32,979,630.21
Total 32,743,397.31 6,980,000.00 8,124,100.65 5,201,436.79 -865,007.06 -2,956,096.18 32,979,630.21
181
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 5,848,590,827.45 6,358,903,792.90
Debt instrument investment 300,043,333.33 1,277,038,356.16
Total 6,148,634,160.78 7,635,942,149.06
12. Fixed assets
Unit: CNY
Item Closing balance Opening balance
Fixed Assets 5,794,773,069.53 6,276,466,308.05
Total 5,794,773,069.53 6,276,466,308.05
(1)Details of fixed assets
Unit: CNY
Buildings and Machinery Transportatio Other Total
Item
constructions equipment n equipment equipment
Original cost of fixed assets
11,927,897,108.4
1.Opening balance 8,170,993,500.95 3,257,314,034.47 68,557,496.20 431,032,076.85
7
2.Increase in current period 140,814,003.78 40,638,352.68 5,676,284.34 20,507,307.58 207,635,948.38
(1) External purchase 14,918,193.52 47,102.56 5,676,284.34 20,507,307.58 41,148,888.00
(2) Transfer from construction
125,895,810.26 40,591,250.12 166,487,060.38
in progress
(3) Increase from business
combination
3.Decrease in current period 1,572,771.20 42,136,794.72 14,882,492.03 8,035,197.51 66,627,255.46
(1) Disposal or retirement 1,572,771.20 42,136,794.72 14,882,492.03 8,035,197.51 66,627,255.46
12,068,905,801.3
4.Closing balance 8,310,234,733.53 3,255,815,592.43 59,351,288.51 443,504,186.92
9
Accumulated depreciation
1.Opening balance 3,030,951,723.52 2,184,682,379.31 59,493,412.49 376,303,285.10 5,651,430,800.42
2.Increase in current period 391,048,659.54 260,975,939.00 4,284,339.13 22,559,411.78 678,868,349.45
(1) Provision 391,048,659.54 260,975,939.00 4,284,339.13 22,559,411.78 678,868,349.45
3.Decrease in current period 754,910.54 35,471,641.96 13,511,424.47 6,428,441.04 56,166,418.01
(1) Disposal or retirement 754,910.54 35,471,641.96 13,511,424.47 6,428,441.04 56,166,418.01
4.Closing balance 3,421,245,472.52 2,410,186,676.35 50,266,327.15 392,434,255.84 6,274,132,731.86
Provision for fixed asset
impairment
182
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 4,888,989,261.01 845,628,916.08 9,084,961.36 51,069,931.08 5,794,773,069.53
2.Opening 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) Investment properties without certification of right
Unit: CNY
Reason for not having the certification of
Item Book value
right
Yanghe Blue-collar workers apartment 29,009,949.65 In process
Yanghe 40,000-ton pottery jar warehouse 158,664,124.59 In process
Yanghe workshop etc. 164,491,024.99 In process
property of the subsidiary, etc. 4,588,086.29 In process
Total 356,753,185.52
13. Construction in progress
Unit: CNY
Item Closing balance Opening balance
Construction in progress 757,145,492.90 525,497,000.26
Total 757,145,492.90 525,497,000.26
183
(1) Details of the construction in progress
Unit: CNY
Closing balance Opening balance
Item Provision for Provision for Book value
Book Balance Book value Book Balance
impairment impairment
Shuanggou 120000 ton pottery jar storage project 3,670,946.95 3,670,946.95
Shuanggou packaging production line 17,191,907.04 17,191,907.04 17,191,907.04 17,191,907.04
Siyang base three-dimensional warehouse, packaging
1,100,810.08 1,100,810.08 1,100,810.08 1,100,810.08
production line projec
40,000 tons of pottery jar warehouse project 1,809,904.55 1,809,904.55 11,494,210.42 11,494,210.42
Nanjing operation center building project 355,622,206.07 355,622,206.07 226,554,154.35 226,554,154.35
Sesame Fragrant Intelligent brewing Project (Workshop
51,567,809.53 51,567,809.53 51,649,644.39 51,649,644.39
115, District 3)
20,000 tons of pottery jar warehouse project 6,814,642.25 6,814,642.25 23,661,457.42 23,661,457.42
sewage treatment capacity expansion and
15,827,143.46 15,827,143.46 14,832,564.56 14,832,564.56
reconstruction project
80,000 tons of pottery jar warehouse project 75,199,149.07 75,199,149.07 7,146,540.68 7,146,540.68
Comprehensive brewing plant 2,753,290.37 2,753,290.37 4,798,126.18 4,798,126.18
Exhibition and Decoration Engineering of Wine History
61,055,364.82 61,055,364.82
Museum, Wine Rhyme Museum, and Wine Art Museum
Phase II of Gui wine project 62,362,038.53 62,362,038.53 43,619,689.76 43,619,689.76
Other projects 102,170,280.18 102,170,280.18 123,447,895.38 123,447,895.38
Total 757,145,492.90 757,145,492.90 525,497,000.26 525,497,000.26
(2) Significant changes in construction in progress
Unit: CNY
Include:Ca Capital
Proportion of Interest
Transfer Other pitalized ization Sourc
Opening Increase in Closing accumulative Progre capitaliz
Item Budget into fixed decrea interest rate e of
balance current period balance project input ss ation
assets ses for the for the funds
in budget (%) rate
period period
Shuanggou 1,000,000,00 Early
3,670,946.95 3,670,946.95 0.37% Other
120000 ton 0.00 stage
184
pottery jar
storage
project
Shuanggou
packaging 120,000,000. Late
17,191,907.04 17,191,907.04 95.01% Other
production 00 stage
line
Siyang base
three-dimensi
onal
41,000,000.0 Late
warehouse, 1,100,810.08 1,100,810.08 64.97% Other
0 stage
packaging
production
line projec
40,000 tons
of pottery jar 360,000,000. 14,880,900.0 Late
11,494,210.42 5,196,594.13 1,809,904.55 57.35% Other
warehouse 00 0 stage
project
Nanjing
operation Middl
800,000,000.
center 226,554,154.35 129,068,051.72 355,622,206.07 51.94% e Other
00
building stage
project
Sesame Late
Fragrant
stage
Intelligent
brewing 68,842,800.0
51,649,644.39 1,004,453.59 1,086,288.45 51,567,809.53 84.10% Other
Project 0
(Workshop
115, District
3)
20,000 tons Late
of pottery jar 42,000,000.0 46,689,383.4
23,661,457.42 29,842,568.27 6,814,642.25 128.94% stage Other
warehouse 0 4
project
sewage
Middl
treatment 23,000,000.0
14,832,564.56 1,221,127.57 226,548.67 15,827,143.46 69.80% e Other
capacity 0
stage
expansion
185
and
reconstructio
n project
80,000 tons
of pottery jar Middl
240,000,000.
7,146,540.68 68,052,608.39 75,199,149.07 31.34% e Other
warehouse 00
stage
project
Comprehensi
40,000,000.0 29,913,631.8 Late
ve brewing 4,798,126.18 27,868,796.06 2,753,290.37 81.67% Other
0 7 stage
plant
Exhibition
and
Decoration
Engineering
of Wine Middl
90,000,000.0
History 61,055,364.82 61,055,364.82 67.84% e Other
0
Museum, stage
Wine Rhyme
Museum, and
Wine Art
Museum
Phase II of Middl
139,540,200.
Gui wine 43,619,689.76 21,397,215.98 2,654,867.21 62,362,038.53 46.59% e Other
00
project stage
2,964,383,00 95,451,619.6
Total 402,049,104.88 348,377,727.48 654,975,212.72
0.00 4
186
14.Right-of-use Assets
187
Unit: CNY
Item Building and construction Total
Total original carrying amount
1.Opening balance 25,119,656.15 25,119,656.15
2. Increased 31,783,315.85 31,783,315.85
(1) New Lease 31,644,842.71 31,644,842.71
(2) Other 138,473.14 138,473.14
3. Decreased 8,092,572.74 8,092,572.74
(1) Disposal 8,092,572.74 8,092,572.74
(2) Other
4.Closing balance 48,810,399.26 48,810,399.26
Accumulated depreciation
1.Opening balance 5,509,542.40 5,509,542.40
2. Increased 11,223,980.36 11,223,980.36
(1) Provisions 11,177,822.64 11,177,822.64
(2) Other 46,157.72 46,157.72
3. Decreased 2,038,725.77 2,038,725.77
(1) Disposal 2,038,725.77 2,038,725.77
4.Closing balance 14,694,796.99 14,694,796.99
Provision for Right-of-use Assets
impairment
1.Opening balance
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 34,115,602.27 34,115,602.27
2. Opening balance on book value 19,610,113.75 19,610,113.75
15. Intangible assets
(1) Details of intangible assets
Unit: CNY
No-patent right Trademark Computer
Item Land use right Patent right Total
technology right software
Original cost of
intangible assets
1.Opening 2,513,716,383.8
1,956,702,688.30 399,936,371.09 157,077,324.41
balance 0
2.Increase in 85,116,919.46 8,508,916.43 93,625,835.89
188
current period
(1)Including:
85,116,919.46 8,508,916.43 93,625,835.89
Acquired
(2)Internally
developed
(3)Business
combination
3.Decrease in
current period
(1)Including:
Disposal
2,607,342,219.6
4.Closing balance 2,041,819,607.76 399,936,371.09 165,586,240.84
9
Accumulated
amortization of
intangible assets
1.Opening
367,309,093.28 391,241,186.28 75,568,171.18 834,118,450.74
balance
2.Increase in
40,762,281.76 2,247,018.10 15,833,393.66 58,842,693.52
current period
(1)Including:
40,762,281.76 2,247,018.10 15,833,393.66 58,842,693.52
Provision
3.Decrease in
current period
(1)Including:
Disposal
4.Closing balance 408,071,375.04 393,488,204.38 91,401,564.84 892,961,144.26
Provision for
impairment
1.Opening
balance
2.Increase in
current period
(1)Including:
Provision
3.Decrease in
current period
(1)Including:
Disposal
4.Closing balance
Book value of
189
intangible assets
Closing book 1,714,381,075.4
1,633,748,232.72 6,448,166.71 74,184,676.00
value 3
Opening book 1,679,597,933.0
1,589,393,595.02 8,695,184.81 81,509,153.23
value 6
The proportion of intangible assets formed through internal research and development of the Company in
the balance of intangible assets at the end of this period is 0.00%.
16. Goodwill
(1) Goodwill book value
Unit: CNY
Decrease in current
Investee’s name Increase in current period
period
or items resulting Opening balance Closing balance
in goodwill Business
Disposal
combination
Jiangsu
Shuanggou
276,001,989.95 276,001,989.95
Distillery Stock
Co., Ltd.
Jiangsu Zhaiugou
E-commerce Co., 6,940,018.79 6,940,018.79
Ltd
Jiangsu Zhaibianli
E-commerce Co., 21,250,284.80 21,250,284.80
Ltd
Guizhou Guijiu
18,826,210.01 18,826,210.01
Co., Ltd.
ZYG
TECHNOLOGY 5,057,111.19 5,057,111.19
INVESTMENT LTD
Guizhou
Maotaizhen
11,333,195.25 11,333,195.25
Guijiu Liquor
Industry Co., Ltd
Total 339,408,809.99 339,408,809.99
(2) Goodwill impairment provision
Unit: CNY
Investee’s name or Increase in current period Decrease incurrent period
items resulting in Opening balance Closing balance
goodwill Provision Disposal
Jiangsu Zhaiugou
6,940,018.79 6,940,018.79
E-commerce Co., Ltd
Jiangsu Zhaibianli
21,250,284.80 21,250,284.80
E-commerce Co., Ltd
190
Guizhou Guijiu Co.,
18,826,210.01 18,826,210.01
Ltd.
ZYG TECHNOLOGY
5,057,111.19 5,057,111.19
INVESTMENT LTD
Guizhou Maotaizhen
Guijiu Liquor 11,333,195.25 11,333,195.25
Industry Co., Ltd
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 of19.04% 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
17. Long-term prepaid expenses
Unit: CNY
Amortization for
Increase in the
Item Opening balance the current Other decreases Closing balance
current period
period
Wine city night
view Identification 12,016,464.46 3,004,116.11 9,012,348.35
project
Brighten old
factory and
1,744,387.40 436,096.85 1,308,290.55
packaging logistics
center project
Decoration
2,343,827.82 585,956.96 1,757,870.86
expenses of hotel
Total 16,104,679.68 4,026,169.92 12,078,509.76
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 Deferred tax
differences assets temporary assets
191
differences
Provision for asset
71,167,403.99 17,707,993.48 69,755,972.71 17,438,816.79
impairment
Unrealized profit from
49,441,159.83 12,360,289.96 57,053,878.39 14,263,469.60
internal transaction
Deductible losses 1,005,233,098.74 251,308,274.69 1,005,233,098.74 251,308,274.69
The difference between
book value of debt and tax 4,703,841,737.42 1,175,960,434.36 4,371,081,520.39 1,092,770,380.10
base
ESOP 163,118,128.78 40,779,532.19 40,703,820.01 10,175,955.00
Total 5,992,801,528.76 1,498,116,524.68 5,543,828,290.24 1,385,956,896.18
(2) Deferred tax assets or liabilities presented as net value after offset
Unit: CNY
Closing balance Of Opening offset amount Opening balance Of
Offset amount of
deferred tax assets or of deferred tax assets deferred tax assets or
Item deferred tax assets and
deferred tax liabilities and deferred tax deferred tax liabilities
deferred tax liabilities
after offset liabilities after offset
Deferred tax assets 1,498,116,524.68 1,385,956,896.18
Deferred tax liabilities 219,046,405.35 299,382,397.38
(3) Details of unrecognized deferred tax assets
Unit: CNY
Item Closing balance Opening balance
Deductible temporary differences 180,135,943.91 192,033,907.02
Deductible losses 265,285,228.80 56,117,773.36
Total 445,421,172.71 248,151,680.38
(4)Deductible losses from unrecognized deferred tax assets will due on the following years
Unit: CNY
Year Closing balance Opening balance Note
2023 年 3,336,993.92 3,336,993.92
2024 年 1,070,547.10 5,217,042.38
2025 年 13,861,118.62 13,861,118.62
2026 年 33,702,618.44 33,702,618.44
2027 年 213,313,950.72
Total 265,285,228.80 56,117,773.36
19. Other non-current assets
Unit: CNY
Closing balance Opening balance
Item Provision for Provision for
Book Balance Book value Book Balance Book value
impairment impairment
Compensation
158,606,824.94 158,606,824.94 158,606,824.94 158,606,824.94
for land
192
demolition
Prepayment of
construction
25,240,376.90 25,240,376.90 27,533,814.44 27,533,814.44
equipment and
house purchase
Total 183,847,201.84 183,847,201.84 186,140,639.38 186,140,639.38
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 2023, the company did not have any unpaid matured notes payable.
21. Accounts payables
(1) Presentation of accounts payables
Unit: CNY
Item Closing balance Opening balance
Payments for goods 1,305,100,314.00 1,364,515,734.82
Payables on equipment 71,109,213.01 79,659,527.26
Total 1,376,209,527.01 1,444,175,262.08
(2) Significant accounts payables aging over one year
No significant accounts payables aging over 1 year are recorded in the ending balance.
22. Contract liabilities
Unit: CNY
Item Closing balance Opening balance
Advance from customers 9,296,856,026.01 11,645,306,829.55
Discounts and allowances payable to
the distributors that have not yet been 4,444,691,651.98 4,159,214,600.62
settled
Total 13,741,547,677.99 15,804,521,430.17
The company is required to comply with the disclosure requirements of the food and alcohol manufacturing
related industries in the "Shenzhen Stock Exchange Listed Companies Self Regulatory Guidelines No. 3-
Industry Information Disclosure"
23. Employee benefits payable
(1) Employee benefits payable shown as follows:
Unit: CNY
Item Opening balance Increase in current Decrease in current Closing balance
193
period period
Short-term benefits 536,524,921.85 3,157,749,362.07 3,211,935,603.97 482,338,679.95
Post-employment
benefits-defined 192,207.31 232,881,595.55 232,420,744.08 653,058.78
contribution plans
Total 536,717,129.16 3,390,630,957.62 3,444,356,348.05 482,991,738.73
(2) Short-term employee benefits payable shown as follows:
Unit: CNY
Increase in current Decrease in current
Item Opening balance Closing balance
period period
Wages, bonuses,
allowances and 536,383,317.12 2,801,055,303.36 2,856,412,693.81 481,025,926.67
grants
Employees’ welfare 82,968,887.25 82,968,887.25
Social insurance
14,860.09 117,905,709.41 117,572,187.30 348,382.20
premiums
Including: Medical
7,972.00 96,522,095.92 96,248,957.60 281,110.32
Insurance
Work-related injury
6,875.34 8,051,429.18 8,030,613.51 27,691.01
insurance
Maternity insurance
12.75 13,332,184.31 13,292,616.19 39,580.87
premium
Housing funds 120,629.80 147,250,554.12 146,421,363.92 949,820.00
Labor union
expenditures and
6,114.84 8,568,907.93 8,560,471.69 14,551.08
employee education
funds
Total 536,524,921.85 3,157,749,362.07 3,211,935,603.97 482,338,679.95
(3) Defined Contribution Plan shown as follows:
Unit: CNY
Increase in current Decrease in current
Item Opening balance Closing balance
period period
Basic endowment
191,323.23 226,075,159.48 225,633,229.48 633,253.23
insurance premium
Unemployment
884.08 6,806,436.07 6,787,514.60 19,805.55
insurance premium
Total 192,207.31 232,881,595.55 232,420,744.08 653,058.78
24. Taxes payable
Unit: CNY
Item Closing balance Opening balance
Value-added tax 234,202,860.34 175,920,362.08
194
Consumption tax 229,128,457.84 554,560,829.94
Enterprise income tax 563,184,112.71 2,200,631,701.75
Individual Income Tax 46,912,680.60 30,310,775.71
Urban maintenance and construction tax 19,917,118.57 26,222,879.17
Land use tax 15,177,169.95 23,861,228.61
Property tax 4,438,533.76 6,464,914.93
Education Surcharge and Local
19,421,778.51 39,516,421.27
Education Surcharge
Stamp tax 1,827,899.05 1,556,153.30
Integrated funds 532.45 6,505.75
Other tax 2,484,661.40 2,333,399.20
Total 1,136,695,805.18 3,061,385,171.71
25. Other payables
Unit: CNY
Item Closing balance Opening balance
Other payables 1,854,922,517.23 1,808,838,882.26
Total 1,854,922,517.23 1,808,838,882.26
(1) Other payables
a) Categories by nature
Unit: CNY
Item Closing balance Opening balance
Dealer deposit 416,896,278.21 538,078,762.11
Dealer risk pledged deposit 672,664,279.37 685,270,708.36
Accrued expenses 508,608,287.32 351,345,770.61
Quality guarantee deposit and
166,220,885.21 131,196,540.43
performance deposit
Other payables 90,532,787.12 102,947,100.75
Total 1,854,922,517.23 1,808,838,882.26
b) Other important payables aging more than 1 year
Unit: CNY
Item Closing balance Reasons for being unpaid or written-off
Dealer risk pledged deposit and dealer Dealer risk pledged deposit and dealer
611,870,057.78
deposit deposit not yet due
Total 611,870,057.78
26. Non-current Liabilities Due within One Year
Unit: CNY
Item Closing balance Opening balance
Lease liabilities due within one year 23,684,406.75 8,405,846.77
Total 23,684,406.75 8,405,846.77
195
27. Other current liabilities
Unit: CNY
Item Closing balance Opening balance
Output VAT to be transferred 889,853,420.31 1,491,462,609.44
Notes endorsed but not
422,394,730.00 547,802,328.28
derecognized
Total 1,312,248,150.31 2,039,264,937.72
28. Long-term loans
(1) Long-term loans by category
Unit: CNY
Item Closing balance Opening balance
Credit loans 36,360.00
Total 36,360.00
29. Lease Liabilities
Unit: CNY
Item Closing balance Opening balance
Lease liabilities 3,715,300.93 10,729,824.19
Total 3,715,300.93 10,729,824.19
30. Long-term payables
Unit: CNY
Item Closing balance Opening balance
Special accounts payables 196,459,834.53 196,694,194.53
Total 196,459,834.53 196,694,194.53
(1) Special accounts payables
Unit: CNY
Increase in Decrease in
Item Opening balance Closing balance Reason
current period current period
Compensation
for replacement
196,694,194.53 234,360.00 196,459,834.53
of employee
status
Total 196,694,194.53 234,360.00 196,459,834.53
31. Deferred incomes
Unit: CNY
Opening Increase in Decrease in
Item Closing balance Reason
balance current period current period
Government grants 77,242,500.00 24,000,000.00 8,965,333.33 92,277,166.67
Total 77,242,500.00 24,000,000.00 8,965,333.33 92,277,166.67 --
196
Projects involving government grants:
Unit: CNY
Non-operating Cost reduction
Opening Increase in Other income in Relevant to asset or
Liability item income in in current Other changes Closing balance
balance current period current period income
current period period
Hubei Lihuacun liquor industry
liquor brewing, filling project
17,539,600.00 4,257,000.00 13,282,600.00 Asset
supporting facilities
construction subsidies
Special fund for packaging
logistics project in Shuanggou 9,000,000.00 3,000,000.00 6,000,000.00 Asset
new area
Special fund for Harbin Binzhou
41,202,900.00 41,202,900.00 Asset
Distillery construction project
Shuanggou sewage treatment
4,500,000.00 1,500,000.00 3,000,000.00 Asset
project
The second batch of provincial-
level industrial and information
5,000,000.00 208,333.33 4,791,666.67 Asset
industry transformation and
upgrading special funds in 2020
Supplementary funds for the
Shuanggou Pottery Tan 24,000,000.00 24,000,000.00 Asset
Warehouse project
Total 77,242,500.00 24,000,000.00 8,965,333.33 92,277,166.67
197
32. Share capital
Unit: CNY
Increases/decreases in the current period (+, -)
Conversion of
Opening balance Issuance of Share Closing balance
reserves funds into Others Subtotal
new shares donation
shares
Total shares 1,506,988,000.00 1,506,988,000.00
33.Capital reserves
Unit: CNY
Increase in current Decrease in current
Item Opening balance Closing balance
period period
Share premium 741,502,550.13 741,502,550.13
Other capital reserves 40,733,820.01 122,414,308.77 163,148,128.78
Total 782,236,370.14 122,414,308.77 904,650,678.91
T
he company confirms the ESOP plan fee to increase the capital reserves-other capital reserves of RMB
122,414,308.77.
34. Treasury shares
Unit: CNY
Increase in current Decrease in current
Item Opening balance Closing balance
period period
Share repurchase 56,278,680.79 56,278,680.79
Total 56,278,680.79 56,278,680.79
35. Other comprehensive incomes
198
Unit: CNY
Current period
Less: Previously Less: previously Amount
Amount in Amount
Opening recognized in other recognized in other attribute to
Item current period Less: attribute to Closing balance
balance comprehensive comprehensive income non-controlling
before income income tax parent company
income transferred transferred to retained shareholders
tax after tax
to profit or loss earnings after tax
II. Other
comprehensive
income that will be -5,843,990.29 7,707,584.12 -153,503.58 7,825,669.24 35,418.46 1,981,678.95
reclassified to profit
or loss
Including: other
comprehensive
income will be
reclassified into -153,503.58 -153,503.58 153,503.58
profits or losses
under the equity
method
Effect on
conversion of
financial
-5,690,486.71 7,707,584.12 7,672,165.66 35,418.46 1,981,678.95
statements
denominated in
foreign currencies
Total other
comprehensiv -5,843,990.29 7,707,584.12 -153,503.58 7,825,669.24 35,418.46 1,981,678.95
e 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.
199
36. Surplus reserves
Unit: CNY
Increase in current Decrease in current
Item Opening balance Closing balance
period period
Statutory surplus
753,494,000.00 753,494,000.00
reserves
Total 753,494,000.00 753,494,000.00
37. Retained Earnings
Unit: CNY
Item Current period Previous period
Retained Earnings before adjustment at
39,505,614,090.53 36,489,911,363.13
the end of the last year
Retained Earnings after adjustment
39,505,614,090.53 36,489,911,363.13
at the beginning of year
Add: net profit attributable to
owners of the parent
9,377,832,429.08 7,507,682,797.40
company for the current
period
Less: Dividends payable on common
4,519,335,222.00 4,491,980,070.00
shares
Retained earnings at the end of the
44,364,111,297.61 39,505,614,090.53
current reporting period
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 resulting from 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 29,499,863,067.64 7,214,917,301.54 24,638,674,089.57 5,702,863,048.47
Other operating
605,033,119.06 430,615,963.18 711,504,114.88 552,534,515.63
income
Total 30,104,896,186.70 7,645,533,264.72 25,350,178,204.45 6,255,397,564.10
Whether the net profit is negative or not after deducting non-recurring profits and losses by audit,
200
□ Yes √ No
Information on revenue:
Unit: CNY
Current period
Category of Contra Segment 1 Segment 2 Total
amount
Commodity type
Including:
liquor 29,499,863,067.64 29,499,863,067.64
Other 605,033,119.06 605,033,119.06
By operating regions
Including:
Type of market or
customer
Including:
Type of contract
Including:
By the time of
commodity transfer
Including:
By the contract time
Including:
By the selling channel
Including:
Total 30,104,896,186.70 30,104,896,186.70
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 9,296,856,026.01, of which CNY 9,296,856,026.01
is expected to be recognized in 2023, and CNY 0.00 is expected to be recognized in 2024.
39. Taxes and surcharges
Unit: CNY
Item Current period amount Previous period amount
Consumption tax 3,611,101,428.65 3,445,365,868.93
Urban maintenance and construction tax 340,401,921.12 300,870,065.44
Educational surcharge 337,972,048.98 298,966,722.11
Property tax 65,064,008.57 70,430,075.52
Land use tax 18,379,939.08 18,361,571.79
Vehicle and vessel tax 8,875.20 8,508.00
201
Stamp tax 14,303,404.79 13,969,946.24
Environmental protection tax 1,080,778.49 9,370.09
Total 4,388,312,404.88 4,147,982,128.12
40. Selling and distribution expenses
Unit: CNY
Item Current period amount Previous period amount
Advertising and promotion expense 2,414,204,544.39 1,911,827,032.90
Payroll 1,177,066,920.45 1,065,844,674.57
Travel expense 433,273,104.21 390,432,690.88
Labor expense 47,961,453.63 88,722,961.18
E-commerce expenses 33,851,096.47 37,801,331.20
Other expense 72,783,688.70 49,736,198.81
Total 4,179,140,807.85 3,544,364,889.54
41. General and administrative expenses
Unit: CNY
Item Current period amount Previous period amount
Payroll 774,749,241.22 738,382,078.49
Travel expense 14,520,700.63 35,607,123.11
Office allowance 7,460,258.87 7,389,752.82
Water, electric and steam expense 66,592,027.85 57,175,472.37
Business entertainment expense 21,636,429.90 25,674,580.41
Depreciation cost 422,769,117.64 430,504,129.04
Repair charge 39,597,394.14 43,706,934.03
Amortization of intangible assets 58,879,062.62 56,541,702.98
Vehicle use expense 19,074,484.31 21,827,557.47
Shipping and handling cost 25,978,095.37 31,039,417.23
ESOP plan fee 119,528,186.15 39,741,779.13
Other expense 364,888,297.05 342,489,612.10
Total 1,935,673,295.75 1,830,080,139.18
42. Research & Development expenses
Unit: CNY
Item Current period amount Previous period amount
Material expenses 121,940,738.99 126,609,051.53
Payroll 84,197,126.24 84,819,165.34
Other expense 47,437,111.16 47,029,885.76
Total 253,574,976.39 258,458,102.63
43. Financial expenses
Unit: CNY
202
Item Current period amount Previous period amount
Interest expense 694,325.50 603,755.58
Bill discount expense 5,887,512.78 28,742,496.43
Less: Interest income 645,806,427.40 433,923,395.67
Plus: Losses from currency exchange
336,446.78 3,194,795.97
(Less: income)
Plus: Bank charges 2,418,036.43 2,236,837.73
Total -636,470,105.91 -399,145,509.96
44. Other income
Unit: CNY
Sources of other income Current period amount Previous period amount
Government grants received 60,162,525.57 87,366,302.47
Withholding personal tax commission 3,610,292.93 3,484,445.51
Total 63,772,818.50 90,850,747.98
45. Investment income
Unit: CNY
Item Current period amount Previous period amount
Investment income from long-term equity
5,201,436.79 2,948,720.95
investments under the equity method
Investment income from disposing long- term equity
-1,052,106.17
investments
Investment income from financial assets held for
39,061,870.99 23,102,480.38
trading during the holding period
Investment income from disposal of financial
396,238,455.03 874,562,276.89
assets held for trading
Income from derecognition of financial assets measured
-13,584,025.11
at amortized cost
Total 425,865,631.53 900,613,478.22
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 -318,331,123.43 -721,212,806.81
Total -318,331,123.43 -721,212,806.81
47. Credit Impairment Loss
Unit: CNY
Item Current period amount Previous period amount
Credit impairment losses of other receivables 819,879.51 12,801,955.01
Credit impairment losses of accounts receivables -1,565,965.47 -174,467.73
Total -746,085.96 12,627,487.28
203
48. Losses from asset impairment
Unit: CNY
Item Current period amount Previous period amount
Losses on inventory devaluation and Contract assets
-2,333,823.54 -7,175,293.45
impairment loss
Total -2,333,823.54 -7,175,293.45
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 1,846,300.27 224,432.51
Gains from disposal of intangible assets -39,747.54
Total 1,846,300.27 184,684.97
50. Non-operating income
Unit: CNY
Amount included in
Item Current period amount Previous period amount non-recurring profit and loss
in current period
Liquidated damages income 6,966,329.61 7,192,792.01 6,966,329.61
Compensation payment 10,662,216.44 11,339,388.88 10,662,216.44
Account payables that
3,463,801.85 20,610.00 3,463,801.85
are unable to pay
Others 4,493,984.81 2,165,592.11 4,493,984.81
Total 25,586,332.71 20,718,383.00 25,586,332.71
51. Non-operating expenses
Unit: CNY
Amount included in
Item Current period amount Previous period amount non-recurring profit and loss
in current period
Donation expenses 12,401,802.24 42,083,802.00 12,401,802.24
Losses from disposal of
6,682,103.85 10,872,590.73 6,682,103.85
fixed asset
Integrated fund 66,741.89 72,950.74
Reparations 15,537.00 3,971,839.00 15,537.00
Others 12,341,516.75 6,218,870.88 12,341,516.75
Total 31,507,701.73 63,220,053.35 31,440,959.84
52. Income tax expense
(1) Details of income tax expense
Unit: CNY
204
Item Current period amount Previous period amount
Income tax for the current reporting
3,306,448,635.67 3,050,593,837.76
period
Deferred income tax expenses -192,562,915.79 -616,983,716.56
Total 3,113,885,719.88 2,433,610,121.20
(2) Adjustment for accounting profit and income tax expense
Unit: CNY
Item Current period amount
Total profit 12,503,283,891.37
Income tax expenses determined by statutory/applicable
3,125,820,972.84
tax rate
Impact from subsidiaries’ different tax rates 1,392,608.98
Adjust for impact from income tax expense in previous
-9,380,792.40
period
Tax effect of non-taxable income -6,287,068.37
Impact of non-deductible costs, expenses and losses 9,779,208.84
Deductible from deferred tax assets in previous period -1,036,623.82
Impact of deductible temporary differences or deductible
losses for which no deferred income tax assets is 52,758,055.68
recognized for the current period
Impact of use unrecognized deferred income tax assets in the
-943,743.09
prior period
Impact of additional deduction of R&D expenses -62,107,915.85
Other 3,891,017.07
Income tax expense 3,113,885,719.88
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
Interest income 398,200,995.54 325,095,935.92
Liquidated damages income 6,966,329.61 7,192,792.01
Government grants 75,197,192.24 78,609,302.47
Charges of withholding individual
3,610,292.93 3,484,445.51
income tax
Others 66,782,450.92 314,046,435.75
Total 550,757,261.24 728,428,911.66
205
(2) Cash paid for other operating activities
Unit: CNY
Item Current period amount Previous period amount
Transportation fee 28,032,045.07 32,454,361.50
Advertising promotion expense 2,243,614,041.05 1,875,126,011.49
Repair charge 39,389,355.92 40,144,581.28
Travel expense 435,008,309.39 431,546,399.27
Entertainment expense 23,994,929.18 25,897,841.15
Labor expense 91,759,676.26 135,250,366.93
Others 606,935,645.43 462,537,339.25
Total 3,468,734,002.30 3,002,956,900.87
(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
(4) Cash paid for other financing activities
Unit: CNY
Item Current period amount Previous period amount
Lease payment 15,204,742.60 6,587,740.77
Total 15,204,742.60 6,587,740.77
55. Supplementary Information about Cash Flow Statement
(1) Supplementary information about of cash flow statement
Unit: CNY
Item Current period amount Previous period amount
Reconciliation of net profit to cash
flow from operating activities
Net profit 9,389,398,171.49 7,512,817,397.48
Add: Impairment of assets 3,079,909.50 -5,452,193.83
Fixed assets depreciation 678,868,349.45 693,049,497.12
Right-of-use assets depreciation 11,177,822.64 5,509,542.40
Amortization of intangible assets 58,842,693.52 56,541,702.98
Amortization of long-term
4,026,169.92 4,153,241.68
deferred expenses
Gains on disposal of fixed
assets, intangible assets and -1,846,300.27 -184,684.97
other long-term assets
Fixed asset scrapping losses 6,682,103.85 10,872,590.73
Losses (gains) from changes in fair
318,331,123.43 721,212,806.81
value
Financial expense 1,030,772.28 3,798,551.55
206
Investments income -425,865,631.53 -900,613,478.22
Decrease in deferred tax asset -112,159,628.50 -460,035,492.67
Increase in deferred tax liabilities -80,335,992.03 -156,957,017.00
Decrease in inventory -922,733,979.02 -1,956,133,735.33
Decrease in operation receivables -371,555,344.91 -230,907,969.63
Increase in operation payables -4,789,890,533.79 10,090,059,214.80
Others -119,425,753.84 -69,564,493.37
Net cash flow from operating activities 3,647,623,952.19 15,318,165,480.53
Significant investing and financing
activities not Involving cash flow:
Conversion of debt into capital
Convertible corporate bonds maturing
within one year
Assets under leases
Net change in cash &cash equivalents
Closing balance of cash 24,019,016,540.72 20,847,003,550.37
Less: Opening balance of cash 20,847,003,550.37 7,243,186,362.29
Add: Closing balance of cash equivalents
Less: Opening balance of cash
equivalents
Net Increase (decrease) in cash and
3,172,012,990.35 13,603,817,188.08
cash equivalents
(2) Composition of cash and cash equivalents
Unit: CNY
Item Closing balance Opening balance
Cash 24,019,016,540.72 20,847,003,550.37
Including: cash on hand 3,549.27
Unrestricted bank deposit 23,974,964,633.03 20,785,927,709.41
Cash equivalents 44,051,907.69 61,072,291.69
Closing balance of cash and cash
24,019,016,540.72 20,847,003,550.37
Equivalents
56. Foreign currency transactions
(1) Foreign currency balance
Unit: CNY
Balance in foreign currency at Balance of CNY converted at the
Item Exchange rate
the end of the reporting period end of the reporting period
Cash and cash equivalents
Including ：USD 2,325,513.37 6.9646 16,196,270.44
EUR
HKD 11,621,517.91 0.8933 10,381,501.95
CLP 471,084,627.00 0.008131 3,830,608.28
207
Accounts receivables
Including ：USD
EUR
HKD
Long-term loans
Including ：USD
EUR
HKD
(2) Description of the overseas business entity, including the important foreign business entity, which
shall disclose its main foreign business place, bookkeeping standard currency and selection basis, and shall
also disclose the reason for the change of the bookkeeping standard currency.
Applicable □N/A
Functional
Foreign business entities Operation site Choosing reason
currency
Currency in the main
JSSJ Industry (HK) Holdings Co., Limited Hong Kong, China HKD economic environment of
business operations
Currency in the main
Hong Kong Zhaiugo International Trade Co.,
Hong Kong, China HKD economic environment of
Ltd.
business operations
Currency in the main
ZYG E-Commerce HK Limited Hong Kong, China HKD economic environment of
business operations
Currency in the main
ZYG LTD Cayman Islands USD economic environment of
business operations
Currency in the main
YangHe International Investment Ltd British Virgin Islands USD economic environment of
business operations
Currency in the main
ZYG TECHNOLOGY INVESTMENT LTD British Virgin Islands USD economic environment of
business operations
Currency in the main
YANGHE CHILE SPA Santiago, Chile CLP economic environment of
business operations
Currency in the main
Yanghe Hong Kong Distillery Co., Ltd. Hong Kong, China HKD economic environment of
business operations
57.Government grants
208
(1) Details of government grants
Unit: CNY
Amount booked in
Category Amount Financial Report Items
current profit and loss
Industrial development guidance funds 30,095,665.00 Other income 30,095,665.00
Steady post subsidy 11,025,458.27 Other income 11,025,458.27
training subsidy 1,548,650.00 Other income 1,548,650.00
Reward funds for local financial and
1,286,600.00 Other income 1,286,600.00
economic contribution
Funding for the 2021 Provincial Industrial
and Information Technology Industry
1,000,000.00 Other income 1,000,000.00
Transformation Project of Sihong County
Finance Bureau
Sihong County Finance Bureau Treasury
Jiangsu Province Intellectual Property 1,000,000.00 Other income 1,000,000.00
Industrial Trademark Cultivation Award
2021 Provincial Innovation Capacity
800,000.00 Other income 800,000.00
Construction Special Fund
Funding for the construction of the liquor
750,000.00 Other income 750,000.00
capital
Yanghe Xinqu 2017 and 2018 Coal
Reduction Work Award and Supplementary 738,000.00 Other income 738,000.00
Funds
2022 National Intangible Cultural Heritage
539,100.00 Other income 539,100.00
Protection Special Fund
Special Fund for Tourism Development of
Sihong County Bureau of Culture, Radio, 500,000.00 Other income 500,000.00
and Television
Park rent subsidy 436,644.87 Other income 436,644.87
Incentive funds for the 2021 Sihong County
Industrial Conference of the State Treasury 300,000.00 Other income 300,000.00
of Sihong County Finance Bureau
Funding for Municipal Science and
300,000.00 Other income 300,000.00
Technology Plan Projects in 2022
2021 New-Add provincial-level reward
funds for industrial enterprises above 200,000.00 Other income 200,000.00
designated size
2021 Science and Technology Innovation
120,000.00 Other income 120,000.00
Award
Others 557,074.10 Other income 557,074.10
Transfer of current deferred earnings 8,965,333.33 Other income 8,965,333.33
Total 60,162,525.57 60,162,525.57
209
VIII. 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
2. Establishing subsidiaries
(1) In March 2022, the company jointly invested 40 million yuan with Tibet Earth Third Pole Industry
Development Co., Ltd., Lhasa Pure Land Industry Investment and Development Group Co., Ltd., and Shenzhen
Baoneng Food Technology Group Co., Ltd. to establish Tibet Earth Third Pole Liquor Industry Co., Ltd. The
company contributed 204 million yuan, accounting for 51% of its registered capital; Tibet Earth Third Pole
Industrial Development Co., Ltd. invested 72 million yuan, accounting for 18% of its registered capital; Lhasa
Pure Land Industry Investment and Development Group Co., Ltd. invested 64 million yuan, accounting for 16% of
its registered capital; Shenzhen Baoneng Food Technology Group Co., Ltd. has invested 60 million yuan,
accounting for 15% of its registered capital. It will be included in the consolidation scope of the consolidated
financial statements starting from March 2022.
(2) In August 2022, the holding subsidiary Kweichow Moutai Guijiu Liquor Industry Co., Ltd. invested 500000
yuan to establish Guizhou Guijiu Liquor Industry Operation Co., Ltd., accounting for 100% of its registered capital.
It will be included in the consolidation scope of the consolidated financial statements starting from August 2022.
(3) In August 2022, the company subscribed 10 million yuan to establish Jiangsu Ulan Shangyin Catering
Management Co., Ltd., accounting for 100% of its registered capital. It will be included in the consolidation scope
of the consolidated financial statements starting from August 2022.
(4) In August 2022, the company subscribed a capital of 300 million yuan and established Jiangsu Yanghe
Dream Investment Management Co., Ltd., accounting for 100% of its registered capital. It will be included in the
consolidation scope of the consolidated financial statements starting from August 2022.
(5) In September 2022, the controlling subsidiary Jiangsu Yanghe Dream Investment Management Co., Ltd.
invested 10 million yuan to establish Jiangsu Yanghe Blue Investment Management Co., Ltd., accounting for
100.00% of its registered capital. It will be included in the consolidation scope of the consolidated financial
statements starting from September 2022.
3. Cancellation of subsidiaries
(1) In September 2022, holding subsidiary Jiangsu Kelite Biotechnology Research Institute Co., Ltd cancelled
in the current reporting period and no longer included in the scope of consolidation from October 2022.
(2) In November 2022, holding subsidiary Guizhou Guijiu Liquor Operations Management Co., Ltd cancelled
in the current reporting period and no longer included in the scope of consolidation from December 2022.
210
IX. Interests in other entities
1. Interests in subsidiaries
(1) Group composition:
Major Shareholding
Name of Place of Nature of
business Acquisition method
subsidiaries registration business Direct Indirect
location
Nanjing,
Nanjing Yanghe Nanjing, Jiangsu
Jiangsu Commerce 100.00% Establishment
Blue Classic Co., Ltd province
province
Beijing Yanghe
Fengtai,
Commerce and Fengtai, Beijing Commerce 100.00% Establishment
Beijing
Trade Co., Ltd.
Jiangsu Huaqu Nanjing,
Nanjing, Jiangsu
Wine Group Co., Jiangsu Commerce 97.00% Establishment
province
Ltd. province
Suqian Tianhai Suqian,
Suqian, Jiangsu
Commerce and Jiangsu Commerce 100.00% Establishment
province
Trade Co., Ltd. province
Suqian Yanghe Suqian,
Suqian, Jiangsu
Guibinguan Co., Jiangsu Hotel industry 100.00% Establishment
province
Ltd. province
Suqian,
Su Wine Group Suqian, Jiangsu
Jiangsu Commerce 83.63% 16.37% Establishment
Trade Co., Ltd province
province
Jiangsu Yanghe
Suqian,
Liquor Operation Suqian, Jiangsu
Jiangsu Commerce 100.00% Establishment
Management Co., province
province
Ltd.
Jiangsu Shuanggou Sihong,
Sihong, Jiangsu
Liquor Operation Jiangsu Commerce 100.00% Establishment
province
Co., Ltd. province
Jiangsu Dongdi Suqian,
Suqian, Jiangsu
Union International Jiangsu Commerce 100.00% Establishment
province
Trade Co., Ltd. province
Jiangsu
Suqian,
Dongdixinghui Suqian, Jiangsu
Jiangsu Commerce 100.00% Establishment
International Trade province
province
Co., Ltd.
Suqian,
Suqian Blue Dream Suqian, Jiangsu
Jiangsu Commerce 100.00% Establishment
Trade Co., Ltd. province
province
Siyang Lantu Liquor Siyang, Siyang, Jiangsu
Commerce 100.00% Establishment
Operation Co., Ltd. Jiangsu province
211
province
JSSJ Industry (HK)
Hong Kong, Hong Kong，
Holdings Co., CORP 100.00% Establishment
China
Limited China
Hubei Lihuacun Shiyan, Hubei Yunxian, Hubei
Commerce 100.00% Establishment
Trade Co., Ltd. province province
Business combinations
Jiangsu Shuanggou Sihong, Liquor
Sihong, Jiangsu involving enterprises
Distillery Stock Co., Jiangsu manufacture 99.99% 0.01%
province not under common
Ltd. province and sales
control
Business combinations
Sihong Shuanggou Sihong, Waste
Sihong, Jiangsu involving enterprises
Antai Waste Jiangsu material 100.00%
province not under common
Recycling Co., Ltd. province recycle
control
Business combinations
Hubei Lihuacun Process liquor,
Shiyan, Hubei Yunxian, Hubei involving enterprises
Liquor Industry Co., wine and fruit 100.00%
province province not under common
Ltd. wine
control
Manufacture
Business combinations
Ningxiang Ningxiang, and sale of
Ningxiang, involving enterprises
Miluochun Liquor Hunan liquor and 100.00%
Hunan province not under common
Industry Co., Ltd. province compound
control
wine
Business combinations
Binxian, Binxian,
Harbin Binzhou involving enterprises
Heilongjiang Heilongjiang Liquor-making 100.00%
Distillery Co., Ltd. not under common
province province
control
Assets/invest
Su Wine Group
Nanjing, ment
Jiangsu Wealth Nanjing, Jiangsu
Jiangsu management, 100.00% Establishment
Management Co., province
province information
Ltd.
consultation
Ningxiang Ningxiang,
Ningxiang,
Miluochun Trade Hunan Commerce 100.00% Establishment
Hunan province
Co., Ltd. province
Suqian,
Suqian Blue Sky Suqian, Jiangsu
Jiangsu Commerce 100.00% Establishment
Trade Co., Ltd. province
province
Liquor,
compound
Shiyan Yunyang
Shiyan, Hubei Shiyan, Hubei wine, health
Lihuacun Package 100.00% Establishment
province province wine
Service Co.,Ltd.
packaging
service
212
Network
technology
development,
Jiangsu Lion and Nanjing, technical
Nanjing, Jiangsu
Sheep Network Jiangsu consultation, 100.00% Establishment
province
Technology Co.,Ltd. province technical
services;
Software
development
Business combinations
Jiangsu Zhaiugou Nanjing,
Nanjing, Jiangsu involving enterprises
E-commerce Co., Jiangsu Commerce 100.00%
province not under common
Ltd province
control
Freight Business combinations
NanjingTongmeng Nanjing,
Nanjing, Jiangsu Transport, involving enterprises
City Logistics Co., Jiangsu 99.99%
province Warehouse not under common
Ltd. province
service control
Freight Business combinations
Nanjing Jinling Nanjing,
Nanjing, Jiangsu Transport, involving enterprises
Tongmeng City Jiangsu 51.00%
province Warehouse not under common
Logistics Co., Ltd. province
service control
Freight Business combinations
Huaian Tongmeng Huaian,
Huaian, Jiangsu Transport, involving enterprises
City Logistics Co., Jiangsu 51.00%
province Warehouse not under common
Ltd. province
service control
Changzhou Freight Business combinations
Changzhou,
Jiezzhong Changzhou, Transport, involving enterprises
Jiangsu 51.00%
Tongmeng City Jiangsu province Warehouse not under common
province
Logistics Co., Ltd. service control
Freight Business combinations
Nantong Tongmeng Nantong,
Nantong, Transport, involving enterprises
City Logistics Co., Jiangsu 51.00%
Jiangsu province Warehouse not under common
Ltd. province
service control
Freight Business combinations
Suzhou Tongmeng Suzhou,
Suzhou, Jiangsu Transport, involving enterprises
City Logistics Co., Jiangsu 51.00%
province Warehouse not under common
Ltd. province
service control
Freight Business combinations
Taizhou Tongmeng Taizhou,
Taizhou, Jiangsu Transport, involving enterprises
City Logistics Co., Jiangsu 51.00%
province Warehouse not under common
Ltd. province
service control
Wuxi Tongmeng Freight Business combinations
Wuxi, Jiangsu Wuxi, Jiangsu
City Logistics Co., Transport, 51.00% involving enterprises
province province
Ltd. Warehouse not under common
213
service control
Freight Business combinations
Yancheng Yancheng,
Yancheng, Transport, involving enterprises
Tongmeng City Jiangsu 51.00%
Jiangsu province Warehouse not under common
Logistics Co., Ltd. province
service control
Freight Business combinations
Zhenjiang Zhenjiang,
Zhenjiang, Transport, involving enterprises
Tongmeng City Jiangsu 51.00%
Jiangsu province Warehouse not under common
Logistics Co., Ltd. province
service control
Freight Business combinations
Yangzhou Yangzhou,
Yangzhou, Transport, involving enterprises
Tongmeng City Jiangsu 53.00%
Jiangsu province Warehouse not under common
Logistics Co., Ltd. province
service control
Freight Business combinations
Suqian Tongmeng Suqian,
Suqian, Jiangsu Transport, involving enterprises
City Logistics Co., Jiangsu 51.00%
province Warehouse not under common
Ltd. province
service control
Freight Business combinations
Pizhou Tongmeng Xuzhou,
Xuzhou, Jiangsu Transport, involving enterprises
City Logistics Co., Jiangsu 51.00%
province Warehouse not under common
Ltd. province
service control
Lianyungang Freight Business combinations
Lianyungang,
Huaxing Tongmeng Lianyungang, Transport, involving enterprises
Jiangsu 51.00%
City Logistics Co., Jiangsu province Warehouse not under common
province
Ltd. service control
Business combinations
Jiangsu Zhaibianli Nanjing,
Nanjing, Jiangsu involving enterprises
E-commerce Co., Jiangsu Commerce 100.00%
province not under common
Ltd province
control
Business combinations
Hongkong Zhaiugou
Hong Kong, Hong Kong, involving enterprises
International Trade Commerce 100.00%
China China not under common
Co., Ltd
control
Guizhou Guijiu Business combinations
Guiyang, Guiyang,
Liquor Operation involving enterprises
Guizhou Guizhou Commerce 100.00%
Management Co., not under common
province province
Ltd. control
Business combinations
Guiyang, Guiyang,
Guizhou Guijiu involving enterprises
Guizhou Guizhou Commerce 100.00%
Trade Co., Ltd. not under common
province province
control
Business combinations
ZYG E-Commerce Hong Kong, Hong Kong, Industrial
100.00% involving enterprises
HK Limited China China investment
not under common
214
control
Business combinations
Cayman Industrial involving enterprises
ZYG LTD Cayman Islands 69.08%
Islands investment not under common
control
YangHe British Virgin British Virgin Industrial
International 100.00% Establishment
Islands Islands investment
Investment Ltd
Healthy wine,
Jiangsu Shuanggou
Suqian, nutrition and
Healthy Liquor Suqian, Jiangsu
Jiangsu health food 100.00% Establishment
Research institute province
province research and
Co., Ltd.
development
Business combinations
ZYG TECHNOLOGY British Virgin British Virgin Industrial involving enterprises
71.03%
INVESTMENT LTD Islands Islands investment not under common
control
Jiangsu Blue Dream Suqian,
Suqian, Jiangsu
E- commerce Co., Jiangsu Commerce 100.00% Establishment
province
Ltd. province
Network
technology
Jiangsu Yanghe
Nanjing, development,
Weiketang Network Nanjing, Jiangsu
Jiangsu technical 100.00% Establishment
Technology Co., province
province consultation,
Ltd.
technical
service
Renhuai, Renhuai, Liquor Business combinations
Kweichow Moutai
involving enterprises
Town Guijiu Liquor Guizhou Guizhou manufacture 100.00%
not under common
Industry Co., Ltd province province and sales control
Road general
cargo
transport,
Suqian Su Wine Suqian,Jiangs Suqian, Jiangsu
cargo 100.00% Establishment
Logistics Co., Ltd. u province province
distribution,
freight
forwarder
Movable and
real estate
investment
Santiago,
YANGHE CHILE SPA Santiago, Chile services, 100.00% Establishment
Chile
building
construction
services
Jiangsu Yanghe Suqian, Suqian, Jiangsu Foreign 50.00% 50.00% Establishment
215
Investment Jiangsu province investment,
Management Co., province Asset
Ltd. management,
Investment
consulting
Enterprise
management
consulting;
Su Wine Group Industrial
Nanjing,
Nanjing Operation Nanjing, Jiangsu investment;
Jiangsu 100.00% Establishment
Management Co., province Food sales;
province
Ltd. Gift sales;
House lease;
Hotel
management
Nanjing,
Jiangsu Zhongshiji Nanjing, Jiangsu Food sales,
Jiangsu 100.00% Establishment
liquor Co., Ltd. province Gift sales
province
Yanghe Hong Kong HongKong, Hong Industrial
100.00% Establishment
Distillery Co., Ltd. China Kong,China investment
Painting and
calligraphy
creation,
exhibition;
Academic
research;
Jiangsu Yanghe Nanjing,
Nanjing, Jiangsu Public art
Calligraphy and Jiangsu 100.00% Establishment
province education;
Painting Academy province
Cultural and
creative
products
development
and
promotion
Sihong,
Jiangsu Shuanggou Sihong, Jiangsu
Jiangsu Commerce 100.00% Establishment
Wine Sales Co., Ltd Province
Province
Internet
Jiangsu Jiushang Suqian,
Suqian, Jiangsu information
Internet Jiangsu 51.00% Establishment
Province service,
Technology Co., LTD Province
alcohol sales
Jiangsu Yanghe Suqian, Tobacco retail,
Suqian, Jiangsu
Cultural Tourism Jiangsu catering, 100.00% Establishment
Province
Co., LTD Province accommodati
216
on, tourism
business
Tobacco retail,
Jiangsu Yanghe Suqian, catering,
Suqian, Jiangsu
Cultural Tourism Jiangsu accommodati 80.00% Establishment
Province
Operation Co., LTD. Province on, tourism
business
Wine
Siyang Blue Sky Sihong ,
Sihong, Jiangsu production
Packaging Service Jiangsu 100.00% Establishment
Province and packaging
Co., Ltd Province
services
Painting and
calligraphy
creation,
exhibition;
Academic
research;
Jiangsu Yanghe Nanjing,
Nanjing, Jiangsu Public art
Calligraphy and Jiangsu 51.00% Establishment
province education;
Painting Academy province
Cultural and
creative
products
development
and
promotion
Kweichow Moutai Zunyi City, Zunyi City,
Guijiu Liquor Guizhou Guizhou Commerce 100.00% Establishment
Industry Co., Ltd Province Province
Jiangsu Ulan Nanjing, Nanjing, Jiangsu
Shangyin Catering Jiangsu province Catering
100.00% Establishment
Management Co., province Management
Ltd.
Jiangsu Yanghe Nanjing, Nanjing, Jiangsu equity
Dream Investment Jiangsu province investment
100.00% Establishment
Management Co., province
Ltd
Jiangsu Yanghe Nanjing, Nanjing, Jiangsu equity
Dream Investment Jiangsu province investment
100.00% Establishment
Management Co., province
Ltd.
The shareholding ratio in the subsidiary is different from the voting ratio:
N/A
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
217
N/A
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:
2. Interests in joint ventures and associates
(1) Summary of financial information of insignificant joint ventures and associates
Unit: CNY
Closing balance/Current period Opening balance/Previous period
amount amount
Associates:
Total carrying amount of investment 8,173,436.53
The aggregate amount of the
following items calculated based on
the Company’s equity share
percentage of the associates
--Net profit 909,717.87 -2,562,964.31
--Other comprehensive income 153,503.58 10,293.63
-- Total comprehensive income 1,063,221.45 -2,552,670.68
Joint ventures:
Total carrying amount of investment 32,979,630.21 24,569,960.78
The sum of the following items
calculated according to the
shareholding ratio
--Net profit 4,291,718.92 5,511,685.26
-- Total comprehensive income 4,291,718.92 5,511,685.26
X. Risks related to financial instruments
The Group is exposed to various financial risks in the ordinary course of business, mainly including:
credit risk, liquidity risk, market risk, etc. The Company's management is fully responsible for the
formulation of risk management objectives and policies, and takes responsibility for risk management
objectives and policies. The objective of the Company’s risk management is to identify and analysis risk,
minimizing the adverse impact of financial risks without excessive influence on the company's
competitiveness and resilience.
1. Credit risks
Credit risk refers to the risk that one party of the financial instruments fails to perform its
obligations and causes the financial losses of the other party. Credit risk mainly related to notes
receivables and accounts receivable, in order to control the risk, the Company takes the following
measures:
(1) Bank deposit
The company's bank deposits are mainly deposited in state-owned holding banks, large and
medium-sized listed banks and other commercial banks with high credit. There is no significant credit
risk and no significant loss caused by default.
(2) Notes receivables and accounts receivables
218
The Company mainly trades with distributors, 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
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 the un discounted
remaining contractual obligations is analyzed as follows:
Closing balance
Item
Within 1 year 1-2 years 2-3 years Over 3 years Total
Account
payables 1,376,209,527.01 1,376,209,527.01
Other
payables 1,854,922,517.23 1,854,922,517.23
Long-term
loan
Long-term
payables 196,459,834.53 196,459,834.53
(Continued)
Opening balance
Item
Within 1 year 1-2 years 2-3 years Over 3 years Total
Account payables 1,444,175,262.08 1,444,175,262.08
Other payables 1,808,838,882.26 1,808,838,882.26
Long-term loan 36,360.00 36,360.00
Long-term payables 196,694,194.53 196,694,194.53
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
219
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 foreign Exchange Balance in foreign Exchange
Balance in CNY Balance in CNY
currency rate currency rate
Cash and
cash
equivalents
Include: USD 2,325,513.37 6.9646 16,196,270.44 10,263,661.09 6.3757 65,438,024.01
HKD 11,621,517.91 0.8933 10,381,501.95 4,177,908.36 0.8176 3,415,857.87
CLP 471,084,627.00 0.008131 3,830,608.28 1,119,093,451.00 0.007483 8,374,417.98
Other
receivables
HKD 155,679.16 0.8933 139,068.19 123,179.16 0.8176 100,711.28
Account
payables
Include: USD
2,766,806.95 6.9646 19,269,703.68 938,460.83 6.3757 5,983,344.71
Other
payables
Include: USD 512.13 6.9646 3,566.78
HKD 217,800.00 0.8933 194,560.74 448,590.73 0.8176 366,767.78
CLP 328,119.00 0.008131 2,668.09 579,431.00 0.007483 4,336.01
Net amount 11,076,949.57 70,974,562.64
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.
XI. 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 Level 2 Level 3 Total
Continuous fair value
-- -- -- --
measurement
Financial assets held for
1,074,170,177.19 13,072,614,102.75 14,146,784,279.94
trading
1.Measured at fair value
1,074,170,177.19 13,072,614,102.75 14,146,784,279.94
through current profit and
220
loss
(1) Debt instrument
8,298,193,452.49 8,298,193,452.49
investment
(2) Equity instrument
1,074,170,177.19 4,774,420,650.26 5,848,590,827.45
investment
Receivables Financing 623,098,310.00 623,098,310.00
Bank acceptance bill 623,098,310.00 623,098,310.00
Total assets continuously
1,074,170,177.19 13,695,712,412.75 14,769,882,589.94
measured at fair value
Non-Continuous fair value
-- -- -- --
measurement
2. Basis for determining the market price of continuous and non-continuous level 1 fair value
measurement items
Active market price
Item Fair value
Trading price Information source
Continuous fair value
measurement
Trading financial assets:
Equity instrument investment 1,074,170,177.19 Closing price Local open market closing price
Total assets continuously measured
1,074,170,177.19
at fair value
3. Valuation techniques and qualitative and quantitative information of key parameters
adopted for continuous and non-continuous level 2 fair value measurement it
None
4. Valuation techniques and qualitative and quantitative information of key parameters
adopted for continuous and non-continuous level 3 fair value measurement it
Item fair value Valuation techniques
Continuous fair value
measurement
1.Financial assets held for trading： 13,072,614,102.75
Using expected returns as an important
Debt instrument investment
8,298,193,452.49 reference for evaluating its fair value
Using cost or the net assets of the invested entity
Equity instrument investment at the end of the period as an important
4,774,420,650.26
reference for evaluating its fair value
2.Receivables Financing 623,098,310.00
Using the face value as an important reference
Bank acceptance bill 623,098,310.00 for evaluating its fair value
221
Item fair value Valuation techniques
Total assets continuously
13,695,712,412.75
measured at fair value
XII. Related parties and related party transactions
1. The parent company of the Company
Shareholding Voting Ratio by
Name of parent Registered
Registration place Business nature ratio by the the parent
company capital
parent company company
Sales of brewing
machinery
equipment,
export of liquor,
import of various
raw and auxiliary
Jiangsu Yanghe
Suqian, Jiangsu materials, CNY 1.5 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 NoteVI.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 VI.2.
Other joint ventures and associates whose related party transactions with the Company in the current period
or balance formed from related party transactions with the Company in the prior period as follows:
Name of joint venture and associate Relationship with the Company
Diageo International Spirits Company Limited Joint Venture
Jiangsu Su Wine Cultural Transmission Co., Ltd. Associate
Nanjing Hesong Culture Technology Co., Ltd. Associate
Jiangsu Xinghe Investment Management Co., Ltd. Associate
4. Other related party
Name of other related party Relationship with the Company
Shanghai Haiyan Logistics Development Co., Ltd. Holding 9.67% shares
VSPT, Via San Pedro Tarapacá S.A. Joint stock company, holding 12.50% shares
222
Controlled by Diageo International Spirits Company Limited,
Jiangsu Diageo Wine Co. LTD
joint venture of Company
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
Whether
Approved exceeding the
Transaction Amount for the Amount for the
Related Party transaction approved
Content current period prior period
amount transaction
amount
VSPT, Via San
Pedro Tarapacá Red wine 16,462,530.10 21,169,155.61
S.A
Nanjing
Advertising and
Hesong Culture
general publicity 756,341.39 303,276.09
Technology
expense
Co., Ltd.
Jiangsu Diageo
Liquor 10,129,543.56
Wine Co. LTD
Total 17,218,871.49 31,601,975.26
Statement of sales of goods/ rendering of labor services
Unit: CNY
Related Party Transaction Content Current period amount Previous period amount
Shanghai Haiyan Logistics
Sales of liquor 866,000.02 5,067,075.48
Development Co., Ltd.
Jiangsu Su Wine Cultural
Sales of liquor 40,369,222.60 46,448,093.82
Transmission Co., Ltd.
Jiangsu Diageo Wine Co. Ltd Sales of liquor 3,820,908.96
Jiangsu Xinghe Investment
Consulting fee income 2,443,396.23
Management Co., Ltd.
Total 41,235,222.62 57,779,474.49
(2) Related party lease
The Company as a lessor
Unit: CNY
Amount in previous
Related party Types of Leased Assets Amount in current period
period
None
The Company as a lessee
Unit: CNY
223
Variable lease
Simplified rental
payments not Interest expense
fees for short-term
included in the on lease Increased use
leases and low Rent paid
Types measurement of liabilities rights assets
value asset leases
lease liabilities（If assumed
Related of （If Applicable）
Applicable）
party Leased
Previo
Assets Previou Previou Previou
Current Current Current Previous Current us Current
s s s
period period period period period period period
period period period
amount amount amount amount amount amou amount
amount amount amount
nt
Jiangsu
Yanghe lease of 298,16 201,834. 68,263. 80,01
Group houses 5.14 86 37 3.55
Co., Ltd
(3) Compensation for key managers
Unit: CNY
Item Current period amount Previous period amount
6. Receivables from and payables to related parties
(1) Payables
Unit: CNY
Item Related party Closing balance Opening balance
Shanghai Haiyan Logistics
Contract liabilities 72,307.08 6,010,270.99
Development Co., Ltd.
Jiangsu Su Wine Cultural Transmission
Contract liabilities 3,803,634.02 26,791,306.31
Co., Ltd.
Accounts payables Jiangsu Diageo Wine Co. Ltd. 2,195,373.19
VSPT,
Accounts payables 6,508,528.42
Via San Pedro Tarapacá S.A.
Shanghai Haiyan Logistics
Other Payables 133,000.00 151,531.60
Development Co., Ltd.
Jiangsu Su Wine Cultural Transmission
Other Payables 950,000.00 1,000,451.00
Co., Ltd.
XIII. Share-based payment
1. Overview of Share-based Payments
Applicable □N/A
Unit: CNY
Total of equity instruments granted during the current
0.00
reporting period
Total of equity instruments vested during the current reporting
0.00
period
Total of equity instruments forfeited during the current
0.00
reporting period
Other information:
According to Phase I Core Backbone Shareholding Plan (Draft) of Jiangsu Yanghe Distillery Co., Ltd., deliberated
224
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 9,118,384 share. 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.
The total amount of expenses recognized in the current period is RMB 122,414,308.77, which is included in
capital reserve - Other capital reserve, accumulated included in capital reserve - other capital reserves RMB
163,118,128.78
XIV. Commitments and contingencies
1. Significant commitments
Significant commitments as of the balance sheet date
By the end of 31 December 2022, 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 2022, 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 significant contingencies to disclose.
XV. Post balance sheet event
1. Profit distribution
Unit: CNY
Profits or dividends to be distributed 29,676,346,187.62
Profits or dividends declared for distribution after being
5,634,104,576.76
approved
The company plans to distribute cash dividends of RMB 37.40
(including tax) to all shareholders for every 10 shares based on
the total share capital on the equity registration date when
Profit distribution plan
implementing the profit distribution plan (excluding the
repurchased shares held in the company's dedicated securities
account for repurchase), with undistributed profits, without
225
bonus shares or conversion to share capital.
226
XVI. Notes to major items of financial statements of parent company
1. Accounts receivable
(1) Disclosure of accounts receivable by categories
Unit: CNY
Closing balance Opening balance
Carrying balance Credit loss provision Carrying balance Credit loss provision
Type
Percentage Proportion Book value Percentage Proportion of Book value
Amount Amount Amount Amount
(%) of provision (%) provision
Including:
Provision
for bad
1,204,313,384.24 100.00% 151,596.00 1,204,161,788.24 424,595,684.45 100.00% 424,595,684.45
debts by
portfolio
Including:
Risk portfolio 5,053,200.00 0.42% 151,596.00 3.00% 4,901,604.00
Other
1,199,260,184.24 99.58% 1,199,260,184.24 424,595,684.45 100.00% 424,595,684.45
portfolio
Total 1,204,313,384.24 100.00% 151,596.00 0.01% 1,204,161,788.24 424,595,684.45 100.00% 424,595,684.45
Provision for bad debts by portfolio: risk portfolio
Unit: CNY
Closing balance
Name of portfolio
Accounts receivables Provision for bad debt Proportion
Within 1 year 5,053,200.00 151,596.00 3.00%
Total 5,053,200.00 151,596.00
Notes to determine provision for bad debt by portfolio:
Provision for bad debts by portfolio: other portfolio
227
Unit: CNY
Closing balance
Name of portfolio
Accounts receivables Provision for bad debt Proportion
Accounts receivable of
companies within the scope 1,199,260,184.24 0.00%
of consolidation
Total 1,199,260,184.24
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
Analysis by aging
Unit: CNY
Aging Closing balance
Within 1 year (including 1 year) 1,204,313,384.24
Within 1 year 1,204,313,384.24
Total 1,204,313,384.24
(2) Provision for bad debt that is accrued, recovered or reversed during this period
Provision for bad debts during this period:
Unit: CNY
Changes in the current period
Opening Closing
Category Recovered or
balance Provision Write off Others balance
reversed
Provision for
bad debt of
151,596.00 151,596.00
accounts
receivables
Total 151,596.00 151,596.00
Significant amount of reversal or recovery during this period
Unit: CNY
Company name Amount recovered or reversed Method
None
(3) Top five entities with the largest balances of the accounts receivables
Unit: CNY
Proportion in the total
Company’s name Closing balance Provision amount
accounts’ receivables (%)
First 1,106,779,402.21 91.90%
Second 91,345,507.40 7.59%
Third 5,053,200.00 0.42% 151,596.00
Fourth 855,899.68 0.07%
Fifth 279,374.95 0.02%
Total 1,204,313,384.24 100.00%
2. Other receivables
Unit: CNY
Item Closing balance Opening balance
Dividend receivable 1,812,736,853.55
Other receivables 1,068,086,225.72 399,089,264.75
Total 1,068,086,225.72 2,211,826,118.30
(1) Dividend receivable
256
1）Category of dividend receivable
Unit: CNY
Item Closing balance Opening balance
Dividends receivable from
1,812,736,853.55
subsidiaries
Total 1,812,736,853.55
2) Provision for bad debt
□Applicable N/A
(2) 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
1,062,874,527.41 397,751,387.98
Group
Guarantee deposit 18,498,496.00 15,060,000.00
Business loans and petty cash 1,128,524.66 575,275.71
Other receivables 2,602,307.10 2,527,992.51
Total 1,085,103,855.17 415,914,656.20
2) Provision for bad debt
Unit: CNY
Phase 1 Phase 2 Phase 3
Provisions for debts Future 12-month Lifetime ECL(without Lifetime ECL(with credit Total
ECL credit impairment) impairment)
Balance as at 1 January
2022 57,926.49 16,767,464.96 16,825,391.45
Change of opening
balance as at 1 January
2022 in current period
Provision in 2022 192,238.00 192,238.00
Balance as at 31
250,164.49 16,767,464.96 17,017,629.45
December 2022
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) 739,643,544.05
Within 1 year 739,643,544.05
1-2 years 314,455,495.91
2-3 years 460,000.00
Over 3 years 30,544,815.21
3-4 years 8,830,032.00
4-5 years 848,000.00
Over 5 years 20,866,783.21
Total 1,085,103,855.17
256
3) Provision, recovery or reversal for bad debt during this period
Unit: CNY
Changes in the current period
Category Opening balance Recovered or Other Closing balance
Provision Write off
reversed changes
Provision for
other
16,825,391.45 192,238.00 17,017,629.45
receivables
bad debt
Total 16,825,391.45 192,238.00 17,017,629.45
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
Proportion in Provisioning
Company’s Name Category Closing balance Aging total amount at
receivables period end
Within 1
Guizhou Guijiu year627,605,000.00，
Loan 941,550,495.91 1-2years 86.77%
Co., Ltd.
313,945,495.91
Guizhou Maotai
Town Guijiu Liquor Loan 103,640,000.00 Within 1 year 9.55%
Industry Co., Ltd
Jiangsu Juntai
Properties Co., Lt.,
Suqian Guotai deposit 15,000,000.00 Over 5 years 1.38% 15,000,000.00
Department Store
Co., Ltd.
Within 1 year
230,000.00, 1-2years
Harbin Binzhou 400,000.00,2-3years
Loan 14,807,100.00 1.36%
Distillery Co., Ltd. 460,000.00, over 3
years 13,717,100.00
Siyang County
Land Acquisition
guarantee 2,938,464.00 Within 1 year 0.27% 58,769.28
and Reserve
Center
合计 1,077,936,059.91 99.33% 15,058,769.28
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
8,180,436,290.49 8,180,436,290.49 7,994,556,728.17 7,994,556,728.17
subsidiaries
Total 8,180,436,290.49 8,180,436,290.49 7,994,556,728.17 7,994,556,728.17
(1) Investment in subsidiaries
Unit: CNY
Increase or decrease in the current period Closing
balance
Investee Opening balance Provision for Closing balance of
Increase Decrease Others provision
impairment
for
256
impairme
nt
Suqian
Yanghe
700,000.00 700,000.00
Guibinguan
Co., Ltd.
Jiangsu
Shuanggou
Distillery 1,717,299,880.97 12,368,912.08 1,729,668,793.05
Stock Co.,
Ltd.
Su Wine
Trade Group 306,242,867.20 61,510,650.24 367,753,517.44
Co., Ltd.
Jiangsu
Yanghe
Liquor
10,983,280.00 10,983,280.00
Operation
Manageme
nt Co., Ltd
Jiangsu
Dongdi
Union
5,000,000.00 5,000,000.00
Internatio
nal Trade
Co., Ltd.
Jiangsu
Dongdixi
nghui
Internati 5,000,000.00 5,000,000.00
onal
Trade
Co., Ltd
Siyang
Lantu
Liquor 3,161,700.00 3,161,700.00
Operation
Co., Ltd.
Hubei
Lihuacun
Liquor 3,000,000.00 3,000,000.00
Industry
Co., Ltd.
Ningxiang
Miluochu
n Liquor 2,129,000.00 2,129,000.00
Industry
Co., Ltd.
Harbin
Binzhou
2,000,000.00 2,000,000.00
Distillery
Co., Ltd.
Su Wine
Group
Jiangsu
Wealth 3,000,000,000.00 3,000,000,000.00
Managem
ent Co.,
Ltd.
Jinagsu
Kelite
Biology
10,000,000.00 10,000,000.00
Technology
Research
Institute
256
Co., Ltd.
Jiangsu Lion
and Sheep
Network 5,460,000.00 5,460,000.00
Technology
Co., Ltd.
Guizhou
Guijiu 943,300,000.00 943,300,000.00
Co., Ltd.
Jiangsu
Yanghe
Weiketang
300,000.00 300,000.00
Network
Technology
Co., Ltd.
YANGHE
456,880,000.00 456,880,000.00
CHILE SPA
Jiangsu
Yanghe
Investment 1,500,000,000.00 1,500,000,000.00
Management
Co., Ltd.
Yanghe Hong
Kong Liquor 18,000,000.00 18,000,000.00
Co., Ltd.
Jiangsu
Jiushang
Internet 5,100,000.00 5,100,000.00
Technology
Co., LTD
Tibet Earth
Third Pole
102,000,0
Liquor 102,000,000.00
00.00
Industry Co.,
Ltd
Jiangsu
Yanghe
Dream 20,000,00
20,000,000.00
Investment 0.00
Management
Co., Ltd
122,000,0
Total 7,994,556,728.17 10,000,000.00 73,879,562.32 8,180,436,290.49
00.00
4. Operating revenue and cost of sales
Unit: CNY
Current period amount Previous period amount
Item
Operating revenue Cost of sales Operating revenue Cost of sales
Primary business 11,033,861,278.77 5,597,622,749.56 9,855,981,149.71 5,134,136,876.95
Other business 458,946,611.18 382,597,476.00 620,861,040.12 558,762,391.77
Total 11,492,807,889.95 5,980,220,225.56 10,476,842,189.83 5,692,899,268.72
Information relating to revenue
Unit: CNY
Category of Contract Segment 1 Segment 2 Current period amount Total
Commodity type 0.00
Including:
Liquor 11,033,861,278.77 11,033,861,278.77
Other 458,946,611.18 458,946,611.18
By operating region
Including:
256
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 11,492,807,889.95 11,492,807,889.95
Information relating to performance obligations
N/A
Information relating to the transaction price apportioned to the remaining performance
obligations:
At the end of this report, the amount of revenue corresponding to the performance obligations
with the contracts signed but not performed or not performed is CNY 17,485,085,741.24, of
which CNY 17,485,085,741.24 is expected to be recognized in 2023, and CNY 0.00 is expected to
be recognized in 2024. CNY 0.00 is expected to be recognized as revenue in 2025.
5. Investment income
Unit: CNY
Item Current period amount Previous period amount
Investment income from long-term
equity investments under the equity 5,529,140,387.31 3,816,035,295.48
method
Investment income from financial assets
held for trading during the holding 3,865,643.47 10,199,080.04
period
Investment income from disposal of
299,644,621.19 198,932,628.59
financial assets held for trading
Income from derecognition of financial
-11,790,752.31
assets measured at amortized cost
Total 5,820,859,899.66 4,025,167,004.11
XIV. Supplementary information
1. Detailed statement of non-recurring profits and losses
Applicable □N/A
Unit: CNY
Item Amount Note
Profit or loss from disposal of
-5,887,909.75
non- current assets
Government grants accounted for, in
60,162,525.57
the profit or loss for the current period
256
(except for the government grants
closely related to the business of the
Company and given at a fixed amount
or quantity in accordance with the
state's uniform standards)
In addition to the effective hedging
business related to the company's
normal business operations, changes in
fair value from holding financial assets
held for trading, derivative financial
assets, financial liabilities held for
trading, fair value changes, and 77,907,331.60
investment income from disposal of
financial assets held for trading and
derivative financial assets, financial
liabilities held for trading, derivative
financial liabilities and other debt
investments
Other non-operating income and
expense except the items 827,476.72
mentioned above
Other profit and loss items that
conform to the definition of 3,610,292.93
non-recurring profits and losses
Less: Effect of income tax 34,647,176.78
Effect of minority equity 784,942.50
Total 101,187,597.79 --
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
Net profits attributable
to ordinary
21.03% 6.2251 6.2251
shareholders of the
Company
Net profits attributable
to ordinary
shareholders of the
Company after 20.80% 6.1580 6.1580
deduction of
extraordinary gain and
loss
3. Difference of the accounting data under accounting rules in and out of
China
(1) Difference of the net profit and net assets disclosed in financial report, under both IAS
(International Accounting Standards) and Chinese GAAP (Generally Accepted Accounting
256
Principles)
□Applicable N/A
(2) Difference of the net profit and net assets disclosed in financial report, under both foreign
accounting rules and Chinese GAAP (Generally Accepted Accounting Principles)
□Applicable N/A
(3) Explain the reasons for differences in accounting data under domestic and foreign
accounting standards, and, where the data audited by an overseas audit institution are subject to
adjustment for difference, indicate the name of the overseas institution.
None.
4.Others
256
