Yantai Changyu Pioneer Wine Co., Ltd. 2019 Semi-annual Report
Yantai Changyu Pioneer Wine Co., Ltd.
2019 Semi-annual Report
Final 2019-03
August, 2019
1
Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
Contents
2019 Semi-annual Report.................................................................................................................. 1
I. Important Notice, Contents and Definition..................................................................................3
II. Brief Introduction for the Company and Main Financial Indicators .................................... 5
III. Summary of the Company’s Businesses .................................................................................. 9
IV. Management Discussion and Analysis ................................................................................... 12
V. Major issues ............................................................................................................................... 26
VI. Changes in Shares and the Shareholders’ Situation .............................................................39
VII. Related Situation of Preferred Shares ..................................................................................44
VIII. Situation for Directors, Supervisors, Senior Executives..................................................... 45
IX. Related Situation of Corporation Bonds ................................................................................47
X. Financial Report.......................................................................................................................... 47
XI. Reference Documents.............................................................................................................. 162
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Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
I. Important Notice, Contents and Definition
The board of directors, the board of supervisors, directors, supervisors and senior executives
of the Company guarantee the truthfulness, accuracy and completeness of the contents
contained in semi-annual report with no false records, misleading statements or significant
omissions, and undertake individual and joint legal liabilities.
Mr. Zhou Hongjiang (Person in charge of the Company) and Mr. Jiang Jianxun (Person in
charge of accounting work as well as Person in charge of accounting organ & account in
charge) assure the truthfulness, accuracy and completeness of the financial report in the
semi-annual report.
No directors, supervisors or senior executives issue a statement of objection to 2019
semi-annual report.
Except following director, other directors have personally attended the meeting for
deliberating the semi-annual report.
Name of director not Position of director Reason of not
attending the meeting not attending the attending the meeting Name of entrustee
personally meeting personally personally
Duan Changqing Independent director On a business trip Wang Zhuquan
Regarding major risks that the Company may face during the production and management
process, please refer to “10. Risks faced with by the Company and response measures” in “IV
Management Discussion and Analysis” in this report. Investors are suggested to read
carefully and pay attention to investment risks.
The Company has no plan to distribute cash dividends and bonus shares and capital reserve
will not be transferred to equity.
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Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
Definition
Definition Item Refers to Definition Content
Company/this Company Refers to Yantai Changyu Pioneer Wine Co., Ltd.
Changyu Group/Controlling Refers to
Yantai Changyu Group Co., Ltd.
Shareholder
CSRC Refers to China Securities Regulatory Commission
SSE Refers to Shenzhen Stock Exchange
Refers to Deloitte Hua Yong Certified Public Accountants
Deloitte Hua Yong
Co., LTD (special general partnership)
CNY Refers to Chinese Yuan
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Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
II、Brief Introduction for the Company and Main Financial Indicators
1. Company’s information
Abbreviation of the Shares: Changyu A、Changyu B Code number of the Shares 000869、200869
Abbreviation of the Shares
-
after alteration
Place of listing of the Shares Shenzhen Stock Exchange
Legal Name in Chinese 烟台张裕葡萄酿酒股份有限公司
Abbreviation of Chinese name 张裕
Legal Name in English YANTAI CHANGYU PIONEER WINE COMPANY LIMITED
Abbreviation of English name CHANGYU
Legal Representative Mr. Zhou Hongjiang
2. Contact person and information
Authorized Representative of the Securities
Secretary of Board of Directors
Affairs
Name Mr. Jiang Jianxun Mr. Li Tingguo
Address 56 Dama Road, Yantai, Shandong, China 56 Dama Road, Yantai, Shandong, China
Tel 0086-535-6602761 0086-535-6633656
Fax 0086-535-6633639 0086-535-6633639
E-mail jiangjianxun@changyu.com.cn stock@changyu.com.cn
3. Other information
1) The Company’s contact information
Whether there is any change in the Company’s registered address, office address, post code, website
and e-mail address during the report period.
□Available Not available
There is no change in the Company’s office address, post code, website and e-mail address during
the report period. For detailed information, please refer to 2018 annual report.
2) Information disclosure and file location
Whether there is any change in the information disclosure and file location during the report period.
□Available Not available
There is no change in the name of newspapers in which the Company’s information is disclosed, the
website assigned by CSRC to carry the semi-annual report and the location of the Company’s
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Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
semi-annual report during the report period. For detailed information, please refer to 2018 annual
report.
4. Key accounting data and financial indicators
Whether the Company makes retroactive adjustments or restates the accounting data of previous
fiscal years.
□Yes No
In the same period of last More or less than last
During the report period
year year (%)
Business revenue (CNY) 2,558,274,785 2,828,230,064 -9.55%
Net profit attributed to the
shareholders of the listed 603,403,789 635,837,405 -5.10%
company (CNY)
Net profit attributed to the
shareholders of the listed
company after deducting the 552,490,695 606,678,719 -8.93%
irregular profit and loss
(CNY)
Net cash flows from the
499,476,006 552,753,472 -9.64%
operating activities (CNY)
Basic earnings per share
0.88 0.93 -5.38%
(CNY/share)
Diluted earnings per share
0.88 0.93 -5.38%
(CNY/share)
Weighted average for earning
6.13% 6.89% -0.76%
rate of the net assets
The end of this report More or less than last
The end of last year
period year (%)
Total assets (CNY) 13,383,093,433 13,117,729,052 2.02%
Net Assets attributed to the
shareholders of the listed 9,791,885,091 9,606,099,365 1.93%
company (CNY)
5. Differences in accounting data under PRC accounting standards and international
accounting standards
1) Differences of net profit and net asset in the financial report disclosed according to both
international accounting standards and PRC accounting standards
Available Not available
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Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
Unit：CNY
Net profit attributed to the Net Assets attributed to the shareholders
shareholders of the listed company of the listed company
Current period Last period End of period Beginning of period
According to PRC
accounting 603,403,789 635,837,405 9,791,885,091 9,606,099,365
standards
Item and amount adjusted according to international accounting standards
According to
international
603,403,789 635,837,405 9,791,885,091 9,606,099,365
accounting
standards
2) Differences of net profit and net asset in the financial report disclosed according to both
foreign accounting standards and PRC accounting standards
□Available Not available
There are no differences of net profit and net asset in the financial report disclosed according to
both foreign accounting standards and PRC accounting standards during the report period.
3) Explanation of the differences in accounting data under domestic and overseas accounting
standards
□Available Not available
6. Item and amount of irregular profit and loss
Available □Not available
Unit：CNY
Amount Explanation
Profit and loss on disposal of non-current assets (including the offset
1,138
of provision for impairment of assets)
Government grants credited in current profit and loss (except for
government grants that are closely related to the entity's business
64,211,892
and are enjoyed with a quota or with a limited quantity in
accordance with national uniform standard
Other non-operating income and expenditure besides
3,411,864
above-mentioned items
Less: Amount affected by income tax 16,671,778
Amount affected by minority equity (after tax) 40,022
Total 50,913,094 -
The reasons shall be made clear and definitely as to the irregular profit and loss that the Company
has defined by virtue of the Explanatory Notice on Public Company’s Information Disclosure No.1
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Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
- Irregular Profit and Loss and as to regarding the irregular profit and loss as recurrent profit and
loss as specified in the Explanatory Notice on Public Company’s Information Disclosure No.1 -
Irregular Profit and Loss.
□Available Not available
There is no situation that the irregular profit and loss is defined and specified as recurrent profit and
loss in accordance with the Explanatory Notice on Public Company’s Information Disclosure No.1 -
Irregular Profit and Loss during the report period.
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Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
III. Summary of the Company’s Businesses
1. Main businesses during the report period
Whether the Company needs to follow the disclosure requirement of special business
No.
During the report period, the Company’s main business is to produce and operate wine and brandy, thus providing the domestic and foreign
consumers with healthy and fashionable alcoholic drinks. Compared with earlier stage, there are no major changes in the Company’s main
businesses. Although there is a certain fluctuation and exists downward pressure in the domestic wine market at present in short term, seen in the
long term, the Chinese wine industry is generally in the growth stage and still remain the rising trend. The Company takes the dominant position
in the domestic wine market.
2. Major changes of main assets
1) Major changes of main assets
Main assets Explanation of major changes
Equity asset No major change
Fixed asset No major change
Intangible asset No major change
Construction in process No major change
2) Main overseas assets condition
Available □Not available
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Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
Proportion of
Control measures for Whether there are
Details of Formation Operating Earning overseas assets in
Assets scale Location safeguarding asset major impairment
assets reason mode position the Company’s net
security risks
assets
This Company
participates in making
Hacienda Y
important decisions
Vinedos Acquisition Independent
500,554,860 Spain through board of 1,859,381 4.97% No
Marques Del of equity operation
directors and appoints
Atrio, SL
CFO for financial
management
This Company
participates in making
Indomita Wine Establishmen important decisions
Independent
Company t by joint 505,803,310 Chile through board of 3,762,504 5.02% No
operation
Chile, SpA venture directors and appoints
CFO for financial
management
This Company directly
Francs Establishmen
appoints senior
Champs t by sole Independent
229,246,260 France executive to conduct 36,704 2.28% No
Participations proprietorshi operation
operation and
SAS p
management
This Company
participates in making
Kilikanoon Acquisition Independent
147,071,845 Australia important decisions -1,509,147 1.46% No
Estate Pty Ltd of equity operation
through board of
directors
Other
During the report period, Kilikanoon Estate Pty Ltd realized the net profit of CNY550thousand for its own production and management, but
condition
after conducting the amortization of premium at the time of acquisition in accordance with accounting policy, the loss was CNY1.5million.
explanation
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Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
3. Analysis of core competitiveness
Whether the Company needs to follow the disclosure requirement of special business?
No.
In the competition pattern of Chinese wine industry, compared with other participants in the
industry, we believe that the Company has following advantages:
Firstly, the Company has a well-known wine brand with more than 120 years of history, “Changyu”,
“Noble Dragon” and “AFIP” are Chinese famous trademarks that have strong influence and good
reputation.
Secondly, the Company has set up a nationwide marketing network. The Company forms a
“three-level” marketing network system mainly composed of two teams containing the Company’s
marketing personnel and distributors, possessing a strong marketing ability and market exploitation
ability.
Thirdly, the Company owns strong scientific prowess and a product R&D system. Relying on the
sole “National-level Wine R&D Center”, the Company grasps advanced winemaking technology
and production processes and has fairly strong product innovation capacity and perfect quality
control system.
Fourthly, the Company is in possession of grape bases that could meet the requirements of
development. The scale and the structure of grape bases locating in regions that are the most
suitable for growing wine-making grapes in China, such as Shandong, Ningxia, Xinjiang, Liaoning,
Hebei and Shaanxi, have basically met the Company’s demands for development.
Fifthly, the Company has a complete high-end, medium-end and low-end products as well as
varieties and categories. More than 100 varieties of wine, brandy, sparkling wine etc., covering
high-end, medium-end and low-end grades, can meet the needs of different consumer groups. After
more than 10 years of rapid development, the Company has occupied the leading position in the
domestic wine industry, which has certain comparative advantages in the future competition.
Sixthly, the Company has a relatively perfect incentive mechanism. Most of Company’s employees
indirectly hold the Company’s equity through controlling shareholders. There are high consistency
between employee benefits and shareholder benefits, in favor of better motivating employees to
create value for shareholders.
Seventhly, the Company has established a flexible and efficient decision-making mechanism. The
core management of the Company has been maintaining a united and pragmatic work style and
flexible and efficient decision-making mechanism, enabling the Company to more unhurriedly
respond to market changes.
Eighthly, the Company has basically completed the layout of global production capacity. The
Company has completed the production capacity layout in the worldwide main wine-producing
countries, such as China, France, Chile, Spain and Australia and so on, and can make better use of
global high-quality raw material resources, capital, talents and advanced production techniques and
technologies to provide consumers with diversified high quality products.
Based on above reasons, the Company has formed strong core competitiveness and will maintain
this comparative advantage in the foreseeable market competition in the future.
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Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
IV. Management Discussion and Analysis
1. Summarization
During the report period, influenced by the slowdown of domestic economic growth, the overall
demand of domestic wine industry was relatively weak. Both domestic and imported wine had
experienced decline at varying degrees in sales volume and sales revenue. The competition in
domestic wine market, especially for middle-and-low-level wines, was very fierce. Due to
continuously influences such as increase in the prices of raw materials and packaging materials,
depreciation of fixed assets and increase in freight and labor costs, the Company’s profitability was
under greater pressure. Facing quite a lot of unfavorable factors, the Company insisted in taking the
market as the center, insisted the development strategy of “Focus on middle-and-high level, Focus
on high quality, Focus on big product” (the strategy of “Three Focuses”) without wavering,
continued intensifying internal reform, further optimized product structure and market layout.
Through product innovation, management innovation and marketing innovation, the Company
strived to promote product sales and achieved certain effects under the background of the market
that both domestic wine and imported wine show a large decrease wholly in China market, realizing
the business income of CNY2558.27million in the first half year with a decrease of 9.55%
compared with last year and the net profit attributable to the parent company’s shareholders of
CNY603.4million in the first half year with a decrease of 5.1% compared with last year.
During the report period, the Company mainly did following work:
Firstly, the Company's Board of Directors, Board of Supervisors and senior executives were
successfully re-elected, injecting new forces, optimizing staff structure, enhancing the management
level and decision-making ability of the management team and providing a reliable organizational
guarantee for the Company’s sustainable and healthy development in the future.
Secondly, the "Three Focuses" strategy was steadily advanced and initial results were achieved.
During the report period, among the three core business segments of domestic wine, brandy and
imported wine, the Company concentrated its main resources to focus on the three domestic wine
brands such as MOSER, Noble Dragon and ZENITHWIRL; the two brandy brands “KOYA” and
“Changyu Superior Five-star Special Fine Brandy” and the two imported wine brands Kilikanoon
and INDOMITA achieved good results, which slowed down the Company’s wine decline and
achieved a small increase in brandy sales revenue.
Thirdly, the organization structure of sales system was basically completed in terms of adjustment
and optimization. The transformation from management dealers to serving dealers was actively
promoted and the construction of “Fund pool” with dealers was energetically developed. During the
report period, the Company eliminated, adjusted, rotated and supplemented some of the provincial
and municipal sales personnel, further rationalized the sales management system and enhanced the
fighting capacity of the sales team. The authorized operation was deeply advanced, which further
mobilized the enthusiasm and initiative of sales personnel. Besides, the Company improved the
performance appraisal mode and work focus, which promoted sales personnel to be closer to the
market and clients and better served terminals and consumers. Moreover, the construction of sales
team and “Fund pool” with dealers was intensified, which alleviated the contradiction of
insufficient market input.
Fourthly, the Company actively coordinated controlling shareholders and other relevant parties.
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Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
After repeated communication and full argumentation, the Company re-determined the proportion
of trademark use fee of "张裕"(Changyu) and other trademarks, revised and improved Trademark
License Contract and eliminated defects in the contract. In addition, the Company cooperated
closely with the controlling shareholders and was freely transferred part of trademarks and patents
from the controlling shareholders, which better guaranteed the integrity of the Company’s assets
and reduced related transactions.
Fifthly, the Company optimized the layout of raw material bases, strengthened quality management,
strived to reduce raw material costs and improved product quality. During the report period, the
Company carried out an overall planning for domestic and foreign raw material supply bases and
laid out medium and long-term raw material bases in Australia, Chile and France. In addition, the
Company increased a large number of high-quality raw material bases in Xinjiang, Ningxia and
Yantai, strengthened the assessments of basic management, profit and key work to the raw material
bases, and use internal self-examination, random sampling, third-party inspection, flight inspection
and other means to strengthen product quality monitoring and control. Moreover, the Company
re-approved supplier list, eliminated unqualified suppliers and continuously improved the quality of
raw material and packaging. As these measures become effective, the product quality and reduce
raw material costs will be fundamentally improved.
Sixthly, it was to strengthen financial management and audit supervision, strive to reduce capital
costs and operational risks, and improve the Company’s operational efficiency. During the report
period, after repeated communication and negotiation, the Company further reduced the bank loan
interest rate and financing cost. In addition, the Company used the SAP system to monitor and
allocate cash flow in real time, strictly implemented two-line management of financial revenues and
expenditures and paid use system of funds, which accelerated capital turnover, improved funds use
efficiency and reduced funds occupation. Moreover, the Company intensified the audit work of key
areas such as the authenticity of financial revenues and expenditures, channel inventory, unsalable
products, advertising fees and economic responsibility of outgoing personnel, and timely
investigated and punished illegal acts, which effectively prevented significant operational risks.
Seventhly, scientific dispatch, carefully organization and close cooperation guaranteed the good
quality and smooth progress of investment projects. During the report period, all projects under
construction of the Company progressed as planned and the project quality was excellent.
Eighthly, it was to continue implementing the internationalization strategy and actively carry out
joint venture and cooperation with strong foreign peers. During the report period, in order to reduce
operating costs of a single winery and play a synergistic effect, the Company used its wholly-owned
subsidiary in France Francs Champs Participations SAS to establish a joint venture company L&M
HOLDINGS together with Advini SA’s subsidiary SC Garri du Gai in France, promoting the
management and operation level of the French wine business segment.
In order to achieve the business objectives set by the Company at the beginning of the year, the
Company will focus on the following work in the second half of 2019:
Firstly, the current market situation has determined that the Company must unswervingly promote
the development strategy of “Three Focus”. The Company will continue classifying products,
compressing the number of products, centralizing superior resources and focusing on market
exploration and marketing work.
Secondly, considering that the main contradiction for future development lies in the market, the
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Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
Company will continue focusing on the construction of two teams of backbone distributors and
full-time sales personnel and further establish and improve the sales system to extend market
coverage. The Company will also make deep penetration into key markets and strive to achieve
breakthrough. In addition, the marketing innovation will be strengthened and the communications
media will be optimized in order to improve the marketing level. A systematic brand manager
system will also be established and a full-time marketing team will be set up for providing systemic
marketing solutions to boost brands by virtue of the top outsourcing companies in the industry. The
Company will take full advantage and integrate online advantageous platform and explore the
digital marketing mode in line with Changyu to provide consumers with a more perfect consumer
experience and enhance user stickiness.
Thirdly, continuous improvement in product quality is the most fundamental thing to win the
market competition. While strictly implementing various quality management measures, the
Company will establish a systematic brand winemaker system, give full play to the main
responsibility of winemakers at all levels and propose clear requirements of salary, appointment,
selection, promotion and exit for winemakers at different levels in order to stimulate winemakers'
enthusiasm and sense of responsibility and promote the significant improvement in product quality.
Fourthly, the establishment of a talent team that is compatible with the Company's development to
the core to achieve sustained and rapid development. The Company will focus on cultivating 60
high-level provincial general managers and 600 outstanding city managers comprehensively
optimize talent echelon and strive to make up the weakness in talents. Moreover, the Company will
further optimize performance appraisal methods, establish and improve various flexible and
efficient incentive mechanisms with the combination of long-term mechanism and short-term
mechanism as well as complementary advantages, and further stimulate the Company’s vitality to
enhance the attraction and centripetal force to the outstanding talents.
Fifthly, the Company will reasonably arrange the production schedule, do well the connection
between production and sales, make full use of sales peak season including Mid-Autumn Festival,
National Day and Spring Festival, increase marketing efforts and promote product sales, providing
important guarantee for achieving annual sales targets.
Sixthly, the Company will scientifically make procurement plan for raw materials such as grapes,
rationally arrange procurement progress and fully complete the procurement work of grape raw
material, providing core raw materials with sufficient quantity, complete varieties, high quality and
low price for future development.
In short, we preliminarily judge that in the second half of this year, with the cumulative effects of
various reform measures in the past year starting to appear, although the downward pressure on the
domestic wine market is increasing, the sales situation of our company may actually gradually go
out of the trough, and revenue may also begin to enter the growth track. The Company will strive to
complete the established revenue target of not lower than CNY5.3 billion at the beginning of the
year. In addition, affected by the double favorable factors of the national cutting taxes and fees
policies and the controlling shareholder's offset of trademark use fee, the Company's profit level
may be improved compared with the same period of last year.
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Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
2. Analysis of main business
Please refer to “1. Summarization” in “Management Discussion and Analysis”.
Change in major financial data on year-on-year basis
Unit: CNY
In the report In the same period More or
Reason for changes
period of last year less (%)
Operating revenue 2,558,274,785 2,828,230,064 -9.55% Mainly owing to the year-on-year decrease in sales volume
Operating costs Mainly owing to the year-on-year increase in the price of grape
936,252,225 974,557,292 -3.93%
material
Sales expenses Mainly owing to the year-on-year decrease in marketing expense and
591,970,801 710,659,033 -16.70%
trademark use fee
Administration expense 155,552,312 157,964,882 -1.53% No major change
Financial expense 8,789,583 13,085,942 -32.83% Mainly owing to the year-on-year decrease in interest expenditure
Income tax expense 210,281,578 211,979,735 -0.80% No major change
Research &
2,706,811 2,127,006 27.26% Mainly owing to the increased investment in scientific research
Development Investment
Net cash flow from
Mainly owing to the decrease in received cash from selling products
499,476,006 552,753,472 -9.64%
operating activities and providing labor service
Net cash flow from Mainly owing to the decrease in the cash paid for purchasing fixed
-114,534,608 -291,217,548 60.67% term deposit and the net cash paid by subsidiaries and other business
investment activities
units
Net cash flow from
Mainly owing to the year-on-year decrease in received fixed term
-18,128,357 -6,350,537 -185.46%
financing activities deposit used for pledge of long-term loan
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Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
Net increased amount of
cash and cash Mainly owing to the year-on-year decrease in the cash outflow of
366,866,743 247,781,188 48.06%
investment activities
equivalents
Whether there is any major change for the Company’s profit structure or profit source during the report period
□Available Not available
There is no major change for the Company’s profit structure or profit source during the report period.
Structure of main businesses
Unit: CNY
Increase or decrease of Increase or decrease of Increase or decrease of gross
Operating Operating Gross profit
Item operating revenue over the operating cost over the same profit rate over the same
revenue cost rate (%)
same period of last year (%) period of last year (%) period of last year
By Sector
Manufactu
ring of
liquor and 2,558,274,785 936,252,225 63.40% -9.55% -3.93% -2.14%
alcoholic
beverages
By Product
Wine 1,928,554,268 680,125,496 64.73% -13.01% -9.65% -1.31%
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Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
Brandy 563,451,068 229,703,175 59.23% 3.33% 18.50% -5.22%
Tourism 42,604,382 12,307,699 71.11% -7.44% -12.47% 1.66%
Other 23,665,067 14,115,855 40.35% 19.01% 1.95% 9.98%
Total 2,558,274,785 936,252,225 63.40% -9.55% -3.93% -2.14%
By Region
Domestic
2,330,780,056 791,113,867 66.06% -9.92% -2.36% -2.63%
business
Overseas
227,494,729 145,138,358 36.20% -5.50% -11.69% 4.47%
business
Total 2,558,274,785 936,252,225 63.40% -9.55% -3.93% -2.14%
3. Analysis to non-main business
□Available Not available
4. Assets and liabilities situation
1) Major changes in assets
Unit: CNY
The end of this report period The end of the same period of last year Proportion increase
Explanation for major
Proportion in the Proportion in the or decrease
Amount Amount changes
total assets (%) total assets (%) (%)
Monetary funds 1,848,632,953 13.81% 1,683,038,453 12.91% 0.90% No major change
Account receivable 186,131,192 1.39% 243,413,092 1.87% -0.48% No major change
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Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
Mainly owing to the
year-on-year increase in
Inventory 2,606,781,436 19.48% 2,338,925,432 17.94% 1.54% work-in-process including
bulk wine at the end of
report period
Investment real estate 30,560,470 0.23% 17,877,379 0.14% 0.09% No major change
Long-term equity
- - - - - No major change
investment
Mainly owing to the
transfer of construction in
Fixed assets 5,684,612,653 42.48% 5,457,575,677 41.86% 0.62%
process during the report
period
Mainly owing to the
transfer of construction in
Construction in process 789,872,373 5.90% 1,015,914,753 7.79% -1.89%
process into fixed assets
during the report period
Mainly owing to the
repayment of short-term
Short-term borrowing 678,170,667 5.07% 750,454,676 5.76% -0.69%
borrowing during the
report period
Long-term loan 165,949,250 1.24% 153,965,191 1.18% 0.06% No major change
2) Measuring assets and liabilities at fair value
□Available Not available
3) Assets rights restricted situation up to the end of report period
No
5. Investment situation analysis
18
Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
1) Overall situation
Available □Not available
Amount of investment during the report Amount of investment in the same period of Extent of change
period (CNY) last year (CNY)
210,000,000.00 210,931,400.00 0.44%
2) Situation of major equity investments acquired during the report period
□Available Not available
3) Situation of ongoing major non-equity investments during the report period
Available □Not available
Unit: CNY
Reasons
Accumulated Accumulated
for
Whether actual realized
Investment unreached
it belongs investment Process income up
Investment Involved amount Capital Estimated planning Disclosure Disclosure
Project name to fixed amount up of to the end
mode industry during the source income schedule date index
assets to the end project of the
report period and
investment of the report report
estimated income
period period
Construction Please refer to
project of Announcement
Yantai Liquor and on Resolution of
Changyu Self- alcoholic 110,000,000.0 1,486,114,100 Owned the Seventh
Yes 0 .00 100% - - No direct income 2019.04.20
International constructed beverage fund Session Board
Wine City industry of
blending and Directors 10th
cooling Meeting
19
Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
center disclosed on the
Construction website of
project of CNINFO
Yantai Liquor and (www.cninfo.co
Changyu Self- alcoholic 953,200,000.0 Owned m.cn)
Yes 40,000,000.00
0 100% - - No direct income 2019.04.20
International constructed beverage fund (announcement
Wine City industry number:
bottling 2019-Temporar
center y 06)
Construction
project of
Yantai Liquor and
Changyu Self- alcoholic 459,907,200.0 Owned
Yes 43,400,000.00
0 100% - - No direct income 2019.04.20
International constructed beverage fund
Wine City industry
logistics
center
Construction
project of
Liquor and
Changyu
Self- alcoholic 122,974,800.0 Owned Not put into
grape Yes 6,000,000.00
0 85% - - 2019.04.20
constructed beverage fund operation
and wine
industry
research
institute
Construction Liquor and
project of Self- alcoholic 128,820,000.0 Owned Not put into
Yes 0.00
0 70% - - 2019.04.20
treasure wine constructed beverage fund operation
chateau industry
147,329,000.0
Construction Self- Yes Liquor and 0.00
0 Owned 100% - - Just put into 2019.04.20
20
Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
project of constructed alcoholic fund operation and no
Koya brandy beverage income
chateau industry
Liquor and
Oak Barrel
Self- alcoholic Owned
Procurement Yes 7,000,000.00 13,432,000.00 30% - - No direct income 2019.04.20
constructed beverage fund
Project
industry
Construction
project of Liquor and
industrial Self- alcoholic Owned
Yes 600,000.00 38,450,000.00 70% - - Not completed 2019.04.20
production constructed beverage fund
SAP industry
information
Procurement
project of
Liquor and
automatic
Self- alcoholic Owned
unibloc Yes 0 0 0.00% - - Not completed 2019.04.20
constructed beverage fund
equipment for
industry
Yantai
chateau
Project of
“Constant
temperature
and humidity” Liquor and
system in Self- alcoholic Owned
Yes 3,000,000.00 3,000,000.00 80% - - Not completed 2019.04.20
underground constructed beverage fund
cellar of industry
Research &
Development
Center
21
Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
Construction
project of
changyu
Liquor and
supplier
Self- alcoholic Owned
management Yes 0.00 0.00 0% - - Not Completed 2019.04.20
constructed beverage fund
platform and
industry
equipment
management
platform
210,000,000.0 3,353,227,100
Total — — — — — 0.00 0.00 -- -- --
0 .00
4) Financial assets investment
(1) Security investment
□Available Not available
There is no security investment for the Company during the report period.
(2) Derivative investment
□Available Not available
There is no derivative investment for the Company during the report period.
6. Sale of major assets and equities
1) Sale of major assets
□Available Not available
22
Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
There is no sale of major assets during the report period.
2) Sale of major equity
□Available Not available
7. Analysis to the major holding and joint stock companies
Available □Not available
Situation of main subsidiaries as well as joint stock companies affecting over 10% of the Company’s net profit
Unit: CNY
Company Company Main business Registered capital Total Net asset Operation Operation Net Profit
name type assets revenue profit
Chateau Changyu Development, production and sales of
240,824,9
Castel Co., Ltd. Subsidiary wine and sparkling wine as well as the USD5million 77,648,048 24,470,842 -2,182,761 -2,189,871
54
YANAI tourism service
Chateau Changyu
Development, production and sales of CNY642.75 686,690,4 12,711,98
AFIP Global Wine Subsidiary 640,778,175 90,339,526 17,401,737
brandy and wine million 42 5
Co., Ltd.
Chateau Liaoning
CNY59.6873 84,854,20
Changyu Ice Wine Subsidiary Production of ice wine 53,126,828 19,763,387 -1,049,804 -1,986,710
million 7
Co., Ltd.
Hacienda Y Vinedos
Production and management of wine and EUR2.385732 500,554,8
Marques Del Atrio, Subsidiary 123,548,662 129,064,457 959,423 1,859,381
other liquors million 60
SL
Indomita Wine
Production and management of wine and 505,803,3
Company Chile, Subsidiary USD47.19million 361,957,114 86,818,838 2,477,697 3,762,504
other liquors 10
SpA
Kilikanoon Estate Subsidiary Production and management of wine and AUD6.529221 147,071,8 82,030,855 22,852,809 -2,587,400 -1,509,147
23
Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
Pty Ltd other liquors million 45
Acquisition and disposal of subsidiaries during the report period
Available □Not available
Mode of Acquisition and disposal of
Company name Effect on overall production and management as well as performance
subsidiaries during the report period
As a newly-established company, this company has very little influence
L&M HOLDINGS Establishment by joint venture
in overall production and management as well as performance.
Joint venture partner uses Chateau This chateau currently has very little influence in overall production and
Chateau Liversan
Liversan as contribution of capital management as well as performance.
Explanation for main holding and joint stock companies
During the report period, Chateau Changyu Castel Co., Ltd. YANAI and Chateau Liaoning Changyu Ice Wine Co., Ltd. incurred operating
losses, mainly because the two companies, as production units, sold their products to the Company’s internal sales units at the internal settlement
price determined by the Company, which could not truly reflect the profitability of the two companies’ products. If it includes the profit
generated by the internal sales units selling products to external customers, the products produced by these two companies are profitable.
During the report period, Kilikanoon Estate Pty Ltd realized the net profit of CNY550thousand for its own production and management, but after
conducting the amortization of premium at the time of acquisition in accordance with accounting policy, the loss was CNY1.5million.
8. Situation of structured subject controlled by the Company
□Available Not available
9. Forecast for the operating performance from January to September of 2019
Caution and explanation for the prediction that the cumulative net profit from the beginning of the year to the end of next report period could be
in a loss or there will be in a great change compared with the same period of last year.
□Available Not available
24
Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
10. Risks faced with by the Company and response measures
(1) Risks in price fluctuation of raw materials
Grapes are the Company’s main raw materials. The grape’s yield and quality are affected to a
certain extent by the natural factors such as drought, wind, rain, frost and snow. These force
majeure factors greatly influence the procurement quantity and price of raw materials and add
the uncertainty to the Company’s production and operation. Therefore, the Company will
lower the fluctuation risks of grape quality and price by means of stabilizing the area of
self-run grape bases, strengthening the management of grape bases and optimizing the layout
of grape bases.
(2) Risks in uncertainty of market input and output
To cope with increasingly fierce market competition and to meet the needs for market
development, the Company will maintain certain market input. The proportion of sales
expense in the operation revenue is also high. The situation of input and output will affect the
Company’s business performance to a great extent and there might occur the risk that partial
input may not reach the expectations. Therefore, the Company will strengthen market
research and analysis, enhance market forecast accuracy and continue perfecting the
input-output evaluation system to ensure the market input to reach the expectations.
(3) Risks in product transportation
The Company’s products are fragile and sold to all over the world mostly by sea
transportation, railway transportation and road transportation. The peak season of sales is
usually in cold winter and is close to the spring festival when there is a great need in the
market. However, at this time, the domestic transportation departments may be overloaded by
the flow of people and logistics, causing serious shortage of transportation capacity. In
addition to natural and human factors such as snow, ice and traffic accidents and so on, there
is a possibility that it is difficult to safely and timely transport products to the market, thus
facing the potential risk of missing sales peak season. Therefore, the company will strive to
reduce such risks by doing well sales forecasts and the connection between production and
sales, rationally arranging production and transportation routes and reasonably increasing
off-site inventory before the coming of peak season and so on.
(4) Risks in investment faults
According to the programme, the Company has basically completed the production layout at
home and abroad. The investment amount of Yantai Changyu Industrial Park (in other words
Yantai Changyu International Wine City) is large, but there are many uncertainties in
domestic wine market, which may lengthen the investment recovery period. Moreover, the
integration and management of overseas M&A projects are difficult and it might also be
difficult for some individual projects to obtain the expected investment income owing to
being affected by various factors. Therefore, the Company will make sufficient demonstration
and scientific decision on investment projects and strive to reduce and avoid investment risks.
25
Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
V. Major issues
1. Information for the Shareholders’ Meeting and Interim Shareholders’ Meeting held during the report period
1) Information for the Shareholders’ Meeting during the report period
Participation ratio of
Session Meeting type Convening date Disclosure date Disclosure Index
investors
http://www.cninfo.com.cn
Annual Announcement on Resolution of
2018 Annual Shareholders’ 2018 Annual Shareholders’
shareholders’ 58.85% 2019.05.17 2019.05.18
Meeting Meeting （Announcement
meeting
number:2019- Temporary 25）
http://www.cninfo.com.cn
Interim Announcement on Resolution of
First Interim Shareholders’ First Interim Shareholders’
shareholders’ 60.89% 2019.07.02 2019.07.03
Meeting in 2019 Meeting in 2019 （Announcement
meeting
number:2019- Temporary 37）
2) Request for convening Interim Shareholders’ Meeting by priority shareholders owing recovered voting right
□Available Not available
2. Situation of profit distribution and capitalization of capital reserve into share capital during the report period
□Available Not available
The Company plans not to distribute cash dividends or give bonus shares or make capitalization of capital reserve into share capital.
26
Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
3. Commitments that the Company’s actual controllers, shareholders, related parties, acquirers and the Company and other related
commitment parties have implemented during the report period and have not implemented up to the end of the report period
Available □Not available
Commitment Commitment Commitment Commitment Commitment
Commitments Implementation
party type content time period
Commitments at equity
reformation
Commitments made in
acquisition report or
equity change report
Commitments at asset
restructuring
Commitments at the
Yantai Changyu Solve horizontal Non-horizontal
initial public offering or May 18th, 1997 Forever Has been performing
Group Co. Ltd. competition competition
refinancing
27
Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
According to
Trademark License
According to Trademark
Contract, the
License Contract, the trademark
trademark use fee of
use fee annually charged by
Changyu and other
Yantai Changyu Group Co.,
trademarks paid by
Ltd. shall be mainly used to
this Company to
publicize trademarks including
Yantai Changyu Clear the use of Yantai Changyu
May 18th, 1997 Forever Chagnyu and contractual
Group Co.,Ltd. trademark use fee Group Co., Ltd every
products. Except 2013 to 2017
year is mainly used
during which the commitment
for advertising
was not strictly performed,
Changyu and other
Yantai Changyu Group Co.,
trademarks and the
Ltd. has been performing the
contractual products
commitment.
by Yantai Changyu
Group Co., Ltd.
Equity incentive
commitments
Commitments at middle
and small shareholders
of the Company
Commitment under
timely implementation No
or not
According to the Trademark License Contract (hereafter referred to as “the Contract”), Changyu Group promises that the trademark
Detailed explanation for use fee annually paid by the Company to Changyu Group shall be mainly used by Changyu Group to publicize trademarks and
specific reasons of contractual products. But above-mentioned ‘mainly’ is not a specific number, which is easy to cause divergence due to different
unimplemented understanding and leads to problem appearance during the implementation process.
commitment as well as From 2013 to 2017, Changyu Group collected a total of CNY420,883,902 trademark use fee, of which 51% was used to publicize
next work plan if trademarks including Changyu and contract products with amount of CNY214,650,790. The amount has been used to publicize
commitment is not trademarks including Changyu and contract products is CNY50,025,181, with a balance of CNY164,625,609.
completed in the In 2018 and 2019, the trademark use fee collected of 2017 and 2018 is CNY155,623,907, of which 51% is used to publicize
commitment period trademarks including Changyu and contract products with amount of CNY79,368,193. The amount has been used to publicize
trademarks including Changyu and contract products is CNY12,225,187, with a balance of CNY67,143,006.
28
Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
Since 2013, the accumulated balance of Changyu Group using to publicize trademarks including Changyu and contract products is
CNY231,768,615. Changyu Group promises that the four-year trademark use fee from 2019 to 2022 will be used for offset. If
insufficient, the shortfall would be filled in one time in 2023. If there is any excess, the excess portion of the trademark use fee
would be collected from the year with excess occurrence.
If Changyu Group is not able to implement the above-mentioned commitment owing to various reasons, the Company will timely
supervise and urge Changyu Group to fulfill its commitment and request Changyu Group to raise funds through bank loaning,
assets sales and equity sales etc in order to implement the commitment.
For other details, please refer to Announcement on Commitment Issues of Yantai Changyu Group Company Limited disclosed by the
Company on April 4th, 2019.
4. The appointment and dismissal of certified public accountants
Whether the semi-annual report has been audited
□ Yes No
The semi-annual report has not been audited.
5. Explanation from the board of directors and the board of supervisors for the “Non-standard Audit Report” during this report period
□Available Not available
6. Explanation from the board of directors for the “Non-standard Audit Report” of last year
□Available Not available
7. Issues related with bankruptcy reorganization
□Available Not available
There are no related issues of bankruptcy reorganization happened at the end of the report period.
8. Litigation Issue
Material litigation and arbitration
□Available Not available
29
Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
There are no material litigation and arbitration during the report period.
Other Litigation Issue
□Available Not available
9. Penalty and rectification
Available Not available
Investigation Disclosure
Name Type Reason Conclusion Disclosure Index
and Punishment date
Yantai http://www.cninfo.com.cn
Changyu Rectification Report of Person
Other Other - 2019.04.04
Pioneer Wine In Charge such as Yantai
Co., Ltd. Yantai Changyu Group Co., Ltd Changyu Pioneer Wine Co.,
has not strictly fulfilled the Litd. Etc on Decision of
commitment “Annual trademark Administrative Supervision
Yantai use fee is mainly used to publicize Measures issued by China
Changyu Controlling trademarks including Changyu Securities Regulatory
and contractual products”. Other - 2019.04.04 Commission Shandong
Group Co., shareholder
Ltd. Regulatory Authority
（Announcement
number:2019- Temporary 05）
The explanation of rectification situation
Available Not available
During the period, this Company, Yantai Changyu Group Co., Ltd. and other related person in charge have received Decision of Administrative
Supervision Measures issued by China Securities Regulatory Commission Shandong Regulatory Authority, and they have made rectification
according to the requirement.
30
Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
10. Credit of the Company, its controlling shareholder and actual controller
Available Not available
11. Implementation of the Company’s equity inventive plan, employee stock ownership plan or other employee incentive measures
□Available Not available
There are no implementation of the Company’s equity inventive plan, employee stock ownership plan and other employee incentive measures
during the report period.
12. Major related transactions
1) Related transactions in relation to routine operations
Available □Not available
Whether
Approved Available
Proportion exceeding
Related Pricing Amount transaction Clearing market price Disclosure Disclosure
Relationship Type Content Price in similar approved
party principle (CNY‘0000) quota form of similar date index
transactions transactio
(CNY‘0000) transactions
n quota
Purchase and
Yantai Controlled
Purchase and manufacturing Determined
Shenma by the same Contractu April
manufacturing consignment by 7,497 10.44% 17,500 No Cash No -
Packaging parent al pricing 20th , 2019
consignment of packaging agreement
Co., Ltd. company
materials
Total - - 7,497 - 17,500 - - - - -
Details information about the return of large sales No
Actual performance of the estimated total amount for daily
related transactions that will occur during this report period
No
by category (if have)
Reason for the bigger deference between transaction price and
Not available
market reference price(if applicable)
31
Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
2) Related transactions in relation to acquisition and sales of assets or equity
□Available Not available
There are no related transactions in relation to acquisition or sales of assets or equity during
the report period.
3) Related transactions in relation to common foreign investment
□Available Not available
There are no related transactions in relation to common foreign investment during the report
period.
4) Related credit and debt dealings
Available Not available
There are no related credit and debt dealings during the report period.
5) Other major related transactions
□Available Not available
There are no other major related transactions during the report period.
13. Non-operating capital occupying of the Company by controlling shareholder and its
related parties
□Available Not available
There is no non-operating capital occupying of the Company by controlling shareholder and
its related parties during the report period.
14. Major contracts and execution condition
1) Trusteeship, contract and lease issues
(1) Trusteeship situation
□Available Not available
There is no trusteeship situation during the report period.
(2) Contract situation
Available □Not available
Explanation for contract situation
For the Company’s contract operation situation during the report period, please refer to ‘‘23.
Other payables’’ in Note 7 ‘‘Notes on consolidated financial statement’’ in the financial
report of this report.
32
Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
Project whose profit and loss brought for the Company reach more than 10% of the total
profit during the report period
□Available Not available
There are no contract projects whose profit and loss brought for the Company reach more
than 10% of the total profit during the report period.
(3) Lease situation
Available □Not available
Explanation for lease situation
On January 1st, 2017, the Company renewed the Space Lease Agreement with the controlling
shareholder Yantai Changyu Group Company Limited. The Company leased the space with
15196.94 square meters locating at No. 174 Shihuiyao Road, Zhifu District, Yantai City. The
rent per year is CNY1.4645 million with a rental period of 5 years from January 1st, 2017 to
December 31st, 2021. On January 1st, 2017, the Company’s subordinate Sales & Marketing Co.
of Yantai Changyu Pioneer Wine Company Limited Brandy Sales Division renewed the
Space Lease Agreement with the controlling shareholder Yantai Changyu Group Company
Limited, leasing the space with 42552.83 square meters locating at No. 1 Jichang Road, Zhifu
District, Yantai City and the space with 3038 square meters locating at 56 Dama Road, Zhifu
District, Yantai City, which are all under the name of controlling shareholder. The rent of
above spaces per year is CNY4.3935million with a rental period of 5 years from January 1st,
2017 to December 31st, 2021.
On July 1st, 2017, this Company signed a house-leasing contract with Yantai Shenma
Packaging Company Limited. According to this contract, since July 1st, 2017, this Company
leased property to Yantai Shenma Packaging Company Limited for a business purpose with
the annual rent of CNY1,626,880. This contract expires on June 30th, 2022.
Project whose profit and loss brought for the Company reach more than 10% of the total
profit during the report period
□Available Not available
There are no lease projects whose profit and loss brought for the Company reach more than
10% of the total profit during the report period.
2) Major guarantee
Available □Not available
33
Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
(1) Guarantee situation
Unit: CNY’0000
External guarantee of the Company and its subsidiaries（excluding guarantee to subsidiaries）
Whether or not
Disclosure date of related Actual date of Whether or not
Actual guarantee Guarantee belong to
Guarantee object name announcement about Guarantee quota occurrence (date of Guarantee type complete
amount Period related-party
guarantee quota agreement) implementation
guarantee
Yantai Economic and
Technological Mortgage;
2016.12.22 34,160 2016.12.21 34,160 10years No No
Development Zone Pledge
Management Council
Total of the external guarantee quota approved Total of the actual external guarantee
0 0
during the report period (A1) amount during the report period (A2)
Balance of the actual external
Total of the external guarantee quota approved at the
34,160 guarantee at the end of the report 34,160
end of the report period (A3)
period (A4)
Guarantee situations between the Company and subsidiaries
Whether or not
Disclosure date of related Actual date of Whether or not
Actual guarantee Guarantee belong to
Guarantee object name announcement about Guarantee quota occurrence (date of Guarantee type complete
amount Period related-party
guarantee quota agreement) implementation
guarantee
Sales & Marketing
Company of Yantai Joint liability
2016.10.31 10,000 2016.11.05 10,000 2 years No Yes
Changyu Pioneer Wine assurance
Company Limited
Yantai Changyu Pioneer 2016.12.22 11,984 2016.12.21 11,984 Mortgage; 10 years No Yes
34
Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
Wine Company Limited Pledge
Yantai Changyu Wine
Joint liability
Research and
2016.12.22 72,176 2016.12.21 72,176 assurance; 10 years No Yes
Development Company
Mortgage
Limited
Kilikanoon Estate Pty Joint liability
2017.12.12 7,100 2018.01.09 7,100 1 year No Yes
Ltd assurance
Total of the actual guarantee amount
Total of the approved guarantee quota to subsidiaries
0 for subsidiaries during the report 0
during the report period (B1)
period (B2)
Balance of the actual guarantee for
Total of the approved guarantee quota to subsidiaries
89,276 subsidiaries at the end of the report 89,276
at the end of the report period (B3)
period (B4)
Guarantee situations between subsidiaries
Whether or not
Disclosure date of related Actual date of Whether or not
Actual guarantee Guarantee belong to
Guarantee object name announcement about Guarantee quota occurrence (date of Guarantee type complete
amount Period related-party
guarantee quota agreement) implementation
guarantee
Hacienda Y Vinedos
Marques Del Atrio. 2016.04.29 3,502 2015.10.08 3,502 Mortgage Long-term No No
SL
Indomita Wine
Company Chile, 2018.04.23 1,986 2018.04.20 1,986 Mortgage Long-term No No
SpA
Total of the actual guarantee amount
Total of the approved guarantee quota to 5,976 0
for subsidiaries during the report
35
Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
subsidiaries during the report period (C1) period (C2)
Balance of the actual guarantee for
Total of the approved guarantee quota to
11,464 subsidiaries by the end of the report 5,488
subsidiaries at the end of the report period (C3)
period (C4)
Total guarantee amount of the Company（Total of above three major items）
Total of the actual guarantee amount
Total of the approved guarantee quota during the
5,976 during the report period 0
report period（A1+B1+C1）
（A2+B2+C2）
Balance of the actual guarantee by
Total of the approved guarantee quota at the end of
134,900 the end of the report period 128,924
the report period（A3+B3+C3）
（A4+B4+C4）
The proportion of actual total guarantee amount (A4+B4+C4) accounting for the Company’s
13.17%
net asset
Among :
Balance of guarantee for shareholders, actual controllers and their related parties（D） 0
Balance of direct or indirect debt guarantee for the guaranteed objects whose asset-liability ratio is
0
more than 70%（E）
Amount of the part in total guarantee amount that exceed 50% of net assets（F） 0
Total amount of the above-mentioned three items（D+E+F） 0
Explanation for undue guarantees that might bear joint and several responsibilities for clearing the
No
debts during the report period (if have)
Explanation for violating due process to provide external guarantee (if have) No
Explanation on specific situations of adapting guarantee by complex methods
36
Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
No.
(2) Illegal external guarantee
□Available Not available
There is no illegal guarantee during the report period.
3) Other major contracts
□Available Not available
There are no other important contracts during the report period.
15. Situation for social responsibility
1) Major environmental situation
Whether or not the listed company and its subsidiaries belong to key pollutant discharging units
stipulated by the state environmental protection department.
Not applicable.
No
2) Situation for carrying out social responsibility of targeted poverty alleviation
(1) Targeted poverty alleviation plan
The Company has reached the mutual agreement with the government of Zhuqiao Town and the
village committee of Dalangya Village to establish a cooperative specialized for grape. It plans to
help to conduct the construction of 100 mu of vineyard per year from 2019 to 2021 with a total area
of 300 mu and also to sign grape purchase contract in order to help local villagers to get rid of
poverty and become better off.
(2) Summary of semi-annual targeted poverty alleviation
The Company intends to help farmers grow their income by establishing vineyards together with
farmers.
(3) Effectiveness of targeted poverty alleviation
The Company has established vineyards with farmers as planned, which is progressing smoothly
now.
(4) Subsequent plan for targeted poverty alleviation
No
37
Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
16. Explanation for other major issues
□Available Not available
There are no other major issues need to be explained during the report period.
17. Major issues of the Company’s subsidiaries
□Available Not available
38
Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
VI. Changes in Shares and the Shareholders’ Situation
1. Changes in shares
1) Changes in shares
Unit: share
Amount before this change Change at this time (+, -) Amount after this change
Transfer
Amount Percentage % Issuing new Distribute capital others Subtotal Amount Percentage %
share bonus share reserve to
share capital
1. Unrestricted shares 685,464,000 100% 685,464,000 100%
(1) A shares 453,460,800 66.15% 453,460,800 66.15%
(2) B shares 232,003,200 33.85% 232,003,200 33.85%
2. Total shares 685,464,000 100% 685,464,000 100%
Reason of changes in shares
□Available Not available
Approval of changes in shares
□Available Not available
Ownership transfer of changes in shares
□Available Not available
Implementation progress of share buy-back
□Available Not available
39
Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
Implementation progress of reducing repurchased shares by the way of centralized bidding
□Available Not available
The influence of changes in shares on financial indicators in the most recent year and the most recent report period, such as basic earnings per
share, diluted earnings per share and net asset per share attributable to the Company’s common shareholders and so on
□Available Not available
Other contents that the Company thinks necessary or securities regulatory departments ask to disclose.
□Available Not available
2) Changes in restricted shares
□Available Not available
2. Securities issuance and listing situation
□Available Not available
3. Situation for the number of shareholders and shareholdings of the Company
Unit：share
Total common shareholders at the Total number of preferred shareholder recovering voting
42,531 0
end of report period power at the end of report period (if have) (refer to note 8)
Shareholders holding more than 5% or shareholdings of the top 10 common shareholders
Number of Number of Pledged or frozen
Common share Changes
Character of Shareholding restricted unrestricted
Name of Shareholder shareholder ratio held at the end of during the Share
the report period common common Amount
report period status
share share
YANTAI Domestic 50.40% 345,473,856 0 0 345,473,856
40
Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
CHANGYU GROUP non-state-owned legal
CO. LTD. person
GAOLING
Foreign legal person 3.08% 21,090,219 0 0 21,090,219
FUND,L.P.
CHINA
State-owned legal 2.25% 15,440,794 0 0 15,440,794
SECURITIES person
FINANCE CORP
BBH BOS S/A
FIDELITY FD - Foreign legal person 2.22% 15,241,826 0 0 15,241,826
CHINA FOCUS FD
SHENWAN
HONGYUAN
Foreign legal person 1.28% 8,798,233 450570 0 8,798,233
SECURITIES(HON
G KONG) LIMITED
FIDELITY
PURITAN TRUST:
FIDELITY SERIES
Foreign legal person 0.93% 6,350,762 250000 0 6,350,762
INTRINSIC
OPPORTUNITIES
FUND
GUOTAI JUNAN
SECURITIES(HON Foreign legal person 0.76% 5,229,016 185509 0 5,229,016
GKONG) LIMITED
CENTRAL HUIJIN
ASSET State-owned legal
0.69% 4,761,200 0 0 4,761,200
MANAGEMENT person
LTD.
41
Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
VANGUARD
EMERGING
Foreign legal person 0.55% 3,788,487 0 0 3,788,487
MARKETS STOCK
INDEX FUND
FIDELITY CHINA
SPECIAL Foreign legal person 0.55% 3,779,202 0 0 3,779,202
SITUATIONS PLC
Situation of Strategic investors or general legal person
becoming the top 10 shareholders owing to placing of new No
shares (if have)(see note 3)
Among the top 10 shareholders, Yantai Changyu Group Company Limited has no
Explanation for above shareholders’ associated
associated relationship or concerted action relationship with the other 9 circulating
relationship and concerted action
shareholders, and the relationship among the other shareholders is unknown.
Shareholdings of top 10 common shareholders with unrestricted shares
Number of unrestricted shares held at Type of share
Name of Shareholders
the end of the report period Type of share Amount
YANTAI CHANGYU GROUP CO. LTD. 345,473,856 A 345,473,856
GAOLING FUND,L.P. 21,090,219 B 21,090,219
CHINA SECURITIES FINANCE CORP 15,440,794 A 15,440,794
BBH BOS S/A FIDELITY FD - CHINA FOCUS FD 15,241,826 B 15,241,826
SHENWAN HONGYUAN SECURITIES(HONG KONG) LIMITED 8,798,233 B 8,798,233
FIDELITY PURITAN TRUST: FIDELITY SERIES INTRINSIC
6,350,762 B 6,350,762
OPPORTUNITIES FUND
GUOTAI JUNAN SECURITIES(HONGKONG) LIMITED 5,229,016 B 5,229,016
CENTRAL HUIJIN ASSET MANAGEMENT LTD. 4,761,200 A 4,761,200
VANGUARD EMERGING MARKETS STOCK INDEX FUND 3,788,487 B 3,788,487
FIDELITY CHINA SPECIAL SITUATIONS PLC 3,779,202 B 3,779,202
42
Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
Explanation for associated relationship and concerted action among top Among the top 10 shareholders, Yantai Changyu Group Company Limited
10 common shareholders with unrestricted shares and between top 10 has no associated relationship or concerted action relationship with the other
common shareholders with unrestricted shares and top 10 common 9 circulating shareholders, and the relationship among the other
shareholders shareholders is unknown.
Explanation for top 10 common shareholders who are involved in The top 10 shareholders are not involved in f securities margin trading
securities margin trading business (if have)(see note 4) business.
Whether or not the Company’s top 10 common shareholders and top 10 shareholders with unrestricted shares take agreed repurchase transaction
during the report period
□Yes No
There is no agreed repurchase transaction taken by the Company’s top 10 common shareholders and top 10 shareholders with unrestricted shares
during the report period.
4. Changes in controlling shareholders or actual controllers
Changes in the controlling shareholders during the report period
□Available Not available
There is no any change in the controlling shareholders during the report period.
Changes in the actual controllers during the report period
□Available Not available
There is no any change in the actual controllers during the report period.
43
Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
VII. Related Situation of Preferred Shares
□Available Not available
There are no preferred shares during the report period.
44
Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
VIII. Situation for Directors, Supervisors, Senior Executives
1. Changes in shareholdings of directors, supervisors and senior executives
□Available Not available
There is no change in shareholdings of directors, supervisors and senior executives during the report
period. For details, please refer to 2018 Annual Report
2. Personnel changes in the Company's directors, supervisors and senior executives
Available □Not available
Name Position Type Date Reason
Leaving the post owing
Sun Liqiang Director 2019.05.17 Retirement
to expiration of tenure
Leaving the post owing
Qu Weimin Director 2019.05.17 Retirement
to expiration of tenure
Leaving the post owing Expiration of tenure
Zhang Ming Director 2019.05.17
to expiration of tenure and job change
Antonio Leaving the post owing Expiration of tenure
Director 2019.05.17
Appignani to expiration of tenure
Independent Leaving the post owing Expiration of tenure
Wang Shigang 2019.05.17
director to expiration of tenure
Independent Leaving the post owing Expiration of tenure
Liu Yan 2019.05.17
director to expiration of tenure
Being elected as
director when
Chen Dianxin Director Elected 2019.05.17
reelecting new session
Board of Directors
Being elected as
director when
Enrico Sivieri Director Elected 2019.05.17
reelecting new session
Board of Directors
Being elected as
director when
Sun Jian Director Elected 2019.05.17
reelecting new session
Board of Directors
Being elected as
director when
Li Jiming Director Elected 2019.05.17
reelecting new session
Board of Directors
45
Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
Being elected as
independent director
Duan Independent
Elected 2019.05.17 when reelecting new
Changqing director
session Board of
Directors
Being elected as
independent director
Independent
Liu Huirong Elected 2019.05.17 when reelecting new
director
session Board of
Directors
Secretary of
Leaving the post owing
Qu Weimin the Board of 2019.05.28 Retirement
to expiration of tenure
Directors
Chief Leaving the post owing
Li Jiming 2019.05.28 Expiration of tenure
engineer to expiration of tenure
Deputy
Being appointed by
Li Jiming general Appointed 2019.05.28
Board of Directors
manager
Chief
Leaving the post owing
Jiang Jianxun Financial 2019.05.28 Expiration of tenure
to expiration of tenure
Officer
Deputy
general
manager & Being appointed by
Jiang Jianxun Appointed 2019.05.28
Secretary of Board of Directors
the Board of
Directors
Resigning from the
Independent post of independent
Guo Guoqing Leaving the post 2019.07.02
director director on his own
initiative
Independent Being elected as
Liu Qinglin Elected 2019.07.02
director independent director
46
Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
IX. Related Situation of Corporation Bonds
Whether or not there are the Company’s corporation bonds issued in public and listed in the
stock exchange, but not due on the issuance date approved in the semi-annual report or failing
to pay in full on the due date
No.
X. Financial Report
1. Audit report
Whether the semi-annual report has been audited
□ Yes √ No
The semi-annual report of the Company has not been audited.
2. Financial statement
The unit in the statements of the financial annotations is RMB Yuan.
2.1 Consolidated balance sheet
Compiling unit: Yantai Changyu Pioneer Wine Co., Ltd. June 30, 2019 Unit: Yuan
December 31,
Item Note June 30, 2019
2018
Current assets:
Monetary fund 7.1 1,848,632,953 1,475,700,477
Settlement reserves
Lending funds
Tradable financial assets
Financial assets measured at the fair value and the variation of which is
recorded into the current profits and losses
Derivative financial assets
Bills receivable 7.2 288,667,988
Accounts receivable 7.3 186,131,192 242,153,083
Receivables financing 7.4 372,281,872
Advance payment 7.5 3,490,928 4,219,949
Premium receivable
Reinsurance accounts receivable
Receivable reserves for reinsurance contract
Other receivables 7.6 28,618,983 22,636,086
Including: Interest receivable 2,099,109 1,332,681
Dividends receivable
Redemptory monetary capital for sale
Inventories 7.7 2,606,781,436 2,724,591,457
Contract assets
Assets held for sale
Non-current assets due within one year
Other current assets 7.8 300,418,901 258,676,396
47
Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
December 31,
Item Note June 30, 2019
2018
Total current assets 5,346,356,265 5,016,645,436
Non-current assets:
Offering loans and imprest
Debt investments
Available-for-sale financial assets 467,251
Other debt investments
Held-to-maturity investments
Long-term receivables
Long-term equity investments
Other investments in equity instruments
Other non-current financial assets 7.9 515,922
Investment real estate 7. 10 30,560,470 31,572,489
Fixed assets 7.11 5,684,612,653 5,749,731,667
Construction in progress 7.12 789,872,373 759,296,591
Productive biological assets 7.13 207,613,439 209,266,373
Oil-and-gas assets
Right-of-use assets
Intangible assets 7.14 647,158,886 655,473,459
Development expenditure
Goodwill 7.15 165,199,111 165,199,111
Long-term prepaid expenses 7.16 276,557,711 244,640,416
Deferred income tax assets 7.17 234,646,603 285,436,259
Other non-current assets
Total non-current assets 8,036,737,168 8,101,083,616
Total assets 13,383,093,433 13,117,729,052
Current liabilities:
Short-term loans 7.18 678,170,667 688,002,410
Borrowings from the Central Bank
Loans from other banks and other financial institutions
Tradable financial liabilities
Financial liabilities measured at the fair value and the variation of which
is recorded into the current profits and losses
Derivative financial liabilities
Bills payable
Accounts payable 7.19 539,459,878 713,572,881
Advances from customers 7.20 177,549,080 226,075,244
Financial assets sold for repurchase
Deposits from customers and interbank
Receivings from vicariously traded securities
Receivings from vicariously sold securities
Employee remunerations payable 7.21 177,466,368 212,304,217
Taxes and dues payable 7.22 109,000,802 128,912,790
Other payables 7.23 977,667,007 608,479,890
Including: Interest payable 2,669,667 712,826
Dividends payable 412,646,375
48
Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
December 31,
Item Note June 30, 2019
2018
Handling charges and commissions payable
Dividend payable for reinsurance
Contract liabilities
Liabilities held for sale
Non-current liabilities due within one year 7.24 180,362,314 152,940,788
Other current liabilities 7.25 14,545,254 15,860,254
Total current liabilities 2,854,221,370 2,746,148,474
Non-current liabilities:
Reserves for insurance contracts
Long-term borrowings 7.26 165,949,250 156,480,662
Bonds payable
Including: Preferred stock
Perpetual bonds
Lease liabilities
Long-term accounts payable 7.27 201,000,000 225,000,000
Long-term employee remunerations payable
Estimated liabilities
Deferred income 7.28 64,050,895 70,367,039
Deferred income tax liabilities 7.17 18,629,612 22,010,647
Other non-current liabilities 7.29 7,159,222 7,234,853
Total non-current liabilities 456,788,979 481,093,201
Total liabilities 3,311,010,349 3,227,241,675
Owner’s equity:
Capital stock 7.30 685,464,000 685,464,000
Other equity instruments
Including: Preferred stock
Perpetual bonds
Capital surplus 7.31 565,955,441 565,955,441
Minus: Treasury stock
Other comprehensive income 7.32 -95,344 2,965,377
Special reserves
Surplus reserves 7.33 342,732,000 342,732,000
General risk preparation
Undistributed profit 7.34 8,197,828,994 8,008,982,547
Total owner’s equities attributable to the parent company 9,791,885,091 9,606,099,365
Minority equity 280,197,993 284,388,012
Total owner’s equities 10,072,083,084 9,890,487,377
Total liabilities and owner’s equities 13,383,093,433 13,117,729,052
Legal Representative: Zhou Hongjiang Accounting Supervisor: Jiang Jianxun Accounting Department Manager: Jiang
Jianxun
2.2 Balance sheet of the parent company
Compiling unit: Yantai Changyu Pioneer Wine Co., Ltd. Unit: Yuan
49
Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
Item Note June 30, 2019 December 31, 2018
Current assets:
Monetary fund 1,083,333,310 624,588,809
Tradable financial assets
Financial assets measured at the fair value and the variation of which is
recorded into the current profits and losses
Derivative financial assets
Bills receivable 39,885,254
Accounts receivable 15.1 1,447,973
Receivables financing 56,047,969
Advance payment 427,816 227
Other receivables 15.2 526,593,613 1,025,643,356
Including: Interest receivable 277,785 254,088
Dividends receivable 4,103,925 500,000,000
Inventories 505,479,473 385,154,740
Contract assets
Assets held for sale
Non-current assets due within one year
Other current assets 35,992,255 24,704,844
Total current assets 2,207,874,436 2,101,425,203
Non-current assets:
Debt investments
Available-for-sale financial assets
Other debt investments
Held-to-maturity investments
Long-term receivables
Long-term equity investments 15.3 7,420,803,069 7,420,803,069
Other investments in equity instruments
Other non-current financial assets
Investment real estate 30,560,470 31,572,489
Fixed assets 260,448,515 265,311,274
Construction in progress 7,319,082 6,311,701
Productive biological assets 121,158,460 125,002,793
Oil and gas assets
Right-of-use assets
Intangible assets 66,054,490 67,244,066
Development expenditure
Goodwill
Long-term prepaid expenses
Deferred income tax assets 20,699,273 24,194,967
Other non-current assets 985,700,000 972,700,000
Total non-current assets 8,912,743,359 8,913,140,359
Total assets 11,120,617,795 11,014,565,562
Current liabilities:
Short-term loans 150,000,000 150,000,000
Tradable financial liabilities
Financial liabilities measured at the fair value and the variation of which
50
Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
Item Note June 30, 2019 December 31, 2018
is recorded into the current profits and losses
Derivative financial liabilities
Bills payable
Accounts payable 106,793,658 132,704,304
Advances from customers
Contract liabilities
Employee remunerations 59,598,048 72,345,179
Taxes and dues payable 3,749,762 13,111,431
Other payables 913,805,782 607,974,519
Including: Interest payable 163,125 181,250
Dividends payable 411,278,400
Liabilities held for sale
Non-current liabilities due within one year
Other current liabilities 3,433,054 3,433,054
Total current liabilities 1,237,380,304 979,568,487
Non-current liabilities:
Long-term borrowings
Bonds payable
Including: Preferred stock
Perpetual bonds
Lease liabilities
Long-term accounts payable
Long-term employee remuneration payable
Estimated liabilities
Deferred income 7,459,789 8,910,918
Deferred income tax liabilities
Other non-current liabilities 2,951,042 2,710,575
Total non-current liabilities 10,410,831 11,621,493
Total liabilities 1,247,791,135 991,189,980
Owner’s equity:
Capital stock 685,464,000 685,464,000
Other equity instruments
Including: Preferred stock
Perpetual bonds
Capital surplus 557,222,454 557,222,454
Minus: Treasury stock
Other comprehensive income
Special reserves
Surplus reserves 342,732,000 342,732,000
Undistributed profit 8,287,408,206 8,437,957,128
Total owner’s equities 9,872,826,660 10,023,375,582
Total liabilities and owner’s equities 11,120,617,795 11,014,565,562
Legal Representative: Zhou Hongjiang Accounting Supervisor: Jiang Jianxun Accounting Department Manager: Jiang
Jianxun
51
Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
2.3 Consolidated profit statement
Compiling unit: Yantai Changyu Pioneer Wine Co., Ltd. Unit: Yuan
Item Note Sum of current period Sum of prior period
1. Total operating income 2,558,274,785 2,828,230,064
Including: Operating income 7.35 2,558,274,785 2,828,230,064
Interest income
Earned premium
Handling fee and commission income
2. Total operating costs 1,818,822,580 2,023,670,406
Including: Operating costs 7.35 936,252,225 974,557,292
Interest expenditure
Handling fees and commission expenditure
Premium rebate
Net amount of indemnity expenditure
Net amount of the withdrawn reserve fund for
insurance contract
Policy bonus payment
Amortized reinsurance expenditures
Taxes and surcharges 7.36 123,550,848 165,276,251
Selling expenses 7.37 591,970,801 710,659,033
Administrative expenses 7.38 155,552,312 157,964,882
Research and development expenses 7.39 2,706,811 2,127,006
Financial expenses 7.40 8,789,583 13,085,942
Including: Interest expenses 9,812,560 18,739,528
Interest income 4,606,417 7,245,870
Plus: Other profit 7.41 64,211,892 37,982,878
Investment profit (loss is listed with "-")
Including: Investment profit for joint-run business and joint
venture
Financial assets measured at amortized cost cease
to be recognized as income (loss is listed with
"-")
Exchange income (loss is listed with "-")
Net exposure hedge income (loss is listed with "-")
Income from fair value changes (loss is listed with "-")
Credit impairment loss (loss is listed with "-") 7.42 -765,935
Asset impairment loss (loss is listed with "-") 7.43 6,148,729 4,730,948
Income from asset disposal (loss is listed with "-") 7.44 1,138 93,958
3. Operating profit (loss is listed with "-") 809,048,029 847,367,442
Plus: Non-operating income 7.45 3,575,914 2,006,392
Minus: Non-operating expenses 7.46 164,050 1,392,362
4. Total profits (total loss is listed with "-") 812,459,893 847,981,472
Minus: Income tax expenses 7.47 210,281,578 211,979,735
5. Net profit (net loss is listed with "-") 602,178,315 636,001,737
5.1 Classification by operation continuity
5.1.1 Net profit from continuing operation (net loss is listed with
602,178,315 636,001,737
"-")
52
Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
5.1.2 Net profit from terminating operation (net loss is listed
with "-")
5.2 Classification by ownership
5.2.1 Net profit attributable to owner of the parent company 603,403,789 635,837,405
5.2.2 Minority interest income -1,225,474 164,332
6. Net after-tax amount of other comprehensive income 7.48 -4,657,291 -11,126,413
Net after-tax amount of other comprehensive income attributable to
-3,060,721 -9,230,820
owner of the parent company
6.1 Other comprehensive income not to be reclassified into profit and
loss later
6.1.1 Changes after remeasuring and resetting the benefit plans
6.1.2 Other comprehensive income not to be reclassified into profit
and loss under equity law
6.1.3 Changes in the fair value of other investments in equity
instruments
6.1.4 Changes in the fair value of the enterprise's own credit risk
6.1.5 Other
6.2 Other comprehensive income to be reclassified into profit and
-3,060,721 -9,230,820
loss later
6.2.1 Other comprehensive income to be reclassified into profit and
loss under equity law
6.2.2 Changes in the fair value of other debt investments
6.2.3 Profit and loss from changes in the fair value of financial assets
for sale
6.2.4 Amount of financial assets reclassified into other
comprehensive income
6.2.5 Profit and loss from reclassification of held-to-maturity
investments into financial assets for sale
6.2.6 Provision for credit impairment of other credit investments
6.2.7 Provision for cash-flow hedge
6.2.8 Difference in translation of Foreign Currency Financial
-3,060,721 -9,230,820
Statement
6.2.9 Other
Net after-tax amount of other comprehensive income attributable to
-1,596,570 -1,895,593
minority shareholders
7. Total comprehensive income 597,521,024 624,875,324
Attributable to owner of the parent company 600,343,068 626,606,585
Attributable to minority shareholders -2,822,044 -1,731,261
8. Earnings per share:
8.1 Basic earnings per share 0.88 0.93
8.2 Diluted earnings per share 0.88 0.93
Legal Representative: Zhou Hongjiang Accounting Supervisor: Jiang Jianxun Accounting Department Manager: Jiang
Jianxun
2.4 Profit statement of the parent company
Compiling unit: Yantai Changyu Pioneer Wine Co., Ltd. Unit: Yuan
Item Note Sum of current period Sum of prior period
1. Operating income 15.4 352,351,002 408,845,211
Minus: Operating costs 15.4 309,570,580 352,646,989
53
Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
Taxes and surcharges 13,140,156 24,463,375
Selling expenses
Administrative expenses 39,434,246 39,827,281
Research and development expenses 405,061 360,466
Financial expenses -3,657,370 -15,151,608
Including: Interest expenses -2,705,073 11,357,611
Interest income 1,470,667 29,630,717
Plus: Other profit 1,716,527 1,976,527
Investment profit (loss is listed with "-") 15.5 264,221,755 312,409,576
Including: Investment profit for joint-run business and joint
venture
Financial assets measured at amortized cost cease
to be recognized as income (loss is listed with
"-")
Net exposure hedge income (loss is listed with "-")
Income from fair value changes (loss is listed with "-")
Credit impairment loss (loss is listed with "-")
Asset impairment loss (loss is listed with "-")
Income from asset disposal (loss is listed with "-") 75,000
2. Operating profit (loss is listed with "-") 259,396,611 321,159,811
Plus: Non-operating income 703,559 56,479
Minus: Non-operating expenses 97,638 528
3. Total profits (total loss is listed with "-") 260,002,532 321,215,762
Minus: Income tax expenses -726,946 2,450,592
4. Net profit (net loss is listed with "-") 260,729,478 318,765,170
4.1Net profit from continuing operation (net loss is listed with
260,729,478 318,765,170
"-")
4.2 Net profit from terminating operation (net loss is listed with
"-")
5. Net after-tax amount of other comprehensive income
5.1 Other comprehensive income not to be reclassified into profit and
loss later
5.1.1 Changes after remeasuring and resetting the benefit plans
5.1.2 Other comprehensive income not to be reclassified into profit
and loss under equity law
5.1.3 Changes in the fair value of other investments in equity
instruments
5.1.4 Changes in the fair value of the enterprise's own credit risk
5.1.5 Other
5.2 Other comprehensive income to be reclassified into profit and
loss later
5.2.1 Other comprehensive income to be reclassified into profit and
loss under equity law
5.2.2 Changes in the fair value of other debt investments
5.2.3 Profit and loss from changes in the fair value of financial assets
for sale
5.2.4 Amount of financial assets reclassified into other
comprehensive income
5.2.5 Profit and loss from reclassification of held-to-maturity
investments into financial assets for sale
5.2.6 Provision for credit impairment of other credit investments
54
Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
5.2.7 Provision for cash-flow hedge
5.2.8 Difference in translation of Foreign Currency Financial
Statement
5.2.9 Other
6. Total comprehensive income 260,729,478 318,765,170
7. Earnings per share:
7.1 Basic earnings per share 0.38 0.47
7.2 Diluted earnings per share 0.38 0.47
Legal Representative: Zhou Hongjiang Accounting Supervisor: Jiang Jianxun Accounting Department Manager: Jiang
Jianxun
2.5 Consolidated cash flow statement
Compiling unit: Yantai Changyu Pioneer Wine Co., Ltd. Unit: Yuan
Item Note Sum of current period Sum of prior period
1. Cash flows from operating activities:
Cash received from sales of goods and rending of
2,399,548,448 2,680,388,050
services
Net increase in customer and interbank deposits
Net increase in borrowings from central bank
Net increase in borrowings from other financial
institutions
Cash received from receiving insurance premium of
original insurance contract
Net cash received from reinsurance business
Net increase in policy holder deposits and investment
funds
Cash received from collecting interest, handling fees
and commissions
Net increase in borrowing funds
Net increase in repurchasement business funds
Net cash received for buying and selling securities
Tax refund received 20,038,271 26,089,608
Other cash received related to operating activities 7.49 67,785,620 42,343,021
Subtotal of cash flows of operating activities 2,487,372,339 2,748,820,679
Cash paid for goods and services 718,093,432 677,552,938
Net increase in customer loans and advances
Net increase in deposits in central bank and interbank
deposits
Cash paid to original insurance contract payments
Net increase in financial assets held for trading purposes
Net increase in lending funds
Cash paid to interest, handling fees and commissions
Cash paid to policy bonus
Cash paid to and on behalf of employees 278,638,333 278,814,385
Cash paid for taxes and expenses 598,384,101 802,722,798
Other cash paid related to operating activities 7.49 392,780,467 436,977,086
Sub-total of cash outflows of operating activities 1,987,896,333 2,196,067,207
55
Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
Item Note Sum of current period Sum of prior period
Net cash flow from operating activities 499,476,006 552,753,472
2. Cash flow from investing activities:
Cash received from disinvestment
Cash received from withdrawal of fixed deposits 104,597,650 305,000,000
Cash received from obtaining investment income
Cash received from obtaining interest income 1,004,552 2,342,015
Cash received from disposal of fixed assets, intangible
175,837 471,130
assets and other long-term assets
Net cash received from disposal of branch and other
business unit
Other cash received related to investing activities
Subtotal of cash flows of investment activities 105,778,039 307,813,145
Cash paid to acquire fixed assets, intangible assets and
135,073,897 154,464,274
other long-term assets
Cash for investment
Cash paid for purchasing fixed deposits 85,238,750 340,000,000
Net increase in hypothecated loan
Net cash paid for acquiring branch and other business
104,566,419
unit
Other cash paid related to investment activities
Subtotal of cash outflows of investment activities 220,312,647 599,030,693
Net cash flow from investing activities -114,534,608 -291,217,548
3. Cash flow from financing activities
Cash received from acquiring investment
Including: cash received from acquiring minority
shareholders investment by branch
Cash received from acquiring loans 656,495,139 669,905,706
Cash received from issuing bonds
Other cash received related to financing activities 7.49 23,521,431
Subtotal cash flows of financing activities 656,495,139 693,427,137
Cash paid for paying debts 658,033,492 658,512,141
Cash paid for distributing dividend and profit or paying
16,590,004 21,265,533
interest
Including: dividend and profit paid to minority
shareholders by branch
Other cash paid related to financing activities 7.49 20,000,000
Subtotal of cash outflows of financing activities 674,623,496 699,777,674
Net cash flow from financing activities -18,128,357 -6,350,537
4. Influences of exchange rate fluctuation on cash
53,702 -7,404,199
and cash equivalents
5. Net Increase in cash and cash equivalents 366,866,743 247,781,188
Plus: balance at the beginning of the period of cash and
1,206,860,334 1,180,889,274
cash equivalents
6. Balance at the end of the period of cash and cash
1,573,727,077 1,428,670,462
equivalents
Legal Representative: Zhou Hongjiang Accounting Supervisor: Jiang Jianxun Accounting Department Manager: Jiang
Jianxun
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Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
2.6 Cash flow statement of the parent company
Compiling unit: Yantai Changyu Pioneer Wine Co., Ltd. Unit: Yuan
Item Sum of current period Sum of prior period
1. Cash flows from operating activities:
Cash received from sales of goods and rending of services 219,405,421 275,862,358
Tax refund received
Other cash received related to operating activities 57,674,830 100,163,394
Subtotal of cash flows of operating activities 277,080,251 376,025,752
Cash paid for goods and services 163,184,301 200,935,534
Cash paid to and on behalf of employees 45,116,586 43,647,320
Cash paid for taxes and expenses 22,530,113 43,132,327
Other cash paid related to operating activities 321,847,893 19,942,485
Sub-total of cash outflows of operating activities 552,678,893 307,657,666
Net cash flow from operating activities -275,598,642 68,368,086
2. Cash flow from investing activities:
Cash received from disinvestment
Cash received from withdrawal of fixed deposits 40,000,000 305,000,000
Cash received from obtaining investment income 760,152,668 717,667,435
Cash received from obtaining interest income 484,857 2,342,015
Net cash received from disposal of fixed assets, intangible assets and
7,519 538,055
other long-term assets
Net cash received from disposal of branch and other business unit
Other cash received related to investing activities
Subtotal of cash flows of investment activities 800,645,044 1,025,547,505
Cash paid to acquiring fixed assets, intangible assets and other
10,164,233 11,968,401
long-term assets
Cash for investment 13,000,000 105,926,184
Cash paid for purchasing fixed deposits 85,238,750 340,000,000
Net cash paid for acquiring branch and other business unit
Other cash paid related to investment activities
Subtotal of cash outflows of investment activities 108,402,983 457,894,585
Net cash flow from investing activities 692,242,061 567,652,920
3. Cash flow from financing activities
Cash received from acquiring investment
Cash received from acquiring loans 200,000,000
Cash received from issuing bonds
Other cash received related to financing activities
Subtotal cash flows of financing activities 200,000,000
Cash paid for debts 600,000,000
Cash paid to distribute dividend, profit or pay interest 3,248,000 11,660,417
Other cash paid related to financing activities
Subtotal of cash outflows of financing activities 3,248,000 611,660,417
Net cash flow from financing activities -3,248,000 -411,660,417
4. Influences of exchange rate fluctuation on cash and cash
equivalents
5. Net Increase in cash and cash equivalents 413,395,419 224,360,589
Plus: balance at the beginning of the period of cash and cash 532,384,882 493,568,866
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Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
Item Sum of current period Sum of prior period
equivalents
6. Balance at the end of the period of cash and cash equivalents 945,780,301 717,929,455
Legal Representative: Zhou Hongjiang Accounting Supervisor: Jiang Jianxun Accounting Department Manager: Jiang
Jianxun
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Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
2.7 Consolidated owner’s equity changing list
Unit: Yuan
This period
Owners’ equity of the parent company
Item Other equity Minority
Minus: Other General Total owners’
instruments Capital Special Surplus Undistributed shareholders’
Capital stock Treasury comprehensive risk Other Subtotal equity
reserves reserves reserves profits equity
Preferred Perpetual stock income preparation
stock bonds Other
1. Balance at the end of
685,464,000 565,955,441 2,965,377 342,732,000 8,008,982,547 9,606,099,365 284,388,012 9,890,487,377
last year
Plus: Accounting
-3,278,942 -3,278,942 -3,278,942
policies changing
Previous error
correction
Business combination
under common control
Other
2. Balance at the
685,464,000 565,955,441 2,965,377 342,732,000 8,005,703,605 9,602,820,423 284,388,012 9,887,208,435
beginning of this year
3. Increased or
decreased amount in
this period (reducing -3,060,721 192,125,389 189,064,668 -4,190,019 184,874,649
amount is listed with
"-")
3.1 Total
-3,060,721 603,403,789 600,343,068 -2,822,044 597,521,024
comprehensive income
3.2 Owners' invested
and reduced capital
3.2.1 Owner’ invested
common stock
3.2.2 Other equity
instrument holders’
invested capital
3.2.3 Amount of shares
paid and reckoned in
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Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
owners' equity
3.2.4 Other
3.3 Profit distribution -411,278,400 -411,278,400 -1,367,975 -412,646,375
3.3.1 Accrued surplus
reserves
3.3.2 Accrued general
risk preparation
3.3.3 Distribution to
owners (or -411,278,400 -411,278,400 -1,367,975 -412,646,375
shareholders)
3.3.4 Other
3.4 Internal transfer of
owners' equity
3.4.1 Capital reserves
transferred and
increased capital (or
capital stock)
3.4.2 Surplus reserves
transferred and
increased capital (or
capital stock)
3.4.3 Surplus reserves
covering deficit
3.4.4 Retained earnings
carried over from the
benefit plan amount
3.4.5 Retained earnings
carried over from other
comprehensive income
3.4.6 Other
3.5 Special reserves
3.5.1 Withdrawal in this
period
3.5.2 Usage in this
period
3.6 Other
4. Balance at the end of
685,464,000 565,955,441 -95,344 342,732,000 8,197,828,994 9,791,885,091 280,197,993 10,072,083,084
this period
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Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
Last period
Owners’ equity of the parent company
Item Other equity Minority
Minus: Other General Total owners’
instruments Capital Special Surplus Undistributed shareholders’
Capital stock Treasury comprehensive risk Other Subtotal equity
reserves reserves reserves profits equity
Preferred Perpetual stock income preparation
stock bonds Other
1. Balance at the end of
685,464,000 565,955,441 3,109,240 342,732,000 7,309,081,618 8,906,342,299 271,636,379 9,177,978,678
last year
Plus: Accounting
policies changing
Previous error
correction
Business combination
under common control
Other
2. Balance at the
685,464,000 565,955,441 3,109,240 342,732,000 7,309,081,618 8,906,342,299 271,636,379 9,177,978,678
beginning of this year
3. Increased or
decreased amount in
this period (reducing -143,863 699,900,929 699,757,066 12,751,633 712,508,699
amount is listed with
"-")
3.1 Total
-143,863 1,042,632,929 1,042,489,066 -1,381,414 1,041,107,652
comprehensive income
3.2 Owners' invested
17,532,823 17,532,823
and reduced capital
3.2.1 Owner’ invested
common stock
3.2.2 Other equity
instrument holders’
invested capital
3.2.3 Amount of shares
paid and reckoned in
owners' equity
3.2.4 Other 17,532,823 17,532,823
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Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
3.3 Profit distribution -342,732,000 -342,732,000 -3,399,776 -346,131,776
3.3.1 Accrued surplus
reserves
3.3.2 Accrued general
risk preparation
3.3.3 Distribution to
owners (or -342,732,000 -342,732,000 -3,399,776 -346,131,776
shareholders)
3.3.4 Other
3.4 Internal transfer of
owners' equity
3.4.1 Capital reserves
transferred and
increased capital (or
capital stock)
3.4.2 Surplus reserves
transferred and
increased capital (or
capital stock)
3.4.3 Surplus reserves
covering deficit
3.4.4 Retained earnings
carried over from the
benefit plan amount
3.4.5 Retained earnings
carried over from other
comprehensive income
3.4.6 Other
3.5 Special reserves
3.5.1 Withdrawal in this
period
3.5.2 Usage in this
period
3.6 Other
4. Balance at the end of
685,464,000 565,955,441 2,965,377 342,732,000 8,008,982,547 9,606,099,365 284,388,012 9,890,487,377
this period
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Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
2.8 Owner’s equity changing list of the parent company
Unit: Yuan
This period
Item Other equity instruments Minus: Other Total owners’
Capital Capital Special Surplus Undistributed equity
Preferred Perpetual Treasury comprehensive Other
stock Other reserves reserves reserves profits
stock bonds stock income
1. Balance at the end of last year 685,464,000 557,222,454 342,732,000 8,437,957,128 10,023,375,582
Plus: Accounting policies changing
Previous error correction
Other
2. Balance at the beginning of this year 685,464,000 557,222,454 342,732,000 8,437,957,128 10,023,375,582
3. Increased or decreased amount in this
period (reducing amount is listed with -150,548,922 -150,548,922
"-")
3.1 Total comprehensive income 260,729,478 260,729,478
3.2 Owners' invested and reduced capital
3.2.1 Shareholders’ invested common
stock
3.2.2 Other equity instrument holder’
invested capital
3.2.3 Amount of shares paid and
reckoned in owners' equity
3.2.4 Other
3.3 Profit distribution -411,278,400 -411,278,400
3.3.1 Drew surplus reserves
3.3.2 Distribution to owners (or
-411,278,400 -411,278,400
shareholders)
3.3.3 Other
3.4 Internal transfer of owners' equity
3.4.1 Capital reserves transferred and
increased capital (or capital stock)
3.4.2 Surplus reserves transferred and
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Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
increased capital (or capital stock)
3.4.3 Surplus reserves covering deficit
3.4.4 Retained earnings carried over
from the benefit plan amount
3.4.5 Retained earnings carried over
from other comprehensive income
3.4.6 Other
3.5 Special reserves
3.5.1 Accrual in this period
3.5.2 Usage in this period
3.6 Other
4. Balance at the end of this period 685,464,000 557,222,454 342,732,000 8,287,408,206 9,872,826,660
Unit: Yuan
Last period
Item Other equity instruments Minus: Other Total owners’
Capital Capital Special Surplus Undistributed equity
Preferred Perpetual Treasury comprehensive Other
stock Other reserves reserves reserves profits
stock bonds stock income
1. Balance at the end of last year 685,464,000 557,222,454 342,732,000 7,811,100,555 9,396,519,009
Plus: Accounting policies changing
Previous error correction
Other
2. Balance at the beginning of this year 685,464,000 557,222,454 342,732,000 7,811,100,555 9,396,519,009
3. Increased or decreased amount in this
period (reducing amount is listed with 626,856,573 626,856,573
"-")
3.1 Total comprehensive income 969,588,573 969,588,573
3.2 Owners' invested and reduced capital
3.2.1 Shareholders’ invested common
stock
3.2.2 Other equity instrument holder’
invested capital
3.2.3 Amount of shares paid and
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Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
reckoned in owners' equity
3.2.4 Other
3.3 Profit distribution -342,732,000 -342,732,000
3.3.1 Drew surplus reserves
3.3.2 Distribution to owners (or
shareholders)
3.3.3 Other
3.4 Internal transfer of owners' equity
3.4.1 Capital reserves transferred and
increased capital (or capital stock)
3.4.2 Surplus reserves transferred and
increased capital (or capital stock)
3.4.3 Surplus reserves covering deficit
3.4.4 Retained earnings carried over
from the benefit plan amount
3.4.5 Retained earnings carried over
from other comprehensive income
3.4.6 Other
3.5 Special reserves
3.5.1 Accrual in this period
3.5.2 Usage in this period
3.6 Other
4. Balance at the end of this period 685,464,000 557,222,454 342,732,000 8,437,957,128 10,023,375,582
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Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
3. Company profile
Yantai Changyu Pioneer Wine Co., Ltd. (the “Company” or the “Joint-stock Company”) was
incorporated as a joint-stock limited company in accordance with the Company Law of the People’s
Republic of China (the “PRC”) in the merger and reorganization carried out by Yantai Changyu Group
Co., Ltd. (“Changyu Group Company”) with its assets and liabilities in relation to wine business. The
Company and its subsidiary companies (hereinafter collectively referred to as the “Group”) are
engaged in the production and sale of wine, brandy and champagne, planting and purchase of grapes,
development of tourism resources, etc. The registered address of the Company is Yantai City,
Shandong Province, and the office address of the headquarters is 56 Dama Road, Zhifu District, Yantai
City, Shandong Province.
As at June 30, 2019, the Company issued 685,464,000 shares accumulatively. Refer to Note 7.30 for
details.
The parent company of the Group is Changyu Group Company incorporated in China, which was
ultimately and actually controlled by four parties, including Yantai Guofeng Investment Holding Co.,
Ltd., ILLVA Saronno Holding Spa, International Finance Corporation and Yantai Yuhua Investment &
Development Co., Ltd.
The financial statement and the consolidated financial statement of the Company were approved by
the Board of Directors on August 26, 2019.
The details of scope of the consolidated financial statement in this period can be seen in Note 9
“Equity in other entities”. The details of scope changes of the consolidated financial statement in this
period can be seen in Note 8 “Changes of the consolidated scope”.
4. Preparation basis of financial statement
4.1 Preparation basis
The Group implements the Accounting Standards for Business Enterprises (including the new and
revised editions published in 2014) (“ASBE”) published by the Ministry of Finance and relevant
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Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
regulations thereof.
Note-accounting basis and pricing principle
The note-accounting basis of financial accounting adopted by the Group is accrual system and the
measurement basis adopted by the Group in preparing its financial statement is historical cost.
Subsequently, if the assets are impaired, the impairment provisions are made in accordance with
relevant accounting standards.
When the historical cost measurement is used, the assets are measured by the amount of cash or cash
equivalent when the assets are purchased or the fair value of the consideration. The liabilities are
measured by the actually received funds or assets for performing the current obligations, or the
contract amount for performing the current obligations, or the amount of cash or cash equivalent paid
for anticipated liabilities in the daily activities.
Fair value refers to a price received for selling an asset or paid for transferring a liability by the market
participant in orderly transactions on the measurement date. No matter the fair value is observable or
estimated by the valuation technique, the fair value measured and disclosed in this financial statement
is recognized on this basis.
The fair value measurement is divided into three levels based on the observable degree of the input
fair value and the importance of this input value on the whole fair value measurement:
*The input value of the first level is the unadjusted price of the same assets or liabilities which can be
acquired in an active market on the measurement date.
*The input value of the second level is the directly or indirectly observable input value of relevant
assets or liabilities except that of the first level.
*The input value of the third level is the unobservable input value of relevant assets or liabilities.
4.2 Continuous operation
The Group has appraised the ability of continuous operation for 12 months from June 30, 2019, and no
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Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
issues or situations causing major doubts to this ability are found. Therefore, this financial statement is
prepared on the basis of the continuous operation assumption.
5. Main accounting policies and accounting estimates
5.1 Statement on compliance with ASBE
This financial statement fulfills the requirement of ASBE and gives a true and integrated view of the
financial status and the consolidated financial status as at June 30, 2019, as well as the operating result,
the consolidated operating result, the cash flow and the consolidated cash flow of the Company from
January to June 2019.
5.2 Accounting period
The accounting period of the Group is from January 1 to December 31.
5.3 Operating cycle
The operating cycle refers to the period from the enterprise purchases the assets used for processing to
the cash or cash equivalent is realized. The operating cycle of the Company is 12 months.
5.4 Recording currency
Since Renminbi (RMB) is the currency of the main economic environment in which the Company and
the domestic subsidiary companies thereof are situated, the Company and the subsidiary companies
thereof adopt RMB as the recording currency. The overseas subsidiary companies thereof determine
EUR, CLP and AUD as the recording currency according to the main economic environment in which
they are situated. The currency in this financial statement prepared by the Group is RMB.
5.5 Accounting treatment method for business combination under common control and
non-common control
5.5.1 Business combination and goodwill under non-common control
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Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
A business combination under non-common control is a business combination in which all of the
combining enterprises are not ultimately controlled by the same party or parties before and after the
combination.
The combination cost shall be the fair value of the assets paid, the liabilities incurred or assumed or
the equity instruments issued by the acquirer in exchange for the control over the acquiree. The
intermediary expenses such as audit, legal services and assessment consultation and other related
management expenses paid by the acquirer for business combination are included in the current profits
and losses when they occur.
The identifiable assets, liabilities and contingent liabilities which are obtained from the acquiree in the
business combination and meet the recognition conditions shall be measured on the acquisition date
according to the fair value thereof.
Where the cost of combination exceeds the acquirer’s interest in the fair value of the acquiree’s
identifiable net assets, the difference shall be recognized as goodwill as an asset and initially measured
at cost. Where the cost of combination is less than the acquirer’s interest in the fair value of the
acquiree’s identifiable net assets, the acquirer firstly re-assesses the measurement of the fair values of
the acquiree’s identifiable assets, liabilities and contingent liabilities and measurement of the cost of
combination. If after that reassessment, the cost of combination is still less than the acquirer’s interest
in the fair value of the acquiree’s identifiable net assets, the acquirer recognizes the remaining
difference immediately in profit or loss for the current period.
The goodwill formed due to business combination shall be separately listed in the consolidated
financial statement and measured on the basis of the cost minus the accumulative impairment
provision.
5.6 Compiling methods of consolidated financial statement
The consolidation scope of the consolidated financial statement is determined on the basis of control.
Control means that the investor holds the power in the invested party, obtains variable returns by
participating in relevant activities of the invested party and has the ability to affect the amount of the
returns by using the power on the invested party. Once any change of the relevant facts and situations
results in any change of relevant elements of the above definition of Control, the Group will carry out
reappraisal.
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Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
The merger of any subsidiary company starts from the date when the Group acquires the power to
control this subsidiary company, while the termination of any subsidiary company ends in the date
when the Group losses the power to control this subsidiary company.
As for any subsidiary company obtained in a business combination under non-common control, the
business result and the cash flow thereof since the acquisition date (date of obtaining the control power)
shall have been properly included in the consolidated income statement and the consolidated cash flow
statement.
The principal accounting policies and accounting period adopted by the subsidiary companies shall be
determined in accordance with the accounting policies and accounting period uniformly regulated by
the Company.
The influence of the internal transaction between the Company and the subsidiary companies as well
as among subsidiary companies on the consolidated financial statement shall be neutralized at the time
of combination.
The shares in the owner's equity of the subsidiary companies, which do not belong to the parent
company, shall be recognized as the minority equity and listed under the item of “minority equity” of
the owner’s equity in the balance sheet. The shares in the current profits and losses of the subsidiary
companies, which belong to the minority equity, shall be listed under the item of “minority equity” of
the net profit in the consolidated income statement.
If the loss of the subsidiary companies borne by minority shareholders exceeds the shares of the
owner's equity entitled therein by the minority shareholders at the beginning of the period, the
difference shall be still credited against the minority equity.
5.7 Determination standard of cash and cash equivalents
Cash comprises cash on hand and demand deposit of the Company. Cash equivalents refer to
short-term highly liquid investments held by the Group which are readily convertible into known
amount of cash with an insignificant risk of changes in value.
5.8 Foreign currency transaction and foreign currency statement translation
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Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
5.8.1 Foreign currency transaction
At the time of initial recognition of a foreign currency transaction, the amount of the foreign currency
shall be translated into the amount of the recording currency at the spot exchange rate on the
transaction date.
The monetary items of the foreign currency transaction shall be translated into RMB at the spot
change rate on the balance sheet date. The currency translation difference generated by the difference
between the spot change rate on the balance sheet date and the spot change rate at the initial
recognition or on the previous balance sheet date shall be included in the current profits and losses,
except: ① the currency translation difference of the dedicated foreign currency loan that meets the
capitalization condition shall be included in the cost of assets as capitalization during the capitalization
period; ② the currency translation difference of the arbitrage tool to avoid foreign exchange risk
shall be treated according to the hedge accounting method; ③ the currency translation difference of
the available-for-sale monetary items generated by changes of the book balance other than the
amortized cost shall be recognized as other comprehensive income and included in the current profits
and losses.
5.8.2 Translation of foreign currency financial statement
In order to compile a consolidated financial statement, the foreign currency financial statement of
overseas business shall be translated into RMB financial statement in accordance with the following
methods: all asset and liability items in the balance sheet shall be translated at the spot exchange rate
on the balance sheet date; the shareholders' equity items, except for the ones as "undistributed profits",
shall be translated at the spot exchange rate at the time when they occur; all items and the items
reflecting the accrual profit distribution in the profit statement shall be translated at the exchange rate
similar to the spot exchange rate at the time when they occur; the undistributed profits at the beginning
of the year shall be the translated to the undistributed profits at the end of the previous year; the
undistributed profits at the end of the year shall be calculated and listed as the translated profit
distribution items; and the difference between the asset items and the sum of the liability items and the
shareholders’ equity items shall be recognized as other comprehensive income and included in the
shareholder's equity.
The foreign currency cash flows and the cash flows of the overseas subsidiary companies shall be
translated at the exchange rate similar to the spot exchange rate at the time when they occur; the
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Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
amount of the cash and cash equivalents impacted by the exchange rate movement shall be, as a
reconciling item, separately listed under “impact of exchange rate movement on cash and cash
equivalents” in the cash flow statement.
The balance at the beginning of the year and the actual amount of the previous year shall be listed as
the amount translated according to the financial statement of the previous year.
5.9 Financial instruments
When becoming a party to a contract of financial instruments, the Company shall recognize a financial
asset or financial liability.
5.9.1 Classification, recognition and measurement of financial assets
According to the business model of financial assets management and the contractual cash flow
characteristics of financial assets, the Company divides financial assets into: financial assets measured
at amortized cost; financial assets measured at fair value and the variation of which is included in
other comprehensive income; and financial assets measured at fair value and the variation of which is
included in the current profits and losses.
At the time of initial recognition, financial assets shall be measured at their fair value. As for the
financial assets measured at their fair value and the variation of which is included in the current profits
and losses, the transaction expenses thereof shall be directly included in the current profits and losses;
as for other categories of financial assets, the transaction expenses thereof shall be included in initial
recognized cost. For accounts receivable or bills receivable arising from sale of products or provision
of services, which do not contain or do not take into account material financing elements, the
Company shall take the amount of consideration that the Company is entitled to receive as expected as
the initial recognized amount.
① Financial assets measured at amortized cost
The Company manages such financial assets by the following business model: collecting contractual
cash flow as the target, with the contractual cash flow characteristics of such financial assets consistent
with the basic lending arrangement, that is, the cash flow generated on a specific date is only the
payment of principal and interest based on the outstanding principal amount. The Company shall
recognize the interest income of such financial assets by the actual interest rate method, and conduct
subsequent measurement at amortized cost. The profits or losses generated from the amortization or
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Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
impairment shall be included in the current profits and losses.
② Financial assets measured at fair value and the variation of which is included in other
comprehensive income
The Company manages such financial assets by the following business model: aiming at both
receiving contractual cash flow and selling, with the contractual cash flow characteristics of such
financial assets consistent with the basic lending arrangements. Such financial assets are measured at
fair value and the variation of which is included in other comprehensive income, but impairment
losses or gains, exchange gains and losses and interest income calculated by the effective interest rate
method shall be included in the current profits and losses.
In addition, the Company designates some non-tradable equity instrument investments as financial
assets measured at fair value and the variation of which is included in other comprehensive income.
The Company shall include relevant dividend income of such financial assets in the current profits and
losses, and the fair value changes in other comprehensive income. When the recognition of such
financial assets is terminated the accumulated gains or losses previously recorded in other
comprehensive income will be transferred into retained income from other comprehensive income,
which shall not be included in the current profits and losses.
③ Financial assets measured at fair value and the variation of which is included in the current profits
and losses
The Company divides those financial assets excluding the above financial assets measured at
amortized cost and financial assets measured at fair value and the variation of which is included in
other comprehensive income into financial assets measured at fair value and the variation of which is
included in the current profits and losses, and list as tradable financial assets. In addition, at the time of
initial recognition, in order to eliminate or significantly reduce accounting mismatches, the Company
designates some financial assets as financial assets measured at fair value and the variation of which is
included in the current profits and losses. For such financial assets, the Company adopts fair value for
subsequent measurement, and the variation in fair value shall be included in the current profits and
losses. The financial assets that have matured for more than one year since the balance sheet date and
are expected to be held for more than one year are listed as other non-current financial assets.
5.9.2 Classification, recognition and measurement of financial liabilities
At the time of initial recognition, financial liabilities are divided into financial liabilities measured at
fair value and the variation of which is included in the current profits and losses and other financial
liabilities. As for the financial liabilities measured at fair value and the variation of which is included
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Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
in the current profits and losses, the transaction expenses thereof shall be directly included in the
current profits and losses; as for other financial liabilities, the transaction expenses thereof shall be
included in initial recognized cost.
① Financial liabilities measured at fair value and the variation of which is included in the current
profits and losses
Financial liabilities measured at fair value and the variation of which is included in the current profits
and losses include tradable financial liabilities (including derivatives belonging to financial liabilities)
and financial liabilities designated as those measured at fair value when initially recognized and the
variation of which is included in the current profits and losses.
Tradable financial liabilities (including derivatives belonging to financial liabilities) shall be
subsequently measured at fair value, and the variation in the fair value shall be included in the current
profits and losses except those related to hedge accounting.
For the financial liabilities designated as those measured at fair value and the variation of which is
included the current profits and losses, the variation in fair value caused by changes in the Company's
own credit risk is included into other comprehensive income, and when the recognition of this liability
is terminated, the accumulated variation in fair value caused by changes in its own credit risk which is
included into other comprehensive income shall be transferred into retained income.
The remaining variations in fair value are included in the current profits and losses. If any accounting
mismatch in profits and losses is caused or enlarged by handling the impact of changes in the own
credit risk of such financial liabilities in the above way, the Company shall include all the gains or
losses of such financial liabilities (including the impact amount of changes in the credit risk of the
enterprise) in the current profits and losses.
② Other financial liabilities
In addition to the financial assets of which the transfer doesn’t meet the conditions to terminate the
recognition or financial liabilities formed by continuous involvement in the transferred financial assets
and other financial liabilities beyond the financial guarantee contract classified as financial liabilities
measured at amortized cost, the financial liabilities shall be measured at the amortized cost for
subsequent measurement, and the profits or losses caused by termination of recognition or
amortization shall be included in the current profits and losses.
5.9.3 Recognition basis and measurement method for the transfer of financial assets
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Where a financial asset meets any of the following requirements, the recognition of it shall be
terminated: ① The contractual rights for collecting the cash flow of the said financial asset are
terminated; ② The financial asset has been transferred and almost all the risks and rewards in the
ownership of the financial asset have been transferred to the transferee; ③The financial asset has been
transferred, although the enterprise has neither transferred nor retained almost all the risks and rewards
in the ownership of the financial asset, it has given up its control over the financial asset. If the
enterprise has neither transferred nor retained nearly all the risks and rewards in the ownership of the
financial asset, and has not given up its control over the financial asset, relevant financial asset shall be
recognized according to the extent of its continued involvement in the transferred financial asset, and
relevant liabilities shall be recognized accordingly. The extent of continued involvement in the
transferred financial asset refers to the risk level faced by the enterprise due to the change in the value
of the financial asset.
Where the overall transfer of the financial asset meets the derecognition conditions, the difference
between the book value of the transferred financial asset as well as the consideration received due to
such transfer and the summation of the cumulative amount of the fair value of the asset that is
originally included in other comprehensive income shall be included in the current profits and losses.
Where the partly transfer of a financial asset meets the derecognition conditions of termination, the
book value of the transferred financial asset shall be distributed between the terminated part of the
recognition and the unterminated part of the recognition, and the difference between the sum of the
consideration received as a result of the transfer and the accumulated mount of the changes in the fair
value of the derecognized part that is originally included in other comprehensive income and the
aforesaid distributed book amount shall be included in the current profits and losses.
The Company shall determine whether almost all the risks and rewards in the ownership of the
financial assets sold by means of attached right of recourse or the financial assets that it holds which
are endorsed to transfer have been transferred. Where almost all the risks and rewards in the ownership
of the financial assets have been transferred to the transferee, the recognition of such financial assets
shall be terminated; Where almost all the risks and rewards in the ownership of the financial assets are
retained, the recognition of such financial assets shall not be terminated; If almost all the risks and
rewards in the ownership of the financial assets are neither transferred nor retained, the enterprise shall
continue to judge whether it retains control over the assets and then conduct accounting treatment in
accordance with the principles described in the preceding paragraphs.
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5.9.4 Derecognition of financial liabilities
Where the current obligation of a financial liability (or part thereof) has been discharged, the Company
shall terminate the recognition of such financial liability (or part thereof). If the Company (borrower)
signs an agreement with the lender to replace the original financial liability by assuming the new
financial liability, and the contract terms of the new financial liability are substantially different from
those of the original financial liability, the recognition of the original financial liability shall be
terminated and a new financial liability shall be recognized at the same time. If the Company
substantially modifies the contract terms of the original financial liability (or part thereof), it shall
terminate the recognition of the original financial liability and recognize a new financial liability in
accordance with the revised terms at the same time.
If the recognition of a financial liability (or part of it) is terminated, the Company shall record the
difference between its book value and the consideration paid (including the transferred non-cash assets
or liabilities assumed) into the current profits and losses.
5.9.5 Offsetting of financial assets and financial liabilities
Where the Company has a legal right that is currently enforceable to set off the recognized amount of
financial assets and financial liabilities, and intends either to settle on a net basis, or to realise the
financial assets and clear off the financial liabilities simultaneously, the financial assets and financial
liabilities shall be offset and the net amount is presented in the balance sheet. Except for the above
circumstances, financial assets and financial liabilities shall be presented separately in the balance
sheet and shall not be offset.
5.9.6 Determination method of the fair value of financial assets and liabilities
The fair value refers to the price that market participants need to pay to receive or transfer a
liability when selling an asset in an orderly transaction that takes place on the measurement
date. Where there is an active market for a financial instrument, the Company shall determine
its fair value by the quotation in the active market. Quotations in the active market are prices
that are readily available from exchanges, brokers, trade associations, pricing services, etc., on
a regular basis, which represent the prices of actual market transactions that occur in fair trade.
Where there is no active market for financial instruments, the Company shall use valuation
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techniques to determine their fair value. Valuation techniques include referring to prices used
in recent market transactions by parties familiar with the situation and willing to trade, current
fair values of other financial instruments that are substantially the same, discounted cash flow
method, option pricing models, etc. At the time of valuation, the Company adopts valuation
techniques applicable to the current situation and supported by sufficient available data and
other information, selects input values consistent with the asset or liability characteristics
considered by market participants in the transaction of related assets or liabilities, and gives
priority to relevant observable input values as far as possible. When relevant observable input
values can’t be obtained or are not practicable to obtain, the non-inputable values shall be
used.
5.9.7 Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of the Company
after deducting all of its liabilities. The Company issues (including refinancing), repurchases, sells or
cancels equity instruments as changes in equity, and transaction costs related to equity transactions are
deducted from the equity. The Company does not recognize any variation in the fair value of equity
instruments.
Dividends paid on the Company's equity instruments during their existence (including the “interest”
generated by the instruments classified as equity instruments) shall be treated as profit distribution.
5.9.8 Impairment of financial assets
For financial assets measured at amortized cost and debt instrument investments measured at fair value
and whose changes are included in other comprehensive income, the Company shall recognize
provision for losses on the basis of expected credit losses.
The Company takes reasonable and reliable information about past events, current situation and
forecast of future economic situation into consideration, calculates the probability weighted amount of
the present value of the difference between the cash flow receivable of the contract and the cash flow
expected to be received based on the weight of the risk of default, and recognizes the expected credit
losses.
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On each balance sheet date, the Company measures the expected credit losses of financial instruments
at different stages respectively. If the credit risk of the financial instrument does not increase
significantly after the initial recognition, in the first stage, the Company shall measure the provision
for losses according to the expected credit losses in the next 12 months; If the credit risk of a financial
instrument has increased significantly since the initial recognition, but no credit impairment has
occurred, in the second stage, the Company shall measure the provision for losses according to the
expected credit loss of the entire duration of the instrument; If the credit impairment of a financial
instrument has occurred since the initial recognition, in the third stage, the Company shall measure the
provision for losses according to the expected credit loss of the entire duration of the instrument.
For financial instruments with low credit risk on the balance sheet date, the Company assumes that the
credit risk has not increased significantly since the initial recognition, and measures the provision for
losses according to the expected credit loss in the next 12 months.
For the financial instruments in the first and second stages and with low credit risk, the Company
calculates the interest income according to the book balance without deduction of impairment
provision at the actual interest rate. For financial instruments in the third stage, interest income is
calculated according to the book balance minus the amortized cost at the actual interest rate after the
provision for impairment has been accrued.
When an individual financial asset can’t evaluate the information of the expected credit loss at a
reasonable cost, the Company divides the receivables into several combinations according to the
characteristics of credit risk, and calculates the expected credit loss on the basis of the combination.
For bills receivable and accounts receivable, no matter whether there is a significant financing
component, the Company measures the provision for losses according to the expected credit loss
throughout the duration.
For the bills receivable divided into portfolio, the Company calculates the expected credit loss by
referring to the historical credit loss experience, combining the current situation as well as the forecast
of the future economic situation, and through the default risk exposure and the expected credit loss
rate of the entire duration.
For the accounts receivable divided into portfolio, the Company calculates the expected credit loss by
referring to the historical credit loss experience, combining the current situation as well as the forecast
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of the future economic situation, and formulating the comparison table of the overdue days of accounts
receivable and the expected credit loss rate of the whole duration.
For other receivables divided into portfolio, the Company calculates the expected credit loss by
referring to the historical credit loss experience, combining the current situation as well as the forecast
of the future economic situation, and through the default risk exposure and the expected credit loss
rate within the next 12 months or the entire duration.
The Company will include the accrued or transferred-back provision for losses in the current profits
and losses. For debt instruments that are measured at fair value and the variation of which is included
in other comprehensive income, the Company shall adjust other comprehensive income while
including impairment loss or profit in the current profits and losses.
5.10 Inventories
5.10.1 Categories of inventories
The inventories of the Group mainly include raw materials, goods in process and finished goods.
Inventories are initially measured at cost. Inventory costs include purchase costs, processing costs and
other expenses incurred to bring inventory to its current location and condition.
The agricultural products harvested are treated in accordance with the Accounting Standard for
Business Enterprises No.1 – Inventories.
5.10.2 Valuation method of inventories upon delivery
The actual cost of inventories upon delivery is calculated by the weighted average method.
5.10.3 Determination basis for net realisable value of inventories
On the balance sheet date, inventories are measured at the lower of cost and net realisable value. If
the net realisable value is below the cost of inventories, a provision for decline in value of inventories
is made. Net realisable value is the estimated selling price in the ordinary course of business less the
estimated costs of completion, the estimated costs necessary to make the sale and relevant taxes. Net
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realisable value is determined on the basis of clear evidence obtained, and takes into consideration the
purposes of holding inventories and effect of post balance sheet events.
Provision for decline in value of other inventories is made based on the excess of cost of inventory
over its net realisable value on an item-by-item basis.
After the provision for decline in value of inventories is made, if the circumstances that previously
caused inventories to be written down below cost no longer exist so that the net realisable value of
inventories is higher than their cost, the original provision for decline in value is reversed and the
reversal is included in profit or loss for the period.
5.10.4 Inventory count system
The perpetual inventory system is maintained for stock system.
5.10.5 Amortization method for low cost and short-lived consumable items and
packaging materials
Packaging materials and low cost and short-lived consumable items are amortized using the immediate
write-off method.
5.11 Non-current assets held for sale
Non-current assets and disposal groups are classified as held for sale category when the Group
recovers the book value through a sale (including an exchange of nonmonetary assets that has
commercial substance) rather than continuing use.
Non-current assets or disposal groups classified as held for sale are required to satisfy the following
conditions: (1) the asset or disposal group is available for immediate sale in its present condition
subject only to terms that are usual and customary for sales of such asset or disposal group; (2) the sale
is highly probable, i.e. the Group has made a resolution about selling plan and obtained a confirmed
purchase commitment and the sale is expected to be completed within one year.
The Group measures the no-current assets or disposal groups classified as held for sale at the lower of
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their carrying amount and fair value less costs to sell. Where the carrying amount is higher than the net
amount of fair value less costs to sell, carrying amount should be reduced to the net amount of fair
value less costs to sell, and such reduction is recognized in impairment loss of assets and included in
profit or loss for the period. Meanwhile, provision for impairment of held-for-sale assets are made.
When there is increase in the net amount of fair value of non-current assets held for sale less costs to
sell On the balance sheet date, the original deduction should be reversed in impairment loss of assets
recognized after the classification of held-for-sale category, and the reverse amount is include in profit
or loss for the period.
Non-current assets held for sale in non-current assets are not subject to depreciation or amortization.
5.12 Long-term equity investments
5.12.1 Judgment basis of control, joint control and significant influence
Control is the power to govern the financial and operating policies of an entity so as to obtain benefits
from its activities. Joint control is the contractually agreed sharing of control over an economic activity,
and exists only when the strategic financial and operating policy decisions relating to the activity
require the unanimous consent of the parties sharing control. Significant influence is the power to
participate in the financial and operating policy decisions of the investee but is not control or joint
control over those policies. When determining whether an investing enterprise is able to exercise
control or significant influence over an investee, the effect of potential voting rights of the investee
(for example, warrants and convertible debts) held by the investing enterprises or other parties that are
currently exercisable or convertible shall be considered.
5.12.2 Determination of initial investment cost
For a long-term equity investment acquired not involving enterprises under common control, the
investment cost of the long-term equity investment is the cost of acquisition.
Audit fee, legal services, evaluation and consulting fees and other related management costs in
acquisition are expensed in profits and losses when happened.
Other long-term equity investments acquired from other than acquisitions are recognized using
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original cost.
5.12.3 Subsequent measurement and recognition of profit or loss
Long-term equity investment accounted for using the cost method
The financial statement of the Company accounts for long-term equity investment using the cost
method. A subsidiary is an investee that is controlled by the Group.
Under the cost method, a long-term equity investment is measured at initial investment cost.
Long-term equity investment is adjusted when capital is added or recollected. Investment income is
recognized in the period in accordance with the attributable share of cash dividends or profit
distributions declared by the investee.
5.12.4 Disposal of long-term equity investments
On disposal of a long-term equity investment, the difference between the proceeds actually received
and receivable and the carrying amount is recognized in profit or loss for the period.
5.13 Investment properties
Investment property is property held to earn rentals or for capital appreciation or both.
An investment property is measured initially at cost. Subsequent expenditures incurred for such
investment property are included in the cost of the investment property if it is probable that economic
benefits associated with an investment property will flow to the Group and the subsequent
expenditures can be measured reliably. Other subsequent expenditures are recognized in profit or loss
in the period in which they are incurred.
The Group uses the cost model for subsequent measurement of investment properties, and adopts a
depreciation or amortization policy for the investment property which is consistent with that for
buildings or land use rights.
When an investment property is sold, transferred, retired or damaged, the Group recognizes the
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amount of any proceeds on disposal net of the carrying amount and related taxes in profit or loss for
the period.
5.14 Fixed assets
5.14.1 Recognition condition
Fixed assets are tangible assets that are held for use in the production or supply of goods or services,
for rental to others, or for administrative purposes, and have useful lives of more than one accounting
year. A fixed asset is recognized only when it is probable that economic benefits associated with the
asset will flow to the Group and the cost of the asset can be measured reliably. Fixed assets are
initially measured at cost.
Subsequent expenditures incurred for the fixed asset are included in the cost of the fixed asset and if it
is probable that economic benefits associated with the asset will flow to the Group and the subsequent
expenditures can be measured reliably. Meanwhile the carrying amount of the replaced part is
derecognized. Other subsequent expenditures are recognized in profit or loss in the period in which
they are incurred.
5.14.2 Depreciation method
A fixed asset is depreciated over its useful life using the straight-line method since the month
subsequent to the one in which it is ready for intended use. The useful life, estimated net residual
value rate and annual depreciation rate of each category of fixed assets are as follows:
Depreciation Residual value Annual depreciation
Classification Depreciation method
life rate rate
Straight-line
Houses and buildings 20-40 years 0-5% 2.4%-5.0%
depreciation
Straight-line
5-30 years 0-5% 3.2%-20.0%
Machinery equipment depreciation
Straight-line
4-12 years 0-5% 7.9%-25.0%
Transportation tools depreciation
Estimated net residual value assumes the situation where a fixed asset expire for its estimated useful
life and is in its expected final status. Estimated net residual value is the amount that the Group can
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obtain from the disposal less expected disposal fees.
5.14.3 Other explanations
If a fixed asset is upon disposal or no future economic benefits are expected to be generated from its
use or disposal, the fixed asset is derecognized. When a fixed asset is sold, transferred, retired or
damaged, the amount of any proceeds on disposal of the asset net of the carrying amount and related
taxes is recognized in profit or loss for the period.
The Group reviews the useful life and estimated net residual value of a fixed asset and the depreciation
method applied at least once at each financial year-end, and account for any change as a change in an
accounting estimate.
5.15 Construction in progress
Construction in progress is measured at its actual costs. The actual costs include various construction
expenditures during the construction period, borrowing costs capitalised before it is ready for intended
use and other relevant costs. Construction in progress is not depreciated. Construction in progress
is transferred to a fixed asset when it is ready for intended use.
5.16 Borrowing costs
Borrowing costs directly attributable to the assets meeting the capitalization conditions during the
acquisition, construction or production shall be capitalized when expenditures for such asset and
borrowing costs are incurred and activities relating to the acquisition, construction or production of the
asset that are necessary to prepare the asset for its intended use or sale have commenced.
Capitalization of borrowing costs shall be terminated when the qualifying asset being acquired,
constructed or produced becomes ready for its intended use or sale. Capitalization of borrowing costs
is suspended during the period in which the acquisition, construction or production of a qualifying
asset is suspended abnormally and when the suspension is for a continuous period of more than 3
months, until the acquisition, construction or production of the asset is resumed. Other borrowing
costs are recognized as an expense in the period in which they are incurred.
The interest expenses actually incurred in the current period of the special loan shall be capitalized
after deducting the interest income obtained by depositing the unused loan funds into the bank or the
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investment income obtained from the temporary investment.
5.17 Biological assets
The biological assets of the Group are productive biological assets.
Productive biological assets are biological assets, for example, held for the production of agricultural
produce, provision of services or leasing Productive biological assets in the Group are vines to
produce grapes. A productive biological asset is initially measured at cost. The cost of a productive
biological asset self-grown or self-bred comprises those costs necessarily incurred and directly
attributable to the asset before the asset becomes available for its intended production and operating
purposes, and any borrowing cost meeting the capitalisation criteria.
The productive biological assets are not accrued depreciation until reaching the intended production
and operation purposes. After reaching the intended production and operation purposes, the productive
biological assets are accrued depreciation within the service life straight-line depreciation. The service
life, estimated net residual value rate and annual depreciation rate of different productive biological
assets are as follows:
Category Useful life Estimated net residual rate Annual depreciation rate
Vines 20 years 5.0%
The Group evaluates the useful life and expected net salvage value by considering the normal
producing life of the productive biological assets.
The Group reviews the useful life and estimated net residual value of productive biological assets and
the depreciation method applied at least once at each financial year-end, and account for any change as
a change in an accounting estimate.
On the sale, identification of any shortages during stocktaking, death or damage of biological asset, the
proceeds on disposal net of the carrying amount and relevant taxes is recognized in profit or loss for
the current period.
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5.18 Intangible assets
Intangible assets include land use right, software, trademark, etc.
An intangible asset is measured initially at cost method. When an intangible asset with a finite useful
life is available for use, its original cost less net residual value and any accumulated impairment losses
is amortized over its estimated useful life using the straight-line method. Intangible assets with
indefinite useful lives are not amortized. The useful lives of the intangible assets are as follows:
Category Useful life Estimated net residual rate Annual amortization rate
Land use right 40-50 years - 2%-2.5%
Software 5-10 years - 10%-20%
Trademark 10 years 10%
Except for the above intangible assets with finite useful life, the Group also has land use right and
trademark use right with infinite useful lives. Land use right with infinite useful life refers to the
permanent land property right held by the Company for purchasing by Via Indómita, S.A., Via Dos
Andes, S.A., and Bodegas Santa Alicia SpA. (collectively referred to as the "Chile Indomita Wine
Group") and Kilikanoon Estate Pty Ltd (hereinafter referred to as “Australian Kilikanoon Estate”)
according to related Chilean and Australian law, which doesn’t need to be amortized. Trademark use
right refers to the trademark held by the Group for purchasing Chile Indomita Wine Group and
Australian Kilikanoon Estate, which has no finite useful life. The valuation of trademark use right is
based on the trends in the market and competitive environment, product cycle, and managing
long-term development strategy. Those basis indicated the trademark will provide net cash flows to the
Group within a given period. Because it was hard to predict the period that it would bring economic
benefits to the Group, the useful lives were uncertain.
For an intangible asset with a finite useful life, the Group reviews the useful life and Amortization
method at the end of the period, and makes adjustments when necessary.
5.19 Impairment of long-term assets
The Group and the Company review the impairment status of long-term equity investments, fixed
assets, investment real estate, construction in progress, productive biological asset and intangible
assets with finite useful life at the end of each year. If the assets exist impairment, the Group estimates
the recoverable amount of the assets. Intangible assets with indefinite useful life and intangible assets
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not yet available for use are tested for impairment annually, irrespective of whether there is any
indication that the assets may be impaired.
Recoverable amount is estimated on individual basis. If it is not practical to estimate the recoverable
amount of an individual asset, the recoverable amount of the asset group to which the asset belongs
will be estimated. The recoverable amount of an asset is the higher of its fair value less costs of
disposal and the present value of the future cash flows expected to be derived from the asset.
If recoverable amount of assets is less than book value, the difference is recognized as impairment
provision and expensed in current period.
Goodwill is tested for impairment at least at the end of each year. For the purpose of impairment
testing, goodwill is considered together with the related assets group (s), i.e., goodwill is reasonably
allocated to the related assets group (s) or each of assets group (s) expected to benefit from the
synergies of the combination. An impairment loss is recognized if the recoverable amount of the assets
group or sets of assets groups (including goodwill) is less than its carrying amount. The impairment
loss is firstly allocated to reduce the carrying amount of any goodwill allocated to such assets group or
sets of assets groups, and then to the other assets of the group pro-rata on the basis of the carrying
amount of each asset (other than goodwill) in the group.
The impairment is recognized in profit or loss for the period in which it is incurred and will not be
reversed in any subsequent period.
5.20 Long-term unamortized expenses
The Long-term unamortized expenses are amortized evenly over the period of estimated earnings, and
the long-term unamortized expenses of the Group are amortized over the following period:
Amortization period
Land requisition fee 50 years
Land lease prepayment 50 years
Greening fee 5-20 years
Leasehold improvement 3-5years
Other 3 years
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5.21 Employee remuneration
5.21.1 Accounting treatments of short-term remuneration
In an accounting period in which an employee has rendered service to the Group, the Group
recognizes the actual long-term remuneration for that service as a liability, and includes in the current
profits and losses or the related asset costs. Employee welfare expenses incurred by the Group shall be
recorded into the current profits and losses or related asset costs according to the actual amount.
Non-monetary employee benefits are measured at fair value.
Social insurances such as medical insurance, injury insurance and pregnancy insurance, housing funds,
labor union and employee education fees paid by the Group for employees, are recognized as relevant
liability in the period in which the employees provide service, in accordance with the regulated
recognition basis and percentage. The related expenditures are included in the current profits and
losses or related asset costs.
5.21.2 Accounting treatments of retired benefits
Retired benefits of the Group are all predetermined provision plan.
In the period in which the employees provide service, the Group recognize liability in accordance with
the amounts to be paid calculated according to the predetermined provision plan, and the related
expenditures are either included in cost of related assets or charged to profit or loss in the period when
they are incurred.
5.21.3 Accounting treatments of termination benefits
When providing termination benefits to employees, the Group recognize employee benefits payroll
resulting from termination benefits at the earlier of: the Group cannot unilaterally withdraw from the
termination plan or the redundancy offer; the Group recognize relevant costs and expenses related to
the payment of termination benefits in reconstructuring.
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5.22 Revenue
5.22.1 Revenue from sale of goods
Revenue from sale of goods is recognized when the Group has transferred to the buyer the significant
risks and rewards of ownership of the goods. The Group retains neither continuing managerial
involvement to the degree usually associated with ownership nor effective control over the goods sold.
The amount of revenue can be measured reliably and it is probable that the associated economic
benefits will flow to the Group. The associated costs incurred or to be incurred can be measured
reliably.
5.22.2 Revenue from rendering of services
When the outcome of a transaction involving the rendering of services can be estimated reliably,
revenue associated with the transaction shall be recognized by reference the stage of completion of the
transaction at the reporting date. The outcome of a transaction can be estimated reliably.
When the outcome of the transaction involving the rendering of services cannot be estimated reliably,
revenue is recognized only to the extent of the costs incurred that will be recoverable, and the costs
incurred are recognized as expenses for the period. When it is not probable that the costs incurred will
be recovered, revenue is not recognized.
5.23 Government grants
Government grants are transfer of monetary assets and non-monetary assets from the government to
the Group at no consideration. A government grant is recognized only when the Group can comply
with the conditions attaching to the grant and the Group will receive the grant.
Monetary government grants are measured by the amount received or receivable.
5.23.1 Judgment basis and accounting treatments of government grant related to an
asset
A government grant related to an asset is recognized as deferred income, and evenly amortized to
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profit or loss over the useful life of the related asset.
5.23.2 Judgment basis and accounting treatments of government grant related to income
For a government grant related to income, if the grant is a compensation for related expenses or losses
to be incurred in subsequent periods, the grant is recognized as deferred income, and recognized in
profit or loss over the periods in which the related costs are recognized. If the grant is a compensation
for related expenses or losses already incurred, the grant is recognized immediately in profit or loss for
the period.
A government grant related to the Group's daily activities is recognized in other income based on the
nature of economic activities; a government grant is not related to the Group's daily activities is
recognized in non-operating income and expenses.
The Company's government loans with below-market rate of interest are directly paid to the Company,
and the related low rate interest will write off related borrowing costs. The government loans with
below-market rate of interest obtained by other subsidiaries of the Group are government loans, which
is provided by local bureau of finance through bank with below-market rate of interest. The actual
amount of the loan received by the Group recognized as borrowings, and the related borrowing costs
are calculated according to the principal of the loan and the below-market rate.
5.24 Deferred income tax assets/deferred income tax liabilities
The income tax expenses include current income tax and deferred income tax.
5.24.1 Current income tax
On the balance sheet date, current income tax liabilities (or assets) for the current and prior periods are
measured at the amount expected to be paid (or recovered) according to the requirements of tax laws.
5.24.2 Deferred income tax assets and deferred income tax liabilities
For temporary differences between the carrying amounts of certain assets or liabilities and their tax
base, or between the nil carrying amount of those items that are not recognized as assets or liabilities
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and their tax base that can be determined according to tax laws, deferred income tax assets and
liabilities are recognized using the balance sheet liability method.
Deferred tax is generally recognized for all temporary differences. Deferred income tax assets for
deductible temporary differences are recognized to the extent that it is probable that taxable profits
will be available against which the deductible temporary differences can be utilised. However, for
temporary differences associated with the initial recognition of goodwill and the initial recognition of
an asset or liability arising from a transaction (not a business combination) that affects neither the
accounting profit nor taxable profits (or deductible losses) at the time of transaction, no deferred tax
asset or liability is recognized.
For deductible losses and tax credits that can be carried forward, deferred income tax assets are
recognized to the extent that it is probable that future taxable profits will be available against which
the deductible losses and tax credits can be utilised.
Deferred income tax liabilities are recognized for taxable temporary differences associated with
investments in subsidiaries and associates, and interests in joint ventures, except where the Group is
able to control the timing of the reversal of the temporary difference and it is probable that the
temporary difference will not reverse in the foreseeable future. Deferred income tax assets arising
from deductible temporary differences associated with such investments and interests are only
recognized to the extent that it is probable that there will be taxable profits against which to utilise the
benefits of the temporary differences and they are expected to reverse in the foreseeable future.
On the balance sheet date, deferred income tax assets and liabilities are measured at the tax rates,
according to tax laws, that are expected to apply in the period in which the asset is realised or the
liability is settled.
Current and deferred tax expenses or income are recognized in profit or loss for the period, except
when they arise from transactions or events that are directly recognized in other comprehensive
income or in shareholders' equity, in which case they are recognized in other comprehensive income or
in shareholders' equity; and when they arise from business combinations, in which case they adjust the
carrying amount of goodwill.
On the balance sheet date, the carrying amount of deferred income tax assets is reviewed and reduced
if it is no longer probable that sufficient taxable profits will be available in the future to allow the
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benefit of deferred income tax assets to be utilised. Such reduction in amount is reversed when it
becomes probable that sufficient taxable profits will be available.
5.24.3 Net off of income taxes
When the Group has a legal right to settle on a net basis and intends either to settle on a net basis or to
realise the assets and settle the liabilities simultaneously, current tax assets and current tax liabilities
are offset and presented on a net basis.
When the Group has a legal right to settle current tax assets and liabilities on a net basis, and deferred
income tax assets and deferred income tax liabilities relate to income taxes levied by the same taxation
authority on either the same taxable entity or different taxable entities which intend either to settle
current tax assets and liabilities on a net basis or to realise the assets and liabilities simultaneously, in
each future period in which significant amounts of deferred income tax assets or liabilities are
expected to be reversed, deferred income tax assets and deferred income tax liabilities are offset and
presented on a net basis.
5.25 Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the
risks and rewards of ownership to the lessee. All other leases are classified as operating leases.
5.25.1 Operating lease accounting treatments
The Group as lessee under operating leases
Operating lease payments are recognized on a straight-line basis over the term of the relevant lease,
and are either included in the cost of related asset or charged to profit or loss for the period. Initial
direct costs incurred are charged to profit or loss for the period.
The Group as lessor under operating leases
Rental income from operating leases is recognized in profit or loss on a straight-line basis over the
term of the relevant lease. Initial direct costs with more than an insignificant amount are capitalised
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Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
when incurred, and are recognized in profit or loss on the same basis as rental income over the lease
term. Other initial direct costs with an insignificant amount are charged to profit or loss in the period
in which they are incurred. Contingent rents are charged to profit or loss in the period in which they
actually arise.
5.26 Changes in major accounting policies and accounting estimates
5.26.1 Changes in major accounting policies
Content and reason of accounting policy
Examination and approval procedure Remarks
change
In 2017, the Ministry of Finance issued
the revised Accounting Standards for
Enterprises No.22–Recognition and
Measurement of Financial Instruments,
Accounting Standards for Enterprises
No.23–Transfer of Financial Assets,
Accounting Standards for Enterprises
No.24 –Hedging and Accounting
In the consolidated balance sheet on
Standards for Enterprises No.37-
January 1, 2019, the accounts receivable
Presentation of Financial Instruments
changed from RMB 242,153,083 to RMB
(hereinafter referred to as “New
237,781,161; the deferred income tax
Financial Instruments Standards”). From Approved by the second meeting of the
assets were changed from RMB
January 1, 2019, the Group conducted eighth Board of Directors.
285,436,259 to RMB 286,529,239; and
accounting treatment in accordance with
the undistributed profit was changed from
the above newly revised standards.
RMB 8,008,982,547 to RMB
According to the linkage provisions, no
8,005,703,605.
adjustment will be made to the
information during the comparable
period. The undistributed profits at the
beginning of this reporting period will be
retroactively adjusted based on the
difference between the new standards
and the existing standards on the first day
of implementation.
According to the requirements in the
Notice on Revising, Printing &
Distributing Financial Report Format for
General Enterprises in 2019 (Cai Kuai
[2019]No. 6), in the balance sheet, the
item of “bills receivable and accounts
receivable” shall be divided into “bills
receivable” and “accounts receivable”;
The change of accounting policy has no
and the item of “bills payable and Approved by the second meeting of the
impact on the merger and the net profit of
accounts payable” shall be divided into eighth Board of Directors.
the Company and the owner's equity.
“bills payable” and “accounts payable”;
in the income statement, the item of
“R&D expenses” not only reflects the
expensed expenditure incurred in the
research and development process, but
also includes the amortization of
self-developed intangible assets listed in
the item of “management expenses”.
5.26.2 Changes in major accounting estimates
Nil
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Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
5.26.3 Particulars of first implementation of New Financial Instruments Standards, new
income standards, and new lease standards to adjust the first implementation of related
items in the financial statements at the beginning of the year
Consolidated Balance Sheet
Unit: Yuan
Item December 31, 2018 January 1, 2019 Adjusted amount
Bills receivable 288,667,988 -288,667,988
Accounts receivable 242,153,083 237,781,161 -4,371,922
Receivables financing 288,667,988 288,667,988
Available-for-sale financial
467,251 -467,251
assets
Other non-current financial
467,251 467,251
assets
Deferred income tax assets 285,436,259 286,529,239 1,092,980
Undistributed profit 8,008,982,547 8,005,703,605 -3,278,942
Total owner’s equity 9,606,099,365 9,602,820,423 -3,278,942
Explanation for adjustment:
Unit: Yuan
Impact of the
Book value listed Book value listed
New Impact of changes in
according to the original according to the new
Item Financial presentation of other
standards on December 31, standards on January 1,
Instrument financial statements
2018 2019
Standards
Bills receivable and
530,821,071 -530,821,071
accounts receivable
Bills receivable -288,667,988 288,667,988
Accounts receivable -4,371,922 242,153,083 237,781,161
Receivables financing 288,667,988 288,667,988
Available-for-sale
467,251 -467,251
financial assets
Other non-current
467,251 467,251
financial assets
Deferred income tax
285,436,259 1,092,980 286,529,239
assets
Total 816,724,581 -3,278,942 813,445,639
Balance Sheet of the Parent Company
Unit: Yuan
Item December 31, 2018 January 1, 2019 Adjusted amount
Bills receivable 39,885,254 -39,885,254
Accounts
1,447,973 1,447,973
receivable
Receivables
39,885,254 39,885,254
financing
Total owner’s
10,023,375,582 10,023,375,582
equity
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Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
Explanation for adjustment:
Unit: Yuan
Impact of the
Book value listed Impact of changes Book value listed
New
according to the original in presentation of according to the new
Item Financial
standards on December 31, other financial standards on January 1,
Instrument
2018 statements 2019
Standards
Bills receivable and
41,333,227 -41,333,227
accounts receivable
Bills receivable -39,885,254 39,885,254
Accounts receivable 1,447,973 1,447,973
Receivables financing 39,885,254 39,885,254
Other receivables 1,025,643,356 1,025,643,356
Total 1,066,976,583 1,066,976,583
5.27 Other
Critical judgments in applying accounting policies and key assumptions and uncertainties in
accounting estimates
In the application of accounting policies as set out in Note 4, the Group is required to make judgments,
estimates and assumptions about the carrying amounts of items in the financial statements that cannot
be measured accurately, due to the internal uncertainties of the operating activities. These judgments,
estimates and assumptions are based on historical experience of the Group's management as well as
other factors that are considered to be relevant. Actual results may differ from these estimates.
The Group periodically reviews the judgments, estimates and assumptions above on a going concern
basis. For those changes in accounting policies that only affect current financial statements, the
influences are recognized in current period. For those changes in accounting policies that affect both
current and future financial statements, the influences are recognized in both current and prospective
periods.
Key assumption and uncertainties in accounting estimates
The following are key assumptions for after balance sheet date event and other factors of uncertain
estimation. They may cause material adjustment on balance sheet in following accounting period.
Deferred income tax assets recognized by deductible loss
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Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
Deferred income tax assets are recognized for all unused tax losses to the extent that it is probable that
taxable profit will be available against which the losses can be utilized. Significant management
judgment is required to determine the amount of deferred income tax assets that can be recognized,
based upon the likely timing and level of future taxable profits together with future tax planning
strategies.
Depreciation of fixed assets
The depreciation is calculated on the straight line basis to write-off the cost of each item of fixed
assets to its residual value over its estimated useful life. The Group's management determines the
estimated useful lives for its fixed assets. This estimate is based on the historical experience of the
actual useful lives of fixed assets of similar nature and functions. If the previous estimates have
significant changes, depreciation expenses will be adjusted in the future period.
Impairment of long-term assets
The Group assesses whether the recoverable amount is lower than the book value. If there are any
indicators that the book value of non-current assets cannot be fully recoverable, impairment losses
should be recorded.
The recoverable amount is the higher of an asset's fair value less costs to sell and the present value of
the future cash flows expected to be derived from an asset. As it is difficult for the Group to obtain
the quoted market price of the assets (or assets group), the fair value of the assets cannot be reliably
estimated. When estimating the present value of future cash flows, it is necessary to make important
judgments about the output, selling price, related operating costs, discount rate used in calculating the
present value of the asset (or asset group), etc. In estimating the recoverable amount, the Group uses
all readily available information, including projections of production volumes, selling prices and
associated operating costs based on reasonable and supportable assumptions.
Inventory depreciation provision accrued based on net realizable value
The inventories are measured on the lower of carrying value and net realizable value, and provision
should be made for impairment on obsolete and slow moving inventories. The Group will reassess
whether the net realizable value is lower than the carrying cost at the end of each year.
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Preparation for the measurement of the fair value of identifiable assets and liabilities of the
acquiree from a business combination
For the cost of business combination, the Group allocates the purchase price based on the fair value of
the identifiable assets and liabilities of the acquiree on the date of acquisition. When measuring the fair
value of the above identifiable assets and liabilities in accordance with the present value of future cash
flow, the management of the Group needs to estimate the sales growth rate based on the supply and
demand situation of the future market to forecast the cash flow, and consider to choose the appropriate
discount rate for the discount. The management may use significant accounting estimates and
judgments in the progress.
6. Taxes
6.1 The main taxes and tax rates are as follows:
Tax category Taxation basis Tax rates
Value added tax Levied on the balance between the
13%, 9% 6% (Chinese), 20%
output tax calculated based on taxable
(France), 21% (Spain), 19% (Chile),
income and the input tax allowed to be
10% (Australia)
deducted in current period
Consumption tax Levied on taxable income 10%, 20% (Chinese)
City development tax Levied on circulation tax actually paid 7% (Chinese)
Corporate income tax Levied on taxable income 25%(Chinese), 33.3%(France), 28%
(Spain), 27% (Chile), 30%
(Australia)
6.2 Tax incentives and relative permit
Ningxia Changyu Grape Growing Co., Ltd.("Ningxia Growing"), a subsidiary of the Group, whose
principal activity is grape growing is incorporated in Ningxia Huizu Autonomous Region. According
to clause 27 of PRC Corporate Income Tax and clause 86 of PRC Corporate Income Tax Measures for
Implementation, Ningxia Growing enjoys an exemption of corporate income tax.
Yantai Changyu Grape Growing Co., Ltd.(" Grape Growing "), a branch of the Company, whose
principal activity is grape growing is incorporated in Zhifu District, Yantai City, Shandong Province.
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Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
According to clause 27 of PRC Corporate Income Tax and clause 86 of PRC Corporate Income Tax
Measures for Implementation, Grape Growing enjoys an exemption of corporate income tax.
Xinjiang Tianzhu Co., Ltd ("Xinjiang Tianzhu"), a subsidiary of the Company, is an enterprise of wine
production and sales incorporated in Shihezi city, Xinjiang Weizu Autonomous. In accordance with the
Notice on Tax Policy Issues concerning Further Implementation of the Western China Development
Strategy (Cai Shui [2011] No.58), Xinjiang Tianzhu is qualified to enjoy preferential taxation policies,
which means it can pay corporate income tax at a preferential rate of 15% for the period from 2015 to
2020.
Xinjiang Babao Baron Chateau Co., Ltd. ("Shihezi Chateau"), a subsidiary of the Company, is an
enterprise of wine production and sales incorporated in Shihezi city, Xinjiang Weizu Autonomous. In
accordance with the Notice on Tax Policy Issues concerning Further Implementation of the Western
China Development Strategy (Cai Shui [2011] No.58), Shihezi Chateau is qualified to enjoy
preferential taxation policies, which means it can pay corporate income tax at a preferential rate of
15% for the period from 2015 to 2020.
7. Notes to items in the consolidated financial statement
7.1 Monetary capital
Unit: Yuan
Item Ending balance Beginning balance
Cash on hand 70,198 114,335
Bank deposit 1,756,744,006 1,382,399,749
Other monetary capital 91,818,749 93,186,393
Total 1,848,632,953 1,475,700,477
As at June 30, 2019, the restricted bank deposit details are listed as follows:
Unit: Yuan
Item Ending balance Beginning balance
Housing fund of the unit 2,647,877 2,611,350
Total 2,647,877 2,611,350
As at June 30, 2019, the details of other monetary funds are listed as follows:
Unit: Yuan
Item Ending balance Beginning balance
Pledge of fixed deposits by Yantai
Changyu Wine Research,
46,100,000 46,100,000
Development and Manufacture Co.,
Ltd. (“R&D Company”)
Guaranteed deposits paid for the letter
44,540,850 44,540,850
of credit
Account balance of Alipay 1,042,367 2,483,816
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Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
Guaranty money for the unit card 125,532 51,727
Guaranty money for ICBC platform 10,000 10,000
Total 91,818,749 93,186,393
As at June 30, 2019, the bank deposits of the Group including short-term fixed deposits ranging from
3 months to 12 months amounted to RMB 180,439,250 Yuan (December 31, 2018: RMB 173,042,400
Yuan), with the interest rates ranging from 1.40% to 2.03%.
7.2 Bills receivable
7.2.1 Classification of bills receivable
Unit: Yuan
Type Ending balance Beginning balance
Bank acceptance 288,667,988
Trade acceptance
Total 288,667,988
7.2.2 Provision for bad debts accrued, withdrawn or transferred back in this period
Nil
7.2.3 Bills receivable pledged by the Company at the end of period
Nil
7.2.4 Bills receivable endorsed or discounted by the Company at the end of period but
not yet matured as of the balance sheet date
Unit: Yuan
Amount terminating recognition at the end Amount not terminating recognition
Item
of period at the end of period
Bank acceptance 275,760,494
Trade acceptance
Total 275,760,494
7.2.5 Bills receivable reclassified as accounts receivable by the Company due to the
default of drawer at the end of period
Nil
7.2.6 Bills receivable actually cancelled after verification in this period
Nil
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Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
7.3 Accounts receivable
7.3.1 Accounts receivable disclosed by type
Unit: Yuan
Ending balance Beginning balance
Provision for bad Provision for bad
Book balance Book balance
Type debts debts
Book value Book value
Amount Proportion Amount Accrued Amount Proportion Amount Accrued
proportion proportion
Accounts
receivable for
which
provision for
242,153,083 100% 242,153,083
bad debts is
accrued on a
single item
basis
Including:
Accounts
receivable for
which
provision for
191,269,049 100% 5,137,857 2.78% 186,131,192
bad debts is
accrued on a
combined
basis
Including:
Accounts
receivable for
which
provision for
191,269,049 100% 5,137,857 2.78% 186,131,192
bad debts is
accrued by
credit risk
features
Total 191,269,049 100% 5,137,857 2.78% 186,131,192 242,153,083 100% 242,153,083
Provision for bad debts accrued on a combined basis:
Unit: Yuan
Ending balance
Name
Book balance Provision for bad debts Accrued proportion
Accounts receivable for which
provision for bad debts is 191,269,049 5,137,857 2.78%
accrued by credit risk features
Total 191,269,049 5,137,857 --
Disclosed by age:
Unit: Yuan
Age Ending balance
Within 1 year (including) 180,854,504
1-2 years 8,978,048
2-3 years 1,199,269
Over 3 years 237,228
Total 191,269,049
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Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
As at June 30, 2019, the accounts receivable with ownership restrictions were RMB 31,134,017 Yuan
(December 31, 2018: RMB 52,015,032 Yuan). Please refer to Note 7.18 for details.
7.3.2 Provision for bad debts accrued, withdrawn or transferred back in this period
Provision for bad debts accrued in this period:
Unit: Yuan
Adjusted Changes in t his period
Beginning amount in the
balance of first Beginning
the original implementation balance of the Withdrawn Ending
Type or
financial of the New year after Accrued Cancelled balance
instruments Financial adjustment transferred
standards Instruments back
Standards
Accounts
receivable for
which provision
4,371,922 4,371,922 765,935 5,137,857
for bad debts is
accrued by credit
risk features
Total 4,371,922 4,371,922 765,935 5,137,857
There were no provision for bad debts withdrawn or transferred back in this period.
7.3.3 Accounts receivable actually cancelled after verification in this period
Nil
7.3.4 Accounts receivable collected by the borrowers of top 5 units ranked by the ending
balance
Unit: Yuan
Relationship with the Percentage in total
Unit Amount Period
Company accounts receivable
Nonggongshang
Supermarket (Group) Co., Third party 10,077,717 Within 1 year 5.3%
Ltd.
Suguo Supermarket Co., Ltd. Third party 7,168,620 Within 1 year 3.7%
Viedos y Bodegas Las
Third party 6,917,840 Within 1 year 3.6%
Pircas
Lianhua Supermarket
Third party 5,408,819 Within 1 year 2.8%
Holdings Co., Ltd.
MARKS AND SPENCER Third party 5,365,322 Within 1 year 2.8%
Total -- 34,938,318 -- 18.3%
7.3.5 Accounts receivable terminating recognition due to transfer of financial assets
Nil
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Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
7.3.6 Accounts receivable transferred and included in assets and liabilities
Nil
7.4 Receivables financing
Unit: Yuan
Item Ending balance Beginning balance
Bank acceptance 372,281,872
Total 372,281,872
7.5 Advance payment
7.5.1 Advance payment listed by age
Unit: Yuan
Ending balance Beginning sum
Age
Amount Proportion Amount Proportion
Within 1 year 3,490,928 100% 4,219,949 100%
1-2 years
2-3 years
More than 3 years
Total 3,490,928 -- 4,219,949 --
7.5.2 Advance payment collected by the prepaid parties of top 5 units ranked by the
ending balance
Unit: Yuan
Percentage
Relationship with in the total
Category of client Amount Age Reason for unsettlement
the Group advance
payment%
Within 1
Ningxia Vangarie Wine Co., Ltd. Third party 600,000 Failure to receive the goods 17.2%
year
Yantai Power Supply Company of State
Within 1 Prepaid electricity
Grid Shandong Electric Power Third party 500,000 14.3%
year purchasing fund
Company
Within 1
DONELLI VINI S.P.A. Third party 463,523 Failure to receive the goods 13.3%
year
YEDA Thermal Power Construction & Third party 250,545 Within 1 Failure to receive the goods 7.2%
102
Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
Installation Engineering Co., Ltd. year
Yantai Deyi Hardware Mechanical & Within 1
Third party 192,045 Failure to receive the goods 5.5%
Electrical Co., Ltd. year
Total -- 2,006,113 -- -- 57.4%
7.6 Other receivables
Unit: Yuan
Item Ending balance Beginning balance
Interest receivable 2,099,109 1,332,681
Dividends receivable
Other receivables 26,519,874 21,303,405
Total 28,618,983 22,636,086
7.6.1 Interest receivable
Unit: Yuan
Item Ending balance Beginning balance
Fixed deposit 2,099,109 1,332,681
Entrusted loan
Bond investment
Total 2,099,109 1,332,681
7.6.2 Other receivables
7.6.2.1 Other receivables classified by nature
Unit: Yuan
Nature Ending book balance Beginning book balance
Deposit and guaranty money receivable 9,991,516 10,453,624
Imprest receivable 2,776,485 2,274,038
Accounts receivable from related parties 1,911,880 813,440
Consumption tax and added-value tax export rebate 9,651,893 6,273,882
Other 2,188,100 1,488,421
Total 26,519,874 21,303,405
7.6.2.2 Disclosed by age
Unit: Yuan
Age Ending balance
Within 1 year (including) 15,284,516
1-2 years 1,162,933
2-3 years 8,302,579
103
Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
Age Ending balance
More than 3 years 1,769,846
Total 26,519,874
7.6.2.3 Provision for bad debts accrued, withdrawn or transferred back in this period
The provision for bad debts accrued in this period was RMB 0 Yuan; and that withdrawn or
transferred back in this period was RMB 0 Yuan.
7.6.2.4 Other receivables actually cancelled after verification in this period
Nil
7.6.2.5 Other receivables collected by the borrowers of top 5 units ranked by the ending
balance
Unit: Yuan
Percentage in total Ending balance of
Ending
Unit Nature Age ending balance of other provision for bad
balance
accounts receivable debts
Construction
YEDA Construction Industry
guaranty 7,709,477 Within 3 years 29.10%
Association
money
Lease
Yantai God Horse Packing Co.,
payment 1,626,880 Within 1 year 6.10%
Ltd. Printing Branch
receivable
Lease
Yantai Zhongya Medical Health
payment 285,000 Within 1 year 1.10%
Wine Co., Ltd.
receivable
Guaranty
YEDA Finance Bureau 198,056 Within 1 year 0.70%
money
Yantai Power Supply Company
of State Grid Shandong Electric Deposit 80,000 Within 1 year 0.30%
Power Company
Total -- 9,899,413 -- 37.30%
7.6.2.6 Accounts receivable involving government subsidies
Nil
7.6.2.7 Other receivables that are terminated for recognition due to transfer of financial
assets
Nil
7.6.2.8 Other receivables transferred and then included in assets and liabilities
Nil
104
Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
7.7 Inventories
7.7.1 Inventory classification
Unit: Yuan
Ending balance Beginning balance
Item Depreciation Depreciation
Book balance Book value Book balance Book value
provision provision
Raw materials 88,705,179 88,705,179 67,267,035 67,267,035
Goods in process 1,837,958,108 1,837,958,108 1,787,819,923 1,787,819,923
Commodity stocks 698,652,646 18,534,497 680,118,149 894,187,725 24,683,226 869,504,499
Total 2,625,315,933 18,534,497 2,606,781,436 2,749,274,683 24,683,226 2,724,591,457
7.7.2 Inventory depreciation provision
Unit: Yuan
Increase in this period Decrease in this period
Beginning
Item Transfer back or Ending balance
balance Accrual Other Other
write-off
Raw materials
Goods in process
Commodity stocks 24,683,226 6,148,729 18,534,497
Total 24,683,226 6,148,729 18,534,497
7.8 Other current assets
Unit: Yuan
Item Ending balance Beginning balance
Prepaid corporate income tax 70,523,939 24,077,323
Deductible input tax 229,478,097 233,087,707
Rent to be amortized 416,865 1,511,366
Total 300,418,901 258,676,396
7.9 Other non-current financial assets
Unit: Yuan
Item Ending balance Beginning balance
Other 515,922
Total 515,922
7.10 Investment real estate
7.10.1 Investment real estate by cost measurement method
105
Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
Unit: Yuan
Houses and Construction in
Item Land use right Total
buildings progress
Ⅰ Original book value
1. Beginning balance 70,954,045 70,954,045
2. Increase in this period
2.1 Outsourcing
2.2 Transfer in from
inventories\fixed assets\
construction in progress
2.3 Business merger
increase
3. Decrease in this period
3.1 Disposal
3.2 Other transfer out
4. Ending balance 70,954,045 70,954,045
Ⅱ Accumulated
depreciation & accumulated
amortization
1. Beginning balance 39,381,556 39,381,556
2. Increase in this period 1,012,019 1,012,019
2.1 Accrual or
1,012,019 1,012,019
amortization
3. Decrease in this period
3.1 Disposal
3.2 Other transfer out
4. Ending balance 40,393,575 40,393,575
Ⅲ Impairment provision
1. Beginning balance
2. Increase in this period
2.1 Accrual
3. Decrease in this period
3.1 Disposal
3.2 Other transfer out
4. Ending balance
Ⅳ Book value
1. Ending book value 30,560,470 30,560,470
2. Beginning book value 31,572,489 31,572,489
7.11 Fixed assets
Unit: Yuan
Item Ending balance Beginning balance
Fixed assets 5,684,612,653 5,749,731,667
Disposal of fixed assets
Total 5,684,612,653 5,749,731,667
7.11.1 Particulars of fixed assets
106
Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
Unit: Yuan
Houses and
Item Machinery equipment Construction tools Total
buildings
Ⅰ Original book value:
1. Beginning balance 4,761,426,425 2,665,798,814 26,580,639 7,453,805,878
2. Increase in this period 33,949,084 48,642,164 1,281,845 83,873,093
2.1 Acquisition 4,174,052 13,254,325 1,281,845 18,710,222
2.2 Transfer in from
29,775,032 35,387,839 65,162,871
construction in progress
2.3 Business merger
increase
3. Decrease in this period 5,422,920 2,867,114 456,453 8,746,487
3.1 Disposal or
5,422,920 2,867,114 456,453 8,746,487
retirement
4. Ending balance 4,789,952,589 2,711,573,864 27,406,031 7,528,932,484
Ⅱ Accumulated
depreciation
1. Beginning balance 621,266,769 1,062,064,237 20,743,205 1,704,074,211
2. Increase in this period 67,239,979 79,376,506 1,071,000 147,687,485
2.1 Accrual 67,239,979 79,376,506 1,071,000 147,687,485
3. Decrease in this period 4,489,447 2,518,788 433,630 7,441,865
3.1 Disposal or
4,489,447 2,518,788 433,630 7,441,865
retirement
4. Ending balance 684,017,301 1,138,921,955 21,380,575 1,844,319,831
Ⅲ Impairment provision
1. Beginning balance
2. Increase in this period
2.1 Accrual
3. Decrease in this period
3.1 Disposal or
retirement
4. Ending balance
Ⅳ Book value
1. Ending book value 4,105,935,288 1,572,651,909 6,025,456 5,684,612,653
2. Beginning book value 4,140,159,656 1,603,734,577 5,837,434 5,749,731,667
As at June 30, 2019, the net value of the fixed assets with ownership restrictions was RMB
353,013,613 Yuan (December 31, 2018: RMB 412,006,421 Yuan). Please refer to Note 7.51
for details.
7.11.2 Particulars of temporarily idle fixed assets
Unit: Yuan
Original book Accumulated Depreciation
Item Book value Remarks
value depreciation reserves
Temporarily idle fixed
124,758,075 67,762,891 56,995,184
assets
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Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
7.11.3 Particulars of fixed assets under finance leases
Nil
7.11.4 Fixed assets under operating lease
Unit: Yuan
Item Ending book value
Machinery equipment 115,720
7.11.5 Particulars of fixed assets without property certificates
Unit: Yuan
Reason for not receiving the property
Item Book value
certificate
Industrial Production Center of the R&D Company 1,733,732,977 Under transaction
Dormitory Building, Main Building and Reception Building of
280,709,011 Under transaction
Chang’an Chateau
European Town, Main Building and Service Building of Beijing
184,687,307 Under transaction
Chateau
Main Building of Yantai Chateau Changyu Tinlot 81,685,892 Under transaction
Fermentation Workshop and Wine Storage Workshop of Xinjiang
17,499,421 Under transaction
Tianzhu
Office Building and Packaging Workshop of Icewine Valley 9,044,465 Under transaction
Wine-making Workshop of Changyu (Jingyang) 4,017,018 Under transaction
Office Building, Laboratory Building and Workshop of
3,572,175 Under transaction
Fermentation Center
Finished Goods Warehouse and Workshop of Kylin Packaging 2,351,511 Under transaction
Office Building of Guangxi Guilin Office and Office Building of
1,110,076 Under transaction
Shanxi Datong Office
Total 2,318,409,853 Under transaction
7.12 Construction in progress
7.12.1 Particulars of construction in progress
Ending balance Beginning balance
Item Impairment Impairment
Book balance Book value Book balance Book value
provision provision
Research, Development & Manufacture
Center (“Changyu Wine City 672,975,492 672,975,492 608,553,617 608,553,617
Complex”)
Construction Project of Chang’an
17,537,828 17,537,828 39,793,893 39,793,893
Chateau
Construction Project of Ningxia
47,371,353 47,371,353 47,163,863 47,163,863
Chateau
Construction Project of Shihezi 379,517 379,517 23,664,124 23,664,124
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Chateau
Construction Project of Sales Company 19,145,181 19,145,181 17,985,882 17,985,882
Construction Projects of Other
32,463,002 32,463,002 22,135,212 22,135,212
Companies
Total 789,872,373 789,872,373 759,296,591 759,296,591
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7.12.2 Changes of major construction in progress in this period
Unit: Yuan
Transferred Proportion of Accumulative Including:
Other Capitalization
Beginning Increase in to fixed accumulative capitalized capitalized amount
Item Budget decrease in Ending balance ratio of interest Capital source
balance this period assets in this project input in amount of of interest in this
this period in this period
period budget interest period
Loans form financial
Changyu Wine City 1.20% and institutions and
4,505,780,000 608,553,617 105,008,609 30,903,286 9,683,448 672,975,492 76.60% 16,954,039
Complex 4.3%
self-raised funds
Construction Project of Self-raised funds
620,740,000 39,793,893 7,523,270 29,779,335 17,537,828 109.90%
Chang’an Chateau
Construction Project of Self-raised funds
780,000,000 23,664,124 4,615,627 138,172 27,762,062 379,517 96.90%
Shihezi Chateau
Construction Project of Self-raised funds
161,350,000 17,985,882 1,262,622 103,323 19,145,181 98.50%
Sales Company
Construction Project of Self-raised funds
41,415,000 47,163,863 207,490 47,371,353 102.60%
Ningxia Chateau
Total 6,109,285,000 737,161,379 118,617,618 60,924,116 37,445,510 757,409,371 -- -- 16,954,039 --
As at June 30, 2019, there was no indication for impairment of construction in progress of the Group, so no provision for impairment was made.
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7.13 Productive biological assets
7.13.1 Productive biological assets by cost measurement method
Unit: Yuan
Item Plantation Total
Immature Mature
Ⅰ Original book value
1. Beginning balance 13,837,608 235,246,042 249,083,650
2. Increase in this period -4,798,454 9,593,745 4,795,291
2.1 Outsourcing
2.2 Self cultivation 2,388,310 2,406,981 4,795,291
The immature turn to the mature -7,186,764 7,186,764
3. Decrease in this period
3.1 Disposal
3.2 Other
4. Ending balance 9,039,154 244,839,787 253,878,941
Ⅱ Accumulated depreciation
1. Beginning balance 39,817,277 39,817,277
2. Increase in this period 6,448,225 6,448,225
2.1 Accrual 6,448,225 6,448,225
3. Decrease in this period
3.1 Disposal
3.2 Other
4. Ending balance 46,265,502 46,265,502
Ⅲ Impairment provision
1. Beginning balance
2. Increase in this period
2.1 Accrual
3. Decrease in this period
3.1 Disposal
3.2 Other
4. Ending balance
Ⅳ Book value
1. Ending book value 9,039,154 198,574,285 207,613,439
2. Beginning book value 13,837,608 195,428,765 209,266,373
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Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
As at June 30, 2019, no ownership of the biological assets was restricted.
As at June 30, 2019, there was no indication for impairment of biological assets of the Group, so no
provision was made.
7.14 Intangible assets
7.14.1 Particulars of intangible assets
Unit: Yuan
Item Land use right Software use right Trademark Total
Ⅰ Original book value
1.Beginning balance 528,252,911 75,822,057 170,068,735 774,143,703
2. Increase in this period 16,176 107,993 124,169
2.1 Acquisition 16,176 107,993 124,169
2.2 Internal R&D
2.3 Business merger
increase
3. Decrease in this period
3.1 Disposal
4.Ending balance 528,269,087 75,930,050 170,068,735 774,267,872
Ⅱ Accumulated amortization
1.Beginning balance 78,070,910 26,722,815 13,876,519 118,670,244
2.Increase in this period 5,231,260 3,185,493 21,989 8,438,742
2.1 Accrual 5,231,260 3,185,493 21,989 8,438,742
3.Decrease in this period
3.1 Disposal
4.Ending balance 83,302,170 29,908,308 13,898,508 127,108,986
Ⅲ Impairment provision
1. Beginning balance
2. Increase in this period
2.1 Accrual
3. Decrease in this period
3.1 Disposal
4. Ending balance
Ⅳ Book value
1. Ending book value 444,966,917 46,021,742 156,170,227 647,158,886
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2. Beginning book value 450,182,001 49,099,242 156,192,216 655,473,459
As at June 30, 2019, the net value of the intangible assets with ownership restrictions was
RMB 215,282,924 Yuan (December 31, 2018: RMB 218,070,414 Yuan). Please refer to
Note 7.51 for details.
7.14.2 Particulars of land use right of that not receiving the property certificate
Nil
7.15 Goodwill
Unit: Yuan
Name of the invested Increase in this period Decrease in this period
Beginning
unit or matter forming Formed by business Ending balance
balance Other Disposal Other
goodwill merger
Etablissements Roullet
Fransac (“Roullet 13,112,525 13,112,525
Fransac”)
Dicot Partners, S.L
92,391,901 92,391,901
(“Atrio Group”)
Societe Civile
Argricole Du Chateau
15,761,440 15,761,440
De Mirefleurs
(“Mirefleurs”)
Indomita Wine
6,870,115 6,870,115
Company Chile, SpA
Kilikanoon Estate,
37,063,130 37,063,130
Australia
Total 165,199,111 165,199,111
7.16 Long-term unamortized expenses
Unit: Yuan
Increase in this Amortization in this
Item Beginning balance Other decrease Ending balance
period period
Land lease fees 54,217,763 1,073,811 53,143,952
Land acquisition
43,427,739 215,293 43,212,446
fees
Afforestation fees 141,224,472 9,683,449 4,615,467 146,292,454
Renovation costs 775,647 27,762,062 476,300 28,061,409
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Other 4,994,795 1,134,446 281,791 5,847,450
Total 244,640,416 38,579,957 6,662,662 276,557,711
Remarks: The amount transferred to long-term unamortized expenses from construction in
progress was RMB 38,234,356 Yuan.
7.17 Deferred income tax assets/liabilities
7.17.1 Un-offset deferred income tax assets
Unit: Yuan
Ending Balance Beginning Balance
Deductible Deductible
Item Deferred income Deferred income
temporary temporary
tax assets tax assets
difference difference
Unrealized profits from inter-company
383,079,453 95,769,863 602,476,583 150,619,145
transactions
Unpaid bonus 107,118,804 26,808,863 141,808,257 35,485,814
Dismission welfare 21,108,526 5,277,132 26,186,243 6,546,561
Asset impairment provision 23,672,354 5,918,088 24,683,226 6,170,807
Deductible loss 326,241,084 83,564,280 262,937,999 67,566,387
Deferred income 78,596,149 17,132,928 86,227,293 18,868,963
Asset valuation impairment 649,811 175,449 661,415 178,582
Total 940,466,181 234,646,603 1,144,981,016 285,436,259
7.17.2 Un-offset deferred income tax liabilities
Unit: Yuan
Ending Balance Beginning Balance
Taxable Taxable
Item Deferred income Deferred income
temporary temporary
tax liabilities tax liabilities
difference difference
Assets appraisal appreciation in business
69,392,888 18,629,612 81,338,130 22,010,647
merger under non-common control
Total 69,392,888 18,629,612 81,338,130 22,010,647
7.17.3 Details of unconfirmed deferred income tax assets
Unit: Yuan
Item Ending balance Beginning balance
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Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
Deductable temporary difference
Deductible loss 157,722,738 171,430,831
Total 157,722,738 171,430,831
7.17.4 Deductible losses of unconfirmed deferred income tax assets will expire in:
Unit: Yuan
Year Ending sum Beginning sum Remark
2020 45,960,766 45,960,766
2021 82,685,213 82,685,213
2022 14,362,787 14,362,787
2023 6,987,182 21,110,792
2024 7,726,790
Total 157,722,738 164,119,558 --
7.18 Short-term loans
7.18.1 Classification of short-term loans
Unit: Yuan
Item Ending balance Beginning balance
Pledge loan
Mortgage loan 65,507,517 79,467,832
Guaranteed loan 7,145,835 3,331,870
Fiduciary loan 605,517,315 605,202,708
Total 678,170,667 688,002,410
As at June 30, 2019, the mortgage loans referred to a loan of factoring business for accounts
receivable of EUR 3,982,860 (equivalent to RMB 31,134,017 Yuan) that Hacienda y Vinedos
Marques del Atrio, S.L.U. (“Marques del Atrio”) transacted in such banks as Banco de
Sabadell, S.A. (December 31, 2018: RMB 52,015,032 Yuan), a loan of USD 5,000,000
(equivalent to RMB 34,373,500 Yuan) that Indomita Wine Company Chile, SpA borrowed
from BBVA bank by mortgage of its fixed assets of CLP 2,931,854,000 (equivalent to RMB
29,904,911 Yuan) (December 31, 2018: RMB 27,452,800 Yuan). The guaranteed loan
referred to a loan borrowed by the Company from Australia & New Zealand Banking with a
guarantee for Kilikanoon Estate, Australia of AUD 1,483,893 (equivalent to RMB 7,145,835
Yuan) (December 31, 2018: RMB 3,331,870 Yuan).
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7.19 Accounts payable
7.19.1 List of accounts payable
Unit: Yuan
Item Ending balance Beginning balance
Trade accounts payable 539,459,878 713,572,881
Total 539,459,878 713,572,881
7.19.2 Explanation of significant accounts payable aged more than one year
As at June 30, 2019, there were no significant accounts payable aged more than one year.
7.20 Advances from customers
7.20.1 List of advances from customers
Unit: Yuan
Item Ending sum Beginning sum
Advances from customers 177,549,080 226,075,244
Total 177,549,080 226,075,244
7.20.2 Advances from customers of significant amount aged more than one year
As at June 30, 2019, the Company had no advances from customers of significant amount
aged more than one year.
7.21 Employee remunerations payable
7.21.1 List of employee remunerations payable
Unit: Yuan
Increase in this Decrease in this
Item Beginning balance Ending balance
period period
1. Short-term remuneration 185,893,109 214,884,524 245,100,514 155,677,119
2. Post-employment welfare – defined
224,865 27,605,713 27,149,855 680,723
contribution plan
3. Dismission welfare 26,186,243 1,310,247 6,387,964 21,108,526
4.Other welfare due within one year
Total 212,304,217 243,800,484 278,638,333 177,466,368
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7.21.2 List of short-term remunerations
Unit: Yuan
Increase in this Decrease in this
Item Beginning balance Ending balance
period period
1. Salaries, bonuses, allowances
187,685,990 188,388,623 215,640,569 160,434,044
and subsidies
2. Staff welfare 3,014,288 4,969,229 7,875,107 108,410
3. Social insurance charges 461,095 14,314,931 14,435,562 340,464
Including: Medical insurance 460,440 12,510,735 12,656,526 314,649
Injury insurance 655 914,251 889,091 25,815
Maternity insurance 889,945 889,945
4. Housing fund 52,510 6,147,006 6,191,272 8,244
5. Union fee and staff education
1,914,079 1,064,735 1,033,635 1,945,179
fee
6. Short-term compensated
absences
7. Short-term profit-sharing plan
Minus: Those divided into
7,234,853 75,631 7,159,222
non-current assets
Total 185,893,109 214,884,524 245,100,514 155,677,119
7.21.3 List of defined contribution plan
Unit: Yuan
Item Beginning balance Increase Decrease Ending balance
1. Basic endowment insurance 224,533 26,914,033 26,457,843 680,723
2. Unemployment insurance 332 691,680 692,012
3. Enterprise annuity payment
Total 224,865 27,605,713 27,149,855 680,723
7.21.4 Dismission welfare
Unit: Yuan
Item Beginning balance Increase Decrease Ending balance
1. Compensation for server of labor
1,275,387 1,275,387 -
relation
2. Compensation for early retirement 26,186,243 34,860 5,112,577 21,108,526
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Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
Item Beginning balance Increase Decrease Ending balance
Total 26,186,243 1,310,247 6,387,964 21,108,526
7.22 Taxes and dues payable
Unit: Yuan
Item Ending balance Beginning balance
Value added tax 28,114,274 36,442,868
Consumption tax 9,089,447 28,636,646
Corporate income tax 59,137,357 40,869,507
Individual income tax 276,031 5,669,099
Urban maintenance and construction tax 2,407,009 4,337,712
Property tax 5,406,700 5,165,128
Urban land use tax 2,255,344 2,476,527
Other 2,314,640 5,315,303
Total 109,000,802 128,912,790
7.23 Other payables
Unit: Yuan
Item Ending balance Beginning balance
Interest payable 2,669,667 712,826
Dividends payable 412,646,375
Other payables 562,350,965 607,767,064
Total 977,667,007 608,479,890
Remarks: Other payables in the above list refer to the payables after deducting interest
payable and dividends payable.
7.23.1 Interest payable
Unit: Yuan
Item Ending balance Beginning balance
Interest of long-term loans with interest paid by
installment and principal paid on maturity
Interest of corporate bonds
Interest payable of short-term loans 2,669,667 712,826
Interest of preferred shares\ perpetual bonds
divided into financial liabilities
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Item Ending balance Beginning balance
Other
Total 2,669,667 712,826
7.23.2 Dividends payable
Unit: Yuan
Item Ending balance Beginning balance
Ordinary stock dividends 411,278,400
Preferred stock dividends/sustainable debt dividends
divided into equity instruments
Other 1,367,975.00
Total 412,646,375.00
7.23.3 Other payables
7.23.3.1 Other payables listed by nature
Unit: Yuan
Item Ending balance Beginning balance
Dealer’s deposit payable 166,741,693 159,191,138
Equipment purchase and construction costs
93,902,789 152,825,734
payable
Transportation charges payable 15,579,562 38,867,725
Trademark use fees payable for Changyu Group
78,414,978
Company
Advertisement marketing expenses payable 209,606,196 96,429,861
Employee cash deposit 869,282 2,806,766
Supplier’s deposit payable 18,732,029 15,901,210
Contracting fees payable 19,130,850 27,070,584
Other 37,788,564 36,259,068
Total 562,350,965 607,767,064
7.23.3.2 Other significant accounts payable aged more than one year
Unit: Yuan
Item Ending balance Cause of unpayment or carry-over
Beijing Qinglang Ecological Agriculture 3,513,506 The contracting fees haven’t been settled
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Technology Development Co., Ltd. (“Beijing
Qinglang”)
VASF Company 4,878,866 The contracting fees haven’t been settled
Total 8,392,372 --
7.24 Non-current liabilities due within one year
Unit: Yuan
Item Ending balance Beginning balance
Long-term loans due within one
146,362,314 118,940,788
year
Bonds payable due within one year
Long-term accounts payable due
34,000,000 34,000,000
within one year
Lease liabilities due within one
year
Total 180,362,314 152,940,788
7.25 Other current liabilities
Unit: Yuan
Item Ending balance Beginning balance
Short-term bonds payable
Refunds payable
Deferred income 14,545,254 15,860,254
Total 14,545,254 15,860,254
7.26 Long-term loans
7.26.1 Classification of long-term loans
Unit: Yuan
Item Ending balance Beginning balance
Pledge loan
Mortgage loan 3,529,655 3,924,916
Guaranteed loan 98,156,000 110,750,000
Fiduciary loan 64,263,595 41,805,746
Total 165,949,250 156,480,662
Description of the classification of long-term loans:
Unit: Yuan
120
Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
Item Ending balance Long-term loan due within one Long-term loan due over one
year year
Pledge loan
Mortgage loan 6,616,377 3,086,722 3,529,655
Guaranteed loan 116,906,000 18,750,000 98,156,000
Fiduciary loan 188,789,187 124,525,592 64,263,595
Total 312,311,564 146,362,314 165,949,250
As at June 30, 2019, the guaranteed loan referred to the long-term loan of RMB 68,750,000
Yuan borrowed by the Company for the R&D Company by means of credit guarantee
(December 31, 2018: 81,250,000 Yuan), which was borrowed from Australia & New Zealand
Banking by the Company for Kilikanoon Estate, Australia of AUD 10,000,000 (equivalent to
RMB 48,156,000 Yuan) (December 31, 2018: 48,250,000 Yuan). The mortgage loan referred
to the loan of EUR 678,868 (equivalent to RMB 5,306,710 Yuan) borrowed from Popular
Espaol by Marques del Atrio by mortgaging its fixed assets of EUR 2,900,925 (equivalent to
RMB 22,676,531 Yuan) (December 31, 2018: RMB 6,749,944 Yuan). Kilikanoon Estate,
Australia borrowed a loan of AUD 271,963 (equivalent to RMB 1,309,667 Yuan) by
pledging its fixed assets of AUD 503,163 (equivalent to RMB 2,423,032 Yuan) from NAB
bank (December 31, 2018: RMB 48,250,000 Yuan).
7.27 Long-term accounts payable
7.27.1 Long-term accounts payable listed by nature
Unit: Yuan
Item Ending balance Beginning balance
China Agricultural Development Key Construction Fund 201,000,000 225,000,000
Total 201,000,000 225,000,000
In 2016, Agricultural Development Fund invested RMB 305,000,000 Yuan in the Research,
Development & Manufacture Company, accounting for 37.9% of the registered capital.
According to the investment agreement, it is agreed that Agricultural Development Fund will
take back the investment fund in ten years and obtain fixed income according to year, which
is 1.2% of the remaining principal. Except for the above fixed income, the Agricultural
Development Fund shall not enjoy other profits of the Research, Development &
Manufacture Company or bear the losses of the Research, Development & Manufacture
Company. Accordingly, the investment of the Agricultural Development Fund in the
Research, Development & Manufacture Company is equity investment nominally, which is
debt investment (finance discount interest loan) in deed. The Group included the investment
of the Agricultural Development Fund in long-term accounts payable measured by amortized
cost. From January to June 2019, the Group gave back the principal of RMB 24,000,000
Yuan. Refer to Note 7.51 for details of mortgaged and pledged assets.
121
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Unit: Yuan
Balance of long-term accounts Long-term accounts payable Long-term accounts payable due in one
payable due within one year year later
235,000,000 34,000,000 201,000,000
7.28 Deferred income
Unit: Yuan
Increase in this Decrease in this
Item Beginning balance Ending balance Forming reason
period period
Governmental
86,227,293 4,465,398 12,096,542 78,596,149
subsidy
Minus: Those
included in current 15,860,254 1,315,000 14,545,254
liabilities
Non-current
70,367,039 4,465,398 10,781,542 64,050,895 --
liabilities
Projects related to governmental subsidy
Unit: Yuan
Amount
of Amount Amount
Amount
subsidy included in included in
Beginning offset Other Ending Related to
Item of liabilities newly non-operating other
balance the cost changes balance assets/income
increased revenue in income in
expenses
in this this period this period
period
Grape bulk wine
3,304,500 717,450 2,587,050 Related to assets
brewing project
Reward for investment
in fixed assets of
6,996,600 1,140,000 5,856,600 Related to assets
Chateau Shihezi
project
Industrial
revitalization and
technical 15,642,000 711,000 14,931,000 Related to assets
transformation project
in Xinjiang
Special subsidy for 4,240,000 530,000 3,710,000 Related to assets
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Amount
of Amount Amount
Amount
subsidy included in included in
Beginning offset Other Ending Related to
Item of liabilities newly non-operating other
balance the cost changes balance assets/income
increased revenue in income in
expenses
in this this period this period
period
supporting
infrastructure
Tourism development Related to
500,000 500,000
fund subsidy project income
Construction project of
grape brewing
3,200,000 200,000 3,000,000 Related to assets
production capacity
(Huanren)
Electronic traceability
2,525,257 333,527 2,191,730 Related to assets
system project of wine
Wine industry
558,000 93,000 465,000 Related to assets
development project
Peninsula blue
economic zone 6,000,000 1,000,000 5,000,000 Related to assets
construction project
Technical
transformation project
of information-based 2,900,000 290,000 2,610,000 Related to assets
system construction
engineering
Cross-border Related to
880,256 67,114 813,142
e-commerce project income
Fund for water
Related to
pollution treatment 206,530 56,801 149,729
income
project
Infrastructure
1,718,750 62,500 1,656,250 Related to assets
construction project
Supporting fund for
32,800,000 2,050,000 30,750,000 Related to assets
industrial development
Subsidy for economic
and energy-saving
1,026,400 64,150 962,250 Related to assets
technical
transformation project
Special fund for 1,639,000 81,000 1,558,000 Related to assets
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Amount
of Amount Amount
Amount
subsidy included in included in
Beginning offset Other Ending Related to
Item of liabilities newly non-operating other
balance the cost changes balance assets/income
increased revenue in income in
expenses
in this this period this period
period
efficient water-saving
irrigation project
Guiding fund for the
Related to
development of service 2,000,000 4,200,000 4,700,000 1,500,000
income
industry
Subsidy for boiler
Related to
renovation and 90,000 90,000
income
demolition
Subsidy for
mechanical 265,398 265,398 Related to assets
development
Total 86,227,293 4,465,398 12,096,542 78,596,149
Minus: Those included
15,860,254 1,315,000 14,545,254
in current liabilities
Non-current liabilities 70,367,039 4,465,398 10,781,542 64,050,895
7.29 Other non-current liabilities
Unit: Yuan
Item Ending balance Beginning balance
Employee remunerations payable 7,159,222 7,234,853
Total 7,159,222 7,234,853
As at June 30, 2019, the employee remunerations payable referred to the job security deposit
deducted from the year-end bonus of the employees higher than sales manager of the
Company in proportion, which will be paid from 2020 to 2022 as predicted.
7.30 Share capital
Unit: Yuan
Increase or decrease (+,-) in this period
Share
Beginning Ending
Newly issued Allocated transferred
balance Other Subtotal balance
shares shares from
accumulation
124
Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
fund
Total shares 685,464,000 685,464,000
7.31 Capital reserves
Unit: Yuan
Decrease in this
Item Beginning balance Increase in this period Ending balance
period
Capital premium (Share
560,038,853 560,038,853
capital premium)
Other capital reserves 5,916,588 5,916,588
Total 565,955,441 565,955,441
7.32 Other comprehensive income
Unit: Yuan
Amount incurred in this period
Minus: amount
Amount included in
incurred other Minus: Attributable Attributable
Beginning Ending
Item before comprehensive income to parent to minority
balance balance
income tax income before tax company shareholders
in this and transferred expenses after tax after tax
period to profit or loss
in this period
1. Other comprehensive income
not to be reclassified into profit
and loss later
Including: change in net liabilities
and net assets from recalculated
defined benefit plan
Share enjoyed in other
comprehensive income not to be
reclassified into profit and loss in
invested unit under equity law
2. Other comprehensive income to
be reclassified into profit and loss 2,965,377 -4,657,291 -3,060,721 -1,596,570 -95,344
later
Including: share enjoyed in other
comprehensive income to be
reclassified into profit and loss in
125
Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
Amount incurred in this period
Minus: amount
Amount included in
incurred other Minus: Attributable Attributable
Beginning Ending
Item before comprehensive income to parent to minority
balance balance
income tax income before tax company shareholders
in this and transferred expenses after tax after tax
period to profit or loss
in this period
invested unit under equity law
Profit and loss from
changes in fair value of financial
assets for sale
Profit and loss from
reclassification of
held-to-maturity investment into
fair value of financial assets for
sale
Effective part of profit and
loss of cash-flow hedge
Difference in translation of
Foreign Currency Financial 2,965,377 -4,657,291 -3,060,721 -1,596,570 -95,344
Statement
Total other comprehensive income 2,965,377 -4,657,291 -3,060,721 -1,596,570 -95,344
7.33 Surplus reserves
Unit: Yuan
Decrease in this
Item Beginning balance Increase in this period Ending balance
period
Legal surplus reserves 342,732,000 342,732,000
Free surplus reserves
Reserve fund
Enterprise expansion fund
Other
Total 342,732,000 342,732,000
7.34 Undistributed profit
126
Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
Unit: Yuan
Item Ending balance Beginning balance
Undistributed profit at the end of prior period before adjustment 8,008,982,547 7,309,081,618
Total Undistributed profit at the beginning of the period before adjustment
-3,278,942
(increase listed with+ , and decrease listed with -)
Undistributed profit at the beginning of the period after adjustment 8,005,703,605 7,309,081,618
Plus: Net profit for owner of the parent company 603,403,789 1,042,632,929
Minus: Drawn legal surplus
Drawn free surplus
Drawn common risk provision
Common dividend payable 411,278,400 342,732,000
Common dividend transferred to share capital
Undistributed profit at the end of period 8,197,828,994 8,008,982,547
7.35 Operating income and operating cost
Unit: Yuan
Amount incurred in this period Amount incurred in prior period
Item
Income Cost Income Cost
Main business 2,541,459,605 927,958,197 2,818,814,912 969,407,949
Other business 16,815,180 8,294,028 9,415,152 5,149,343
Total 2,558,274,785 936,252,225 2,828,230,064 974,557,292
7.36 Taxes and surcharges
Unit: Yuan
Item Amount incurred in this period Amount incurred in prior period
Consumption tax 68,699,658 97,343,463
Urban maintenance and construction tax 18,763,626 23,778,056
Education surcharges 13,670,717 17,417,976
Building tax 14,184,915 16,878,556
Land use tax 5,478,045 6,013,248
Stamp duty 1,504,356 2,247,814
Other 1,249,531 1,597,138
Total 123,550,848 165,276,251
127
Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
7.37 Selling expenses
Unit: Yuan
Item Amount incurred in this period Amount incurred in prior period
Marketing expenses 268,185,487 326,942,076
Employee remunerations 130,725,779 139,247,494
Transportation expenses 53,735,626 67,177,736
Trademark use fees 43,363,867
Storage and lease expenses 24,274,917 19,857,616
Depreciation expenses 20,476,637 21,735,895
Advertisement expenses 26,920,257 23,574,432
Conference expenses 8,945,999 9,319,883
Design & production expenses 2,365,761 2,457,300
Service charges 11,484,614 12,459,237
Travel expenses 11,822,548 10,886,711
Water, electricity and gas charges 7,697,325 7,166,936
Office & postage costs 2,801,706 2,349,806
Packing expenses 3,971,486 3,873,287
Public security & clean-keeping
2,214,479 2,336,546
expenses
Business entertainment expenses 1,763,307 1,995,516
Other 14,584,873 15,914,695
Total 591,970,801 710,659,033
7.38 Management expenses
Unit: Yuan
Item Amount incurred in this period Amount incurred in prior period
Employee remunerations 62,572,295 60,660,238
Depreciation expenses 31,887,697 35,410,914
Contracting expenses 7,178,106 7,178,106
Repair expenses 8,253,897 7,076,148
Office expenses 10,177,651 10,977,189
Amortization expenses 7,677,849 9,520,182
Afforestation fees 7,682,946 6,493,556
Safe production costs 2,357,016 2,422,526
Rental expenses 4,766,202 5,061,778
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Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
Business entertainment expenses 2,631,383 2,815,060
Public security & clean-keeping
3,356,435 3,953,646
expenses
Travel expenses 2,971,468 2,139,939
Other 4,039,367 4,255,600
Total 155,552,312 157,964,882
7.39 R&D expenses
Unit: Yuan
Item Amount incurred in this period Amount incurred in prior period
R&D expenses 2,706,811 2,127,006
Total 2,706,811 2,127,006
7.40 Financial expenses
Unit: Yuan
Item Amount incurred in this period Amount incurred in prior period
Interest expenditure 9,812,560 18,739,528
Minus: Interest income 4,606,417 7,245,870
Plus: Commission charges 1,271,831 3,005,483
Exchange gain or loss 2,311,609 -1,413,199
Total 8,789,583 13,085,942
7.41 Other income
Unit: Yuan
Amount incurred in prior
Source of other income Amount incurred in this period
period
Supporting fund for industrial development 2,050,000 2,050,000
Industrial revitalization and technical transformation
1,086,000
project in Ningxia
Reward for investment in fixed assets 1,140,000 1,140,000
Special fund for construction of peninsula blue economic
1,000,000 1,000,000
zone
Other 3,082,627 4,012,100
Special fund for supporting corporate development 51,633,350 15,011,673
Other 5,305,915 13,683,105
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Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
Amount incurred in prior
Source of other income Amount incurred in this period
period
Total 64,211,892 37,982,878
7.42 Loss on impairment of credit
Unit: Yuan
Item Amount incurred in this period Amount incurred in prior period
Loss on bad debts of accounts receivable -765,935
Total -765,935
7.43 Loss on impairment of assets
Unit: Yuan
Item Amount incurred in this period Amount incurred in prior period
1. Loss on bad debts
2. Inventory falling price loss 6,148,729 4,730,948
3. Loss on impairment of available-for-sale
financial assets
4. Loss on impairment of held-to maturity
investment
5. Loss on impairment of long-term equity
investment
6. Loss on impairment of investment real estate
7. Loss on impairment of fixed assets
8. Loss on impairment of engineering materials
9. Loss on impairment of construction in progress
10. Loss on impairment of productive biological
assets
11. Loss on impairment of oil and gas assets
12. Loss on impairment of intangible assets
13. Loss on impairment of goodwill
14. Other
Total 6,148,729 4,730,948
7.44 Income from asset disposal
Unit: Yuan
Source of income from asset disposal Amount incurred in this period Amount incurred in prior period
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Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
Income from disposal of fixed assets 1,138 93,958
Total 1,138 93,958
7.45 Non-operating income
Unit: Yuan
Amount incurred in Amount incurred in Amount included in the current
Item
this period prior period non-recurring profits/losses
Gains on debt recombination
Gains on exchange of non-monetary
assets
Grains on donations
Governmental subsidy
Other 3,575,914 2,006,392 3,575,914
Total 3,575,914 2,006,392 3,575,914
7.46 Non-operating expenses
Unit: Yuan
Amount incurred in Amount incurred in Amount included in the current
Item
this period prior period non-recurring profits/losses
Loss on debt recombination
Loss on exchange of
non-monetary assets
Donation
Fine, penalty and overdue fine
10,811 1,187,713 10,811
paid due to violation of laws and
administrative regulations
Other 153,239 204,649 153,239
Total 164,050 1,392,362 164,050
7.47 Income tax expenses
7.47.1 List of income tax expenses
Unit: Yuan
Item Amount incurred in this period Amount incurred in prior
Current income tax expenses 161,779,976 178,993,081
Deferred income tax expenses 48,501,602 32,986,654
Total 210,281,578 211,979,735
131
Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
7.47.2 Adjustment process of accounting profit and income tax expenses
Unit: Yuan
Item Amount incurred in this
Total profit 812,459,893
Income tax expenses calculated according to the legal/applicable tax rate 203,114,973
Influence of different tax rates applicable to subsidiary -66,516
Influence of income tax in the term before adjustment 3,082,397
Influence of nontaxable income
Influence of non-deductible costs, expenses and losses 2,219,026
Influence of deductible loss from use of unconfirmed deferred income tax assets in prior
period
Influence of deductible temporary difference or deductible loss of unconfirmed deferred 1,931,698
income tax assets in this period
Income tax expense 210,281,578
7.48 Other comprehensive income
Refer to Note 7.32 for details.
7.49 Items of cash flow statement
7.49.1 Other cash received related to operating activities
Unit: Yuan
Item Amount incurred in this period Amount incurred in prior period
Governmental subsidy income 62,580,748 33,687,978
Interest income 2,835,438 3,302,294
Net amercement income 1,225,511 1,609,829
Other 1,143,923 3,742,920
Total 67,785,620 42,343,021
7.49.2 Other cash paid related to operating activities
Unit: Yuan
Item Amount incurred in this period Amount incurred in prior period
Selling expenses 348,849,996 387,846,396
Administrative expenses 41,017,612 45,235,101
Other 2,912,859 3,895,589
132
Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
Total 392,780,467 436,977,086
7.49.3 Other cash received related to financial activities
Unit: Yuan
Item Amount incurred in this period Amount incurred in prior period
Government subsidies received related
3,150,000
to assets
Interest income from pledge of fixed
371,431
deposits by the R&D Company
Long-term loans from pledge of fixed
20,000,000
deposits by R&D Company
Total 23,521,431
7.49.4 Other cash paid related to financial activities
Unit: Yuan
Item Amount incurred in this period Amount incurred in prior period
R&D Company’ long-term loans pledged by
20,000,000
fixed-term deposits
Total 20,000,000
7.50 Supplementary information to cash flow statement
7.50.1 Supplementary information to cash flow statement
Unit: Yuan
Supplementary materials Amount incurred in this period Amount incurred in prior period
1. Cash flows from operating activities calculated by
-- --
adjusting the net profit:
Net profit 602,178,315 636,001,737
Plus: Provision for impairment of assets -5,382,794 -4,730,948
Depreciation of fixed assets, oil-and-gas assets and
155,147,729 148,983,240
productive biological assets
Depreciation of right-of-use assets
Amortization of intangible assets 8,438,742 11,567,301
Amortization of long-term deferred expenses 6,662,662 8,117,444
Losses on disposal of fixed assets, intangible assets and
-1,138 -93,958
other long-term assets (profit listed with “－”)
133
Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
Supplementary materials Amount incurred in this period Amount incurred in prior period
Losses on retirement of fixed assets (profit listed with
“－”)
Losses on fair value change (profit listed with “－”)
Financial costs (profit listed with “－”) 13,987,879 15,048,678
Investment losses (profit listed with “－”)
Decrease in deferred income tax assets (increase listed
50,789,656 37,133,223
with “-”)
Increase of deferred income tax liabilities (decrease
-3,381,035 -4,146,569
listed with “－”)
Decrease in inventories (increase listed with “-”) 123,958,750 216,486,236
Decrease in operating receivables (increase listed with
-305,623,146
“-”) -172,662,167
Increase in operating payable (decrease listed with “-”) -280,260,593 -205,989,766
Other
Net cash flows from operating activities 499,476,006 552,753,472
2. Significant investment and financing activities not
-- --
involving cash deposit and withdrawal:
Debt transferred into assets
Convertible corporate bond due within 1 year
Fixed assets under financing lease
3. Net changes of cash and cash equivalent: -- --
Ending balance of cash 1,573,727,077 1,428,670,462
Minus: Beginning balance of cash 1,206,860,334 1,180,889,274
Plus: Ending balance of cash equivalent
Minus: Beginning balance of cash equivalent
Net increase amount of cash and cash equivalent 366,866,743 247,781,188
7.50.2 Composition of cash and cash equivalents
Unit: Yuan
Item Ending balance Beginning balance
1. Cash 1,573,727,077 1,428,670,462
Including: Cash on hand 70,198 151,228
Bank deposits on demand 1,573,656,879 1,428,519,234
Other monetary capital on demand
Due from central bank available for payment
134
Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
Due from the industry
Inter-bank lending
2. Cash equivalents
Including: Bond investment due within three months
3. Balance of cash and cash equivalents at the end of
1,573,727,077 1,428,670,462
period
Including: Restricted use of parent company or
subsidiaries in the group
7.51 Assets with ownership or use right restrictions
Unit: Yuan
Item Ending book value Reason for restriction
Loan deposit, L/C deposit, frozen balance of Alipay,
Monetary capital 94,466,626 housing fund and guaranty money for deposit in unit
card
Accounts receivable 31,134,017 Pledge of short-term loans
Pledge of short-term loans, long-term loans and
Fixed assets 353,013,613
long-term accounts payable
Intangible assets 215,282,924 Pledge of long-term accounts payable
Total 693,897,180 --
7.52 Foreign currency monetary items
7.52.1 Foreign currency monetary items
The foreign currency monetary items of the Group in domestic entities of China are listed as
follows:
Unit: Yuan
Item Ending foreign currency balance Translation exchange rate Ending converted RMB balance
Monetary capital -- -- 46,815,034
Including: USD 6,805,498 6.8747 46,785,757
EUR 2,901 7.817 22,677
HKD 7,503 0.8797 6,600
7.52.2 Overseas operational entities
The currency adopted by the overseas subsidiaries of the Company according to the main
economic environment where the operation is located shall be chosen as the recording
currency. Marques del Atrio and Francs Champs Participations SAS (“Francs Champs”) both
use euro as the recording currency, Indomita Wine Company Chile, SpA uses Chilean peso as
the recording currency, and Kilikanoon Estate, Australia uses Australian dollar as the
135
Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
recording currency. The foreign currency assets or liabilities of overseas subsidiaries are
listed as follows:
Unit: Yuan
Item Ending foreign currency balance Translation exchange rate Ending converted RMB balance
Monetary capital -- -- 3,553,711
Including: USD 516,926 6.8747 3,553,711
EUR
HKD
Short-term loans -- -- 75,621,700
Including: USD 11,000,000 6.8747 75,621,700
EUR
HKD
8. Changes in scope of consolidation
Nil
9. Equity in other entities
9.1 Equity in the subsidiaries
9.1.1 Constitution of enterprise group
Proportion of
Business
Name of subsidiary Principal business location Registration place shareholding Acquisition mode
nature
Direct Indirect
Acquired from a
Shihezi City, Xinjiang
Shihezi City, Xinjiang Uygur Manufacturing business combination
Xinjiang Tianzhu (a) Uygur Autonomous Region, 60%
Autonomous Region, China industry under non-common
China
control
Acquired from a
business combination
Roullet Fransac Cognac, France Cognac, France Trading 100%
under non-common
control
Acquired from a
business combination
Mirefleurs Bordeaux, France Bordeaux, France Trading 100%
under non-common
control
Marques del Atrio Navarra, Spain Navarra, Spain Sales 75% Acquired from a
136
Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
Proportion of
Business
Name of subsidiary Principal business location Registration place shareholding Acquisition mode
nature
Direct Indirect
business combination
under non-common
control
Acquired by
Indomita Wine Santiago, Chile Santiago, Chile Sales 85% establishment or
investment
Acquired from a
Kilikanoon Estate, business combination
Adelaide, Australia Adelaide, Australia Sales 80%
Australia under non-common
control
Beijing Changyu Wine Acquired by
Marketing Co., Ltd. Beijing City, China Beijing City, China Sales 50% 50% establishment or
(“Beijing Marketing”) investment
Yantai Kylin Packaging Acquired by
Yantai City, Shandong Yantai City, Shandong Manufacturing
Co., Ltd. (“Kylin 100% establishment or
Province, China Province, China industry
Packaging”) investment
Yantai Chateau Acquired by
Yantai City, Shandong Yantai City, Shandong Manufacturing
Changyu-Castel Co., Ltd. 70% establishment or
Province, China Province, China industry
(“Chateau Changyu”) (b) investment
Changyu (Jingyang) Acquired by
Xianyang City, Shaanxi Xianyang City, Shaanxi Manufacturing
Pioneer Wine Co., Ltd. 100% establishment or
Province, China Province, China industry
(“Jingyang Wine”) investment
Yantai Changyu Pioneer Acquired by
Yantai City, Shandong Yantai City, Shandong
Wine Sales Co., Ltd. Sales 100% establishment or
Province, China Province, China
(“Sales Company”) investment
Langfang Development
Acquired by
Zone Castel-Changyu Wine Langfang City, Hebei Langfang City, Hebei Manufacturing
39% 10% establishment or
Co., Ltd. (“Langfang Province, China Province, China industry
investment
Castel”) (c)
Changyu (Jingyang) Acquired by
Xianyang City, Shaanxi Xianyang City, Shaanxi
Pioneer Wine Sales Co., Sales 100% establishment or
Province, China Province, China
Ltd. (“Jingyang Sales”) investment
Langfang Changyu Pioneer Acquired by
Langfang City, Hebei Langfang City, Hebei
Wine Sales Co., Ltd. Sales 100% establishment or
Province, China Province, China
(“Langfang Sales”) investment
Shanghai Changyu Wine Acquired by
Marketing Co., Ltd. Shanghai City, China Shanghai City, China Sales 30% 70% establishment or
(“Shanghai Marketing”) investment
137
Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
Proportion of
Business
Name of subsidiary Principal business location Registration place shareholding Acquisition mode
nature
Direct Indirect
Beijing Changyu AFIP
Eco-agriculture Acquired by
Miyun County, Beijing City, Miyun County, Beijing City,
Development Co., Ltd. Sales 100% establishment or
China China
(“Eco-agriculture investment
Development”)
Beijing Changyu AFIP Acquired by
Manufacturing
Wine Chateau Co., Ltd. Beijing City, China Beijing City, China 90% establishment or
industry
(“Beijing Chateau”) (d) investment
Acquired by
Yantai Changyu Wine Sales Yantai City, Shandong Yantai City, Shandong
Sales 90% 10% establishment or
Co., Ltd. ( “Wine Sales”) Province, China Province, China
investment
Yantai Changyu Pioneer
Acquired by
International Wine Co., Yantai City, Shandong Yantai City, Shandong
Sales 70% 30% establishment or
Ltd. (“Pioneer Province, China Province, China
investment
International”)
Hangzhou Changyu Wine Acquired by
Hangzhou City, Zhejiang Hangzhou City, Zhejiang
Sales Co., Ltd. (“Hangzhou Sales 100% establishment or
Province, China Province, China
Changyu”) investment
Acquired by
Yinchuan City, Ningxia Hui Yinchuan City, Ningxia Hui Planting
Ningxia Growing 100% establishment or
Autonomous Region, China Autonomous Region, China industry
investment
Huanren Changyu National Acquired by
Benxi City, Liaoning Benxi City, Liaoning Province,
Wine Sales Co., Ltd. Sales 100% establishment or
Province, China China
(“National Wine”) investment
Liaoning Changyu Icewine Acquired by
Benxi City, Liaoning Benxi City, Liaoning Province, Manufacturing
Valley Co., Ltd. (“Icewine 51% establishment or
Province, China China industry
Valley”) (e) investment
Yantai Development Zone
Acquired by
Changyu Trading Co., Ltd. Yantai City, Shandong Yantai City, Shandong
Sales 100% establishment or
(“Development Zone Province, China Province, China
investment
Trading”)
Shenzhen Changyu Wine Acquired by
Shenzhen City, Guangdong Shenzhen City, Guangdong
Marketing Co., Ltd. Sales 100% establishment or
Province, China Province, China
(“Shenzhen Marketing”) investment
Yantai Fushan District Acquired by
Yantai City, Shandong Yantai City, Shandong
Changyu Trading Co., Ltd. Sales 100% establishment or
Province, China Province, China
(“Fushan Trading”) investment
Beijing Changyu AFIP Miyun County, Beijing City, Miyun County, Beijing City, Service 100% Acquired by
138
Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
Proportion of
Business
Name of subsidiary Principal business location Registration place shareholding Acquisition mode
nature
Direct Indirect
International Conference China China industry establishment or
Center Co., Ltd. investment
(“Conference Center”)
Beijing Changyu AFIP Acquired by
Miyun County, Beijing City, Miyun County, Beijing City, Tourist
Tourism and Culture Co., 100% establishment or
China China industry
Ltd. (“AFIP Tourism”) investment
Acquired by
Yinchuan City, Ningxia Hui Yinchuan City, Ningxia Hui Manufacturing
Ningxia Wine 100% establishment or
Autonomous Region, China Autonomous Region, China industry
investment
Yantai Changyu Chateau Acquired by
Yantai City, Shandong Yantai City, Shandong Wholesale and
Tinlot Co., Ltd. (“Chateau 65% 35% establishment or
Province, China Province, China retail
Tinlot”) investment
Changyu (Qingtongxia) Qingtongxia City, Ningxia Acquired by
Qingtongxia City, Ningxia Hui
Wine Sales Co., Ltd. Hui Autonomous Region, Sales 100% establishment or
Autonomous Region, China
(“Qingtongxia Sales”) China investment
Shihezi City, Xinjiang Acquired by
Shihezi City, Xinjiang Uygur Manufacturing
Shihezi Chateau Uygur Autonomous Region, 100% establishment or
Autonomous Region, China industry
China investment
Acquired by
Yinchuan City, Ningxia Hui Yinchuan City, Ningxia Hui Manufacturing
Ningxia Chateau 100% establishment or
Autonomous Region, China Autonomous Region, China industry
investment
Chateau Changyu Rena Acquired by
Xianyang City, Shaanxi Xianyang City, Shaanxi Manufacturing
Shaanxi Co., Ltd. 100% establishment or
Province, China Province, China industry
(“Chang’an Chateau”) investment
Acquired by
Research, Development & Yantai City, Shandong Yantai City, Shandong Manufacturing
68% establishment or
Manufacture Company (f) Province, China Province, China industry
investment
Changyu (Huanren) Wine-making Acquired by
Benxi City, Liaoning Benxi City, Liaoning Province,
Pioneer Wine Co., Ltd. project 100% establishment or
Province, China China
(“Huanren Wine”) preparation investment
Xinjiang Changyu Wine Acquired by
Xinjiang Uygur Xinjiang Uygur Autonomous
Sales Co., Ltd. (“Xinjiang Sales 100% establishment or
Autonomous Region, China Region, China
Sales”) investment
Ningxia Changyu Trading Acquired by
Yinchuan City, Ningxia Hui Yinchuan City, Ningxia Hui
Co., Ltd. (“Ningxia Sales 100% establishment or
Autonomous Region, China Autonomous Region, China
Trading”) investment
Shaanxi Changyu Rena Xianyang City, Shaanxi Xianyang City, Shaanxi Acquired by
Sales 100%
Wine Sales Co., Ltd. Province, China Province, China establishment or
139
Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
Proportion of
Business
Name of subsidiary Principal business location Registration place shareholding Acquisition mode
nature
Direct Indirect
(“Shaanxi Sales”) investment
Penglai Changyu Wine Acquired by
Penglai City, Shandong Penglai City, Shandong
Sales Co., Ltd. (“Penglai Sales 100% establishment or
Province, China Province, China
Wine”) investment
Laizhou Changyu Wine Acquired by
Laizhou City, Shandong Laizhou City, Shandong
Sales Co., Ltd. (“Laizhou Sales 100% establishment or
Province, China Province, China
Sales”) investment
Acquired by
Francs Champs Investment
Cognac, France Cognac, France 100% establishment or
Participations SAS trade
investment
Lanzhou Changyu Wine Acquired by
Lanzhou City, Gansu Lanzhou City, Gansu Province,
Marketing Co., Ltd. Sales 100% establishment or
Province, China China
(“Lanzhou Marketing”) investment
Beijing Changyu Trading Acquired by
Co., Ltd. (“Beijing Beijing City, China Beijing City, China Sales 100% establishment or
Trading”) investment
Tianjin Changyu Pioneer Acquired by
Wine Sales Co., Ltd. Tianjin City, China Tianjin City, China Sales 100% establishment or
(“Tianjin Pioneer”) investment
Fuzhou Changyu Pioneer Acquired by
Fuzhou City, Fujian Fuzhou City, Fujian Province,
Wine Co., Ltd. (“Fuzhou Sales 100% establishment or
Province, China China
Pioneer”) investment
Nanjing Changyu Pioneer Acquired by
Nanjing City, Jiangsu Nanjing City, Jiangsu
Wine Co., Ltd. (“Nanjing Sales 100% establishment or
Province, China Province, China
Pioneer”) investment
Xianyang Changyu Pioneer Acquired by
Xianyang City, Shaanxi Xianyang City, Shaanxi
Wine Sales Co., Ltd. Sales 100% establishment or
Province, China Province, China
(“Xianyang Pioneer”) investment
Shenyang Changyu Pioneer Acquired by
Shenyang City, Liaoning Shenyang City, Liaoning
Wine Co., Ltd. (“Shenyang Sales 100% establishment or
Province, China Province, China
Pioneer”) investment
Jinan Changyu Pioneer Acquired by
Jinan City, Shandong Jinan City, Shandong Province,
Wine Co., Ltd. (“Jinan Sales 100% establishment or
Province, China China
Pioneer”) investment
Shanghai Changyu Pioneer Acquired by
Wine Co., Ltd. (“Shanghai Shanghai City, China Shanghai City, China Sales 100% establishment or
Pioneer”) investment
Fuzhou Changyu Pioneer Fuzhou City, Jiangxi Fuzhou City, Jiangxi Province, Sales 100% Acquired by
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Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
Proportion of
Business
Name of subsidiary Principal business location Registration place shareholding Acquisition mode
nature
Direct Indirect
Wine Co., Ltd. (“Fuzhou Province, China China establishment or
Pioneer”) investment
Shijiazhuang Changyu
Acquired by
Pioneer Wine Sales Co., Shijiazhuang City, Hebei Shijiazhuang City, Hebei
Sales 100% establishment or
Ltd. (“Shijiazhuang Province, China Province, China
investment
Pioneer”)
Hangzhou Yuzefeng Acquired by
Hangzhou City, Zhejiang Hangzhou City, Zhejiang
Trading Co., Ltd. Sales 100% establishment or
Province, China Province, China
(“Hangzhou Yuzefeng”) investment
Acquired by
Jilin Changyu Pioneer Wine Changchun City, Jilin Changchun City, Jilin
Sales 100% establishment or
Co., Ltd. (“Jilin Pioneer”) Province, China Province, China
investment
Beijing Changyu Pioneer Acquired by
Wine Sales Co., Ltd. Beijing City, China Beijing City, China Sales 100% establishment or
(“Beijing Pioneer”) investment
Harbin Changyu Pioneer Acquired by
Harbin City, Heilongjiang Harbin City, Heilongjiang
Wine Sales Co., Ltd. Sales 100% establishment or
Province, China Province, China
(“Harbin Pioneer”) investment
Hunan Changyu Pioneer Acquired by
Changsha City, Hunan Changsha City, Hunan
Wine Co., Ltd. (“Hunan Sales 100% establishment or
Province, China Province, China
Pioneer”) investment
Yinchuan Changyu Pioneer Acquired by
Yinchuan City, Ningxia Hui Yinchuan City, Ningxia Hui
Wine Co., Ltd. (“Yinchuan Sales 100% establishment or
Autonomous Region, China Autonomous Region, China
Pioneer”) investment
Kunming Changyu Pioneer Acquired by
Kunming City, Yunnan Kunming City, Yunnan
Wine Co., Ltd. (“Kunming Sales 100% establishment or
Province, China Province, China
Pioneer”) investment
Chongqing Changyu Acquired by
Pioneer Wine Sales Co., Chongqing City, China Chongqing City, China Sales 100% establishment or
Ltd. (“Chongqing Pioneer”) investment
Wuhan Changyu Pioneer Acquired by
Wuhan City, Hubei Wuhan City, Hubei Province,
Wine Co., Ltd. (“Wuhan Sales 100% establishment or
Province, China China
Pioneer”) investment
Hohhot Changyu Pioneer Hohhot City, Inner Acquired by
Hohhot City, Inner Mongolia
Wine Co., Ltd. (“Hohhot Mongolia Autonomous Sales 100% establishment or
Autonomous Region , China
Pioneer”) Region , China investment
Chengdu Changyu Pioneer Chengdu City, Sichuan Chengdu City, Sichuan Acquired by
Sales 100%
Wine Co., Ltd. (“Chengdu Province, China Province, China establishment or
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Proportion of
Business
Name of subsidiary Principal business location Registration place shareholding Acquisition mode
nature
Direct Indirect
Pioneer”) investment
Nanning Changyu Pioneer Nanning City, Guangxi Acquired by
Nanning City, Guangxi Zhuang
Wine Co., Ltd. (“Nanning Zhuang Autonomous Sales 100% establishment or
Autonomous Region, China
Pioneer”) Region, China investment
Lanzhou Changyu Pioneer Acquired by
Lanzhou City, Gansu Lanzhou City, Gansu Province,
Wine Co., Ltd. (“Lanzhou Sales 100% establishment or
Province, China China
Pioneer”) investment
Yantai Roullet-Fransac
Acquired by
Imported Wine Sales Co., Yantai City, Shandong Yantai City, Shandong
Sales 100% establishment or
Ltd. (“Yantai Province, China Province, China
investment
Roullet-Fransac”)
Hefei Changyu Pioneer Acquired by
Hefei City, Anhui Province, Hefei City, Anhui Province,
Wine Co., Ltd. (“Hefei Sales 100% establishment or
China China
Pioneer”) investment
Urumchi Changyu Pioneer Urumchi City, Xinjiang Acquired by
Urumchi City, Xinjiang Uygur
Wine Co., Ltd. (“Urumchi Uygur Autonomous Region, Sales 100% establishment or
Autonomous Region, China
Pioneer”) China investment
Guangzhou Changyu Acquired by
Guangzhou City, Guangzhou City, Guangdong
Pioneer Wine Co., Ltd. Sales 100% establishment or
Guangdong Province, China Province, China
(“Guangzhou Pioneer”) investment
Acquired by
Yantai City, Shandong Yantai City, Shandong
Wine Sales Co., Ltd. Sales 100% establishment or
Province, China Province, China
investment
Explanation for difference between the proportion of shareholding and proportion of voting power
in the subsidiaries:
(a) Xinjiang Tianzhu is a subsidiary of the Company obtained by merger and acquisition,
whose 60% of the shares are held by the Company. The Company exercises full control over
the operation, investment and financing policies of Xinjiang Tianzhu by contract arrangement.
This contract arrangement was expired on August 6, 2017. After the expiration, the minority
shareholders of Xinjiang Tianzhu shall enjoy/bear all rights/duties of shareholders specified
in the Articles of Association.
(b) Changyu Chateau is a Sino-foreign joint venture established by the Company and a
foreign investor, whose 70% of the shares are held by the Company. The Company exercises
full control over the operation, investment and financing policies of Changyu Chateau by
contract arrangement. The contract arrangement will expire on December 31, 2022.
(c) Langfang Castel is a Sino-foreign joint venture established by the Company and a foreign
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investor, whose 49% of the shares are held by the Company and its subsidiaries. The
Company exercises full control over the operation, investment and financing policies of
Langfang Castel by contract arrangement. The contract arrangement expired on December 31,
2017. After the expiration of the contract arrangement, the minority shareholders of Langfang
Castel normally enjoy/undertake all rights/duties of the shareholders agreed in the Articles of
Association of the Company.
(d) Beijing Chateau is a limited liability company jointly established by the Company and
Yantai De’an and Beijing Qinglang, in which the Company holds 90% of the shares. The
Company exercises full control over the operation, investment and financing policies of
Beijing Chateau by contract arrangement. The contract arrangement will expire on September
2, 2019.
(e) Icewine Valley is a Sino-foreign joint venture established by the Company and a foreign
investor, whose 51% of the shares are held by the Company. The Company exercises full
control over the operation, investment and financing policies of Icewine Valley by contract
arrangement. The contract arrangement will expire on December 31, 2021.
(f) The Research, Development & Manufacture Company is a joint venture established by the
Company and Agricultural Development Fund, whose 68% of the shares were held by the
Company on June 30, 2019. As stated in Note 7.27, the Company exercises full control over
the operation, investment and financing policies of the Research, Development &
Manufacture Company by contract arrangement. The contract arrangement will expire on
May 22, 2026. Up to June 30, 2019, the remaining investment of the Agricultural
Development Fund accounted for 32% of the registered capital.
9.1.2 Important non-wholly-owned subsidiaries
Unit: Yuan
Dividend declared to be
Shareholding Profit/loss attributable Balance of minority
distributed to minority
Name of subsidiary proportion of minority to minority shareholders shareholder’s interest at
shareholders in this
shareholders in this period the end of period
period
Xinjiang Tianzhu 40% -1,200,628 49,412,020
Marques del Atrio 25% 464,844 1,367,975 29,878,944
Changyu Chateau 30% 12,365,016
Langfang Castel 51% -752,237 20,175,744
Beijing Chateau 10% 65,133,868
Icewine Valley 49% 33,319,062
Indomita Wine 15% 564,376 53,709,304
Kilikanoon Estate, 20% -301,829 16,204,035
Australia
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Explanation for difference between the proportion of shareholding and proportion of voting
power of the minority shareholders in the subsidiaries: See details in Note 9.1.1.
9.1.3 Main financial information of important non-wholly-owned subsidiaries
Unit: Yuan
Ending balance Beginning balance
Name of
Current Non-curren Current Non-curren Total Current Non-curren Total Current Non-curren Total
subsidiary Total assets
assets t assets liabilities t liabilities liabilities assets t assets assets liabilities t liabilities liabilities
Xinjiang
26,891,774 64,187,998 91,079,771 -169,932 5,336,114 5,166,181 27,390,495 66,486,795 93,877,290 5,336,114 5,336,114
Tianzhu
Changyu
126,947,614 113,877,340 240,824,954 163,176,906 163,176,906 141,298,023 114,694,168 255,992,191 171,869,662 171,869,662
Chateau
Langfang
16,966,616 15,672,549 32,639,165 4,033,546 4,033,546 17,659,511 16,001,682 33,661,193 3,358,322 3,358,322
Castel
Beijing
228,256,490 458,433,952 686,690,442 45,912,267 45,912,267 219,973,582 461,115,089 681,088,671 62,598,545 62,598,545
Chateau
Icewine
61,748,346 23,105,860 84,854,207 31,627,378 100,000 31,727,378 45,194,591 23,920,890 69,115,481 14,974,458 100,000 15,074,458
Valley
Marques
407,617,465 92,937,395 500,554,860 304,115,810 72,890,389 377,006,198 464,421,130 99,080,668 563,501,798 381,659,315 54,520,937 436,180,252
del Atrio
Indomita
210,503,095 295,300,215 505,803,310 138,985,158 4,861,038 143,846,196 214,784,490 300,969,342 515,753,832 148,359,328 4,976,161 153,335,489
Wine
Kilikanoon
Estate, 82,656,715 64,415,130 147,071,845 12,813,137 52,227,853 65,040,990 87,634,707 63,759,866 151,394,573 13,387,942 51,893,171 65,281,113
Australia
Unit: Yuan
Amount incurred in this period Amount incurred in prior period
Name of Total Total
Operating Operating Operating Operating
subsidiary Net profit comprehensive Net profit comprehensive
income cash flow income cash flow
income income
Xinjiang
-3,001,571 -1,297,212 -417,462 18,803 -184,572 -184,572 10,284,801
Tianzhu
Changyu
24,470,842 -2,189,871 -686,874 6,946,282 43,226,910 2,861,474 2,861,474 2,419,427
Chateau
Langfang -1,474,975 -821,013 25,801 5,038,281 -1,952,954 -1,952,954 -4,435,022
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Castel
Beijing
12,711,985 22,752,823 9,667,568 78,502,666 15,243,700 15,243,700 12,282,145
Chateau 90,339,526.00
Icewine
-1,986,710 -754,056 1,903,734 27,305,133 905,396 905,396 2,018,740
Valley 19,763,387.00
Marques
129,064,457 1,859,381 -4,084,674 -23,846,960 148,197,893 1,214,012 -929,332 -21,783,821
del Atrio
Indomita
86,818,838 3,762,504 1,880,687 -1,725,571 93,719,341 -281,859 -4,460,814 -7,723,684
Wine
Kilikanoon
Estate, 22,852,809 -1,509,147 -4,011,458 1,024,962 25,904,401 -115,317 -3,779,883 -1,469,903
Australia
10. Risks related to financial instruments
The main financial instruments of the Group include monetary capital, bills receivable,
accounts receivable, receivables financing, other receivables, other non-current financial assets,
short-term loans, non-current liabilities due within one year, accounts payable, other payables,
long-term accounts payable and long-term loans, etc. Please refer to Note 7 for details of each
financial instruments. The risks related to these financial instruments and risk management policies
adopted by the Group to reduce these risks are shown as follows. The management of the Group
manages and monitors these risk exposures to ensure that the above-mentioned risks are controlled
within a defined scope.
The Group adopts sensitivity analysis techniques to analyze the possible influence of possible
reasonable changes of risk variables on the current profits and losses and shareholders’ equity. Since
any risk variable merely changes independently and the final influence of relevance between variables
on the change of certain risk variable will exert a great effect, the following content is carried out
under the hypothesis that each variable changes independently.
The risk management objective of the Group is to achieve proper balance between risks and benefits,
to minimize the negative influence of the risks on the business performance of the Group and to
maximize the shareholders’ benefit. Based on this risk management objective, the basic risk
management strategy of the Group is to determine and analyze various risks faced by the Group, to set
up proper risk tolerance bottom line and to carry out risk management, and to supervise various risks
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Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
timely and reliably to control the risks within a defined scope.
10.1 Risk management objective and policy
10.1.1 Market risk
① Foreign exchange risk
Foreign exchange risk refers to the risk that causes loss due to exchange rate fluctuation. The foreign
exchange risk borne by the Group is mainly relevant to EUR and USD. Except that the overseas
subsidiaries of the Group purchase and sell in EUR, Chilean peso and AUD, which borrow in USD,
and domestic subsidiaries deposit in EUR and USD, other main business activities of the Group are
priced and settled in RMB. As at June 30, 2019, except that the assets and liabilities mentioned in the
table below were the balance of deposits or loans shown in foreign currencies, other assets and
liabilities of the entities of the Group were settled in their respective functional currencies.
Unit: Yuan
Item Ending balance Beginning balance
Monetary capital (EUR) 22,677 199,753
Monetary capital (USD) 50,339,468 51,283,910
Short-term loans (USD) 75,621,700 75,495,200
The foreign exchange risk caused by the assets and liabilities of such foreign currency balance may
exert an influence on the business performance of the Group. The Group pays close attention to the
influence of exchange rate fluctuation on the foreign exchange risk of the Group. The Group has not
taken any measures to avoid the foreign exchange risk at present.
Sensitivity analysis of foreign exchange risk
With the other variables unchanged, the pre-tax influence of possible reasonable exchange rate
fluctuation on current profit and loss and shareholders’ equity is shown as follows:
Domestic entities:
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Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
Unit: Yuan
This period
Item Exchange rate fluctuation
Influence on profit in this period Influence on shareholders’ equity
EUR 5% appreciation against RMB 1,134 1,134
EUR 5% depreciation against RMB -1,134 -1,134
USD 5% appreciation against RMB 2,339,288 2,339,288
USD 5% depreciation against RMB -2,339,288 -2,339,288
Overseas entities:
Unit: Yuan
This period
Item Exchange rate fluctuation
Influence on profit in this period Influence on shareholders’ equity
USD 5% appreciation against EUR 10,250 10,250
USD 5% depreciation against EUR -10,250 -10,250
USD 10% appreciation against CLP -115,086 -115,086
USD 10% depreciation against CLP 115,086 115,086
Note: As at June 30, 2019, the management of the Group predicted that EUR and USD exchange rate
against RMB, and USD exchange rate against EUR changed by 5%; and USD exchange rate against
CLP changed by 15%.
② Interest rate risk – risk of change in cash flow
The risk of change in cash flow of financial instruments caused by interest rate change of the Group is
mainly relevant to the monetary capital and bank loan at floating interest rate. The policy of the Group
is to maintain the floating interest rate of these loans to eliminate the risk of change in fair value of the
interest rate.
Sensitivity analysis of interest rate risk
Sensitivity analysis of interest rate risk is based on the hypothesis that the change in market interest
rate influences the interest income or expense of financial instruments at variable rate.
The management of the Group thinks that the interest rate risk of deposit in bank borne by the Group
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Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
is not significant, and therefore the sensitivity analysis of interest rate of deposit in bank is not
disclosed here.
On the basis of the above-mentioned hypothesis, with the other variables unchanged, the pre-tax
influence of possible reasonable exchange rate fluctuation on current profit and loss and shareholders’
equity is as follows:
Unit: Yuan
This period
Item Interest rate change
Influence on profit of this period Influence on shareholders’ equity
Bank loan Increase by 50 BP -323,958 -323,958
Bank loan Decrease by 50 BP 323,958 323,958
Note: As at June 30, 2019, the management of the Group predicted that the bank floating rate changed
by 50 basis points
10.1.2 Credit risk
As at June 30, 2019, the largest credit risk exposure possibly causing the financial loss of the
Group was mainly caused by the loss generated by the financial assets of the Group due to
failure of another party of the contract in fulfilling obligations.
To lower the credit risk, the Group only trades with the recognized and reputable third party.
In accordance with the policy of the Group, credit check shall be carried out for all customers
who transact by means of credit. In addition, the Group conducts continuous monitoring on
the balance of accounts receivable to ensure that the Group will not face major risk of bad
debts. For transactions not settled with recording currency of relevant business units, unless
the credit control department of the Group specially approves, the Group will not provide
credit trade terms. In addition, the Group audits the collection of each single significant
account receivable on each date of balance sheet to ensure that sufficient bad-debt provision
is accrued for accounts unable to be collected. Therefore, the management of the Group
thinks the credit risk borne by the Group is greatly reduced.
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Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
Since the Group only trades with the recognized and reputable third party, no collateral is
required. The credit risk is managed centrally according to the customer/counter-party,
geographic area and industry. As at June 30, 2019, 18.3% of accounts receivable of the Group
came from top five borrowers in accounts receivable of the Group (December 31, 2018:
19.8%). The Group holds no collateral or other credit enhancement for the balance of
accounts receivable.
10.1.3 Liquidity risk
When managing the liquidity risk, the Group reserves and monitors the cash and cash
equivalents the management considers sufficient to satisfy the operation need of the Group
and reduce the influence of fluctuation in cash flow. The management of the Group monitors
the use of bank loans and ensures to abide by the loan agreement.
11. Related parties and related transactions
11.1 Particulars of the parent company of the Company
Proportion of Proportion of
Name of parent shareholding of the voting powers of
Registration place Business nature Registered capital
company parent company in the parent company
the Company in the Company
Changyu Group Manufacturing
Yantai City 50,000,000 50.40% 50.40%
Company industry
From January to June 2019, there was no fluctuation in the registered capital of the parent
company and its share in equity interest and voting right.
11.2 Particulars of the subsidiaries of the Company
See particulars of the subsidiaries of the Company in Note 9.
11.3 Particulars of other related parties
Name of other related parties Relationship between other related parties and the Company
Yantai Changyu Wine Culture Museum Co., Ltd. (“Wine
A company controlled by the same parent company
Culture Museum”)
Yantai Changyu Window of International Wine City Co. Ltd.
A company controlled by the same parent company
(“Window of Wine City”)
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Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
Yantai God Horse Packing Co., Ltd. (“God Horse Packing”) A company controlled by the same parent company
Yantai Zhongya Medical Health Wine Co., Ltd. (“Zhongya
A company controlled by the same parent company
Medical”)
Yantai Changyu Cultural Tourism Product Sales Co., Ltd.
A company controlled by the same parent company
(“Cultural Sales”)
Yantai Changyu Cultural Tourism Development Co., Ltd.
A company controlled by the same parent company
(“Cultural Development”)
11.4 Related transactions
11.4.1 Related transactions of purchasing and selling goods and providing and receiving
services
List of purchasing goods/receiving services
Unit: Yuan
Approved transaction Exceeding the
Related Amount incurred Amount incurred in
Related parties amount transaction amount or
transactions in this period prior period
not
Purchasing
God Horse Packing 74,970,845 95,990,354
goods
Purchasing
Zhongya Medical 2,970,007 6,037,893
goods
Wine Culture Purchasing
7,324,199 9,475,159
Museum goods
Window of Wine Purchasing
6,853,112 2,857,130
City goods
Purchasing
Cultural Sales 65,907
goods
Cultural Purchasing
40,458
Development goods
List of selling goods/providing services
Unit: Yuan
Amount incurred in this
Related parties Related transactions Amount incurred in prior period
period
Wine Culture Museum Selling goods 3,377,011 13,889,017
Window of Wine City Selling goods 3,891,101 8,773,612
Zhongya Medical Selling goods 2,559,870 2,203,629
God Horse Packing Selling goods 3,520 15,742
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Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
Cultural Sales Selling goods 3,873,204
Cultural Development Selling goods 1,847,727 220,759
The price of transactions between the Group and the related parties are based on the
negotiated price.
11.4.2 Related trusteeship/contracting and mandatory administration/outsourcing
Nil
11.4.3 Leasing with related parties
The Company as a lessor:
Unit: Yuan
Rental income recognized in Rental income recognized in
Name of the lessee Type of leased assets
this period prior period
Office building and
God Horse Packing 742,883 739,491
plant
Window of Wine City Office building 488,595 486,364
Zhongya Medical Office building 260,279 259,091
The Company as a lessee:
Unit: Yuan
Rent recognized in prior
Name of the lessor Type of leased assets Rent recognized in this period
period
Changyu Group Company Office building and plant 3,447,891 3,432,147
11.4.4 Related guarantee
Nil
11.4.5 Inter-bank borrowing and lending of related parties
Nil
11.4.6 Asset transfer and debt recombination of related parties
Nil
11.4.7 Other related transactions
Unit: Yuan
Item Note Amount incurred in this period Amount incurred in prior period
Trademark use fee (a) 44,428,033
Patent fee (b) 25,000
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Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
11.5 Accounts receivable and payable of the related parties
11.5.1 Accounts receivable
Unit: Yuan
Ending balance Beginning balance
Provision
Item Related parties Book Provision for
for bad Book balance
balance bad debts
debts
Accounts receivable Zhongya Medical 4,384,629 2,768,391
Accounts receivable God Horse Packing 17,137
Accounts receivable Window of Wine City 1,777,525 1,911,157
Other receivables God Horse Packing 1,626,880 813,440
Other receivables Zhongya Medical 285,000
Other receivables Window of Wine City 535,000
11.5.2 Accounts payable
Unit: Yuan
Item Related parties Ending book balance Beginning book balance
Accounts payable God Horse Packing 36,227,351 55,366,785
Accounts payable Zhongya Medical 8,002,230 6,722,667
Accounts payable Wine Culture Museum 7,301,765 4,646,731
Accounts payable Window of Wine City 1,139,407 4,789,600
Accounts payable Cultural Sales 6,360
Other accounts payable Changyu Group Company 3,775,362 78,414,978
Other accounts payable God Horse Packing 450,000
12. Commitment and contingency
12.1 Significant commitment
Unit: Yuan
Item Ending balance Beginning balance
Making long-term asset commitments 469,980,000 996,675,000
12.2 Contingency
As of the balance sheet date, the Group didn’t have any contingency to be disclosed.
13. Matters after balance sheet
13.1 Important non-adjusting events
Nil
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Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
13.2 Profit distribution
Unit: Yuan
Profits or dividends to be distributed 411,278,400
Allocated profits or dividends approved to declare upon
411,278,400
discussion
13.3 Other statement of events after the balance sheet date
According to the decision of the Shareholders’ Meeting dated May 17, 2019, based on the issued
capital stock of 685,464,000 shares in 2018, the Company allocated RMB 6 Yuan in cash (including
tax) for every 10 shares to all shareholders with the total cash dividends of RMB 411,278,400 Yuan.
Such cash dividends were distributed on July 8, 2019 and July 10, 2019 respectively.
14. Other important matters
Nil
15. Notes on major items in financial statements of the parent company
15.1 Accounts receivable
15.1.1 Accounts receivable disclosed by type
Unit: Yuan
Ending balance Beginning balance
Provision for bad Provision for bad
Book balance Book balance
Type debts debts
Book value Book value
Accrued Accrued
Amount Proportion Amount Amount Proportion Amount
proportion proportion
Accounts receivable for
which provision for bad
1,447,973 100% 1,447,973
debts is accrued on a
single item basis
Accounts receivable for
bad debts is accrued on a
combined basis
Total 1,447,973 100% 1,447,973
15.1.2 Provision for bad debts accrued, withdrawn or transferred back in this period
The provision for bad debts accrued in this period was RMB 0 Yuan; and that withdrawn or
transferred back in this period was RMB 0 Yuan.
15.1.3 Accounts receivable actually cancelled after verification in this period
Nil
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Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
15.1.4 Accounts receivable collected by the borrower of top 5 units ranked by the ending
balance
Nil
15.1.5 Accounts receivable derecognized due to transfer of financial assets
Nil
15.1.6 Accounts receivable transferred and included in assets and liabilities
Nil
15.2 Other receivables
Unit: Yuan
Item Ending balance Beginning balance
Interest receivable 277,785 254,088
Dividends receivable 4,103,925 500,000,000
Other receivables 522,211,903 525,389,268
Total 526,593,613 1,025,643,356
Remarks: The other receivables in the above list refer to those deducting interest receivable and dividends receivable.
15.2.1 Interest receivable
Unit: Yuan
Item Ending balance Beginning balance
Fixed deposit 277,785 254,088
Entrusted loan
Bond investment
Total 277,785 254,088
15.2.2 Dividends receivable
Unit: Yuan
Item (or the invested unit) Ending balance Beginning balance
Dividends receivable from subsidiaries 4,103,925 500,000,000
Total 4,103,925 500,000,000
15.2.3 Other receivables
15.2.3.1 Particulars of other receivables classified by nature
Unit: Yuan
Nature Ending book balance Beginning book balance
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Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
Nature Ending book balance Beginning book balance
Accounts receivable from subsidiaries 518,330,846 523,579,831
Deposit and guaranty money receivable 12,500
Other 3,881,057 1,796,937
Total 522,211,903 525,389,268
15.2.3.2 Disclosed by age
Unit: Yuan
Age Ending balance
Within 1 year (including) 422,841,109
1-2 years 99,270,390
2-3 years 100,404
More than 3 years
Total 522,211,903
15.2.3.3 Provision for bad debts accrued, withdrawn or transferred back in this period
The provision for bad debts accrued in this period was RMB 0 Yuan; and that withdrawn or
transferred back in this period was RMB 0 Yuan.
15.2.3.4 Accounts receivable actually cancelled after verification in this period
Nil
15.2.3.5 Other accounts receivable collected by the borrower of top 5 units ranked by
the ending balance
Unit: Yuan
Percentage in the
Ending balance
Nature of total ending
Unit Ending balance Age of provision for
fund balance of other
bad debts
accounts receivable
Internal
Sales Company incomings Within 1 year 34.3%
179,295,939
and outgoings
Internal
R&D Company incomings Within 1 year 21.3%
111,343,650
and outgoings
Internal
Laizhou Wine incomings Within 1 year 1.1%
5,549,972
and outgoings
Internal
Penglai Sales incomings Within 1 year 0.8%
3,992,770
and outgoings
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Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
Percentage in the
Ending balance
Nature of total ending
Unit Ending balance Age of provision for
fund balance of other
bad debts
accounts receivable
Internal
Indomita Wine Company Chile, SpA incomings Within 1 year 0.6%
3,330,413
and outgoings
Total -- 303,512,744 -- 58.1%
15.2.3.6 Accounts receivable related to governmental subsidy
Nil
15.2.3.7 Other accounts receivable derecognized due to transfer of financial assets
Nil
15.2.3.8 Other accounts receivable transferred and included in assets and liabilities
Nil
15.3 Long-term equity investment
Unit: Yuan
Ending balance Beginning balance
Item Impairment Impairment
Book balance Book value Book balance Book value
reserve reserve
Investment in
7,420,803,069 7,420,803,069 7,420,803,069 7,420,803,069
subsidiaries
Investment in associated
enterprises and joint
ventures
Total 7,420,803,069 7,420,803,069 7,420,803,069 7,420,803,069
15.3.1 Investment in subsidiaries
Unit: Yuan
Provision for
Ending balance
Beginning Increase in this Decrease in this impairment
Invested unit Ending balance of impairment
balance period period accrued in this
provision
period
Xinjiang Tianzhu
60,000,000 60,000,000
(a)
Kylin Packaging 23,176,063 23,176,063
Changyu Chateau
28,968,100 28,968,100
(a)
Pioneer
3,500,000 3,500,000
International (b)
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Provision for
Ending balance
Beginning Increase in this Decrease in this impairment
Invested unit Ending balance of impairment
balance period period accrued in this
provision
period
Ningxia Growing 36,573,247 36,573,247
National Wine 2,000,000 2,000,000
Icewine Valley (a) 30,440,500 30,440,500
Beijing Chateau (a) 579,910,000 579,910,000
Sales Company 7,200,000 7,200,000
Langfang Sales (b) 100,000 100,000
Langfang Castel (a) 19,835,730 19,835,730
Wine Sales 4,500,000 4,500,000
Shanghai Marketing
300,000 300,000
(b)
Beijing Marketing 850,000 850,000
Jingyang Sales (b) 100,000 100,000
Jingyang Wine (b) 900,000 900,000
Ningxia Wine 222,309,388 222,309,388
Ningxia Chateau 453,463,500 453,463,500
Chateau Tinlot (b) 212,039,586 212,039,586
Shihezi Chateau 812,019,770 812,019,770
Chang’an Chateau 803,892,258 803,892,258
Research,
Development &
3,288,906,445 3,288,906,445
Manufacture
Company (a)
Huanren Wine 22,200,000 22,200,000
Wine Sales
Company
Francs Champs 236,025,404 236,025,404
Marques del Atrio 190,150,544 190,150,544
Indomita Wine 274,248,114 274,248,114
Kilikanoon Estate,
107,194,420 107,194,420
Australia
Total 7,420,803,069 7,420,803,069
(a) The Company acquired 100% voting right and usufruct of such non-wholly-owned subsidiaries by
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Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
means of contract arrangement. Please refer to Note 9.1.
(b) The Company acquired 100% voting right of such subsidiaries by means of indirect holding through
its wholly-owned subsidiaries.
From January to June 2019, there were no restrictions for the invested entities of the Company to transfer
assets to the Company.
15.4 Operating income and operating cost
Unit: Yuan
Amount incurred in this period Amount incurred in prior period
Item
Income Cost Income Cost
Main business 334,207,600 292,023,685 384,520,180 330,810,994
Other business 18,143,402 17,546,895 24,325,031 21,835,995
Total 352,351,002 309,570,580 408,845,211 352,646,989
15.5 Investment income
Unit: Yuan
Amount incurred in this Amount incurred in prior
Item
period period
Income from long-term equity investment by cost method 264,221,755 312,409,576
Income from long-term equity investment by equity method
Investment income from disposal of long-term equity
investment
Investment income of the financial assets measured at their
fair values and the variation of which is recorded into the
current profits and losses during the holding period
Investment income gained from disposal of the financial
assets measured at their fair values and the variation of which
is recorded into the current profits and losses
Investment income of held-to-maturity investment during the
holding period
Investment income of financial assets held for sale during the
holding period
Investment income gained from disposal of financial assets
held for sale
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Gains generated from the remaining equity remeasured as per
fair value after the loss of control
Total 264,221,755 312,409,576
16. Supplementary materials
16.1 List of non-current profits/losses in this period
Unit: Yuan
Item Amount Remark
Profits/losses on disposal of non-current assets 1,138
Tax return, deduction and exemption approved beyond the
authority or without formal approval document
Governmental subsidy included in the current profits/losses
(excluding those closely related to the enterprise business and
64,211,892
enjoyed in accordance with the unified standard quota or
ration of the state)
Payment for use of funds by non-financial enterprises included
in the current profits/losses
Income obtained when the investment cost obtained by the
enterprise from subsidiaries, joint-run business and joint
venture is less than the fair value of the net identifiable assets
obtained from the invested units when the investment is made
Profits/losses on exchange of non-monetary assets
Profits/losses on entrusting other people to make investment
or manage assets
Asset impairment provision accrued due to force majeure such
as natural disaster
Profits/losses on debt restructuring
Enterprise reorganization expenses such as staffing
expenditure and integration expenses, etc.
Profits/losses on those beyond the fair value generated from
transactions with unfair transaction price
Current net profits/losses on subsidiaries acquired from a
business combination under common control from the
beginning to the consolidation date
Profits/losses on contingencies irrelated to the normal business
of the Company
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Item Amount Remark
Profits/losses on changes of fair value of tradable financial
assets, derivative financial assets, tradable financial liabilities
and derivative financial liabilities, and investment income
from disposal of tradable financial assets, derivative financial
assets, tradable financial liabilities, derivative financial
liabilities and other investment in creditor's rights, excluding
effective hedging operations relevant to the normal business of
the Company
Transfer-back of accounts receivable with single impairment
test and provision for impairment of contract assets
Profits/losses on external entrusted loans
Profits/losses on fair value changes of investment real estate
with fair value mode for follow-up measurement
Influence of the one-time adjustment of the current
profits/losses in accordance with tax and accounting laws and
regulations on the current profits/losses
Trustee fee income from entrusted operation
Other non-operating income and expenditure besides the
3,411,864
above items
Other profits/losses conforming to the definition of
non-current profits/losses
Minus: Influenced amount of income tax 16,671,778
Influenced amount of minority shareholders’ equity 40,022
Total 50,913,094 --
16.2 Return on net assets and earnings per share
Earnings per share
Weighted average return on
Profit incurred in this period Basic EPS Diluted EPS
net assets
(Yuan/Share) (Yuan/Share)
Net profit attributable to common
6.13% 0.88 0.88
shareholders of the Company
Net profit attributable to common
shareholders of the Company deducting 5.62% 0.81 0.81
non-incidental profits/losses
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16.3 Accounting data difference under domestic and foreign accounting standard
16.3.1 Net profits & net assets difference disclosed in the financial report according to
the international accounting standard and Chinese accounting standard
Unit: Yuan
Net profits Net assets
Amount incurred in Amount incurred in prior
Ending balance Beginning balance
this period period
In accordance with the
603,403,789 635,837,405 9,791,885,091 9,606,099,365
Chinese accounting standard
Item & amount adjusted in accordance with the international accounting standard:
In accordance with the
international accounting 603,403,789 635,837,405 9,791,885,091 9,606,099,365
standard
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Yantai Changyu Pioneer Wine Co. Ltd. 2019 Semi-annual Report
XI. Reference Documents
(1)The original of 2019 Semi-annual Report autographed by the chairman.
(2)The Financial Statements autographed and signed by the chairman, chief accountant and
accountants in charge.
(3)The Prospectus and Public Offering Announcement for Stock B in 1997; The Prospectus and The
Shares’ Change & Public Offering Announcement of Stock A for Stock A in 2000.
(4) The originals of all documents and announcements that the Company made public during the
report period in the newspapers designated by China Securities Regulatory Commission.
Yantai Changyu Pioneer Wine Co., Ltd.
Board of Directors
August 28th, 2019
162
