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古井贡B:2021年年度报告(英文版)2022-04-30  

                        Anhui Gujing Distillery Company Limited

          Annual Report 2021




               April 2022
                                                                                    Annual Report 2021




Part I Important Notes, Table of Contents and Definitions



The Board of Directors (or the “Board”), the Supervisory Committee as well as the
directors, supervisors and senior management of Anhui Gujing Distillery Company
Limited (hereinafter referred to as the “Company”) hereby guarantee the factuality,
accuracy and completeness of the contents of this Report and its summary, and shall
be jointly and severally liable for any misrepresentations, misleading statements or
material omissions therein.
Liang Jinhui, the legal representative, and Zhu Jiafeng, the Deputy Chief Accountant
and Board Secretary, hereby guarantee that the financial statements carried in this
Report are factual, accurate and complete.
All the Company’s directors have attended the Board meeting for the review of this
Report and its summary.
Any plans for the future and other forward-looking statements mentioned in this
Report shall NOT be considered as absolute promises of the Company to investors.
Investors, among others, shall be sufficiently aware of the risk and shall differentiate
between plans/forecasts and promises. Again, investors are kindly reminded to pay
attention to possible investment risks.
Investors’ attention is kindly directed to the detailed description of possible risks in
the Company’s operations in “XI Prospects” under “Part III Management Discussion
and Analysis”.
The Board has approved a final dividend plan as follows: based on the Company’s
total share capital of 528,600,000 shares, a cash dividend of RMB22.00 (tax inclusive)
per 10 shares is to be distributed to the shareholders, with no bonus issue from either
profit or capital reserves.
This Report and its summary have been prepared in both Chinese and English.
Should there be any discrepancies or misunderstandings between the two versions,
the Chinese versions shall prevail.




                                        ~ 2 ~
                                                              Annual Report 2021




Table of Contents
Part I Important Notes, Table of Contents and Definitions      2

Part II Corporate Information and Key Financial Information    6

Part III Management Discussion and Analysis                    11

Part IV Corporate Governance                                  38

Part V Environmental and Social Responsibility                59

Part VI Significant Events                                    64

Part VII Share Changes and Shareholder Information            71

Part VIII Preferred Shares                                    81

Part IX Corporate Bonds                                       82

Part X Financial Statements                                   83




                              ~ 3 ~
                                                                        Annual Report 2021



                     Documents Available for Reference



(I) Financial statements signed and sealed by the Company’s legal representative, the

Company’s Chief Accountant and the head of the Company’s financial department

(equivalent to financial manager);

(II) The original copy of the Independent Auditor's Report stamped by the CPA firm

as well as signed and stamped by the engagement certified public accountants;

(III) All originals of the Company’s documents and announcements that have been

publicly disclosed in the Reporting Period on the media designated by the China

Securities Regulatory Commission; and

(IV) This Report disclosed in other securities markets.




                                       ~ 4 ~
                                                                                                      Annual Report 2021




                                                 Definitions




                       Term                                               Definition

                                          Anhui Gujing Distillery Company Limited inclusive of its consolidated
The “Company”, “ Gu Jing” or “we”
                                          subsidiaries, except where the context otherwise requires

Gujing Sales                              Bozhou Gujing Sales Co., Ltd.

                                          Anhui Gujing Distillery Company Limited exclusive of subsidiaries,
The Company as the parent
                                          except where the context otherwise requires

Gujing Group                              Anhui Gujing Group Co., Ltd.

Yellow Crane Tower                        Yellow Crane Tower Distillery Co., Ltd.

Mingguang                                 Anhui Mingguang Distillery Co., Ltd.




                                                 ~ 5 ~
                                                                                                                         Annual Report 2021




          Part II Corporate Information and Key Financial Information


I Corporate Information


Stock name                            Gujing Distillery, Gujing Distillery-B     Stock code                    000596, 200596

Changed stock name (if any)

Stock     exchange    for     stock
                                      Shenzhen Stock Exchange
listing

Company name in Chinese               安徽古井贡酒股份有限公司

Abbr.                                 古井

Company name in English (if ANHUI GUJING DISTILLERY COMPANY LIMITED
any)

Abbr. (if any)                        GU JING

Legal representative                  Liang Jinhui

Registered address                    Gujing Town, Bozhou City, Anhui Province, P.R.China

Zip code                              236820

Change of registered address          N/A

Office address                        Gujing Industrial Park, Gujing Town, Bozhou City, Anhui Province, P.R.China

Zip code                              236820

Company website                       http://www.gujing.com

Email address                         gjzqb@gujing.com.cn


II Contact Information

                                                                   Board Secretary                          Securities Representative

Name                                                 Zhu Jiafeng                                  Mei Jia

                                                     Gujing     Town,   Bozhou    City,   Anhui   Gujing    Town,    Bozhou     City,   Anhui
Address
                                                     Province, P.R.China                          Province, P.R.China

Tel.                                                 (0558)5712231                              (0558)5710057

Fax                                                  (0558)5710099                              (0558)5710099

Email address                                        gjzqb@gujing.com.cn                          gjzqb@gujing.com.cn


III Media for Information Disclosure and Place where this Report Is Lodged

Newspapers       designated    by      the   Company      for    China Securities Journal, Shanghai Securities News, Ta Kung Pao (HK)

                                                                     ~ 6 ~
                                                                                                                    Annual Report 2021


information disclosure

Website designated by CSRC for publication of this           http://www.cninfo.com.cn
Report

Place where this Report is lodged                            The Board Secretary’s Office


IV Change to Company Registered Information

Unified social credit code                             913400001519400083

Change to principal activity of the Company
                                                       No change
since going public (if any)

Every change of controlling shareholder since
                                                       No change
incorporation (if any)


V Other Information

The independent audit firm hired by the Company:

Name                                   RSM China

                                       Suite 901-22 to 901-26, Wai Jing Mao Building (Tower 1), No. 22 Fuchengmen Wai Street,
Office address
                                       Xicheng District, Beijing, China

Accountants writing signatures         Zhang Liping, and Han Songliang

The independent sponsor hired by the Company to exercise constant supervision over the Company in the Reporting Period:

√ Applicable □ Not applicable

               Sponsor                      Office address                    Representatives                 Supervision period

                                    27-28/F, China World Office 2,
China International Capital
                                    No. 1 Jianguomenwai Avenue,       Fang Lei, and Chen Jingjing         2021.7.22-2022.12.31
Corporation Limited
                                    Chaoyang District, Beijing

The independent financial advisor hired by the Company to exercise constant supervision over the Company in the Reporting Period:

√ Applicable □ Not applicable

         Financial Advisor                  Office address                    Representatives                 Supervision period

                                    27-28/F, China World Office 2,
China International Capital
                                    No. 1 Jianguomenwai Avenue,       Fang Lei, and Chen Jingjing         2021.7.22-2022.12.31
Corporation Limited
                                    Chaoyang District, Beijing


VI Key Financial Information

Indicate by tick mark whether there is any retrospectively restated datum in the table below.

□ Yes √ No

                                                2021                      2020               2021-over-2020               2019

                                                                 ~ 7 ~
                                                                                                                    Annual Report 2021


                                                                                              change (%)

Operating revenue (RMB)                     13,269,826,266.04      10,292,064,534.41                    28.93%       10,416,961,584.23

Net profit attributable to the listed
                                             2,297,894,413.25        1,854,576,249.29                   23.90%         2,097,527,739.86
company’s shareholders (RMB)

Net profit attributable to the listed
company’s       shareholders   before       2,186,239,468.68        1,773,011,307.05                   23.31%         1,891,097,157.37
exceptional gains and losses (RMB)

Net cash generated from/used in
                                             5,254,308,127.79        3,624,543,525.53                   44.96%           192,447,063.45
operating activities (RMB)

Basic     earnings        per     share
                                                         4.45                     3.68                  20.92%                      4.17
(RMB/share)

Diluted        earnings   per     share
                                                         4.45                     3.68                  20.92%                      4.17
(RMB/share)

Weighted average return on equity
                                                      21.25%                   19.53%                    1.72%                   25.55%
(%)

                                                                                             Change of 31
                                          31 December 2021       31 December 2020         December 2021 over       31 December 2019
                                                                                         31 December 2020 (%)

Total assets (RMB)                          25,418,086,447.80      15,186,625,708.79                    67.37%       13,871,297,363.16

Equity attributable to the listed
                                            16,537,389,443.64      10,043,288,013.73                    64.66%         8,944,111,764.44
company’s shareholders (RMB)

Indicate by tick mark whether the lower of the net profit attributable to the listed company’s shareholders before and after exceptional

gains and losses was negative for the last three accounting years, and the latest independent auditor’s report indicated that there was

uncertainty about the Company’s ability to continue as a going concern.

□ Yes √ No

Indicate by tick mark whether the lower of the net profit attributable to the listed company’s shareholders before and after exceptional

gains and losses was negative.

□ Yes √ No


VII Accounting Data Differences under China’s Accounting Standards for Business
Enterprises (CAS) and International Financial Reporting Standards (IFRS) and Foreign
Accounting Standards

1. Net Profit and Equity under CAS and IFRS

□ Applicable √ Not applicable

No difference for the Reporting Period.


                                                                ~ 8 ~
                                                                                                                 Annual Report 2021


2. Net Profit and Equity under CAS and Foreign Accounting Standards

□ Applicable √ Not applicable

No difference for the Reporting Period.


3. Reasons for Accounting Data Differences Above

□ Applicable √ Not applicable


VIII Key Financial Information by Quarter

                                                                                                                         Unit: RMB

                                                    Q1                      Q2                   Q3                    Q4

Operating revenue                             4,130,015,502.32           2,877,480,965.42     3,094,775,914.80     3,167,553,883.50

Net profit attributable to the listed
                                                814,470,363.67            564,333,464.79       590,128,559.28        328,962,025.51
company’s shareholders

Net profit attributable to the listed
company’s      shareholders    before          801,677,741.93            536,607,519.06       563,373,758.33        284,580,449.36
exceptional gains and losses

Net cash generated from/used in
                                              -1,373,645,850.02          1,637,612,982.28     3,688,705,129.87     1,301,635,865.66
operating activities

Indicate by tick mark whether any of the quarterly financial data in the table above or their summations differs materially from what

have been disclosed in the Company’s quarterly or interim reports.

□ Yes √ No

IX Exceptional Gains and Losses
√ Applicable □ Not applicable

                                                                                                                         Unit: RMB

                       Item                               2021                   2020            2019                Note

Gain or loss on disposal of non-current
assets (inclusive of impairment allowance                -5,976,856.98        -3,692,640.09     -7,615,741.56
write-offs)

Government subsidies charged to current
profit or loss (exclusive of government
subsidies      consistently    given     in   the
                                                         55,274,502.42        48,617,479.37     98,293,177.32
Company’s ordinary course of business at
fixed quotas or amounts as per governmental
policies or standards)

Gain or loss on fair-value changes in trading            34,792,433.45        21,490,043.05   144,234,319.52


                                                                  ~ 9 ~
                                                                                                                Annual Report 2021


financial assets and liabilities & investment
income from disposal of trading financial
assets and liabilities and available-for-sale
financial assets (exclusive of effective
portion    of   hedges   that     arise   in   the
Company’s ordinary course of business)

Reversed portion of impairment allowance
for receivables which are tested individually          1,949,809.53                43,554.94             0.00
for impairment

Non-operating income and expense other
                                                      77,025,619.76        44,100,616.61        57,215,092.96
than the above

Less: Income tax effects                             40,243,159.73         27,033,395.22        71,418,613.38

        Non-controlling interests effects (net
                                                      11,167,403.88         1,960,716.42        14,277,652.37
of tax)

Total                                                111,654,944.57        81,564,942.24       206,430,582.49        --

Particulars about other items that meet the definition of exceptional gain/loss:

□ Applicable √ Not applicable

No such cases for the Reporting Period.

Explanation of why the Company reclassifies as recurrent an exceptional gain/loss item listed in the Explanatory Announcement No.

1 on Information Disclosure for Companies Offering Their Securities to the Public—Exceptional Gain/Loss Items:

□ Applicable √ Not applicable

No such cases for the Reporting Period.




                                                             ~ 10 ~
                                                                                                                       Annual Report 2021




                        Part III Management Discussion and Analysis

I Industry Overview for the Reporting Period

(I) Principal Activity of the Company
The Company primarily produces and markets liquor and spirits. According to the Industry Categorization Guide for Listed
Companies (Revised in 2012) issued by the CSRC, liquor and spirits making belongs to the “liquor, beverage and refined tea making
industry" (C15). The Company’s principal operations remained unchanged in the Reporting Period.
(II) Status of the Industry and Position of the Company in the Industry
1. Status of the Liquor and Spirits Industry
Since the beginning of the 21st century, China's liquor and spirits industry has experienced three development stages. Before 2012,
with rapid economic growth, the income of urban and rural residents rose fast, and the demand for liquor and spirits continued to
increase, while production and sales of liquor and spirits continuously expanded at a fast pace. As a result, the liquor and spirits
industry witnessed booming supply and demand. During that period, national liquor and spirits brands and local regional renowned
liquor enterprises achieved rapid development. In the context of the rise in both the demand and price of liquor and spirits, the sales
income and total profits of liquor enterprises increased quickly.
From the second half of 2012 to 2016, China's economy once again entered a period of adjustment, as the Chinese government
introduced a string of policies to restrict the spending on official overseas visits, official vehicles and official hospitality, such as the
"Eight-point Decision" and "Six Prohibitions", which include restrictions on the consumption of high-end alcohol with public funds.
Consumption scenarios such as commercial consumption and government consumption were limited, leading to a drop in consumer
demand in a short time. Moreover, liquor prices were under huge pressure. China's liquor and spirits industry entered a period of
profound adjustment. After 2012, both the output growth and income growth of China's liquor and spirits industry slowed down.
The liquor and spirits industry began to recover in the second half of 2016, with a rise in consumption demand by end-users,
propelling the growth of the overall income and profits of the industry. Since 2017, the overall demand and price of liquor and spirits
have increased, and the recovery of mid- and high-end liquor and spirits has picked up. In the future, benefiting from the
consumption upgrade and the change of consumption concept, the growth of sub-high-end liquor and spirits will be the key driver for
the development of the liquor and spirits industry. The consumption upgrade is the major driving force for the development of the
liquor and spirits industry. Liquor enterprises need to fully grasp the great opportunities from the extensive consumption upgrade and
strive to better meet the consumption needs of the market through quality improvement, market segmentation and product innovation
and other means, so as to advance the transformation and upgrade of the product structure.
From January to December 2021, in China, the total output of alcoholic beverage made and brewed by the enterprises above the
designated size in the alcoholic beverages industry was 54,068,500 kiloliter, increased by 3.95% year on year, of which, the output of
liquor and spirits was 7,156,300 kiloliter, decreased by 0.59% year on year. With the acceleration of consumption upgrading, among
Chinese residents, it gradually shows such a trend of consumption upgrading that "you should drink less liquor, but you should drink
better liquor". During the period of the 14th Five-year Plan, the consumption growth of sub-high-end liquor and spirits will bring
more fierce competition in the sector of high-end liquor and spirits.
2. Position of the Company in the Industry
China has a long history of liquor. There are a large number of liquor production enterprises in the country, but the regional
distribution of liquor consumers is particularly evident. The liquor and spirits industry is characterized by full competition, with a
high degree of marketization. The market competition is fierce, and the industry adjustments are constantly deepening. In the national
market, the competitive edges of the enterprises come from their brand influence, product style and marketing & operation models. In
                                                               ~ 11 ~
                                                                                                                   Annual Report 2021


a single regional market, the competitive strengths of the enterprises depend on their brand influence in the region, the recognition of
the companies by regional consumers and comprehensive marketing capacity.
As one of China’s traditional top eight liquor brands, the Company is the first listed liquor and spirits company with both A and B
stocks. It is located in Bozhou City, Anhui Province in China, the hometown of historic figures Cao Cao and Hua Tuo, as well as one
of the world’s top 10 liquor-producing areas. No changes have occurred to the main business of the Company in the Reporting Period.
As the main product of the Company, the Gujing spirit originated as a “JiuYunChun Spirit”, together with its making secrets, being
presented as a hometown specialty by Cao Cao, a famous warlord in China’s history, to Emperor Han Xiandi (name: Liu Xie) in A.D.
196, and was continually presented to the royal house since then. With crystalline liquid, rich aroma, a fine flavor and a lingering
aftertaste, the Gujing spirit has helped the Company win four national distilled spirit golden awards, a golden award at the 13th SIAL
Paris, the title of China’s “Geographical Indication Product”, the recognition as a “Key Cultural Relics Site under the State
Protection”, the recognition with a “National Intangible Cultural Heritage Protection Project”, a Quality Award from the Anhui
provincial government, a title of “National Quality Benchmark”, among other honors. In 2021, Gujing Distillery ranked fourth in
China's liquor and spirits industry with a brand value of RMB200.672 billion in the 13 th "Hua Liquor Cup" (list of Chinese liquor
brands by value).
In April 2016, Gujing Distillery signed a strategic cooperation agreement with Huanghelou Liquor Co., Ltd., opening a new era of
cooperation in China's famous liquor industry. Yellow Crane Tower Baijiu is the only famous Chinese liquor in Hubei. Its unique
style is "soft, mellow, elegant and cool, and has a long lingering fragrance". It won the two China gold medal in liquor appreciation in
1984 and 1989. At present, Huanghelou liquor industry has three bases: Wuhan, Xianning and Suizhou. Among them, Huanghelou
Liquor Culture Expo Park in Wuhan base has been approved as national AAA scenic spot, and Huanghelou forest wine town in
Xianning base has been approved as national AAA scenic spot.
In January 2021, Gujing Distillery and Mingguang signed a strategic cooperation agreement. The unique mung bean flavor adds to
the famous liquor family of Gujing. Anhui Mingguang Distillery Co., Ltd. has such representative products as Mingguang Jianiang,
Mingguang Daqu, Mingguang Youye, Mingguang Tequ, and 53% alcohol Minglueye. In December, the ancient Mingguang
liquor-making technique was selected into the six batch of provincial intangible cultural heritage list.


II Principal Activity of the Company in the Reporting Period

The Company is subject to the Guideline No. 14 of the Shenzhen Stock Exchange on Information Disclosure by Industry—for Listed
Companies Engaging in Food and Liquor & Wine Production.
Main sales model
The Company's key sales model is dealer model. Under the dealer model, the Company will select one or more dealers for sales of a
product brand (or product sub-brand) according to the market capacity.
Distribution model:
√ Applicable □ Not applicable
1. Operating Performance by Distribution Channel and Product Category
                                                                                                                            Unit: RMB
                                                                                                                                YoY
                                                                                                      YoY
                                                                                                                  YoY        change in
                                                                                                    change in
                                                                                                                change in       gross
          By               Operating revenue            Cost of sales       Gross profit margin     operating
                                                                                                                 cost of       profit
                                                                                                     revenue
                                                                                                                sales (%)      margin
                                                                                                       (%)
                                                                                                                                (%)

Channel

                                                             ~ 12 ~
                                                                                                                   Annual Report 2021


Online                              531,343,420.84         121,945,000.89                77.05%     41.43%         32.58%         1.53%

Offline                       12,738,482,845.20           3,182,132,011.03               75.02%     28.46%         29.47%        -0.19%

          Total               13,269,826,266.04           3,304,077,011.92               75.10%     28.93%         29.58%        -0.13%

                                                                                                                                 YoY
                                                                                                     YoY
                                                                                                                   YoY         change in
                                                                                                   change in
                                                                                                                change in        gross
           By               Operating revenue             Cost of sales      Gross profit margin   operating
                                                                                                                  cost of       profit
                                                                                                   revenue
                                                                                                                 sales (%)      margin
                                                                                                     (%)
                                                                                                                                 (%)

Product series

Aged Original Liquor           9,307,819,185.05           1,563,365,943.45               83.20%     18.81%          7.86%         1.70%

Gujinggong Liquor              1,609,244,106.16            666,012,511.39                58.61%     16.62%         21.39%        -1.63%

Yellow Crane Tower             1,133,924,525.09            282,351,666.86                75.10%    168.69%       112.94%          6.52%

          Total               12,050,987,816.30           2,511,730,121.70               79.16%     25.06%         17.88%         1.27%

2. Number of Distributors by Geographical Segment

             Segment                           Increase                       Decrease                         Ending number

North China                                                   307                            148                                   1,005

South China                                                   163                             91                                    452

Central China                                                 799                            418                                   2,538

International                                                   4                              0                                         12

                  Total                                     1,273                            657                                   4,007

Proportion of store sales terminal exceeds 10%
□ Applicable √ Not applicable
Online direct sales
√ Applicable □ Not applicable
The major product varieties sold online are Aged Original Liquor Series, and Gujinggong Liquor Series, among others. The main
online sales platforms are Gujing Distillery platform, Tmall, JD.com, and Suning.com.
Any over 30% YoY movements in the selling price of main products contributing over 10% of current total operating revenue
□ Applicable √ Not applicable
Model and contents of purchase
The Company primarily adopts the bidding and strategic cooperation models. It also adopts the base planting model in order to
ensure the quality of some raw materials.
Major suppliers:
Purchase contents

                Purchase contents                          Purchase model                          Amount (RMB’0,000)

                                                 Strategic purchasing                                                        62,982.75
    1       Raw materials
                                                 Tendering purchasing                                                        89,722.26


                                                               ~ 13 ~
                                                                                                                              Annual Report 2021



    2          Packing materials                    Tendering purchasing                                                               215,928.61


                                        Total                                                                                          368,633.62

The proportion of raw materials purchased from cooperations or farmers to total purchase amount exceeds 30%
□ Applicable √ Not applicable
Any over 30% YoY movements in prices of main purchased raw materials
□ Applicable √ Not applicable
Main production model
The Company's existing production model is sales-based production. Specifically, the Logistics Control Center is responsible for
coordinating the implementation of production plans, release of material production plans, and delivery and tracking of products, and
prepares balanced production plans on a quarterly basis according to the product inventory. The logistics distribution system is
coordinated according to the production schedule and inventory with a view to ensuring timely delivery of products.
Commissioned production
□ Applicable √ Not applicable
Breakdown of cost of sales

                                             2021                                                     2020
                                                                                                                                          Change
       Item                                         As % of total cost of                                    As % of total cost of
                       Cost of sales (RMB)                                     Cost of sales (RMB)                                          (%)
                                                            sales                                                    sales

Direct
                           2,321,320,105.47                         70.26%         1,857,491,476.93                           72.85%       24.97%
materials

Direct labor
                             285,205,229.63                         8.63%            261,553,817.02                           10.26%        9.04%
cost

Manufacturing
                             210,507,603.20                         6.37%            201,171,173.25                            7.89%        4.64%
expenses

Fuels                         91,709,296.08                         2.78%                89,428,707.39                         3.51%        2.55%

       Total               2,908,742,234.38                         88.04%         2,409,645,174.59                           94.51%       20.71%

Output and inventory
1. Output, sales volume and inventory of main products for the Reporting Period and respective YoY changes thereof
                                                                                                                                         Unit: ton

                                                                                                                YoY changes
                                                                                              YoY changes                            YoY changes
          Main product                Output            Sales volume         inventory                             of sales
                                                                                                of output                            of inventory
                                                                                                                   volume

Aged Original Liquor Series            50,488.82            43,216.05         13,809.65             26.84%              1.40%             111.26%

Gujinggong Liquor Series               29,066.16            28,269.08           2,875.28            30.19%             24.93%              38.35%

Yellow Crane Tower Liquor
                                        8,350.52             9,183.42            782.04             52.89%           100.52%              -51.57%
Series

Other series                           22,042.26            20,386.15           2,151.69            37.11%             19.21%            334.18%

2. Ending inventory of finished liquor and semi-product
                                                                    ~ 14 ~
                                                                                                                  Annual Report 2021



                        Category                                                        Ending quantity (ton)

Finished liquor                                                                                                             19,618.66

Semi-product (including base liquor)                                                                                       183,264.17

3. Capacity
                                                                                                                             Unit: ton

    Main product              Designed capacity                      Actual capacity                        Capacity in progress

Finished liquor                             115,000                                        109,948                            130,000


III Core Competitiveness Analysis

No significant changes occurred to the Company’s core competitiveness in the Reporting Period.


IV Analysis of Core Businesses

1. Overview

The year 2021 marks the beginning of the "14th Five-Year Plan", and the normalization of the prevention and control of COVID-19.
In the face of complex external environment and all the more fierce competition in the industry, the Company continued to follow the
guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, thoroughly implemented the guiding
principle of the 19th CPC National Congress and the various plenary sessions of the 19th CPC Central Committee, the guiding
principle of the Central Economic Work Conference, and the guiding principle of the provincial and municipal Party congresses,
implemented the new concept for development, centered on the annual objectives of the Company, and adhered to long-term
perspective mindset, the concept of excellence, and the awareness of high-quality products, to successfully complete various
objectives and tasks throughout the year.
For 2021, the Company recorded operating revenue of RMB13.27billion, up 28.93% compared to the prior year; a net profit
attributable to the Company as the parent of RMB2.298billion, increasing 23.90% from the year earlier; earnings per share of
RMB4.45, 20.92% higher than last year; and net cash generated from operating activities of RMB5.254 billion, going up 44.96% on
a year-on-year basis. In the 13th "Hua Zun Cup" Chinese liquor brand valuation, the brand value of "Gujinggong" reached a record
high of RMB200.672 billion.
The overall operating performance of the Company in the Reporting Period
(I) The Company rapidly promoted the “nationwide, sub-high-end” strategy, and reached a new high of brand value
The Company adhered to the nationwide, sub-high-end, and "Gu 20+" development strategy, and continuously intensified "Three
Ones Project". It continuously intensified efforts for brand building, adhered to the brand orientation of "liquor made in China is
favored in the world", and grandly held the activities of the Corporate Day of Gujinggong Liquor in Expo 2020 Dubai. The brand
influence of "liquor made in China is favored in the world" was continuously increased.
(II) Higher efficiency and higher quality
The Company continuously optimized its liquor-making process, comprehensively promoted liquor-making standardized production,
and steadily improved the quality of its original liquor. Quality was improved and efficiency was increased for filling production of
finished liquor products, and the project of automatic filling was steadily promoted.
(III) The Company continuously intensified research and development, and further increased strength for research and
development

                                                             ~ 15 ~
                                                                                                                    Annual Report 2021


The Company carried out experiments and research for liquor-making, further optimized and improved production process. It was
granted three patents of invention, and 55 patents of utility models; it successively and honorably won the "Prize for Outstanding
Contribution in Science and Technology of China's Liquor and Spirits industry", and the "Second Prize of Anhui Science and
Technology Progress Award", which was a breakthrough in provincial major special projects. Once again, the Company won "Anhui
Provincial People's Government Quality Award".
(IV) The Company accelerated promotion of digital construction, and new accomplishment was displayed with integration of
“information technology and industrialization”
The Company intensified efforts to promote and apply systems, comprehensively empowered digital marketing, scenario-based
applications, intelligent parks, and informationized procedures, so as to boost comprehensive management efficacy. In 2021, Gujing's
digital construction achievements were successfully selected into the industry-level platform of industrial Internet of things.
(V) The Company continuously promoted mechanism innovation, and enhanced organizing vitality
The Company continuously optimized and vitalized appraisal mechanism, and delegated more power to grassroots level for making
self-decisions on appraisal. Besides, it realized the match of remuneration with performance in market-oriented pilot units. It
established a normalized exit mechanism of personnel, adhered to the practice that the person ranking the last place in appraisal will
be laid off, and that positions will be rotated for improving multiple skills. Thus, it further stimulated management vitality, and
promoted the cultivation of comprehensive talents.
(VI) The Company maintained the integrity of thoughts to vitalize the driving force of Party building
The Company promoted its high-quality development with high-quality Party-building. Its staff members at various levels solidly
carried out the learning and education of Party history, earnestly implemented the guiding principle of the important "July 1” remarks
made by General Secretary Xi Jinping, and that of the Sixth Plenary Session of the 19th CPC Central Committee, made in-depth
understanding of the decisive significance of the “Two Establishments", enhanced the "Four Consciousnesses", firmly believed in the
"Four Self-confidences", and implemented the "Two Maintenances". The Company carried forward the great spirit of Party-building
and used it into the whole process of corporate operation and management. As a result, work style in the Company was continuously
improved, and ideological and political awareness and the self-consciousness for actions constantly became better.
(VII) In the Reporting Period, the Company was still under pressure and had deficiencies as follows.
(1) Brand driving force was not strong enough, and nationwide promotion was yet to be intensified.
(2) The internal management system of the Company was not excellent, the mechanism was not vigorous, and its internal power was
yet to be stimulated.
(3) The supply chain management was not fully modernized, its service was not sound, and its efficiency was not high.


2. Revenue and Cost Analysis

(1) Breakdown of Operating Revenue

                                                                                                                             Unit: RMB

                                          2021                                          2020

                                                 As % of total                                 As % of total
                                                                                                                      Change (%)
                        Operating revenue      operating revenue      Operating revenue      operating revenue
                                                      (%)                                           (%)

Total                    13,269,826,266.04                   100%      10,292,064,534.41                   100%                   28.93%

By operating division


                                                             ~ 16 ~
                                                                                                                     Annual Report 2021


Manufacturing             13,269,826,266.04              100.00%       10,292,064,534.41                 100.00%                28.93%

By product category

Distilled spirits         12,760,915,418.70                  96.16%    10,074,148,990.37                  97.88%                26.67%

Hotel services                75,349,826.75                  0.57%            63,321,699.07                0.62%                19.00%

Other                        433,561,020.59                  3.27%         154,593,844.97                  1.50%              180.45%

By operating segment

North China                1,070,574,558.72                  8.07%         692,953,553.05                  6.73%                54.49%

Central China             11,311,204,419.40                  85.24%     9,015,585,004.98                  87.60%                25.46%

South China                  877,937,089.22                  6.62%         579,972,219.24                  5.64%                51.38%

Overseas                      10,110,198.70                  0.08%             3,553,757.14                0.03%              184.49%

By sales model

Online                       531,343,420.84                  4.00%         375,683,415.01                  3.65%                41.43%

Offline                   12,738,482,845.20                  96.00%       9,916,381,119.40                96.35%                28.46%


(2) Operating Division, Product Category, Operating Segment or Sales Model Contributing over 10% of
Operating Revenue or Operating Profit

√ Applicable □ Not applicable
                                                                                                                             Unit: RMB

                                                                                  YoY change in                          YoY change in
                                                               Gross profit                          YoY change in
                    Operating revenue    Cost of sales                           operating revenue                        gross profit
                                                                 margin                              cost of sales (%)
                                                                                       (%)                                margin (%)

By operating division

Manufacturing       13,269,826,266.04 3,304,077,011.92                75.10%              28.93%               29.58%             -0.13%

By product category

Distilled spirits   12,760,915,418.70 2,908,742,234.38                77.21%              26.67%               20.71%             1.13%

Hotel services           75,349,826.75    41,333,869.68               45.14%              19.00%               24.38%             -2.38%

Other                   433,561,020.59   354,000,907.86               18.35%             180.45%             231.04%            -12.48%

By operating segment

North China           1,070,574,558.72   269,682,095.69               74.81%              54.49%               42.47%             2.13%

Central China       11,311,204,419.40 2,836,727,062.69                74.92%              25.46%               28.39%             -0.57%

South China             877,937,089.22   194,916,297.30               77.80%              51.38%               30.67%             3.52%

Overseas                 10,110,198.70        2,751,556.24            72.78%             184.49%               39.87%            28.14%

By sales model

Online                  531,343,420.84   121,945,000.89               77.05%              41.43%               32.58%             1.53%

Offline             12,738,482,845.20 3,182,132,011.03                75.02%              28.46%               29.47%             -0.19%

                                                              ~ 17 ~
                                                                                                                          Annual Report 2021


Core business data of the prior year restated according to the changed statistical caliber for the Reporting Period:
□ Applicable √ Not applicable


(3) Whether Revenue from Physical Sales is Higher than Service Revenue

√ Yes □ No

 Operating division                Item                Unit                      2021                    2020                Change (%)

                        Sales volume                   Ton                        101,054.70                 86,930.68               16.25%
Distilled spirits
                        Output                         Ton                        109,947.76                 83,668.45               31.41%
brewage
                        Inventory                      Ton                         19,618.66                 10,725.60               82.91%

Any over 30% YoY movements in the data above and why:
√ Applicable □ Not applicable
Output increased 31.41% compared to 2020, primarily driven by the increased inventories prepared for the Spring Festival.
Inventory increased 82.91% compared to 2020, primarily driven by the increased inventories prepared for the Spring Festival.


(4) Execution Progress of Major Signed Sales and Purchase Contracts in the Reporting Period

□ Applicable √ Not applicable


(5) Breakdown of Cost of Sales

By operating division
                                                                                                                                 Unit: RMB

                                                           2021                                     2020
    Operating
                            Item                             As % of total cost                         As % of total cost    Change (%)
       division                            Cost of sales                            Cost of sales
                                                                  of sales (%)                             of sales (%)

Food
                    Direct materials      2,321,320,105.47               70.26% 1,857,491,476.93                  72.85%             24.97%
manufacturing

Food
                    Direct labor cost      285,205,229.63                 8.63%     261,553,817.02                10.26%              9.04%
manufacturing

Food                Manufacturing
                                           210,507,603.20                 6.37%     201,171,173.25                 7.89%              4.64%
manufacturing       expenses

Food
                    Fuels                   91,709,296.08                 2.78%         89,428,707.39              3.51%              2.55%
manufacturing


(6) Changes in the Scope of Consolidated Financial Statements for the Reporting Period

√Yes □ No
Compared with the prior year, the following subsidiaries were added to the consolidated financial statements of the Reporting Period:
Anhui Mingguang Distillery Co., Ltd., Renhuai Maotai Town Zhencang Winery Industry Co., Ltd., Mingguang Tiancheng Ming


                                                                  ~ 18 ~
                                                                                                           Annual Report 2021


Wine Sales Co., Ltd., Fengyang Xiaogang Village Ming Wine Distillery Co., Ltd., Anhui Jiuhao China Railway Construction
Engineering Co., Ltd., and Anhui Jiuan Mechanical Electrical Equipment Co., Ltd. Meanwhile, Bozhou Gujing Waste Recycling Co.,
Ltd. has been de-registered during the Reporting Period.


(7) Major Changes to the Business Scope or Product or Service Range in the Reporting Period

□ Applicable √ Not applicable


(8) Major Customers and Suppliers

Major customers:

Total sales to top five customers (RMB)                                                                       1,845,323,034.24

Total sales to top five customers as % of total sales of the
                                                                                                                          13.91%
Reporting Period (%)

Total sales to related parties among top five customers as % of
                                                                                                                          0.00%
total sales of the Reporting Period (%)

Information about top five customers:

                                                           Sales revenue contributed for
   No.                        Customer                                                     As % of total sales revenue (%)
                                                           the Reporting Period (RMB)

    1      Distributor A                                                 658,146,119.50                                   4.96%

    2      Distributor B                                                 496,463,500.64                                   3.74%

    3      Distributor C                                                 319,902,346.49                                   2.41%

    4      Distributor D                                                 194,693,089.35                                   1.47%

    5      Distributor E                                                 176,117,978.26                                   1.33%

  Total                             --                                  1,845,323,034.24                                13.91%

Other information about major customers:
□ Applicable √ Not applicable
Major suppliers:

Total purchases from top five suppliers (RMB)                                                                 1,089,038,984.77

Total purchases from top five suppliers as % of total purchases
                                                                                                                          29.55%
of the Reporting Period (%)

Total purchases from related parties among top five suppliers
                                                                                                                          0.00%
as % of total purchases of the Reporting Period (%)

Information about top five suppliers:

                                                            Purchase in the Reporting
    No.                           Supplier                                                  As % of total purchases (%)
                                                                  Period (RMB)

     1       Supplier A                                                  297,710,603.31                                   8.08%

     2       Supplier B                                                  290,714,378.92                                   7.89%


                                                            ~ 19 ~
                                                                                                                            Annual Report 2021


       3          Supplier C                                                       215,756,887.60                                       5.85%

       4          Supplier D                                                       161,148,582.38                                       4.37%

       5          Supplier E                                                       123,708,532.56                                       3.36%

   Total                                 --                                       1,089,038,984.77                                     29.55%

Other information about major suppliers:
□ Applicable √ Not applicable


3. Expense

                                                                                                                                   Unit: RMB

                                          2021                    2020               Change (%)          Reason for any significant change

Selling expense                      4,008,075,483.08       3,120,977,163.32                 28.42%

Administrative expense               1,022,181,419.74           802,201,580.48               27.42%

Finance costs                         -204,055,657.06           -260,836,456.07              21.77%

R&D expense                              51,449,475.36           40,590,136.46               26.75%

The Company is subject to the Guideline No. 14 of the Shenzhen Stock Exchange on Information Disclosure by Industry—for Listed
Companies Engaging in Food and Liquor & Wine Production.
Breakdown of selling expense:
                                                                                                                                   Unit: RMB

           Item                   2021                   2020            Change (%)                             Reason

Employment
                               863,583,183.40       723,874,977.05           19.30%
benefits
Travel fees                    161,091,812.25       133,511,390.56           20.66%
Advertisement
                               900,546,437.33       840,407,171.96            7.16%
fees
Comprehensive
                          1,268,396,513.56          755,941,972.88           67.79%       More sales promotion activities
promotion costs
Service fees                   705,368,563.00       578,401,082.92           21.95%

Others                         109,088,973.54        88,840,567.95           22.79%

       Total              4,008,075,483.08        3,120,977,163.32           28.42%

Details about advertisement

             No.                                 Main way                                            Amount (RMB’0,000)

              1                                    TV                                                                                41,466.82

              2                                   Offline                                                                            36,967.85

              3                                   Online                                                                             11,619.97

                                     Total                                                                                           90,054.64




                                                                    ~ 20 ~
                                                                                                                          Annual Report 2021


4. R&D Investments

√ Applicable □ Not applicable

  Names of main                                                                                               Expected impact on the future
                             Project objectives           Project progress       Objectives to be achieved
  R&D projects                                                                                                development of the Company

                    Aiming at different types
                                                                                                              The experimental research on
                    of raw materials, the
                                                                                                              liquor making with different
                    process and experiments                                  The process of liquor-making
Research of process                                                                                           types of original grain will
                    of liquor making are                                     with different types of
and experiments on                            Promoted                   and                                  play an important role in
                    conducted to provide the                                 original grain is explored to
original grain for                            applied.                                                        optimized       selection  of
                    Company with         data                                expand the scope of using
liquor distillation                                                                                           original       grain,     and
                    support for the selection                                original grain.
                                                                                                              improvement of quality of
                    of original grain for
                                                                                                              original liquor.
                    liquor-making.

                         The           experiments
                         systematically optimize        The process and
                                                                                Theoretically and practically,
Research          and    the production process of      experiments    have
                                                                               the various parameters of the The quality of Gujinggong
application         of   making strongly fragrant       been carried out for
                                                                               strongly fragrant liquor are liquor will be steadily
process           and    liquor,    improve       the   many times, and part
                                                                               revealed to be scientific and improved to maintain the
experiments        for   sensory      quality      of   of the experimental
                                                                               reasonable,      and       the continuously        improving
making       strongly    Gujinggong           liquor,   achievements have
                                                                               self-consciousness of process quality of the brand.
fragrant liquor          making the product No. 1       been promoted and
                                                                               performance is improved.
                         in China in terms of           applied.
                         strongly fragrant liquor.

                                                                                                              The     exploring    of    the
                                                                                                              production      process     of
                         The process of producing
                                                                             The high-quality flavoring       compound fragrant liquor will
Research on and          compound fragrant liquor
                                                                             liquor with unique flavor is     enable the production of the
application of the       is explored to prepare for
                                                    Promoted             and produced to prepare for the      high-quality flavoring liquor
process of making        the development of new
                                                    applied.                 development of new products      with unique flavor, further
compound fragrant        products and the design
                                                                             and the design of liquor body    enrich the product system of
liquor                   of liquor body of the
                                                                             of the Company.                  Gujinggong      Liquor,   and
                         Company.
                                                                                                              strengthen                  its
                                                                                                              competitiveness.

                         The production process
                                                                             The parameters of the Standardized documents for
                         of high-temperature Qu
Optimization and                                                             production      process      of operation and process will be
                         liquor is standardized to
regularization of the                                                        high-temperature Qu liquor provided for the Company to
                         form standard operation Promoted                and
production process                                                           are determined, the quality of improve       the     production
                         documents and further applied.
of high-temperature                                                          the liquor is improved, and quality of high-temperature
                         improve the quality of
Qu liquor                                                                    the richness of original liquor Qu liquor, and to stabilize the
                         high-temperature      Qu
                                                                             is increased.                   quality of the liquor.
                         liquor.

Research         with
optimized
                         The taste and quality of
experiments on the                                 Part      of    the                                        The taste of liquor body is
                         original     liquor    is                       The quality of the original
method              of                             achievements of the                                        enriched to provide the
                         improved to enhance the                       liquor on the high level of a
collecting     scums                               project have been                                          Company with an exploration
                         overall quality of liquor                     liquor pit is improved
floated in liquid in a                             promoted.                                                  on optimizing process.
                         samples.
micro-recirculation
way


Research on the          Different means to add                                                               The technical and operational
                                                                             The impact on the quality of
means to add syrup       syrup is comprehensively Promoted               and original liquor caused by        foundation will be laid for the
to strongly fragrant     assessed    to   provide applied.                                                    improvement of quality of
                                                                             different means to add syrup
liquor                   technical support for the                                                            original liquor.
                                                                             is judged to choose relatively
                         Company regarding the
                                                                   ~ 21 ~
                                                                                                          Annual Report 2021


                       usage of adding syrup to                       better syrup adding way.
                       liquor-making process.

Details about R&D personnel:

                                                  2021                         2020                     Change (%)

Number of R&D personnel                                        978                          1,014                      -3.35%
R&D personnel as % of total
                                                             9.10%                        10.21%                       -1.11%
employees
Educational background of
                                                  ——                         ——                       ——
R&D personnel

Bachelor’s degree                                             211                               228                   -7.46%

Master’s degree                                                41                                43                   -4.65%

Other                                                          726                               743                   -2.29%

Age structure of R&D
                                                  ——                         ——                       ——
personnel

Below 30                                                       164                               168                   -2.38%

30~40                                                          321                               391                  -17.90%

Over 40                                                        493                               455                   8.35%

Details about R&D investments:

                                                  2021                         2020                     Change (%)

R&D investments (RMB)                               300,602,964.92                300,404,769.73                       0.07%
R&D investments as % of
                                                             2.27%                         2.92%                       -0.65%
operating revenue
Capitalized R&D investments
                                                               0.00                              0.00                  0.00%
(RMB)
Capitalized R&D investments
                                                             0.00%                         0.00%                       0.00%
as % of total R&D investments
Reasons for any significant change to the composition of R&D personnel and the impact:
□ Applicable √ Not applicable
Reasons for any significant YoY change in the percentage of R&D investments in operating revenue:
□ Applicable √ Not applicable
Reasons for any sharp variation in the percentage of capitalized R&D investments and rationale:
□ Applicable √ Not applicable


5. Cash Flows

                                                                                                                     Unit: RMB

               Item                               2021                         2020                     Change (%)

Subtotal of cash generated from
                                                  16,698,641,516.83            13,919,228,342.47                      19.97%
operating activities
Subtotal of cash used in operating
                                                  11,444,333,389.04            10,294,684,816.94                      11.17%
activities


                                                             ~ 22 ~
                                                                                                                   Annual Report 2021


Net cash generated from/used in
                                                   5,254,308,127.79                3,624,543,525.53                           44.96%
operating activities

Subtotal of cash generated from
                                                    721,528,559.15                      372,197,845.63                        93.86%
investing activities
Subtotal of cash used in investing
                                                   9,582,979,679.33                     603,414,750.96                     1,488.12%
activities

Net cash generated from/used in
                                                -8,861,451,120.18                   -231,216,905.33                       -3,732.53%
investing activities

Subtotal of cash generated from
                                                   5,165,337,169.81                     130,665,500.00                     3,853.10%
financing activities
Subtotal of cash used in financing
                                                   1,137,547,692.56                     831,838,344.55                        36.75%
activities

Net cash generated from/used in
                                                   4,027,789,477.25                 -701,172,844.55                          674.44%
financing activities

Net increase in cash and cash
                                                    420,646,484.86                 2,692,153,775.65                           -84.38%
equivalents

Explanation of why any of the data above varies significantly:
√ Applicable □ Not applicable
(1) Net cash generated from operating activities stood at RMB5,254,308,127.79 in the Reporting Period, up 44.96% year-on-year,
primarily driven by the increased sales revenue.
(2) Subtotal of cash used in investing activities stood at RMB9,582,979,679.33 in the Reporting Period, up 1,488.12% year-on-year,
the main reason is the impact of purchasing financial products.
(3) Net cash generated from financing activities stood at RMB4,027,789,477.25 in the Reporting Period, up 674.44% year-on-year,
primarily driven by the arrival of funds raised through a private placement.
(4) Net increase in cash and cash equivalents stood at RMB420,646,484.86 in the Reporting Period, down 84.38% year-on-year, the
main reason is the impact of purchasing financial products.
Reasons for any big difference between the net operating cash flow and the net profit for this Reporting Period
□ Applicable √ Not applicable


V Analysis of Non-Core Businesses

□ Applicable √ Not applicable


VI Analysis of Assets and Liabilities

1. Significant Changes in Asset Composition

                                                                                                                             Unit: RMB

                          31 December 2021                    31 December 2020                Change in
                                                                                                           Reason for any significant
                                       As % of total                      As % of total       percentage
                       Amount                              Amount                                                   change
                                          assets                               assets            (%)


                                                              ~ 23 ~
                                                                                                                       Annual Report 2021


Monetary assets 11,924,922,771.76               46.92% 5,971,212,569.66              39.18%         7.74%

Accounts
                       89,005,804.17             0.35%      67,933,735.91             0.45%         -0.10%
receivable

Inventories         4,663,456,672.30            18.35% 3,416,880,808.96              22.42%         -4.07%

Investment
                        4,075,801.06             0.02%       4,392,943.54             0.03%         -0.01%
property

Long-term
equity                  5,312,600.78             0.02%       4,915,575.83             0.03%         -0.01%
investments

Fixed assets        1,984,063,975.87             7.81% 1,797,789,271.62              11.80%         -3.99%

Construction in
                    1,064,134,904.21             4.19%     279,169,201.60             1.83%         2.36%
progress

Right-of-use
                       43,927,228.97             0.17%      57,402,412.53             0.38%         -0.21%
assets

Short-term
                       30,035,138.89             0.12%      70,665,500.00             0.46%         -0.34%
borrowings

Contract
                    1,825,447,705.85             7.18% 1,206,573,886.26               7.92%         -0.74%
liabilities

Long-term
                     172,356,255.83              0.68%      60,117,638.89             0.39%         0.29%
borrowings

Lease liabilities      28,107,223.18             0.11%      53,226,677.43             0.35%         -0.24%

Indicate whether overseas account for a larger proportion in the total assets.
□ Applicable √ Not applicable


2. Assets and Liabilities at Fair Value

√ Applicable □ Not applicable
                                                                                                                                Unit: RMB

                                    Gain/loss on
                                                    Cumulative Impairment
                                       fair-value
                                                     fair-value    allowance                        Sold in the
                      Beginning        changes in                                Purchased in the                  Other
         Item                                         changes       for the                         Reporting               Ending amount
                       amount             the                                    Reporting Period                 changes
                                                     charged to    Reporting                          Period
                                       Reporting
                                                         equity     Period
                                        Period

Financial assets




                                                                  ~ 24 ~
                                                                                                                     Annual Report 2021


1.Held-for-trading
financial assets
(excluding               203,877,915.51 7,225,961.17      0.00              2,450,000,000.00                           2,661,103,876.68
derivative
financial assets)

2. Investment in
other equity                       0.00        0.00 693,720.70                 53,848,697.80                              54,542,418.50
instruments

Subtotal            of
                         203,877,915.51 7,225,961.17 693,720.70             2,503,848,697.80                           2,715,646,295.18
financial assets

Total of the above 203,877,915.51 7,225,961.17 693,720.70                   2,503,848,697.80                           2,715,646,295.18

Financial
                                   0.00         0.00       0.00                          0.00                                       0.00
liabilities

Significant changes to the measurement attributes of the major assets in the Reporting Period:
□ Yes √ No


3. Restricted Asset Rights as at the Period-End


                         Item                          Ending carrying value (RMB)                    Reason for restriction

                                                                                            Structured deposits and time deposits
                                                                                            that cannot be withdrawn in advance and
Monetary assets                                                          5,867,372,593.16
                                                                                            time deposits that are pledged for issuing
                                                                                            bank acceptance drafts

Fixed assets                                                                 4,225,738.45 Mortgage secured borrowing.

Intangible assets                                                            2,780,644.18 Mortgage secured borrowing.

                         Total                                           5,874,378,975.79                       --


VII Investments Made

1. Total Investment Amount

□ Applicable √ Not applicable




                                                              ~ 25 ~
                                                                                                                                                                                Annual Report 2021


2. Major Equity Investments Made in the Reporting Period

□ Applicable √ Not applicable


3. Major Non-Equity Investments Ongoing in the Reporting Period

√ Applicable □ Not applicable
                                                                                                                                                                                      Unit: RMB

                                                                                                                                                       Reason for
                                                                                                                                        Accumulative
                                                               Input amount    Accumulative                                                            not reaching
                                  Fixed assets                                                                             Estimated      realized
                    Way of                         Industry       in the        actual input       Capital                                             the schedule    Disclosure     Disclosure
     Item                         investment                                                                    Progress   return on     revenues as
                  investment                       involved     Reporting     amount as of the    resources                                                  and      date (if any) index (if any)
                                     or not                                                                                investment      of the
                                                                  Period        period-end                                                             anticipated
                                                                                                                                         period-end
                                                                                                                                                         income

                                                                                                                                                                                    For details,
                                                                                                                                                                                    please refer to
                                                                                                                                                                                    the
                                                                                                                                                                                    Announcement
                                                                                                                                                                                    on Investment
The smart
                                                                                                                                                                                    in the Smart
technology
                                                                                                 Self-owned                                                                         Technology
transformation                                   Liquor                                                                                                               3 March
                 Self-built    Yes                            841,790,505.09 1,001,582,020.44 funds and            11.22% N/A           N/A            N/A                          Transformation
project for                                      production                                                                                                           2020
                                                                                                 raised funds                                                                       Project for
liquor
                                                                                                                                                                                    Liquor
production
                                                                                                                                                                                    Production
                                                                                                                                                                                    disclosed by
                                                                                                                                                                                    the Company
                                                                                                                                                                                    on the website
                                                                                                                                                                                    of Cninfo

                                                                                               ~ 26 ~
                                                                                                                                                                               Annual Report 2021


                                                                                                                                                                                   dated 3 March
                                                                                                                                                                                   2020.

Total                      --                --           --        841,790,505.09 1,001,582,020.44    --          --         N/A          N/A            --             --                --


4. Financial Investments

√ Applicable □ Not applicable
                                                                                                                                                                                     Unit: RMB
                                                                                        Gain/loss
                                                                                         on fair Cumulative
 Variety                                                                                                     Purchased in
             Code of        Name of             Initial     Accounting    Beginning      value    fair value              Sold in the Gain/loss in     Ending                      Source of
                                                                                                                 the
   of                                                       measurement                changes in changes                 Reporting the Reporting                 Accounting title
             securities     securities      investment cost                                                   Reporting                                                              funds
                                                              model     carrying value    the     charged to                Period      Period     carrying value
securities                                                                                                      Period
                                                                                       Reporting    equity
                                                                                         Period
                          DAPU Asset                         Fair value                                                                                              Held-for-trading Self-owned
Fund                                        200,000,000.00                203,877,915.51 -339,271.15                                  14,393,316.21 203,538,644.36
                          Management                         method                                                                                                  financial assets funds

Other ending holding securities
                                                                                                                                                                              --                --
investments

Total                                       200,000,000.00        --      203,877,915.51 -339,271.15                                  14,393,316.21 203,538,644.36            --                --

Disclosure         date         of    the
announcement about the board’s The Company held the 8th Meeting of the 9th Board of Directors on 27 August 2021, reviewed and approved the proposal on carrying out securities investment
consent      for     the        securities business.
investment

Disclosure         date         of    the
announcement about the general
                                            N/A
meeting’s      consent         for   the
securities investment (if any)




                                                                                                 ~ 27 ~
                                                                                                                                                                                 Annual Report 2021


(2) Investments in Derivative Financial Instruments

√ Applicable □ Not applicable
                                                                                                                                                                                  Unit: RMB’0,000

                                                                                                                                                                             Proportion
                                                                                                                                                                             of closing
                                                                                                                                                                                            Actual
                                                                                                                     Purchased in                                            investment
              Relationship                                        Initial                               Beginning                   Sold in the   Impairment     Ending                   gain/loss in
                              Connected            Type of                                                               the                                                 amount in
  Operator       with the                                      investment Starting date Ending date investment                      Reporting     provision (if investment                    the
                              transaction         derivative                                                          Reporting                                                 the
                Company                                          amount                                  amount                       Period         any)        amount                   Reporting
                                                                                                                       Period                                                Company’s
                                                                                                                                                                                            Period
                                                                                                                                                                             ending net
                                                                                                                                                                               assets

Reverse
                                             Reverse
repurchase                                                                     27 January   5 January
              Naught         No              repurchase of              0.00                                  0.00     60,970.20      53,349.70                   7,620.50        0.44%         67.35
of national                                                                    2021         2022
                                             national debt
debt

Total                                                                   0.00          --           --         0.00     60,970.20      53,349.70                   7,620.50        0.44%         67.35

Capital source for derivative investment                       Company’s own funds

Lawsuits involved (if applicable)                              N/A

Disclosure date of board announcement approving
                                                               30 August 2013
derivative investment (if any)

Disclosure     date     of       shareholders’      meeting
announcement approving derivative investment (if
any)

Analysis of risks and control measures associated with
derivative investments held in the Reporting Period The Company had controlled the relevant risks strictly according to the Derivatives Investment Management System.
(including but not limited to market risk, liquidity risk,

                                                                                                   ~ 28 ~
                                                                                                                                                                                     Annual Report 2021


credit risk, operational risk, legal risk, etc.)

Changes in market prices or fair value of derivative
investments during the Reporting Period (fair value
                                                                Naught
analysis should include measurement method and
related assumptions and parameters)

Significant changes in accounting policies and specific
accounting      principles    adopted      for     derivative
                                                                Naught
investments in the Reporting Period compared to
previous reporting period

                                                                Based on the sustainable development of the main business and the sufficient free idle money, the Company increased the profits through
                                                                investing in the reasonable financial derivative instruments, which was in favor of improving the service efficiency of the idle funds; in
                                                                order to reduce the investment risks of the financial derivative instruments, the Company had set up corresponding supervision
Opinion of independent directors on derivative mechanism for the financial derivative instrument business and formulated reasonable accounting policy as well as specific principles of
investments and risk control                                    financial accounting; the derivative Investment business developed separately took national debts as mortgage object, which was met
                                                                with the cautious and steady risks management principle and the interest of the Company and shareholders. Therefore, agreed the
                                                                Company to develop the derivative Investment business of reverse repurchase of national debt not more than the limit of RMB0.3
                                                                billion.


5. Use of Funds Raised

√ Applicable □ Not applicable


(1) Overall Usage of Funds Raised

√ Applicable □ Not applicable
                                                                                                                                                                                         Unit: RMB’0,000

                                          Total funds     Total funds used Accumulative         Total funds with Accumulative        Proportion of     Total unused     The usage and        Amount of
      Year          Way of raising
                                             raised         in the Current        fund used      usage changed       funds with      accumulative          funds        destination of     funds raised idle

                                                                                                 ~ 29 ~
                                                                                                                                                                                         Annual Report 2021


                                                            Period                                                usage changed       funds with                            unused funds        for over two
                                                                                                                                     usage changed                                                 years

                                                                                                                                                                          Deposited in
                  Private                                                                                                                                                 fund raising
2021              placement of             495,434.21         43,076.74         43,076.74                 0.00                0.00             0.00%         452,357.47 account and                        0.00
                  stocks                                                                                                                                                  cash
                                                                                                                                                                          management

Total                       --             495,434.21         43,076.74         43,076.74                 0.00                0.00             0.00%         452,357.47           --                       0.00

                                                                             Explanation of overall usage of funds raised

Through this issuance, the Company raised total proceeds of RMB5,000,000,000.00. After deducting the expenses related to the issuance of RMB45,657,925.15 (excluding VAT), the actual net
proceeds raised were RMB4,954,342,074.85, the actual amount of funds received is RMB 4,957,547,169.81.
During 2021, the Company used raised funds of RMB430.7674 million in total, paid issuance costs of RMB1.2514 million, received income revenue of RMB16.6838 million in the raised funds
account (deducting the issuance costs and used raised funds), and used temporarily idle raised funds to purchase structured deposits of RMB4,420 million. At 31 December 2021, the balance of t
he raised funds account stood at RMB4,542.2122 million.


(2) Commitment Projects of Fund Raised

√ Applicable □ Not applicable
                                                                                                                                                                                           Unit: RMB’0,000

                                                                                                                                                                                                   Whether
                                                                                                            Accumulative        Investment
                                    Changed or                                               Investment                                            Date of        Realized         Whether         occurred
                                                        Committed         Investment                             investment     schedule as
 Committed investment project      not (including                                           amount in the                                        reaching       income in the      reached        significant
                                                        investment        amount after                       amount as of            the
and super raise fund arrangement         partial                                             Reporting                                         intended use      Reporting        anticipated     changes in
                                                         amount        adjustment (1)                       the period-end      period-end
                                     changes)                                                  Period                                          of the project      Period          income          project
                                                                                                                    (2)         (3)=(2)/(1)
                                                                                                                                                                                                  feasibility

Committed investment project

The smart technology               Not                    495,434.21         495,434.21         43,076.74           43,076.74          8.69% 31 December                         N/A            Not

                                                                                              ~ 30 ~
                                                                                                                        Annual Report 2021


transformation project for liquor                                                                      2024
production

Subtotal of committed investment
                                          --   495,434.21   495,434.21    43,076.74   43,076.74   --          --   --             --
project

Total                                     --   495,434.21   495,434.21    43,076.74   43,076.74   --          --   --             --

Condition and reason for not
reaching the schedule and
                                    N/A
anticipated income (by specific
items)

Notes of condition of significant
changes occurred in project         N/A
feasibility

Amount, usage and schedule of
                                    N/A
super raise fund

Changes in implementation
                                    N/A
address of investment project

Adjustment of implementation
                                    N/A
mode of investment project

Advance investments in projects
financed with raised funds and
swaps of such advance               N/A
investments with subsequent
raised funds

Idle fund supplementing the
                                    N/A
current capital temporarily


                                                                         ~ 31 ~
                                                                                                                                                                          Annual Report 2021


Amount of surplus in project
                                    N/A
implementation and the reasons

Usage and destination of unused     As of December 31, 2021, the unused raised funds and interest were stored in the special account, the idle raised funds were used for cash management, and
funds                               the purchase of financial products had not been redeemed by 44.20 million yuan.

Problems incurred in fund using
                                    N/A
and disclosure or other condition


(3) Changes in Items of Funds Raised

□ Applicable √ Not applicable
No such cases in the Reporting Period.


VIII Sale of Major Assets and Equity Interests

1. Sale of Major Assets

□ Applicable √ Not applicable
No such cases in the Reporting Period.


2. Sale of Major Equity Interests

□ Applicable √ Not applicable


IX Principal Subsidiaries and Joint Stock Companies

√ Applicable □ Not applicable
Principal subsidiaries and joint stock companies with an over 10% effect on the consolidated net profit:
                                                                                                                                                                                 Unit: RMB

                                                                                          ~ 32 ~
                                                                                                                                                                                         Annual Report 2021



                         Relationship with the      Main business
  Company name                                            scope              Registered capital       Total assets          Net assets       Operating revenues      Operating profit        Net profit
                               Company

                                                 Wholesales            of
                                                 distilled        spirit,
Bozhou       Gujing
                         Subsidiary              construction                    84,864,497.89      4,809,706,779.15        127,377,019.76    11,364,553,622.12         840,739,673.81       625,815,758.69
Sales Co., Ltd
                                                 materials, feeds and
                                                 assistant materials

                                                 Manufacture and
Anhui Longrui
                         Subsidiary              sale of glass                   86,660,268.98        427,785,997.39        357,183,946.32          321,096,222.99       46,908,148.94        40,890,221.16
Glass Co., Ltd
                                                 products

Yellow Crane Tower                               Production and
Wine Industry Co., Subsidiary                    sales of distilled              400,000,000.00     1,735,601,365.26        712,095,045.65      1,458,982,962.92        221,500,064.26       171,059,692.48
Ltd                                              spirit

Shanghai     Gujing
Jinhao           Hotel                           Hotel management
                         Subsidiary                                              54,000,000.00        194,348,147.99         77,011,449.84           67,349,141.24       21,002,505.46        19,134,556.66
Management        Co.,                           and house lease
Ltd.

Subsidiaries obtained or disposed in the Reporting Period:
√Applicable □Not applicable

                                                                            Acquisition and disposal of subsidiaries during the reporting           The impact on the overall production operation and
                    The name of the company
                                                                                                       period                                                         performance

                                                                                                                                            Strengthen the development of the Company’s main business
                                                                                                                                            of liquor, accelerate the national layout of the product market,
Anhui Mingguang Distillery Co., Ltd.                                   Business combination not under the same control
                                                                                                                                            and enhance the Company’s brand influence and business
                                                                                                                                            scale

Mingguang Tiancheng Ming Wine Sales Co., Ltd.                          Business combination not under the same control                      Strengthen the development of the Company’s main business


                                                                                                   ~ 33 ~
                                                                                                                                                             Annual Report 2021


                                                                                                                  of liquor, accelerate the national layout of the product market,
                                                                                                                  and enhance the Company’s brand influence and business
                                                                                                                  scale

                                                                                                                  Strengthen the development of the Company’s main business
                                                                                                                  of liquor, accelerate the national layout of the product market,
Fengyang Xiaogang Village Ming Wine Distillery Co., Ltd.        Business combination not under the same control
                                                                                                                  and enhance the Company’s brand influence and business
                                                                                                                  scale

                                                                                                                  Strengthen the development of the Company’s main business
                                                                                                                  of liquor, accelerate the national layout of the product market,
Renhuai Maotai Town Zhencang Winery Industry Co., Ltd.          Business combination not under the same control
                                                                                                                  and enhance the Company’s brand influence and business
                                                                                                                  scale

                                                                                                                  Optimize the internal management structure and enhance the
Anhui Jiuan Mechanical Electrical Equipment Co., Ltd.           Set up
                                                                                                                  internal driving force.

Anhui Jiuhao China Railway Construction Engineering Co.,                                                          Optimize the internal management structure and enhance the
                                                                Set up
Ltd.                                                                                                              internal driving force.

Bozhou Gujing Waste Recycling Co., Ltd.                         Cancel

Other information on principal subsidiaries and joint stock companies:
N/A


X Structured Bodies Controlled by the Company

□ Applicable √ Not applicable




                                                                                        ~ 34 ~
                                                                                                                  Annual Report 2021


XI Prospects

(I) Development Prospect of the Industry the Company is in
1. The tightening regulation has promoted the sound development of the liquor and spirits industry
Since the National Development and Reform Commission issued the Catalogue for Guiding Industry Restructuring in 2019, "the
product line of liquor and spirits" has been deleted from "restricted" items. This has released the "trammels" besetting the
development of this industry for many years, and has brought a period of rapid development for the liquor and spirits industry. In
2021, the regulatory authorities intensified the regulation on the liquor and spirits industry. The government and relevant departments
successively issued a number of policies, and the State Administration for Market Regulation regulated and guided the development
of the industry through multiple channels, all of which have promoted the sound development of the liquor and spirits industry.
2. The exacerbating differentiation has further increased the brand concentration among liquor enterprises
China's liquor and spirits industry is moving faster to transform from an expanding market to a competitive market, and as a result,
the strong have become stronger and the weak have become weaker. The "Matthew Effect" has become intensified. The market
shares of leading liquor enterprises above the designated size have kept rising, but the overall number of liquor enterprises has kept
declining. Meanwhile, the consumption philosophies of rational drinking and healthy drinking have been gradually deeply rooted in
people's hearts, and when making choices of consuming liquor and spirits, consumers have gradually strengthened their brand
awareness.
3. Channel transformation, particularly digital transformation, has enabled liquor enterprises to enhance their core
competitiveness
Due to the pandemic, channel transformation has been intensified, digital trend has emerged, the online and offline closed-loop flow
has offered all-channel shopping experience to consumers, and the penetration rate in such digital channels as E-commerce, O2O,
live streaming, and community group purchasing has been increased. Thus, the concentration in the liquor and spirits industry has
been further strengthened, and the enterprises, in order to enhance their core competitiveness, have relied on digital platforms to
refine the management of supply side, internal procedures of enterprises, and customer operations in the whole process of operations,
which enables the enterprises to reduce their operation costs and improve their operation efficiency.
4. The alternating pattern of the consumer groups of the liquor and spirits industry is being transformed
Young consumer groups constitute the future main consumption force of the liquor and spirits industry, and the future new growth
points in the sector of China's liquor and spirits. In consideration of the alternation toward younger consumers, in which the
consumption of liquor and spirits is being more rapidly transformed toward the new generation of consumers, many renowned liquor
enterprises have made their overall arrangements for their brand promotion and the packing and appearance of products with the
symbols and expression of a younger and more fashionable orientation. In such manners as online marketing and offline branding,
brand promotion has redefined the cognition of younger consumption groups to the brands and products of liquor and spirits, which
has realized the market education to young consumer groups through brand promotion of liquor and spirits.
(II) Development Strategy of the Company
1. Firmly boost "Strategy 5.0, Five-Star Operation” Strategy
Comprehensively fulfill Strategy 5.0 and have the "User-Centered" thought fully and deeply implemented in the Company. Solidly
create the "Five-Star Operation", enhance competitive force, improve quality and efficiency, optimize services and promote healthy
and efficient operation of the enterprise.
2. Firmly boost reform and innovation strategy
Deeply boost marketing innovation, technological innovation and mechanism innovation and generate endogenous power of the
enterprise.
3. Firmly create “Talent Highland” strategy
Intensify talent recruitment and attraction and establish flexible talent attraction and wisdom experience borrowing mechanism.
Innovate talent training mode and promote independent cultivation & development and absorption & attraction simultaneously.

                                                            ~ 35 ~
                                                                                                                    Annual Report 2021


(III) Operating Revenue Plan of the Company in 2022
In 2022, the Company plans to achieve the operating revenue of RMB15.3 billion, rising 15.30% compared with that of last year; and
achieve a total profit of RMB3.55 billion, rising 11.94% compared with that of last year.
(IV) Operating Risk of the Company
1. The adverse effect of the systematic risk in the macro-economic environment on the development of the industry and the
Company.
2. The strengthened concentration, intensified polarization, and continuously escalated competition in the liquor and spirits industry
3. The normalization of the COVID-19 pandemic, and the more complex, severe and uncertain external environment.
(V) Operating Measures
1. Marketing
The Company made all efforts to push forward market and brand building, optimized the supply of resources, intensified the
dissemination via Internet and new media, upgraded its brand IP, and increased the influence of Gujinggong brand. It was determined
to carry out unswervingly its "nationwide, sub-high-end, and Gu 20+" strategy, and to push forward the re-optimization of its product
structure and market structure.
2. Product Management
The Company strictly kept carrying out its production processes, continuously optimized its production operations, further explored
the improvement of its key processes, and constantly improved the quality of its original liquor. It established a sound management
system standard for planting of grain bases, prevented and controlled bio-safety risks, carried out an exploratory reformation for
management mode of quality check, and intensified the control and supervision on production processes, so that the quality of
original grain can be controlled well from the source.
3. Engineering Construction
The Company accelerated the construction of the smart technology transformation project (smart park) for liquor production, and
adhered to high standards and high quality to promote the construction of smart park projects.
4. Informatization Construction
The Company intensified digital construction. Aided by modern technological means, the Company centered on smart manufacturing
and green liquor making, set up an Internet platform for the liquor and spirits industry, and built a lighthouse factory of Gujing "5G+
industrial Internet", to comprehensively promote the digital transformation of Gujing. It proactively pushed forward big data building,
strengthened business data analysis, promoted procedure optimization, and improved the Company's operation efficiency and
management standard.
5. Safety and Environmental Protection
The Company comprehensively consolidated safety responsibility system, and continuously made great efforts to investigate and
control hazards, identify dangerous sources, and conduct safety education; it intensified fire-fighting management by specifying the
spot checks of facilities, monitoring precautions, and fire control drills; it broadened thinking of safety work to build a steady safety
defense line with the aid of the information system of safety prevention. Under the premise of ensuring up-to-standard pollutant
discharge, and compliant waste disposal, the Company explored ways to comprehensively utilize the by-product of liquor-making, to
improve energy service efficiency, increase the proportion of new energy, further conserve energy and reduce carbon emission, and
pursue green development.
6. Internal Management
The Company improved its incentive mechanism, and continuously promoted "separate legal entity system", and "creating platforms
for innovation and entrepreneurship". It delegated powers to lower levels to stimulate vitality, and balanced powers with
responsibilities, thus gradually realizing market-oriented distribution of such key factors as personnel, expenses, and remuneration.
The measures also further vitalized the operation mechanism of grass-roots units, and stimulated the motivation and creativity of staff
members. The Company also comprehensively sorted out such risk matters as its business, operating model, and financial
management, optimizing its internal control system. Meanwhile, it deepened the internal control assessment, and effectively

                                                             ~ 36 ~
                                                                                                                  Annual Report 2021


integrated internal control assessment with performance auditing and special auditing, thus intensifying the supervision on internal
control.
7. Corporate Culture Construction
The Company adhered to the principle that "Party-building helps build, vitalize, and stabilize the enterprise", and increased its
cohesion through high-quality Party-building and cultural work, thus providing a strong political assurance for its high-quality
development, and forming a firm ideological front line that helped build, revitalize, and strengthen the enterprise. The Company
deepened and promoted the learning and education of Party history. It focused on the in-depth integration and mutual promotion of
Party-building and production and operation, normally carried out the activities of "I do practical things for the masses", conducted
"Party-building brand" creation activities, deepened co-built Party-building, consolidated the building achievements of
standardization within Party branches, and optimized the Party-building training system. The Company strictly implemented the
spirit of Eight-point Decision issued by the CPC Central Committee, and constantly improved the supervision and governance
efficiency. It continuously integrated the Gujing Values into each aspect of the Company including production, operation, and
management.
In 2022, the Company will continue to be guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era,
thoroughly implement the spirit of the 19th CPC National Congress and the various plenary sessions of the 19th CPC Central
Committee, enhance the "Four Consciousnesses", firmly believe in the "Four Self-confidences", implement the "Two Maintenances",
carry forward the great Party-building spirit, and adhere to the general principle of pursuing progress while ensuring stability. Under
the strong leadership of the municipal CPC committee and the municipal government, the Company will implement the spirit of the
provincial and municipal Party congresses, adhere to "three Stricts and Three Honests", and "do things immediately, genuinely, and
solidly", gather strength to build "China Liquor Town", continuously implement long-term perspective mindset, the concept of
excellence, and the awareness of high-quality products, maintain integrity and innovation, pursue progress while ensuring stability,
and once again build a new "Gujing", an enterprise with digital and global operations and law-based management, enabling the
Company to boast excellent achievements to celebrate the 20th CPC National Congress to be successfully held.


XII Communications with the Investment Community such as Researches, Inquiries and
Interviews

□ Applicable √ Not applicable




                                                            ~ 37 ~
                                                                                                                 Annual Report 2021




                                         Part IV Corporate Governance

I General Information of Corporate Governance

Indicate by tick market whether there is any material in-compliance with laws, administrative regulations and the regulatory
documents issued by the CSRC governing the governance of listed companies.
□ Yes √ No
The Company has enabled the General Meeting, the Board of Directors, the Board of Supervisors and the management to form a
standardized and scientific decision-making mechanism of operation to sufficiently protect the rights and interests of investors, and
small and medium investors in particular, and to intensify the standardized operation of the Company, in strict accordance with
relevant laws and regulations such as the Company Law, the Securities Law, the Code of Corporate Governance for Listed
Companies, the Rules for Stock Listing of Shenzhen Stock Exchange, and the Guidelines of the Shenzhen Stock Exchange for the
Standard Operation of Listed Companies. During the Reporting Period, the Company's actual situation of corporate governance met
the relevant requirements of the normative documents on the governance of listed companies issued by the China Securities
Regulatory Commission. In strict accordance with the relevant laws and regulations, and the Company's requirements on internal
rules, regulations, and management system, each of the directors, supervisors and senior managers of the Company executed his or
her rights and obligations, to ensure transparent disclosure of the Company's information, its operation according to law, and honesty
and trustworthiness.
1. Shareholders and General Meeting of Shareholders
The Company regulates the convening, holding, and voting procedures of the general meeting of shareholders in strict accordance
with the provisions and requirements of the Company Law, the Articles of Association, and the Rules of Procedure of the General
Meeting. During the Reporting Period, the convening and holding procedures of general meetings of shareholders, the qualifications
of attendants to the meetings and the voting procedures of the meetings all met the provisions of the Company Law, Rules of
Procedure of the General Meeting, and other laws and regulations. The Company equally treated all of its shareholders, and small
and medium shareholders in particular, to ensure full execution of rights of all shareholders.
2. The Company and Controlling Shareholders
The Company's controlling shareholders are able to strictly regulate their own behaviors, without any violation of provisions of
relevant laws, regulations, and the Company's Articles of Association. They have not directly or indirectly interfered with the
Company's decision-making, and production and operation activities, nor have they occupied the Company's funds; the Company has
not provided its controlling shareholders with any form of guarantee.
3. Directors and Board of Directors
The Company's Board of Directors consists of nine directors, three of whom are independent directors. The number of directors and
the personnel composition of the Board of Directors comply with the requirements of laws, regulations, and the Articles of
Association. All directors act in accordance with the Articles of Association, Rules of Procedure of the Board of Directors, and the
Work Policy for Independent Directors, etc., attend the meetings of the Board of Directors and general meetings of shareholders,
diligently and faithfully perform their duties and obligations. Meanwhile, they actively participate in relevant training, and get
familiar with relevant laws and legislations. Under the Board of Directors, there are four special committees, i.e., the Audit
Committee, the Nominating Committee, the Remuneration and Appraisal Committee, and the Strategy Committee, which perform
their normal duties, to provide scientific and professional comments and references for decision-making of the Board of Directors.
4. Supervisors and Board of Supervisors
There are five supervisors in the Company's Board of Supervisors, including two employee supervisors. The number and


                                                             ~ 38 ~
                                                                                                                  Annual Report 2021


composition of the Board of Supervisors are in compliance with the requirements of laws and regulations. All supervisors are able to
conscientiously perform their duties in accordance with the requirements of the Rules of Procedure of the Board of Supervisors,
earnestly perform their duties, and supervise the major events, related-party transactions, financial status, law-and-regulation
compliance of performance of duties of directors and senior managers of the Company.
5. The Mechanism of Performance Appraisal, and Incentive and Constraint
The procedures for appointment and removal of directors, supervisors, and senior managers of the Company shall be open and
transparent, and in line with the relevant provisions of laws, regulations, and the Articles of Association; the Company's remuneration
appraisal scheme shall specifically stipulate the evaluation to the Company's management team. The Company shall constantly
improve the performance evaluation standard and incentive and constraint mechanism of directors, supervisors, and senior managers.
6. Fulfillment of Social Responsibilities, and Stakeholders
The Company is able to fully respect and protect the legitimate rights and interests of relevant stakeholders, achieve a balance of
interests between the society, shareholders, the Company, suppliers, customers, employees, and other relevant parties, to promote the
sustainable, stable, and healthy development of the Company.
7. Information Disclosure and Transparency
The Company faithfully performs the obligation of information disclosure in strict accordance with the Articles of Association of the
Company, Listing Rules of Shenzhen Stock Exchange, Self-Regulatory Guidelines No. 1 for Companies Listed on Shenzhen Stock
Exchange - Standard Operation of Listed Companies on the Main Board, Self-regulatory Guidelines No. 5 for Companies Listed on
Shenzhen Stock Exchange - Management of Information Disclosure Affairs, and the relevant laws and regulations of China's
Securities Regulatory Commission and Shenzhen Stock Exchange. The Company designates China Securities Journal, Shanghai
Securities News, Ta Kung Pao, and Cninfo (http://www.cninfo.com.cn) as its information disclosure media and website, to guarantee
investors' right to know, and to ensure that all shareholders of the Company have a fair opportunity to obtain information of the
Company. Meanwhile, the Company has established diversified communication channels for investors, including special telephone
line, exclusive mailbox, and interactive platform for investors, and many other forms, to fully guarantee the right of a large number
of investors to know.
8. The formulation and implementation of the registration and management system on inside information and insiders
In accordance with the requirements of regulatory authorities, the Company and all of its controlling shareholders have formulated
the system for registration and record on inside information and insiders, regulated the acts of managing inside information of the
Company and its controlling shareholder, strengthened the classification of inside information, and safeguarded the principle of
fairness for information disclosure. During the Reporting Period, in strict accordance with the Management System on Inside
Information and Insiders, the Company has made well classification of inside information, and registration and record on insiders.


II The Company’s Independence from Its Controlling Shareholder and Actual Controller in
Business, Personnel, Asset, Organization and Financial Affairs

The Company and the controlling shareholder, Anhui Gujing Group Co., Ltd., realized five independences in terms of business,
personnel, assets, organizations and financial affairs, with separate independent calculation, independent and complete business,
independent operation ability, and independent responsibilities and risks. Majority shareholders cannot surpass the shareholders’
general meeting to directly or indirectly interfere with the Company’s decisions and legal production as well as operation activities,
and there is no same trade competition state of the same products between the company and majority shareholders.
1. Independence of Business
The Company is mainly engaged in the production and sale of liquor and spirits, and the Company's business is mutually independent
of its controlling shareholder Gujing Group and other enterprises controlled by the Group. The issuer owns independent research and
development system, purchasing system, production system, and sale system, forming a complete business chain, all of which do not
rely on its shareholders and their subordinate enterprises. Therefore, the issuer's business is independent of its controlling

                                                            ~ 39 ~
                                                                                                                  Annual Report 2021


shareholders.
2. Independence of Personnel
The Company has independent management systems of labor, personnel, salary, etc., and independent staff teams, in which the salary
payment and welfare expenditure of the Company are strictly independent of those of its shareholders and related parties. The
directors, supervisors and senior managers of the Company are all selected in strict accordance with the relevant provisions of the
Company Law and the Company's Articles of Association. All senior managers do not take other positions than directors or
supervisors in any of other entities controlled by the controlling shareholders or actual controllers of the Company, nor do they
receive salary from any other entities controlled by the controlling shareholders or actual controllers of the Company. None of the
financial staff members of the Company takes part-time positions in any of other entities controlled by the controlling shareholders or
actual controllers of the Company.
3. Independence of Assets
The Company has its production system, auxiliary production system, and supporting facilities related to its production and operation;
and legally has the ownership or use rights of the land, plants, machines, trademarks, and patents in relation to its production and
operation. Therefore, there is not any damage to the Company's interests in such a way that the assets and funds of the Company are
occupied by the Company's controlling shareholders and their related parties.
4. Independence of Organization
The Company has established a sound and integral governance structure of general meeting of shareholders, the Board of Directors,
and the Board of Supervisors, and formulated the corresponding internal control management system. The Company independently
exercises the duties and rights of operation and management, in which the Company's units of production, operation, and office are
completely separated from the shareholding entities. Therefore, the Company does not make mixed operation and has mixed office
with its shareholding entities; the Company's shareholding entities and their related entities or persons do not interfere with the
Company's structural setup; there is not any subordinate relationship between the Company and its controlling shareholders, or
between their functional departments.
5. Independence of Finance
The Company has set up an independent finance department with full-time personnel; and established an independent accounting
system and financial management system, independently making financial decisions, and implementing a strict internal audit system.
An independent bank account has been opened for the Company, without sharing the account with the Company's shareholding
entities or any other entity or person. The Company, as an independent taxpayer, declares taxes and fulfills tax payment obligations
independently according to law, and does not pay taxes together with its shareholding entities.


III Horizontal Competition

□ Applicable √ Not applicable


IV Annual and Extraordinary General Meetings Convened during the Reporting Period

1. General Meeting Convened during the Reporting Period


                                                   Investor                                                      Index to disclosed
       Meeting                    Type                              Date of the meeting     Disclosure date
                                              participation ratio                                                   information

                                                                                                                Announcement       on
The 2020 Annual        Annual General
                                                           59.34%      25 May 2021            26 May 2021       Resolutions of the
General Meeting        Meeting
                                                                                                                2020          Annual

                                                              ~ 40 ~
                                                                                                      Annual Report 2021


                                                                                                    General     Meeting
                                                                                                    disclosed       on
                                                                                                    www.cninfo.com.cn


2. Extraordinary General Meetings Convened at the Request of Preferred Shareholders with Resumed
Voting Rights

□ Applicable √ Not applicable


V Directors, Supervisors and Senior Management

1. Basic Information

                                                                            Increase Decrease
                                                          End Beginning in the      in the        Other        Ending
                         Incumbent/Form Gende Ag Start of of
    Name    Office title                                      shareholdin Reportin Reportin increase/decreas shareholdin
                               er         r    e tenure tenur
                                                           e   g (share) g Period g Period      e (share)     g (share)
                                                                            (share)   (share)

            Chairman                                19      18
Liang
            of the       Incumbent     Male    56 June      June
Jinhui
            Board                                   2020    2023

                                                    19      18
Li Peihui Director       Incumbent     Male    49 June      June
                                                    2020    2023

                                                    19      18
Zhou        Director,
                         Incumbent     Male    48 June      June
Qingwu      GM
                                                    2020    2023

            Director,
                                                    19      18
            Executive
Yan Lijun                Incumbent     Male    49 June      June
            Deputy
                                                    2020    2023
            GM

            Director,                               19      18
Xu Peng     Deputy       Incumbent     Male    52 June      June
            GM                                      2020    2023

Ye                                                  19      18
Changqin Director        Incumbent     Male    48 June      June
g                                                   2020    2023

                                                    19      18
Zhang       Independen
                         Incumbent     Male    71 June      June
Guiping     t director
                                                    2020    2023

Wang        Independen                              19      18
                         Incumbent     Male    60
Ruihua      t director                              June    June

                                                           ~ 41 ~
                                                              Annual Report 2021


                                             2020     2023

                                             19       18
Xu         Independen
                        Incumbent   Male   46 June    June
Zhihao     t director
                                             2020     2023

           Chairman
           of                                19       18
Sun
           Supervisor Incumbent     Male   57 June    June
Wanhua
           y                                 2020     2023
           Committee

                                             19       18
Yang
           Supervisor Incumbent     Male   55 June    June
Xiaofan
                                             2020     2023

                                                      10
                                             19
Wang       Employee                                   Marc
                        Incumbent   Male   52 June
Zibin      supervisor                                 h
                                             2020
                                                      2022

                                             19       18
Lu
           Supervisor Incumbent     Male   42 June    June
Duicang
                                             2020     2023

                                             19       18
           Employee
Zhang Bo                Incumbent   Male   57 June    June
           supervisor
                                             2020     2023

                                             19       18
Zhang      Deputy
                        Incumbent   Male   54 June    June
Lihong     GM
                                             2020     2023

Zhu                                          19       18
           Deputy
Xianghon                Incumbent   Male   48 June    June
           GM
g                                            2020     2023

                                             19       18
Gao        Deputy
                        Incumbent   Male   52 June    June
Jiakun     GM
                                             2020     2023

                                             28       18
           Deputy
Li Anjun                Incumbent   Male   52 August June
           GM
                                             2020     2023

                                             28       18
           GM
Kang Lei                Incumbent   Male   44 August June
           assistant
                                             2020     2023

           GM                                28       18
Zhu
           assistant,   Incumbent   Male   45 August June
Jiafeng
           Deputy                            2020     2023


                                                     ~ 42 ~
                                                                                                                   Annual Report 2021


               Chief
               Accountant

               Secretary                                       29         18
Zhu
               of the         Incumbent            Male   45 Octobe June
Jiafeng
               Board                                           r 2021 2023

  Total             --                 --            --   --        --     --

Indicate by tick mark whether any directors or supervisors left or any senior management were disengaged during the Reporting
Period
□ Yes √ No
Change of Directors, Supervisors and Senior Management
√Applicable □ Not applicable

      Name                  Office title     Type of change     Date of change                 Reason for change

                         Deputy GM,
                         Chief
Ye Changqing             Accountant,        Left               13 August 2021     Job change
                         Secretary of the
                         Board

                         Secretary of the
Zhu Jiafeng                                 Appointed          29 October 2021 Appointment
                         Board


2. Biographical Information

Professional backgrounds, major work experience and current duties in the Company of the incumbent directors, supervisors and
senior management:
1. Mr. Liang Jinhui, male, born in October 1966, member of CPC, is Political Engineer and a deputy to the 13th National People’s
Congress with MBA degree, incumbent Secretary of CPC and president of the Company and president and Secretary of CPC of
Gujing Group. He ever took the post of MD, GM, Deputy GM, GM of Bozhou Gujing Sales Co., Ltd., Supervisor of Third
Supervisory Committee, Director of the 4th, 5th and 6th Board of Directors and Chairman of the 7th and 8th Board of Directors of the
Company.
2. Mr. Li Peihui, male, born in July 1973, member of CPC, is a holder of master degree. He is a senior accountant, CPA and member
of national leading accounting talents. At present, he acts as the Company’s Vice Secretary of CPC and president of Gujing Group.
He had ever served as deputy GM and GM of Financial Department, deputy chief accountant, chief accountant, Secretary of Board of
Directors and Director of the Company; Chairman of the Board of Anhui Ruijing Business Travel Group Co. and Anhui Huixin
Financial Investment Group; executive vice president and CFO of Gujing Group; and director of the 7 th and 8th Board of Directors.
3. Mr. Zhou Qingwu, male, born in February 1974, member of CPC, is a senior engineer, and China Chief Liquor and Spirits Taster
with educational experience of graduate student. At present, he is Vice Secretary of CPC, Director and General Manager of the
Company, Vice Secretary of CPC of Gujing Group. He had ever acted as Deputy GM and deputy executive GM of the Company and
Director of the 5th , 6th, 7th and 8th Board of Directors of the Company.
4. Mr. Yan Lijun, male, June 1973, member of CPC, is a holder of master degree with Senior Taster. Now he is Vice Secretary of
CPC, Director, Executive Deputy GM of the Company, member of CPC Committee of Gujing Group, Chairman of the Board and
GM of Bozhou Gujing Sales Co., Ltd. He once worked as a salesman of Sale Company, District Manager, Director of Market


                                                                         ~ 43 ~
                                                                                                                Annual Report 2021


Research, Vice Manager of Planning Department, Director of Hefei Strategic Operations Center, Vice GM and director of the 7 th and
8th Board of Directors of the Company.
5. Mr. Xu Peng, male, born in September 1970, member of CPC, has educational experience of undergraduate college. He is the
member of CPC Committee, Director and Deputy GM of the Company, member of CPC Committee of Gujing Group, and Chairman
of the Board of Yellow Crane Tower Liquor Industry Co., Ltd. He had ever acted as Deputy Director and Director of Finance Second
Office of Finance Department of the Company, Manager of Finance Department of Anhui Laobada Co., Ltd., Vice Manager and
Manager of Finance Department of the Company, Deputy General Manager and Chief Supervisor of Market Supervision Department
of Bozhou Gujing Sales Company, Chairman of the 7th Supervisory Committee and Director of the 7th and 8th Board of Directors of
the Company.
6. Mr. Ye Changqing, male, born in October 1974, member of CPC, is a member of national leading accounting talents with master
degree and International Certified Internal Auditor. He is the incumbent Director of the Company and CFO of Gujing Group. He had
ever acted as Chief Auditor of Audit Department, Vice Manager of Audit Department and Vice Supervisor and Supervisor of
Auditing& Supervision Department; and Supervisor of the 4th Supervisory Committee of the Company; Director and Secretary of the
5th, 6th, 7th and 8th Board of Directors, and Chief Accountant of the Company.
7. Zhang Guiping, male, born in August 1951, is a member of the Revolutionary Committee of the Chinese Kuomintang and a
bachelor's degree holder. He is currently a member of the 13 th CPPCC National Committee, Chairman of Sunning Global, Chairman
of Suning Universal Co., Ltd., Independent Director of the Company, President of Commercial Culture Association of China,
Director of Anhui International Huishang Exchange Association, Director of Southeast University, Director and Professor at Nanjing
Normal University, and other social positions. Many awards have been bestowed upon him, including “Excellent Contributor to
Building of Socialism with Chinese Characteristics”, “China Outstanding Private Entrepreneur”, “China Most Influential Business
Leader”, “Chinese Talent with Great Integrity”, “Top Ten Influential People in China Real Estate Industry”, and “Outstanding
Individual Contributor to China Charity”.
8. Wang Ruihua, male, born in January 1962, member of CPC, is a non-practicing Chinese CPA with a doctor’s degree in
management. Now he acts as a professor and doctoral advisor in the Business School of Central University of Finance and
Economics, the independent director in the Company, BCEG Environmental Remediation Co., Ltd., and Bank Of Beijing Co., Ltd.,
member of Independent Director Committee of China Association for Public Companies.
9. Xu Zhihao, male, born in June 1976, is a senior engineer who graduated from Renmin University of China. He also holds a
master's degree from the PBC School of Finance, Tsinghua University, and is studying for a doctorate at Zhejiang University and
Singapore Management University. He possesses the professional qualifications to engage in fund and securities businesses. He is
currently Independent Director of the Company, CEO of Geely Technology Group Co., Ltd., Chairman of QJMOTOR, and Chairman
of Lifan Technology.
10. Sun Wanhua, male, was born in October 1965, member of CPC, with a bachelor degree. Now he acts as the Chairman of the
Supervisory Committee of the Company, member of the Party Committee and vice president in Gujing Group. He once held the posts
of the member of Standing Committee of CPC County Committee, the Party Secretary of People’s Armed Forces Department and
political commissar in Minquan County, Henan Province, member of Standing Committee of Discipline Inspection Committee in
Bozhou, Deputy Director of Bozhou Supervision Bureau and Deputy Secretary of Bozhou Discipline Inspection Committee,
Chairman of the 8th Supervisory Committee of the Company.
11. Mr. Yang Xiaofan, male, born in April 1967, member of CPC, is a holder of master degree. At present, he is Supervisor of the
Company and Vice President and member of CPC Committee of Gujing Group. He once acted as Vice President and General
Manager of Anhui Gujing Real Estates Group Co., Ltd., Assistant to President of Gujing Group; Director of the 5 th, 6th and 7th Board
of Directors of the Company and Supervisor of the 7 th and 8th Supervisory Committee of the Company.
12. Wang Zibin, male, born in August 1970, member of CPC, a senior auditor, certified internal auditor and CPA with a college
degree. Now he acts as the Employee Supervisor of the Company, member of the Party Committee in Gujing Group. He once held

                                                            ~ 44 ~
                                                                                                               Annual Report 2021


the posts of the GM of Audit Department in Gujing Group, Assistant GM in Bozhou Construction Investment Real Estate
Development Co., Ltd., CFO and Deputy GM in Hefei Marketing Center of Bozhou Gujing Sales Company, the Supervisor of the 7 th
and 8th Supervisory Committee of the Company and Director in Audit Supervision Center and Secretary of the Discipline Inspection
Committee in Gujing Group.
13. Lu Duicang, male, born in March 1980, member of CPC, a senior accountant with a master degree. Now he serves as the
supervisor of the Company, the Chairman of Anhui Longrui Glass Co., Ltd. and director of Mengcheng Rural Commercial Bank Co.,
Ltd. He once acted as the accountant, deputy director, and director of No.1 Center of Finance Department, factory director of the
Liquor and Spirits Bottling Branch and Manager of Finished Product Department in the Company, Controller of the Financial
Management Center in Gujing Group, GM of Anhui Huixin Finance Investment Group Co., Ltd. Assistant Financial Controller in
Gujing Group and the Supervisor of the 5th, 6th, 7th and 8th Supervisory Committee of the Company.
14. Mr. Zhang Bo, male, born in July 1965, member of CPC, is an economist with bachelor degree. Now, he serves as Employee
Supervisor of the Company and director of 5A Management Committee (preparatory). He once worked as Chairman of the board and
GM of Bozhou Gujing Printing Co., Ltd. and Bozhou Gujing Glassware Manufacturing Co., Ltd. as well as Chairman of the Board of
Bozhou Ruineng Heat and Power Co., Ltd., Supervisor of the 7th and 8th Supervisory Committee of the Company, Chairman of the
Labor Union of Gujing Group and Chairman of the Board & GM of Anhui Mingguang Distillery Co., Ltd.
15. Mr. Zhang Lihong, male, born in October 1968, member of CPC, is an economist with bachelor degree. He is incumbent Vice
Secretary of CPC and Deputy GM of the Company and member of CPC Committee and deputy secretary of Commission for
Discipline and Inspection of Gujing Group. He once acted as clerk, Secretary of Operation Department and Market Development
Department, Deputy GM, Director of General Office, Director of Service Centre of Bozhou Gujing Sales Co., Ltd., Director of HR
Department and Administrative Service Center and GM Assistant of the Company.
16. Mr. Zhu Xianghong, male, born in September 1974, member of CPC, is a senior Wine Taster with bachelor degree. He is
incumbent Deputy GM of Company, GM of Yellow Crane Tower Liquor Industry Co., Ltd. He once acted as GM of Product
Department of Bozhou Gujing Sales Co., Ltd., GM of Hefei Office, regional GM of Northern Anhui Province, GM of Anhui
Operating Centre, standing Deputy GM of Sales Company and assistant to GM of the Company.
17. Mr. Gao Jiakun, male, born in November 1970, member of CPC, is a holder of bachelor degree. He is incumbent member of the
CPC and Deputy GM of the Company. He once served as GM of Production Management Department, Vice Director of Production
Management Centre, Chairman of the Board and GM of Bozhou Pairuite Packing Products Co., Ltd., Director of Finished Products
Filling Centre and Production Management Centre, and assistant to GM of the Company.
18. Li Anjun, male, born in May 1970, is a member of CPC with a master's degree. He is currently a member of the Party Committee,
Deputy General Manager, Chief Engineer, and Director of the Technical Quality Center of the Company. He served as the Deputy
Director of the Company's Technical Quality Center.
19. Kang Lei, male, born in July 1978, is a member of CPC with a college degree. He is currently Assistant to General Manager, and
Director of the Enterprise Management Center of the Company. He served as Deputy Director of the Financial Management Center
of Bozhou Gujing Sales Company, Director of the Company's Administrative Service Center, and Deputy Director of the President's
Executive Office of Gujing Group.
20. Zhu Jiafeng, male, born in August 1977, is a member of CPC with a college degree. He is currently assistant to General Manager,
Deputy Chief Accountant, Secretary of the Board and Director of the Financial Management Center of the Company. He served as
the Manager and Deputy Director of the Financial Management Center of the Company.
Offices held concurrently in shareholding entities:
√Applicable □Not applicable
                                                             Office held in
                                                                                                               Remuneration or
                                                                  the
     Name                       Shareholding entity                         Start of tenure   End of tenure   allowance from the
                                                             shareholding
                                                                                                              shareholding entity
                                                                 entity

                                                           ~ 45 ~
                                                                                                              Annual Report 2021


                                                           Chairman of
Liang Jinhui     Anhui Gujing Group Co., Ltd.              the Board of 1 May 2014                            Yes
                                                           Directors

                                                                          31 October
Li Peihui        Anhui Gujing Group Co., Ltd.              President                                          Yes
                                                                          2017

                                                           Vice           31 October
Sun Wanhua       Anhui Gujing Group Co., Ltd.                                                                 Yes
                                                           President      2017

                                                           Vice           1 November
Yang Xiaofan     Anhui Gujing Group Co., Ltd.                                                                 Yes
                                                           President      2009

Ye Changqing     Anhui Gujing Group Co., Ltd.              CFO            13 August 2021                      Yes

                 The above-mentioned personnel, though they take posts in shareholders’ entities, comply with the relevant
Notes            employment requirements of Company Law, Securities Law and never disciplined by CSRC, other relevant
                 departments and the Stock Exchange.

Offices held concurrently in other entities:
√Applicable □Not applicable
                                                                                                               Remuneration or
                                                            Office held in
     Name                          Other entity                            Start of tenure    End of tenure    allowance from
                                                             other entity
                                                                                                                 other entity
                                                            Chairman of
                  Suning Universal Group Co.,Ltd                          December 2005                        No
                                                            the Board
Zhang Guiping                                               Chairman of
                  Suning Universal Co.,Ltd                  the Board,    October 2017       October 2023      Yes
                                                            President

                  Geely Technology Group Co., Ltd.          CEO           January 2018                         Yes

                                                            Chairman of
                  Zhejiang Qjiang Motorcycle Co.,Ltd.                     February 2020 May 2024               No
                                                            the Board
Xu Zhihao                                                   Chairman of
                  Lifan Technology (Group) Co.,Ltd.                       January 2021       January 2024      No
                                                            the Board

                  Mingtai Investment Development Group      Chairman of
                                                                          August 2021                          No
                  Co., Ltd                                  the Board

                  Central University of Finance and
                                                            Professor     July 1983                            Yes
                  Economics

                                                            Independent
Wang Ruihua       Bank Of Beijing Co., Ltd.                               December 2019 December 2022          Yes
                                                            director

                  BCEG Environmental Remediation Co.,       Independent
                                                                          March 2020         March 2023        Yes
                  Ltd.                                      director

                  Mengcheng Rural Commercial Bank Co.,
Lu Duicang                                                  Director      March 2018                           No
                  Ltd.

Notes             Zhang Guiping, Wang Ruihua and Xu Zhihua are independent directors of the Company.


                                                         ~ 46 ~
                                                                                                                  Annual Report 2021


Punishments imposed in the recent three years by the securities regulator on the incumbent directors, supervisors and senior
management as well as those who left in the Reporting Period:
□ Applicable √ Not applicable


3. Remuneration of Directors, Supervisors and Senior Management

Decision-making procedure, determination basis and actual payments of remuneration for directors, supervisors and senior
management:
(I) Decision-making procedure of remuneration for Directors, Supervisors and Executive Officers
The remuneration of independent directors is decided through the general meeting of shareholders, and the remuneration of the
directors, supervisors, and senior managers assuming positions in the Company is defined in accordance with the relevant regulations
of the State-owned Assets Supervision and Administration Commission (the "SASAC") of Haozhou Municipal People's Government,
and the relevant policies of the Company.
(II) Determination basis of remuneration for Directors, Supervisors and Executive Officers
The remuneration is determined based on the annual performance of the Company and the appraisal result in accordance with the
spirits in the Implementation Opinion on Deepening the System Reform of Remuneration of Chargers in Provincial Enterprises
(WF[2015] No. 28), and the Interim Procedures of Remuneration Management of Chargers in Municipal Enterprises (GZG[2017] No.
21) issued by the CPC Anhui Provincial Committee and the People’s Government of Anhui.
(III) Actual Payment of remuneration for Directors, Supervisors and Executive Officers
Part of basic remuneration is paid on a monthly basis, and according to appraisal, performance-based remuneration is paid at the end
of the year.
Remuneration of directors, supervisors and senior management for the Reporting Period
                                                                                                                    Unit: RMB'0,000

                                                                                               Total before-tax
                                                                                                                        Any
                                                                           Incumbent/Forme        remuneration
       Name            Office title          Gender             Age                                                 remuneration
                                                                                    r               from the
                                                                                                                  from related party
                                                                                                   Company

                   Chairman of the
Liang Jinhui                          Male                              56 Incumbent                              Yes
                   Board

Li Peihui          Director           Male                              49 Incumbent                              Yes

Zhou Qingwu        Director, GM       Male                              48 Incumbent                      183.13 No

                   Director,
Yan Lijun          Executive Deputy Male                                49 Incumbent                      348.47 No
                   GM

                   Director, Deputy
Xu Peng                               Male                              52 Incumbent                      134.24 No
                   GM

Ye Changqing       Director           Male                              48 Incumbent                      107.38 Yes

                   Independent
Zhang Guiping                         Male                              71 Incumbent                           7.5 No
                   director

Wang Ruihua        Independent        Male                              60 Incumbent                           7.5 No


                                                           ~ 47 ~
                                                                                                        Annual Report 2021


                    director

                    Independent
Xu Zhihao                               Male                           46 Incumbent                   7.5 No
                    director

                    Chairman of
Sun Wanhua          Supervisory         Male                           57 Incumbent                       Yes
                    Committee

Yang Xiaofan        Supervisor          Male                           55 Incumbent                       Yes

                    Employee
Wang Zibin                              Male                           52 Incumbent                       Yes
                    supervisor

Lu Duicang          Supervisor          Male                           42 Incumbent                 64.60 No

                    Employee
Zhang Bo                                Male                           57 Incumbent                       Yes
                    supervisor

Zhang Lihong        Deputy GM           Male                           54 Incumbent             163.61 No

Zhu Xianghong       Deputy GM           Male                           48 Incumbent             278.18 No

Gao Jiakun          Deputy GM           Male                           52 Incumbent             139.86 No

Li Anjun            Deputy GM           Male                           52 Incumbent             146.76 No

Kang Lei            GM assistant        Male                           44 Incumbent             143.93 No

                    GM assistant,
                    Deputy Chief
Zhu Jiafeng         Accountant,         Male                           45 Incumbent             142.81 No
                    Secretary of the
                    Board

Total                          --               --               --                --          1,875.47           --


VI Performance of Duty by Directors in the Reporting Period

1. Board Meeting Convened during the Reporting Period


               Meeting                   Date of the meeting             Disclosure date        Meeting resolutions

                                                                                           Announcement on Resolutions
                                                                                           of the 7th Meeting of the 9th
                                                                                           Board of Directors of Anhui
The 7th Meeting of the 9th Board
                                    29 April 2021                 30 April 2021            Gujing    Distillery   Company
of Directors
                                                                                           Limited     (No.:      2021-012)
                                                                                           disclosed on the website of
                                                                                           Cninfo (www.cninfo.com.cn).

                                                                                           Announcement on Resolutions
The 8th Meeting of the 9th Board
                                    27 August 2021                28 August 2021           of the 8th Meeting of the 9th
of Directors
                                                                                           Board of Directors of Anhui


                                                               ~ 48 ~
                                                                                                                                Annual Report 2021


                                                                                                               Gujing     Distillery    Company
                                                                                                               Limited         (No.:   2021-026)
                                                                                                               disclosed on the website of
                                                                                                               Cninfo (www.cninfo.com.cn).

                                                                                                               Announcement on Resolutions
                                                                                                               of the 9th Meeting of the 9th
                                                                                                               Board of Directors of Anhui
The 9th Meeting of the 9th Board
                                   29 October 2021                       30 October 2021                       Gujing     Distillery    Company
of Directors
                                                                                                               Limited         (No.:   2021-035)
                                                                                                               disclosed on the website of
                                                                                                               Cninfo (www.cninfo.com.cn).


2. Attendance of Directors at Board Meetings and General Meetings


                                       Attendance of directors at board meetings and general meetings

                                                                                                                    The director
                   Total number
                                                                                  Board                            failed to attend
                      of board             Board                                                     Board
                                                            Board meetings       meetings                                two           General
                    meetings the          meetings                                               meetings the
     Director                                              attended by way of    attended                           consecutive        meetings
                    director was         attended on                                             director failed
                                                           telecommunication     through a                              board          attended
                     eligible to            site                                                   to attend
                                                                                  proxy                               meetings
                       attend
                                                                                                                      (yes/no)

Liang Jinhui                       3                   1                     2               0                 0 No                                1

Li Peihui                          3                   1                     2               0                 0 No                                1

Zhou Qingwu                        3                   1                     2               0                 0 No                                1

Yan Lijun                          3                   1                     2               0                 0 No                                1

Xu Peng                            3                   1                     2               0                 0 No                                1

Ye Changqing                       3                   1                     2               0                 0 No                                1

Zhang Guiping                      3                   0                     3               0                 0 No                                0

Wang Ruihua                        3                   0                     3               0                 0 No                                1

Xu Zhihao                          3                   1                     2               0                 0 No                                0


3. Objections Raised by Directors on Matters of the Company

Indicate by tick mark whether any independent directors raised any objections on any matter of the Company.
□ Yes √ No
No such cases in the Reporting Period.




                                                                   ~ 49 ~
                                                                                                                        Annual Report 2021


4. Other Information about the Performance of Duty by Directors

Indicate by tick mark whether any suggestions from directors were adopted by the Company.
√ Yes □ No
Suggestions from directors adopted or not adopted by the Company
During the Reporting Period, the directors of the Company carried out their work diligently and conscientiously in strict accordance
with the Company Law, the Securities Law, the Code of Corporate Governance for Listed Companies, the Guidelines of the
Shenzhen Stock Exchange for the Standard Operation of Listed Companies, the Articles of Association, and Rules of Procedure of the
Board of Directors. Based on the Company's reality, they put forward relevant opinions on the Company's major governance and
operation decisions, and reached consensus through full communication and discussion. They resolutely supervised and promoted the
implementation of the resolutions of the Board of Directors to ensure scientific, timely, and efficient decision-making and safeguard
the legitimate rights and interests of the Company and all of its shareholders.


VII Performance of Duty by Specialized Committees under the Board in the Reporting Period

                                                                                                                         Other
                                                                                                                        informat   Details
                                                                                                                          ion       about
                                    Number of
                                                Convene                                 Important opinions and           about     issues
  Committee          Members         meetings                      Content
                                                  d date                                   suggestions raised             the       with
                                     convened
                                                                                                                        perform objections
                                                                                                                        ance of    (if any)
                                                                                                                         duty

                                                                                     The        Audit    Committee
                                                                                     carried      out    its   work
                                                                                     diligently                 and
                                                                                     conscientiously      in   strict
                                                                                     accordance         with     the
                                                                                     Company            Law,     the
                                                                                     regulations of the China
                 Zhang Guiping,
The Audit                                                                            Securities          Regulatory
                 Wang Ruihua,                      26      Review the Audit Plan
Committee                                                                            Commission, the Articles of
                 Xu Zhihao, Xu           1       March for Annual Report 2020
under the                                                                            Association, and the Rules
                 Peng, Ye                         2021     of the Company
Board                                                                                of Procedure of the Board
                 Changqing
                                                                                     of Directors. It put forward
                                                                                     relevant opinions based on
                                                                                     the reality of the Company.
                                                                                     Upon full communication
                                                                                     and         discussion,     all
                                                                                     proposals                 were
                                                                                     unanimously approved.

The Audit        Zhang Guiping,                 26 April Review the Company’s The              Audit    Committee
                                         1
Committee        Wang Ruihua,                     2021     Financial   Report     for carried     out    its   work

                                                             ~ 50 ~
                                                                                                                   Annual Report 2021


under the   Xu Zhihao, Xu                  2020       and        Auditor’s diligently                     and
Board       Peng, Ye                       Report,     the        Internal conscientiously           in   strict
            Changqing                      Control              Evaluation accordance              with     the
                                           Report for 2020, the Company                            Law,     the
                                           Proposal        on     Contract regulations of the China
                                           Renewal of the CPAs Securities                           Regulatory
                                           Firm      and        the     First Commission, the Articles of
                                           Quarterly Report 2021                Association, and the Rules
                                                                                of Procedure of the Board
                                                                                of Directors. It put forward
                                                                                relevant opinions based on
                                                                                the reality of the Company.
                                                                                Upon full communication
                                                                                and        discussion,      all
                                                                                proposals                 were
                                                                                unanimously approved.

                                                                                The       Audit     Committee
                                                                                carried      out    its   work
                                                                                diligently                 and
                                                                                conscientiously      in   strict
                                                                                accordance         with     the
                                                                                Company            Law,     the
                                                                                regulations of the China
            Zhang Guiping,
The Audit                                                                       Securities          Regulatory
            Wang Ruihua,           25      Review       the           Interim
Committee                                                                       Commission, the Articles of
            Xu Zhihao, Xu    1   August Report        2021        of      the
under the                                                                       Association, and the Rules
            Peng, Ye              2021     Company
Board                                                                           of Procedure of the Board
            Changqing
                                                                                of Directors. It put forward
                                                                                relevant opinions based on
                                                                                the reality of the Company.
                                                                                Upon full communication
                                                                                and        discussion,      all
                                                                                proposals                 were
                                                                                unanimously approved.

                                                                                The       Audit     Committee
                                                                                carried      out    its   work
            Zhang Guiping,                                                      diligently                 and
The Audit                                  Review          the         Third
            Wang Ruihua,           25                                           conscientiously      in   strict
Committee                                  Quarterly Report 2021
            Xu Zhihao, Xu    1   October                                        accordance         with     the
under the                                  and the Usage of Raised
            Peng, Ye              2021                                          Company            Law,     the
Board                                      Funds of the Company
            Changqing                                                           regulations of the China
                                                                                Securities          Regulatory
                                                                                Commission, the Articles of


                                             ~ 51 ~
                                                                                                                  Annual Report 2021


                                                                                Association, and the Rules
                                                                                of Procedure of the Board
                                                                                of Directors. It put forward
                                                                                relevant opinions based on
                                                                                the reality of the Company.
                                                                                Upon full communication
                                                                                and      discussion,       all
                                                                                proposals                were
                                                                                unanimously approved.

                                                                                The               Nomination
                                                                                Committee carried out its
                                                                                work        diligently    and
                                                                                conscientiously     in   strict
                                                                                accordance        with     the
                                                                                Company          Law,      the
                                                                                regulations of the China
The              Zhang Guiping,
                                                        Review the Proposal on Securities          Regulatory
Nomination       Wang Ruihua,                    25
                                                        the Nomination of the Commission, the Articles of
Committee        Xu Zhihao,            1      October
                                                        Company’s Secretary of Association, and the Rules
under the        Liang Jinhui, Li               2021
                                                        the Board               of Procedure of the Board
Board            Peihui
                                                                                of Directors. It put forward
                                                                                relevant opinions based on
                                                                                the reality of the Company.
                                                                                Upon full communication
                                                                                and      discussion,       all
                                                                                proposals                were
                                                                                unanimously approved.


VIII Performance of Duty by the Supervisory Committee

Indicate by tick mark whether the Supervisory Committee found any risk to the Company during its supervision in the Reporting
Period.
□ Yes √ No
The Supervisory Committee raised no objections in the Reporting Period.


IX Employees

1. Number, Functions and Educational Backgrounds of Employees


Number of in-service employees of the Company as the parent at
                                                                                                                               5,671
the period-end

Number of in-service employees of major subsidiaries at the
                                                                                                                               5,074
period-end

                                                          ~ 52 ~
                                                                                                               Annual Report 2021


Total number of in-service employees                                                                                        10,745

Total number of paid employees in the Reporting Period                                                                      10,745

Number of retirees to whom the Company as the parent or its
                                                                                                                             1,370
major subsidiaries need to pay retirement pensions

                                                              Functions

                             Function                                                        Employees

Production                                                                                                                   5,387

Sales                                                                                                                        2,911

Technical                                                                                                                      586

Financial                                                                                                                      217

Administrative                                                                                                                 966

Other                                                                                                                          678

                                  Total                                                                                     10,745

                                                     Educational backgrounds

                     Educational background                                                  Employees

Master or above                                                                                                                 99

Bachelor                                                                                                                     2,663

Junior college                                                                                                               2,355

High school or below                                                                                                         5,628

Total                                                                                                                       10,745


2. Employee Remuneration Policy

The remuneration policy was conducted strictly in line with the related law and regulations of the state, and the plan of operation
performance and profits of the Company and the relevant remuneration policy management.


3. Employee Training Plans

Employee training is significant in the Human resource management. The Company always pay high attention to the employee
training and development, the Company sets up effective training plan combining with the current situation of the Company, annual
plan, nature of the post and the demand of employee learning, which includes new employee induction training, on-job training,
front-line employee operating skills training, management improvement training and part-time study. Continuously improve the
whole quality of the employees, realized a win-win situation and progress between the Company and the employees.


4. Labor Outsourcing

√ Applicable □ Not applicable

Total man-hours (hour)                                                                                                 3,005,548


                                                          ~ 53 ~
                                                                                                                  Annual Report 2021


Total remuneration paid (RMB)                                                                                          54,929,711.75


X Profit Distributions (in the Form of Cash and/or Stock)

How the profit distribution policy, especially the cash dividend policy, was formulated, executed or revised in the Reporting Period:
√ Applicable □ Not applicable
The 2020 Annual General Meeting held on 25 May 2021 reviewed and approved the Company’s Interest Distribution Scheme in
2020 that based on the total shares of 503,600,000 of the Company on 31 December 2020, cash dividends was distributed at
RMB15.00 per 10 shares (tax inclusive), and the total cash dividends distributed was RMB755,400,000.00 (tax inclusive), which has
been carried out completely in June 2021.

                                            Special statement about the cash dividend policy

In compliance with the Company’s Articles of Association and
                                                                      Yes
resolution of general meeting

Specific and clear dividend standard and ratio                        Yes

Complete decision-making procedure and mechanism                      Yes

Independent directors faithfully performed their duties and
                                                                      Yes
played their due role

Non-controlling interests are able to fully express their opinion
                                                                      Yes
and desire and their legal rights and interests are fully protected

In case of adjusting or changing the cash dividend policy, the
conditions and procedures involved are in compliance with No adjustments or changes
applicable regulations and transparent

Indicate by tick mark whether the Company fails to put forward a cash dividend proposal for shareholders despite the facts that the
Company has made profits in the Reporting Period and the profits of the Company as the parent distributable to shareholders are
positive.
□ Applicable √ Not applicable
Final dividend plan for the Reporting Period
√ Applicable □ Not applicable

Bonus issue from capital reserves for every 10
                                                                                                                                    0
shares (share)

Dividend for every 10 shares (RMB) (tax inclusive)                                                                              22.00

Bonus issue from profit for every 10 shares (share)                                                                                 0

Total shares as the basis for the final dividend plan
                                                                                                                         528,600,000
(share)

Total cash dividends (RMB) (tax inclusive)                                                                          1,162,920,000.00

Cash dividends in other ways (such as share
                                                                                                                                 0.00
repurchase) (RMB)

Total cash bonus (including other methods) (RMB)                                                                    1,162,920,000.00



                                                              ~ 54 ~
                                                                                                                  Annual Report 2021



Distributable profits (RMB)                                                                                         8,904,467,073.30


Percentage of cash dividends (including other                                                                               100.00%
methods) to the total distributed profits

                                                  Particulars about the cash dividends

If the Company is in a mature development stage and has plans for any significant expenditure, in profit allocation, the ratio of cash
dividends in the profit allocation shall be 40% or above.

                                         Details of final dividend plan for the Reporting Period

The Company intends to distribute RMB22.00 (tax included) per 10 shares based on the total shares of 528,600,000 at the end of
the year, totaling RMB1,162,920,000.00. This year does not send bonus, does not transfer to increase capital stock with
accumulation fund.


XI Equity Incentive Plans, Employee Stock Ownership Plans or Other Incentive Measures for
Employees

□ Applicable √ Not applicable
No such cases in the Reporting Period.


XII Establishment and Execution of the Internal Control System for the Reporting Period

1. Establishment and Execution of the Internal Control System

In accordance with the provisions of the Basic Code for Internal Control of Enterprises and its supporting guidelines, the Company
has set up a complete procedure system for internal control system, in which the assessment incorporates the entities, business,
matters, and high risk fields, covering all major aspects of the Company's operation and management, without material omissions.
The Company's internal control is designed soundly and reasonably, and basically implemented effectively, without material
omissions. Through the operation, analysis, and assessment of the internal control system, the Company has effectively prevented
risks in operation and management, and promoted the realization of internal control objectives.


2. Material Internal Control Weaknesses Identified for the Reporting Period

□ Yes √ No


XIII Management and Control over Subsidiaries by the Company for the Reporting Period

During the Reporting Period, In accordance with the relevant requirements for standard operation of listed companies, and the
relevant internal control system of the Company, and by dispatching directors and supervisors to subsidiary companies, the Company
participated in the daily operation of the Board of Directors and the Board of Supervisors, thus realized the effective management
and supervision on such matters as overseas investment, related-party transactions, development planning, compliant operation, and
human resources of subsidiary companies, specified the reporting system and deliberation procedure of major events, and in a timely
manner, followed up such major events as financial status, business operation, and investment operation of subsidiary companies.




                                                              ~ 55 ~
                                                                                                                          Annual Report 2021


XIV Internal Control Self-Evaluation Report or Independent Auditor’s Report on Internal
Control

1. Internal Control Self-Evaluation Report


Disclosure date of the internal control
                                               30 April 2022
self-evaluation report

Index to the disclosed internal control See www.cninfo.com.cn for the Anhui Gujing Distillery Company Limited
self-evaluation report                         Self-assessment Report of Internal Control

Evaluated entities’ combined assets as % of
                                                                                                                                        95.36%
consolidated total assets
Evaluated entities’ combined operating
revenue as % of consolidated operating                                                                                                  99.87%
revenue

                                       Identification standards for internal control weaknesses

                                               Weaknesses in internal control over financial Weaknesses in internal control not related
                    Type
                                                                  reporting                                    to financial reporting

                                               Critical defect: Separate defect or other
                                               defects that result in failure in preventing,
                                               finding out and correcting major wrong
                                               reporting in financial report in time. The
                                               following circumstances are deemed as Any of the following circumstances shall
                                               critical defects: (1) Ineffective in controlling be deemed as a critical defect, and other
                                               the environment; (2) Malpractice of directors, circumstances shall be deemed as major
                                               supervisors and senior management officers; or minor defects according to their degree
                                               (3) According to external auditing, there’s of impact.
                                               major wrong reporting in current financial (1) Violate national laws, regulations or
                                               report, which fails to be found by the standardized documents;
                                               company in its operating process; (4) Major
                                                                                                  (2) Major decision making procedure is
Nature standard                                defects found and reported to the top
                                                                                                  not scientific;
                                               management fail to be corrected within a
                                                                                                  (3) Lack of systems results in systematic
                                               reasonable    period    of     time;   (5)   The
                                                                                                  failure;
                                               supervision of audit committee of the
                                                                                                  (4) Critical or major defects fail to be
                                               company and its internal audit department for
                                                                                                  rectified;
                                               internal control is ineffective;
                                                                                                  (5) Other circumstances that have major
                                               (6) Other defects that may affect correct
                                                                                                  impact on the company.
                                               judgment of users of statements. Major
                                               defect: Separate defect or other defects that
                                               result in failure in preventing, finding out and
                                               correcting wrong reporting in financial report
                                               in time, which shall be noted by the top
                                               management despite of not attaining or


                                                               ~ 56 ~
                                                                                                                     Annual Report 2021


                                                exceeding critical level. Minor defect: Other
                                                internal control defects not constituting
                                                critical or major defects.

                                                Critical defect:
                                                (1) Wrong reporting ≥0.5% of total operating
                                                revenue;
                                                                                                Critical defect: The defect with direct
                                                (2) Wrong reporting ≥5% of total profit;
                                                                                                property loss amounting to over RMB10
                                                (3) Wrong reporting ≥0.5% of total assets;
                                                                                             million, has great negative impact on the
                                                (4) Wrong reporting ≥0.5% of total owner’s company and is disclosed in public in the
                                                equity.                                      form of announcement.
                                                Major defect:                                   Major defect: The defect with direct
                                                (1) Wrong reporting ≥0.2% but <0.5% of property          loss   amounting   to    RMB1
                                                total operating revenue;                        million to RMB10 million (included), or
                                                (2) Wrong reporting ≥2% but <5% of total is penalized by governmental authority of
Quantitative standard                           profit;                                         the country but has not resulted in

                                                (3) Wrong reporting ≥0.2% but <0.5% of negative impact on the company.
                                                total assets;                                   Minor defect: The defect with direct

                                                (4) Wrong reporting ≥0.2% but <0.5% of property loss no more than RMB1 million
                                                total owner’s equity.                   (included),    or   is    penalized  by
                                                                                                governmental      authority    of     the
                                                Minor defect:
                                                                                                provincial-level or below but has not
                                                (1) Wrong reporting<0.2% of total operating
                                                                                                resulted in negative impact on the
                                                revenue;
                                                                                                company.
                                                (2) Wrong reporting<2% of total profit;
                                                (3) Wrong reporting<0.2% of total assets;
                                                (4) Wrong reporting<0.2% of total owner’s
                                                equity.

Number of material weaknesses in internal
                                                                                                                                       0
control over financial reporting
Number of material weaknesses in internal
                                                                                                                                       0
control not related to financial reporting
Number of serious weaknesses in internal
                                                                                                                                       0
control over financial reporting
Number of serious weaknesses in internal
                                                                                                                                       0
control not related to financial reporting


2. Independent Auditor’s Report on Internal Control

√ Applicable □ Not applicable

                                  Opinion paragraph in the independent auditor’s report on internal control

We believe that the Company has maintained effective internal control on financial report in all significant respects according to the
Basic Rules for Enterprise Internal Control and relevant regulations on 31 December 2021.

                                                                   ~ 57 ~
                                                                                                                   Annual Report 2021


Independent auditor’s report on
                                      Disclosed
internal control disclosed or not

Disclosure date                       30 April 2022

Index to such report disclosed        See www.cninfo.com.cn for Audit Report of Internal Control

Type of the auditor’s opinion        Unmodified unqualified opinion
Material weaknesses in internal
control not related to financial None
reporting

Indicate by tick mark whether any modified opinion is expressed in the independent auditor’s report on the Company’s internal
control.
□ Yes √ No
Indicate by tick mark whether the independent auditor’s report on the Company’s internal control is consistent with the internal
control self-evaluation report issued by the Company’s Board.
√ Yes □ No


XV Rectifications of Problems Identified by Self-inspection in the Special Action for Listed
Company Governance

On 10 December 2020, the China Securities Regulatory Commission issued Announcement on Launching a Special Campaign to
Improve the Governance of Listed Companies; and to implement the requirements of the Opinions of the State Council on Further
Improving the Quality of Listed Companies, in 2021, the Company organized and carried out self-inspection on the special actions of
corporate governance of the Company from 2018 to 2020. The self-inspection list involves the Company in regard to its basic
information, the operation and decision-making of organization structure, controlling shareholders, actual controllers and their related
parties, the system construction for standardizing internal control, information disclosure and transparency, institutional and overseas
investors, and other issues, which are the matters of a total of seven aspects. The conclusion of the self-inspection is as follows:
Through comprehensive self-inspection of the Company's self-governance, it is not identified that there is any violation of relevant
laws and regulations, and such internal system as the Articles of Association.




                                                             ~ 58 ~
                                                                                                                         Annual Report 2021




                       Part V Environmental and Social Responsibility

I Major Environmental Issues

Indicate by tick mark whether the Company or any of its subsidiaries is a heavily polluting business identified by the environmental
protection authorities of China.
Yes

                                         Numbe
                                                                                  Discharge
                Name of                   r of      Distribution     Discharge
  Name of                       Way of                                            standards       Total        Approved total     Excessive
                    major                dischar of discharge concentratio
  polluter                  discharge                                            implemente     discharge         discharge       discharge
               pollutants                  ge         outlets           n
                                                                                      d
                                         outlets

                                                                                   Gujing
                                                                                 plant≦50m      Gujing         Gujing plant:
Anbui                                              Gujing plant,                     g/L       plant: 23.39t      105.916t
                                                                     24.93mg/L
Gujing                      Directly               Zhangji plant,                  Zhangji       Zhangji       Zhangji plant:
              COD                          3                         33.31mg/L                                                     Naught
Distillery                  discharge              Headquarter                     plant、     plant: 6.64t        26.504t
                                                                     25.60mg/L
Co., Ltd.                                          plant                         Headquarter Headquarter        Headquarter
                                                                                 plant≦100 plant: 40.74t plant: 116.0596t
                                                                                    mg/L

                                                                                   Gujing
                                                                                 plant≦5mg/     Gujing         Gujing plant:
Anbui                                              Gujing plant,                      L        plant: 0.48t       10.5916t
                                                                     0.51mg/L
Gujing                      Directly               Zhangji plant,                  Zhangji       Zhangji       Zhangji plant:
                NH3-N                      3                         0.63mg/L                                                      Naught
Distillery                  discharge              Headquarter                     plant、     plant: 0.13t        2.6504t
                                                                     0.48mg/L
Co., Ltd.                                          plant                         Headquarter Headquarter        Headquarter
                                                                                 plant≦10m plant: 0.76t plant: 11.60596t
                                                                                     g/L

                                                                                   Gujing
                                                                                   plant、       Gujing
                            Organize                                                                            Gujing plant:
Anbui                                              Gujing plant,                 Headquarter plant: 0.22t
                            d                                        0.79mg/m                                      4.301t
Gujing                                             Zhangji plant,                plant≦10m      Zhangji
              Smoke         discharge      3                         1.58mg/m                                  Zhangji plant: /    Naught
Distillery                                         Headquarter                      g/m3       plant: 0.04t
                            through                                  1.16mg/m                                   Headquarter
Co., Ltd.                                          plant                           Zhangji     Headquarter
                            chimney                                                                              plant: 5.01t
                                                                                 plant≦20m plant: 0.64t
                                                                                    g/ m3

Anbui                       Organize               Gujing plant,                   Gujing        Gujing         Gujing plant:
                                                                     3.41mg/m
Gujing        Sulfur Diox d                        Zhangji plant,                  plant、     plant: 0.96t        15.055t
                                           3                         0.84mg/m                                                      Naught
Distillery    ide           discharge              Headquarter                   Headquarter     Zhangji       Zhangji plant: /
                                                                     8.01mg/m
Co., Ltd.                   through                plant                         plant≦35m plant: 0.02t        Headquarter


                                                                    ~ 59 ~
                                                                                                                  Annual Report 2021


                           chimney                                             g/m3     Headquarter     plant: 17.536t
                                                                              Zhangji    plant: 4.45t
                                                                           plant≦50m
                                                                               g/ m3

                                                                              Gujing
                                                                              plant、      Gujing       Gujing plant:
                           Organize
Anbui                                         Gujing plant,                Headquarter plant: 3.10t        21.056t
                           d                                   10.95mg/m
Gujing       Nitrogen                         Zhangji plant,               plant≦50m      Zhangji      Zhangji plant:
                           discharge     3                     24.21mg/m                                                  Naught
Distillery   oxide                            Headquarter                      g/m3      plant: 0.63t      10.318t
                           through                             23.30mg/m
Co., Ltd.                                     plant                           Zhangji   Headquarter     Headquarter
                           chimney
                                                                            plant≦150 plant: 12.95t plant: 25.051t
                                                                              mg/ m3

                           Organize
Anhui                                                                                   1# furnace:
                           d
Longrui                                       1# furnace        0.74mg/m                   0.244t
             Smoke         discharge     2                                  ≦10mg/m                          /           Naught
Glass Co.,                                    2# furnace        0.81mg/m                2# furnace:
                           through
Ltd                                                                                         0.38t
                           chimney

                           Organize
Anhui                                                                                   1# furnace:
                           d
Longrui      Sulfur Diox                      1# furnace        9.63mg/m                   3.158t
                           discharge     2                                  ≦50mg/m                          /           Naught
Glass Co.,   ide                              2# furnace        14mg/m                  2# furnace:
                           through
Ltd                                                                                        6.535t
                           chimney

                           Organize
Anhui                                                                                   1# furnace:
                           d
Longrui      Nitrogen                         1# furnace        56mg/m            18.357t
                           discharge     2                             ≦200mg/m                              /           Naught
Glass Co.,   oxide                            2# furnace        49mg/m          2# furnace:
                           through
Ltd                                                                                        22.847t
                           chimney

Construction and operation of facilities for preventing pollution:
1. Construction and operation of the sewage control facilities of the listed Company and its subsidiary companies
(1) The sewage treatment capacity of the sewage treatment station of Zhangji plant of Anhui Gujing Distillery Co., Ltd is about 550
tons per day. IC anaerobic jar, improved A/O and in-depth treatment process has been adopted. The sewage is discharged after
treatment and up to the standard, and discharge of sewage is in compliance with the direct discharge requirements in GB27631-2011
Discharge Standard of Water Pollutants for Fermentation Alcohol and Distilled Spirits Industry.
(2) The sewage treatment capacity of the sewage treatment station of the headquarters of Anhui Gujing Distillery Co., Ltd is about
4300 tons per day. IC anaerobic jar, A/O and in-depth treatment process has been adopted. The sewage is discharged after treatment
and up to the standard, and discharge of sewage is in compliance with the direct discharge requirements in GB27631-2011 Discharge
Standard of Water Pollutants for Fermentation Alcohol and Distilled Spirits Industry.
(3) The sewage treatment capacity of the sewage treatment station of Gujing Subsidiary under Anhui Gujing Distillery Co., Ltd is
about 2600 tons per day. IC anaerobic jar, A/O and in-depth treatment process is adopted. The sewage is discharged after treatment
and up to the standard, and discharge of sewage is in compliance with the direct discharge requirements in GB27631-2011 Discharge
Standard of Water Pollutants for Fermentation Alcohol and Distilled Spirits Industry.
(4) The production and living sewage of Anhui Longrui Glass Co., Ltd is discharged into the sewage treatment station of Zhangji

                                                               ~ 60 ~
                                                                                                                 Annual Report 2021


Plant under Anhui Gujing Distillery Company Limited, and it is discharged after treatment and up to the standard.
2. Construction and operation situation of waste gas control facilities of the listed Company and its subsidiaries
(1) The flue gas control facilities of thermal power stations of the Headquarters and Gujing Subsidiary of Anhui Gujing Distillery
Company Limited run well, and waste gas is discharged through the 65-meter-tall exhaust funnel after the waste gas treatment is up
to the standard, adopting the process of cloth-bag dust removal + Limestone - Wet flue gas Desulfurization+ SNCR Denitrification by
non-catalytic reduction + SCR Denitrification by catalytic reduction + Wet electrostatic precipitator, and discharge of flue gas meets
the super-low discharge requirements (smoke ≤10mg/m3, SO2≤35mg/m3, NOx≤50mg/m3).
(2) The gas-fired boilers at Zhangji Plant under Anhui Gujing Distillery Company Limited operate in a steady manner, and waste gas
is discharged through the 20-meter-tall exhaust funnel, of which and discharge of flue gas meets the requirements for gas-fired boiler
in GB13271-2014 Emission Standard of Air Pollutants for Industrial Kiln and Furnace.
(3) 1#, 2# furnace flue gas treatment facilities of Anhui Longrui Glass Co., Ltd. are operating well. For 1# furnace, the company uses
bag dust removal + dry desulfurization + SCR catalytic reduction denitrification process. After it meets the standard, the exhaust gas
will be discharged through a 48-meter high exhaust pipe. The flue gas emission is in line with the glass industry A-class enterprise
emission requirements as set out in Technical Guide for the Development of Emergency Emission Reduction Measures for Key
Industries in Heavy Pollution Weather (soot ≤ 10 mg/m3, SO2 ≤ 50 mg/m3, NOx ≤ 200 mg/m3). For 2# furnace, the company adopts
bag dust removal + desulfurization tank + SCR low-temperature denitrification process, and the exhaust gas is discharged through a
50-meter high exhaust pipe after it meets the standard. The flue gas emission meets the glass industry A-class enterprise emission
requirements as set out in Technical Guide for the Development of Emergency Emission Reduction Measures for Key Industries in
Heavy Pollution Weather (soot ≤ 10 mg/m3, SO2 ≤ 50mg/m3, NOx ≤ 200 mg/m3).
(4) The Headquarter of Anhui Gujing Distillery Company Limited and Gujing Branch finished product coding machine exhaust gas
treatment facilities are operating well. By adopting photocatalytic oxidation technology, the Company’s flue gas emissions comply
with the Table 1 standard requirements of DB12/524-2014 Emission Standard for Industrial Enterprises Volatile Organic Compounds.
(5) The Headquarters of Anhui Gujing Distillery Company Limited and the odor treatment facilities of Zhangji Sewage Station are
operating well. By adopting technologies like photocatalytic oxidation and activated carbon adsorption, and the Company’s emission
of exhaust gas meets the requirements of Table 2 of the Standard for Emission of Pollutants.
In 2021, the environment protection facilities of the Company and its subsidiaries ran normally in general, main pollutants can
achieve up-to-standard discharge, environment information is opened to the public normally, and they have performed their social
responsibilities properly.
Environmental impact assessment of construction project and other administrative license situation in respect of
environmental protection

                                                                         EIA approval (filing)
 No.                         Item                   Category of EIA                                   EIA approval (filing) number
                                                                                 time

         Intelligent                    Technical
         Transformation Project of Liquor            Environment
  1                                                                    2 February 2021             BHS【2021】No. 4
         Production     of      Anhui     Gujing    affection report
         Distillery Co., Ltd.

         12# Intelligent Integrated Storage
                                                     Environment
  2      Center Construction Project of                                17 March 2021               BHB【2021】No. 5
                                                     affection form
         Anhui Gujing Distillery Co., Ltd.

         VOCs Advanced Treatment Project             Environment
  3                                                                    14 April 2021               20213416000100000018
         of Anhui Longrui Glass Co., Ltd             affection form

Emergency plan for sudden environment affairs
                                                             ~ 61 ~
                                                                                                               Annual Report 2021


The Company has formulated the Emergency Plan of Anhui Gujing Distillery Company Limited for Sudden Environmental Pollution
Accident, which has been filed with Bureau of Ecology and Environment of Bozhou (File No. 341602-2021-006-H). Emergency plan
drills have been carried out as planned.
Anhui Longrui Glass Co., Ltd has formulated the Emergency Plan of Anhui Longrui Glass Co., Ltd for Sudden Environmental
Pollution Accident, which has been filed with Bureau of Ecology and Environment of Bozhou (File No. 341602-2021-006-M).
Emergency plan drills have been carried out as planned.
Environmental self-monitoring scheme
Anhui Gujing Distillery Co., Ltd. has formulated the Self-Monitoring Scheme of Anhui Gujing Distillery Company Limited and
published it on the relevant website of Anhui Province.
Anhui Longrui Glass Co., Ltd has formulated the Self-Monitoring Scheme of Anhui Longrui Glass Co., Ltd and published it on the
relevant website of Anhui Province.
Administrative punishments received with respect to environmental issues in the Reporting Period
Naught
Other environment information that should be disclosed
Naught
Measures taken to reduce carbon emission and effects during the Reporting Period
√ Applicable □ Not applicable
1. Balanced production of thermal power plant: In order to improve the operation efficiency of a boiler, and reduce carbon emission,
in September 2021, balanced production was first conducted in Gujing plant area. After the execution of balanced production, the
efficiency of coal burning was increased by 13% year on year. Calculated on the basis of the coal consumption from September to
December, fire coal was conserved by approximately 1,500 tons year on year, converted to the standard coal of 1,070 tons, and
carbon dioxide emission was reduced by approximately 2,900 tons.
2. Intensified power conservation of the Company: (1) The Company organized 440 battery-driven vehicles of various types and
various entities for peak-shifting charge. (2) The Company conserved power in offices, sufficiently utilized natural light, and
prohibited lamps from shining all the time, replaced lamps in passageways with sound-controlled types, and strictly implemented the
requirements of temperature setting on air-conditioners. (3) The Company conserved power used by street lamps, and strictly
specified turn-off and turn-on time; through the above-mentioned measures, power wasted in offices has been greatly reduced, which
has played an active role in the energy conservation and carbon reduction of the Company.
Other related environment protection information
Naught


II Social Responsibility

For details, please refer to the Corporate Social Responsibility Report for 2021 disclosed by the Company on the website Cninfo
dated 30 April 2022.


III Consolidation and Expansion of Poverty Alleviation Outcomes, and Rural Revitalization

The Company organized and carried out the activities tackling difficulties in poverty alleviation, activities with the theme of
"Appreciating CPC, and Striding toward New Times", visited and conveyed greetings to the appointed cadres and poverty-stricken
households and their children; organized Party members and management personnel to go to Wuma Town to express regards to the
financially difficult households of the three villages under the assistance, and sent medicines, clinical thermometers, and masks to


                                                           ~ 62 ~
                                                                                                              Annual Report 2021


give aid for fighting pandemic. The goods for poverty alleviation were bought. The Company helped the poverty-stricken villages in
Xingyuan Subdistrict in Woyang to sell tomatoes and celery; helped poverty-stricken households in Wuma to promote peaches; and
helped Pishan County in Khotan Prefecture, Xinjiang to sell walnuts and Chinese dates.




                                                          ~ 63 ~
                                                                                                                   Annual Report 2021




                                         Part VI Significant Events

I Fulfillment of Commitments

1. Commitments of the Company’s Actual Controller, Shareholders, Related Parties and Acquirers, as well
as the Company Itself and other Entities Fulfilled in the Reporting Period or Ongoing at the Period-end

√ Applicable □ Not applicable

                                                                                             Date of
                                                            Type of        Details of                       Term of
             Commitment                   Promisor                                         commitment                   Fulfillment
                                                         commitment      commitment                      commitment
                                                                                             making

                                                                        The Company
                                                                        promised that
                                                                        Yellow Crane
                                                                        Tower
                                                                        Distillery Co.,
                                                                        Ltd. would                                     Complete the
                                                                        realize the                                    performance
                                       Anhui Gujing
Commitments made in acquisition                                         operating                                      commitment
                                       Distillery       Performance
documents or shareholding alteration                                    revenue of        29 April 2016 Y2017-Y2021 of the
                                       Company          commitment
documents                                                               RMB1,700.56                                    supplementar
                                       Limited
                                                                        25 million (tax                                y agreement
                                                                        inclusive) and                                 in 2021.
                                                                        the net profit
                                                                        margin would
                                                                        be not lower
                                                                        than 11.00%
                                                                        in 2021.

Fulfilled on time                      Yes

                                       Before and after the Spring Festival in 2020, the COVID-19 pandemic occurred and spread
                                       to many places across China (hereinafter referred to as the "pandemic"), and all provinces
                                       and municipalities successively launched the highest level of response for major public
                                       health emergencies. Hubei Province, where Yellow Crane Tower locates, was materially
Specific reasons for failing to fulfill adversely    affected    by   the pandemic.       Annual   performance:   Revenue stood      at
commitments on time and plans for RMB583,131,800, down 55.27% year on year. Due to the force majeure of the COVID-19
next step (if any)                     pandemic, market trading activities were seriously affected, resulting in part of the terms of
                                       the original agreement unable to be fulfilled on schedule. To this end, upon consultation by
                                       all parties, the Supplementary Agreement on Equity Transfer was entered into. For the
                                       commitments in respect of net sales interest rate, net sales profit and expected distributable
                                       profit of Yellow Crane Tower, the assessment period has been extended by one year from


                                                                ~ 64 ~
                                                                                                                               Annual Report 2021


                                            the execution date of the Supplementary Agreement. In other words, the year 2020 will not
                                            be regarded as the assessment year, and 2021 will be taken as the fourth assessment year
                                            and 2022 as the fifth assessment year.


2. Where there had been an earnings forecast for an asset or project and the Reporting Period was still
within the forecast period, explain why the forecast has been reached for the Reporting Period.

□ Applicable √ Not applicable


II Occupation of the Company’s Capital by the Controlling Shareholder or any of Its Related
Parties for Non-Operating Purposes

□ Applicable √ Not applicable


III Irregularities in the Provision of Guarantees

□ Applicable √ Not applicable


IV Explanations Given by the Board of Directors Regarding the Latest “Modified Opinion”
on the Financial Statements

□ Applicable √ Not applicable


V Explanations Given by the Board of Directors, the Supervisory Board and the Independent
Directors (if any) Regarding the Independent Auditor's “Modified Opinion” on the Financial
Statements of the Reporting Period

□ Applicable √ Not applicable


VI YoY Changes to Accounting Policies, Estimates or Correction of Material Accounting
Errors

√ Applicable □ Not applicable

Contents of changes in accounting policies
                                                                Approval procedures                                    Note
               and reasons thereof

On 7 December 2018, the Ministry of
Finance revised and issued the Accounting
Standards       for     Business      Enterprises                                                  For     details,   please     refer   to   the
No.21-Leases                  (CK(2018)No.35) Reviewed and approved on the           7th   Meeting announcement on changes in accounting
(hereinafter     referred    to    as the   new of the   9th   Board of Directors and the 5th      policies             disclosed             on
standards governing leases) and required Meeting of the 9th Supervisory Committee http://www.cninfo.com.cn dated 30 April
those enterprises both listed in domestic                                                          2021.
and aboard and those enterprises overseas
listed   with         International    Financial

                                                                    ~ 65 ~
                                                                                                                Annual Report 2021


Reporting     Standards       or     Accounting
Standards for Business Enterprises for
preparation of financial statements to
implement it since 1 January 2019,
required other enterprises carrying out the
Accounting        Standards    for     Business
Enterprises to implement it since 1 January
2021.


VII YoY Changes to the Scope of the Consolidated Financial Statements

√ Applicable □ Not applicable

                                             Principal                                     Stake(%)
                                                          Registered   Nature of the
         Name of subsidiary                   place of                                                              Make way
                                                            place        business      Directly    Indirect
                                              business

                                                                                                                Business

                                             Chuzhou,     Mingguang,                                            combination not
Anhui Mingguang Distillery Co., Ltd.                                   Manufacturing       60.00
                                                  Anhui     Anhui                                               under the same

                                                                                                                control

                                                                                                                Business

Mingguang Tiancheng Ming Wine                Chuzhou,     Mingguang,     Trade and                              combination not
                                                                                                        60.00
Sales Co., Ltd.                                   Anhui     Anhui        business                               under the same

                                                                                                                control

                                                                                                                Business

Fengyang Xiaogang Village Ming               Chuzhou,     Fengyang,                                             combination not
                                                                       Manufacturing                    42.00
Wine Distillery Co., Ltd.                         Anhui     Anhui                                               under the same

                                                                                                                control
                                                                                                                Incorporation
Anhui     Jiuhao      China        Railway    Bozhou,      Bozhou,      Engineering
                                                                                           52.00                through
Construction Engineering Co., Ltd.                Anhui     Anhui       construction                            investment
                                                                                                                Incorporation
Anhui Jiuan Mechanical Electrical             Bozhou,      Bozhou,      Engineering
                                                                                         100.00                 through
Equipment Co., Ltd.                               Anhui     Anhui       construction                            investment

                                                                                                                Business

Renhuai Maotai Town Zhencang                 Renhuai,      Renhuai,                                             combination not
                                                                       Manufacturing       60.00
Winery Industry Co., Ltd.                     Guizhou      Guizhou                                              under the same

                                                                                                                control




                                                             ~ 66 ~
                                                                                                           Annual Report 2021


VIII Engagement and Disengagement of Independent Auditor

Current independent auditor

Name of the domestic independent auditor                  RSM Certified Public Accountants (LLP)

The Company’s payment to the domestic independent
                                                          200.00
auditor (RMB’0,000)

How many consecutive years the domestic independent
                                                          3
auditor has provided audit service for the Company

Names of the certified public accountants from the
domestic independent auditor writing signatures on the Zhang Liping, Han Songliang
auditor’s report

How many consecutive years the certified public
accountants have provided audit service for the 1
Company

Indicate by tick mark whether the independent auditor was changed for the Reporting Period.
□Yes √ No
Independent auditor, financial advisor or sponsor engaged for the audit of internal controls:
√ Applicable □ Not applicable
In 2021, the Company engaged RSM Certified Public Accountants (LLP) as the internal control auditor and China International
Capital Corporation Limited as the sponsor for the Company’s private placement of stocks with the payment of RMB1 million (tax
inclusive).


IX Possibility of Delisting after Disclosure of this Report

□ Applicable √ Not applicable


X Insolvency and Reorganization

□ Applicable √ Not applicable


XI Major Legal Matters

□ Applicable √ Not applicable


XII Punishments and Rectifications

□ Applicable √ Not applicable


XIII Credit Quality of the Company as well as Its Controlling Shareholder and Actual
Controller

□ Applicable √ Not applicable


                                                              ~ 67 ~
                                                                                          Annual Report 2021


XIV Major Related-Party Transactions

1. Continuing Related-Party Transactions

□ Applicable √ Not applicable


2. Related-Party Transactions Regarding Purchase or Sales of Assets or Equity Interests

□ Applicable √ Not applicable


3. Related Transactions Regarding Joint Investments in Third Parties

□ Applicable √ Not applicable


4. Credits and Liabilities with Related Parties

□ Applicable √ Not applicable


5. Transactions with Related Finance Companies

□ Applicable √ Not applicable


6. Transactions with Related Parties by Finance Companies Controlled by the Company

□ Applicable √ Not applicable


7. Other Major Related-Party Transactions

□ Applicable √ Not applicable


XV Major Contracts and Execution thereof

1. Entrustment, Contracting and Leases

(1) Entrustment

□ Applicable √ Not applicable


(2) Contracting

□ Applicable √ Not applicable


(3) Leases

□ Applicable √ Not applicable

                                                  ~ 68 ~
                                                                                                                                        Annual Report 2021


2. Major Guarantees

□ Applicable √ Not applicable


3. Cash Entrusted for Wealth Management

(1) Cash Entrusted for Wealth Management

√ Applicable □ Not applicable
Overviews of cash entrusted for wealth management during the Reporting Period
                                                                                                                                           Unit: RMB'0,000

                                                                                                                                          Unrecovered
                                                                                                                  Unrecovered           overdue amount
    Specific type           Capital resources         Amount incurred              Undue balance
                                                                                                              overdue amount            with provision for
                                                                                                                                           impairment

Bank financial
                          Raised funds                            442,000.00               442,000.00                           0.00                    0.00
products

Others                    Self-owned funds                         20,000.00                    20,000.00                       0.00                    0.00

Total                                                             462,000.00               462,000.00                           0.00                    0.00



Particulars of cash entrusted for wealth management with single significant amount or low security, bad liquidity, and no capital
preservation
                                                                                                                                          Unit: RMB’0,000

                                                                                                  Amou Actual
                                                                                                                                           Plan for
                                                                                                   nt of recover                                       Overvi
                                                                                                                                          entrusted
                    Type                                          Determin Annua Estim actual                y of    Allowa                            ews of
           Type                             Sta En                                                                               Legal       asset
Name of              of                                             ation      l yield    ate     profit     profit nce for                            events
           of the          Amo Capital rt        d Use of                                                                        proced manage
   the              the                                           method of     for      profit or loss or loss impair                                  and
           truste           unt resource dat da            fund                                                                  ures or ment in
 trustee            prod                                          remunerat refere        (if       in        in     ment (if                          query
               e                             e   te                                                                               not         the
                    uct                                              ion        nce      any) Report Reporti           any)                            index
                                                                                                                                           future or
                                                                                                   ing        ng                                       (if any
                                                                                                                                             not
                                                                                                  Period Period

                                                      Purchas
                                                      ing new
                                                      shares      1.2% of
           Privat
DAPU                                                  offline, products’
           e
Asset                      20,00 Self-fun             product net value                            1,439. Recove
           fund Fund                                                           7.00%                                            Yes       Yes
Manage                         0 ded                  s with      and 20%                                33 red
           mana
ment                                                  fixed       of excess
           ger
                                                      earning earnings
                                                      s,
                                                      reverse

                                                                     ~ 69 ~
                                                                                                             Annual Report 2021


                                               repurch
                                               ase of
                                               nationa
                                               l debt,
                                               and etc.

                        20,00                                                 1,439.
Total                             --   -- --      --      --      --                    --              --        --      --
                            0                                                     33

Whether there is the case where the principal cannot be recovered at maturity or other case which may cause impairment for cash
entrusted for wealth management
□ Applicable √ Not applicable


(2) Entrusted Loans

□ Applicable √ Not applicable


4. Other Major Contracts

□ Applicable √ Not applicable


XVI Other Significant Events

□ Applicable √ Not applicable


XVII Significant Events of Subsidiaries

□ Applicable √ Not applicable




                                                          ~ 70 ~
                                                                                                                                    Annual Report 2021




                                Part VII Share Changes and Shareholder Information

            I Share Changes

            1. Share Changes

                                                                                                                                             Unit: share

                                                       Before                     Increase/decrease in the Reporting Period (+/-)                   After

                                                                                                      Shares as
                                                                                       Shares as
                                                                                                      dividend
                                                           Percentage                   dividend                                                           Percentag
                                              Shares                      New issues                  converted     Other       Subtotal      Shares
                                                                (%)                    converted                                                             e (%)
                                                                                                     from capital
                                                                                       from profit
                                                                                                      reserves

I. Restricted shares                                                      25,000,000                                           25,000,000    25,000,000       4.73%


1. Shares held by the state

2. Shares held by state-owned
                                                                           1,900,000                                            1,900,000     1,900,000       0.36%
corporations

3. Shares held by other domestic
                                                                          21,600,000                                           21,600,000    21,600,000       4.09%
investors

Among which: Shares held by
                                                                          21,600,000                                           21,600,000    21,600,000       4.09%
domestic corporations

                 Shares         held   by
domestic individuals

4. Shares held by foreign investors                                        1,500,000                                            1,500,000     1,500,000       0.28%

Among which: Shares held by
                                                                           1,500,000                                            1,500,000     1,500,000       0.28%
foreign corporations

                  Shares held by
foreign individuals


                                            503,600,000         100.00%                                                                     503,600,000      95.27%
II. Non-restricted shares


                                            383,600,000         76.17%                                                                      383,600,000      72.57%
1. RMB ordinary shares

2.   Domestically      listed     foreign
                                            120,000,000         23.83%                                                                      120,000,000      22.70%
shares

3. Overseas listed foreign shares

4. Other

                                                                                ~ 71 ~
                                                                                                                                  Annual Report 2021



III. Total shares                     503,600,000        100.00% 25,000,000                                                   25,000,000 528,600,000     100.00%


            Reasons for share changes:
            √ Applicable □ Not applicable
            On 23 June 2021, the Company issued 25,000,000 ordinary shares (A shares) denominated in Renminbi to specific targets in a
            non-public manner.
            Approval of share changes:
            √ Applicable □ Not applicable
            Approved by the China Securities Regulatory Commission under CSRC Permit [2021] No. 1422, the Company issued
            RMB25,000,000 ordinary shares (A shares) to specific targets on 23 June 2021. The above shares were registered with the Shenzhen
            Branch of CSDC on 12 July 2021 and listed on the Shenzhen Stock Exchange on 22 July 2021.
            Transfer of share ownership:
            √ Applicable □ Not applicable
            The relevant matters of the 25,000,000 shares of the Company issued in a non-public manner were audited and confirmed with the
            Shenzhen Branch of China Securities Depository and Clearing Corporation Limited, registered with the Branch on 12 July 2021, and
            listed on the Shenzhen Stock Exchange on 22 July 2021. Upon completion of this share issuance in a non-public manner, the total
            shares of the Company were changed from 503,600,000 shares to 528,600,000 shares.
            Effects of share changes on the basic and diluted earnings per share, equity per share attributable to the Company’s ordinary
            shareholders and other financial indicators of the prior year and the prior accounting period, respectively:
            √ Applicable □ Not applicable
            During the Reporting Period, the total share capital of the Company was changed from 503,600,000 shares at the beginning of the
            period to 528,600,000 shares at the end of the period, which has diluted to a certain degree the earnings per share and the net asset
            per share owned by the shareholders of ordinary shares of the Company.
            Other information that the Company considers necessary or is required by the securities regulator to be disclosed:
            □ Applicable √ Not applicable


            2. Changes in Restricted Shares

            √ Applicable □ Not applicable
                                                                                                                                           Unit: Share

                                   Restricted shares Restricted shares Restricted shares Restricted shares
                Name of the                                                                                          Restricted     Restricted shares
                                    amount at the       increased of the   relieved of the       amount at the
                shareholders                                                                                           reasons        relieved date
                                     period-begin           period             period             period-end

            JPMorgan Chase
                                                                                                                  Private
            Bank, National                          0           750,000                      0          750,000                    22 January 2022
                                                                                                                  placement
            Association

            Guotai Junan                                                                                          Private
                                                    0         1,125,000                      0        1,125,000                    22 January 2022
            Securities Co., Ltd.                                                                                  placement

            E Fund                                                                                                Private
                                                    0        12,750,000                      0       12,750,000                    22 January 2022
            Management Co.,                                                                                       placement


                                                                           ~ 72 ~
                                                                                                                         Annual Report 2021


Ltd.

Caitong Fund
                                                                                                   Private
Management Co.,                         0         1,130,000                0        1,130,000                             22 January 2022
                                                                                                   placement
Ltd.

Taiping Fund
                                                                                                   Private
Management                              0          750,000                 0            750,000                           22 January 2022
                                                                                                   placement
Company Limited

Fullgoal Fund
                                                                                                   Private
Management Co.,                         0         1,275,000                0        1,275,000                             22 January 2022
                                                                                                   placement
Ltd.

Huatai Securities                                                                                  Private
                                        0          775,000                 0            775,000                           22 January 2022
Co., Ltd.                                                                                          placement

Huatai Securities
                                                                                                   Private
Asset Management                        0          750,000                 0            750,000                           22 January 2022
                                                                                                   placement
Co., Ltd.

ICBC Credit Suisse
                                                                                                   Private
Asset Management                        0         2,150,000                0        2,150,000                             22 January 2022
                                                                                                   placement
Co., Ltd.

Morgan Stanley &
                                                                                                   Private
Co. International                       0          750,000                 0            750,000                           22 January 2022
                                                                                                   placement
Plc

China Life Asset
                                                                                                   Private
Management Co.,                         0          750,000                 0            750,000                           22 January 2022
                                                                                                   placement
Ltd.

China Merchants
                                                                                                   Private
Fund Management                         0         2,000,000                0        2,000,000                             22 January 2022
                                                                                                   placement
Co., Ltd.

China Universal
                                                                                                   Private
Asset Management                        0           45,000                 0              45,000                          22 January 2022
                                                                                                   placement
Co., Ltd.

Total                                   0        25,000,000                0       25,000,000                --                  --


II. Issuance and Listing of Securities

1. Securities (Exclusive of Preferred Shares) Issued in the Reporting Period

√ Applicable □ Not applicable

   Name of                        Issue price                                  Number      Termination            Index to
                                                  Issued                                                                       Disclosure
 stock and its    Issue date      (or interest                Listing date approved for      date of              disclosed
                                                  number                                                                          date
  derivative                         rate)                                public trading transaction          information


                                                              ~ 73 ~
                                                                                                                     Annual Report 2021


  securities

Stocks

                                                                                                         For details,
                                                                                                         see the
                                                                                                         Report on the
                                                                                                         Issuance of
                                                                                                         the Private
                                                                                                         Placement of
                                                                                                         A-shares &
Private                       RMB200/sha                                                                 Announceme
               23 June 2021                     25,000,000 22 July 2021        25,000,000                                21 July 2021
placement                     re                                                                         nt on the
                                                                                                         Listing of
                                                                                                         These Shares
                                                                                                         disclosed by
                                                                                                         the Company
                                                                                                         on
                                                                                                         www.cninfo.
                                                                                                         com.cn

Particulars about the securities (exclusive of preferred shares) issued in the Reporting Period:
Approved by the China Securities Regulatory Commission under CSRC Permit [2021] No. 1422, the Company issued
RMB25,000,000 ordinary shares (A shares) to specific targets on 23 June 2021 at an issuing price of RMB200.00 per share, raising
total proceeds of RMB5,000,000,000.00. After deducting the expenses related to the issue of RMB45,657,925.15 (excluding VAT),
the actual net proceeds raised were RMB4,954,342,074.85. RSM (special ordinary partnership) has audited the availability of the
funds raised from the non-public offering of shares of the Company on 29 June 2021 and issued Capital Verification Report R.C.Y.Z
[2021] No. 518Z0050. The above shares were registered with the Shenzhen Branch of CSDC on 12 July 2021 and listed on the
Shenzhen Stock Exchange on 22 July 2021.


2. Changes to Total Shares, Shareholder Structure and Asset and Liability Structures

√ Applicable □ Not applicable
Upon completion of this share issuance of the Company in a non-public manner, the total share capital of the Company was changed
from 503,600,000 shares to 528,600,000 shares, with the total assets increased, and the asset-liability ratio decreased accordingly.


3. Existing Staff-Held Shares

□ Applicable √ Not applicable


III Shareholders and Actual Controller

1. Shareholders and Their Shareholdings at the Period-End

                                                                                                                             Unit: share

Number of                 31,645 Number of                  35,931 Number of                         0 Number of                       0

                                                             ~ 74 ~
                                                                                                                               Annual Report 2021


ordinary                               ordinary                            preferred                            preferred
shareholders                           shareholders at                     shareholders with                    shareholders
                                       the month-end                       resumed voting                       with resumed
                                       prior to the                        rights (if any) (see                 voting rights at
                                       disclosure of this                  note 8)                              the month-end
                                       Report                                                                   prior to the
                                                                                                                disclosure of this
                                                                                                                Report (if any)
                                                                                                                (see note 8)

                                                5% or greater shareholders or top 10 shareholders

                                                                          Increas                               Shares in pledge, marked or
                                                                          e/decre                                           frozen
                                           Shareholdi Total shares        ase in Restricted
      Name of              Nature of                                                            Non-restricte
                                                ng          held at the     the      shares
     shareholder          shareholder                                                           d shares held
                                           percentage       period-end    Reporti      held                        Status             Shares
                                                                            ng
                                                                          Period

ANHUI      GUJING
GROUP                   State-owned
                                                51.12%      270,234,022                         270,234,022 In pledge                114,000,000
COMPANY                 legal person
LIMITED

GAOLING                 Foreign legal
                                                2.35%        12,446,408                           12,446,408
FUND,L.P.               person

BANK               OF
CHINA-CHINA
MERCHANTS
CHINA
SECURITIES
                        Other                   2.10%        11,110,421             1,900,000      9,210,421
LIQUOR INDEX
CLASSIFICATIO
N     SECURITIES
INVESTMENT
FUND

AGRICULTURAL
BANK OF CHINA
-     E       FUND
CONSUMPTION
                        Other                   1.92%        10,128,102             1,000,000      9,128,102
SECTOR STOCK
SECURITIES
INVESTMENT
FUND

INDUSTRIAL              Other                   1.89%         9,999,951                            9,999,951

                                                                     ~ 75 ~
                                                                              Annual Report 2021


AND
COMMERCIAL
BANK OF CHINA
LIMITED-
INVESCO GREAT
WALL
EMERGING
GROWTH
HYBRID
SECURITIES
INVESTMENT
FUND

CHINA
INTERNATIONA
L        CAPITAL Foreign legal
                                            1.65%   8,707,752     8,707,752
CORPORATION          person
HONG        KONG
SECURITIES LTD

HONG        KONG
SECURITIES           Foreign legal
                                            1.53%   8,086,818     8,086,818
CLEARING             person
COMPANY LTD.

UBS          (LUX)
EQUITY FUND -
                     Foreign legal
CHINA                                       1.42%   7,505,261     7,505,261
                     person
OPPORTUNITY
(USD)

BANK            OF
CHINA-
INVESCO GREAT
WALL      DINGYI
                     Other                  0.95%   4,995,403     4,995,403
HYBRID
SECURITIES
INVESTMENT
FUND (LOF)

GREENWOODS
                     Foreign legal
CHINA      ALPHA                            0.87%   4,614,326     4,614,326
                     person
MASTER FUND

Strategic investor or general legal
person becoming a top-10 ordinary
                                      N/A
shareholder due to rights issue (if
any) (see note 3)


                                                         ~ 76 ~
                                                                                                                           Annual Report 2021


                                            Among the shareholders above, the Company’s controlling shareholder—Anhui Gujing Group
                                            Company Limited—is not a related party of other shareholders; nor are they parties acting in
                                            concert as defined in the Administrative Measures on Information Disclosure of Changes in
Related or acting-in-concert parties
                                            Shareholding of Listed Companies. As for the other shareholders, the Company does not know
among the shareholders above
                                            whether they are related parties or whether they belong to parties acting in concert as defined
                                            in the Administrative Measures on Information Disclosure of Changes in Shareholding of
                                            Listed Companies.

Explain if any of the shareholders
above        was       involved        in
entrusting/being      entrusted      with N/A
voting rights or waiving voting
rights

Special      account        for     share
repurchases (if any) among the top N/A
10 shareholders (see note 10)

                                                       Top 10 non-restricted shareholders

                                                                                                                    Shares by type
          Name of shareholder                       Non-restricted shares held at the period-end
                                                                                                                  Type            Shares

ANHUI          GUJING             GROUP                                                                   RMB-denominate
                                                                                            270,234,022                         270,234,022
COMPANY LIMITED                                                                                           d ordinary share

                                                                                                          Domestically
GAOLING FUND,L.P.                                                                            12,446,408 listed foreign           12,446,408
                                                                                                          share

INDUSTRIAL                          AND
COMMERCIAL              BANK          OF
CHINA        LIMITED-        INVESCO                                                                      RMB-denominate
                                                                                              9,999,951                           9,999,951
GREAT         WALL          EMERGING                                                                      d ordinary share
GROWTH HYBRID SECURITIES
INVESTMENT FUND

BANK         OF        CHINA-CHINA
MERCHANTS                          CHINA
                                                                                                          RMB-denominate
SECURITIES LIQUOR INDEX                                                                       9,210,421                           9,210,421
                                                                                                          d ordinary share
CLASSIFICATION SECURITIES
INVESTMENT FUND

AGRICULTURAL             BANK         OF
CHINA          -       E          FUND
                                                                                                          RMB-denominate
CONSUMPTION                       SECTOR                                                      9,128,102                           9,128,102
                                                                                                          d ordinary share
STOCK                   SECURITIES
INVESTMENT FUND

CHINA               INTERNATIONAL                                                                         Domestically
                                                                                              8,707,752                           8,707,752
CAPITAL              CORPORATION                                                                          listed foreign

                                                                  ~ 77 ~
                                                                                                                              Annual Report 2021


HONG KONG SECURITIES LTD                                                                                      share

HONG           KONG           SECURITIES                                                                      RMB-denominate
                                                                                                  8,086,818                             8,086,818
CLEARING COMPANY LTD.                                                                                         d ordinary share

                                                                                                              Domestically
UBS (LUX) EQUITY FUND -
                                                                                                  7,505,261 listed foreign              7,505,261
CHINA OPPORTUNITY (USD)
                                                                                                              share

BANK OF CHINA- INVESCO
GREAT WALL DINGYI HYBRID                                                                                      RMB-denominate
                                                                                                  4,995,403                             4,995,403
SECURITIES                INVESTMENT                                                                          d ordinary share
FUND (LOF)

                                                                                                              Domestically
GREENWOODS CHINA ALPHA
                                                                                                  4,614,326 listed foreign              4,614,326
MASTER FUND
                                                                                                              share

                                                Among the shareholders above, the Company’s controlling shareholder—Anhui Gujing Group
Related or acting-in-concert parties
                                                Company Limited—is not a related party of other shareholders; nor are they parties acting in
among top 10 unrestricted public
                                                concert as defined in the Administrative Measures on Information Disclosure of Changes in
shareholders, as well as between
                                                Shareholding of Listed Companies. As for the other shareholders, the Company does not know
top     10          unrestricted       public
                                                whether they are related parties or whether they belong to parties acting in concert as defined
shareholders           and       top      10
                                                in the Administrative Measures on Information Disclosure of Changes in Shareholding of
shareholders
                                                Listed Companies.

                                                Since October 2021, the Company's controlling shareholder Gujing Group has conducted the
Top    10      ordinary        shareholders
                                                business of "Refinancing by Lending Securities", and as of 31 December 2021, 1,170,000 lent
involved       in     securities       margin
                                                shares were outstanding,the ownership of the shares lent by the refinancing securities will not
trading (if any) (see note 4)
                                                be transferred.

Indicate by tick mark whether any of the top 10 ordinary shareholders or the top 10 unrestricted ordinary shareholders of the
Company conducted any promissory repo during the Reporting Period.
□ Yes √ No
No such cases in the Reporting Period.


2. Controlling Shareholder

Nature of the controlling shareholder: controlled by a local state-owned legal person
Type of the controlling shareholder: legal person

                                                  Legal
      Name of controlling                                                                   Unified social credit
                                         representative/person Date of establishment                                        Principal activity
            shareholder                                                                             code
                                                in charge

                                                                                                                      Making beverage,
ANHUI GUJING GROUP
                                        Liang Jinhui              16 January 1995        91341600151947437P           construction materials and
COMPANY LIMITED
                                                                                                                      plastic products, etc.

Controlling            shareholder’s As of 31 December 2021, the controlling shareholder ANHUI GUJING GROUP COMPANY
holdings       in     other     listed LIMITED directly holds 99,220,400 shares of Huaan Securities Co., Ltd. owning the proportion of

                                                                      ~ 78 ~
                                                                                                                  Annual Report 2021


companies at home or abroad shares of 2.11%.
in the Reporting Period

Change of the controlling shareholder in the Reporting Period:
□ Applicable √ Not applicable
No such cases in the Reporting Period.


3. Information about the Actual Controller and Acting-in-concert Parties

Nature of the actual controller: Local administrator for state-owned assets
Type of the actual controller: legal person

                                            Legal
                                                                   Date of      Unified social credit
   Name of actual controller         representative/person                                                    Principal activity
                                                               establishment            code
                                           in charge

State-owned Assets Supervision
and              Administration
                                     Zhao Liang              N/A               113416007316875206       N/A
Commission of the People’s
Government of Bozhou

Other listed companies at home
or abroad controlled by the
                                     N/A
actual    controller      in   the
Reporting Period

Change of the actual controller during the Reporting Period:
□ Applicable √ Not applicable
No such cases in the Reporting Period.
Ownership and control relations between the actual controller and the Company:




Indicate by tick mark whether the actual controller controls the Company via trust or other ways of asset management.

                                                                   ~ 79 ~
                                                                                       Annual Report 2021


□ Applicable √ Not applicable


4. Number of Accumulative Pledged Shares held by the Company’s Controlling Shareholder or the Largest
Shareholder as well as Its Acting-in-Concert Parties Accounts for 80% of all shares of the Company held
by Them

□ Applicable √ Not applicable


5. Other 10% or Greater Corporate Shareholders

□ Applicable √ Not applicable


6. Limitations on Shareholding Decrease by the Company’s Controlling Shareholder, Actual Controller,
Reorganizer and Other Commitment Makers

□ Applicable √ Not applicable


IV Specific Implementation of Share Repurchase during the Reporting Period

Progress on any share repurchase
□ Applicable √ Not applicable
Progress on reducing the repurchased shares by means of centralized bidding
□ Applicable √ Not applicable




                                                          ~ 80 ~
                                                                     Annual Report 2021




                                       Part VIII Preference Shares

□ Applicable √ Not applicable
No preference shares in the Reporting Period.




                                                 ~ 81 ~
                                                  Annual Report 2021




                                  Part IX Bonds

□ Applicable √ Not applicable




                                   ~ 82 ~
                                                                                                                    Annual Report 2021




                                        Part X Financial Statements

I Independent Auditor’s Report

Type of auditor’s opinion                                          Unmodified unqualified opinion

Date of signing the auditor’s report                               29 April 2022

Name of the auditor                                                 RSM China

No. of the auditor’s report                                        Rongcheng audit character [2022] 518Z0165

Name of CPA                                                         Zhang Liping, Han Songliang



                                                  Text of the Auditor’s Report
To the Shareholders of Anhui Gujing Distillery Company Limited:
I. Opinion
We have audited the financial statements of Anhui Gujing Distillery Co., Ltd. (hereafter referred to as “Anhui Gujing”), which
comprises the consolidated and the parent company’s statement of financial position as at 31 December 2021, the consolidated and
the parent company’s statement of profit or loss and other comprehensive income, the consolidated and the parent company’s
statement of cash flows, the consolidated and the parent company’s statement of changes in equity for the year then ended, and the
notes to the financial statements.
In our opinion, the accompanying Anhui Gujing’s financial statements present fairly, in all material respects, the consolidated and the
company’s financial position as at 31 December 2021 and of their financial performance and cash flows for the year then ended in
accordance with Accounting Standards for Business Enterprises.
II. Basis for Opinion
We conducted our audit in accordance with Chinese Standards on Auditing (CSAs). 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 Anhui Gujing in accordance with the Code of Ethics for Professional Accountants of the Chinese Institute of Certified Public
Accountants, and we have fulfilled our other ethical responsibilities. We believe that the audit evidence we obtained is sufficient and
appropriate to provide a basis for our opinion.
III. Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of the most significance in our audit of the financial
statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and
informing our opinion thereon, and we do not provide a separate opinion on these matters.
(I) Revenue recognition
1. Description
Refer to notes to the consolidated financial statements "3. 27. Revenue" and "5. 37. Revenue and Cost of Sales ".
In 2021, the Company achieved revenue of RMB13.27 billion, an increase of 28.93% compared with the same period in 2020. As
revenue is one of the key performance indicators of the company, there may be the risk of material misstatement in whether the
revenue is recognized in an appropriate accounting period. Therefore, we regard revenue recognition as a key audit matter.
2. Audit response


                                                             ~ 83 ~
                                                                                                                   Annual Report 2021


Our procedures for revenue recognition include:
(1) Understand the internal control process design related to the sales business, and execute the walk-through test, perform the
control test on the identified key control points;
(2) Interview with the management, check the samples of sales contract, analyze the significant risk and reward transferring point
related to revenue recognition of liquor sales, and then evaluate whether the company's sales revenue recognition policy is
reasonable;
(3) Sampling inspection of supporting documents related to liquor sales revenue recognition, including sales orders, sales invoices,
outbound orders, etc.;
(4) Compared with the liquor sales data of other enterprises in the same industry, compared the liquor sales data of the last period
with the current period, analyzed the overall rationality of revenue and gross margin;
(5) For the liquor sales revenue recognized before and after the balance sheet date, select samples to check the sales orders, sales
invoices, outbound orders, etc., in order to evaluate whether the sales revenue is recorded in an appropriate accounting period;
(6) Confirm the amount of liquor sold and the closing balance of the advance payment to the main distributor by sending
confirmation letter.
(II) Accuracy of inventory balances
1. Description
Refer to notes to the consolidated financial statements "3 12. Inventory" and "5. 7. Inventory".
Anhui Gujing has a large inventory balance and needs to maintain an appropriate level of inventory to meet future market or
production demand. The inventory balance accounts for 18.35% of the Company's total assets, and most of the inventory is
semi-finished products and work in progress products. As the most important asset of liquor production enterprises, inventory has a
high balance at the end of the year and a large proportion of the total assets. Therefore, we regard the accuracy of the Company's
inventory balance as a key audit matter.
2. Audit response
Our procedures for the accuracy of inventory balances include:
(1) Understand the internal control process design related to inventory business, and carry out walk-through test, carry out control
tests for identified key control points;
(2) Obtain the stocktaking plan and stocktaking results of the company, understand the stocktaking methods and review procedures of
the company, and supervise the stocktaking;
(3) Understand the company's inventory cost accounting method, select several months of cost calculation sheet to review, and select
the main categories of inventory to carry out valuation test;
(4) To understand the provision method of the company's inventory impairment, evaluate the appropriateness of the provision method,
and review whether the provision amount is correct;
(5) Perform analytical procedures and compare with companies in the same industry.
IV. Other information
Management of Anhui Gujing is responsible for the other information. The other information comprises the information included in
the Annual Report of Anhui Gujing for the year of 2021, but does not include the financial statements and our auditor’s report
thereon.
Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion
thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or


                                                                ~ 84 ~
                                                                                                                      Annual Report 2021


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.
V. Responsibilities of Management and Those Charged with Governance for the Financial Statements
Management of Anhui Gujing is responsible for the preparation and fair presentation of the financial statements in accordance with
Accounting Standards of Business Enterprises, and for the design, implementation and maintenance of such internal control as
management determines is necessary to enable the preparation of financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing Anhui Gujing’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 management either
intends to liquidate Anhui Gujing or to cease operations, or have no realistic alternative but to do so.
Those charged with governance are responsible for overseeing Anhui Gujing’s financial reporting process.
VI. Auditor’s Responsibilities for the Audit of the Financial Statements
Our Objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high
level of assurance, but is not a guarantee that an audit conducted in accordance with CSAs will always detect a material misstatement
when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with CSAs, we exercise professional judgment and maintain professional skepticism throughout the
audit. We also:
1. Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform
audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our
opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud
may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
2. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the
circumstances.
3. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures
made by management.
4. Conclude on the appropriateness of management’s 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 Anhui Gujing’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 Anhui Gujing to cease to continue as a going concern.
5. Evaluate the overall presentation, structure and content of the financial statements, and whether the financial statements represent
the underlying transactions and events in a manner that achieves fair presentation.
6. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within Anhui
Gujing 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 those charged with governance with a statement that we have complied with relevant ethical requirements regarding

                                                                 ~ 85 ~
                                                                                                                Annual Report 2021


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 those charged with governance, we determine those matters that were of most significance in
the audit of the 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.




                 RSM China CPA LLP                                                    [Name of CPA]:Zhang Liping

                                                                                           (Engagement Partner)




                     ChinaBeijing                                                     [Name of CPA]:Han Songliang




                                                                                              [Date] 29 April 2022




                                                           ~ 86 ~
                                                                                                   Annual Report 2021


II Financial Statements

Currency unit for the financial statements and the notes thereto: RMB


1. Consolidated Balance Sheet

Prepared by Anhui Gujing Distillery Company Limited
                                                        31 December 2021
                                                                                                            Unit: RMB

                    Item                              31 December 2021                   31 December 2020

Current assets:

  Monetary assets                                                  11,924,922,771.76                 5,971,212,569.66

  Settlement reserve

  Interbank loans granted

  Held-for-trading financial assets                                 2,661,103,876.68                  203,877,915.51

  Derivative financial assets

  Notes receivable

  Accounts receivable                                                    89,005,804.17                 67,933,735.91

  Accounts receivable financing                                         545,204,103.42               1,673,510,794.51

  Prepayments                                                           156,570,970.99                 55,575,543.21

  Premiums receivable

  Reinsurance receivables

  Receivable      reinsurance    contract
reserve

  Other receivables                                                      71,753,212.24                 33,451,121.48

     Including: Interest receivable

                  Dividends receivable

  Financial assets purchased under
resale agreements

  Inventories                                                       4,663,456,672.30                 3,416,880,808.96

  Contract assets

  Assets held for sale

  Current portion of non-current assets

  Other current assets                                                  178,222,222.56                 97,412,681.26

Total current assets                                               20,290,239,634.12                11,519,855,170.50

Non-current assets:

  Loans and advances to customers

                                                           ~ 87 ~
                                                                    Annual Report 2021


  Investments in debt obligations

  Investments in other debt obligations

  Long-term receivables

  Long-term equity investments                       5,312,600.78        4,915,575.83

  Investments in other equity
                                                   54,542,418.50                 0.00
instruments

  Other non-current financial assets

  Investment property                                4,075,801.06        4,392,943.54

  Fixed assets                                   1,984,063,975.87    1,797,789,271.62

  Construction in progress                       1,064,134,904.21     279,169,201.60

  Productive living assets

  Oil and gas assets

  Right-of-use assets                              43,927,228.97                 0.00

  Intangible assets                              1,063,468,842.61      934,711,977.79

  Development costs

  Goodwill                                        561,364,385.01      478,283,495.29

  Long-term prepaid expense                        55,908,338.03        64,591,933.65

  Deferred income tax assets                      283,828,000.24        96,972,421.95

  Other non-current assets                           7,220,318.40        5,943,717.02

Total non-current assets                         5,127,846,813.68    3,666,770,538.29

Total assets                                    25,418,086,447.80   15,186,625,708.79

Current liabilities:

  Short-term borrowings                            30,035,138.89        70,665,500.00

  Borrowings from the central bank

  Interbank loans obtained

  Held-for-trading financial liabilities

  Derivative financial liabilities

  Notes payable                                   127,114,336.16      140,614,535.60

  Accounts payable                               1,020,437,321.89     505,206,561.86

  Advances from customers

  Contract liabilities                           1,825,447,705.85    1,206,573,886.26

  Financial      assets      sold    under
repurchase agreements
  Customer deposits and interbank
deposits


                                             ~ 88 ~
                                                                        Annual Report 2021


  Payables     for        acting   trading   of
securities
  Payables          for    underwriting      of
securities

  Employee benefits payable                           709,671,787.74       498,129,114.76

  Taxes payable                                       873,270,986.71      349,142,692.10

  Other payables                                     2,280,937,078.12    1,396,599,161.14

     Including: Interest payable

                     Dividends payable

  Handling charges and commissions
payable

  Reinsurance payables

  Liabilities directly associated with
assets held for sale
  Current      portion       of    non-current
                                                       13,190,399.32                 0.00
liabilities

  Other current liabilities                           799,522,562.60      320,792,383.03

Total current liabilities                            7,679,627,317.28    4,487,723,834.75

Non-current liabilities:

  Insurance contract reserve

  Long-term borrowings                                172,356,255.83        60,117,638.89

  Bonds payable

     Including: Preferred shares

                     Perpetual bonds

  Lease liabilities                                    28,107,223.18                 0.00

  Long-term payables

  Long-term           employee         benefits
payable

  Provisions

  Deferred income                                      91,101,512.05        75,111,997.53

  Deferred income tax liabilities                     194,033,257.93       114,821,451.24

  Other non-current liabilities

Total non-current liabilities                         485,598,248.99      250,051,087.66

Total liabilities                                    8,165,225,566.27    4,737,774,922.41

Owners’ equity:

  Share capital                                       528,600,000.00      503,600,000.00

  Other equity instruments

                                                  ~ 89 ~
                                                                                                         Annual Report 2021


     Including: Preferred shares

                  Perpetual bonds

  Capital reserves                                              6,224,747,667.10                           1,295,405,592.25

  Less: Treasury stock

  Other comprehensive income                                       -2,735,058.19                                        0.00

  Specific reserve

  Surplus reserves                                               269,402,260.27                              256,902,260.27

  General reserve

  Retained earnings                                             9,517,374,574.46                           7,987,380,161.21

Total equity attributable to owners of
                                                               16,537,389,443.64                          10,043,288,013.73
the Company as the parent

Non-controlling interests                                        715,471,437.89                              405,562,772.65

Total owners’ equity                                          17,252,860,881.53                          10,448,850,786.38

Total liabilities and owners’ equity                          25,418,086,447.80                          15,186,625,708.79


Legal representative: Liang Jinhui                                       The Company’s chief accountant: Zhu Jiafeng


Head of the Company’s financial department: Zhu Jiafeng


2. Balance Sheet of the Company as the Parent

                                                                                                                  Unit: RMB

                    Item                            31 December 2021                         31 December 2020

Current assets:

  Monetary assets                                               6,701,949,499.06                           4,287,808,756.66

  Held-for-trading financial assets                             2,611,037,013.67                             203,877,915.51

  Derivative financial assets

  Notes receivable

  Accounts receivable                                                       0.00                                 494,976.27

  Accounts receivable financing                                  269,471,899.40                            1,399,214,331.97

  Prepayments                                                     85,579,299.60                               11,737,580.47

  Other receivables                                              290,480,736.49                              141,378,010.40

     Including: Interest receivable

                  Dividends receivable

  Inventories                                                   3,667,928,608.55                           2,976,360,208.66

  Contract assets


                                                           ~ 90 ~
                                                                  Annual Report 2021


  Assets held for sale

  Current portion of non-current assets

  Other current assets                          142,527,867.24         9,734,249.41

Total current assets                          13,768,974,924.01    9,030,606,029.35

Non-current assets:

  Investments in debt obligations

  Investments in other debt obligations

  Long-term receivables

  Long-term equity investments                 1,547,415,641.38    1,118,213,665.32

  Investments in other equity
instruments

  Other non-current financial assets

  Investment property                              4,075,801.06        4,392,943.54

  Fixed assets                                 1,375,344,792.42    1,322,818,855.86

  Construction in progress                      692,315,065.86      139,865,487.21

  Productive living assets

  Oil and gas assets

  Right-of-use assets                             40,811,867.62                0.00

  Intangible assets                             437,919,619.31      369,163,089.18

  Development costs

  Goodwill

  Long-term prepaid expense                      41,319,866.13        44,072,241.78

  Deferred income tax assets                     28,775,933.22        30,716,488.80

  Other non-current assets                                 0.00          75,999.80

Total non-current assets                       4,167,978,587.00    3,029,318,771.49

Total assets                                  17,936,953,511.01   12,059,924,800.84

Current liabilities:

  Short-term borrowings

  Held-for-trading financial liabilities

  Derivative financial liabilities

  Notes payable                                            0.00          74,535.60

  Accounts payable                              672,018,963.99      397,554,006.51

  Advances from customers

  Contract liabilities                           23,438,890.01     1,130,074,436.39


                                           ~ 91 ~
                                                                       Annual Report 2021


  Employee benefits payable                          160,404,100.41      127,974,331.78

  Taxes payable                                      473,881,384.92      200,876,134.49

  Other payables                                     632,857,371.46      524,000,730.59

     Including: Interest payable

                    Dividends payable

  Liabilities directly associated with
assets held for sale
  Current      portion      of   non-current
                                                      11,633,827.85                 0.00
liabilities

  Other current liabilities                           15,080,461.56      160,738,917.51

Total current liabilities                           1,989,315,000.20    2,541,293,092.87

Non-current liabilities:

  Long-term borrowings

  Bonds payable

     Including: Preferred shares

                    Perpetual bonds

  Lease liabilities                                   26,476,999.19                 0.00

  Long-term payables

  Long-term          employee         benefits
payable

  Provisions

  Deferred income                                     27,176,546.19        31,601,732.51

  Deferred income tax liabilities                     21,499,021.71        19,407,895.89

  Other non-current liabilities

Total non-current liabilities                         75,152,567.09        51,009,628.40

Total liabilities                                   2,064,467,567.29    2,592,302,721.27

Owners’ equity:

  Share capital                                      528,600,000.00      503,600,000.00

  Other equity instruments

     Including: Preferred shares

                    Perpetual bonds

  Capital reserves                                  6,176,504,182.20    1,247,162,107.35

  Less: Treasury stock

  Other comprehensive income                           -1,385,311.78                0.00

  Specific reserve


                                                 ~ 92 ~
                                                                                     Annual Report 2021


  Surplus reserves                                          264,300,000.00             251,800,000.00

  Retained earnings                                        8,904,467,073.30           7,465,059,972.22

Total owners’ equity                                     15,872,485,943.72           9,467,622,079.57

Total liabilities and owners’ equity                     17,936,953,511.01          12,059,924,800.84


3. Consolidated Income Statement

                                                                                            Unit: RMB

                   Item                            2021                       2020

1. Revenue                                                13,269,826,266.04          10,292,064,534.41

  Including: Operating revenue                            13,269,826,266.04          10,292,064,534.41

              Interest income

              Insurance premium income

              Handling        charge       and
commission income

2. Costs and expenses                                     10,213,542,938.71           7,878,036,538.50

  Including: Cost of sales                                 3,304,077,011.92           2,549,814,944.76

              Interest expense

              Handling        charge       and
commission expense

              Surrenders

              Net insurance claims paid

              Net amount provided as
insurance contract reserve
              Expenditure       on       policy
dividends
              Reinsurance            premium
expense

              Taxes and surcharges                         2,031,815,205.67           1,625,289,169.55

              Selling expense                              4,008,075,483.08           3,120,977,163.32

              Administrative expense                       1,022,181,419.74            802,201,580.48

              R&D expense                                     51,449,475.36              40,590,136.46

              Finance costs                                 -204,055,657.06            -260,836,456.07

                 Including:            Interest
                                                               7,036,575.14                876,815.80
expense

                              Interest
                                                             210,634,326.57            261,861,342.00
income

Add: Other income                                             55,269,628.48              47,474,532.19

                                                  ~ 93 ~
                                                                           Annual Report 2021


         Return on investment (“-” for loss)             4,692,379.15         6,787,443.77

              Including: Share of profit or loss
                                                             397,024.95          237,293.59
of joint ventures and associates
                Income          from          the
derecognition of financial assets at
amortized cost (“-” for loss)

         Exchange gain (“-” for loss)

         Net gain on exposure hedges (“-”
for loss)

         Gain on changes in fair value (“-”
                                                           7,225,961.17       -19,983,181.51
for loss)

         Credit impairment loss (“-” for
                                                           -6,492,841.44         -933,752.84
loss)

         Asset impairment loss (“-” for loss)           -16,738,156.85      -14,095,047.32

         Asset disposal income (“-” for
                                                           1,368,763.13         1,223,536.53
loss)

3. Operating profit (“-” for loss)                    3,101,609,060.97    2,434,501,526.73

Add: Non-operating income                                 80,358,158.20        66,597,288.07

Less: Non-operating expense                               10,673,284.61        27,262,848.08

4. Profit before tax (“-” for loss)                   3,171,293,934.56    2,473,835,966.72

Less: Income tax expense                                 796,962,295.09      625,947,783.69

5. Net profit (“-” for net loss)                      2,374,331,639.47    1,847,888,183.03

  5.1 By operating continuity

        5.1.1 Net profit from continuing
                                                        2,374,331,639.47    1,847,888,183.03
operations (“-” for net loss)

        5.1.2 Net profit from discontinued
operations (“-” for net loss)

  5.2 By ownership

        5.2.1 Net profit attributable to
shareholders of the Company as the                      2,297,894,413.25    1,854,576,249.29
parent
        5.2.1 Net profit attributable to
                                                          76,437,226.22        -6,688,066.26
non-controlling interests
6. Other comprehensive income, net of
                                                           -2,702,255.36                0.00
tax
  Attributable to owners of the Company
                                                           -2,735,058.19                0.00
as the parent
        6.1     Items    that   will    not   be
                                                             312,174.31                 0.00
reclassified to profit or loss


                                                    ~ 94 ~
                                                                              Annual Report 2021


         6.1.1   Changes            caused       by
remeasurements         on        defined    benefit
schemes
         6.1.2    Other            comprehensive
income that will not be reclassified to
profit or loss under the equity method
         6.1.3 Changes in the fair value of
                                                                312,174.31                 0.00
investments in other equity instruments
         6.1.4 Changes in the fair value
arising from changes in own credit risk

         6.1.5 Other

     6.2 Items that will be reclassified to
                                                              -3,047,232.50                0.00
profit or loss
         6.2.1    Other            comprehensive
income that will be reclassified to profit
or loss under the equity method
         6.2.2 Changes in the fair value of
investments in other debt obligations
         6.2.3    Other            comprehensive
income arising from the reclassification                      -3,047,232.50                0.00
of financial assets
         6.2.4        Credit          impairment
allowance for investments in other debt
obligations
         6.2.5 Reserve for cash flow
hedges
         6.2.6 Differences arising from the
translation                 of              foreign
currency-denominated                       financial
statements

         6.2.7 Other

  Attributable         to         non-controlling
                                                                 32,802.83                 0.00
interests

7. Total comprehensive income                              2,371,629,384.11    1,847,888,183.03

  Attributable to owners of the Company
                                                           2,295,159,355.06    1,854,576,249.29
as the parent
  Attributable         to         non-controlling
                                                             76,470,029.05        -6,688,066.26
interests

8. Earnings per share

  8.1 Basic earnings per share                                         4.45                3.68

  8.2 Diluted earnings per share                                       4.45                3.68



                                                       ~ 95 ~
                                                                                                             Annual Report 2021


Legal representative: Liang Jinhui                                         The Company’s chief accountant: Zhu Jiafeng


Head of the Company’s financial department: Zhu Jiafeng


4. Income Statement of the Company as the Parent

                                                                                                                    Unit: RMB

                     Item                                  2021                                       2020

1. Operating revenue                                              6,861,927,173.56                            5,879,367,295.74

Less: Cost of sales                                               2,685,143,091.93                            2,404,770,507.12

        Taxes and surcharges                                      1,709,930,259.58                            1,486,154,736.28

        Selling expense                                             57,374,585.54                                51,077,418.28

        Administrative expense                                     638,615,142.40                              573,997,212.59

        R&D expense                                                 24,789,072.53                                26,372,590.76

        Finance costs                                             -146,376,995.59                              -147,492,851.31

          Including: Interest expense                                2,057,303.09

                        Interest income                            148,286,685.55                              147,976,230.15

Add: Other income                                                   12,884,387.21                                22,085,298.08

         Return on investment (“-” for
                                                                   740,925,389.76                              703,295,993.73
loss)

            Including: Share of profit or
loss of joint ventures and associates
              Income          from         the
derecognition of financial assets at
amortized cost (“-” for loss)

         Net gain on exposure hedges (“-”
for loss)

         Gain on changes in fair value (“-”
                                                                     7,159,098.16                               -19,983,181.51
for loss)

         Credit impairment loss (“-” for
                                                                     1,569,395.15                                  381,399.86
loss)
         Asset impairment loss (“-” for
                                                                     -9,447,015.13                               -8,393,409.55
loss)
         Asset disposal income (“-” for
                                                                     1,217,988.71                                   60,176.99
loss)

2. Operating profit (“-” for loss)                              2,646,761,261.03                            2,181,933,959.62

Add: Non-operating income                                           45,118,776.84                                38,145,926.01

Less: Non-operating expense                                          5,010,863.26                                22,352,299.16

3. Profit before tax (“-” for loss)                             2,686,869,174.61                            2,197,727,586.47

                                                           ~ 96 ~
                                                                          Annual Report 2021


Less: Income tax expense                                479,562,073.53      374,398,634.87

4. Net profit (“-” for net loss)                     2,207,307,101.08    1,823,328,951.60

  4.1    Net     profit    from      continuing
                                                       2,207,307,101.08    1,823,328,951.60
operations (“-” for net loss)

  4.2 Net profit from discontinued
operations (“-” for net loss)

5. Other comprehensive income, net of
                                                          -1,385,311.78                0.00
tax
  5.1 Items that will not be reclassified
to profit or loss
      5.1.1      Changes        caused        by
remeasurements on defined benefit
schemes
      5.1.2 Other comprehensive income
that will not be reclassified to profit or
loss under the equity method
      5.1.3 Changes in the fair value of
investments in other equity instruments
      5.1.4 Changes in the fair value
arising from changes in own credit risk

      5.1.5 Other

  5.2 Items that will be reclassified to
                                                          -1,385,311.78                0.00
profit or loss
      5.2.1 Other comprehensive income
that will be reclassified to profit or loss
under the equity method
      5.2.2 Changes in the fair value of
investments in other debt obligations
      5.2.3 Other comprehensive income
arising from the reclassification of                      -1,385,311.78                0.00
financial assets
      5.2.4 Credit impairment allowance
for     investments        in     other     debt
obligations

      5.2.5 Reserve for cash flow hedges

      5.2.6 Differences arising from the
translation               of              foreign
currency-denominated                  financial
statements

      5.2.7 Other

6. Total comprehensive income                          2,205,921,789.30    1,823,328,951.60


                                                    ~ 97 ~
                                                                                      Annual Report 2021


7. Earnings per share

    7.1 Basic earnings per share                                        4.18                       3.62

    7.2 Diluted earnings per share                                      4.18                       3.62


5. Consolidated Cash Flow Statement

                                                                                             Unit: RMB

                        Item                        2021                       2020

1. Cash flows from operating activities:

  Proceeds from sale of commodities
                                                           15,533,370,561.71          10,807,605,859.36
and rendering of services
  Net increase in customer deposits and
interbank deposits
  Net increase in borrowings from the
central bank
  Net increase in loans from other
financial institutions
  Premiums          received       on   original
insurance contracts

  Net proceeds from reinsurance

  Net        increase      in     deposits    and
investments of policy holders
  Interest,        handling       charges     and
commissions received
  Net increase in interbank loans
obtained
  Net      increase       in    proceeds     from
repurchase transactions
  Net proceeds from acting trading of
securities

  Tax rebates                                                 10,939,461.17                7,344,191.33

  Cash generated from other operating
                                                            1,154,331,493.95           3,104,278,291.78
activities
Subtotal      of    cash        generated    from
                                                           16,698,641,516.83          13,919,228,342.47
operating activities
  Payments          for    commodities        and
                                                            2,476,695,652.35           2,216,094,155.87
services
  Net increase in loans and advances to
customers
  Net increase in deposits in the central
bank and in interbank loans granted


                                                    ~ 98 ~
                                                                          Annual Report 2021


  Payments for claims on original
insurance contracts

  Net increase in interbank loans
granted

  Interest,        handling      charges     and
commissions paid

  Policy dividends paid

  Cash paid to and for employees                       2,764,878,720.68    2,377,569,201.11

  Taxes paid                                           3,745,603,413.41    3,323,475,922.81

  Cash       used      in     other    operating
                                                       2,457,155,602.60    2,377,545,537.15
activities
Subtotal of cash used in operating
                                                      11,444,333,389.04   10,294,684,816.94
activities
Net   cash         generated     from/used    in
                                                       5,254,308,127.79    3,624,543,525.53
operating activities

2. Cash flows from investing activities:

  Proceeds from disinvestment                           685,446,809.53      326,968,000.00

  Return on investment                                   27,570,964.03        41,473,224.56

  Net proceeds from the disposal of
fixed assets, intangible assets and other                  8,510,785.59        3,756,621.07
long-lived assets
  Net proceeds from the disposal of
subsidiaries and other business units
  Cash generated from other investing
activities
Subtotal      of     cash      generated   from
                                                        721,528,559.15      372,197,845.63
investing activities
  Payments for the acquisition of fixed
assets, intangible assets and other                     578,154,171.08      561,616,750.96
long-lived assets

  Payments for investments                             8,939,702,000.00       41,798,000.00

  Net increase in pledged loans granted

  Net payments for the acquisition of
                                                         65,123,508.25                 0.00
subsidiaries and other business units
  Cash       used      in      other   investing
activities
Subtotal of cash used in investing
                                                       9,582,979,679.33     603,414,750.96
activities
Net   cash         generated     from/used    in
                                                      -8,861,451,120.18     -231,216,905.33
investing activities

3. Cash flows from financing activities:

                                                   ~ 99 ~
                                                                                        Annual Report 2021


  Capital contributions received                              4,962,827,169.81                       0.00

      Including: Capital contributions by
                                                                 5,280,000.00                        0.00
non-controlling interests to subsidiaries

  Borrowings raised                                            202,510,000.00             130,665,500.00

  Cash generated from other financing
activities
Subtotal      of     cash      generated       from
                                                              5,165,337,169.81            130,665,500.00
financing activities

  Repayment of borrowings                                      357,436,327.65                        0.00

  Interest and dividends paid                                  760,093,886.59             831,838,344.55

      Including:       Dividends        paid    by
                                                                          0.00              75,792,108.39
subsidiaries to non-controlling interests
  Cash       used      in     other     financing
                                                                20,017,478.32                        0.00
activities
Subtotal of cash used in financing
                                                              1,137,547,692.56            831,838,344.55
activities
Net    cash        generated     from/used       in
                                                              4,027,789,477.25            -701,172,844.55
financing activities
4. Effect of foreign exchange rates
changes on cash and cash equivalents
5. Net increase in cash and cash
                                                               420,646,484.86            2,692,153,775.65
equivalents
Add:     Cash       and     cash      equivalents,
                                                              5,636,903,693.74           2,944,749,918.09
beginning of the period
6. Cash and cash equivalents, end of the
                                                              6,057,550,178.60           5,636,903,693.74
period


6. Cash Flow Statement of the Company as the Parent

                                                                                               Unit: RMB

                       Item                            2021                      2020

1. Cash flows from operating activities:

  Proceeds from sale of commodities
                                                              6,255,940,908.12           6,224,786,292.61
and rendering of services

  Tax rebates                                                      136,317.05                 367,573.41

  Cash generated from other operating
                                                              1,011,350,323.14           1,055,973,163.52
activities
Subtotal      of     cash      generated       from
                                                              7,267,427,548.31           7,281,127,029.54
operating activities
  Payments          for     commodities         and
                                                              1,619,308,652.04           1,620,053,478.29
services


                                                      ~ 100 ~
                                                                          Annual Report 2021


  Cash paid to and for employees                        893,957,837.80      785,902,280.22

  Taxes paid                                          2,421,277,549.92     2,490,592,485.18

  Cash       used     in   other      operating
                                                        257,177,069.10      235,549,046.19
activities
Subtotal of cash used in operating
                                                      5,191,721,108.86     5,132,097,289.88
activities
Net   cash        generated     from/used    in
                                                      2,075,706,439.45     2,149,029,739.66
operating activities

2. Cash flows from investing activities:

  Proceeds from disinvestment                           546,849,809.53      306,970,000.00

  Return on investment                                   43,845,258.48      738,058,038.36

  Net proceeds from the disposal of
fixed assets, intangible assets and other                 6,000,032.69         5,535,791.98
long-lived assets
  Net proceeds from the disposal of
                                                         13,673,346.37                 0.00
subsidiaries and other business units
  Cash generated from other investing
activities
Subtotal     of     cash      generated   from
                                                        610,368,447.07     1,050,563,830.34
investing activities
  Payments for the acquisition of fixed
assets, intangible assets and other                     793,665,435.61      414,403,643.54
long-lived assets

  Payments for investments                            8,151,105,000.00        21,800,000.00

  Net payments for the acquisition of
                                                        440,643,400.00                 0.00
subsidiaries and other business units
  Cash       used     in      other   investing
activities
Subtotal of cash used in investing
                                                      9,385,413,835.61      436,203,643.54
activities
Net   cash        generated     from/used    in
                                                      -8,775,045,388.54     614,360,186.80
investing activities

3. Cash flows from financing activities:

  Capital contributions received                      4,957,547,169.81                 0.00

  Borrowings raised

  Cash generated from other financing
activities
Subtotal     of     cash      generated   from
                                                      4,957,547,169.81                 0.00
financing activities

  Repayment of borrowings



                                                  ~ 101 ~
                                                                           Annual Report 2021


  Interest and dividends paid                            755,400,000.00      755,400,000.00

  Cash       used     in    other     financing
                                                          18,667,478.32                 0.00
activities
Subtotal of cash used in financing
                                                         774,067,478.32      755,400,000.00
activities
Net    cash     generated     from/used       in
                                                       4,183,479,691.49      -755,400,000.00
financing activities
4. Effect of foreign exchange rates
changes on cash and cash equivalents
5. Net increase in cash and cash
                                                       -2,515,859,257.60    2,007,989,926.46
equivalents
Add:     Cash       and    cash     equivalents,
                                                       4,087,808,756.66     2,079,818,830.20
beginning of the period
6. Cash and cash equivalents, end of the
                                                       1,571,949,499.06     4,087,808,756.66
period




                                                   ~ 102 ~
                                                                                                                                                                                                 Annual Report 2021



7. Consolidated Statements of Changes in Owners’ Equity

2021
                                                                                                                                                                                                        Unit: RMB

                                                                                                                2021

                                                                  Equity attributable to owners of the Company as the parent

                                       Other equity
       Item                                                                                                                      Gener
                                       instruments                              Less:      Other      Specifi                                                                         Non-controlli   Total owners’
                                                                 Capital                                          Surplus          al       Retained        Othe
                  Share capital              Perpetu                            Treasur comprehensi     c                                                             Subtotal         ng interests      equity
                                  Preferre             Othe     reserves                                         reserves        reserv     earnings         r
                                               al                               y stock   ve income reserve
                                  d shares              r                                                                          e
                                             bonds
1. Balance as
at the end of 503,600,000.                                    1,295,405,592.                                    256,902,260.              7,987,380,161.           10,043,288,013. 405,562,772. 10,448,850,786.
the       prior             00                                             25                                               27                         21                        73              65               38
year
Add:
Adjustment
for change in
accounting
policy


Adjustment
for
correction of
previous
error



                                                                                                   ~ 103 ~
                                                                                                                               Annual Report 2021


Adjustment
for business
combination
under
common
control
     Other
adjustments
2. Balance as
at               the 503,600,000.     1,295,405,592.                  256,902,260.   7,987,380,161.   10,043,288,013. 405,562,772. 10,448,850,786.
beginning of                    00               25                            27               21                73            65               38
the year
3.       Increase/
decrease         in
                       25,000,000.0   4,929,342,074.   -2,735,058.1   12,500,000.0   1,529,994,413.   6,494,101,429.9 309,908,665. 6,804,010,095.1
the        period
                                 0               85              9              0               25                 1            24                5
(“-”           for
decrease)
     3.1     Total
                                                       -2,735,058.1                  2,297,894,413.   2,295,159,355.0 76,470,029.0 2,371,629,384.1
comprehensi
                                                                 9                              25                 6             5                1
ve income
     3.2
Capital
                       25,000,000.0   4,929,342,074.                                                  4,954,342,074.8 233,438,636. 5,187,780,711.0
increased
                                 0               85                                                                5            19                4
and reduced
by owners
         3.2.1
Ordinary               25,000,000.0   4,929,342,074.                                                  4,954,342,074.8                4,954,342,074.8
shares                           0               85                                                                5                              5
increased by

                                                                ~ 104 ~
                                                                                   Annual Report 2021


owners
       3.2.2
Capital
increased by
holders of
other equity
instruments
       3.2.3
Share-based
payments
included in
owners’
equity

       3.2.4                                                              233,438,636.
                                                                                         233,438,636.19
Other                                                                              19

 3.3      Profit        12,500,000.0   -767,900,000.0
                                                        -755,400,000.00                  -755,400,000.00
distribution                      0                0

       3.3.1
Appropriatio            12,500,000.0
                                       -12,500,000.00
n to surplus                      0
reserves
       3.3.2
Appropriatio
n to general
reserve
       3.3.3
                                       -755,400,000.0
Appropriatio                                            -755,400,000.00                  -755,400,000.00
                                                   0
n to owners


                   ~ 105 ~
                               Annual Report 2021


(or
shareholders
)
       3.3.4
Other
     3.4
Transfers
within
owners’
equity
       3.4.1
Increase        in
capital        (or
share capital)
from capital
reserves
       3.4.2
Increase        in
capital        (or
share capital)
from surplus
reserves
       3.4.3
Loss        offset
by         surplus
reserves
       3.4.4
Changes         in
defined

                     ~ 106 ~
                                                                                                                            Annual Report 2021


benefit
schemes
transferred to
retained
earnings
       3.4.5
Other
comprehensi
ve         income
transferred to
retained
earnings
       3.4.6
Other
     3.5
Specific
reserve
       3.5.1
Increase       in
the period
       3.5.2
Used in the
period

     3.6 Other

4. Balance as
                    528,600,000.   6,224,747,667.   -2,735,058.1   269,402,260.   9,517,374,574.   16,537,389,443. 715,471,437. 17,252,860,881.
at the end of
                             00               10              9             27               46                64            89             53
the period

2020


                                                             ~ 107 ~
                                                                                                                                                                                                Annual Report 2021


                                                                                                                                                                                                       Unit: RMB

                                                                                                                2020

                                                                  Equity attributable to owners of the Company as the parent

                                       Other equity
       Item                                                                                                                      Gener
                                       instruments                              Less:      Other      Specifi                                                                        Non-controlli   Total owners’
                                                                 Capital                                          Surplus          al       Retained        Othe
                  Share capital                                                 Treasur comprehensi     c                                                             Subtotal        ng interests      equity
                                             Perpetu
                                  Preferre             Othe     reserves                                         reserves        reserv     earnings         r
                                               al                               y stock   ve income reserve
                                  d shares              r                                                                          e
                                             bonds
1. Balance as
at the end of 503,600,000.                                    1,295,405,592.                                    256,902,260.              6,888,203,911.           8,944,111,764.4 488,042,947. 9,432,154,711.7
the       prior             00                                             25                                               27                         92                        4              30                    4
year
Add:
Adjustment
for change in
accounting
policy


Adjustment
for
correction of
previous
error


Adjustment
for business
combination
under

                                                                                                   ~ 108 ~
                                                                                                                      Annual Report 2021


common
control
     Other
adjustments
2. Balance as
at               the 503,600,000.   1,295,405,592.        256,902,260.   6,888,203,911.   8,944,111,764.4 488,042,947. 9,432,154,711.7
beginning of                  00               25                  27               92                 4              30                 4
the year
3.       Increase/
decrease         in
                                                                         1,099,176,249.   1,099,176,249.2 -82,480,174.6 1,016,696,074.6
the        period
                                                                                    29                 9               5                 4
(“-”           for
decrease)
     3.1     Total
                                                                         1,854,576,249.   1,854,576,249.2                   1,847,888,183.0
comprehensi                                                                                                 -6,688,066.26
                                                                                    29                 9                                 3
ve income
     3.2
Capital
increased
and reduced
by owners
         3.2.1
Ordinary
shares
increased by
owners
         3.2.2
Capital
increased by

                                                     ~ 109 ~
                                                                            Annual Report 2021


holders of
other equity
instruments
          3.2.3
Share-based
payments
included in
owners’
equity
          3.2.4
Other

    3.3     Profit             -755,400,000.0                     -75,792,108.3
                                                -755,400,000.00                   -831,192,108.39
distribution                               0                                 9

          3.3.1
Appropriatio
n to surplus
reserves
          3.3.2
Appropriatio
n to general
reserve
          3.3.3
Appropriatio
n to owners                    -755,400,000.0                     -75,792,108.3
                                                -755,400,000.00                   -831,192,108.39
(or                                        0                                 9
shareholders
)
          3.3.4
Other

                     ~ 110 ~
                               Annual Report 2021


     3.4
Transfers
within
owners’
equity
       3.4.1
Increase        in
capital        (or
share capital)
from capital
reserves
       3.4.2
Increase        in
capital        (or
share capital)
from surplus
reserves
       3.4.3
Loss        offset
by         surplus
reserves
       3.4.4
Changes         in
defined
benefit
schemes
transferred to
retained
earnings

                     ~ 111 ~
                                                                                                                                    Annual Report 2021


       3.4.5
Other
comprehensi
ve         income
transferred to
retained
earnings
       3.4.6
Other
     3.5
Specific
reserve
       3.5.1
Increase       in
the period
       3.5.2
Used in the
period

     3.6 Other

4. Balance as
                    503,600,000.         1,295,405,592.                    256,902,260.   7,987,380,161.   10,043,288,013. 405,562,772. 10,448,850,786.
at the end of
                             00                     25                              27               21                73            65             38
the period


8. Statements of Changes in Owners’ Equity of the Company as the Parent

2021
                                                                                                                                           Unit: RMB

             Item                                                               2021


                                                                     ~ 112 ~
                                                                                                                                                                                Annual Report 2021


                                                 Other equity instruments                         Less:       Other
                                                                                                                           Specific      Surplus        Retained                   Total owners’
                                 Share capital Preferred Perpetual           Capital reserves    Treasury comprehensive                                                 Other
                                                                     Other                                                 reserve       reserves        earnings                     equity
                                                 shares   bonds                                   stock      income

1. Balance as at the end
                                503,600,000.00                               1,247,162,107.35                                         251,800,000.00 7,465,059,972.22             9,467,622,079.57
of the prior year
Add: Adjustment for
change in accounting
policy
  Adjustment              for
correction of previous
error

  Other adjustments

2. Balance as at the
                                503,600,000.00                               1,247,162,107.35                                         251,800,000.00 7,465,059,972.22             9,467,622,079.57
beginning of the year
3. Increase/ decrease in
the period (“-” for 25,000,000.00                                          4,929,342,074.85              -1,385,311.78               12,500,000.00 1,439,407,101.08             6,404,863,864.15
decrease)
  3.1                   Total
                                                                                                           -1,385,311.78                             2,207,307,101.08             2,205,921,789.30
comprehensive income
  3.2 Capital increased
                                 25,000,000.00                               4,929,342,074.85                                                                                     4,954,342,074.85
and reduced by owners
        3.2.1 Ordinary
shares increased by              25,000,000.00                               4,929,342,074.85                                                                                     4,954,342,074.85
owners
        3.2.2 Capital
increased by holders of
other equity
instruments


                                                                                                ~ 113 ~
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     3.2.3 Share-based
payments included in
owners’ equity

     3.2.4 Other

  3.3               Profit
                                       12,500,000.00 -767,900,000.00        -755,400,000.00
distribution
     3.3.1
Appropriation           to             12,500,000.00    -12,500,000.00
surplus reserves
     3.3.2
Appropriation           to
                                                       -755,400,000.00      -755,400,000.00
owners                 (or
shareholders)

     3.3.3 Other

  3.4 Transfers within
owners’ equity
     3.4.1 Increase in
capital      (or    share
capital) from capital
reserves
     3.4.2 Increase in
capital      (or    share
capital) from surplus
reserves
     3.4.3 Loss offset
by surplus reserves
     3.4.4 Changes in
defined            benefit


                             ~ 114 ~
                                                                                                                                                                        Annual Report 2021


schemes transferred to
retained earnings
       3.4.5         Other
comprehensive income
transferred to retained
earnings

       3.4.6 Other

  3.5 Specific reserve

       3.5.1 Increase in
the period
       3.5.2 Used in the
period

  3.6 Other

4. Balance as at the end
                             528,600,000.00                                6,176,504,182.20            -1,385,311.78          264,300,000.00 8,904,467,073.30            15,872,485,943.72
of the period

2020
                                                                                                                                                                              Unit: RMB

                                                                                                         2020

                                              Other equity instruments                        Less:   Other
           Item                                                                                                    Specific      Surplus         Retained                   Total owners’
                             Share capital Preferred Perpetual           Capital reserves Treasury comprehensive                                                Other
                                                                 Other                                             reserve       reserves        earnings                      equity
                                              shares   bonds                                  stock   income

1. Balance as at the
                           503,600,000.00                                1,247,162,107.35                                     251,800,000.00 6,397,131,020.62             8,399,693,127.97
end of the prior year
Add: Adjustment for
change in accounting
policy

  Adjustment         for

                                                                                            ~ 115 ~
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correction            of
previous error

  Other adjustments

2. Balance as at the
                            503,600,000.00   1,247,162,107.35             251,800,000.00 6,397,131,020.62     8,399,693,127.97
beginning of the year
3. Increase/ decrease
in the period (“-” for                                                                1,067,928,951.60      1,067,928,951.60
decrease)
  3.1               Total
comprehensive                                                                           1,823,328,951.60      1,823,328,951.60
income
  3.2             Capital
increased            and
reduced by owners
     3.2.1 Ordinary
shares increased by
owners
     3.2.2 Capital
increased by holders
of other equity
instruments
     3.2.3
Share-based
payments included in
owners’ equity

     3.2.4 Other

  3.3              Profit
                                                                                         -755,400,000.00       -755,400,000.00
distribution


                                                                ~ 116 ~
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     3.3.1
Appropriation           to
surplus reserves
     3.3.2
Appropriation           to
                                       -755,400,000.00      -755,400,000.00
owners                 (or
shareholders)

     3.3.3 Other

  3.4          Transfers
within owners’ equity
     3.4.1 Increase in
capital      (or    share
capital) from capital
reserves
     3.4.2 Increase in
capital      (or    share
capital) from surplus
reserves
     3.4.3 Loss offset
by surplus reserves
     3.4.4 Changes in
defined            benefit
schemes      transferred
to retained earnings
     3.4.5          Other
comprehensive
income transferred to
retained earnings


                             ~ 117 ~
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     3.4.6 Other

  3.5         Specific
reserve
     3.5.1 Increase in
the period
     3.5.2 Used in
the period

  3.6 Other

4. Balance as at the
                         503,600,000.00   1,247,162,107.35             251,800,000.00 7,465,059,972.22     9,467,622,079.57
end of the period




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                  Anhui Gujing Distillery Company Limited
                               Notes to the Financial Statements
                           for the Year Ended 31 December 2021
             (Unless otherwise stated, all amounts are expressed in CNY Yuan.)



Note 1 Company profile
1.1 Company profile
The Anhui State-owned Asset Management Bureau approved through WanGuoZiGongZi
(1996) Di 053 Hao the incorporation of Anhui Gujing Distillery Company Limited (the
Company and GJ Distillery) by Anhui Gujing Group Company Limited (GJ Group), as the sole
founder, by the operating assets of Anhui Bozhou Gujing Distillery Factory (GJ Distillery
Factory), which is the core operating unit of GJ Group. The incorporation was further
approved by the Anhui People's Government through WanZhengMi (1996) 42 Hao. The
incorporation General Meeting was held on 28 May 1996 and the incorporation was
registered with the Anhui Admistration Bureau for Commerce and Industry on 30 May
1996 with the registered address at Bozhou, Anhui, the People’s Republic of China (the
PRC). At incorporation, the Company’s total number of shares stood at 155 million with a
valuation of CNY 377 .17million, which was the fair value of the operating assets of GJ
Distillery Factory upon appraisal.
The Company initiated public offering of 60 million domestic listed shares held by foreign
investors (known as “B share(s)”) in June 1996 and 20 million domestic listed CNY ordinary
shares (known as “A share(s)”) in September 1996. The par value of both the B share and A
share is CNY 1.00 per share. The B shares and A shares issued were listed on the Shenzhen
Stock Exchange.
The Company is headquartered at Gujing, Bozhou, Anhui. The Company and its subsidiaries
(collectively, the Group) operates in the food manufacturing sector and engages in the
production and sales of distilled wine.
As of the public listing, the Company has 235 million shares in total with the share capital
at CNY 235 million. The Company’s at public listing comprised 155 million state-owned
shares, 60 million B shares and 20 million A shares. Each of the Company’s shares has a par
value at CNY 1.00 per share.
In accordance with the resolution of the General Meeting held on 29 May 2006, the
Company exercised the share reorganisation plan in June 2006. Immediately after the


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implementation of the share reorganisation plan, the Company had in total 235 million
shares, comprising 147 million shares with restriction of disposal (equal to 62.55% of total
shares) and 88 million free-floating shares (equal to 37.45% of total shares).
Upon the Company’s publication of the Notice of Lifting Restriction of Shares on 27 June
2007, the restriction on disposal on 11.75 million shares was lifted on 29 June 2007.
Immediately after the lifting, the Company had in total 235 million shares, comprising
135.25 million shares with restriction of disposal (equal to 57.55% of total shares) and
99.75 million free-floating shares (equal to 42.45% of total shares).
Upon the Company’s publication of the Notice of Lifting Restriction of Shares on 17 July
2008, the restriction on disposal on 11.75 million shares was lifted on 18 July 2008.
Immediately after the lifting, the Company had in total 235 million shares, comprising
123.5 million shares with restriction of disposal (equal to 52.55% of total shares) and 111.5
million free-floating shares (equal to 47.45% of total shares).
Upon the Company’s publication of the Notice of Lifting Restriction of Shares on 24 July
2009, the restriction on disposal on 123.5 million shares was lifted on 29 July 2009.
Immediately after the lifting, the Company had in total 235 million shares, comprising 235
million free-floating shares (equal to 100% of total shares).
Upon approval by the China Securities Regulatory Commission (CSRC) through
ZhengJianXuKe [2011] 943 Hao, the Company issued on 15 July 2011 through private
offering of 16.8 million A shares with the par value at CNY 1.00 to designated investors.
The shares were issued at CNY 75.00 per share. Gross proceeds from this issuance was CNY
1,260 million and the respective net proceeds after deduction of the cost of issuance (CNY
32.5 million) was CNY 1,227.5 million. The subscription for the issuance was verified by
Reanda CPAs Co., Ltd. through Reanda YanZi [2011] Di 1065 Hao. Immediately after this
private offering, the share capital of the Company increased to CNY 251.8 million.
In accordance with the resolution of the Company’s 2011 General Meeting, a bonus issue
of 10 shares for every 10 shares held at 31 December 2011 through utilisation of capital
reserves was exercised in 2012. 251.8 bonus shares were issued in total. Immediately after
the exercise of the bonus issue, the Company’s share capital increased to CNY 503.6
million.
Upon approval by the CSRC through ZhengJianXuKe [2021] 1422 Hao, the Company issued
on 22 July 2021 through private offering of 25 million A shares with the par value at CNY
1.00 to designated investors. The shares were issued at CNY 200.00 per share. Gross
proceeds from this issuance was CNY 5,000 million and the respective net proceeds after


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deduction of the cost of issuance (CNY 45.66 million) was CNY 4,954.34 million. The
subscription for the issuance was verified by RSM China CPAs LLP through RSM Yan [2021]
No. 518Z0050. Immediately after this private offering, the share capital of the Company
increased to CNY 528.6 million.
As of 31 December 2021, total number of the Company’s shares stood at 528.6 million. See
Note 5.32 for further details.
Place of registration: Gujing, Bozhou, Anhui.
Registered scope of operation: grain purchase (operation under permit), production of
distilled wine, brewery equipments, packaging materials, glass bottles, alcohol, fat (as
by-product of alcohol production), development of innovative technology and biological
technology, deep processing of agricultural and auxillary products, and sales of owned
produced goods.
These financial statements are approved on 29 April 2022 by the Company’s Board of
Directors for publication.
1.2 Scope of consolidation
1.2.1 Subsidiaries included in the Company’s scope of consolidation as of the statement
date
                                                                                          Shareholding %
                               Subsidiary                             Abbreviation
                                                                                          Direct   Indirect
 1     Bozhou Gujing Sales Co., Ltd.                                     GJ Sales          100        -

 2     Anhui Jinyunlai Culture Media Co., Ltd.                          Jinyunlai          100        -

 3     Anhui Ruisi Weier Technology Co., Ltd.                          Ruisi Weier         100        -

 4     Anhui Longrui Glass Co., Ltd.                                  Longrui Glass        100        -

 5     Bozhou Gujing Waste Recycle Co., Ltd. (Dissolved)              Waste Recycle        100        -

 6     Shanghai Gujing Jinhao Hotel Management Co., Ltd.               Jinhao Hotel        100        -

 7     Baozhou Gujing Guest House Co., Ltd.                          GJ Guest House        100        -

 8                                                                   YQ Environment        100        -
       Anhui Yuanqing Environment Protection Co., Ltd.
                                                                       Protection
 9     Anhui Gujing Yunshang E-Commerce Co., Ltd.                    GJ E-Commerce         100        -

10     Anhui Runan Xinke Testing Technology Co., Ltd.                  Runan Xinke         100        -

11     Anhui Jiuan Electric Equipments Co., Ltd.                      Jiuan Electric       100        -

12     Anhui Jiudao Culture Media Co., Ltd.                           Jiudao Media         100        -

13     Anhui Jiuhao ChinaRail Construction Engineering Co., Ltd.     Jiuhao ChinaRail      52         -

14     Anhui Zhenrui Construction Engineering Co., Ltd.            Zhenrui Construction     -        52



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                                                                                    Shareholding %
                              Subsidiary                        Abbreviation
                                                                                    Direct   Indirect
15   Huanghelou Distillery Co., Ltd.                            HHL Distillery       51         -

16   HHL Distillery (Suizhou) Co., Ltd.                         HHL Suizhou           -        51

17   Hubei Junlou Culture Travel Co., Ltd.                      Junlou Culture        -        51

18   Hubei HHL Beverage Co., Ltd.                               HHL Beverage          -        51

19   HHL Distillery (Xianning) Co., Ltd.                        HHL Xianning          -        51

20   Wuhan Yashibo Technology Co., Ltd.                            Yashibo            -        51

21   Hubei Xinjia Testing Technology Co., Ltd.                  Xinjia Testing        -        51

22   Wuhan Tianlong Jindi Technology Development Co., Ltd.      Tianlong Jindi        -        51

23   Wuhan Junya Sales Co., Ltd.                                 Junya Sales          -        51

24   Xianning Junhe Sales Co., Ltd.                            Xianning Junhe         -        51

25   Suizhou Junhe Trading Co., Ltd.                            Suizhou Junhe         -        51

26   Guizhou Huairen Maotai Treasure Distillery Co., Ltd.     Treasure Distillery    60         -

27   Anhui Mingguang Distillery Co., Ltd.                    Mingguang Distillery    60         -

28   Mingguang Tiancheng Mingjiu Sales Co., Ltd.               Tiancheng Sales        -        60

29   Fengyang Xiaogangcun Mingjiu Distillery Co., Ltd.         FY Xiaogangcun         -        42

See Note 7 for further details.
1.2.2 Change of the scope of consolidation in the period
See Note 7 for further details. Mingguang Distillery, Tiancheng Sales, FY Xiaogangcun,
Treasure Distillery, Jiuhao ChinaRail and Jiuan Electric were included in the Company’s
scope of consolidation in the period for the first time. Waste Recylce was excluded from
the Company’s scope of consolidation in the period upon dissolution.


Note 2 Basis of preparation for the financial statements
2.1 Basis of preparation
Based on going concern, according to actually occurred transactions and events, the
Company prepares its financial statements in accordance with the Accounting Standards
for Business Enterprises – Basic standards and concrete accounting standards, Accounting
Standards for Business Enterprises – Application Guidelines, Accounting Standards for
Business Enterprises – Interpretations and other relevant provisions (collectively known as
“Accounting Standards for Business Enterprises” or ASBE(s)). At the same time, the
Company discloses relevant financial information in accordance with Disclosure Rule for
Companies with Publicly Traded Securities No. 15 – General Provisions for Financial

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Statements (Revised in 2014) issued by the CSRC.
2.2 Going concern
The Company has assessed its ability to continually operate for the next twelve months
from the end of the reporting period, and no any matters that may result in doubt on its
ability as a going concern were noted. Therefore, it is reasonable for the Company to
prepare financial statements on the going concern basis.


Note 3 Significant account policies and accounting estimates
The following significant accounting policies and accounting estimates of the Company are
formulated in accordance with the Accounting Standards for Business Enterprises.
Businesses not mentioned are complied with relevant accounting policies of the
Accounting Standards for Business Enterprises.
3.1 Statement of compliance with the Accounting Standards for Business Enterprises
The Company prepares its financial statements in accordance with the requirements of the
Accounting Standards for Business Enterprises, truly and completely reflecting the
Company’s financial position as at 31 December 2021, and its operating results, changes in
shareholders' equity, cash flows and other related information for the year then ended.
3.2 Accounting period
The accounting year of the Company is from January 1 to December 31 in calendar year.
3.3 Operating cycle
The normal operating cycle of the Company is twelve months.
3.4 Functional currency
The functional currency of the Company is CNY Yuan. An Overseas subsidiary (or branch)
uses the currency prominent in its business activities as its functional currency.
3.5 Business combination under common control and business combination not under
common contorl
3.5.1 Business combination under common control
The assets and liabilities that the Company obtains in a business combination under
common control are measured at their carrying amounts as consolidated in the ultimate
controller’s consolidated statement of financial position at the combination date. If the
accounting policy adopted by the acquired entity is different from that adopted by the
Company, the Company, according to accounting policy it adopts, adjusts the relevant
items in the financial statements of the acquired entity based on the principle of
materiality. the Company’s capital reserve (capital premium or share premium) is adjusted



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by the difference between the carrying amount of the net assets obtained by the Company
and the carrying amount of the consideration paid for the combination; where the capital
reserve (capital premium or share premium) is not sufficient to absorb the difference, the
excess is adjusted to the Company’s surplus reserves, and retained earnings if needed.
See Note 3.6.6 for business combination under common control through multiple
transactions.
3.5.2 Business combination not under common control
The identifiable assets and liabilities that the Company obtains in a business combination
not under common control are measured at their fair value at the acquisition date. If the
accounting policy adopted by the acquired entity is different from that adopted by the
Company, the Company, according to accounting policy it adopts, adjusts the relevant
items in the financial statements of the acquired entity based on the principle of
materiality. The Company recognises the excess of the cost of combination over the fair
value of the identifiable net assets it obtains from the acquired entity as goodwill. Where
the fair value of the identifiable net assets obtained by the Company is higher than the
cost of combination, the Company review the measurement of the fair values of the
identifiable assets, liabilities and contingent liabilities it obtains from the acquired entity as
well as the cost of combination; where the excess remains upon the review, the Company
recognises the excess through profit or loss for the period in which the combination
occurs.
See Note 3.6.6 for business combination not under common control through multiple
transactions.
3.5.3 Transaction costs of a business combination
The intermediary costs such as audit, legal services and valuation consulting and other
related management costs that are directly attributable to the business combination are
charged to profit or loss in the period in which they are incurred. The costs to issue equity
or debt securities for the consideration of business combination are recorded as a part of
the value of the respect equity or debt securities upon initial recognition.
3.6 Consolidated financial statements
3.6.1 Scope of consolidation
The scope of consolidation is determined on the basis of control. It not only includes
subsidiaries determined based on voting power (or similar) or other arrangement, but also
structured entities under one or several contract arrangements.
Control exists when the Company has all the following: power over the investee; exposure,


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or rights to variable returns from the Company’s involvement with the investee; and the
ability to use its power over the investee to affect the amount of the investor’s returns.
Subsidiaries are the entities that controlled by the Company (including a legal entity, a
divisible part of the investee, and a structured entity controlled by a legal entity). A
structured entity (sometimes called a Special Purpose Entity) is an entity that has been
designed so that voting or similar rights are not the dominant factor in deciding who
controls the entity.
3.6.2 Accounting policies applicable to an investing entity
Where an entity is an investing entity, it consolidates its subsidiaries to the extent that the
subsidiaries which provide services to the investing entity; investment by the investing
entity in other subsidiaries of the investing entity which are not consolidated by the
investing entity is reocgnised as financial assets at fair value through profit or loss.
An entity is an investing entity is all of the following conditions are satisfied:
    I. the entity obtains funds from one or more investors for the purpose of providing
    those investors with investment management services;
    II. the entity commits to its investors that its business purpose is to invest funds solely
    for returns from capital appreciation, investment income or both; and
    III. the entity measures and evaluates the performance of substantially all of its
    investments on a fair value basis.
Where a non-investing entity becomes an investing entity, subsidiaries excluded from
consolidation upon the change in status are accounted for in accordance with the principle
of partial disposal not giving rise to loss of control.
Where an investing entity becomes a non-investing entity, subsidiairies which were not
previously consolidated are consolidated into the non-investing entity upon the change in
status in accordance with the principle of business combination not under common control
while their fair value as of the date of change in status is recognised by the non-investing
entity as cost of combination.
3.6.3 Preparation of the consolidated financial statements
The consolidated financial statements are prepared by the Company based on the financial
statements of the Company and its subsidiaries, and using other related information.
When preparing consolidated financial statements, the Company considers the entire
group as an accounting entity, adopts uniform accounting policies and applies the
requirements of Accounting Standard for Business Enterprises related to recognition,
measurement and presentation. The consolidated financial statements reflect the overall


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                                                                               Annual Report 2021



financial position, operating results and cash flows of the group.
    I. Like items of assets, liabilities, equity, income, expenses and cash flows of the parent
    are combined with those of the subsidiaries.
    II. The carrying amount of the parent’s investment in each subsidiary is eliminated
    (off-set) against the parent’s portion of equity of each subsidiary.
    III. The impact of intragroup transactions between the Company and the subsidiaries
    or between subsidiaries are eliminated, and when intragroup transactions indicate an
    impairment of related assets, the losses are recognised in full.
    IV. Adjustments are made for special transactions from the perspective of the group.
3.6.4 Accounting for inclusion into and exclusion from the scope of consolidation
3.6.4.1 Inclusion into the scope of consolidation
    I. Subsidiaries or businesses acquired through business combination under common
    control
    When preparing the consolidated statements of financial position, the opening
    balances are adjusted. Related items of comparative financial statements are adjusted
    as well, deeming that the combined entity has always existed ever since the ultimate
    controlling party began to control.
    Incomes, expenses and profits of the subsidiary arising from the beginning of the
    reporting period to the end of the reporting period are included into the consolidated
    statement of comprehensive income. Related items of comparative financial
    statements are adjusted as well, deeming that the combined entity has always existed
    ever since the ultimate controlling party began to control.
    Cash flows from the beginning of the reporting period to the end of the reporting
    period are included into the consolidated statement of cash flows. Related items of
    comparative financial statements are adjusted as well, deeming that the combined
    entity has always existed ever since the ultimate controlling party began to control.
    II. Subsidiaries or businesses acquired through business combination not under
    common control
    When preparing the consolidated statements of financial position, the opening
    balances of the consolidated statements of financial position are not adjusted.
    Incomes, expenses and profits of the subsidiary arising from the acquisition date to the
    end of the reporting period are included into the consolidated statement of
    comprehensive income.
    Cash flows from the acquisition date to the end of the reporting period are included


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    into the consolidated statement of cash flows.
3.6.4.2 Exclusion from the scope of consolidation resulted from disposal of subsidiaries or
businesses
When preparing the consolidated statements of financial position, the opening balances of
the consolidated statements of financial position are not adjusted.
Incomes, expenses and profits incurred from the beginning of the subsidiary to the
disposal date are included into the consolidated statement of comprehensive income.
Cash flows from the beginning of the subsidiary to the disposal date are included into the
consolidated statement of cash flows.
3.6.5 Special consideration in consolidation elimination
3.6.5.1 Long-term equity investment held by the subsidiaries to the Company is recognised
as treasury stock of the Company, which is offset with equity, represented as “treasury
stock” under “equity” in the consolidated statement of financial position.
Long-term equity investment held by subsidiaries between each other is accounted for
taking long-term equity investment held by the Company to its subsidiaries as reference.
That is, the long-term equity investment is eliminated (off- set) against the portion of the
corresponding subsidiary’s equity.
3.6.5.2 Due to not belonging to share capital and capital reserve, and being different from
retained earnings and undistributed profit, “Specific reserves” is recovered based on the
proportion attributable to owners of the parent company after long-term equity
investment to the subsidiaries is eliminated with the subsidiaries’ equity.
3.6.5.3 If temporary timing difference between the book value of the assets and liabilities
in the consolidated statement of financial position and their tax basis is generated as a
result of elimination of unrealised inter-company transaction profit or loss, deferred tax
assets of deferred tax liabilities are recognised, and income tax expense in the
consolidated statement of comprehensive income is adjusted simultaneously, excluding
deferred taxes related to transactions or events directly recognised in equity or business
combination.
3.6.5.4 Unrealised inter-company transactions profit or loss generated from the Company
selling assets to its subsidiaries is eliminated against “net profit attributable to the
shareholders of the parent company” in full. Unrealised inter-company transactions profit
or loss generated from the subsidiaries selling assets to the Company is eliminated
between “net profit attributable to the shareholders of the parent company” and “net
profit attributable to non-controlling shareholders” pursuant to the proportion of the


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Company in the related subsidiaries. Unrealised inter-company transactions profit or loss
generated from the assets sales between the subsidiaries is eliminated between “net profit
attributable to the shareholders of the parent company” and “net profit attributable to
non-controlling shareholders” pursuant to the proportion of the Company in the selling
subsidiaries.
3.6.5.5 If loss attributable to the non-controlling shareholders of a subsidiary in current
period is more than the proportion of non-controlling interest in this subsidiary at the
beginning of the period, non-controlling interest is still to be written down.
3.6.6 Accounting for special transactions
3.6.6.1 Acquiring shares from non-controlling shareholders
Where, the Company purchases non-controlling interests of its subsidiary, in the separate
financial statements of the Company, the cost of the long-term equity investment obtained
in purchasing non-controlling interests is measured at the fair value of the consideration
paid. In the consolidated financial statements, difference between the cost of the
long-term equity investment newly obtained in purchasing non-controlling interests and
share of the subsidiary’s net assets from the acquisition date or combination date
continuingly calculated pursuant to the newly acquired shareholding proportion shall be
adjusted into capital reserve (capital premium or share premium). If capital reserve is
insufficient for offset, surplus reserve and retained earnings shall be offset in turn.
3.6.6.2 Gaining control over a subsidiary in stages through multiple transactions
    I. Business combination under common control through multiple transactions
    On the combination date, in the separate financial statement, initial cost of the
    long-term equity investment is determined according to the share of carrying amount
    of the acquiree’s net assets in the ultimate controlling entity’s consolidated financial
    statements after combination. The difference between the initial cost of the long-term
    equity investment and the carrying amount of the long -term investment held prior of
    control plus book value of additional consideration paid at acquisition date is adjusted
    into capital reserve (capital premium or share premium). If the capital reserve is not
    enough to absorb the difference, any excess is adjusted against surplus reserve and
    undistributed profit in turn.
    In the consolidated financial statements, the assets and liabilities acquired during the
    combination are recognised at their carrying amounts in the ultimate controlling
    entity’s consolidated financial statements on the combination date unless any
    adjustment is resulted from the difference in accounting policies. The difference
    between the carrying amount of the investment held prior of control plus book value

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    of additional consideration paid on the acquisition date and the net assets acquired
    through the combination is adjusted into capital reserve (capital premium or share
    premium). If the capital reserve is not enough to absorb the difference, any excess is
    adjusted against retained earnings.
    If the acquiring entity holds equity investment in the acquired entity prior to the
    combination date and the equity investment is accounted for under the equity method,
    related profit or loss, other comprehensive income and other changes in equity which
    have been recognised during the period from the later of the date of the Company
    obtaining original equity interest and the date of both the acquirer and the acquiree
    under common control of the same ultimate controlling party to the combination is
    offset against the opening balance of retained earnings at the comparative financial
    statements period respectively.
    II. Business combination not under common control through multiple transactions
    On the consolidation date, in the separate financial statements, the initial cost of
    long-term equity investment is determined according to the carrying amount of the
    original long-term investment plus the cost of new investment.
    In the consolidated financial statements, the equity interest of the acquired entity held
    prior to the acquisition date is re-measured at its fair value on the acquisition date.
    Difference between the fair value of the equity interest and its book value is
    recognised as investment income. Other comprehensive income related to the equity
    interest held prior to the acquisition date calculated through equity method is
    transferred to current investment income of the acquisition period, excluding other
    comprehensive income resulted from the remeasurement of defined benefit plans.
    The Company discloses acquisition-date fair value of the equity interest held prior to
    the acquisition date, and the related gains or losses due to the remeasurement based
    on fair value.
3.6.6.3 Disposal of investment in subsidiaries without a loss of control
For partial disposal of a long-term equity investment in a subsidiary without a loss of
control, when the Company prepares consolidated financial statements, difference
between consideration received from the disposal and the corresponding share of
subsidiary’s net assets cumulatively calculated from the acquisition date or combination
date is adjusted into capital reserve (capital premium or share premium). If the capital
reserve is not enough to absorb the difference, any excess is adjusted against retained
earnings.
3.6.6.4 Disposal of investment in subsidiaries with a loss of control

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I. Loss of control through one single transaction
If the Company loses control in an investee through partial disposal of the equity
investment, when the consolidated financial statements are prepared, the retained
equity interest is re-measured at fair value at the date of loss of control. The
difference between i) the fair value of consideration received from the disposal plus
non-controlling interest retained; ii) share of the former subsidiary’s net assets
cumulatively calculated from the acquisition date or combination date according to
the original proportion of equity interest, is recognised in current investment income
when control is lost.
Moreover, other comprehensive income and other changes in equity related to the
equity investment in the former subsidiary is transferred into current investment
income when control is lost, excluding other comprehensive income resulted from the
remeasurement of defined benefit plans.
II. Loss of control through multiple transactions
In the consolidated financial statements, whether the transactions should be
accounted for as “a single transaction” needs to be decided firstly.
If the disposal through multiple transactions is not classified as “a single transaction”,
in the separate financial statements, for transactions prior to the date of loss of
control, carrying amount of each disposal of long-term equity investment is
de-recognised at upon disposal, and the difference between consideration received
and the carrying amount of long-term equity investment corresponding to the equity
interest disposed is recognised in current investment income; in the consolidated
financial statements, the disposal transaction is accounted for in accordance with
3.6.6.3.
If the disposal through multiple transactions is classified as “a single transaction”,
these transactions should be accounted for as one single transaction of disposal of
subsidiary resulting in loss of control. In the separate financial statements, for each
transaction prior to the date of loss of control, difference between consideration
received and the carrying amount of long-term equity investment corresponding to
the equity interest disposed is recognised in other comprehensive income firstly, and
transferred to profit or loss as a whole when control is lost; in the consolidated
financial statements, for each transaction prior to the date of loss of control,
difference between consideration received and proportion of the subsidiary’s net
assets corresponding to the equity interest disposed is recognised in profit or loss as a


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    whole when control is lost.
    In considering of the terms and conditions of the transactions as well as their
    economic impact, the presence of one or more of the following indicators may lead to
    account for multiple transactions as a single transaction:
           i. The transactions are entered into simultaneously or in contemplation of one
           another.
           ii. The transactions form a single transaction designed to achieve an overall
           commercial effect.
           iii. The occurrence of one transaction depends on the occurrence of at least one
           other transaction.
           iv. One transaction, when considered on its own merits, does not make economic
           sense, but when considered together with the other transaction or transactions
           would be considered economically justifiable.
3.6.6.5 Diluting equity share of parent company in its subsidiaries due to additional capital
contribution by the subsidiaries’ non-controlling shareholders.
Other shareholders (non-controlling shareholders) of the subsidiaries inject additional
capital in the subsidiary, which results in the dilution of equity interest of parent company
in the subsidiary. In the consolidated financial statements, difference between share of the
corresponding subsidiary’s net assets calculated based on the parent’s equity interest
before and after the capital injection is adjusted into capital reserve (capital premium or
share premium). If the capital reserve is not enough to absorb the difference, any excess is
adjusted against retained earnings.
3.7 Joint arrangement
A joint arrangement is an arrangement of which two or more parties have joint control.
Joint arrangement of the Company is classified as either a joint operation or a joint
venture.
3.7.1 Joint operation
A joint operation is a joint arrangement whereby the parties that have joint control of the
arrangement have rights to the assets, and obligations for the liabilities, relating to the
arrangement.
The Company recognises the following items in relation to shared interest in a joint
operation, and accounts for them in accordance with relevant accounting standards of the
Accounting Standards for Business Enterprises:
    I. its assets, including its share of any assets held jointly;


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    II. its liabilities, including its share of any liabilities incurred jointly;
    III. its revenue from the sale of its share of the output arising from the joint operation;
    IV. its share of the revenue from the sale of the output by the joint operation; and
    V. its expenses, including its share of any expenses incurred jointly.
3.7.2 Joint venture
A joint venture is a joint arrangement whereby the parties that have joint control of the
arrangement have rights to the net assets of the arrangement.
The Company accounts for its investment in the joint venture by applying the equity
method of long-term equity investment.
3.8 Cash and cash equivalents
Cash comprises cash on hand and deposits that can be readily withdrawn on demand. Cash
equivalents include short-term (generally within three months of maturity at acquisition),
highly liquid investments that are readily convertible into known amounts of cash and
which are subject to an insignificant risk of changes in value.
3.9 Foreign currency
3.9.1 Translation of a transaction denominated in a foreign currency
At the time of initial recognition of a foreign currency transaction, the amount in the
foreign currency is translated into the amount in the functional currency at the spot
exchange rate of the transaction date, or at an exchange rate which is determined through
a systematic and reasonable method and is approximate to the spot exchange rate of the
transaction date (hereinafter referred to as the approximate exchange rate).
3.9.2 Translation of monetary items denominated in foreign currencies on a balance-sheet
date
The foreign currency monetary items are translated at the spot exchange rate on the
balance sheet date. The balance of exchange arising from the difference between the spot
exchange rate on the balance sheet date and the spot exchange rate at the time of initial
recognition or prior to the balance sheet date shall be recorded into the profits and losses
at the current period. The foreign currency non-monetary items measured at the historical
cost are translated at the spot exchange rate on the transaction date; the foreign currency
non-monetary items restated to a fair value measurement are translated at the spot
exchange rate at the date when the fair value was determined, the difference between the
restated functional currency amount and the original functional currency amount shall be
recorded into the profits and losses at the current period.
3.9.3 Translation of financial statements denominated in a foreign currency


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Before translating the financial statements of foreign operations, the accounting period
and accounting policies are adjusted so as to conform to the Company’s accounting period
and accounting policies. The adjusted foreign operation financial statements denominated
in foreign currency (other than functional currency) are translated in accordance with the
following method:
    I. The asset and liability items in the statement of financial position shall be translated
    at the spot exchange rates at the date of that statement of financial position. The
    equity items except retained earnings are translated at the spot exchange rates when
    they are incurred.
    II. The income and expense items in the statement of comprehensive income are
    translated at the spot exchange rates or approximate exchange rate at the date of
    transaction.
    III. Foreign currency cash flows and cash flows of foreign subsidiaries are translated at
    the spot exchange rate or approximate exchange rate when the cash flows are incurred.
    The effect of exchange rate changes on cash is presented separately in the statement
    of cash flows as an adjustment item.
    IV. The differences arising from the translation of foreign currency financial statements
    are presented separately as “other comprehensive income” under the equity items of
    the consolidated statement of financial position.
When disposing a foreign operation involving loss of control, the cumulative amount of the
exchange differences relating to that foreign operation recognised under other
comprehensive income in the statement of financial position are reclassified into current
profit or loss according to the proportion disposed.
3.10 Financial instruments
A financial instrument is any contract which gives rise to both a financial asset of one entity
and a financial liability or equity instrument of another entity.
3.10.1 Recognition and derecognition of a financial instrument
A financial asset or a financial liability is recognised in the statement of financial position
when, and only when, an entity becomes party to the contractual provisions of the
instrument.
A financial asset can only be derecognised when the rights to the contractual cash flows
from the financial asset expire; or
A financial liability (or a part of a financial liability) is derecognised in on of the following
ways:
    I. a financial liability (or a part of the financial liability) is derecognised when the

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    obligation associated with the financial liability (or the part of the financial liability) is
    released;
    II. Where an existing financial liability is replaced by a new financial liability by an
    agreement with the counter party and the new financial liability is substantially
    different from the existing financial liability, the existing financial liability is
    derecognised while the new financial liablity is recognised;
    III. Where the contractual terms of a financial liability (or a part of a financial liability)
    are substantially altered, the financial liablity is dercognised in full and a new financial
    liablity reflecting the contractual terms after alteration is recognised.
Purchase or sale of a financial instrument in a regular-way is recognised and derecognised
using trade date accounting. A regular-way purchase or sale of a financial instrument is a
transaction under a contract whose terms require delivery of the instrument within the
timeframe established generally by regulations or convention in the market place
concerned. Trade date is the date on which the entity commits itself to purchase or sell aA
financial instrument.
3.10.2 Classification and measurement of financial assets
A financial asset is recognised as one of the following upon initial recognition based on
both the business model for managing the financial asset and the contractual cash flow
characteristics of the financial asset:
    I. a financial asset at amortised cost;
    II. a financial asset at fair value through profit or loss (FVATPL); or
    III. a financial asset at fair value through other comprehensive income (FVATOCI).
Reclassification of a financial asset is permitted if, and only if, the objective of the entity’s
business model for managing the financial asset changes. In this circumstance, all affected
financial assets are reclassified on the first day of the first reporting period after the
changes in business model; otherwise a financial asset cannot be reclassified after initial
recognition.
Financial assets shall be measured at initial recognition at fair value. For financial assets
measured at fair value through profit or loss, transaction costs are recognised in current
profit or loss. For financial assets not measured at fair value through profit or loss,
transaction costs should be included in the initial measurement. Notes receivable or
accounts receivable that arise from sales of goods or rendering of services are initially
measured at the transaction price defined in the accounting standard of revenue where
the transaction does not include a significant financing component.
Subsequent measurement of financial assets will be based on their categories:

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    I. Financial assets at amortised cost
    A financial asset is classified as a financial asset at amortised cost when both the
    following conditions are satisfied:
        i. the financial asset is held within the business model whose objective is to hold
        the financial asset in order to collect contractual cash flows; and
        ii. the contractual term of the financial asset gives rise to cash flows on specified
        dates that are solely payment of principal and interest on the outstanding
        principal amount.
    A financial asset at amortised cost is subsequently measured at amortised cost by
    adopting the effective interest rate method. Any gain or loss arising from
    derecognition, amortisation computed using the effective interest rate method, and
    impairment are recognised in current profit or loss.
    II. Financial assets at fair value through other comprehensive income (FVATOCI)
    A financial asset is classified as a FVATOCI when both the following conditions are
    satisfied:
        i. the financial asset is held within the business model whose objective is achieved
        by both collecting contractual cash flows and selling financial asset; and
        ii. the contractual term of the financial asset gives rise to cash flows on specified
        dates that are solely payment of principal and interest on the outstanding
        principal amount.
    A FVATOCI is subsequently measured at fair value with changes in fair value
    recognised in other comprehensive income excep for the following gain or loss, which
    is recognised in current profit or loss:
        i. gain or loss arising from impairment or exchange differences; and
        ii. interest income calculated based on the effective interest rate
    Where a non-trading equity instrument investment is irrevocably designated as a
    FVTAOCI, fair value change is recognised in other comprehensive income and dividend
    income is recognised in current profit or loss. Upon derecognised, cumulative gain or
    loss previously recognised in other comprehensive income is reclassified to retained
    earnings.
    III Financial assets at fair value through profit or loss (FVATPL)
    A financial asset which is neither a financial asset at amortised cost nor a FVATOCI is
    classified as a FVATPL. A FVATPL is subsequently measured as fair value with changes
    in fair value recognised in current profit or loss.
3.10.3 Classification and measurement of financial liabilities

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The Company classified the financial liabilities as financial liabilities at fair value through
profit or loss (FVLTPL), loan commitments at a below-market interest rate, financial
guarantee contracts, and financial liablities at amortised cost.
Subsequent measurement of financial assets will be based on the classification:
    I. Financial liabilities at fair value through profit or loss (FVLTPL)
    Held-for-trading financial liabilities (including derivatives that are financial liabilities)
    and financial liabilities designated as FVLTPL are classified as financial liabilities at
    FVLTPL. After initial recognition, any gain or loss (including interest expense) are
    recognised in current profit or loss except for those to which hedge accounting is
    applied. For a financial liability that is designated as a FVLTPL, changes in the fair value
    of the financial liability that is attributable to changes in the own credit risk of the
    issuer is recognised in other comprehensive income. At derecognition, cumulative gain
    or loss previously recognised under other comprehensive income is reclassified to
    retained earnings.
    II. Loan commitments and financial guarantee contracts
    A loan commitment is a commitment by the Company to provide a loan to customer
    under specified contract terms. The provision of impairment losses of loan
    commitments is recognised based on expected credit losses model.
    A financial guarantee contract is a contract that requires the Company to make
    specified payments to reimburse the holder for a loss it incurs because a specified
    debtor fails to make payment when due in accordance with the original or modified
    terms of a debt instrument. A financial guarantee contract liability shall be
    subsequently measured at the higher of the amount determined in accordance with
    the accounting policies applicable to impairment of a financial asset and the amount
    initially recognised less the cumulative amortisation calculated in accordance with the
    accounting policies applicable to revenue.
    III. Financial liabilities at amortised cost
    A financial liability at amortised cost is subsequently measured at its amortised cost
    calculated using the effective interest rate method.
Unless in exceptional case, financial liabilities and equity instruments are classfified in the
following ways:
    I. Where the issuer of a financial instrument has no uncondintional right to avoid
    deliverying cash or another financial asset(s) to fulfill an obligation, this obligation
    meets the definition of a financial liablity. A contract of a financial instrument may not


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    explicitly comprise terms and conditions relating to a obligation of delivery cash or
    another financial asset(s), it may implicitly include such obligation through other terms
    and conditions.
    II. Where a financial instrument can only or may be settled by the issuer’s own equity
    instruments:
         i. if the issuer’s equity instruments are a substitution of cash or other financial
         asset(s), the financial instrument is the issuer’s liability;
         ii. if the issuer’s equity instruments enable the holder to the issuer’s residual
         interest after deducting all of the issuer’s liabilities from all of the issuer’s assets,
         the financial instrument is the issuer’s equity instrument.
In certain cases, a financial instrument can only or may be settled by the issuer’s own
equity instruments and the settlement amount is calculated by multiplying the number of
equity instruments deliverable with the fair value of the equity instrument at the
settlement date, the instrument is the issuer’s financial liablity regardless of whether the
settlement amount is fixed or determinable wholly or partly by variables other than the
market price of the issuer’s own equity instrument (such as interest rate, market price of a
commodity, or price of a financial instrument).
3.10.4 Derivatives and embedded derivatives
A financial derivative is initially measured at its fair value at the inception date of the
derivative contract and subsequently measured at fair value. At initial recognition, a
financial deriivative with fair value at positive amount is recognised as an asset and as a
liability is the fair value is at negative amount.
Except for the change of fair value of the effective portion of a cash flow hedge, which is
recognised other comprehensive income and reclassified to profit or loss upon cease of
hedging effectiveness, change of fair value of a financial financial derivative in recognised
in current profit or loss.
Where the non-derivative part of a hybrid instrument is a financial asset, the hybrid
instrument is as a whole accounted for a financial asset.
Where the non-derivative part of a hybrid instrument is a non-financial asset, the
derivative part is separately accounted for as a financial derivative if all of the following
conditions are satisfied:
    I. the hybrid instrument is not accounted for at fair value through profit or loss;
    II. the economic characteristics and risks of the derivative part is not closely related to
    those of the non-derivative part; and
    III. a stand-alone instrument with characteristics similar to the derivative part is a

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    financial derivative.
Where the fair value of the derivative part of a hybrid instrument with the non-derivative
part being a non-financial asset cannot be inidividually measured either upon or
subsequent to initial recognition, the hybrid instrument as a whole is accounted as either a
FVATPL or FVLTPL.
3.10.5 Impairment of financial instruments
Impairment allowance for financial assets at amortised costs, FVATOCI, contract assets,
lease receivables, loan commitments and financial guarantee contracts is recognised on
the basis of their expected credit loss.
    I. Measurement of expected credit loss
    Expected credit loss are the weighted average of credit loss of a financial instrument
    with the respective risks of a default occurring as the weights. Credit loss is the
    difference between all contractual cash flows that are due to the Company in
    accordance with the contract and all the cash flows that the Company expects to
    receive (ie all cash shortfalls), discounted at the original effective interest rate or
    credit-adjusted effective interest rate in the case of purchased credit-impaired
    financial assets or financial assets with origninated credit impairment.
    Lifetime expected credit losses are the expected credit losses that result from all
    possible default events over the expected life of a financial instrument.
    12-month expected credit losses are the portion of lifetime expected credit losses that
    represent the expected credit losses that result from default events on a financial
    instrument that are possible within the 12 months after the reporting date (or the
    expected lifetime, if the expected life of a financial instrument is less than 12 months).
    At each reporting date, the Company classifies financial instruments into three stages
    and makes provisions for expected credit losses accordingly. A financial instrument of
    which the credit risk has not significantly increased since initial recognition is at stage 1.
    The Company shall measure the loss allowance for that financial instrument at an
    amount equal to 12-month expected credit losses. A financial instrument with a
    significant increase in credit risk since initial recognition but is not considered to be
    credit-impaired is at stage 2. The Company shall measure the loss allowance for that
    financial instrument at an amount equal to the lifetime expected credit losses. A
    financial instrument is considered to be credit-impaired as at the end of the reporting
    period is at stage 3. The Company shall measure the loss allowance for that financial
    instrument at an amount equal to the lifetime expected credit losses.
    The Company may assume that the credit risk on a financial instrument has not

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increased significantly since initial recognition if the financial instrument is determined
to have low credit risk at the reporting date and measure the loss allowance for that
financial instrument at an amount equal to 12-month expected credit losses.
For financial instrument at stage 1, stage 2 and those have low credit risk, the interest
revenue shall be calculated by applying the effective interest rate to the gross carrying
amount of a financial asset (ie, impairment loss not been deducted). For financial
instrument at stage 3, interest revenue shall be calculated by applying the effective
interest rate to the amortised cost after deducting of impairment loss.
For notes receivable, accounts receivable and accounts receivable financing, no matter
it contains a significant financing component or not, the Company shall measure the
loss allowance at an amount equal to the lifetime expected credit losses.
    i. Receivables
   For the notes receivable, accounts receivable, other receivables, accounts
   receivable financing and long-term receivables which are demonstrated to be
   impaired by any objective evidence, or applicable for individual assessment, the
   Company shall individually assess for impairment and recognise the loss allowance
   for expected credit losses. If the Company determines that no objective evidence of
   impairment exists for notes receivable, accounts receivable, other receivables,
   accounts receivable financing and long-term receivables, or the expected credit loss
   of a single financial asset cannot be assessed at reasonable cost, such notes
   receivable, accounts receivable, other receivables, accounts receivable financing
   and long-term receivables shall be divided into several groups with similar credit
   risk characteristics and collectively calculated the expected credit loss. The
   determination basis of groups is as following:
         A. Notes receivables:
         Group 1: Commercial acceptance
         Group 2: Bank acceptance
         For each group, the Company calculates expected credit losses through
         default exposure and the lifetime expected credit losses rate, taking reference
         to historical experience for credit losses and considering current condition
         and expectation for the future economic situation.
         B. Accounts receivable:
         Group 1: Related parties within the scope of consolidation
         Group 2: Receivables due from third parties
       The expected credit loss for a portfolio of accounts receivable is computed

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       using the expected credit loss rate over the entire lifes of the accounts
       receivable and the age groups of these accouns receivable while taking into
       consideration of their historical credit loss and the assessment for current and
       expected general economic conditions.
         C. Other receivables:
         Group 1: Related parties within the scope of consolidation
         Group 2: Receivables due from third parties
         The expected credit loss for a portfolio of other receivables is computed using
         the expected credit loss rate over the next 12 months of the other receivables
         and their exposure to default risk while taking into consideration of their
         historical credit loss and the assessment for current and expected general
         economic conditions.
    ii. Debts investment and other debt investments
    The expected credit loss for a debt investment or other debt investment is
    computed using the expected credit loss rate over the next 12 months or the
    entire life of the investment and its exposure to default risk while taking into
    consideration of its nature.
II. Low credit risk
If the financial instrument has a low risk of default, the borrower has a strong capacity
to meet its contractual cash flow obligations in the near term and adverse changes in
economic and business conditions in the longer term may, but will not necessarily,
reduce the ability of the borrower to fulfill its contractual cash flow obligations.
III. Significant increase in credit risk
The Company shall assess whether the credit risk on a financial instrument has
increased significantly since initial recognition, using the change in the risk of a default
occurring over the expected life of the financial instrument, through the comparison of
the risk of a default occurring on the financial instrument as at the reporting date with
the risk of a default occurring on the financial instrument as at the date of initial
recognition.
To make that assessment, the Company shall consider reasonable and supportable
information, that is available without undue cost or effort, and that is indicative of
significant increases in credit risk since initial recognition, including forward-looking
information. The information considered by the Company are as following:
    i. significant changes in internal price indicators of credit risk as a result of a
    change in credit risk since inception;

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    ii. existing or forecast adverse change in the business, financial or economic
    conditions of the borrower that results in a significant change in the borrower’s
    ability to meet its debt obligations;
    iii. an actual or expected significant change in the operating results of the
    borrower; An actual or expected significant adverse change in the regulatory,
    economic, or technological environment of the borrower;
    iv. significant changes in the value of the collateral supporting the obligation or in
    the quality of third-party guarantees or credit enhancements, which are expected
    to reduce the borrower’s economic incentive to make scheduled contractual
    payments or to otherwise have an effect on the probability of a default occurring;
    v. significant change that are expected to reduce the borrower’s economic
    incentive to make scheduled contractual payments
    vi. expected changes in the loan documentation including an expected breach of
    contract that may lead to covenant waivers or amendments, interest payment
    holidays, interest rate step-ups, requiring additional collateral or guarantees, or
    other changes to the contractual framework of the instrument;
    vii. significant changes in the expected performance and behaviour of the
    borrower
    viii. contractual payments are not less than 30 days past due.
Depending on the nature of the financial instruments, the Company shall assess
whether the credit risk has increased significantly since initial recognition on an
individual financial instrument or a group of financial instruments. When assessed
based on a group of financial instruments, the Company can group financial
instruments on the basis of shared credit risk characteristics, for example, past due
information and credit risk rating.
Generally, the Company shall determine the credit risk on a financial asset has
increased significantly since initial recognition when contractual payments are more
than 30 days past due. The Company can only rebut this presumption if the Company
has reasonable and supportable information that is available without undue cost or
effort, that demonstrates that the credit risk has not increased significantly since initial
recognition even though the contractual payments are more than 30 days past due.
IV. Credit-impaired financial asset
The Company shall assess at each reporting date whether the credit impairment has
occurred for financial asset at amortised cost and debt investment at fair value
through other comprehensive income. A financial asset is credit-impaired when one or

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    more events that have a detrimental impact on the estimated future cash flows of that
    financial asset have occurred. Evidences that a financial asset is credit-impaired
    include observable data about the following events:
    Significant financial difficulty of the issuer or the borrower;a breach of contract, such
    as a default or past due event; the lender(s) of the borrower, for economic or
    contractual reasons relating to the borrower’s financial difficulty, having granted to
    the borrower a concession(s) that the lender(s) would not otherwise consider;it is
    becoming probable that the borrower will enter bankruptcy or other financial
    reorganisation;the disappearance of an active market for that financial asset because
    of financial difficulties;the purchase or origination of a financial asset at a deep
    discount that reflects the incurred credit losses.
    V. Presentation of impairment of expected credit loss
    In order to reflect the changes of credit risk of financial instrument since initial
    recognition, the Company shall at each reporting date remeasure the expected credit
    loss and recognise in profit or loss, as an impairment gain or loss, the amount of
    expected credit losses addition(or reversal). For financial asset at amortised cost, the
    loss allowance shall reduce the carrying amount of the financial asset in the statement
    of financial position; for debt investment at fair value through other comprehensive
    income, the loss allowance shall be recognised in other comprehensive income and
    shall not reduce the carrying amount of the financial asset in the statement of financial
    position.
    VI. Write-off
    The Company shall directly reduce the gross carrying amount of a financial asset when
    the Company has no reasonable expectations of recovering the contractual cash flow
    of a financial asset in its entirety or a portion thereof. Such write-off constitutes a
    derecognition of the financial asset. This circumstance usually occurs when the
    Company determines that the debtor has no assets or sources of income that could
    generate sufficient cash flow to repay the write-off amount.
    Recovery of financial asset written off shall be recognised in profit or loss as reversal of
    impairment loss.
3.10.6 Transfer of financial assets
An entity may transfer a financial asset by either transferring the contractual rights to the
cash flows of the financial asset to another party or transferring the financial asset to
another party while retaining the contractual rights to the cash flows of the financial asset
and assuming the contractual obligations to deliver cash flows received to one or multiple

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parties.
    I. Derecognition of transferred assets
    If the Company transfers substantially all the risks and rewards of ownership of the
    financial asset, or neither transfers nor retains substantially all the risks and rewards of
    ownership of the financial asset but has not retained control of the financial asset, the
    financial asset shall be derecognised.
    Whether the Company has retained control of the transferred asset depends on the
    transferee’s ability to sell the asset. If the transferee has the practical ability to sell the
    asset in its entirety to an unrelated third party and is able to exercise that ability
    unilaterally and without needing to impose additional restrictions on the transfer, the
    Company has not retained control.
    The Company judges whether the transfer of financial asset qualifies for derecognition
    based on the substance of the transfer.
    If the transfer of financial asset qualifies for derecognition in its entirety, the
    difference between the following shall be recognised in profit or loss:
           i. the carrying amount of transferred financial asset;
           ii. the sum of consideration received and the part derecognised of the cumulative
           changes in fair value previously recognised in other comprehensive income (The
           financial assets involved in the transfer are classified as financial assets at fair
           value through other comprehensive income in accordance with Article 18 of the
           Accounting Standards for Business Enterprises - Recognition and Measurement of
           Financial Instruments).
    If the transferred asset is a part of a larger financial asset and the part transferred
    qualifies for derecognition, the previous carrying amount of the larger financial asset
    shall be allocated between the part that continues to be recognised (For this purpose,
    a retained servicing asset shall be treated as a part that continues to be recognised)
    and the part that is derecognised, based on the relative fair values of those parts on
    the date of the transfer. The difference between following two amounts shall be
    recognised in profit or loss:
           i. the carrying amount (measured at the date of derecognition) allocated to the
           part derecognised
           ii. the sum of the consideration received for the part derecognised and part
           derecognised of the cumulative changes in fair value previously recognised in
           other comprehensive income (The financial assets involved in the transfer are
           classified as financial assets at fair value through other comprehensive income in

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         accordance with Article 18 of the Accounting Standards for Business Enterprises -
         Recognition and Measurement of Financial Instruments).
    II. Continuing involvement in transferred assets
    If the Company neither transfers nor retains substantially all the risks and rewards of
    ownership of a transferred asset, and retains control of the transferred asset, the
    Company shall continue to recognise the transferred asset to the extent of its
    continuing involvement and also recognise an associated liability.
    The extent of the Company’s continuing involvement in the transferred asset is the
    extent to which it is exposed to changes in the value of the transferred asset.
    III. Continue to recognise the transferred assets
    If the Company retains substantially all the risks and rewards of ownership of the
    transferred financial asset, the Company shall continue to recognise the transferred
    asset in its entirety and the consideration received shall be recognised as a financial
    liability.
    The financial asset and the associated financial liability shall not be offset. In
    subsequent accounting period, the Company shall continuously recognise any income
    (gain) arising from the transferred asset and any expense (loss) incurred on the
    associated liability.
3.10.7 Offsetting financial assets and financial liabilities
Financial assets and financial liabilities shall be presented separately in the statement of
financial position and shall not be offset. When meets the following conditions, financial
assets and financial liabilities shall be offset and the net amount presented in the
statement of financial position:
The Company currently has a legally enforceable right to set off the recognised amounts;
The Company intends either to settle on a net basis, or to realise the asset and settle the
liability simultaneously.
In accounting for a transfer of a financial asset that does not qualify for derecognition, the
Company shall not offset the transferred asset and the associated liability.
3.10.8 Determination of fair value of financial instruments
See Note 3.11 for determination of fair value of financial instruments.
3.11 Determination of fair value
Fair value refers to the price that would be received to sell an asset or paid to transfer a
liability in an orderly transaction between market participants at the measurement date.
The Company determines fair value of the related assets and liabilities based on market
value in the principal market, or in the absence of a principal market, in the most

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advantageous market price for the related asset or liability. The fair value of an asset or a
liability is measured using the assumptions that market participants would use when
pricing the asset or liability, assuming that market participants act in their economic best
interest.
The principal market is the market in which transactions for an asset or liability take place
with the greatest volume and frequency. The most advantageous market is the market
which maximizes the value that could be received from selling the asset and minimizes the
value which is needed to be paid in order to transfer a liability, considering the effect of
transport costs and transaction costs both.
If the active market of the financial asset or financial liability exists, the Company shall
measure the fair value using the quoted price in the active market. If the active market of
the financial instrument is not available, the Company shall measure the fair value using
valuation techniques.
A fair value measurement of a non-financial asset takes into account a market participant’s
ability to generate economic benefits by using the asset in its highest and best use or by
selling it to another market participant that would use the asset in its highest and best use.
3.11.1 Valuation techniques
The Company uses valuation techniques that are appropriate in the circumstances and for
which sufficient data are available to measure fair value, including the market approach,
the income approach and the cost approach. The Company shall use valuation techniques
consistent with one or more of those approaches to measure fair value. If multiple
valuation techniques are used to measure fair value, the results shall be evaluated
considering the reasonableness of the range of values indicated by those results. A fair
value measurement is the point within that range that is most representative of fair value
in the circumstances.
When using the valuation technique, the Company shall give the priority to relevant
observable inputs. The unobservable inputs can only be used when relevant observable
inputs is not available or practically would not be obtained. Observable inputs refer to the
information which is available from market and reflects the assumptions that market
participants would use when pricing the asset or liability. Unobservable Inputs refer to the
information which is not available from market and it has to be developed using the best
information available in the circumstances from the assumptions that market participants
would use when pricing the asset or liability.
3.11.2 Fair value hierarchy
To Company establishes a fair value hierarchy that categorises into three levels the inputs

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to valuation techniques used to measure fair value. The fair value hierarchy gives the
highest priority to Level 1 inputs and second to the Level 2 inputs and the lowest priority to
Level 3 inputs. Level 1 inputs are quoted prices (unadjusted) in active markets for identical
assets or liabilities that the entity can access at the measurement date. Level 2 inputs are
inputs other than quoted prices included within Level 1 that are observable for the asset or
liability, either directly or indirectly. Level 3 inputs are unobservable inputs for the asset or
liability.
3.12 Inventories
3.12.1 Classification of inventories
Inventories are finished goods or products held for sale in the ordinary course of business,
in the process of production for such sale, or in the form of materials or supplies to be
consumed in the production process or in the rendering of services, including raw
materials, semi-finished goods, work in progress, finished goods, merchandises,
consumables, etc.
3.12.2 Measurement method applicable to issuance of inventories
Inventories are measured at actual cost at recognition. The actual cost of an item of
inventories comprises the purchase cost, cost of processing and other costs. Inventories
are issued at weighted average cost.
3.12.3 Inventory system
The perpetual inventory system is adopted. The inventories should be counted at least
once a year, and surplus or losses of inventory stocktaking shall be included in current
profit and loss.
3.12.4 Provision for impairment of inventory
Inventories are stated at the lower of cost and net realizable value. The excess of cost over
net realisable value of the inventories is recognised as provision for impairment of
inventory, and recognised in current profit or loss.
Net realizable value of the inventory should be determined on the basis of reliable
evidence obtained, and factors such as purpose of holding the inventory and impact of
post balance sheet event shall be considered.
3.12.4.1 In normal operation process, finished goods, products and materials for direct sale,
their net realizable values are determined at estimated selling prices less estimated selling
expenses and relevant taxes and surcharges; 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 sales contracts are less than the quantities held
by the Company, the net realizable value of the excess portion of inventories shall be

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based on general selling prices. Net realizable value of materials held for sale shall be
measured based on market price.
3.12.4.2 For materials in stock need to be processed, in the ordinary course of production
and business, net realisable value is determined at the estimated selling price less the
estimated costs of completion, the estimated selling expenses and relevant taxes. If the
net realisable value of the finished products produced by such materials is higher than the
cost, the materials shall be measured at cost; if a decline in the price of materials indicates
that the cost of the finished products exceeds its net realisable value, the materials are
measured at net realisable value and differences shall be recognised at the provision for
impairment.
3.12.4.3 Provisions for inventory impairment are generally determined on an individual
basis. For inventories with large quantity and low unit price, the provisions for inventory
impairment are determined on a category basis.
3.12.4.4 If any factor rendering write-downs of the inventories has been eliminated at the
reporting date, the amounts written down are recovered and reversed to the extent of the
inventory impairment, which has been provided for. The reversal shall be included in profit
or loss.
3.12.5 Amortisation method of low-value consumables
A low-value consumable is amortised in full upon issuance. A packaging material is
amortised in full upon issuance.
3.13. Contract assets and contract liabilities
Effective on 1 January 2020
Contract assets and contract liabilities are reocgnised on the basis of fulfilment of
performance obligations and payment received from clients. A right to receive a promised
consideration from a client resulting from goods transferred to or services provided to the
client (where the right to consideration is dependent on factors other than the passage of
time) is reocgnised a contract asset. A payment received from a client for which goods
shall be transferred to or services shall be provided to the client is recognised as a contract
liability.
See Note 3.10 for impairment of contract assets.
Contract assets and contract liabilities are presentd as line items on the statement of
financial position. A contract asset and contract liability arising from one contract are
presented in net; while the net amount is a debit balance, it is presented in contract assets
or other non-current assets depending on liquidity; while the net amount is a credit
balance, it is presented in contract liabilities or other non-current liabilities depending on

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liquidity. Contract assets and contract liabilities arising form different contracts are not be
offset.
3.14 Contract costs
Effective on 1 January 2020
Costs for a contract include costs to fulfill the contract and costs to obtain the contract.
An asset is recognised for the costs incurred to fulfill a contract on if those costs meet all of
the following criteria:
    I. the costs are directly associated with a contract or an anticipated contract, explicitly
    chargeable to the client under the contract, incurred only for the contract;
    II. the costs generate or enhance resouces of the Company that will be used in
    satisfying performance obligations in the future; and
    III. the costs are expected to be recovered.
An asset is recognised for the costs incurred to obtain a contract with a client if those costs
are expected to be recovered.
An asset recognised for the costs of a contract are amortised on a systematic basis that is
consistent with recognition of revenue arising from the contract. Where the costs incurred
to obtain a contract would be amortised for a period less than one year should they be
recognised as an asset, the costs are recognised in the current profit or loss as incurred.
An impairment is recognised for an asset recognised for the costs of a contract to the
extent that the carrying amount of the asset exceeds:
    I. the remaining amount of consideration that is expected to be received in exchange
    for the goods or services to which the asset relates; less
    II. the costs that relate directly to providing those goods or services and that have not
    been recognised as expenses.
Upon recognition of the impairment, further consideration is given for provision for an
onerous contract, in necessary.
A reversal of some or all of an impairment loss previously recognised for an asset for the
costs of a contract when the impairment conditions no longer exist or have improved. The
increased carrying amount of the asset is cappted by the amount that would have been
determined (net of amortisation) if no impairment loss had been recognised previously.
An asset recognised for the costs to fulfill a contract is presented in inventories if its
amortisation is not longer than 1 year or an operating cycle upon initial recognition;
otherwise, it is presented in other non-current assets.
An asset recognised for the costs to obtain a contract is presented in other current assets if
its amortisation is not longer than 1 year or an operating cycle upon initial recognition;

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otherwise, it is presented in other non-current assets.
3.15 Long-term equity investments
Long-term equity investments refer to equity investments where an investor has control of,
or significant influence over, an investee, as well as equity investments in joint ventures.
Associates of the Company are those entities over which the Company has significant
influence.
3.15.1 Determination basis of joint control or significant influence over the investee
Joint control is the relevant agreed sharing of control over an arrangement, and the
arranged relevant activity must be decided under unanimous consent of the parties
sharing control. In assessing whether the Company has joint control of an arrangement,
the Company shall assess first whether all the parties, or a group of the parties, control the
arrangement. When all the parties, or a group of the parties, considered collectively, are
able to direct the activities of the arrangement, the parties control the arrangement
collectively. Then the Company shall assess whether decisions about the relevant activities
require the unanimous consent of the parties that collectively control the arrangement. If
two or more groups of the parties could control the arrangement collectively, it shall not
be assessed as have joint control of the arrangement. When assessing the joint control, the
protective rights are not considered.
Significant influence is the power to participate in the financial and operating policy
decisions of the investee but is not control or joint control of those policies. In
determination of significant influence over an investee, the Company should consider not
only the existing voting rights directly or indirectly held but also the effect of potential
voting rights held by the Company and other entities that could be currently exercised or
converted, including the effect of share warrants, share options and convertible corporate
bonds that issued by the investee and could be converted in current period.
If the Company holds, directly or indirectly 20% or more but less than 50% of the voting
power of the investee, it is presumed that the Company has significant influence of the
investee, unless it can be clearly demonstrated that in such circumstance, the Company
cannot participate in the decision-making in the production and operating of the investee.
3.15.2 Determination of initial investment cost
3.15.2.1 Long-term equity investments arising from business combination
3.15.2.1.1 For a business combination involving enterprises under common control, if the
Company makes payment in cash, transfers non-cash assets or bears liabilities as the
consideration for the business combination, the share of carrying amount of the owners’
equity of the acquiree in the consolidated financial statements of the ultimate controlling

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party is recognised as the initial cost of the long-term equity investment on the
combination date. The difference between the initial investment cost and the carrying
amount of cash paid, non-cash assets transferred and liabilities assumed shall be adjusted
against the capital reserve; if capital reserve is not enough to be offset, undistributed profit
shall be offset in turn.
3.15.2.1.2 For a business combination involving enterprises under common control, if the
Company issues equity securities as the consideration for the business combination, the
share of carrying amount of the owners’ equity of the acquiree in the consolidated
financial statements of the ultimate controlling party is recognised as the initial cost of the
long-term equity investment on the combination date. The total par value of the shares
issued is recognised as the share capital. The difference between the initial investment
cost and the carrying amount of the total par value of the shares issued shall be adjusted
against the capital reserve; if capital reserve is not enough to be offset, undistributed profit
shall be offset in turn.
3.15.2.1.3 For business combination not under common control, the assets paid, liabilities
incurred or assumed and the fair value of equity securities issued to obtain the control of
the acquiree at the acquisition date shall be determined as the cost of the business
combination and recognised as the initial cost of the long-term equity investment. The
audit, legal, valuation and advisory fees, other intermediary fees, and other relevant
general administrative costs incurred for the business combination, shall be recognised in
profit or loss as incurred.
3.15.2.2 Long-term equity investments not arising from business combination
3.15.2.2.1 For long-term equity investments acquired by payments in cash, the initial cost
is the actually paid purchase cost, including the expenses, taxes and other necessary
expenditures directly related to the acquisition of long-term equity investments.
3.15.2.2.2 For long-term equity investments acquired through issuance of equity securities,
the initial cost is the fair value of the issued equity securities.
3.15.2.2.3 For the long-term equity investments obtained through exchange of
non-monetary assets, if the exchange has commercial substance, and the fair values of
assets traded out and traded in can be measured reliably, the initial cost of long-term
equity investment traded in with non-monetary assets are determined based on the fair
values of the assets traded out together with relevant taxes. Difference between fair value
and book value of the assets traded out is recorded in current profit or loss. If the
exchange of non-monetary assets does not meet the above criterion, the book value of the
assets traded out and relevant taxes are recognised as the initial investment cost.

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3.15.2.2.4 For long-term equity investment acquired through debt restructuring, the initial
cost is measured at the fair value of the equity investment obtained. Difference between
the fair value of the equity investment obtained and the book value of the debt given away
is recognised in current profit or loss.
3.15.3 Subsequent measurement and recognition of profit or loss
Long-term equity investment to an entity over which the Company has ability of control
shall be accounted for at cost method. Long-term equity investment to a joint venture or
an associate shall be accounted for at equity method.
3.15.3.1 Cost method
For Long-term equity investment at cost method, cost of the long-term equity investment
shall be adjusted when additional amount is invested or a part of it is withdrawn. The
Company recognises its share of cash dividends or profits which have been declared to
distribute by the investee as current investment income.
3.15.3.2 Equity method
If the initial cost of the investment is in excess of the share of the fair value of the net
identifiable assets in the investee at the date of investment, the difference shall not be
adjusted to the initial cost of long-term equity investment; if the initial cost of the
investment is in short of the share of the fair value of the net identifiable assets in the
investee at the date investment, the difference shall be included in the current profit or
loss and the initial cost of the long-term equity investment shall be adjusted accordingly.
The Company recognises the share of the investee’s net profits or losses, as well as its
share of the investee’s other comprehensive income, as investment income or losses and
other comprehensive income respectively, and adjusts the carrying amount of the
investment accordingly. The carrying amount of the investment shall be reduced by the
share of any profit or cash dividends declared to distribute by the investee. The investor’s
share of the investee’s owners’ equity changes, other than those arising from the
investee’s net profit or loss, other comprehensive income or profit distribution, shall be
recognised in the investor’s equity, and the carrying amount of the long-term equity
investment shall be adjusted accordingly. The Company recognises its share of the
investee’s net profits or losses after making appropriate adjustments of investee’s net
profit based on the fair values of the investee’s identifiable net assets at the investment
date. If the accounting policy and accounting period adopted by the investee is not in
consistency with the Company, the financial statements of the investee shall be adjusted
according to the Company’s accounting policies and accounting period, based on which,
investment income or loss and other comprehensive income, etc., shall be adjusted. The

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unrealized profits or losses resulting from inter-company transactions between the
company and its associate or joint venture are eliminated in proportion to the company’s
equity interest in the investee, based on which investment income or losses shall be
recognised. Any losses resulting from inter-company transactions between the investor
and the investee, which belong to asset impairment, shall be recognised in full.
Where the Company obtains the power of joint control or significant influence, but not
control, over the investee, due to additional investment or other reason, the relevant
long-term equity investment shall be accounted for by using the equity method, initial cost
of which shall be the fair value of the original investment plus the additional investment.
Where the original investment is classified as other equity investment, difference between
its fair value and the carrying value, in addition to the cumulative gain or loss previously
recorded in other comprehensive income, shall be recogised into current profit or loss at
the time when the equity method becomes applicable.
If the Company loses the joint control or significant influence of the investee for some
reasons such as disposal of equity investment, the retained interest shall be measured at
fair value and the difference between the carrying amount and the fair value at the date of
loss the joint control or significant influence shall be recognised in profit or loss. When the
Company discontinues the use of the equity method, the Company shall account for all
amounts previously recognised in other comprehensive income under equity method in
relation to that investment on the same basis as would have been required if the investee
had directly disposed of the related assets or liabilities.
3.15.4 Held-for-sale equity investments
The remaining equity investment after partial disposal, which is not classified as
held-for-sale, is accounted for by the equity method.
If a held-for-sale equity investment no longer satisfies the conditions for classifying as
held-for-sale, it is retrospectively adjusted from the date on which it was classified as
held-for-sale using the equity method. The financial statements for the period during
which the investment was classified as held-for-sale are respectively restated.
3.15.5 Impairment of long-term equity investments
See Note 3.22 for details.
3.16 Investment properties
3.16.1 Classification
Investment properties are properties to earn rentals or for capital appreciation or both,
including:
    I. Land use right leased out;

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    II. Land held for transfer upon appreciation;
    III. Buildings leased out.
3.16.2 Measurement
Investment properties are subsequently measured by the cost method. See Note 3.22 for
impairment of investment properties.
The residual after deducting the scrap value and cumulative impairment from the historical
cost of an item of investment properties is depreciated or amortised using the straight-line
method.
3.17 Fixed assets
Fixed assets refer to the tangible assets with higher unit price held for the purpose of
producing commodities, rendering services, renting or business management with useful
lives exceeding one year.
3.17.1 Recognition
Fixed assets will only be recognised at the actual cost paid when obtaining as all the
following criteria are satisfied:
    I. It is probable that the economic benefits relating to the fixed assets will flow into the
    Company;
    II. The costs of the fixed assets can be measured reliably.
Subsequent expenditure for fixed assets shall be recorded in cost of fixed assets, if
recognition criteria of fixed assets are satisfied, otherwise the expenditure shall be
recorded in current profit or loss when incurred.
3.17.2 Depreciation
The Company begins to depreciate the fixed asset from the next month after it is available
for intended use using the straight-line-method. The estimated useful life and annual
depreciation rates which are determined according to the categories. The estimated
economic useful lives and estimated net residual rates of fixed assets are listed as
followings:
                       Depreciation                                                   Annual depreciation
     Category                           Useful life in years   Scrap value rate (%)
                         method                                                            rate (%)
Houses and buildings   Straight line        8.00-35.00              3.00-5.00             2.70-12.10
Machinery               Straight line       5.00-10.00              3.00-5.00             9.50-19.40
Transportation
                        Straight line          4.00                   3.00                  24.25
vehicles
Administrative and
                        Straight line          4.00                   3.00                  32.33
other devices
For the fixed assets with impairment provided, the impairment provision should be
excluded from the cost when calculating depreciation.


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At the end of reporting period, the Company shall review the useful life, estimated net
residual value and depreciation method of the fixed assets. Estimated useful life of the
fixed assets shall be adjusted if it is changed compared to the original estimation.
3.17.3 Fixed assets acquired through financial lease
Where a leasing arrangement transfers substantially all risks and rewards associated with
the leased item to the Group, the lease is regarded as a finance lease and the leased item
is recognised as an item of fixed assets. An item of fixed asset obtained from a finance
lease is measured upon recognition at the lower of the fair value of the leased item and
the present value of the minimum lease payment as of the lease inception date. An item of
fixed asset obtained through a finance lease is depreciated in accordance with the
depreciation method applicable to the category of fixed assets to which the lease item
belongs. If it is reasonably certain that ownership of the lease item will transfer to the
Group upon expiry of the lease, the leased item is depreciated over its useful life; if,
however, transfer of ownership of the leased item upon expiry of the lease to the Group
cannot be reasonably expected, the leased item is depreciated over the shorter of its
useful life and the lease term.
3.18 Construction in progress
3.18.1 Construction in progress is measured on an individual project basis.
3.18.2 Transfer to fixed assets
The initial book values of the fixed assets are stated at total expenditures incurred before
they are ready for their intended use, including construction costs, original price of
machinery equipment, other necessary expenses incurred to bring the construction in
progress to get ready for its intended use and borrowing costs of the specific loan for the
construction or the proportion of the general loan used for the constructions incurred
before they are ready for their intended use. The construction in progress shall be
transferred to fixed asset when the installation or construction is ready for the intended
use. For construction in progress that has been ready for their intended use but relevant
budgets for the completion of projects have not been completed, the estimated values of
project budgets, prices, or actual costs should be included in the costs of relevant fixed
assets, and depreciation should be provided according to relevant policies of the Company
when the fixed assets are ready for intended use. After the completion of budgets needed
for the completion of projects, the estimated values should be substituted by actual costs,
but depreciation already provided is not adjusted.
3.19 Right-of-use assets
At the lease commencement date, a right-of-use asset is measured at cost. The cost of a

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right-of-use asset comprise:
    I. the amount of the initial measurement of the lease liability;
    II. any lease payments made at or before the commencement date, less any lease
    incentives received;
    III. any initial direct costs incurred by the Group; and
    IV. an estimate of costs to be incurred by the Group 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.
A right-of-use asset is subsequently measured at cost. If it is reasonably certain that
ownership of the lease item will transfer to the Group upon expiry of the lease, the leased
item is depreciated over its useful life; if, however, transfer of ownership of the leased
item upon expiry of the lease to the Group cannot be reasonably expected, the leased item
is depreciated over the shorter of its useful life and the lease term. Where a leased item
has recorded impairment, its residual value after deducting the impairment allowance is
depreciated in accordance the principle described in this paragraph.
3.20 Borrowing costs
3.20.1 Capitalisation
The Company shall capitalize the borrowing costs that are directly attributable to the
acquisition, construction or production of qualifying assets when meet the following
conditions:
    I. Expenditures for the asset are being incurred;
    II. Borrowing costs are being incurred, and;
    III. Acquisition, construction or production activities that are necessary to prepare the
    assets for their intended use or sale are in progress.
Other borrowing cost, discounts or premiums on borrowings and exchange differences on
foreign currency borrowings shall be recognized into current profit or loss when incurred.
Capitalization of borrowing costs is suspended during periods in which the acquisition,
construction or production of a qualifying asset is interrupted abnormally and the
interruption is for a continuous period of more than 3 months.
Capitalization of such borrowing costs ceases when the qualifying assets being acquired,
constructed or produced become ready for their intended use or sale. The expenditure
incurred subsequently shall be recognised as expenses when incurred.
3.20.2 Capitalisation rate and capitalised amount
When funds are borrowed specifically for purchase, construction or manufacturing of

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assets eligible for capitalization, the Company shall determine the amount of borrowing
costs eligible for capitalisation as the actual borrowing costs incurred on that borrowing
during the period less any interest income on bank deposit or investment income on the
temporary investment of those borrowings.
Where funds allocated for purchase, construction or manufacturing of assets eligible for
capitalisation are part of a general borrowing, the eligible amounts are determined by the
weighted-average of the cumulative capital expenditures in excess of the specific
borrowing multiplied by the general borrowing capitalization rate. The capitalization rate
will be the weighted average of the borrowing costs applicable to the general borrowing.
3.21 Intangible assets
3.21.1 Initial measurement
An intangible assets is initial measured at the actual cost of acquisition
3.21.2 Useful lives
3.21.2.1 Intangible assets with define useful lives
           Category        Useful life in years              Basis for useful life determination
Land use rights                    50             Legal right to use
Patents                            10             Period that the asset can generate economic benefits
Software                           3-5            Period that the asset can generate economic benefits
Trademarks                         10             Period that the asset can generate economic benefits

For intangible assets with finite useful life, the estimated useful life and amortisation
method are reviewed annually at the end of each reporting period and adjusted when
necessary. No change incur in current year in the estimated useful life and amortisation
method upon review.
3.21.2.2 Assets of which the period to bring economic benefits to the Company are
unforeseeable are regarded as intangible assets with indefinite useful lives. The Company
reassesses the useful lives of those assets at every year end. If the useful lives of those
assets are still indefinite, impairment test should be performed on those assets at the
balance sheet date.
3.21.2.3 Amortisation
For intangible assets with finite useful lives, their useful lives should be determined upon
their acquisition and systematically amortised on a straight-line basis [units of production
method] over the useful life. The amortisation amount shall be recognized into current
profit or loss according to the beneficial items. The amount to be amortised is cost
deducting residual value. For intangible assets which has impaired, the cumulative
impairment provision shall be deducted as well. The residual value of an intangible asset


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with a finite useful life shall be assumed to be zero unless: there is a commitment by a
third party to purchase the asset at the end of its useful life; or there is an active market
for the asset and residual value can be determined by reference to that market; and it is
probable that such a market will exist at the end of the asset’s useful life.
Intangible assets with indefinite useful lives shall not be amortised. The Company
reassesses the useful lives of those assets at every year end. If there is evidence to indicate
that the useful lives of those assets become finite, the useful lives shall be estimated and
the intangible assets shall be amortised systematically and reasonably within the
estimated useful lives.
3.21.3 Research and development expenditure
3.21.3.1 Preparation activities related to materials and other relevant aspects undertaken
by the Company for the purpose of further development shall be treated as research phase.
Expenditures incurred during the research phase of internal research and development
projects shall be recognised in profit or loss when incurred.
3.21.3.2 Development activities after the research phase of the Company shall be treated
as development phase.
3.21.4 Capitalisation of research and development expenditure
Expenditures arising from development phase on internal research and development
projects shall be recognised as intangible assets only if all of the following conditions have
been met:
    I. Technical feasibility of completing the intangible assets so that they will be available
    for use or sale;
    II. Its intention to complete the intangible asset and use or sell it;
    III. The method that the intangible assets generate economic benefits, including the
    Company can demonstrate the existence of a market for the output of the intangible
    assets or the intangible assets themselves or, if it is to be used internally, the
    usefulness of the intangible assets;
    IV. The availability of adequate technical, financial and other resources to complete
    the development and to use or sell the intangible asset; and
     V. Its ability to measure reliably the expenditure attributable to the intangible asset.
3.22 Impairment of long-term assets
Impairment loss of long-term equity investment in subsidiaries, associates and joint
ventures, investment properties, fixed assets, constructions in progress, and intangible
assets subsequently measured at cost shall be determined according to following method:
The Company shall assess at the end of each reporting period whether there is any

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indication that an asset may be impaired. If any such indication exists, the Company shall
estimate the recoverable amount of the asset and test for impairment. Irrespective of
whether there is any indication of impairment, the Company shall test for impairment of
goodwill acquired in a business combination, intangible assets with an indefinite useful life
or intangible assets not yet available for use annually.
The recoverable amounts of the long-term assets are the higher of their fair values less
costs to dispose and the present values of the estimated future cash flows of the long-term
assets. The Company estimate the recoverable amounts on an individual basis. If it is
difficult to estimate the recoverable amount of the individual asset, the Company
estimates the recoverable amount of the groups of assets that the individual asset belongs
to. Identification of an group of asset is based on whether the cash inflows from it are
largely independent of the cash inflows from other assets or groups of assets.
If, and only if, the recoverable amount of an asset or a group of assets is less than its
carrying amount, the carrying amount of the asset shall be reduced to its recoverable
amount and the provision for impairment loss shall be recognised accordingly.
For the purpose of impairment testing, goodwill acquired in a business combination shall,
from the acquisition date, be allocated to relevant group of assets based on reasonable
method; if it is difficult to allocate to relevant group of assets, good will shall be allocated
to relevant combination of asset groups. The relevant group of assets or combination of
asset groups is a group of assets or combination of asset groups that is benefit from the
synergies of the business combination and is not larger than the reporting segment
determined by the Company.
When test for impairment, if there is an indication that relevant group of assets or
combination of asset groups may be impaired, impairment testing for group of assets or
combination of asset groups excluding goodwill shall be conducted first, and calculate the
recoverable amount and recognize the impairment loss. Then the group of assets or
combination of asset groups including goodwill shall be tested for impairment, by
comparing the carrying amount with its recoverable amount. If the recoverable amount is
less than the carrying amount, the Company shall recognise the impairment loss.
The mentioned impairment loss will not be reversed in subsequent accounting period once
it had been recognised.
3.23 Long-term deferred expenses
Long-term deferred expenses are various expenses already incurred, which shall be
amortised over current and subsequent periods with the amortisation period exceeding
one year. Long-term deferred expenses are evenly amortised over the beneficial period.

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3.24 Employee benefits
Employee benefits refer to all forms of consideration or compensation given by the
Company in exchange for service rendered by employees or for the termination of
employment relationship. Employee benefits include short-term employee benefits,
post-employment benefits, termination benefits and other long-term employee benefits.
Benefits provided to an employee's spouse, children, dependents, family members of
decreased employees, or other beneficiaries are also employee benefits.
According to liquidity, employee benefits are presented in the statement of financial
position as “Employee benefits payable” and “Long-term employee benefits payable”.
3.24.1 Short-term employee benefits
3.24.1.1 Salaries, wages, allowances and subsidies
The Company recognises, in the accounting period in which an employee provides service,
actually occurred short-term employee benefits as a liability, with a corresponding charge
to current profit except for those recognised as capital expenditure based on the
requirement of accounting standards.
3.24.1.2 Welfare
The Company shall recognise the employee welfare based on actual amount when
incurred into current profit or loss or related capital expenditure. Employee welfare shall
be measured at fair value as it is a non-monetary benefits.
3.24.1.3 Social securities such as medical insurance and work-place injury insurance,
housing funds, labor union fund and employee education fund
Payments made by the Company of social insurance for employees, such as medical
insurance and work-place injury insurance, payments of housing funds, and labor union
fund and employee education fund accrued in accordance with relevant requirements, in
the accounting period in which employees provide services, is calculated according to
required accrual bases and accrual ratio in determining the amount of employee benefits
and the related liabilities, which shall be recognised in current profit or loss or the cost of
relevant asset.
3.24.1.4 Short-term paid absences
The company shall recognise the related employee benefits arising from accumulating paid
absences when the employees render service that increases their entitlement to future
paid absences. The additional payable amounts shall be measured at the expected
additional payments as a result of the unused entitlement that has accumulated. The
Company shall recognise relevant employee benefit of non-accumulating paid absences
when the absences actually occurred.

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3.24.1.5 Short-term profit-sharing plan
The Company shall recognise the related employee benefits payable under a profit-sharing
plan when all of the following conditions are satisfied:
    I. The Company has a present legal or constructive obligation to make such payments
    as a result of past events; and
    II. A reliable estimate of the amounts of employee benefits obligation arising from the
    profit- sharing plan can be made.
3.24.2 Post-employement benefits
3.24.2.1 Defined contribution plans
The Company shall recognise, in the accounting period in which an employee provides
service, the contribution payable to a defined contribution plan as a liability, with a
corresponding charge to the current profit or loss or the cost of a relevant asset.
When contributions to a defined contribution plan are not expected to be settled wholly
before twelve months after the end of the annual reporting period in which the employees
render the related service, they shall be discounted using relevant discount rate (market
yields at the end of the reporting period on high quality corporate bonds in active market
or government bonds with the currency and term which shall be consistent with the
currency and estimated term of the defined contribution obligations) to measure
employee benefits payable.
3.24.2.2 Defined benefit plans
    I. Present value of defined benefit obligation and current service costs
    Based on the expected accumulative welfare unit method, the Company shall make
    estimates about demographic variables and financial variables in adopting the
    unbiased and consistent actuarial assumptions and measure defined benefit obligation,
    and determine the obligation period. The Company shall discount the obligation
    arising from defined benefit plan using relevant discount rate (market yields at the end
    of the reporting period on high quality corporate bonds in active market or
    government bonds with the currency and term which shall be consistent with the
    currency and estimated term of the defined benefit obligations) in order to determine
    the present value of the defined benefit obligation and the current service cost.
    II. Net assets or liabilities of a defined benefit plan
    The net defined benefit liability (asset) is the deficit or surplus recognised as the
    present value of the defined benefit obligation less the fair value of plan assets (if any).
    When the Company has a surplus in a defined benefit plan, it shall measure the net
    defined benefit asset at the lower of the surplus in the defined benefit plan and the

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    asset ceiling.
    III. Amount recognised as plan assets or charged to the current profit or loss
    Service cost comprises current service cost, past service cost and any gain or loss on
    settlement. Other service cost shall be recognised in profit or loss unless accounting
    standards require or allow the inclusion of current service cost within the cost of
    assets.
    Net interest on the net defined benefit liability (asset) comprising interest income on
    plan assets, interest cost on the defined benefit obligation and interest on the effect of
    the asset ceiling, shall be included in profit or loss.
    IV. Amount recognised in other comprehensive income
    Changes in the net liability or asset of the defined benefit plan resulting from the
    remeasurements including:
         i. Actuarial gains and losses, the changes in the present value of the defined
         benefit obligation resulting from experience adjustments or the effects of changes
         in actuarial assumptions;
         ii. Return on plan assets, excluding amounts included in net interest on the net
         defined benefit liability or asset;
         iii. Any change in the effect of the asset ceiling, excluding amounts included in net
         interest on the net defined benefit liability (asset).
    Remeasurements of the net defined benefit liability (asset) recognised in other
    comprehensive income shall not be reclassified to profit or loss in a subsequent period.
    However, the Company may transfer those amounts recognised in other
    comprehensive income within equity.
3.24.3 Termination benefits
The Company providing termination benefits to employees shall recognise an employee
benefits liability for termination benefits, with a corresponding charge to the profit or loss
of the reporting period, at the earlier of the following dates:
    I. When the Company cannot unilaterally withdraw the offer of termination benefits
    because of an employment termination plan or a curtailment proposal; or
    II. When the Company recognises costs or expenses related to a restructuring that
    involves the payment of termination benefits.
If the termination benefits are not expected to be settled wholly before twelve months
after the end of the annual reporting period, the Company shall discount the termination
benefits using relevant discount rate (market yields at the end of the reporting period on
high quality corporate bonds in active market or government bonds with the currency and

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term which shall be consistent with the currency and estimated term of the defined
benefit obligations) to measure the employee benefits.
3.24.4 Other long-term employee benefits
3.24.4.1 Other long-term employee beneifts satisfying the recognition conditions
applicable to defined contribution plans
When other long-term employee benefits provided by the Company to the employees
satisfies the conditions for classifying as a defined contribution plan, all those benefits
payable shall be accounted for as employee benefits payable at their discounted value.
3.24.4.2 Other long-term employee benefits satisfying the recognition conditions
applicable to defined benefit plans
At the end of the reporting period, the Company recognised the cost of employee benefit
from other long-term employee benefits as the following components:
    I. Service costs;
    II. Net interest cost for net liability or asset of other long-term employee benefits;
    III. Changes resulting from the remeasurements of the net liability or asset of other
    long-term employee benefits.
In order to simplify the accounting treatment, the net amount of above items shall be
recognised in profit or loss or relevant cost of assets.
3.25 Lease liabilities
At the commencement date, the Group measures the lease liability at the present value of
the lease payments that are not paid at that date. The lease payments comprise:
    I. fixed payments, or in-substance fixed payments, less any lease incentives receivable;
    II. variable lease payments that depend on an index or a rate;
    III. the exercise price of a purchase option if the Group is reasonably certain to
    exercise that option;
    IV. payments of penalties for terminating the lease, if the lease term reflects the
    Group exercising an option to terminate the lease; and
    V. amounts expected to be payable by the Group under residual value guarantees.
The lease payments shall be discounted using the interest rate implicit in the lease, if that
rate can be readily determined. If that rate cannot be readily determined, the lessee shall
use the lessee’s incremental borrowing rate. The excess of the lease payments over its
present value is amortised over the lease term as interest expenses using the discount rate.
A variable lease payment which is not included in the initial measurement of the lease
liability is recognised in profit or loss when incurred.



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3.26 Provisions
3.26.1 Recognition
A provision is recognised for an obligation associated with a contingent event when the
following conditions are satisfied:
    I. The obligation is a present obligation assumed by the entity;
    II. It is probable that fulfillment of the obligation will result in outflows of economic
    benefits from the entity;
    III. The amount of the obligation can be reliably measured.
3.26.2 Measurement
A provision is initially measured at the best estimate of expenses required for the
performance of relevant present obligations. The Company, when determining the best
estimate, has had a comprehensive consideration of risks with respect to contingencies,
uncertainties and the time value of money. The carrying amount of the provision shall be
reviewed at the end of every reporting period. If conclusive evidences indicate that the
carrying amount fails to be the best estimate of the provision, the carrying amount shall be
adjusted based on the updated best estimate.
3.27 Revenue
Effective on 1 January 2020
3.27.1 General policy
Revenue is total economic inflows arising from the Company’s daily operation which result
in increases in equity, other than those relating to contributions from holders of equity
claims.
The Company recognises revenue when (or as) the Company satisfies a performance
obligation by transferring a promised good or service (ie an asset) to a customer. An asset
is transferred when (or as) the customer obtains control of that asset. A customer has
control of an asset when (or as) the customer has the ability to direct the use of, and
obtain substantially all of the remaining benefits from, the asset.
Where a contract include two or more performance obligations, the Company allocate the
transaction    price,   upon    inception    of    the   contract,     to   each performance
obligation identified in the contract on a relative stand-alone selling price basis, revenue
associated with each performance obligation is measured at the allocated price.
The transaction price is the amount of consideration to which the Company expects to be
entitled in exchange for transferring promised goods or services to a customer, excluding
amounts collected on behalf of third parties. If the consideration promised in


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a contract includes a variable amount, the Company estimates the amount of
consideration to which the Company will be entitled in exchange for transferring the
promised goods or services to a customer to the extent that it is highly probable that a
significant reversal in the amount of cumulative revenue recognised will not occur when
the uncertainty associated with the variable consideration is subsequently resolved. Where
a contract contains a significant financing component, the Company recognises revenue at
an amount that reflects the price that a customer would have paid for the promised goods
or services if the customer had paid cash for those goods or services when (or as) they
transfer to the customer (ie the cash selling price); the difference between the amount of
promised consideration and the cash selling price of the promised goods or services is
amortised over the life of the contract using the effective interest rate method. The
Company does not adjust the promised amount of consideration for the effects of a
significant financing component if the Comopany expects, at contract inception, that the
period between when the Company transfers a promised good or service to a customer
and when the customer pays for that good or service will be one year or less.
The Company transfers control of a good or service over time and, therefore, satisfies
a performance obligation and recognises revenue over time, if one of the following criteria
is met:
      I. the customer simultaneously receives and consumes the benefits provided by the
      Company’s performance as the entity performs;
      II. the Company’s performance creates or enhances an asset that the customer controls
      as the asset is created or enhanced; or
      III. the Company’s performance does not create an asset with an alternative use to the
      Company and the Company has an enforceable right to payment for performance
      completed to date.
For       each   performance      obligation     satisfied   over   time,   the     Company
recognises revenue over time by measuring the progress towards complete satisfaction of
that performance obligation, unless the progress towards complete satisfaction cannot be
reliably measured. The Company uses either the input method or output method to
measure the progress towards complete satisfaction of a performance obligation. When
the progress towards complete satisfaction of a performance obligation cannot be reliably
measured, the Company recognises revenue only to the extent of the costs incurred until
such time that it can reasonably measure the outcome of the performance obligation.
Where a performance obligation is satisfied at a point in time, the Company recognises
revenue when (or as) the customer obtains control of the transferred asset (either goods

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or service). To determine the point in time at which a customer obtains control of a
promised asset, the Company considers the following indicators:
   I. The Company has a present right to payment for the asset, ie. the customer has the
   present obligation to pay for the asset.
   II. The legal title to the asset has been transferred to the customer, ie. the customer
   has the legal title to the asset.
   III. The Company has transferred physical possession of the asset, ie. the customer has
   physical possession of the asset.
   IV. The significant risks and rewards of ownership of the asset has been transferred to
   the customer, ie. the customer has obtained the significant risks and rewards of
   ownership of the asset.
   V. The customer has accepted the asset.
   VI. Other indication that the customer has obtained control over the asset.
3.27.2 Specific policies
3.27.2.1 Revenue from sales of goods
Revenue from sales of goods is recognised if all of following conditions are satisfied:
   I. Substantially all risks and rewards associated with the ownership of the goods are
   transferred to the customer.
   II. The Company retains neither continuous management associated with the
   ownership of the goods nor effective control over the goods.
   III. Revenue from the sales can be realiably measured.
   IV. It is probable that the associated economic benefits will flow to the Company.
   V. Costs incurred and expected to be incurred can be realiably measured.
With regards to domestic sales, revenue is recognised upon dispatch of the goods and
delivery of the goods to the customer if all of following conditions are satisfied:
   I. Substantially all risks and rewards associated with the ownership of the goods are
   transferred to the customer.
   II. The Company retains neither continuous management associated with the
   ownership of the goods nor effective control over the goods.
   III. Revenue from the sales can be realiably measured.
   IV. It is probable that the associated economic benefits will flow to the Company.
   V. Costs incurred and expected to be incurred can be realiably measured.
With regards to export sales, revenue is recognised upon the presence of the respective
bill of lading and custom clearance.
3.27.2.2 Revenue from rendering of services

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Where the outcome of a service rendered by the Company can be reliably estimated on a
statement date, revenue arising from the rendering of the service is recognised using the
percentage of completion method.
The outcome of a service rendered by the Company can be reliably estimated if all of the
following conditions are satisfied:
   I. The revenue can be reliably measured.
   II. It is probable that the associated economic benefits will flow to the Company.
   III. The percentage of completion can be reliably determined.
   IV. Costs incurred and expected to be incurred can be realiably measured.
Total revenue of a service rendered is determined by the respective contract price, unless
the contract price is not fair. Revenue from a service rendered recognised for a particular
period is computed as the residual after deducting revenue from that service cumulatively
recognised in prior periods from the product of multiplying the service’s total revenue with
the percentage of completion as of the statement date. Costs for a service rendered
recognised for a particular period are computed as the residual after deducting costs for
that service cumulatively recognised in prior periods from the product of multiplying the
service’s total budgeted costs with the percentage of completion as of the statement date.
Where the outcome of a service rendered by the Company can not be reliably estimated
on a statement date, costs incurred are recognised in profit or loss upon occurrence and
revenue is recognised to the extent that costs incurred can be recovered.
3.27.2.3 Revenue from usage of assets
Revenue from usage of the Group’s assets is recognised if the revenue can be reliably
measured and it is probable that the associated economic benefits will flow to the Group.
Interest income is measured using the effective interest rate method on the basis of the
period during which the Group monetary funds are used by the user.
Royalty income is measured in accordance with the method determined by the respective
contracts.
3.28 Government grants
3.28.1 Recognition
A government grant shall not be recgonised until there is reasonable assurance that:
    I. The Company will comply with the conditions attaching to them; and
    II. The grants will be received.
3.28.2 Measurement
Monetary grants from the government shall be measured at amount received or receivable,
and non-monetary grants from the government shall be measured at their fair value or at a

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nominal value of CNY 1.00 when reliable fair value is not available.
3.28.3 Accounting for government grant
3.28.3.1 Asset-related government grants
Government grants pertinent to assets mean the government grants that are obtained by
the Company used for purchase or construction, or forming the long-term assets by other
ways. Government grants pertinent to assets shall be recognised as deferred income, and
should be recognised in profit or loss on a systematic basis over the useful lives of the
relevant assets. Grants measured at their nominal value shall be directly recognised in
profit or loss of the period when the grants are received. When the relevant assets are sold,
transferred, written off or damaged before the assets are terminated, the remaining
deferred income shall be transferred into profit or loss of the period of disposing relevant
assets.
3.28.3.2 Income-related government grants
Government grants other than related to assets are classified as government grants
related to income. Government grants related to income are accounted for in accordance
with the following principles:
If the government grants related to income are used to compensate the enterprise’s
relevant expenses or losses in future periods, such government grants shall be recognised
as deferred income and included into profit or loss in the same period as the relevant
expenses or losses are recognised;
If the government grants related to income are used to compensate the enterprise’s
relevant expenses or losses incurred, such government grants are directly recognised into
current profit or loss.
For government grants comprised of part related to assets as well as part related to
income, each part is accounted for separately; if it is difficult to identify different part, the
government grants are accounted for as government grants related to income as a whole.
Government grants related to daily operation activities are recognised in other income in
accordance with the nature of the activities, and government grants irrelevant to daily
operation activities are recognised in non-operating income.
3.28.3.3 Loan interest subsidies
When loan interest subsidy is allocated to the bank, and the bank provides a loan at
lower-market rate of interest to the Company, the loan is recognised at the actual received
amount, and the interest expense is calculated based on the principal of the loan and the
lower-market rate of interest.
When loan interest subsidy is directly allocated to the Company, the subsidy shall be

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recognised as offsetting the relevant borrowing cost.
3.28.3.4 Repayment of government grants
Repayment of the government grants shall be recorded by increasing the carrying amount
of the asset if the book value of the asset has been written down, or reducing the balance
of relevant deferred income if deferred income balance exists, any excess will be
recognised into current profit or loss; or directly recognised into current profit or loss for
other circumstances.
3.29 Deferred tax assets and deferred tax liabilities
Temporary differences are differences between the carrying amount of an asset or liability
in the statement of financial position and its tax base at the balance sheet date. The
Company recognises and measures the effect of taxable temporary differences and
deductible temporary differences on income tax as deferred tax liabilities or deferred tax
assets using liability method. Deferred tax assets and deferred tax liabilities shall not be
discounted.
3.29.1 Recognition of deferred tax assets
Deferred tax assets should be recognised for deductible temporary differences, the
carryforward of unused tax losses and the carryforward of unused tax credits to the extent
that it is probable that taxable profit will be available against which the deductible
temporary differences, the carryforward of unused tax losses and the carryforward of
unused tax credits can be utilised at the tax rates that are expected to apply to the period
when the asset is realised, unless the deferred tax asset arises from the initial recognition
of an asset or liability in a transaction that:
    I. is not a business combination; and
    II. at the time of the transaction, affects neither accounting profit nor taxable profit
    (tax loss).
The Company shall recognise a deferred tax asset for all deductible temporary differences
arising from investments in subsidiaries, associates and joint ventures, only to the extent
that, it is probable that:
    I. the temporary difference will reverse in the foreseeable future; and
    II. taxable profit will be available against which the deductible temporary difference
    can be utilised.
At the end of each reporting period, if there is sufficient evidence that it is probable that
taxable profit will be available against which the deductible temporary difference can be
utilized, the Company recognises a previously unrecognised deferred tax asset.
The carrying amount of a deferred tax asset shall be reviewed at the end of each reporting

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period. The Company shall reduce the carrying amount of a deferred tax asset to the
extent that it is no longer probable that sufficient taxable profit will be available to allow
the benefit of part or all of that deferred tax asset to be utilised. Any such reduction shall
be reversed to the extent that it becomes probable that sufficient taxable profit will be
available.
3.29.2 Recognition of deferred tax liabilities
A deferred tax liability shall be recognised for all taxable temporary differences at the tax
rate that are expected to apply to the period when the liability is settled.
No deferred tax liability shall be recognised for taxable temporary differences arising from:
    I. the initial recognition of goodwill; or
    II. the initial recognition of an asset or liability in a transaction which: is not a business
    combination; and at the time of the transaction, affects neither accounting profit nor
    taxable profit (tax loss)
An entity shall recognise a deferred tax liability for all taxable temporary differences
associated with investments in subsidiaries, associates, and joint ventures, except to the
extent that both of the following conditions are satisfied:
    I. the Company is able to control the timing of the reversal of the temporary difference;
    and
    II. it is probable that the temporary difference will not reverse in the foreseeable
    future.
3.29.3 Recognition of deferred tax liabilities or assets involved in special transactions or
events
3.29.3.1 Deferred tax liabilities or assets related to business combination
For the taxable temporary difference or deductible temporary difference arising from a
business combination not under common control, a deferred tax liability or a deferred tax
asset shall be recognised, and simultaneously, goodwill recognised in the business
combination shall be adjusted based on relevant deferred tax expense (income).
3.29.3.2 Items directly recognised in equity
Current tax and deferred tax related to items that are recognised directly in equity shall be
recognised in equity. Such items include: other comprehensive income generated from fair
value fluctuation of other debt investments; an adjustment to the opening balance of
retained earnings resulting from either a change in accounting policy that is applied
retrospectively or the correction of a prior period (significant) error; amounts arising on
initial recognition of the equity component of a compound financial instrument that
contains both liability and equity component.

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3.29.3.3 Unused tax losses and unused tax credits
3.29.3.3.1 Unsused tax losses and unused tax credits generated from daily operation of the
Company itself
Deductible loss refers to the loss calculated and permitted according to the requirement of
tax law that can be offset against taxable income in future periods. The criteria for
recognising deferred tax assets arising from the carryforward of unused tax losses and tax
credits are the same as the criteria for recognising deferred tax assets arising from
deductible temporary differences. The Company recognises a deferred tax asset arising
from unused tax losses or tax credits only to the extent that there is convincing other
evidence that sufficient taxable profit will be available against which the unused tax losses
or unused tax credits can be utilised by the Company. Income taxes in current profit or loss
shall be deducted as well.
3.29.3.3.2 Unsused tax losses and unused tax credits arising from a business combination
Under a business combination, the acquiree’s deductible temporary differences which do
not satisfy the criteria at the acquisition date for recognition of deferred tax asset shall not
be recognised. Within 12 months after the acquisition date, if new information regarding
the facts and circumstances exists at the acquisition date and the economic benefit of the
acquiree’s deductible temporary differences at the acquisition is expected to be realised,
the Company shall recognise acquired deferred tax benefits and reduce the carrying
amount of any goodwill related to this acquisition. If goodwill is reduced to zero, any
remaining deferred tax benefits shall be recognised in profit or loss. All other acquired
deferred tax benefits realised shall be recognised in profit or loss.
3.29.3.4 Temporary difference generated in consolidation elimination
When preparing consolidated financial statements, if temporary difference between
carrying value of the assets and liabilities in the consolidated financial statements and their
taxable bases is generated from elimination of inter-company unrealized profit or loss,
deferred tax assets or deferred tax liabilities shall be recognised in the consolidated
financial statements, and income taxes expense in current profit or loss shall be adjusted
as well except for deferred tax related to transactions or events recognised directly in
equity and business combination.
3.29.3.5 Share-based payment settled by equity
If tax authority permits tax deduction that relates to share-based payment, during the
period in which the expenses are recognised according to the accounting standards, the
Company estimates the tax base in accordance with available information at the end of the
accounting period and the temporary difference arising from it. Deferred tax shall be

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recognised when criteria of recognition are satisfied. If the amount of estimated future tax
deduction exceeds the amount of the cumulative expenses related to share-based
payment recognised according to the accounting standards, the tax effect of the excess
amount shall be recognised directly in equity.
3.30 Leases
3.30.1 Identifying a lease contract
Upon contract inception, the Company assesses whether a contract is a lease contract or a
contract with embedded leasing arrangement. Where a party to a contract transfers the
use right of one or more identified asset over a period for consideration, the contract is
either a lease contract or a contract with embedded leasing arrangement. A party to a
contract transfers the use right of one or more identified asset over a period when the two
conditions as follow are present:
     I. the counter party is entitled to obtain substantially all economic benefits arising
     from the use of the identified asset over the period specified by the contact; and
     II. the counter party is entitled to direct the use of the identified asset during the
     period period specified by the contract.
3.30.2 Identifying individual leases
Where a contract comprises multiple leases, the contract is separated and each lease is
accounted for separately. A leasing arrangement in a contract is a separately identifiable
lease if:
     I. the leasee can obtain economic benefits by using the assets covered by the leasing
     arrangement alone or in combination with other resources obtainable by the leasee;
     and
     II. the assets covered by the leasing arrangement has no close dependence on or close
     connection to other assets specified by the contract.
3.30.3 Accounting for a lease as the lessee
A lease which has a lease term of 12 months or less at the commencement date is a
short-term lease. A lease for which the underlying asset is of low value when it is new is a
low-value lease. Where an asset of low value when it is new obtained from a lease is
intended to be subleased, the lease for which such asset is not a low-value lease.
A right to use asset and lease liability is recognised for a lease, which is neither a
short-term lease nor a low-value lease, at its commencement.
3.30.4 Accounting for a lease as the lessor
A lease which substantially transfers all the risks and rewards incidental to ownership of an
underlying asset is classified as a finance lease at its commencement; a lease which is not a

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finance lease is classified as an operating lease at it commencement.
3.30.4.1 Operating lease
When the Company as a lessor, lease income should be recognised over the lease terms on
a straight-line basis. Where the Company offers rental-free period in a lease, the
amortisation period is the lease term inclusive of the rental free period. Where certain
costs incurred by the lessee are reimbursed by the Company, rental income recognised is
reduced proportionately by the reimbursement.
Substantial initial direct costs relating to lease transactions incurred by the Company shall
be capitalised and amortised over the lease terms on the same basis as the recognition of
lease income. Contingent rental, if included in the lease contract, shall be recognised into
profit or loss upon occurrence.
3.30.4.2 Finance lease
The sum of initial direct costs and minimum lease rentals receivable is recognised as lease
rentals receivable at the commencement date. The excess of the sum of unguaranteed
residual value of the leased item, intial direct costs and minimum lease rentals receivable
over the present value of the sum is reocgnised as unrealised financing gain at the
commencement date and subsequently amortised using the effective interest rate
method.
3.31 Change of significant accounting policies and significant accounting estimates
3.31.1 Change of significant accounting policies
ASBE 21 – Leases (Revised in 2018) (ASBE 21 (2018)) was issued by the Ministry of Finance
on 7 December 2018 through CaiKuai [2018] No. 35. Companies with both domestic and
foreign listing which prepare the financial statements in accordance with either the
International Financial Reporting Standards or ASBEs shall adopt ASBE 21 (2018) on 1
January 2019. Other companies which prepare the financial statements in accordance with
ASBEs shall adopt ASBE 21 (2018) on 1 January 2021.
In accordance with ASBE 21 (2018):
    I. A lessee shall recognise a right-of-use asset and lease liability for a lease except in
    the case that the lease in question is either a short-term lease or low-value lease.
    II. A right-of-use asset shall be depreciated over the useful life of the underlying asset
    if it is reasonably certain that the ownership of the underlying asset will transfer to the
    lessee upon lease expiry; it shall be depreciated over the shorter of the useful life of
    the underlying asset and the lease term if transfer of ownership of the underlying
    asset to the lessee upon lease expiry is not reasonably certain. A right-of-use asset is
    subject is impairment assessment and impairment, is any, shall be properly accounted

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     for.
     III. A lessee shall establish interest expense in connection with the lease liability
     applicable to each period within the lease term and recognise the interest expense in
     profit or loss for the respective period.
     IV. A lessee may elect not to recognise a right-of-use asset and lease liability for a
     short-term lease or low-value lease. In such case, the lease rental of the short-term
     lease or low value lease shall be recognised in profit or loss or as part of the cost of the
     respective asset using the straight-line method or another reasonable systematic
     method.
Resulting from the adoption of ASBE 21 (2018), the following adjustments were made to
the Company’s consolidated statement of financial position as of 1 January 2021: increase
of right-of-use assets at CNY 57.4 million, increase of lease liabilities at CNY 53.2 million,
and decrease of prepayments at CNY 4.2 million. These adjustments had no impact on the
Company’s consolidated equity attributable to shareholders of the Company; nor did they
have impact on the Company’s consolidated surplus reserves or consolidated retained
earnings. These adjustments had no impact on the Company’s consolidated
non-controlling interests. The following adjustments were made to the Company’s
statement of financial position as of 1 January 2021: increase of right-of-use assets at CNY
52.7 million, increase of lease liabilities at CNY 48.6 million, and decrease of prepayments
at CNY 4.2 million. These adjustments had no impact on the Company’s equity; nor did
they have impact on the Company’s surplus reserves or retained earnings. See Note 3.31.2
for further information.
3.31.2 Impact on the financial statements as a result of adoption of ASBE 21 (2018)
Consolidated Statement of Financial Position
                                                                     Currency unit: CNY million
   Affected line item        31/12/2020                1/1/2021               Adjustment
Right-of-use assets                       0.00                     57.4                      57.4
Lease liabilities                         0.00                     53.2                      53.2
Prepayments                               55.6                     51.4                      -4.2



Statement of Financial Position
                                                                     Currency unit: CNY million
   Affected line item        31/12/2020                1/1/2021               Adjustment
Right-of-use assets                       0.00                     52.7                      52.7
Lease liabilities                         0.00                     48.6                      48.6


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   Affected line item          31/12/2020                    1/1/2021                         Adjustment
Prepayments                                    11.7                         7.6                              -4.1

3.31.3 Change of significant accounting estimates
There is no change of significant accounting estimates in the current period.


Note 4 Taxes
4.1 Major taxes and tax rates
              Tax                      Tax base                                    Tax rate
                             Valur added in the course of
Value added tax (VAT)        sales of goods and rendering                                           13%, 9%, 6%
                             of services
                                                             Tax by quantity: CNY 1.00 per kilogram or litre
                                                                                     of distrilled wine sold;
Consumption duty             Taxable revnue
                                                             Tax by revenue: 20% on taxable revenue from
                                                                                      sale of distrilled wine
Urban maintenance and
                             Transaction tax payable                                                       7%, 5%
construction tax
Education surcharge          Transaction tax payable                                                          3%
Local education surcharge    Transaction tax payable                                                          2%
Corporate income tax (CIT)   Taxable income                                                                  25%

The CIT rate applicable to the Company is 25%. The CIT rates applicable to certain
subsidiaries are presented below.
                    Entity                                              CIT rate
Longrui Glass                                                                                              15.00%

Ruisi Weier                                                                                                15.00%

Runan Xinke                                                                                                15.00%

Yashibo                                                                                                      2.5%

GJ Guest House                                                                                               2.5%
                                                                 Taxable income up to CNY 1 million: 2.5%
Junlou Culture                                Taxable income between CNY 1 million and CNY 3 million: 10%
HHL Beverage                                                                                                 2.5%
                                                                 Taxable income up to CNY 1 million: 2.5%
Xinjia Testing                                Taxable income between CNY 1 million and CNY 3 million: 10%
Jiuan Electric                                                                                               2.5%

4.2 Preferential tax treatments
4.2.1 Longrui Glass’s High-Tech Enterprise Status was jointly approved by the Anhui Science
and Technology Department (Anhui STD), Anhui Finance Department (Anhui FiD) and Anhui
Tax Office (Anhui PAT) through GuoKeHuoZi [2019] No. 216 and was issued the High-Tech
Enterprise Certificate (GR201934001625) with the validity term of 3 years. In accordance
with the Corporate Income Tax Law of the People’s Republic of China, the CIT rate

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applicable to Longrui Glass for the period from 1 January 2019 to 31 Decmeber 2021 is
15%.
4.2.2 Ruisi Weier’s High-Tech Enterprise Status was jointly approved by the Anhui STD,
Anhui FiD and Anhui PAT through GuoKeHuoZi [2019] No. 216 and was issued the
High-Tech Enterprise Certificate (GR201934000355) with the validity term of 3 years. In
accordance with the Corporate Income Tax Law of the People’s Republic of China, the CIT
rate applicable to Ruisi Weier for the period from 1 January 2019 to 31 Decmeber 2021 is
15%.
4.2.3 Runan Xinke’s High-Tech Enterprise Status was jointly approved by the Anhui STD,
Anhui FiD and Anhui PAT through WanKeGaoMi [2022] No. 49 and was issued the
High-Tech Enterprise Certificate (GR202134004920) with the validity term of 3 years. In
accordance with the Corporate Income Tax Law of the People’s Republic of China, the CIT
rate applicable to Runan Xinke for the period from 1 January 2021 to 31 Decmeber 2023 is
15%.
4.2.4 In accordance with MoF&SAT Announcement [2021] No. 12 jointly issued by the
Ministry for Finance and State Administration of Taxation, 87.5% of the first CNY 1 million
annual taxable income of a qualified small entreprise with small profit for the period from 1
January 2021 to 31 Dcember 2022 is exempted from CIT and the CIT rate applicable to the
remaining 12.5% is 20%; 50% of the annual taxable income between CNY 1 million and CNY
3 million of a qualified small entreprise with small profit for the period from 1 January 2021
to 31 Dcember 2022 is exempted from CIT and the CIT rate applicable to the remaining
12.5% is 20%; GJ Guest House, Junlou Culture, HHL Beverage, Xinjia Testing, Jiuan Electric
and Yashibo are eligible to this preferential tax treatment.


Note 5 Notes to the consolidated financial statements
5.1 Monetary funds
                                         31/12/2021                     31/12/2020
Cash on hand                                          135,129.66                     178,127.77
Cash at bank                                  11,891,283,646.58              5,936,406,199.84
Other monetary funds                                33,503,995.52               34,628,242.05
               Total                          11,924,922,771.76              5,971,212,569.66

Cash at bank as of the statement date included fixed term deposits pledged for bank
acceptance at CNY 100 million, deposits pledged for guarantee letters at CNY 4 million and
structural deposits not eligible for early redemption at CNY 573 thousand; other monetary
funds as of the statement date included margin deposits not eligible for early redemption


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at CNY 33.4 million. Except for the pre-mentioned, monetary funds as of the statement
date was not subject to limitation on usage such as pledging or freezing or risk on recovery.
5.2 Financial assets held for trading
                                                    31/12/2021                          31/12/2020
FVTPL                                                     2,661,103,876.68                        203,877,915.51
T/o: Structural financial products                        2,457,565,232.32                                     -
T/o: Fund investments                                       203,538,644.36                        203,877,915.51
                Total                                     2,661,103,876.68                        203,877,915.51
Increase of financial assets held for trading for CNY 2,457 million, or 1,205.24% year over
year was mainly due to the Company’s purchase of structural financial products close to
the statement date.
5.3 Accounts receivable
5.3.1 Disclosure by age group
                Age group                              31/12/2021                        31/12/2020
Within 1 year                                                    97,023,731.05                     64,157,166.51
T/o: Within 6 months                                             92,114,086.85                     61,367,773.81
T/o: 7 months to 1 years                                          4,909,644.20                      2,789,392.70
1 to 2 years                                                       883,133.28                       4,953,687.55
2 to 3 years                                                       137,464.27                        142,796.00
Over 3 years                                                      1,146,581.68                                 -
                   Gross                                         99,190,910.28                     69,253,650.06
Less: Impairment allowance                                       10,185,106.11                      1,319,914.15
                   Net                                           89,005,804.17                     67,933,735.91

5.3.2 Dislcosure by method of impairment
                                                                    31/12/2021
                                           Gross                     Impairment allowance
                                                                                                       Net
                                     Amount         % of total     Amount        Impairment %
Individual assessment                7,792,783.72        7.86    7,792,783.72            100.00                -
Portfolio assessment            91,398,126.56           92.14 2,392,322.39                  2.62 89,005,804.17
T/o: Group 1

T/o: Group 2                    91,398,126.56           92.14    2,392,322.39               2.62 89,005,804.17
           Total                99,190,910.28          100.00 10,185,106.11               10.27 89,005,804.17

(Continued)
                                                                    31/12/2020
                                            Gross                    Impairment allowance
                                                                                                       Net
                                     Amount         % of total     Amount        Impairment %


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                                                                           31/12/2020
                                           Gross                            Impairment allowance
                                                                                                                    Net
                                    Amount              % of total        Amount        Impairment %
Individual assessment                               -              -                -                    -                    -
Portfolio assessment              69,253,650.06           100.00 1,319,914.15                         1.91     67,933,735.91
T/o: Group 1                                        -              -                -                    -                    -
T/o: Group 2                      69,253,650.06           100.00 1,319,914.15                         1.91     67,933,735.91
            Total                 69,253,650.06           100.00 1,319,914.15                         1.91     67,933,735.91

Group 2 Receivables
                                                                           31/12/2021
          Age group
                                          Gross                        Impairment allowance            Impairment %
Within 1 year                              89,230,947.33                        1,088,695.25                               1.22
T/o: Within 6 months                       84,321,303.13                           843,213.03                              1.00
T/o: 7 months to 1 years                     4,909,644.20                          245,482.22                              5.00
1 to 2 years                                   883,133.28                           88,313.32                             10.00
2 to 3 years                                   137,464.27                           68,732.14                             50.00
Over 3 years                                 1,146,581.68                       1,146,581.68                          100.00
               Total                       91,398,126.56                        2,392,322.39                               2.62

  (Continued)
                                                                           31/12/2020
          Age group
                                          Gross                        Impairment allowance            Impairment %
Within 1 year                              64,157,166.51                           753,147.38                              1.17
T/o: Within 6 months                       61,367,773.81                           613,677.74                              1.00
T/o: 7 months to 1 years                     2,789,392.70                          139,469.64                              5.00
1 to 2 years                                 4,953,687.55                          495,368.77                             10.00
2 to 3 years                                   142,796.00                           71,398.00                             50.00
Over 3 years                                                  -                               -                               -
               Total                       69,253,650.06                        1,319,914.15                               1.91

See Note 3.10 for recognition and measurement of impairment by portfolio.
5.3.3 Movement of impairment allowance
                                                                                              Movement
                                                        31/12/2020                                Business combination not
                                                                               Provision
                                                                                                   under common control
Individually significant receivables subject to
                                                                                7,792,783.72
individual impairment assessment
Individually insignificant receivables subject to
individual impairment assessment
Group 2                                                 1,319,914.15               546,297.81                    1,166,733.53
                       Total                            1,319,914.15            8,339,081.53                     1,166,733.53

(Continued)

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                                                                  Movement
                                                      Reversal or          Release or           31/12/2021
                                                       recovery             write-off
Individually significant receivables subject to
individual impairment assessment                                                                   7,792,783.72
Individually insignificant receivables subject to
                                                                                                                -
individual impairment assessment
Group 2                                                      640,623.10                            2,392,322.39
                     Total                                   640,623.10                           10,185,106.11

5.3.4 Top-five accounts receivable as of the statement date
                                 Gross              % of gross accounts receivable       Impairment allowance
          Top 1                 14,642,996.21                                  14.76                146,429.96
          Top 2                 13,949,950.50                                  14.06                139,499.51
          Top 3                 13,469,384.49                                  13.58                134,693.84
          Top 4                   7,792,783.72                                  7.86              7,792,783.72
          Top 5                   5,350,431.84                                  5.39                   53,504.32
          Total                 55,205,546.76                                  55.65              8,266,911.35

5.3.5 Increase of accounts receivable for 31.02% year over year was mainly resulted from
the increase of accounts receivable due to Tianlong Jindi.
5.4 Receivables held for factoring
5.4.1 General disclosure
                                                                  31/12/2021
           Type
                                       Gross                 Impairment allowance                Net
Bank acceptance                          545,204,103.42                                         545,204,103.42
Commercial acceptance                                  -                             -                          -
           Total                         545,204,103.42                                         545,204,103.42

(Continued)
                                                                  31/12/2020
           Type
                                       Gross                 Impairment allowance                Net
Bank acceptance                       1,673,510,794.51                               -         1,673,510,794.51
Commercial acceptance                                  -                             -                          -
           Total                      1,673,510,794.51                               -         1,673,510,794.51

5.4.2 Notes receivable transferred by endorsement or cashed by discount which are not
matured as of the statement date
                                                                                              Amount not
                         Type                                Amount derecognised
                                                                                             derecognised
                   Bank acceptance                                  2,692,765,337.03

Notes receivable cashed with discount or transferred with endorsement were originally



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issued by banks with advanced credit rating. Due the credit rating of the issuing banks,
credit risks and risks of delayed payment are relatively low and transferred from the
Company upon cashing or transfer. These notes receivable were therefore derecognised
upon cashing or transfer.
5.4.3 No accounts receivable were resulted from reclassification of notes receivables due to
issuers’ default.
5.4.4 Dislcosure by method of impairment
                                                               31/12/2021
                                      Gross                        Impairment allowance
                                                                                                     Net
                             Amount               % of total       Amount       Impairment %
Individual assessment                         -                -            -              -                   -
Portfolio assessment         545,204,103.42           100.00                -              -    545,204,103.42
T/o: Group 1                                                                -
T/o: Group 2                 545,204,103.42           100.00                -              -    545,204,103.42
        Total                545,204,103.42           100.00                -              -    545,204,103.42

(Continued)
                                                               31/12/2020
                                      Gross                        Impairment allowance
                                                                                                     Net
                             Amount               % of total       Amount       Impairment %
Individual assessment                         -                -            -              -                  -
Portfolio assessment        1,673,510,794.51          100.00                -              - 1,673,510,794.51
T/o: Group 1                                                                -                                 -
T/o: Group 2                1,673,510,794.51          100.00                -              - 1,673,510,794.51
         Total              1,673,510,794.51          100.00                -              - 1,673,510,794.51

Note 1: No Group 1 receivable was subject to impairment assessment.
Note 2: The Company assessed impairment for Group 2 receivables as of the statement
date. Upon the assessment, the Company believed that Group 2 receivables were unlikely
subject to loss resulted from the default by issuing banks or other issuers and therefore
not subject to significant credit risk.
5.4.5 Movement of impairment allowance
Not applicable.




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5.5 Prepayments
5.5.1 Disclosure by age group
                                     31/12/2021                               31/12/2020
       Age group
                              Amount               % of total           Amount               % of total
Within 1 year                 156,395,547.90                99.89       55,069,897.85                99.09
1 to 2 years                     173,426.53                     0.11      505,645.36                  0.91
2 to 3 years                        1,996.56                       -                -                     -
Over 3 years                               -                       -                -                     -
          Total               156,570,970.99               100.00       55,575,543.21              100.00

5.5.2 Top-five venders as of the statement date by prepayment balance
                                   31/12/2021                                % of total
          Top 1                            102,458,395.34                                            65.44
          Top 2                                14,684,191.29                                          9.38
          Top 3                                 6,632,298.50                                          4.24
          Top 4                                 6,214,000.00                                          3.97
          Top 5                                 4,309,993.84                                          2.75
          Total                            134,298,878.97                                            85.78

5.6 Other receivables
5.6.1 General disclosure
                                           31/12/2021                            31/12/2020
Interests receivable                                                                                      -
Dividends receivable                                                                                      -
Other receivables                                       71,753,212.24                       33,451,121.48
                  Total                                 71,753,212.24                       33,451,121.48

5.6.2 Other receivables
(1) Disclosure by age group
               Age group                   31/12/2021                            31/12/2020
Within 1 year                                           68,887,383.04                       31,014,800.18
T/o: Within 6 months                                    62,942,239.54                       29,186,461.60
T/o: 7 months to 1 years                                 5,945,143.50                        1,828,338.58
1 to 2 years                                             2,808,217.47                        2,842,287.06
2 to 3 years                                             2,530,226.11                          523,089.00
Over 3 years                                            43,669,449.88                       42,535,188.41
                 Gross                               117,895,276.50                         76,915,364.65
Less: Impairment allowance                              46,142,064.26                       43,464,243.17



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               Age group                           31/12/2021                             31/12/2020
                    Net                                      71,753,212.24                        33,451,121.48

(2) Disclosure by nature
                                                   31/12/2021                             31/12/2020
Security investments                                         38,857,584.88                        40,807,394.41
Margin deposits                                               8,788,917.25                         5,266,477.91
Advanced travel expenses                                      1,219,958.15                              795,646.51
Rentals and utilities receivable                              7,910,881.41                         8,962,876.17
Others                                                       61,117,934.81                        21,082,969.65
                 Gross                                     117,895,276.50                         76,915,364.65
Less: Impairment allowance                                   46,142,064.26                        43,464,243.17
                    Net                                      71,753,212.24                        33,451,121.48

(3) Disclosure by method of impairment
A. Disclosure by the 3-stage m odel as of the statement date
                                       Gross               Impairment allowance                   Net
Stage 1                                 79,037,691.62                    7,284,479.38             71,753,212.24
Stage 2
Stage 3                                 38,857,584.88                38,857,584.88                                -
            Total                      117,895,276.50                46,142,064.26                71,753,212.24

Details of Stage 1 receivables as of the statement date
                                                   Expected loss rate
                                                                             Impairment
                                    Gross           for the next 12                                    Net
                                                                              allowance
                                                     months in %
Individual assessment
Portfolio assessment               79,037,691.62                  9.22         7,284,479.38       71,753,212.24
T/o: Group 1
T/o: Group 2                       79,037,691.62                  9.22         7,284,479.38       71,753,212.24
            Total                  79,037,691.62                  9.22         7,284,479.38       71,753,212.24

Details of Group 2 receivables as of the statement date
                                                                 31/12/2021
          Age group
                                       Gross                 Impairment allowance             Impairment %
Within 1 year                            68,887,383.04                    926,679.58                           1.35
T/o: Within 6 months                     62,942,239.54                    629,422.41                           1.00
T/o: 7 months to 1 years                    5,945,143.50                  297,257.17                           5.00
1 to 2 years                                2,808,217.47                  280,821.74                          10.00
2 to 3 years                                2,530,226.11                 1,265,113.06                         50.00
Over 3 years                                4,811,865.00                 4,811,865.00                        100.00



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                                                             31/12/2021
          Age group
                                    Gross               Impairment allowance                Impairment %
            Total                     79,037,691.62                  7,284,479.38                          9.22



Details of Stage 3 receivables as of the statement date
                                              Expected loss rate
                                                                         Impairment
                                 Gross         for the next 12                                     Net
                                                                          allowance
                                                months in %
Individual assessment           38,857,584.88            100.00           38,857,584.88
Portfolio assessment
T/o: Group 1
T/o: Group 2
            Total               38,857,584.88              100.00         38,857,584.88

Details of receivables subject to individual assessment as of the statement date
                                                           31/12/2021
                                                  Impairment                                     Reason for
                                   Gross                           Impairment %
                                                   allowance                                    impairment
Hengxin Securities Co., Ltd.     28,966,894.41     28,966,894.41           100.00              In bankruptcy

Jianqiao Securities Co., Ltd.     9,890,690.47         9,890,690.47                 100.00     In bankruptcy
             Total               38,857,584.88        38,857,584.88                 100.00            -

B. Disclosure by the 3-stage model as of 31 December 2020
                                    Gross               Impairment allowance                    Net
Stage 1                              36,107,970.24                   2,656,848.76               33,451,121.48
Stage 2                                           -                             -                              -
Stage 3                              40,807,394.41               40,807,394.41                                 -
            Total                    76,915,364.65               43,464,243.17                  33,451,121.48

Details of Stage 1 receivables as of 31 December 2020
                                              Expected loss rate
                                                                         Impairment
                                 Gross         for the next 12                                     Net
                                                                          allowance
                                                months in %
Individual assessment                       -                   -                       -                      -
Portfolio assessment            36,107,970.24                 7.36         2,656,848.76         33,451,121.48
T/o: Group 1                                -                    -                      -                      -
T/o: Group 2                    36,107,970.24                 7.36         2,656,848.76         33,451,121.48
            Total               36,107,970.24                 7.36         2,656,848.76         33,451,121.48

Details of Group 2 receivables as of 31 December 2020
                                                             31/12/2020
          Age group
                                    Gross               Impairment allowance                Impairment %
Within 1 year                         31,014,800.18                   383,281.55                           1.24
T/o: Within 6 months                  29,186,461.60                   291,864.62                           1.00



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                                                                   31/12/2020
        Age group
                                       Gross                   Impairment allowance               Impairment %
T/o: 7 months to 1 years                    1,828,338.58                      91,416.93                           5.00
1 to 2 years                                2,842,287.06                    284,228.71                           10.00
2 to 3 years                                  523,089.00                    261,544.50                           50.00
Over 3 years                                1,727,794.00                   1,727,794.00                         100.00
            Total                        36,107,970.24                     2,656,848.76                           7.36

Details of Stage 3 receivables as of 31 December 2020
                                                     Expected loss rate
                                                                               Impairment
                                    Gross             for the next 12                                     Net
                                                                                allowance
                                                       months in %
Individual assessment             40,807,394.41                   100.00        40,807,394.41                        -
Portfolio assessment                             -                     -                      -                      -
T/o: Group 1                                     -                     -                      -                      -
T/o: Group 2                                     -                     -                      -                      -
            Total                 40,807,394.41                   100.00        40,807,394.41                        -

Details of receivables subject to individual assessment as of 31 December 2020
                                                                   31/12/2020
                                                       Impairment                                      Reason for
                                    Gross                                     Impairment %
                                                        allowance                                     impairment
Hengxin Securities Co.,
                                  28,966,894.41         28,966,894.41                    100.00      In bankruptcy
Ltd.

Jianqiao Securities Co.,          11,840,500.00         11,840,500.00                    100.00      In bankruptcy
Ltd.
            Total                 40,807,394.41         40,807,394.41                    100.00            -

(4) Movement of impairment allowance
                                                                Movement
                                                         Business
                     31/12/2020                        combination                        Release       31/12/2021
                                                                           Reversal or
                                       Provision        not under                            or
                                                                            recovery
                                                         common                           write-off
                                                          control
Individual
                    40,807,394.41                                          1,949,809.53                 38,857,584.88
assessment
Portfolio
                     2,656,848.76     1,392,920.96      3,883,438.08        648,728.42                   7,284,479.38
assessment
      Total         43,464,243.17     1,392,920.96      3,883,438.08       2,598,537.95                 46,142,064.26

(5) Top-five other receivables as of the statement date
                                                                                 % of total gross       Impairment
   Debtor              Nature           31/12/2021              Age group
                                                                                other receivables        allowance
   Top 1        Security investment     28,966,894.41          Over 3 years                  24.57     28,966,894.41

   Top 2                Other           18,255,567.00 Within 6 months                        15.48        182,555.67

   Top 3        Security investment         9,890,690.47       Over 3 years                   8.39      9,890,690.47


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                                                                                      % of total gross              Impairment
   Debtor                Nature             31/12/2021              Age group
                                                                                     other receivables               allowance
    Top 4                Other               7,318,942.51          Within 1 year                       6.21            97,193.84

    Top 5                Other               6,499,462.17 Within 6 months                              5.51            64,994.62
    Total                                   70,931,556.56                                          60.16           39,202,329.01

 5.6.3 Increase of other receivables for 114.50% year over year was mainly resulted from
 increase in prepaid expenses.


 5.7 Inventories
 5.7.1 General disclosure
                                                                                 31/12/2021
                                                                                 Impairment
                                                          Gross                                                      Net
                                                                                  allowance
Raw materials and packaging                             236,485,211.32              22,919,192.93                  213,566,018.39
Semi-finished goods and work in progress            3,680,675,328.83                          0.00            3,680,675,328.83
Merchandises                                            776,158,681.46               6,943,356.38                  769,215,325.08
                   Total                            4,693,319,221.61                29,862,549.31             4,663,456,672.30

 (Continued)
                                                                                   31/12/2020
                                                                                   Impairment
                                                           Gross                                                      Net
                                                                                    allowance
  Raw materials and packaging                           191,873,650.49              13,274,081.73              178,599,568.76
  Semi-finished   goods      and     work    in
                                                    2,861,343,683.53                               -      2,861,343,683.53
  progress
  Merchandises                                          387,506,042.80              10,568,486.13              376,937,556.67
                    Total                           3,440,723,376.82                23,842,567.86         3,416,880,808.96

 5.7.2 Movement of impairment allowance
                                                        Increase                         Decrease
                                                               Business
                        31/12/2020                         combination not          Reversal and                     31/12/2021
                                            Provision                                                  Other
                                                            under common              release
                                                                control
Raw materials
                    13,274,081.73 11,527,075.19                8,134,202.39 10,016,166.38                      - 22,919,192.93
and packaging
Merchandises        10,568,486.13       5,331,142.92                  2,607.59      8,958,880.26               -     6,943,356.38
     Total          23,842,567.86 16,858,218.11                8,136,809.98 18,975,046.64                      - 29,862,549.31

 5.8 Other current assets
                                                        31/12/2021                                 31/12/2020
Loans securied by treasury bonds                                   76,205,000.00                                                  -
Interests on deposits                                              54,529,762.09                                    19,563,936.43



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                                                          31/12/2021                                   31/12/2020
Deductible taxes                                                        47,487,460.47                                 77,848,744.83
                    Total                                           178,222,222.56                                    97,412,681.26

Increase of other current assets for 82.96% year over year was mainly resulted from
increase in loans securied by treasury bonds and interests on deposits.
5.9 Long-term equity investments
                                                                                 Movement
         Investee                31/12/2020                                      Investment
                                                                Investment                             OCI    Other equity
                                                 Contribution                     income at
                                                                withdrawal                         adjustment movement
                                                                                    equity
A. Associates                                -
Beijing Guge Trading Co., Ltd.
                                  4,915,575.83                                        397,024.95
(Guge Trading)
            Total                 4,915,575.83                                        397,024.95                  -                    -

(Continued)
                                                      Movement
                                  Dividend or                                                                         Cumulative
         Investee                                     Impairment                               31/12/2021             impairment
                                     profit
                                                        allowance            Others                                    allowance
                                 appropriation
                                                       recognised
                                   declared
A. Associates                                                                                                 -

Guge Trading                                      -                     -                 -        5,312,600.78                        -

            Total                                 -                     -                 -        5,312,600.78                        -

5.10 Other equity investments
                                                                  31/12/2021                              31/12/2020
Anhui Mingguang Village Commercial Bank
                                                                            54,542,418.50
(Mingguang VCB)
                         Total                                              54,542,418.50

Supplementary disclosure
                         Dividend                                                Reclassification
                          income            Cumulative          Cumulative        from OCI to          Reason for designation
                       recognised in          gain                 loss             retained                as FVTOCI
                        the period                                                  earnings
                                                                                                       On the basis of purpose
Mingguang VCB               809,860.62           693,720.70
                                                                                                       of investment
5.11 Investment properties
                                           Houses and buildings              Land use rights                      Total
A. Costs
1. 31/12/2020                                         8,680,555.75                 2,644,592.00                   11,325,147.75
2. Increase                                                         -                              -                               -
3. Decrease                                                         -                              -                               -
4. 31/12/2021                                         8,680,555.75                 2,644,592.00                   11,325,147.75


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                                        Houses and buildings             Land use rights                     Total
B. Cumulative depreciation
1. 31/12/2020                                     6,176,477.79                     755,726.42                 6,932,204.21
2. Increase                                         261,115.92                         56,026.56                317,142.48
(1) Recognition                                     261,115.92                         56,026.56                317,142.48
3. Decrease                                                        -                           -                            -
4. 31/12/2021                                     6,437,593.71                     811,752.98                 7,249,346.69
C. Impairment allowance
1. 31/12/2020                                                      -                           -                            -
2. Increase                                                        -                           -                            -
3. Decrease                                                        -                           -                            -
4. 31/12/2021                                                      -                           -                            -
D. Net value
1. As of the statement date                       2,242,962.04                   1,832,839.02                 4,075,801.06
2. As of 31/12/2020                               2,504,077.96                   1,888,865.58                 4,392,943.54

5.12 Fixed assets
5.12.1 Disclosure by category
                                                       31/12/2021                                  31/12/2020
Fixed assets                                                  1,984,063,975.87                           1,797,789,271.62
Fixed asset disposals                                                             -                                          -
                    Total                                     1,984,063,975.87                           1,797,789,271.62

5.12.2 Fixed assets
5.12.2.1 General disclosure
                             Houses and                            Transportation Administrative
                                                Machinery                                                        Total
                              buildings                               vehicles    and other devices
A. Costs

1. 31/12/2020                2,110,023,036.54   1,137,831,234.61       63,055,889.31        202,211,609.80    3,513,121,770.26

2. Increase                   180,129,304.08     225,064,092.92        13,431,756.86         81,405,165.78     500,030,319.64

(1) Purchase                   12,028,973.66      23,895,869.67         5,082,033.26         19,273,732.23      60,280,608.82
(2) Reclassification from
construction in progress       40,268,524.79     148,773,794.01                    -         36,731,276.67     225,773,595.47

(3) Business combination      127,441,392.30      46,747,037.26         8,269,210.78          7,457,866.92     189,915,507.26

(4) Others                        390,413.33       5,647,391.98           80,512.82          17,942,289.96      24,060,608.09

3. Decrease                    62,328,761.51      31,975,682.30         5,254,418.05         14,647,711.05     114,206,572.91

(1) Disposal or scrap          50,289,570.30      20,561,493.46         5,254,418.05          8,274,628.89      84,380,110.70

(2) Others                     12,039,191.21      11,414,188.84                    -          6,373,082.16      29,826,462.21

4. 31/12/2021                2,227,823,579.11   1,330,919,645.23       71,233,228.12        268,969,064.53    3,898,945,516.99

B. Cumulative depreciation




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                           Houses and                            Transportation Administrative
                                              Machinery                                                         Total
                            buildings                               vehicles    and other devices
1. 31/12/2020                887,885,451.17   652,893,081.63         54,246,302.02       115,239,124.54   1,710,263,959.36

2. Increase                  100,743,005.66   127,047,360.43         11,938,113.54        47,675,329.27       287,403,808.90

(1) Recognition               82,594,638.72   106,147,587.41          5,614,356.78        30,141,917.34       224,498,500.25

(2) Business combination      17,769,678.01    15,507,216.88          6,249,135.23         4,805,171.31        44,331,201.43

(3) Others                      378,688.93      5,392,556.14            74,621.53         12,728,240.62        18,574,107.22

3. Decrease                   48,672,755.95    23,688,674.55          4,797,006.03        10,598,210.13        87,756,646.66

(1) Disposal or scrap         44,602,165.53    15,272,988.76          4,797,006.03         4,510,379.11        69,182,539.43

(2) Others                     4,070,590.42     8,415,685.79                     -         6,087,831.02        18,574,107.23

4. 31/12/2021                939,955,700.88   756,251,767.51         61,387,409.53       152,316,243.68   1,909,911,121.60

C. Impairment allowance

1. 31/12/2020                  2,804,324.86     1,674,420.09              7,047.07          582,747.26          5,068,539.28

2. Increase                     611,808.94                   -                   -                    -          611,808.94

(1) Recognition                 611,808.94                   -                   -                    -          611,808.94

3. Decrease                     299,539.41        403,328.74              7,047.07               13.48           709,928.70

(1) Disposal or scrap           299,539.41        403,328.74              7,047.07               13.48           709,928.70

4. 31/12/2021                  3,116,594.39     1,271,091.35                     -          582,733.78          4,970,419.52

D. Net value
1. As of the statement
date                       1,284,751,283.84   573,396,786.37          9,845,818.59       116,070,087.07   1,984,063,975.87

2. As of 31/12/2020        1,219,333,260.51   483,263,732.89          8,802,540.22        86,389,738.00   1,797,789,271.62

5.12.2.2 Temporarily idle fixed assets
                                                                      Cumulative
                                               Cumulative
                              Cost                                    impairment            Net value             Note
                                              depreciation
                                                                       allowance
Houses and
                           10,582,609.55        7,282,125.83            3,116,594.39          183,889.33
buildings
Machinery                   9,002,312.33        7,610,219.08            1,271,091.35          121,001.90
Transportation
                                         -                       -                   -                    -
vehicles
Administrative and
                             874,608.18           265,657.69               582,733.78          26,216.71
other devices
          Total            20,459,530.06       15,158,002.60            4,970,419.52          331,107.94

5.12.2.3 Fixed assets with uncompleted ownership registration
                                                    Net value                                    Remark
Houses and buildings                                             638,158,624.34          Registration in progress
                   Total                                         638,158,624.34                    ——

5.12.2.4 Fixed assets with restriction as of the statement date
                                                                      Cumulative
                                               Cumulative
                              Cost                                    impairment            Net value             Note
                                              depreciation
                                                                       allowance



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                                                                             Cumulative
                                                    Cumulative
                                  Cost                                       impairment              Net value            Note
                                                   depreciation
                                                                              allowance
Houses and
                               8,982,726.64          4,756,988.19                             -      4,225,738.45
buildings
        Total                  8,982,726.64          4,756,988.19                             -      4,225,738.45

5.13 Construction in progress
5.13.1 Disclosure by category
                                                        31/12/2021                                     31/12/2020
Construction in progress                                          1,064,134,904.21                               279,169,201.60
Materials held for construction                                                        -                                           -
                     Total                                        1,064,134,904.21                               279,169,201.60

5.13.2 Construction in progress
5.13.2.1 General disclosure
                                                31/12/2021                                           31/12/2020
                                                Impairment                                           Impairment
                                 Gross                                 Net            Gross                               Net
                                                 allowance                                            allowance
Smart Zone                    700,794,613.29                 -   700,794,613.29      54,494,827.90                -     54,494,827.90

Theme Hotel                    61,431,126.99                 -    61,431,126.99       5,538,005.31                -      5,538,005.31

Automated Brewery                        0.00                -               0.00    42,832,649.99                -     42,832,649.99

Automated Bottling System                0.00                -               0.00    14,835,486.72                -     14,835,486.72
Renovation

GJ Plant #11 Wine Cellar                    -                -                  -    11,166,144.14                -     11,166,144.14

GJ Plant #12 Wine Cellar       10,666,666.95                 -    10,666,666.95                                   -

Experience Centre                           -                -                  -     8,064,287.27                -      8,064,287.27

Suizhou Plant                 266,102,852.17                 -   266,102,852.17     135,930,812.66                -    135,930,812.66

Other projects                 25,139,644.81                 -    25,139,644.81       6,306,987.61                -      6,306,987.61

             Total           1,064,134,904.21                - 1,064,134,904.21     279,169,201.60                -    279,169,201.60

5.13.2.2 Detailed disclosure
                                                     Budget CNY million               31/12/2020                  Increase
Smart Zone                                                             8,289.66            54,494,827.90          648,404,140.96
Theme Hotel                                                             499.00              5,538,005.31              55,893,121.68
Automated Brewery                                                       274.30             42,832,649.99              77,555,002.43
Automated Bottling System Renovation                                     40.00             14,835,486.72              15,164,247.79
GJ Plant #11 Wine Cellar                                                 90.00             11,166,144.14              48,281,006.51
GJ Plant #12 Wine Cellar                                                162.50                           -            10,666,666.95
Experience Centre                                                        29.50              8,064,287.27               9,544,855.31
Suizhou Plant                                                           600.00          135,930,812.66            130,320,712.07
Other projects                                                           51.71              6,306,987.61              39,649,557.36



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                                       Budget CNY million          31/12/2020                    Increase
                     Total                       10,036.67          279,169,201.60          1,035,479,311.06

(Continued)

                                       Reclassification to
                                                                  Other decrease                31/12/2021
                                          fixed assets
Smart Zone                                    2,104,355.57                          -            700,794,613.29
Theme Hotel                                                  -                      -             61,431,126.99
Automated Brewery                          120,387,652.42                           -                           -
Automated Bottling System Renovation        29,999,734.51                           -                        0.00
GJ Plant #11 Wine Cellar                    59,447,150.65                           -                           -
GJ Plant #12 Wine Cellar                                                                          10,666,666.95
Experience Centre                                            -       17,609,142.58                              -
Suizhou Plant                                   148,672.56                          -            266,102,852.17
Other projects                              13,686,029.76              7,130,870.40               25,139,644.81
                     Total                 225,773,595.47            24,740,012.98          1,064,134,904.21

(Continued)
                                                                            Cumulative        T/o: Borrowing
                                                           % of            capitalisation          costs
                                       % of budget
                                                        completion         of borrowing        capitalised in
                                                                               costs            the period
Smart Zone                                      8.48               11.22                    -                 -
Theme Hotel                                    12.31               24.37                    -                  -
Automated Brewery                              95.85              100.00                    -                  -
Automated Bottling System Renovation           76.74              100.00                    -                  -
GJ Plant #11 Wine Cellar                       66.05              100.00                    -                  -
GJ Plant #12 Wine Cellar                        6.56                6.56                    -                  -
Experience Centre                              86.93              100.00
Suizhou Plant                                  44.38               44.38     2,527,982.73         2,527,982.73
Other projects                                 88.87               88.87                    -                  -
                    Total                                                    2,527,982.73         2,527,982.73

(Continued)
                                             Current period
                                                                                 Source of funding
                                            capitalisation rate
Smart Zone                                                             - Self-funded, public financing
Theme Hotel                                                            - Self-funded
Automated Brewery                                                      - Self-funded
Automated Bottling System Renovation                                   - Self-funded
GJ Plant #11 Wine Cellar                                               - Self-funded
GJ Plant #12 Wine Cellar                                               - Self-funded
Experience Centre                                                          Self-funded


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                                               Current period
                                                                                     Source of funding
                                              capitalisation rate
Suizhou Plant                                                          3.45 Self-funded, loans
Other projects                                                            - Self-funded
                  Total                                                   -

Increase of construction in progress for 281.18% year over year was mainly resulted from
investment in Smart Zone and Suizhou Plant in the period.
5.14 Right-of-use assets
                                Houses and buildings           Machinery                      Total
A. Costs                                                                                                    -
1. 31/12/2020                                                                                               -
Change of accounting policies                                                                               -
1/1/2021                               56,071,482.96                1,330,929.57              57,402,412.53
2. Increase                               978,998.78                                             978,998.78
3. Decrease                                             -                        -                          -
4. 31/12/2021                          57,050,481.74                1,330,929.57              58,381,411.31
B. Cumulative depreciation                                                                                  -
1. 31/12/2020                                                                                               -
Change of accounting policies                                                                               -
1/1/2021                                                -                        -                          -
2. Increase                            14,010,539.12                   443,643.22             14,454,182.34
3. Decrease                                             -                        -                          -
4. 31/12/2021                          14,010,539.12                   443,643.22             14,454,182.34
C. Impairment allowance                                                                                     -
1. 31/12/2020                                                                                               -
Change of accounting policies                                                                               -
1/1/2021                                                                                                    -
2. Increase                                                                                                 -
3. Decrease                                                                                                 -
4. 31/12/2021                                           -                        -                          -
D. Net value                                                                                                -
1. As of the statement date            43,039,942.62                   887,286.35             43,927,228.97
2. As of 01/01/2021                    56,071,482.96                1,330,929.57              57,402,412.53

5.15 Intangible assets
5.15.1 General disclosure
                                                                          Patents and
                                Land use rights         Software                                 Total
                                                                          trademarks
A. Costs
1. 31/12/2020                    846,743,730.35 125,206,832.57 215,006,066.19 1,186,956,629.11
2. Increase                      155,302,466.40         5,495,369.70      38,039,080.00      198,836,916.10


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                                                                                  Patents and
                                     Land use rights             Software                                Total
                                                                                  trademarks
(1) Purchase                          103,066,353.81             2,201,787.53        26,992.33       105,295,133.67
(2) Internal development                               -                    -                   -                  -
(3) Reclassification from
                                                       -         3,293,582.17                   -      3,293,582.17
construction in progress
(4) Business combination                   52,236,112.59                    -     38,012,087.67       90,248,200.26
3. Decrease                                  282,456.00          1,451,037.06                   -      1,733,493.06
(1) Disposal                                 282,456.00          1,451,037.06                   -      1,733,493.06
4. 31/12/2021                        1,001,763,740.75 129,251,165.21 253,045,146.19 1,384,060,052.15
B. Cumulative amortisation                                                                      -                  -
1. 31/12/2020                         158,016,689.40         48,008,475.16        46,219,486.76      252,244,651.32
2. Increase                                23,935,548.47     22,301,486.24        23,335,984.15       69,573,018.86
(1) Recognition                            19,804,993.98     22,301,486.24           46,904.15        42,153,384.37
(2) Business combination                    4,130,554.49                    -     23,289,080.00       27,419,634.49
3. Decrease                                  282,456.00           944,004.64                    -      1,226,460.64
(1) Disposal                                 282,456.00           944,004.64                           1,226,460.64
4. 31/12/2021                         181,669,781.87         69,365,956.76        69,555,470.91      320,591,209.54
C. Impairment allowance                                                                         -                  -
1. 31/12/2020                                          -                    -                   -                  -
2. Increase                                            -                    -                   -                  -
3. Decrease                                            -                    -                   -                  -
4. 31/12/2021                                          -                    -                   -                  -
D. Net value                                                                                    -                  -
1. As of the statement date           820,093,958.88         59,885,208.45 183,489,675.28 1,063,468,842.61
2. As of 31/12/2020                   688,727,040.95         77,198,357.41 168,786,579.43            934,711,977.79

5.15.2 Intangible assets pledged as of the statement date
                                               Cumulative            Impairment
                              Cost                                                      Net value           Note
                                              amortisation            allowance
Land use rights             4,029,919.10        1,249,274.92                            2,780,644.18
       Total                4,029,919.10        1,249,274.92                            2,780,644.18

5.15.3 No intangible assets as of the statement date was with pending ownership
registration.




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5.16 Goodwill
5.16.1 General disclosure
                                         Increase                         Decrease
   Investee     31/12/2020        Business                                                      31/12/2021
                                                  Other           Disposal           Other
                                combination
HHL Distillery 478,283,495.29                                                                 478,283,495.29
Mingguang
                              - 60,686,182.07                                                   60,686,182.07
Distillery
Treasure
                              - 22,394,707.65                                                   22,394,707.65
Distillery
     Total    478,283,495.29 83,080,889.72                                                    561,364,385.01

5.16.2 Asset groups associated with goodwill
                                        Asset group CNY million
                                                   Unrecognis                                           Chang
               Composition               Alloca   ed goodwill                                            e in
   Investee      of asset       Book      ted     attributable                  Determination
                                                                  Total                                  the
                  group         value    good           to                                              period
                                          will    non-control
                                                  ling interest
                                                                          Active      markets     are
                                                                          available for the products
                 Operating                                                of the asset group to which
HHL              assets of      974.0     478.2                   1,91    goodwill is allocated and
                                                       459.53                                             No
Distillery         HHL              8         8                   1.89    hence the asset group is
                 Distillery                                               capable of generating
                                                                          identifiable separate cash
                                                                          flows.
                                                                          Active      markets     are
                                                                          available for the products
                Operating                                                 of the asset group to which   Recog
Mingguang        assets of      187.1                             288.    goodwill is allocated and     nition
                                          60.68         40.46
Distillery      Mingguang           3                               27    hence the asset group is      in the
                 Distillery                                               capable of generating         period
                                                                          identifiable separate cash
                                                                          flows.
                                                                          Active      markets     are
                                                                          available for the products
                 Operating                                                of the asset group to which   Recog
Treasure         assets of                                        107.    goodwill is allocated and     nition
                                69.85     22.39         14.93
Distillery       Treasure                                           17    hence the asset group is      in the
                 Distillery                                               capable of generating         period
                                                                          identifiable separate cash
                                                                          flows.

Note: The book value of HHL Distillery asset group did not include surplus assets and
non-operating liabilities of HHL Distillery.
5.16.3 Impairment assessment
The recoverable amounts of the asset groups were determined by the present value of
their respective future cash flows. Detailed forecasted cash flows for the next 5 years and


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further forecasted cash flows for periods starting from the 6th year from the statement date
applicable to each asset group was approved by the management of the Company. The
discount rates adopted reflect the current time value of money and the specific risks of the
asset groups. Key assumptions such revenue, cost of sales, growth rate and expenses were
used in the forecast. These key assumptions had been developed by taking into
consideration factors such as historical profitability, growth trend, sector conditions and
management expection for future market development.
Following the impairment test and with reference to the Appraisal Reports
(HuayaZhengxinPingBaoZi [2022] No. A07-0006 and HuayaZhengxinPingBaoZi [2022] No.
A07-0007) issued by Beijing Huaya Zhengxin Assets Appraisal Co., Ltd., the recoverable
amounts of the asset groups were not lower than their respective value inclusive of
goodwill as of the statement date. No impairment was identified upon the impairment test.
5.16.4 Impact of impairment assessment
See Note 11.1 for further details.
5.17 Long-term deferred expenses
                            31/12/2020     Capitalisation       Amortisation    Other decrease       31/12/2021
Experience Centre          25,368,080.45   17,682,269.18        12,597,202.10                    -   30,453,147.53
Waste Water Plant           2,844,754.10                    -     922,622.95                     -    1,922,131.15
HHL Winery and
                            7,937,278.72                    -    3,466,982.03                    -    4,470,296.69
Museum
GJCCP Culture Centre        3,545,454.55                    -    1,181,818.18                    -    2,363,636.37
Yantai Distilled Wine
                              937,109.64                    -     488,926.78                     -      448,182.86
Culture Project
Miscellaneous              23,959,256.19       7,357,775.48     15,066,088.24                    -   16,250,943.43
         Total             64,591,933.65   25,040,044.66        33,723,640.28                    -   55,908,338.03

5.18 Deferred tax assets (DTAs) and deferred tax liabilities (DTLs)
5.18.1 DTAs before offset
                                      31/12/2021                                     31/12/2020
                        Deductible temporary                          Deductible temporary
                                                       DTA                                              DTA
                             difference                                    difference
Asset impairment
                               34,832,968.83          8,597,940.21               28,911,107.14        7,211,407.41
allowance
Credit impairment
                               56,327,170.37         14,078,521.69               44,784,157.32       11,179,541.79
allowance
Unrealised profit              89,880,690.08         22,470,172.52               31,616,173.72        7,904,043.43
Deferred income                91,101,512.05         22,355,416.63               75,111,997.53       18,270,618.94
Recoverable loss                3,275,424.29           235,799.84                43,272,801.87       10,777,899.23
Accrued employee
                               14,728,894.07          3,682,223.52               21,874,338.70        5,468,584.68
benefits
Accrued expenses              845,357,525.22       211,333,743.87               144,731,955.22       36,160,326.47


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                                      31/12/2021                                       31/12/2020
                        Deductible temporary                            Deductible temporary
                                                       DTA                                              DTA
                             difference                                      difference
and rebates

Fair value change
or receivables held             4,296,727.84          1,074,181.96
for factoring
        Total                1,139,800,912.75       283,828,000.24             390,302,531.50       96,972,421.95

5.18.2 DTLs before offset
                                             31/12/2021                                  31/12/2020
                               Taxable temporary                           Taxable temporary
                                                             DTL                                        DTL
                                   difference                                  difference
Fixed asset depreciation           74,959,073.18        18,739,768.30           73,753,668.04       18,438,417.01
Purchase price allocation         689,376,361.16       172,344,090.29          381,654,221.40       95,413,555.35
Fair value change of
financial asset held for           11,103,876.68          2,775,969.16             3,877,915.51        969,478.88
trading
Fair value change of other
                                      693,720.70             173,430.18
equity investments
            Total                 776,133,031.72       194,033,257.93          459,285,804.95      114,821,451.24

5.19 Other non-current assets
                                                   31/12/2021                             31/12/2020
Prepayment for machinery                                      7,220,318.40                            5,943,717.02
                Total                                         7,220,318.40                            5,943,717.02

5.20 Short-term borrowings
                                                       31/12/2021                           31/12/2020
Credit loans                                                                                         70,665,500.00
Loans with securities by physical assets                           10,008,555.55
Loans with securities by intangible assets                         20,026,583.34
                    Total                                          30,035,138.89                     70,665,500.00

5.21 Notes payable
5.21.1 Disclosure by type
                Type                               31/12/2021                             31/12/2020
Bank acceptance                                           127,114,336.16                           140,540,000.00
Commercial acceptance                                                      -                            74,535.60
                Total                                     127,114,336.16                           140,614,535.60

5.21.2 No overdue note payable as of the statement date.
5.21.3 Decrease of notes payable for 9.60% year over year was mainly resulted from
settlement of mature notes payable prior to the year end.
5.22 Accounts payable

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5.22.1 Disclosure by nature
                                                      31/12/2021                          31/12/2020
Payable for goods                                             605,774,178.94                    299,936,875.62
Payable for construction and machinery                        253,893,258.27                    135,720,442.04
Others                                                        160,769,884.68                      69,549,244.20
                       Total                                1,020,437,321.89                    505,206,561.86

5.22.2 Top-five venders as of the statement date by account payable balance
                                                31/12/2021                  Reason for remaining unsettled
                Top 1                                          505,111.19           Payable for goods
                Top 2                                          393,392.70      Tail payment for construction
                Top 3                                          348,350.03                 Other
                Top 4                                          312,248.05      Tail payment for construction
                Top 5                                          244,906.28      Tail payment for construction
                 Total                                       1,804,008.25

5.23 Contract liabilities
                                                31/12/2021                              31/12/2020
Advanced receipts for goods                            1,825,447,705.85                        1,206,573,886.26
                Total                                  1,825,447,705.85                        1,206,573,886.26

Increase of contract liabilities for 51.29% year over year was mainly resulted from increase
of advanced receipts for goods by GJ Sales.
5.24 Employee benefits payable
5.24.1 General disclosure
                                   31/12/2020               Accrual            Decrease           31/12/2021
A. Short-term benefits            496,473,581.57 2,847,457,558.70 2,634,468,000.81              709,463,139.46
B. Post-employment benefits
                                    1,655,533.19       127,559,816.28       129,006,701.19           208,648.28
–Defined comtribution plans
C. Termination benefits                           -         1,111,573.22       1,111,573.22                    -
D. Other long-term benefits due
                                                  -                    -                   -                   -
within 1 year
              Total               498,129,114.76 2,976,128,948.20 2,764,586,275.22              709,671,787.74

5.24.2 Short-term benefits
                                   31/12/2020               Accrual            Decrease           31/12/2021
A. Salaries, wages allowances
                                  418,034,813.69 2,502,957,312.68 2,290,212,301.09              630,779,825.28
and subsidies
B. Welfare                                             101,477,123.04       101,477,123.04                     -
C. Social securities                     486,019.58     57,776,560.68        57,817,118.04           445,462.22
  T/o: Medical insurance                 486,019.58     55,629,075.40        55,669,667.26           445,427.72
  T/o: Work-place injury
                                                            2,147,485.28       2,147,450.78               34.50
  insurance

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                                  31/12/2020              Accrual             Decrease          31/12/2021
D. Housing funds                   4,342,621.32       82,964,882.88           81,654,033.80       5,653,470.40
E. Union fund and education
                                  70,812,311.30       27,042,198.40           28,333,852.22      69,520,657.48
fund
F. Annuity                         2,797,815.68       75,239,481.02           74,973,572.62       3,063,724.08
             Total               496,473,581.57 2,847,457,558.70 2,634,468,000.81              709,463,139.46

5.24.3 Post-employement benefits – Defined contribution plans
                                  31/12/2020              Accrual             Decrease          31/12/2021
A. Basic pension                   1,655,533.19      123,493,690.55          124,940,575.46         208,648.28
B. Job-loss insurance                           -         4,066,125.73         4,066,125.73                   -
             Total                 1,655,533.19      127,559,816.28          129,006,701.19         208,648.28

5.25 Taxes and fees payable
                                                            31/12/2021                    31/12/2020
VAT                                                             154,597,583.14                   93,836,793.23
Consumption duty                                                406,331,487.38                 144,069,975.35
CIT                                                             255,882,481.65                   78,334,425.91
Individual income tax                                                2,674,057.91                 2,966,503.37
Urban maintenance and construction tax                              20,431,543.35                12,449,531.95
Stamp duty                                                           2,882,861.65                   909,983.20
Education surcharge                                                 18,506,770.12                11,829,108.81
Others                                                              11,964,201.51                 4,746,370.28
                         Total                                  873,270,986.71                 349,142,692.10

5.26 Other payables
5.26.1 General disclosure
                                               31/12/2021                              31/12/2020
Interests payable                                                                                             -
Dividends payable                                                        -                                    -
Other payables                                       2,280,937,078.12                         1,396,599,161.14
                 Total                               2,280,937,078.12                         1,396,599,161.14

5.26.2 Other payables
                                               31/12/2021                              31/12/2020
Margin deposits                                      1,845,795,843.02                         1,280,042,883.26
Quality warranty                                          48,556,830.53                          41,210,694.26
Withheld housing fund payable                              4,722,066.45                           4,342,621.32
Others                                                381,862,338.12                             71,002,962.30
                 Total                               2,280,937,078.12                         1,396,599,161.14

Other payables aged over 1 year as of the statement date mainly comprised pre-mature
margin deposits and quality warranty.


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5.27 Non-current liabilities due within 1 year
                                                  31/12/2021                                  31/12/2020
Lease liabilities due within 1 year                              13,190,399.32
                   Total                                         13,190,399.32

5.28 Other current liabilities
                                                  31/12/2021                                  31/12/2020
Accruals                                                     562,547,100.62                           164,008,324.26
Pre-mature output VAT                                        236,975,461.98                           156,784,058.77
                   Total                                     799,522,562.60                           320,792,383.03

5.29 Long-term borrowings
                                                  31/12/2021                                  31/12/2020
Credit loans                                                     60,000,000.00                          60,000,000.00
Interests                                                           176,255.83                             117,638.89
Guaranteed loans                                             112,180,000.00
                   Total                                     172,356,255.83                             60,117,638.89

5.30 Lease liabilities
                                                  31/12/2021                                  31/12/2020
Gross lease payments                                             45,436,263.46
Less: Unrecognised financing costs                                4,138,640.96
                   Net                                           41,297,622.50                                       -
T/o: Due within 1 year                                           13,190,399.32
T/o: Due after 1 year                                            28,107,223.18                                       -

5.31 Deferred income
5.31.1 General disclosure
                                                                                                 Reason for
                           31/12/2020       Increase             Decrease        31/12/2021
                                                                                                 recognition
                                                                                            Receipt of
Government grants          75,111,997.53 23,193,903.44           7,204,388.92 91,101,512.05 asset-related
                                                                                            government grants
           Total           75,111,997.53 23,193,903.44           7,204,388.92 91,101,512.05

5.31.2 Government grants
                                                           Reclassified
                                                                               Other
                           31/12/2020      Receipt          to other                       31/12/2021       Nature
                                                                              movement
                                                             income
Subsidy on
Construction of            35,338,000.00               -                  -              - 35,338,000.00 Asset-related
Suizhou Plant
Refund of Land Fee         22,032,186.60 22,208,000.00 1,539,876.31                      - 42,700,310.29 Asset-related
Fund for Clustered
Development Base
                            2,375,360.02               -    622,719.96                   - 1,752,640.06 Asset-related
for Strategic
Innovative Sectors


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                                                       Reclassified
                                                                       Other
                          31/12/2020     Receipt        to other                     31/12/2021       Nature
                                                                      movement
                                                         income
Subsidy Fund for Air
                          2,379,469.47             -    294,364.80               - 2,085,104.67 Asset-related
Pollution Prevention
Subsidy on Devices        1,681,178.20             -    401,472.41               - 1,279,705.79 Asset-related
Subsidy of 2019
Leading
Manufacturing
Province and              1,558,837.69             -    308,654.28               - 1,250,183.41 Asset-related
Non-state-owned
Economy
Development
Anhui Innovation
Subsidy for
Development of            1,217,575.00             -    730,545.00               -    487,030.00 Asset-related
Owned Innovation
Capacity
R&D Fund for Smart
Distilling Yeast          1,130,000.00             - 1,130,000.00                -                - Asset-related
Fabrication
Subsidy on
Renovation of #2           981,481.48              -    222,222.24               -    759,259.24 Asset-related
Furnace
Subsidy on
                           795,911.83              -    127,004.59               -    668,907.24 Asset-related
Equipments
Renovation of GJ
                           787,708.47              -     47,499.96               -    740,208.51 Asset-related
Zhangji Cellar
Subsidy for
Corporation on Key
Technology of Key          600,000.00              -    600,000.00               -                - Asset-related
Food Isotope
Authenticity
Subsidy for
Improvement of Food        551,724.25              -    137,931.00               -    413,793.25 Asset-related
Safety
Anhui Leading Capital
                           502,439.24              -    292,682.88               -    209,756.36 Asset-related
for Service Sector
Subsidy for Electricity
Demand-side                372,000.00              -    144,000.00               -    228,000.00 Asset-related
Adminsitration
Full-time Online
Supervision on
Automated Blending         171,875.00              -     93,749.68               -     78,125.32 Asset-related
Storage and Product
Quality
Energy Saving
Renovation for
                           137,500.28              -    137,500.28               -          0.00 Asset-related
Electric Motors and
Furnaces



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                                                              Reclassified
                                                                                   Other
                           31/12/2020         Receipt          to other                              31/12/2021        Nature
                                                                                  movement
                                                                income
Technological
Renovation for             2,410,208.51                   -    229,487.88                    - 2,180,720.63 Asset-related
Distilling System
Smart Fermentation
                              88,541.49                   -     31,250.04                    -          57,291.45 Asset-related
Innovation
Designated Fund for
                                          -   232,500.00        35,000.00                    -         197,500.00 Asset-related
Furnace Renovation
Bonus for
Technological
                                          -   631,049.92        78,427.61                    -         552,622.31 Asset-related
Improvement
Investment
Subsidy to the
Technical and Quality                     -   122,353.52                     -               -         122,353.52 Asset-related
Department
          Total           75,111,997.53 23,193,903.44 7,204,388.92                                   91,101,512.05

5.32 Share capital
                                                                Movement
                   31/12/2020                           Bonus          Reserve
                                          Issue                                        Others          Total       31/12/2021
                       Qty                              issue         conversion
                                           Qty.                                         Qty.           Qty.
                                                         Qty.            Qty
Shares            503,600,000.00 25,000,000.00                  -                  -             -             - 528,600,000.00

5.33 Capital reserves
                                      31/12/2020                Increase               Decrease                31/12/2021
Share premium                         1,262,552,456.05 4,929,342,074.85                                        6,191,894,530.90
Other capital reserves                    32,853,136.20                                                           32,853,136.20
           Total                      1,295,405,592.25 4,929,342,074.85                                        6,224,747,667.10

5.34 Other comprehensive income (OCI)
                                                                                                        Movement
                                                                    31/12/2020
                                                                                         Before tax             Less: Income tax
A. Not reclassifiable to profit or loss                                                      693,720.70               173,430.18
Change in the fair value of other equity investments                                         693,720.70               173,430.18
B. Reclassifiable to profit or loss                                                      -4,296,727.84             -1,074,181.96
Gain from reclassification of financial assets                                           -4,296,727.84             -1,074,181.96
                          Total                                                          -3,603,007.14               -900,751.78

(Continued)
                                                                                 Movement
                                                                   After tax              After tax
                                                                attributable to        attributable to            31/12/2021
                                                               shareholders of         non-controlling
                                                                 the Company              interests


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                                                                        Movement
                                                               After tax            After tax
                                                            attributable to      attributable to        31/12/2021
                                                           shareholders of       non-controlling
                                                             the Company            interests
A. Not reclassifiable to profit or loss                            312,174.31         208,116.21            312,174.31
Change in the fair value of other equity investments               312,174.31         208,116.21            312,174.31
B. Reclassifiable to profit or loss                            -3,047,232.50         -175,313.38         -3,047,232.50
Gain from reclassification of financial assets                 -3,047,232.50         -175,313.38         -3,047,232.50
                          Total                                -2,735,058.19              32,802.83      -2,735,058.19

5.35 Surplus reserves
                                  31/12/2020            Increase                 Decrease              31/12/2021
Statutory reserve                 256,902,260.27        12,500,000.00                                  269,402,260.27
          Total                   256,902,260.27        12,500,000.00                                  269,402,260.27

10% of the current year’s net profit was transferred to surplus reserves in accordance with
the Company Law and the Company’s Article of Association.
5.36 Retained earnings
                                                                        Y/e 31/12/2021             Y/e 31/12/2020
As of 31/12/2020                                                         7,987,380,161.21             6,888,203,911.92
Total adjustment of retained earnings brought forward                                        -                         -
As of 1/1/2021                                                           7,987,380,161.21             6,888,203,911.92
Add: Net profit attributable to shareholders of the Company              2,297,894,413.25             1,854,576,249.29
Less: Transfer to statutory reserve                                           12,500,000.00
Less: Dividends on ordinary shares payable                                 755,400,000.00              755,400,000.00
As of 31/12/2021                                                         9,517,374,574.46             7,987,380,161.21

5.37 Revenue and cost of sales
                                      Y/e 31/12/2021                                  Y/e 31/12/2020
                             Revenue               Cost of sales                Revenue               Cost of sales
Primary operation        13,180,706,416.64         3,271,880,424.79      10,236,883,038.46            2,522,906,977.56
Other operation               89,119,849.40          32,196,587.13              55,181,495.95            26,907,967.20
        Total            13,269,826,266.04         3,304,077,011.92      10,292,064,534.41            2,549,814,944.76

5.38 Taxes and surcharges
                                                                           Y/e 31/12/2021             Y/e 31/12/2020
Consumption duty                                                            1,669,063,914.39          1,343,748,348.14
Urban construction and maintenance tax and education surcharges                 300,643,974.00         231,441,505.09
Urban land use tax                                                               15,985,317.49           13,696,863.78
Property tax                                                                     18,286,057.72           17,123,738.65



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                                                        Y/e 31/12/2021       Y/e 31/12/2020
Stamp duty                                                   11,749,843.93       8,853,581.53
Others                                                       16,086,098.14      10,425,132.36
                          Total                         2,031,815,205.67     1,625,289,169.55

5.39 Selling expenses
                                  Y/e 31/12/2021                      Y/e 31/12/2020
Personnel costs                            863,583,183.40                      723,874,977.05
Travel                                     161,091,812.25                      133,511,390.56
Advertisement                              900,546,437.33                      840,407,171.96
Comprehensive promotion                  1,268,396,513.56                      755,941,972.88
Services                                   705,368,563.00                      578,401,082.92
Others                                     109,088,973.54                       88,840,567.95
                  Total                  4,008,075,483.08                    3,120,977,163.32

5.40 Administrative expenses
                                  Y/e 31/12/2021                      Y/e 31/12/2020
Personnel costs                            647,493,344.01                      507,634,459.19
Office costs                                 61,116,360.31                      60,807,905.04
Repairs                                      59,205,451.47                      46,267,736.17
Depreciation                                 76,054,616.50                      67,142,270.79
Amortisation                                 34,799,459.54                      31,267,096.32
Sewage                                       27,191,838.92                      17,742,036.94
Travel                                       11,420,677.10                      10,324,813.18
Utilities                                    11,157,257.56                       7,613,501.49
Others                                       93,742,414.33                      53,401,761.36
                  Total                  1,022,181,419.74                      802,201,580.48

5.41 R&D expenses
                                  Y/e 31/12/2021                     Y/e 31/12/2020
Personnel costs                              32,495,950.89                      24,471,993.23
Direct costs                                  9,389,089.92                       3,988,348.08
Depreciation                                  3,230,977.28                       3,084,671.65
Overheads                                     6,333,457.27                       9,045,123.50
               Total                         51,449,475.36                      40,590,136.46

5.42 Financial costs
                                  Y/e 31/12/2021                     Y/e 31/12/2020
Interest expenses                             7,036,575.14                         876,815.80
Less: Interest income                      210,634,326.57                     261,861,342.00
Net interest expenses                     -203,597,751.43                     -260,984,526.20



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                                               Y/e 31/12/2021                           Y/e 31/12/2020
Net exchange loss                                                -168,340.77                             51,764.56
Bank charges and others                                          -289,564.86                             96,305.57
                Total                                      -204,055,657.06                        -260,836,456.07

Increase of financial costs for 21.77% year over year was mainly resulted from reduction in
interest income in the period.
5.43 Other income
                                                          Y/e 31/12/2021       Y/e 31/12/2020         Nature
Government grants
T/o: Transfer from deferred income                              7,204,388.92      5,548,440.39     Asset-related
T/o: Government grants directly recognised in P&L              48,065,239.56     41,926,091.80 Revenue-related
                         Total                                 55,269,628.48     47,474,532.19

Increase of other income for 16.42% year over year was mainly resulted from receipt of the
Hubei University of Science and Technology Industrialisation Fund in the period.
5.44 Investment income
                                                                          Y/e 31/12/2021         Y/e 31/12/2020
Investment income from long-term equity investments at equity                     397,024.95           237,293.59
Gain from disposal of FVTPLs                                                   11,855,405.29
Gain from holding of debt instruments
Gain from holding of other equity investments                                     809,860.62
Gain from disposal of FVTOCIs                                                  -23,271,118.08      -34,923,074.38
Gain from holding of financial assets held for trading                         14,393,316.21        41,473,224.56
Others                                                                            507,890.16
                                   Total                                        4,692,379.15         6,787,443.77

Decrease of investment income for 30.87% year over year was mainly resulted from
reduction in Gain from holding of financial assets held for trading in the period.
5.45 Gain from fair value changes
                                               Y/e 31/12/2021                           Y/e 31/12/2020
Financial assets held for trading                               7,225,961.17                       -19,983,181.51
T/o: Derivative financial assets                                           -                                       -
                Total                                           7,225,961.17                       -19,983,181.51

5.46 Credit impairment loss
                                               Y/e 31/12/2021                           Y/e 31/12/2020
Notes receivable                                                           -                             34,938.37
Accounts receivable                                            -7,698,458.43                          -596,892.02
Other receivables                                               1,205,616.99                          -371,799.19



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                                                 Y/e 31/12/2021                         Y/e 31/12/2020
                Total                                          -6,492,841.44                         -933,752.84

5.47 Asset impairment loss
                                                 Y/e 31/12/2021                         Y/e 31/12/2020
Inventories                                                   -16,126,347.91                      -13,182,487.48
Fixed assets                                                     -611,808.94                         -912,559.84
                Total                                         -16,738,156.85                      -14,095,047.32

5.48 Gain from asset disposals
                                                                     Y/e 31/12/2021            Y/e 31/12/2020
Gain or loss from disposal of fixed assets, construction in
                                                                             1,368,763.13           1,223,536.53
progress and intangible assets not classified as held for sale
T/o: Fixed assets                                                            1,368,763.13           1,223,536.53
                                Total                                        1,368,763.13           1,223,536.53

5.49 Non-operating income
5.49.1 General disclosure
                                                                                                Current period
                                                    Y/e 31/12/2021         Y/e 31/12/2020
                                                                                                non-recurring
Damage and scrapping of non-current assets                    12,541.54              178.25           12,541.54
Government grants not related to ordinary
                                                               4,873.94          150,000.00              4,873.94
operating activities
Fine and compensation                                  43,776,517.37           34,815,119.51      43,776,517.37
Wastes                                                  4,549,768.93            5,743,313.19        4,549,768.93
Release of payables                                    30,649,702.32           23,936,972.51      30,649,702.32
Others                                                  1,364,754.10            1,951,704.61        1,364,754.10
                        Total                          80,358,158.20           66,597,288.07      80,358,158.20

5.49.2 Government grants not related to ordinary operating activities
                                                    Y/e 31/12/2021          Y/e 31/12/2020          Nature
Other bonuses                                                  4,873.94           150,000.00    Revenue related
                        Total                                  4,873.94           150,000.00                      -

5.50 Non-operating expenses
                                                                                               Current period
                                                   Y/e 31/12/2021         Y/e 31/12/2020
                                                                                               non-recurring
Damage and scrapping of non-current assets             7,358,161.65          4,916,354.87           7,358,161.65
Donations                                                                   21,405,652.43
Others                                                 3,315,122.96            940,840.78           3,315,122.96
                        Total                         10,673,284.61         27,262,848.08          10,673,284.61

5.51 Income tax expenses
5.51.1 General disclosure


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                                                   Y/e 31/12/2021                        Y/e 31/12/2020
Current income tax                                               903,705,314.91                  636,476,576.50
Deferred income tax                                              -106,743,019.82                  -10,528,792.81
                Total                                            796,962,295.09                  625,947,783.69

5.51.2 Reconciliation of profit before tax and income tax expenses
                                                                                         Y/e 31/12/2021
Profit before tax                                                                               3,171,293,934.56
Income tax calcuated by the applicable tax rate                                                  792,823,483.64
Impact of different tax rates applicable to subsidiaries                                          -10,694,115.33
Adjustment for prior period                                                                        28,428,411.94
Non-taxable income                                                                                 -2,437,521.86
Non-deductible costs, expenses and loss                                                             1,328,323.89
Utilisation of prior period recoverable tax loss with no DTA recognised                                         -
Impact of current period recoverable tax loss and temporary differences
                                                                                                                -
with no DTA recognised
Progressive deduction for R&D expenses                                                            -12,486,287.19
Impact of tax rate changes                                                                                      -
Exemption
                             Income tax expenses                                                 796,962,295.09

5.52 Notes to the consolidated cash flow statements
5.52.1 Other cash receipts in relation to operating activities
                                                                  Y/e 31/12/2021            Y/e 31/12/2020
Margin deposits and quality warranty                                    573,099,096.03             71,271,892.53
Government grants received                                               59,512,598.91             42,815,381.22
Bank interests received                                                 175,668,500.91           244,206,194.38
Release of restricted cash                                              334,308,875.92          2,675,000,000.00
Others                                                                   11,742,422.18             70,984,823.65
                          Total                                       1,154,331,493.95          3,104,278,291.78

5.52.2 Other cash payments for operating activities
                                                                  Y/e 31/12/2021            Y/e 31/12/2020
Paid expenses                                                         2,252,989,080.36          1,947,222,615.61
Margin deposits and quality warranty                                      7,522,439.34              7,848,981.62
Cash restricted for bank acceptance and guarantee
                                                                        133,372,593.16           134,308,875.92
letters
Structural desposits and fixed term deposits not
                                                                                                 200,000,000.00
eligible for early redemption
Others                                                                   63,271,489.74             88,165,064.00
                          Total                                       2,457,155,602.60          2,377,545,537.15



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5.52.3 Other cash receipts in relation to financing activities
                                                               Y/e 31/12/2021              Y/e 31/12/2020
Financing costs paid                                                    4,587,264.16
Rentals paid                                                           15,430,214.16
                         Total                                         20,017,478.32

5.53 Supplemenatry information to the consolidated cash flow statement
5.53.1 Suppplementary information to the consolidated cash flow statement
                                                                             Y/e 31/12/2021      Y/e 31/12/2020
A. Reconciliation between net profit and net cash flows from operating
activities
Net profit                                                                   2,374,331,639.47 1,847,888,183.03
Add: Asset impairment loss                                                       16,738,156.85      15,028,800.16
Add: Credit impairment loss                                                       6,492,841.44
Add: Fixed asset depreciation and investment property depreciation              224,815,642.73    214,098,270.11
Add: Right-of-use asset depreciation                                             14,454,182.34
Add: Intangible asset amortisation                                               42,153,384.37      34,419,897.25
Add: Long-term deferred expense amortisation                                     33,723,640.28      23,731,383.35
Add: Loss from disposal of fixed assets, intangible assets and other
                                                                                 -1,368,763.13      -1,223,536.53
long-term assets (gain with “–”)
Add: Loss from scrapping of fixed assets (gain with “–”)                       7,345,620.11       4,916,176.62
Add: Loss from fair value changes (gain with “–”)                             -7,225,961.17      19,983,181.51
Add: Financial costs (income with “–”)                                       -47,493,186.95         928,580.36
Add: Investment loss (gain with “–”)                                          -4,692,379.15      -6,787,443.77
Add: DTA decrease (increase with “–”)                                      -186,855,578.29       -6,477,877.44
Add: DTL increase (decrease with “–”)                                         79,211,806.69      -4,050,915.37
Add: Inventory decrease (increase with “–”)                              -1,252,595,844.79     -415,011,334.66
Add: Operating receivable decrease (increase with “–”)                       868,490,814.49    -548,002,635.36
Add: Operating payable increase (decrease with “–”)                       2,752,473,236.58     104,411,672.19
Add: Others (Note)                                                              334,308,875.92 2,340,691,124.08
Net cash flows from operating activities                                     5,254,308,127.79 3,624,543,525.53
B. Significant investing and financing activities not involving cash
Debt-to-equity conversion                                                                                         -

Corporate bonds convertible within 1 year                                                                         -

Fixed asset acquired through financial leasing                                                                    -

C. Movement of cash and cash equivalents
Cash as of 31/12/2021                                                        6,057,550,178.60 5,636,903,693.74
Less: Cash as of 31/12/2020                                                  5,636,903,693.74 2,944,749,918.09
Add: Cash equivalents as of 31/12/2021                                                                            -
Less: Cash equivalents as of 31/12/2020                                                                           -


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                                                                             Y/e 31/12/2021       Y/e 31/12/2020
Net increase of cash and cash equivalents                                     420,646,484.86 2,692,153,775.65

Note: Others represented impact of restricted cash on the net cash flows from operating
activities for the period.
5.53.2 Composition of cash and cash equivalents
                                                                               31/12/2021           31/12/2020
A. Cash                                                                     6,057,550,178.60 5,636,903,693.74
T/o: Cash in hand                                                                   135,129.66          178,127.77
T/o: Cash at bank usable on demand                                          6,057,283,646.58 5,636,406,199.84
T/o: Other monetary funds usable on demand                                          131,402.36          319,366.13
B. Cash equivalents                                                                           -                    -
T/o: Investment in debt instruments mature in 3 months                                        -                    -
C. Cash and cash equivalents as of 31 December                              6,057,550,178.60 5,636,903,693.74
T/o: Cash and cash equivalents held by group companies with
                                                                                                                   -
restriction on use
5.54 Assets with restriction on ownership or disposal
                       Book value as of
                                                                          Restriction
                         31/12/2021
                                              Structural deposits not eligible for early redemption and fixed term
Notes receivable        5,867,372,593.16
                                                      deposits and margin deposits for bank acceptance
Fixed assets                   4,225,738.45                           Securities for loans
Intangible assets              2,780,644.18                           Securities for loans
          Total         5,874,378,975.79                                     ——

5.55 Government grants
5.55.1 Asset related government grants
                                                                Amount recognised in the income          Income
                                                   Balance                statement
                                Grant amount                                                           statement
                                                  sheet item
                                                                Y/e 31/12/2021 Y/e 31/12/2020              item
Subsidy on Construction of                         Deferred
                                35,338,000.00                                   -                   - Other income
Suizhou Plant                                      income
                                                   Deferred
Refund of Land Fee              42,700,310.29                       1,539,876.31        530,641.33 Other income
                                                   income
Fund for Clustered
                                                   Deferred
Development Base for             1,752,640.06                         622,719.96        422,719.98 Other income
                                                   income
Strategic Innovative Sectors
Subsidy Fund for Air                               Deferred
                                 2,085,104.67                         294,364.80        265,613.82 Other income
Pollution Prevention                               income
                                                   Deferred
Subsidy on Devices               1,279,705.79                         401,472.41        155,259.30 Other income
                                                   income
Subsidy of 2019 Leading
Manufacturing Province                             Deferred
                                 1,250,183.41                         308,654.28        311,162.31 Other income
and Non-state-owned                                income
Economy Development




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                                                             Amount recognised in the income       Income
                                                Balance                statement
                               Grant amount                                                      statement
                                               sheet item
                                                             Y/e 31/12/2021 Y/e 31/12/2020           item
Anhui Innovation Subsidy
                                               Deferred
for Development of Owned         487,030.00                       730,545.00      730,545.00 Other income
                                               income
Innovation Capacity
R&D Fund for Smart                             Deferred
                                           -                    1,130,000.00                   - Other income
Distilling Yeast Fabrication                   income
Subsidy on Renovation of                       Deferred
                                 759,259.24                       222,222.24       18,518.52 Other income
#2 Furnace                                     income
                                               Deferred
Subsidy on Equipments            668,907.24                       127,004.59      288,116.33 Other income
                                               income
Renovation of GJ Zhangji                       Deferred
                                 740,208.51                        47,499.96       47,499.96 Other income
Cellar                                         income
Subsidy for Corporation on
                                               Deferred
Key Technology of Key Food                 -                      600,000.00                   - Other income
                                               income
Isotope Authenticity
Subsidy for Improvement                        Deferred
                                 413,793.25                       137,931.00      137,931.00 Other income
of Food Safety                                 income
Anhui Leading Capital for                      Deferred
                                 209,756.36                       292,682.88      292,682.88 Other income
Service Sector                                 income
Subsidy for Electricity
                                               Deferred
Demand-side                      228,000.00                       144,000.00      144,000.00 Other income
                                               income
Adminsitration
Full-time Online
Supervision on Automated                       Deferred
                                  78,125.32                        93,749.68       93,750.00 Other income
Blending Storage and                           income
Product Quality
Energy Saving Renovation
                                               Deferred
for Electric Motors and                 0.00                      137,500.28      137,499.96 Other income
                                               income
Furnaces
Technological Renovation                       Deferred
                                2,180,720.63                      229,487.88       62,499.96 Other income
for Distilling System                          income
Smart Fermentation                             Deferred
                                  57,291.45                        31,250.04       31,250.04 Other income
Innovation                                     income
Designated Fund for                            Deferred
                                           -                               -       22,500.00 Other income
Company Development                            income
                                               Deferred
IOT Souce Tracing System                   -                               -    1,856,250.00 Other income
                                               income
Designated Fund for                            Deferred
                                 197,500.00                        35,000.00                    Other income
Furnace Renovation                             income
Bonus for Technological                        Deferred
                                 552,622.31                        78,427.61                    Other income
Improvement Investment                         income
Subsidy to the Technical                       Deferred
                                 122,353.52                                -                    Other income
and Quality Department                         income
Total                          91,101,512.05       -            7,204,388.92    5,548,440.39        ——

5.55.2 Revenue related government grants
                                                 Income      Amount recognised in the income        Income
                               Grant amount    statement               statement                  statement
                                                   item      Y/e 31/12/2021 Y/e 31/12/2020            item
                                                  Other
Tax Refund                     10,939,461.17                   10,939,461.17     7,142,710.58 Other income
                                                 income



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                                              Income    Amount recognised in the income      Income
                            Grant amount    statement             statement                statement
                                                item    Y/e 31/12/2021 Y/e 31/12/2020          item
Hubei University of
                                              Other
Science and Technology       9,541,000.00                  9,541,000.00    2,180,000.00 Other income
                                             income
Industrialisation Fund
Subsidy for Suizhou
                                              Other
Relocation and               6,946,300.00                  6,946,300.00                   Other income
                                             income
Renovation Project
Xianning Fiscal Incentive
                                              Other
for 0 Fiscal Account         2,300,000.00                  2,300,000.00                   Other income
                                             income
Balance
                                              Other
Job-loss Insurance Refund    1,504,366.43                  1,504,366.43    2,280,389.84 Other income
                                             income
2021 Training Subsidy for
                                              Other
Workplace Skill              1,226,000.00                  1,226,000.00                   Other income
                                             income
Improvement
2021 Substantial Fund for                     Other
                             1,200,000.00                  1,200,000.00                   Other income
Innovative Province                          income
2020 Designated Fund for
Provincial Manufacturing                      Other
                             1,000,000.00                  1,000,000.00                   Other income
Development with High                        income
Quality
Fiscal Bonus for Digital
Economy Development
                                              Other
offered by Construction      1,000,000.00                  1,000,000.00                   Other income
                                             income
Fund of Leading
Manufacturing Province
Subsidies by Local
                                              Other
Finance Supervision          1,000,000.00                  1,000,000.00                   Other income
                                             income
Authorities
Bonus for Strategic                           Other
                             1,000,000.00                  1,000,000.00                   Other income
Innovative Base                              income
2020 Construction Fund
                                              Other
of Leading Manufacturing                                                   5,160,000.00 Other income
                                             income
Province
2020 Designated Fund for
Development of                                Other
                                                                           4,600,000.00 Other income
Emerging Leading                             income
Manufacturing City
Fiscal Subsidy offered by
                                              Other
Cashing Centre of Wuhan                                                    2,364,000.00 Other income
                                             income
Hanyang Treasury
Subsidy for Wuhan Class
A Scenic Site Free
                                              Other
Entrance offered by                                                        2,220,000.00 Other income
                                             income
Wuhan Culture and Travel
Bureau




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                                                   Income     Amount recognised in the income        Income
                               Grant amount      statement              statement                  statement
                                                     item     Y/e 31/12/2021 Y/e 31/12/2020            item
Subsidy for Air Pollution
Prevention offered by                              Other
                                                                                   1,000,000.00 Other income
Environmental Protection                          income
Bureau
AMR Bonus for                                      Other
                                                                                     900,000.00 Other income
Standardisation                                   income
Trademark Bonus by                                 Other
                                                                                     895,000.00 Other income
Bozhou Treasury                                   income
Other grants related to
                                                   Other
ordinary operating             10,408,111.96                     10,408,111.96    13,183,991.38 Other income
                                                  income
activities
Grants related to ordinary                      Non-operat                                        Non-operating
                                     4,873.94                         4,873.94       150,000.00
operating activities                            ing income                                           income
                                                 Financial
Interest subsidies                874,116.13                        874,116.13       992,947.18 Financial costs
                                                   costs
             Total             48,944,229.63        ——         48,944,229.63    43,069,038.98       ——

Note 6 Change in the scope of consolidation
6.1 Business combination not under common control
6.1.1 General disclosure
                                                                                     Revenue for Net profit for
                                                                                      the period the period
                                                                       Determinati
           Date of                                 Type of                             from the      from the
Subsidiar                Purchase Shareholdi                Combinatio      on of
          acquisitio                             transactio                          combination combination
   y                       price     ng acquired              n date combination
             n                                        n                               date to the date to the
                                                                             date
                                                                                      statement     statement
                                                                                         date          date
                                                                          Purchase
                                                                         price paid,
                                                                         transfer of
Mingguan
           2021.1.1     200,200,000.                                   ownership of 295,308,911. -11,423,106.
g                                        60%      Purchase 2021.1.10
                  0               00                                       shares,               41          29
Distillery
                                                                         transfer of
                                                                       control over
                                                                            assets
                                                 Additiona
                                                                        Completion
Treasure     2021.9.1   224,723,400.                  l
                                         60%                 2021.9.15 of regulatory           0.00 -914,211.68
Distillery          5             00              investme
                                                                        registration
                                                     nt




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6.1.2 Cost of acquisition and goodwill
                                         Mingguang Distillery                Treasure Distillery
Cost of acquisition
     Cash                                              200,200,000.00                     224,723,400.00
Total cost of acquisition                              200,200,000.00                     224,723,400.00
Less: Fair value of net identifiable
                                                       139,513,817.93                     202,328,692.35
assets acquired
Goodwill                                                60,686,182.07                      22,394,707.65

6.1.3 Net identifiable assets of the acquirees as of the combination dates
Mingguang Distillery
                                              Fair value                        Book value

Monetary funds                                         135,013,666.90                     135,013,666.90

Accounts receivable                                     10,711,363.41                      10,711,363.41

Prepayments                                                1,596,899.47                      1,596,899.47

Other receivables                                          6,122,501.16                      6,122,501.16

Inventories                                            281,633,786.01                     211,852,592.58

Other current assets                                           2,546.37                            2,546.37

Other equity investments                                53,848,697.80                      14,530,000.00

Fixed assets                                           119,631,918.83                      72,638,969.35

Construction in progress                                    557,987.45                        557,987.45

Intangible assets                                       56,327,165.76                        9,123,081.42

Long-term deferred expenses                                2,929,439.00                      2,929,439.00

Deferred tax assets                                        3,498,516.13                      3,498,516.13

Short-term borrowings                                   94,000,000.00                      94,000,000.00

Accounts payable                                        43,654,530.85                      43,654,530.85

Contract liabilities                                    46,956,781.25                      46,956,781.25

Employee benefits payable                                  4,147,589.59                      4,147,589.59

Taxes and fees payable                                  38,825,770.24                      38,825,770.24

Other payables                                         141,767,461.40                     141,767,461.40

Other current liabilities                               18,104,381.56                      18,104,381.56

Deferred income                                             807,082.92                        807,082.92

Deferred tax liabilities                                50,824,231.26                                 0.00

Net Assets                                             232,786,659.22                      80,313,965.43

Less: Non-controlling interests                         93,272,841.29                      32,283,763.77


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                                                       Fair value                                Book value

Net assets acquired                                               139,513,817.93                            48,030,201.66

Treasure Distillery
                                                       Fair value                                Book value
Monetary funds                                                         62,824.85                                 62,824.85

Accounts receivable                                                   303,593.00                               303,593.00

Other receivables                                                 224,723,400.00                           224,723,400.00
Inventories                                                       162,938,624.00                            28,256,221.73
Other current assets                                                     2,970.29                                 2,970.29
Fixed assets                                                       25,952,387.00                            11,875,869.22
Intangible assets                                                   6,501,400.00                              5,962,094.20
Short-term borrowings                                               6,200,000.00                              6,200,000.00
Taxes and fees payable                                                 16,882.41                                 16,882.41
Other payables                                                     39,729,273.01                            39,729,273.01
Deferred tax liabilities                                           37,324,556.46
Net Assets                                                        337,214,487.26                           225,240,817.87
Less: Non-controlling interests                                   134,885,794.91                            90,096,327.15
Net assets acquired                                               202,328,692.35                           135,144,490.72

6.2 Other changes
Jiuhao ChinaRail and Jiuan Electric were included in the Company’s scope of consolidation for the
first time in the period as a result of incorporation. Waste Recycle was excluded from the
Company’s scope of consolidation in the period as a result of dissolution.
Note 7 Interests in other entities
7.1 Interests in subsidiaries
7.1.1 General disclosure
                                    Place of                                        Shareholding in %        Means of
                                                   Place of         Nature of
            Subsidiary              primary                                                                   control
                                                 registration       operation       Direct    Indirect
                                   operation                                                                acquisition
                                    Bozhou,        Bozhou,
GJ Sales                                                             Trading         100.00    ——        Incorporation
                                     Anhui          Anhui
                                    Bozhou,        Bozhou,
Longrui Glass                                                       Production       100.00    ——        Incorporation
                                     Anhui          Anhui
                                    Bozhou,        Bozhou,            Waste
Waste Recycle                                                                        100.00    ——        Incorporation
                                     Anhui          Anhui            recycling
                                    Bozhou,        Bozhou,          Machinery
Jiuan Electric                                                                       100.00    ——        Incorporation
                                     Anhui          Anhui           production
Jinyunlai                         Hefei, Anhui   Hefei, Anhui       Advertising      100.00    ——        Incorporation


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                              Place of                                     Shareholding in %        Means of
                                             Place of        Nature of
          Subsidiary          primary                                                                control
                                           registration      operation     Direct    Indirect
                             operation                                                             acquisition
                              Bozhou,        Bozhou,
Ruisi Weier                                                    R&D          100.00    ——        Incorporation
                               Anhui          Anhui
                                                                                                    Business
                                                               Hotel                              combination
Jinhao Hotel                 Shanghai       Shanghai                        100.00    ——
                                                            management                           under common
                                                                                                     control
                                                                                                    Business
                              Bozhou,        Bozhou,           Hotel                              combination
GJ Guest House                                                              100.00    ——
                               Anhui          Anhui          operation                           under common
                                                                                                     control
                              Bozhou,        Bozhou,          Sewage
YQ Environment Protection                                                   100.00    ——        Incorporation
                               Anhui          Anhui          processing
GJ E-Commerce               Hefei, Anhui   Hefei, Anhui     E-commerce      100.00    ——        Incorporation
                              Bozhou,        Bozhou,
Runan Xinke                                                 Food testing    100.00    ——        Incorporation
                               Anhui          Anhui
Jiudao Media                Hefei, Anhui   Hefei, Anhui     Advertising     100.00       ——     Incorporation
                                                                                                    Business
                                                                                                  combination
                              Wuhan,         Wuhan,
HHL Distillery                                              Production       51.00                  not under
                               Hubei          Hubei
                                                                                                    common
                                                                                                     control
                                                                                                    Business
                                                                                                  combination
                             Xianning,      Xianning,
HHL Xianning                                                Production     ——         51.00       not under
                               Hubei          Hubei
                                                                                                    common
                                                                                                     control
                                                                                                    Business
                                                                                                  combination
                             Suizhou,       Suizhou,
HHL Suizhou                                                 Production     ——         51.00       not under
                               Hubei          Hubei
                                                                                                    common
                                                                                                     control
                                                                                                    Business
                                                                                                  combination
                              Wuhan,         Wuhan,
Junlou Culture                                              Advertising    ——         51.00       not under
                               Hubei          Hubei
                                                                                                    common
                                                                                                     control
                             Xianning,      Xianning,
HHL Beverage                                                Production     ——         51.00     Incorporation
                               Hubei          Hubei
                              Wuhan,         Wuhan,
Yashibo                                                        R&D         ——         51.00     Incorporation
                               Hubei          Hubei



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                              Place of                                   Shareholding in %        Means of
                                           Place of        Nature of
           Subsidiary         primary                                                              control
                                          registration     operation     Direct    Indirect
                             operation                                                           acquisition
                             Xianning,     Xianning,
Xinjia Testing                                            Food testing   ——         51.00     Incorporation
                               Hubei        Hubei
                                                                                                  Business
                                                                                                combination
                              Wuhan,       Wuhan,
Tianlong Jindi                                              Trading      ——         51.00       not under
                               Hubei        Hubei
                                                                                                  common
                                                                                                   control
                                                                                                  Business
                                                                                                combination
                             Xianning,     Xianning,
Xianning Junhe                                              Trading      ——         51.00       not under
                               Hubei        Hubei
                                                                                                  common
                                                                                                   control
                              Wuhan,       Wuhan,
Junya Sales                                                 Trading      ——         51.00     Incorporation
                               Hubei        Hubei
                              Suizhou,     Suizhou,
Suizhou Junhe                                               Trading         ——      51.00     Incorporation
                               Hubei        Hubei
                                                                                                  Business
                                                                                                combination
                             Chuzhou,    Mingguang,
Mingguang Distillery                                      Production       60.00                  not under
                               Anhui        Anhui
                                                                                                  common
                                                                                                   control
                                                                                                  Business
                                                                                                combination
                             Chuzhou,    Mingguang,
Tiancheng Sales                                             Trading                   60.00       not under
                               Anhui        Anhui
                                                                                                  common
                                                                                                   control
                                                                                                  Business
                                                                                                combination
                             Chuzhou,      Fengyang
FY Xiaogangcun                                            Production                  42.00       not under
                               Anhui        Anhui
                                                                                                  common
                                                                                                   control
                              Bozhou,      Bozhou,
Jiuhao ChinaRail                                          Construction     52.00                Incorporation
                               Anhui        Anhui
                           Bozhou,         Bozhou,
Zhenrui Construction                                      Construction                52.00     Incorporation
                           Anhui            Anhui
                                                                                                  Business
                                                                                                combination
                             Renhuai,      Renhuai,
Treasure Distillery                                       Production     60.00                    not under
                              Guizhou      Guizhou
                                                                                                  common
                                                                                                   control

7.1.2 Significant partially owned subsidiaries

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                                                                  Profit or loss
                                                                 attributable to         Dividends declared            Minority interest as
                                         Non-controlling
             Subsidiary                                                minority                 for minority             of the statement
                                         shareholding %
                                                               shareholders for the             shareholders                   date
                                                                       period
HHL Distillery                                         49.00           81,338,863.48                                        486,726,322.76

7.1.3 Key Significant partially owned subsidiaries
                                                                       31/12/2021
 Subsidiary                             Non-current                                Current            Non-current
                 Current assets                                Total                                                        Total liabilities
                                           assets                                 liabilities            liabilities
HHL
                  1,106,087,761.34      1,004,277,608.57   2,110,365,369.91        792,402,887.81        324,643,456.05       1,117,046,343.86
Distillery

(Continue)
                                                                       31/12/2020
 Subsidiary                             Non-current                                Current            Non-current
                 Current assets                                Total                                                        Total liabilities
                                           assets                                 liabilities            liabilities
HHL
                    633,542,317.24       868,332,173.16    1,501,874,490.40        482,603,067.57        191,592,294.97        674,195,362.54
Distillery

(Continue)
                                                                          Y/e 31/12/2021
       Subsidiary                                                                     Total comprehensive               Cash flows from
                                      Revenue                  Net profit
                                                                                                income                 operating activities
HHL Distillery                       1,458,982,962.92           165,997,680.58               165,639,898.18                 386,107,248.19

(Continue)
                                                                          Y/e 31/12/2020
       Subsidiary                                                                     Total comprehensive               Cash flows from
                                      Revenue                  Net profit
                                                                                                income                 operating activities
HHL Distillery                        516,045,801.88            -13,649,114.81                  -13,649,114.81              -22,001,852.09

7.2 Significant joint ventures and associates
The Company had no significant joint venture or associate.


Note 8 Risks associated with financial instruments
Risks related to the financial instruments of the Company arise from the recognition of various
financial assets and financial liabilities during its operation, including credit risk, liquidity risk and
market risk.
Management of the Company is responsible for determining risk management objectives and
policies related to financial instruments. Operational management is responsible for the daily risk
management through functional departments (e.g. credit management department of the

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Company reviews each credit sale). Internal audit department is responsible for the daily
supervision of implementation of the risk management policies and procedures, and report their
findings to the audit committee in a timely manner.
Overall risk management objective of the Company is to establish risk management policies to
minimize the risks without unduly affecting the competitiveness and resilience of the Company.
8.1 Credit risk
Credit risk is the risk of one party of the financial instrument face to a financial loss because the
other party of the financial instrument fails to fulfill its obligation. The credit risk of the Company is
related to monetary funds, notes receivable, accounts receivables, other receivables and long-term
receivables. Credit risk of these financial assets is derived from the counterparty’s breach of
contract. The maximum risk exposure is equal to the carrying amount of these financial
instruments.
Monetary funds of the Company has lower credit risk, as they are mainly deposited in financial
institutions such as commercial banks, of which the Company believes with higher reputation and
financial position.
Notes receivable held by the Company mainly comprise bank acceptance which have relatively
high liquidity. The Company has established necessary internal control policies that can ensure the
safety of the maintenance and usage of notes and such policies have been implemented effectively.
The Company believes that notes receivable have low credit risk.
Accounts receivable mainly arising from sales. The Company makes sales only to customers with
advanced credit worthiness and monitors accounts receivable on a continuous basis to ensure the
occurrence of significant bad debts. The maximum risk exposure brought by financial instruments
is their book value. The Company believes that the credit risk is relatively low.
8.2 Liquidity risk
Liquidity risk is the risk of shortage of funds when fulfilling the obligation of settlement by
delivering cash or other financial assets. The Company is responsible for the capital management
of all of its subsidiaries, including short-term investment of cash surplus and dealing with
forecasted cash demand by raising loans. The Company’s policy is to monitor the demand for
short-term and long-term floating capital and whether the requirement of loan contracts is
satisfied so as to ensure to maintain adequate cash and cash equivalents.
8.3 Market risk
The market risk of a financial instrument refers to the risk on the fair value or future cash flows of
the financial instrument brought by market factors. Market risk mainly comprises foreign exchange
risk and interest risk.


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8.3.1 Foreign currency risk
Foreign currency risk of the Company mainly arise from foreign currency assets and liabilities
denominated in currency other than the Company’s functional currency. As the Company mainly
operate in Mainland China with transactions mostly settled in CNY and very limited export
activities, foreign currency risk is insignificant.
8.3.2 Interest risk
Interest risk refers to the risk on the fair value or future cash flows of a financial instrument
brought by the change of market interest rate. Interest risk mainly arises from bank loans. As of the
statement date, the Company had no bank loan with a floating interest rate.
8.3.2 Other price risk
Investments held for trading were measured at fair value. As such, these investments are subject
to the risk brought by the change of security prices. The Company controls this risk to the
acceptable level by utilising multiple investment mix.
Note 9 Fair value disclosure
The inputs used in the fair value measurement in its entirety are to be classified in the level of the
hierarchy in which the lowest level input that is significant to the measurement is classified.
Level 1: Inputs consist of unadjusted quoted prices in active markets for identical assets or
liabilities
Level 2: Inputs for the assets or liabilities (other than those included in Level 1) that are either
directly or indirectly observable.
Level 3: Inputs are unobservable inputs for the assets or liabilities
9.1 Fair value of assets and liabilities measured by fair value as of the statement date
                                                            Fair value as of the statement date
                                        Level 1                  Level 2            Level 3               Total
Continously measured by fair value
A. Financial assets held for trading                            2,661,103,876.68                        2,661,103,876.68

a. FATPLs                                                       2,661,103,876.68                        2,661,103,876.68

1. Debt instruments                                                                                                    -

2. Structural financial products                                2,457,565,232.32                        2,457,565,232.32

3. Investment in funds                                -          203,538,644.36                          203,538,644.36


B. FATOCIs                                                        54,542,418.50     545,204,103.42       599,746,521.92

a. Receivables held for factoring                     -                             545,204,103.42       545,204,103.42

b. Other equity investments                                       54,542,418.50                           54,542,418.50

Total                                                           2,715,646,295.18    545,204,103.42      3,260,850,398.60




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The fair value of financial instruments traded in an active market was based on quoted market
prices at the reporting date. The fair value of financial instruments not traded in an active market
was determined by using valuation techniques. Specific valuation techniques used to value the
above financial instruments include discounted cash flow and market approach to comparable
company model. Inputs in the valuation technique include risk-free interest rates, benchmark
interest rates, exchange rates, credit spreads, liquidity premiums, discount for lack of liquidity.
9.2 Qualitative and quantitative information of key inputs and valuation methods applicable to
Level 2 financial instruments continuously measured by fair value
     As of the statement date, the Company’s Level 3 financial instruments comprised mainly
investment in funds and structural financial products. The fair value of investment in funds was
determined by the valuation offered by the asset management companies. The fair value of
structural financial products were computed in accordance with the terms of the respective
contracts.
9.3 Qualitative and quantitative information of key inputs and valuation methods applicable to
Level 3 financial instruments continuously measured by fair value
As of the statement date, the Company’s Level 3 financial instruments comprised solely
pre-mature notes receivable. Issuers of the notes had healthy credit worthiness. The fair value of
these receivables as of the statement date was measured at the recoverable amount of these
receivables as of the statement date, which was computed using the respective discount rates
offered by banks for cashing.
Note 10 Related parties
An entity or individual is a related party to the Company if the entity or individual:
a. is controlled or jointly controlled by the Company;
b. over which the Company has significant influence;
c. controls or jointly controls the Company; or
d. is subject to the same control or joint control over the Company.
10.1 Controlling shareholder of the Company
                                                                               Shareholding in      Voting right in
                 Place of
                                  Nature of business     Registered capital     the Company          the Company
                registration
                                                                                    in %                 in %
                                    Production of
                                beverage, construction
GJ Group      Bozhou, Anhui                                    1,000 million               51.34                51.34
                                  materials, plastic
                                      products.

The Company’s ultimate controller is the State-owned Asset Management Commission of the

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People's Government of Baozhou, Anhui
10.2 Subsidiaries
See Note 7 for details.
10.3 Joint ventures and associates
See Note 7 for details.
10.4 Other related parties of the Company
                                                                               Relationship to the Company
                                                                         Controlled by the Company's controlling
Anhui Ruifuxiang Food Co., Ltd. (Ruifuxiang Food)
                                                                         shareholder or ultimate controller
                                                                         Controlled by the Company's controlling
Anhui Ruijing Catering Co., Ltd. (Ruijing Catering)
                                                                         shareholder or ultimate controller
                                                                         Controlled by the Company's controlling
Anhui Haochidian Catering Co., Ltd. (Haochidian Catering)
                                                                         shareholder or ultimate controller
                                                                         Controlled by the Company's controlling
Shanghai Beihai Hotel Co., Ltd. (Beihai Hotel)
                                                                         shareholder or ultimate controller
                                                                         Controlled by the Company's controlling
Anhui Ruijing Shanglv (Group) Co., Ltd. (RJSL Group)
                                                                         shareholder or ultimate controller
                                                                         Controlled by the Company's controlling
Bozhou Guest House Co., Ltd. (Bozhou Guest House)
                                                                         shareholder or ultimate controller
Dongfang Ruijing Enterprise Investment Co., Ltd.                         Controlled by the Company's controlling
(Dongfang Ruijing)                                                       shareholder or ultimate controller
                                                                         Controlled by the Company's controlling
Anhui Hengxin Pawnshop Co., Ltd. (Hengxin Pawnshop)
                                                                         shareholder or ultimate controller
Anhui Ruijing Shanglv (Group) Co., Ltd. Hefei Gujing Holiday Inn (RJSL   Controlled by the Company's controlling
Holiday Inn)                                                             shareholder or ultimate controller
Anhui Gujing Hotel Development Co., Ltd.                                 Controlled by the Company's controlling
(GJ Hotel Development)                                                   shareholder or ultimate controller
                                                                         Controlled by the Company's controlling
Anhui Ruixin Pawnshop Co., Ltd. (Ruixin Pawnshop)
                                                                         shareholder or ultimate controller
Anhui Zhongxin Financial Leasing Co., Ltd.                               Controlled by the Company's controlling
(Zhongxin Financial Leasing)                                             shareholder or ultimate controller
Anhui Huixin Financial Investment Group Co., Ltd.                        Controlled by the Company's controlling
(Huixin Financial Investment)                                            shareholder or ultimate controller
Hefei Longxin Corporate Management Advisory Co., Ltd. (Longxin           Controlled by the Company's controlling
Advisory)                                                                shareholder or ultimate controller
                                                                         Controlled by the Company's controlling
Bozhou Anxin Small Loan Co., Ltd. (Anxin Small Loan)
                                                                         shareholder or ultimate controller
Dazhongyuan Wine Valley Culture Travel Development Co., Ltd.             Controlled by the Company's controlling
(Dazhongyuan)                                                            shareholder or ultimate controller
                                                                         Controlled by the Company's controlling
Anhui Youxin Financing Guarantee Co, Ltd. (Youxin Guarantee)
                                                                         shareholder or ultimate controller
                                                                         Controlled by the Company's controlling
Anhui Lixin E-Commerce Co., Ltd. (Lixin E-Commerce)
                                                                         shareholder or ultimate controller
Bozhou Gujing Huuishenglou Catering Co., Ltd.                            Controlled by the Company's controlling


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                                                                                    Relationship to the Company
(GJ Huishenglou Catering)                                                   shareholder or ultimate controller

                                                                            Controlled by the Company's controlling
Anhui Gujing Health Industry Co., Ltd. (Health Industry)
                                                                            shareholder or ultimate controller
                                                                            Controlled by the Company's controlling
Anhui Lejiu Jiayuan Travel Management Co., Ltd. (Lejiu Jiayuan)
                                                                            shareholder or ultimate controller
                                                                            Controlled by the Company's controlling
Anhui Shenglong Trading Co., Ltd. (Longsheng Trading)
                                                                            shareholder or ultimate controller
Anhui Gujing International Development Co., Ltd.                            Controlled by the Company's controlling
(GJ International)                                                          shareholder or ultimate controller
Anhui Lvyuan Ecological Agriculture Development Co., Ltd. (Ecological       Controlled by the Company's controlling
Agriculture)                                                                shareholder or ultimate controller
Anhui Jiuan Construction Management Advisory Co., Ltd.                      Controlled by the Company's controlling
(Jiuan Advisory)                                                            shareholder or ultimate controller
Nanjing Suning Property Development Co., Ltd.                               Controlled by ZHANG Guiping,              the
(Suning Property Development)                                               non-executive director of the Company

10.5 Related party transactions
10.5.1 Goods and services
Purchase of goods and services
                   Related party                           Transaction          Y/e 31/12/2021      Y/e 31/12/2020
                                                    Purchase of materials
    Haochidian Catering                                                           16,752,135.81       22,586,183.13
                                                           and services
    GJ Group                                        Houses and buildings                        -      9,608,025.00
                                                   Receiving catering and
    Bozhou Guest House                                                             5,276,946.76        6,540,711.38
                                                        accommodation
                                                   Receiving catering and
    GJ Huishenglou Catering                                                        1,697,688.00        2,309,426.00
                                                        accommodation
                                                   Receiving catering and
    Haochidian Catering                                                            2,800,831.40        1,419,119.70
                                                        accommodation
                                                   Receiving catering and
    GJ Hotel Development                                                           1,195,369.24        1,124,539.94
                                                        accommodation
    RJSL Group                                      Purchase of materials             96,890.00          623,966.45
                                                   Receiving catering and
    RJSL Group                                                                       658,611.03           24,820.00
                                                        accommodation
                                                   Receiving catering and
    RJSL Holiday Inn                                                                 113,524.00          405,725.64
                                                        accommodation
                                                    Purchase of materials
    RJSL Holiday Inn                                                                 871,614.88          653,730.07
                                                           and services
                                                    Purchase of materials
    Dazhongyuan                                                                                 -        215,018.51
                                                           and services
                                                    Purchase of materials
    Health Industry                                                                             -        191,893.81
                                                           and services


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                    Related party                Transaction           Y/e 31/12/2021     Y/e 31/12/2020
    GJ International                          Receiving services                    -         103,773.58
    Lejiu Jiayuan                           Purchase of materials                   -          99,546.43
    GJ Group                                Purchase of materials                   -          56,952.00
    Youxin Guarantee                          Receiving services            49,504.95          47,169.81
    Ruifuxiang Food                         Purchase of materials                   -          31,130.76
                                            Purchase of materials
    Ecological Agriculture                                                          -          19,562.48
                                                and services
                                            Purchase of materials
    GJ Hotel Development                                                     2,735.85           3,413.21
                                                and services
    Haochidian Catering                      Purchase of assets            135,398.23                   -
    Jiuan Advisory                         Advisory and assurance        3,427,517.43                   -
                        Total                        ——               33,078,767.58      46,064,707.90

Sales of goods and rendering of services
                 Related party                   Transaction             Y/e 31/12/2021      Y/e 31/12/2020
Longsheng Trading                           Sales of distilled wine         1,506,569.89         1,456,440.72
RJSL Group                                  Sales of distilled wine         1,125,056.17          649,884.96
GJ Hotel Development                         Provision of utilities           290,336.98                      -
                                           Provision of catering and
GJ Group                                                                      279,597.00          184,013.00
                                               accommodation
GJ Group                                   Sales of small materials           223,523.11            94,174.07
GJ Hotel Development                        Sales of distilled wine           146,484.95          122,893.76
                                           Provision of catering and
RJSL Group                                                                    121,295.14            70,217.96
                                               accommodation
RJSL Holiday Inn                            Sales of distilled wine            81,451.34            30,265.48
Bozhou Guest House                          Sales of distilled wine            55,274.34            74,628.33
Huixin Financial Investment                 Sales of distilled wine            38,500.88            39,836.29
GJ Huishenglou Catering                     Sales of distilled wine            30,106.20            77,893.81
Anxin Small Loan                            Sales of distilled wine            19,656.64            15,330.09
Haochidian Catering                         Sales of distilled wine            19,115.04            71,283.20
Zhongxin Financial Leasing                  Sales of distilled wine            11,572.57            14,939.82
Hengxin Pawnshop                            Sales of distilled wine            11,405.32            11,207.09
Jiuan Advisory                              Sales of distilled wine             8,968.14                      -
Beihai Hotel                                Sales of distilled wine             8,601.77            17,203.54
Lejiu Jiayuan                               Sales of distilled wine             8,235.39             8,261.95
                                           Provision of catering and
Longsheng Trading                                                               7,084.00            14,470.00
                                               accommodation
Lejiu Jiayuan                                Provision of utilities             6,545.75            56,413.97

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                   Related party                         Transaction              Y/e 31/12/2021        Y/e 31/12/2020
Ruixin Pawnshop                                    Sales of distilled wine                   6,443.36              6,614.16
Youxin Guarantee                                   Sales of distilled wine                   3,082.30              4,983.18
Haochidian Catering                                 Provision of services                    2,547.17                     -
Bozhou Guest House                                  Provision of services                     707.55                      -
                                                  Provision of catering and
Jiuan Advisory                                                                               2,230.00                     -
                                                      accommodation
Longxin Advisory                                   Sales of distilled wine                   1,194.69                     -
Jiuan Advisory                                    Sales of small materials                    778.68                      -
GJ International                                   Sales of distilled wine                          -       1,649,076.57
Health Industry                                     Provision of services                           -            232,430.19
Bozhou Ruineng Thermal Electricity Co., Ltd.       Sales of distilled wine                          -             74,150.45
Dazhongyuan                                        Sales of distilled wine                          -             44,674.42
Lejiu Jiayuan                                       Provision of services                           -              7,620.00
Lixin E-Commerce                                   Sales of distilled wine                          -              7,461.93
GJ International                                  Sales of small materials                          -              5,437.89
Dazhongyuan                                         Provision of services                           -              2,889.91
                                                  Provision of catering and
GJ International                                                                                    -              2,820.00
                                                      accommodation
Dazhongyuan                                       Sales of small materials                          -              2,631.13
Health Industry                                   Sales of small materials                          -              1,314.60
                                                  Provision of catering and
Health Industry                                                                                     -              1,250.00
                                                      accommodation
                                                  Provision of catering and
Dazhongyuan                                                                                         -               420.00
                                                      accommodation
Health Industry                                    Sales of distilled wine              -797,129.56         5,254,234.43
                       Total                                 ——                      3,219,234.81        10,307,366.90

10.5.2 Leases
The Company as the Lessor
                                                                       Rental income             Rental income
                      Lessee                   Leased item
                                                                    Y/e 31/12/2021               Y/e 31/12/2020
    GJ Hotel Development                 Houses and buildings                 1,379,517.44                670,730.21

                       Total                      ——                        1,379,517.44                670,730.21

The Company as the Lessee
                                                                        Rental cost                Rental cost
                      Lessor                   Leased item
                                                                    Y/e 31/12/2021               Y/e 31/12/2020
    GJ Group                             Houses and buildings                 1,197,761.12              1,850,265.66

    Suning Property Development          Houses and buildings                 2,050,000.00              1,583,333.32


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                       Total                                                        3,247,761.12              3,433,598.98

10.5.3 Key management remuneration
                                                         Y/e 31/12/2021                        Y/e 31/12/2020
     Key management remuneration                                       18.53 million                         14.18 million

10.6 Related party balances - Liabilities
                                       Related party                           31/12/2021                    31/12/2020
Contract liabilities    Health Industry                                                617,959.73                   658,339.50
Contract liabilities    RJSL Group                                                          92.04                   342,484.96
Contract liabilities    GJ International                                               164,675.75                   186,083.60
Contract liabilities    GJ Huishenglou Catering                                                                      15,300.00
Accounts payable        GJ Group                                                                                  4,804,012.50
Accounts payable        Haochidian Catering                                                                       2,479,131.69
Other payables          GJ Group                                                                                  1,050,004.75
Other payables          RJSL Group                                                     115,533.60                   114,660.00

Other payables          GJ Hotel Development                                            50,000.00                   100,000.00

Note 11 Commitments and contingencies
11.1 Significant commitments
In accordance with the agreement entered into by the Company, Wuhan Tianlong Investment
Group Co., Ltd, and YAN Hongye on the transfer of the shareholding in HHL Distillery, the Company
made a commitment for the tax inclusive revenue performance of HHL Distillery as follow:
                                   2017                  2018                2019                  2020              2021
Committed                          805.00              1,006.25             1,308.13           1,700.56            2,040.68
tax inclusive revenue              million             million               million               million          million

The Company also committed that in the five consecutive years following the year in which the
ownership transaction is completed, the net profit ratio of HHL Distillery for each year shall not be
less than 11.00%. If in any of the 5 consecutive year, the audited net profit ratio of HHL Distillery is
less than 11.00%, the Company shall compensate the sellers the difference between the
committed net profit and the actual net profit. If the audited net profit ratio for any 2 consecutive
years with the 5-year period is lower than 11.00%, the sellers are entitled to repurchase all
shareholding sold to the Company at the repurchase price of CNY 816.00 million.
The operating performance of HHL Distillery for 2020, as reported by its financial statements for
that period, is presented as below:
                                                                                                              % of Committed
                                          Actual                 Commited                Difference
                                                                                                               performance
Revenue (tax inclusive)                 583.13 million           1,700.56 million      -1,117.43 million          34.29%



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Net profit                               -11.72 million          165.54 million       -177.26 million             Loss
Net profit ratio                                -2.27%                   11.00%              -13.27%              Loss

The operation of HHL Distillery was significant impacted by the COVID-19 pandemic. Upon mutual
negotiation, the performance commitment was altered with 2020 excluded from the performance
assessment period.
1) Committed before tax revenue for the assessment period
                               2017                2018              2019          2020             2021             2022
Committed                      805.00             1,006.25        1,308.13                         1,700.56         2,040.68
                                                                                  Excluded
tax inclusive revenue          million            million            million                       million           million

2) The committed net profit ratio, net profit and estimated profit available for distribution as
agreed by the orginal agreement for 2020 and 2021 become applicable for 2021 and 2022
respectively.
3) No party to the agreement shall have the right to demand reimbursement, compensation or
other liabilities to any other party to the agreement on the basis of the performance of HHL
Distillery for 2020.
The operating performance of HHL Distillery for 2021, as reported by its financial statements for
that period, is presented as below:
                                                                                                             % of Committed
                                         Actual                 Commited              Difference
                                                                                                              performance

Revenue (tax inclusive)            1,707.01 million            1,700.56 million           6.45 million                100.38%

Net profit                            171.06 million             165.54 million           5.52 million                103.33%

Net profit ratio                               11.32%                    11.00%                0.32%                  102.91%

11.2 Contingencies
No contingency as of the statement date was required for disclosure.
Note 12 Subsequent events
Except for the matters described in Note 11, as of the date of these financial statements, no
subsequent event is required for disclosure.
Note 13 Other significant matters – Segment reporting
In accordance with the Company’s internal management and reporting structure, segment
reporting is not applicable.
Note 14 Notes to the separate financial statements of the Company
14.1 Accounts receivable
14.1.1 Disclosure by age group
                   Age group                                31/12/2021                         31/12/2020

    Within 1 year                                                                                              494,976.27


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                  Age group                           31/12/2021                             31/12/2020

   T/o: Within 6 months                                                                                    494,976.27

   T/o: 7 months to 1 years                                                                                          -

   1 to 2 years                                                                                                      -

   2 to 3 years                                                                                                      -

   Over 3 years                                                                                                      -

                    Gross                                                                                  494,976.27

   Less: Impairment allowance                                                                                     0.00

                      Net                                                                                  494,976.27

14.1.2 Dislcosure by method of impairment
                                                                    31/12/2021
                                             Gross                   Impairment allowance
                                                                                                          Net
                                    Amount            % of total    Amount       Impairment %
   Individual assessment                          -             -            -                 -                     -
   Portfolio assessment                           -             -            -                 -                     -
   T/o: Group 1                                   -             -            -                 -                     -
   T/o: Group 2                                   -             -            -                 -                     -
              Total                               -             -            -                 -                     -

(Continued)
                                                                    31/12/2020
                                             Gross                   Impairment allowance
                                                                                                          Net
                                    Amount            % of total    Amount       Impairment %
   Individual assessment                          -             -            -                 -                     -
   Portfolio assessment                  494,976.27      100.00              -                 -          494,976.27
   T/o: Group 1                          494,976.27      100.00              -                 -          494,976.27
   T/o: Group 2                                   -             -            -                 -                     -
              Total                      494,976.27      100.00              -                 -          494,976.27

Group 1 Receivables as of 31 December 2020
                                                                        31/12/2020
                                                 Gross              Impairment allowance           Impairment %
   Related parties within the scope of
                                                      494,976.27                         -                           -
   consolidation
                    Total                             494,976.27                         -                           -

Group 2 Receivables had no balance as of 31 December 2020.
14.1.3 Impairment movement for the period was not applicable for accounts receivable.
14.1.4 No account receivable as of the statement date.

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14.2 Other receivables
14.2.1 General disclosure
                                               31/12/2021                          31/12/2020
   Interests receivable                                                                                  -
   Dividends receivable                                                                                  -
   Other receivables                                 290,480,736.49                      141,378,010.40
                    Total                            290,480,736.49                      141,378,010.40

14.2.2 Other receivables
(1) Disclosure by age group
                  Age group                    31/12/2021                          31/12/2020
   Within 1 year                                     289,632,069.08                      140,143,887.64
   T/o: Within 6 months                              289,213,314.37                      139,805,782.01
   T/o: 7 months to 1 years                                 418,754.71                          338,105.63
   1 to 2 years                                             763,921.03                     1,322,306.20
   2 to 3 years                                             797,227.20                          244,089.00
   Over 3 years                                          39,383,584.88                    41,333,188.41
                    Gross                            330,576,802.19                      183,043,471.25
   Less: Impairment allowance                            40,096,065.70                    41,665,460.85
                      Net                            290,480,736.49                      141,378,010.40

(2) Disclosure by nature
                                               31/12/2021                          31/12/2020
   Due from related party within the
                                                     267,559,576.83                      133,696,578.89
   scope of consolidation
   Security investments                                  38,857,584.88                    40,807,394.41
   Margin deposits                                        3,330,794.09                     1,879,230.29
   Rentals and utilities receivable                         472,547.89                     1,275,238.93
   Others                                                20,356,298.50                     5,385,028.73
                    Total                            330,576,802.19                      183,043,471.25

(3) Disclosure by method of impairment
A. Disclosure by the 3-stage m odel as of the statement date
                                       Gross              Impairment allowance             Net
   Stage 1                              291,719,217.31              1,238,480.82         290,480,736.49
   Stage 2                                                                                               -
   Stage 3                               38,857,584.88            38,857,584.88                          -
              Total                     330,576,802.19            40,096,065.70          290,480,736.49

Details of Stage 1 receivables as of the statement date

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                                                     Expected loss rate for
                                                                                     Impairment
                                       Gross          the next 12 months                                    Net
                                                                                     allowance
                                                                in %
    Individual assessment
    Portfolio assessment            291,719,217.31                         0.42       1,238,480.82      290,480,736.49
    T/o: Group 1                    267,559,576.83                            -                         267,559,576.83
    T/o: Group 2                     24,159,640.48                         5.13       1,238,480.82       22,921,159.66
                  Total             291,719,217.31                         0.42       1,238,480.82      290,480,736.49

Details of Group 2 receivables as of the statement date
                                                                        31/12/2021
         Age group
                                          Gross                   Impairment allowance                  Impairment %
Within 1 year                                  22,072,492.25                        237,475.12                               1.08
T/o: Within 6 months                           21,653,737.54                        216,537.38                               1.00
T/o: 7 months to 1 years                          418,754.71                         20,937.74                               5.00
1 to 2 years                                      763,921.03                         76,392.10                           10.00
2 to 3 years                                      797,227.20                        398,613.60                           50.00
Over 3 years                                      526,000.00                        526,000.00                          100.00
               Total                           24,159,640.48                      1,238,480.82                               5.13

Details of Stage 3 receivables as of the statement date
                                                     Expected loss rate for
                                                                                     Impairment
                                       Gross          the next 12 months                                    Net
                                                                                     allowance
                                                                in %
    Individual assessment            38,857,584.88                     100.00        38,857,584.88                       -
    Portfolio assessment
    T/o: Group 1
    T/o: Group 2
                  Total              38,857,584.88                     100.00        38,857,584.88                       -

Details of receivables subject to individual assessment as of the statement date
                                                                       31/12/2021
                                                           Impairment                                    Reason for
                                          Gross                                     Impairment %
                                                               allowance                                 impairment
    Hengxin Securities Co., Ltd.        28,966,894.41          28,966,894.41                   100.00   In bankruptcy
    Jianqiao Securities Co., Ltd.        9,890,690.47           9,890,690.47                   100.00   In bankruptcy
                   Total                38,857,584.88          38,857,584.88                   100.00

B. Disclosure by the 3-stage model as of 31 December 2020
                                           Gross                 Impairment allowance                    Net
    Stage 1                                142,236,076.84                         858,066.44            141,378,010.40
    Stage 2                                               -                                -                             -

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                                          Gross                   Impairment allowance                    Net
   Stage 3                                    40,807,394.41                40,807,394.41                                 -
               Total                      183,043,471.25                   41,665,460.85                 141,378,010.40

Details of Stage 1 receivables as of 31 December 2020
                                                      Expected loss rate for
                                                                                   Impairment
                                      Gross           the next 12 months                                     Net
                                                                                    allowance
                                                               in %
   Individual assessment                          -                          -                    -                      -
   Portfolio assessment            142,236,076.84                         0.60        858,066.44         141,378,010.40
   T/o: Group 1                    133,696,578.89                            -                    -      133,696,578.89
   T/o: Group 2                      8,539,497.95                      10.05          858,066.44           7,681,431.51
               Total               142,236,076.84                         0.60        858,066.44         141,378,010.40

Details of Group 2 receivables as of 31 December 2020
                                                                      31/12/2020
             Age group
                                          Gross                   Impairment allowance                Impairment %
   Within 1 year                               6,447,308.75                       77,997.31                           1.21
   T/o: Within 6 months                        6,109,203.12                       61,092.03                           1.00
   T/o: 7 months to 1 years                      338,105.63                       16,905.28                           5.00
   1 to 2 years                                1,322,306.20                      132,230.63                          10.00
   2 to 3 years                                  244,089.00                      122,044.50                          50.00
   Over 3 years                                  525,794.00                      525,794.00                        100.00
               Total                           8,539,497.95                      858,066.44                          10.05

Details of Stage 3 receivables as of 31 December 2020
                                                      Expected loss rate for
                                                                                   Impairment
                                      Gross           the next 12 months                                     Net
                                                                                    allowance
                                                               in %
   Individual assessment            40,807,394.41                     100.00        40,807,394.41                     0.00
   Portfolio assessment                           -                          -                    -                      -
   T/o: Group 1                                   -                          -                    -                      -
   T/o: Group 2                                   -                          -                    -                      -
               Total                40,807,394.41                     100.00        40,807,394.41                     0.00

Details of receivables subject to individual assessment as of 31 December 2020
                                                                       31/12/2020
                                                            Impairment                                    Reason for
                                         Gross                                    Impairment %
                                                              allowance                                   impairment
   Hengxin Securities Co., Ltd.        28,966,894.41          28,966,894.41                   100.00     In bankruptcy
   Jianqiao Securities Co., Ltd.       11,840,500.00          11,840,500.00                   100.00     In bankruptcy
                  Total                40,807,394.41          40,807,394.41                   100.00                     -

(4) Movement of impairment allowance

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                                                                                  Movement
                                        31/12/2020                               Reversal or        Release or         31/12/2021
                                                                Provision
                                                                                  recovery           write-off
     Individual assessment               40,807,394.41                           1,949,809.53                          38,857,584.88

     Portfolio assessment                   858,066.44 380,414.38                                                       1,238,480.82

                Total                    41,665,460.85 380,414.38 1,949,809.53                                         40,096,065.70

(5) Top-five other receivables as of the statement date
                                                                                                    % of total gross        Impairment
    Debtor                  Nature                       31/12/2021               Age group
                                                                                                   other receivables            allowance
                   Due from related party
                                                                                      Within 6
Top 1               within the scope of                   97,207,352.12                                   29.41                               -
                                                                                      months
                        consolidation
                   Due from related party
                                                                                      Within 6
Top 2               within the scope of                   90,000,000.00                                   27.23                               -
                                                                                      months
                        consolidation
                   Due from related party
                                                                                      Within 6
Top 3               within the scope of                   78,961,561.36                                   23.89                               -
                                                                                      months
                        consolidation
                                                                                      Over 3
Top 4               Security investment                   28,966,894.41                                   8.76              28,966,894.41
                                                                                       years
                                                                                      Within 6
Top 5                        Other                        18,255,567.00                                   5.52                    182,555.67
                                                                                      months
     Total                                               313,391,374.89                                   94.81             29,149,450.08

14.3 Long-term equity investments
14.3.1 General disclosure
                                        31/12/2021                                                       31/12/2020
                                        Impairment                                                       Impairment
                        Gross                             Impairment %                   Gross                              Impairment %
                                        allowance                                                         allowance
Investment in
                   1,547,415,641.38                  -        1,547,415,641.38        1,118,213,665.32                  -       1,118,213,665.32
subsidiaries
     Total         1,547,415,641.38                  -        1,547,415,641.38        1,118,213,665.32                  -       1,118,213,665.32

14.3.2 Investment in subsidiaries
                                                                                                                                 Cumulative
                                                                                                               Impairment
                                                                                                                                 impairment
  Subsidiary       31/12/2020             Increase                Decrease                31/12/2021           recognised
                                                                                                                                     as of
                                                                                                               in the period
                                                                                                                                 31/12/2021
GJ Sales                68,949,286.89                     -                       -            68,949,286.89                -                  -
Longrui Glass           85,267,453.06                                             -            85,267,453.06                -                  -
Jinhao Hotel            49,906,854.63                     -                       -            49,906,854.63                -                  -


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                                                                                                                      Cumulative
                                                                                                     Impairment
                                                                                                                      impairment
  Subsidiary           31/12/2020          Increase              Decrease        31/12/2021          recognised
                                                                                                                          as of
                                                                                                     in the period
                                                                                                                      31/12/2021
GJ Guest
                             648,646.80                    -                 -         648,646.80                 -                -
House

Ruisi Weier               40,000,000.00                    -                 -       40,000,000.00                -                -

YQ
Environment               16,000,000.00                    -                 -       16,000,000.00

Protection
GJ
                           5,000,000.00                    -                 -        5,000,000.00                -                -
E-Commerce
Zhenrui
                          10,000,000.00                    -     10,000,000.00                   -                -                -
Construction
HHL Distillery           816,000,000.00                    -                 -      816,000,000.00                -                -

Jinyunlai                 15,000,000.00                    -                 -       15,000,000.00                -                -
Waste
                           1,441,423.94                    -      1,441,423.94                   -                -                -
Recycle

Runan Xinke               10,000,000.00                    -                 -       10,000,000.00                -                -
Jiuan Electric                                 10,000,000.00                 -       10,000,000.00                -                -

Mingguang
                                           200,200,000.00                           200,200,000.00
Distillery

Treasure
                                           224,723,400.00                           224,723,400.00
Distillery
Jiuhao
                                                5,720,000.00                          5,720,000.00
ChinaRail
     Total              1,118,213,665.32   440,643,400.00        11,441,423.94    1,547,415,641.38                -                -

14.4 Revenue and cost of sales
                                           Y/e 31/12/2021                                  Y/e 31/12/2020
                                     Revenue               Cost of sales           Revenue                Cost of sales
     Primary operation            6,756,444,863.19        2,623,827,961.16       5,806,187,227.99        2,359,384,925.04
     Other operation                105,482,310.37             61,315,130.77       73,180,067.75             45,385,582.08
               Total              6,861,927,173.56        2,685,143,091.93       5,879,367,295.74        2,404,770,507.12

14.5 Investment income
                                                                                  Y/e 31/12/2021             Y/e 31/12/2020
Investment income from long-term equity investments at cost                          737,875,260.92               707,487,107.56
Gain from disposal of long-term equity investments                                      2,670,112.66
Gain from disposal of FVTPLs                                                            8,072,295.21                               -


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                                                                                    Y/e 31/12/2021             Y/e 31/12/2020
Gain from holding of debt instruments                                                                                              -
Gain from holding of other debt like investments                                                                                   -
Gain from disposal of FVTOCIs                                                           -22,496,045.46             -34,762,044.63
Gain from holding of financial assets held for trading                                   14,393,316.21              30,570,930.80

Others                                                                                     410,450.22                              -
                                    Total                                              740,925,389.76              703,295,993.73

Note 15 Supplementary information
15.1 Non-recurring gain or loss
                                                                               Y/e 31/12/2021        Y/e 31/12/2020        Note
Gain or loss from disposal of non-current assets                                    -5,976,856.98        -3,692,640.09
Government grants included in current profit or loss (excluding
government grants closely associated with the Company’s operation                  55,274,502.42      48,617,479.37
and granted in accordance with national standard quota or quantity
Gain or loss from changes in fair value of financial assets held for
trading, derivative financial assets, financial liabilities held for trading
and derivative financial liabilities and gain from disposal of financial
assets held for trading, derivative financial assets, financial liabilities         34,792,433.45      21,490,043.05
held for trading, derivative financial liabilities and other debt-like
investments, excluding instruments held for effective hedging
associated with the Company’s operation
Reversal of impairment allowance for accounts receivable previously
                                                                                     1,949,809.53              43,554.94
recognised upon individual assessment
Non-operating income and non-operating expenses not included in
                                                                                    77,025,619.76      44,100,616.61
above categories
Other items falling into the definition of non-recurring gain or loss                                                  -
Total non-recurring gain or loss                                                   163,065,508.18     110,559,053.88
Less: Impact on income tax                                                          40,243,159.73      27,033,395.22
Total non-recurring gain or loss (net of income tax)                                11,167,403.88        1,960,716.42
T/o: Attributable to non-controlling interests                                     111,654,944.57      81,564,942.24

15.2 Return on net assets (RONA) and earnings per share (EPS)
15.2.1 Year ened 31 December 2021
                                                         Weighted average                                EPS
                     Net profit
                                                              RONA in %                  Basic EPS                Diluted EPS
Net profit attributable to shareholders of the
                                                                           21.25                     4.45                       4.45
Company
Net profit post adjustment for non-recurring
gain or loss attributable to shareholders of the                           20.22                     4.24                       4.24
Company


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15.2.2 Year ened 31 December 2020
                                                   Weighted average                     EPS
                    Net profit
                                                      RONA in %           Basic EPS              Diluted EPS
Net profit attributable to shareholders of the
                                                                  19.53               3.68                     3.68
Company
Net profit post adjustment for non-recurring
gain or loss attributable to shareholders of the                  18.68               3.52                     3.52
Company




                                                               Anhui Gujing Distillery Company Limited
                                                                                                29 April 2022


                                                   Chairman of the Board:

                                                                                             (Liang Jinhui)

                                                   Anhui Gujing Distillery Company Limited

                                                                               29 April 2022




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