Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
Yantai Changyu Pioneer Wine Co., Ltd.
2021 Annual Report
Final 2022-01
April 2022
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Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
Contents
I、Important Notice, Contents and Definition................................................................................3
II、Brief Introduction for the Company and Main Financial Indicators .................................. 6
III、Management Discussion and Analysis ................................................................................. 11
IV、Corporate Governance .......................................................................................................... 33
V、Environmental and Social Responsibility ............................................................................. 56
VI、Major issues ............................................................................................................................59
VII、Changes in Shares and Shareholders’ Situation ............................................................... 70
VIII、Related Situation of Preferred Shares .............................................................................. 79
IX、Related Situation of Bonds ....................................................................................................79
X、Financial Report ...................................................................................................................... 79
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Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
I. Important Notice, Content 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 the
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), Mr. Jiang Jianxun (Person in charge of
accounting work) and Ms. Guo Cuimei (Person in charge of accounting organ & Accountant in
charge) assure the truthfulness, accuracy and completeness of the financial report in the annual
report.
All directors have personally attended the meeting for deliberating the annual report.
Except for the following directors, other directors attended this board meeting for reviewing this
annual report in person
Name of director not attending Position of director not attending Reason of not attending the Name of
the meeting personally the meeting personally meeting personally entrustee
Aldino Marzorati Director Due to time conflict of work Zhou Hongjiang
Stefano Battioni Director Due to time conflict of work Leng Bin
Enrico Sivieri Director Due to time conflict of work Zhou Hongjiang
Forward-looking statements such as future plans and development strategies covered in this report
do not constitute a substantial commitment of the Company to investors. Investors are advised to
pay attention to investment risks.
About significant risks that may be faced in production and operation process, please refer to “(5)
Potential Risks” of “11. Expectation for the Company’s Future Development” in the “III.
Management Discussion and Analysis” of this report. Investors are advised to read carefully and
pay attention to investment risks.
The Company’s preliminary scheme of profit distribution deliberated and passed by the board of
directors this time is shown as following: Based on the Company’s total 685,464,000 shares, the
Company plans to pay CNY4.5 (including tax) in cash as dividends for every 10 shares to all
shareholders and send 0 bonus share (including tax); capital reserve will not be transferred to
equity.
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Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
Reference Documents
(1)The original of 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 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.
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Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
Definition
Definition Item Refers to Definition Content
Company/The Company Refers to Yantai Changyu Pioneer Wine Co., Ltd.
Changyu Group/Controlling Shareholder Refers to Yantai Changyu Group Co., Ltd.
CSRC Refers to China Securities Regulatory Commission
SSE Refers to Shenzhen Stock Exchange
KPMG Huazhen Refers to KPMG Huazhen LLP (Limited Liability Partnership)
CNY Refers to Chinese Yuan
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Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
II. Brief Introduction for the Company and Main Financial Indicators
1. Company’s information
Stock Abbreviation Changyu A, Changyu B Stock Code 000869, 200869
Stock Abbreviation after Alteration -
Place of Stock Listing 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 Zhou Hongjiang
Registered Address 56 Dama Road, Yantai, Shandong, China
Postal Code of Registered Address 264000
Historical Change in Registered Address No
Office Address 56 Dama Road, Yantai, Shandong, China
Postal Code of Office Address 264000
Website http://www.changyu.com.cn
E-mail webmaster@changyu.com.cn
2. Contact person and information
Secretary to the Board of Directors Authorized Representative of Securities 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. Information disclosure and filing location
Stock exchange website for disclosing annual
Shenzhen Stock Exchange (http://www.szse.cn)
report
China Securities Newspaper , Securities Times, Hong Kong
Media name and website for disclosing
Commercial Daily and CNINFO website
annual report
(http://www.cninfo.com.cn)
Filing location of the Company’s annual Board of Directors’ Office of the Company, 56 Dama Road,
report Yantai, Shandong
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Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
4. Registration changes
Organization Code 913700002671000358
The business scope determined by the Company when it was established
on September 18th, 1997 is production, processing and sales of wine,
distilled liquor, healthy liquor, fruit liquor, non-alcohol beverage, fruit
jam, packing material and winemaking machine.On April 17th, 2008,
approved by the 2007 Shareholders’ Meeting, the Company’s business
scope was changed to production, processing and sales of wine, distilled
liquor, medicinal liquor, fruit liqueur, non-alcohol beverage, fruit jam,
packing material and winemaking machines; licensed import and export.
On May12th, 2010, approved by the 2009 Shareholders’ Meeting, the
Company’s business scope was changed to production, processing and
sales of wine, distilled liquor, medicinal liquor, fruit liqueur,
Changes for the main businesses
non-alcohol beverage, fruit jam, packing material and its products and
of the Company since it was listed
winemaking machinery; licensed import and export; external investment
subject to national policy. On September 23rd, 2016, approved by the
2016 annual 1st Interim Shareholders’ Meeting, the Company’s business
scope was changed to production of wine and fruit wine (bulk wine,
processing and filling); production of blending liquor and other blending
liquors (grape liqueur); production of other liquors (other distilled
liquors); production, processing and sales of packing material and
winemaking machines; grape plantation and procurement; tourism
resources development (excluding tourism); packaging design; activity
of building rental; licensed import and export; warehouse business;
external investment subject to national policy.
Changes for all previous
No
controlling shareholders
5. Other relevant information
The accounting firm appointed by the Company
Name KPMG Huazhen LLP
Level 8, No.2 East Wing of Dongfang Square, No.1 East Chang’an
Address
Street, Dongcheng District, Beijing
Name of signatory accountants Ms. Wang Ting, Ms. Xu Weiran
The sponsor institution appointed by the Company to perform the duty of continuous supervision
during the report period
□Available Not available
The financial adviser appointed by the Company to perform the duty of continuous supervision
during the report period
□Available Not available
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Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
6. Key accounting data and financial indicators
Whether the Company needs to retrospectively adjust or restate the accounting data of previous
fiscal years.
□Yes No
Increase/decrease compared
2021 2020 2019
with last year (%)
Operating revenue (CNY) 3,953,067,583 3,395,402,001 16.42% 5,074,025,899
Net profit attributed to shareholders
500,102,606 470,860,587 6.21% 1,141,367,296
of the listed company (CNY)
Net profit attributed to shareholders
of the listed company after
472,235,962 397,655,187 18.76% 892,496,644
deducting non-recurring profits and
losses (CNY)
Net cash flows from operating
1,125,382,658 505,146,673 122.78% 848,852,360
activities (CNY)
Basic earnings per share (CNY) 0.73 0.69 5.80% 1.67
Diluted earnings per share (CNY) 0.73 0.69 5.80% 1.67
Weighted average for earning rate
4.84% 4.57% 0.27% 11.40%
of net assets (CNY)
December 31, December 31, Increase/decrease compared December 31,
2021 2020 with last year-end (%) 2019
Total assets (CNY) 13,472,009,754 13,102,481,541 2.82% 13,647,932,568
Net Assets attributed to
shareholders of the listed company 10,447,884,183 10,267,832,644 1.75% 10,308,910,198
(CNY)
The lower of the net profit before and after non-recurring gains and losses in recent three fiscal
years is negative and the audit report in recent one year indicates there is uncertainty in the
Company’s sustainable operation ability
□Yes No
The lower of the net profit before and after non-recurring gains and losses is negative
□Yes No
7. Differences in accounting data under PRC accounting standards and international
accounting standards
(1) Differences between net profits and net assets in the financial report disclosed according to
both international accounting standards and PRC accounting standards
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Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
□Available Not available
There are no differences between net profits and net assets in the financial report disclosed
according to both international accounting standards and PRC accounting standards during the
report period.
(2) Differences between net profits and net assets in the financial report disclosed according to
both foreign accounting standards and PRC accounting standards
□Available Not available
There are no differences between net profits and net assets in the financial report disclosed
according to both foreign accounting standards and PRC accounting standards during the report
period.
8. Key financial indicators by quarter
Unit：CNY
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
Operating revenue 1,134,006,251 740,454,186 796,762,047 1,281,845,099
Net profit attributed to shareholders of the
286,745,340 85,076,479 79,742,460 48,538,327
listed company
Net profit attributed to shareholders of the
listed company after deducting non-recurring 280,760,222 72,915,820 67,549,124 51,010,796
profits and losses
Net cash flows from operating activities 314,895,523 141,039,626 336,257,978 333,189,531
Whether there are significant differences between the above mentioned financial indicators or their
sum and the related financial indicators in the quarterly reports and semi-annual reports disclosed
by the Company.
□Yes No
9. Item and amount of non-recurring profit and loss
Available □Not available
Unit：CNY
Item 2021 2020 2019 Explanation
Profits and losses on disposal of non-current assets, including
-15,364,993 -1,165,162 6,272,676
the provision for asset impairment write-off part
Government grants included in the current profits and
losses(except for those recurring government grants that are
48,240,741 73,180,848 84,837,581
closely related to the entity’s operation, in line with related
regulations and have proper basis of calculation)
The subsidiary’s net profit and loss for the current period
from the beginning of the period to the combining date
12,715,544 16,514,012
resulting from the combination of enterprises under the same
control
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Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
Other non-operating revenues and expenditures in addition to
2,328,169 10,098,551 7,298,479
the aforementioned items
Other profit and loss projects conforming to the definition of
0 0 218,649,636
non-recurring profit and loss
Less：Income tax effect 7,306,787 21,595,671 84,171,927
Minority shareholders' equity effect (after taxes) 30,486 28,710 529,805
Total 27,866,644 73,205,400 248,870,652 --
Specific situation of other profit and loss projects conforming to the definition of non-recurring
profit and loss
□Available Not available
There does not exist specific situation of other profit and loss projects conforming to the definition
of non-recurring profit and loss.
Explanation for regarding the non-recurring profit and loss specified in the Explanatory
Announcement on Public Company’s Information Disclosure No.1 –Non-recurring Profit and Loss
as recurrent profit and loss
□Available Not available
There is no situation regarding the non-recurring profit and loss specified in the Explanatory
Announcement on Public Company’s Information Disclosure No.1 –Non-recurring Profit and Loss
as recurrent profit and loss.
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Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
III. Management Discussion and Analysis
1. Situation of industry in which the Company operates during the report period
In 2021, a strong wine consumption atmosphere had not yet been formed in China. The wine market
was still mainly distributed in some developed coastal areas. Most consumers did not develop the
habit of drinking wine frequently. Wine consumption was highly vulnerable to the impact of the
epidemic and spirits. The overall scale of domestic wine market continued to decline, the sales
volume of imported wine and domestic wine continued the trend of “double decline”, and the vast
majority of wine production and operation enterprises had difficulties in operation. The domestic
wine industry was still on the verge of loss.
Facing these disadvantages, the Company persisted in taking the market as the center, adhered to
the development strategy of “Focus on middle-and-high level, Focus on high quality, Focus on big
product” and the marketing philosophy of “obtaining growth from the terminal and nurturing
consumers”, took market-oriented action to adjust marketing strategies in a timely manner,
promoted reform and innovation to stimulate enterprise vitality, and took consumer satisfaction as
the ultimate goal to continuously improve product quality. In 2021, the Company realized the
operating revenue of CNY3,953.06million with a year-on-year increase of 16.42% and the net profit
attributable to the parent company’s shareholders of CNY500.1million with a year-on-year increase
of 6.21%, maintaining the leading role in the industry.
2. Main businesses during the report period
The Company need to comply with the disclosure requirements of Food and Liquor Manufacturing
Related Businesses in Shenzhen Stock Exchange Industry Information Disclosure Guideline No. 3 -
Industry Information Disclosure.
(1) Situation of the industry in which the Company operates
During the report period, the Company’s main businesses are production and operation of wine and
brandy, thus providing domestic and foreign consumers with healthy and fashionable
alcoholic drinks. Compared with earlier stage, there are no significant changes happened to the
Company’s main businesses. The wine industry that the Company involved in is still in growth
stage. Although being affected by many factors including the epidemic for the short-term, the
competition in the market is fierce, the wine consumption temporarily declines, and a large number
of wine production enterprises are on the brink of loss. However, seen from the long term, with the
change in the consumption conception of younger consumers, the whole domestic wine market is
likely to be on the rising trend. The Company is at the forefront in the domestic wine market and is
significantly ahead of major domestic competitors.
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Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
The Company’s products were divided into two series: wine and brandy. For wine, main brands
included Changyu, Noble Dragon, AFIP, Longyu, Golden Ice Valley, Zenithwirl, Vermouth, Rena,
Baron Balboa, J.LORMIN, Atrio, Kilikanoon and IWCC and so on. For Brandy, main brands
included Koya, Mminni, Pagese, Roullet Fransac and so on.
(2) License obtained
As of December 31st, 2021, the Company and its subsidiaries have obtained 8 food production
licenses (alcohol), of which the food production licenses having been obtained since the beginning
of 2020 are as follows:
Food Food production license
Producer name Obtaining time Obtaining method
category number
Shaanxi Chateau Changyu Rena Approval from
Alcohol 2020.10.19 SC11561040400532
Co., Ltd. government authority
Yantai Chateau Koya Brandy Co., Approval from
Alcohol 2021.01.11 SC11537063601165
Ltd. government authority
(3) Explanation for other major events
During the report period, there did not exist the trademark ownership dispute, food quality issue or
food safety incident etc. that had a significant impact on the Company.
Major sales mode
The Company’s main sales mode was the distribution mode, and main sales channel was offline
sales, that is, the Company’s products were distributed to sales terminals through approximately
4,000 distributors at home and abroad and ultimately provided to consumers.
Distribution mode
Available □Not available
(1) Situation of change in the number of distributors
Increased number
Number at the Number at the
Region during this report
beginning of 2021 end of 2021
period
Eastern China 1702 155 1857
South China 541 24 565
Central China 479 -3 476
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Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
North China 358 7 365
Northwest China 156 28 184
Southwest China 411 82 493
Northeast China 289 29 318
HongKong, Macao,Taiwan
511 62 573
China and overseas
Total 4447 384 4831
(2) The Company adopted the settlement method of cash and carry with the distributors, and
mainly adopted buyout distribution mode.
The ratio of sales in self-owned exclusive shop exceeds 10%
□Available Not available
Sales of online direct selling
Available □Not available
2021 2020
Sales model Operating income Operating cost Operating income Operating cost Gross
Gross margin
(CNY) (CNY) (CNY) (CNY) margin
Distribution 3,263,303,800 1,349,422,481 58.65% 2,945,453,550 1,289,537,264 56.22%
Direct sales 689,763,784 298,367,393 56.74% 449,948,451 214,340,143 52.36%
Total 3,953,067,583 1,647,789,874 58.32% 3,395,402,001 1,503,877,407 55.71%
The change in sales prices of major products accounting for more than 10% of total operating
income in current report period exceeds 30% compared with those in last report period
□Available Not available
Procurement mode and procurement content
Unit：CNY’0000
The amount of the main
Procurement mode Procurement content
procurement content
Price determined by quality comparison with standard price items Raw materials such as grapes/ bulk wine 49,125.70
Tender/Price determined by quality comparison with standard price items Packaging materials 53,324.70
Tender/Price determined by quality comparison with standard price items Brewing materials 2,262.50
Tender/Price determined by quality comparison with standard price items Vineyard supplies 1,082.80
Contract Fuel and power 2,945.50
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Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
Price determined by quality comparison with standard price items Other wines and derivatives 1,651.80
Amount of purchasing raw materials from cooperatives or farmers exceeds 30% of total procedure
amount
□Available Not available
The year-on-year change in the price of major outsourced raw materials exceeds 30%
□Available Not available
Major production mode
The production mode of the Company is self-produce.
Manufacturing consignment
□Available Not available
Major components of operating costs
Please refer to ‘4. Analysis in main business’ in this chapter.
Yield and inventory
Please refer to ‘4. Analysis in main business’ in this chapter.
3. Analysis of core competitiveness
Compared with the participants in the arena of the Chinese wine sector, the Company owns
following advantages:
Firstly, the Company has a large brand influence. Main brands used have a long history. “Changyu”,
“Noble Dragon” and “AFIP” are all “China famous brands” that have strong influence and good
reputation.
Secondly, the Company has set up a nationwide marketing network. The Company has formed a
“three-level” marketing network system mainly composed of the Company’s salesmen and
distributors and the online sales platform has had a certain scale and influence, owing strong
marketing ability and market exploitation ability.
Thirdly, the Company has strong scientific prowess and a product R&D system. Relying on the
country’s “State-level Wine R&D Center”, the Company has owned powerful winemaker team,
mastered advanced winemaking technology and production processes and had strong product
innovation capacity and perfect quality control system.
Fourthly, the Company is in possession of a lot of grape-growing bases that are compatible with its
development requirements. The Company has developed a great deal of vineyards in the most
suitable areas for wine grape growing such as Shandong, Ningxia, Xinjiang, Liaoning, Hebei and
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Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
Shaanxi, and its subsidiary overseas enterprises also own matching grape bases in local area,
making the overall scale and structure generally meet the Company’s needs for future development.
Fifthly, products in high, medium and low-grade as well as varieties and categories are all complete.
Over 100 varieties of series products such as wine, brandy and sparkling wine covers various grades,
including high, medium and low-grade, which can meet different consumer groups’ demands. The
Company has taken the dominant status in the domestic wine industry after many years’
development and has comparative advantages in the future competition.
Sixthly, the Company has a relatively perfect motivation system. Most of Company’s employees
indirectly hold the Company’s equity through controlling shareholders. There are high consistency
between employee benefits and shareholders benefits, in favor of motivating employees to create
value for shareholders.
Seventhly, the Company has set up flexible and efficient decision-making mechanism. The
Company’s core management team always maintains a working style of unity and pragmatic and
flexible and efficient decision-making mechanism, which makes the Company can deal with market
changes more calmly.
Eighthly, the global production capacity layout has been basically completed. The Company has
completed production capacity layout in China, France, Chile, Spain, Australia and other major
wine producing countries in the world, enabling making better use of global high-quality raw
material resources, capital, talents and advanced production processes and technologies to provide
consumers with diversified quality products and better serve consumers.
Based on the above reasons, the Company has formed relatively strong core competence and will
maintain a relatively dominant position in the future predictable market competition.
4. Analysis in main business
(1) Summarization
Increase or decrease at
Description the end of the period Cause of significant changes
over the end of last year
Operating revenue 16.42%Mainly because of increase in sales volume
Operating cost 9.57%Mainly because of increase in sales volume
Mainly because of increased advertising fee and marketing
Sales expense 26.73%
expense resulting from increased market investment
Mainly because of increase in depreciation fee and
Management expense 2.90%
administrative expense
Mainly because of increase in research input, purchasing
R&D expense 140.97%
and updating scientific equipment
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Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
Mainly because of increase in exchange loss of the
Financial expense 3.61%
Company’s subsidiary overseas enterprises
Net amount of cash flow generated Mainly because of increase in received sales payment
122.78%
in operating activities resulting from increased sales volume
Mainly because of decrease in cash received from
Net amount of cash flow generated
-23.38% investment recovery and cash recovered from disposal of
in investment activities
fixed assets, intangible assets and other long-term assets
Mainly because of decrease in cash paid for distribution of
Net amount of cash flow generated
29.22% dividends, profits or repayment of interest and other cash
in financing activities
paid in connection with financing activities
Review and summary of the process of the Company’s early-disclosed development strategy and
business plan during the report period
During the report period, the domestic wine industry continued the decline trend and the market
competition was very intense. The Company realized the operating revenue of
CNY3,953.06million with an increase of 16.42% compared with last year, exceeding the target
fixed at the beginning of the year of realizing operating revenue no less than CNY3.8billion, and
realized the net profit attributable to the parent company’s shareholders of CNY500.1million with
an increase of 6.21% compared with last year. The main works during the report period were
shown as followed:
Firstly, the Company adhered to the market-oriented strategy and timely adjusted marketing
strategies. For wine, on the basis of the Three-Focus strategy, the Company further focused on
brands, products, cities, methods and barcode; actively adjusted the organizational structure,
realizing good performance in the annihilation war and showing a good momentum in some
markets; strengthened the management and control of marketing expenses and further focused the
market investment in consumer cultivation; constantly innovated the contents and methods of brand
communication, expanding the brand influence. For brandy, the Company further improved the
sales system, realizing high-low separation in traditional mature markets such as Guangdong and
Yantai and making the independent system cover the national market; continued to carry out
marketing activities, such as tasting activities, chateau experience, exchange of empty bottles for
brandy and Koya XO cultural experience hall and so on; steadily improved the quantity and quality
of new distributors, such as group-buying, consumer and cross-border distributors. For imported
wine, the Company continued to optimize the structure of imported products and focused on the
core products of the Company's overseas acquired brands. Besides, the Company accelerated the
pace of digital transformation and upgrading, achieving sustained and rapid growth in the online
business and making its sales rank first in the wine industry's entire network sales.
Secondly, the Company promoted reform and innovation and stimulated the vitality of enterprises.
In view of the irreplaceable role of high-end products in enhancing brand influence and promoting
the long-term development of the company, the Company established the Longyu business division
in order for the high-end wines to strive to break through the market dilemma and begin to reverse,
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Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
thus leading the Chinese wine market to gradually recover in an all-round way. The integration of
various tourism units was completed, and the organization and personnel was further streamlined,
greatly improving the operating efficiency. The Company solidly promoted technological
innovation and was authorized 3 national invention patents of wine and 2 national invention patents
of brandy. It also cooperated with online big enterprises, such as Guoqu, Yixin Kechuang and
Jiuaizhihe, used platforms including JD.com, Tmall and Tiktok to increase product and brand
promotion efforts, and continuously expanded the scale of fans, further enhancing brand
communication power, guidance and influence and promoting product sales. In the planting process,
the Company introduced the internationally-leading NETAFIM "integration of water and fertilizer "
drip irrigation system to achieve precise water and fertilizer supply to grapes, greatly reducing the
use of labor, water and fertilizer use; organic fertilizer and biological pest control technology was
promoted to continuously improve the yield of organic grapes. In the production process, the
Company introduced a scientific and reasonable thermal energy recovery system to recycle and
utilize equipment waste heat; use electricity at different times and peaks and use the height
difference of production facilities to facilitate material transportation that further reduces
production costs, and the energy consumption index per ton of wine has reached the national green
factory standard. In the logistics link, the logistics mode of using three-layer cartons and pallet
packaging for national circulation has been promoted, and the amount of paper used and packaging
costs have been greatly reduced.
Thirdly, the Company strengthened financial and safety management, strengthened audit
supervision and prevented operational risks. The Company has coordinated the channel of expense
listing, strengthened fixed capital management and financial management of joint venture
companies, reduced capital occupation, saved labor costs and reduced financial risks. Establish and
improve the occupational safety and health system, carry out occupational safety and health
education for employees, take multiple measures to mobilize employees to be vaccinated in time,
strengthen employees’ awareness of environmental protection, safety and occupational health,
improve employees’ safety production skills, self-protection ability and group protection awareness,
actively carry out the rectification of hidden dangers in safety production, continuously improve the
level of safety production management to prevent safety loopholes and successfully achieve “zero
infection and zero accident”. By conduction internal unit profit authenticity audits, flight audits,
resign audit of middle and senior-level employees and technical renovation project audits to prevent
major violations of laws an disciplines.
Fourthly, the Company further improved the salary system, strengthened talent team construction
and improved the combat effectiveness of the management team. Through process decomposition
and segmented accounting, the Company improved the performance assessment and evaluation
system of the production system and improved the production efficiency. Further refine the
evaluation and reward and punishment standards of brand winemaker that makes the
responsibilities, rights and benefits of brand winemakers more clear and lays a talent foundation for
continuous improvement of product quality. Continue to carry out employee training and further
attract social outstanding talent to inject fresh blood into the enterprise and enhance the
development momentum of the enterprise.
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Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
Fifthly, the Company carefully organized and successfully completed the purchase of raw materials
such as grapes. Through scientific organization and planing, the Company overcame the obstacles
caused by the epidemic, bad weather and other factors and completed the purchase of grapes and
other raw materials with high quality and quantity that provides reliable raw material guarantee for
future production and operation.
(2) Revenue and cost
① Composition of operating revenue
Unit: CNY
2021 2020 Year-on-year
Proportion in Proportion in increase or
Amount Amount
operating revenue operating revenue decrease (%)
Total operating revenue 3,953,067,583 100% 3,395,402,001 100% 16.42%
Sector-classified
Sector of liquor and
3,953,067,583 100% 3,395,402,001 100% 16.42%
alcoholic beverage
Product-classified
Wine 2,834,114,276 71.69% 2,424,359,348 71.40% 16.90%
Brandy 1,036,164,837 26.22% 877,428,035 25.84% 18.09%
Tourism 73,192,187 1.85% 69,589,233 2.05% 5.18%
Others 9,596,283 0.24% 24,025,385 0.71% -60.06%
Area-classified
Domestic 3,421,775,481 86.56% 2,889,121,152 85.09% 18.44%
Overseas 531,292,102 13.44% 506,280,849 14.91% 4.94%
Sales model- classified
Distribution 3,263,303,800 82.55% 2,945,453,550 86.75% 10.79%
Direct sales 689,763,784 17.45% 449,948,451 13.25% 53.30%
② The cases of industry, product or area accounting for over 10% in the Company’s
operating revenue or operating profit
Available □Not available
Unit: CNY
Year-on-year Year-on-year Year-on-year
Operating Gross increase or increase or increase or
Operating cost
revenue margin decrease (%) of decrease (%) of decrease (%) of
operating revenue operating cost gross profit rate
Sector-classified
Sector of liquor
and alcoholic 3,953,067,583 1,647,789,874 58.32% 16.42% 9.57% 2.61%
beverage
Product-classified
18
Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
Wine 2,834,114,276 1,185,871,086 58.16% 16.90% 7.64% 3.60%
Brandy 1,036,164,837 415,041,606 59.94% 18.09% 13.59% 1.58%
Tourism 73,192,187 42,835,101 41.48% 5.18% 78.82% -24.10%
Others 9,596,283 4,042,081 57.88% -60.06% -68.36% 11.06%
Area-classified
Domestic 3,421,775,481 1,308,515,057 61.76% 18.44% 6.99% 4.09%
Overseas 531,292,102 339,274,817 36.14% 4.94% 20.80% -8.39%
Sales model- classified
Distribution 3,263,303,800 1,349,422,481 58.65% 10.79% 4.64% 2.43%
Direct sales 689,763,784 298,367,393 56.74% 53.30% 39.20% 4.38%
Under the condition that the statistical caliber of the Company’s main business data is adjusted
during the report period, the Company’s main business data adjusted on the basis of caliber at the
end of report period in recent one year.
□Available Not available
③ Whether the Company’s sales revenue for material object is more than labor service
revenue
Yes □No
Sector Project Unit 2021 2020 Year-on-year increase or decrease (%)
Alcohol and Sales volume Ton 97,499 98,414 -0.93%
alcoholic beverage Yield Ton 100,737 93,990 7.18%
industry Inventory Ton 30,412 28,522 6.63%
Sales volume Ton 67,700 70,662 -4.19%
Wine Yield Ton 67,342 67,477 -0.20%
Inventory Ton 16,104 15,898 1.30%
Sales volume Ton 29,799 27,752 7.38%
Brandy Yield Ton 33,394 26,513 25.95%
Inventory Ton 14,308 12,624 13.34%
Explanation on the causes of over 30% year-on-year changes of the related comparison data
□Available Not available
④ The fulfillment of major sales contract signed by the Company up to the report period
Available Not available
19
Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
⑤ Composition of operating costs
Classification of sector and product
Unit: CNY
2021 2020 Year-on-year
Sector Project Proportion in the Proportion in the increase or
Amount Amount
operating cost (%) operating cost (%) decrease (%)
Blending liquor 833,479,062 51.93% 731,348,214 49.42% 13.96%
Liquor
Packing material 477,555,065 29.76% 457,572,889 30.92% 4.37%
and
Wages 59,063,486 3.68% 56,969,384 3.85% 3.68%
alcoholic
Manufacturing
beverage 234,857,160 14.63% 234,032,840 15.81% 0.35%
expenses
Blending liquor 611,321,504 51.55% 540,591,702 49.07% 13.08%
Packing material 328,926,668 27.74% 326,909,741 29.67% 0.62%
Wine Wages 50,206,319 4.23% 48,585,743 4.41% 3.34%
Manufacturing
195,416,595 16.48% 185,657,867 16.85% 5.26%
expenses
Blending liquor 220,058,439 53.02% 190,756,512 52.20% 15.36%
Packing material 147,425,674 35.52% 130,663,148 35.76% 12.83%
Brandy
Wages 8,708,416 2.10% 8,383,641 2.29% 3.87%
Manufacturing cost 38,849,077 9.36% 35,597,765 9.75% 9.13%
Explanation
No
⑥ Whether there are changes of consolidation scope during the report period
Yes □No
During the report period, Yantai Fushan Changyu Trading Co., Ltd. was not included in the scope
of consolidation because it was cancelled; the newly-established Shanghai Changyu Guoqu Digital
Technology Co., Ltd., Tianjin Changyu Yixin Digital Technology Co., Ltd. and Shanghai Changyu
Yixin Digital Technology Co., Ltd. were included in the scope of consolidation. For other changes,
please refer to ‘1. Equity in subsidiaries’ in Note ‘VI Equity in other entities’ to the financial
statements.
⑦ Major changes or adjustments of the Company’s businesses, products or service during
the report period
□Available Not available
20
Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
⑧ Information of major sales customers and major suppliers
The Company’s major sales customers
The total sales amount of the top five customers（CNY） 283,472,286
The proportion that total sales amount of the top five customers accounting for the annual total
7.17%
sales amount（%）
The proportion that sales amount of the related party in the total sales amount of the top five
0%
customers accounting for the annual total sales amount（%）
Information of the Company’s 5 biggest sales customers
No. Customer name Sales amount（CNY） Proportion in total sales for the year（%）
1 Rank 1 st
140,814,494 3.56%
2 Rank 2 nd
59,764,528 1.51%
3 Rank 3 rd
33,447,664 0.85%
4 Rank 4th 26,225,001 0.66%
5 Rank 5 th
23,220,599 0.59%
Total -- 283,472,286 7.17%
Other situation explanations of major customers
□Available Not available
Information on the Company’s main suppliers
The total purchase amount of the top 5 suppliers 136,914,471
The proportion of the total purchase amount of the top 5 suppliers in the annual purchase
24.08%
amount
The proportion of the related party purchase amount in the top 5 supplier purchase amount
3.58%
in annual purchase amount
Information on the Company’s top 5 biggest suppliers
No. Supplier name Purchase amount(CNY) Proportion in total purchase for the year（%）
1 Rank 1st 44,870,025 7.89%
2 Rank 2 nd
27,057,504 4.76%
3 Rank 3 rd
23,934,593 4.21%
4 Rank 4 th
20,715,005 3.64%
5 Rank 5th 20,337,344 3.58%
Total -- 136,914,471 24.08%
Other situation explanations of main suppliers
□Available Not available
21
Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
(3) Expense
Unit: CNY
Year-on-year increase
2021 2020 Explanation of significant changes
or decrease (%)
Mainly because of increased advertising
Sales expense 998,954,105 788,252,485 26.73% fee and marketing expense resulting from
increased market investment
Mainly because of increase in
Management
299,076,376 290,646,466 2.90% depreciation fee and administrative
expense
expense
Mainly because of increase in exchange
Financial
21,178,727 20,441,713 3.61% loss of the Company’s subsidiary
expense
overseas enterprises
Research and Mainly because of increase in research
Development 10,919,262 4,531,418 140.97% input, purchasing and updating scientific
expense equipment
(4) Research and development investment
Available Not available
2021 2020 Percentage of changes (%)
Number of R&D personnel (person) 137 135 1.48%
The proportion of the number of R&D personnel 5.96% 5.27% 0.69%
Educational structure of R&D personnel —— —— ——
Below Bachelor 65 68 -4.41%
Bachelor 48 46 4.35%
Postgraduate 23 20 15.00%
Doctor 1 1 0.00%
Age structure of R&D personnel —— —— ——
Under 30-year-old 33 32 3.13%
30-to 40-year-old 41 40 2.50%
Above 40-year-old 63 63 0.00%
The investment of the Company’s R&D
2021 2020 Percentage of changes (%)
R&D investment amount (CNY) 10,919,262 4,531,418 140.97%
R&D investment as a percentage of operating income 0.28% 0.13% 0.15%
Amount of R&D investment capitalized (CNY) 0 0 0.00%
Capitalized R&D investment as a percentage of R&D
0.00% 0.00% 0.00%
investment (CNY)
Reasons and effects of major changes in the composition of the company’s R&D personnel
Available Not available
22
Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
Reasons for the significant change in the proportion of total R&D investment in operating income
compared with the previous year
Available Not available
Reasons for the substantial changes in the capitalization rate of R&D investment and its rationality
explanation
Available Not available
(5) Cash flow
Unit: CNY
Year-on-year increase
Item 2021 2020
or decrease (%)
Subtotal of cash inflow in operating activities 3,812,599,382 3,385,896,941 12.60%
Subtotal of cash outflow in operating activities 2,687,216,724 2,880,750,268 -6.72%
Net amount of cash flow generated in operating activities 1,125,382,658 505,146,673 122.78%
Subtotal of cash inflow in investment activities 104,064,718 186,578,214 -44.22%
Subtotal of cash outflow in investment activities 279,720,766 328,946,684 -14.96%
Net amount of cash flow generated in investment activities -175,656,048 -142,368,470 -23.38%
Subtotal of cash inflow in financing activities 855,198,786 987,668,379 -13.41%
Subtotal of cash outflow in financing activities 1,354,745,101 1,693,437,449 -20%
Net amount of cash flow generated in financing activities -499,546,315 -705,769,070 29.22%
Net increase of cash and cash equivalents 449,661,924 -344,734,365 not available
Explanation of main influence factors contributing to great changes in related data on year-on-year
basis
□Available Not available
Explanation on the causes of major differences between the net cash flow generated by the
Company’s operating activities and net profit of this year during the report period.
□Available Not available
5. Analysis to non-main business
□Available Not available
23
Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
6. Assets and liabilities
(1) Significant changes of assets composition
Unit: CNY
At the end of 2021 At the beginning of 2021
Proportion increase or Explanation on
Proportion in the total assets Proportion in the total assets
Amount Amount decrease (%) significant changes
(%) (%)
Monetary funds 1,567,095,993 11.63% 1,194,214,929 9.11% 2.52% No significant changes
Receivables 291,006,410 2.16% 183,853,362 1.40% 0.76% No significant changes
Contract assets 0% 0% 0% No significant changes
Inventory 2,802,622,520 20.80% 2,945,548,651 22.48% -1.68% No significant changes
Investment real estate 24,502,258 0.18% 27,057,730 0.21% -0.03% No significant changes
Long-term equity investments 46,496,510 0.35% 48,263,507 0.37% -0.02% No significant changes
Fixed assets 5,687,867,314 42.22% 5,724,935,846 43.69% -1.47% No significant changes
Construction in progress 590,172,099 4.38% 635,495,152 4.85% -0.47% No significant changes
Right-of-use asset 134,569,039 1% 130,293,427 0.99% 0.01% No significant changes
Short-term borrowings 622,066,457 4.62% 689,090,715 5.26% -0.64% No significant changes
Contract liability 147,120,716 1.09% 135,073,280 1.03% 0.06% No significant changes
Long-term borrowings 176,047,043 1.31% 200,352,968 1.53% -0.22% No significant changes
Lease liability 101,811,588 0.76% 98,401,900 0.75% 0.01% No significant changes
24
Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
Foreign asset has a high proportion
Available □Not available
Proportion of overseas Whether there
Formation Operation Control measures for safeguarding of Earning
Details of assets Assets scale Location assets in the are significant
reasons mode asset security condition
Company’s net assets impairment risks
Hacienda Y The Company participates in making
Vinedos Acquisition of Independent important decisions through board of
516,273,836 Spain 13,169,484 4.83% No
Marques Del equity operation directors and appoints CFO on
Atrio. SL financial management.
Indomita Wine The Company participates in making
Establishment Independent
Company Chile, 511,244,907 Chile important decisions through board of 19,716,978 4.78% No
of joint venture operation
S.p.A. directors.
The Company participates in making
Kilikanoon Acquisition of Independent
167,079,311 Australia important decisions through board of 360,073 1.56% No
Estate Pty., Ltd. equity operation
directors.
FrancsChampsP Sole The Company participates in making
Independent
articipations proprietorship 220,966,759 France important decisions through board of -3,327,344 2.07% No
operation
SAS establishment directors.
(2) Assets and liabilities measured at fair value
□Available Not available
(3) Limitations of assets rights up to the end of the report period
Please refer to the “52. Assets with restrictive ownership title or right of use” of the “Notes to the financial statements” in this report’s financial
report.
25
Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
7. Investment condition analysis
(1) Overall situation
Available □Not available
Investment amount during the report period (CNY) Investment amount of the same period of last year (CNY) Variation
148,020,000 305,280,700 -51.51%
(2) Cases of acquired significant equity investments during the report period
□Available Not available
(3) Cases of significant ongoing non-equity investments during the report period
Available □Not available
Unit: CNY
Accumulated Accumulated Reasons for
Whether Involved Investment
actual investment realized unreached Disclosure
Investment belongs to sectors of amount Capital Project Estimated Disclosure index (if
Project name amount up to the earnings up to planning schedule date (if
mode fixed assets investment during the source progress earnings have)
end of the report the end of the and estimated have)
investment projects report period
period report period earnings
Yantai Please refer to
Changyu Resolution
Liquor and
International Announcement of
Self-constr alcoholic Owned
Wine City Yes 58,730,000 1,685,024,100 100% 0 0 — 2017.04.22 Seventh Session
ucted beverage fund
Blending and Board of Directors
sector
Cooling 4th Meeting,
Center Resolution
26
Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
Yantai Announcement of
Changyu Seventh Session
International Self-constr Owned Board of Directors
Yes 15,910,000 1,090,110,000 100% 0 0 — 2017.04.22
Wine City ucted fund 8th Meeting,
Bottling Resolution
Center Announcement of
Yantai Seventh Session
Changyu Board of Directors
International Self-constr Owned 10th Meeting,
Yes 0 462,677,200 100% 0 0 — 2017.04.22
Wine City ucted fund Resolution
Logistics Announcement of
Center Eighth Session
Changyu Board of Directors
Vineand Wine Self-constr Owned 4th Meeting and
Yes 26,880,000 179,854,800 98% 0 0 — 2017.04.22
Research ucted fund Resolution
Institute Announcement of
Treasure Wine Self-constr Owned Eighth Session
Yes 0 211,320,000 95% 0 0 — 2017.04.22
Chateau ucted fund Board of Directors
Koya Brandy Self-constr Owned 7th Meeting
Yes 0 207,095,500 100% 0 0 — 2017.04.22
Chateau ucted fund disclosed on China
Securities Journal,
Oak barrel Securities Times and
Self-constr Owned
procurement Yes 46,500,000 148,084,200 80% 0 0 — 2021.04.28 CNINFO
ucted fund
project (http://www.cninfo.
com.cn/)
Total -- -- -- 148,020,000 3,984,165,800 -- -- 0 0 -- -- --
27
Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
(4) Financial assets investment
① Security investment situation
□Available Not available
There are no security investments for the Company during the report period.
② Derivatives investment
□Available Not available
There are no derivatives investments for the Company during the report period.
(5) The usage situation of raised capital
□Available Not available
There are no usage situations of raised capital for the Company during the report period.
8. Sale of significant assets and equities
(1) Sale of significant assets
□Available Not available
The Company did not sell significant assets during the report period.
(2)Sale of significant equities
□Available Not available
9. Analysis of main holding and joint stock companies
Available Not available
Situation of main subsidiaries and joint stock companies affecting over 10% of the Company’s net profit
Unit: CNY
Company Main Registered Operating Operating
Company name Total assets Net assets Net profit
type business capital revenue profit
Yantai Changyu
Pioneer Wine Sales Subsidiary Sales CNY8million 989,932,250 176,281,834 2,670,739,279 639,123,060 509,991,945
Co., Ltd.
Yantai Changyu Wine
Subsidiary Sales CNY5million 169,968,188 151,271,261 1,040,063,518 117,359,790 87,244,317
Sales Co., Ltd.
Changyu Trading Co.,
Ltd. in Development Subsidiary Sales CNY5million 66,005,809 14,386,591 181,246,321 68,884,834 46,573,280
Zone of Yantai
Laizhou Changyu
Subsidiary Sales CNY1million 55,767,467 1,000,000 259,246,590 77,371,763 58,027,832
Wine Sales Co., Ltd.
28
Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
Acquisition and disposal of subsidiaries during the report period
□Available Not available
Explanation on main holding and joint stock companies
10. Situation of the structured subjects controlled by the Company
□Available Not available
11. Expectation for the Company’s future development
On the basis of our limited experience and professional skills, the Company makes the following
judgments on the wine industry and future development:
(1) The sector competition pattern and development trend
Affected by the increase in the uncertainty caused by the slowdown of national macroscopic
economy growth and other factors such as COVID-19 epidemic, the wine consumption scene is
blocked and is obviously squeezed by other alcoholic products. Most wine companies have small
scales with poor profitability and do not have much resources for cultivating the market.The full
recovery of the wine market will take a long hard time.
Although the development of the wine industry is currently encountering some difficulties, there are
also lots of positive factors for the development of the industry. President Xi Jinping pointed out
that ‘China’s wine industry has great prospects’ when he inspected Ningxia. The local governments
of all wine-producing regions are actively responding to support the development of the wine
industry. The atmosphere of domestic wine consumption and the perception of healthy wine
consumption are gradually forming. Young consumer groups have the momentum to switch to wine
consumption. Consumption of domestic products has gradually become a fashion. In the long run,
the huge development potential has not changed.
In such a case of long-term coexistence of opportunities and challenges, those enterprises that
possess strong brand influence and marketing ability, catch the opportunities, actively take
adjustments, make full use of newly emerging and traditional sales channels, make efforts to guide
and cultivate wine consuming groups, timely satisfy the consumers’ demands and provide products
with high cost performance will have the opportunity to be the final winner of competitions, and
then form a new pattern of the future Chinese wine market.
(2) The Company’s development strategy
The Company will adhere to the development strategy of “Focus on middle-and-high level, Focus
on high quality, Focus on big product”and the marketing philosophy of “obtaining growth from the
terminal and nurturing consumers”,continue improving the relatively independent system
construction of wine, brandy, imported wine and overseas business, enhance wine, scale up brandy,
improve imported wine, stabilize overseas business and promote the all-round development of
various alcohol products.
(3) Management plan for the new year
In 2022, the Company will try its best to realize operating revenue of not less than CNY4.3billion
and control the main operating costs and three period expenses below CNY3.4billion.
(4) Measures to be taken by the Company
29
Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
In 2022, the China’s economic development is currently facing triple pressures including demand
contraction, supply shock, and weakening prediction, and the development trend of the wine
industry is still not optimistic.The Company will take 130th anniversary of Changyu’s establishment
as an opportunity to mobilized all members of the Company, integrate various resources, stand at a
new starting point and implement new measures to promote the Company to move forward in
adversity and achieve greater development.
The first is to reform the market system, increase marketing innovation and promote the Company’s
development. According to different types of wine variety, grades, consumer groups and marketing
methods, the Company established six business divisions, that include: establishing Longyu
business division to further on high-end strategic brands; establishing Chateau wine business
division to stabilize and consolidate the existing high-end wine market; establishing the Nobel
Dragon business division to stabilize the basic market sales; establishing brandy business division to
form a more independent brandy sales system; establishing imported wine business division to
continue to specialize in imported wine business; establishing online business division to seek
greater development of online business. The Company focuses more on marketing strategies and
investment, integrates more investment, prescribed marketing actions, invests more in the
cultivation of target consumer groups and core brand promotion, and accurately reaches the
middle and high-end consumer class and captures the iteration of young consumer groups to explore
more marketing innovation opportunities. The Company continues to deepen cooperation with
e-commerce platforms such as JD.com and Tmall, vigorously promotes digital transformation,
integrates and opens up various business modules, and continuously empowers the online and
offline operation system and performance growth.
The second is to adhere to the concept of “consumer first” and continuously improve product quality.
The Company continues to do a good job in the construction of grape bases, vigorously cultivate
small varieties of red grapes and white grapes that are in line with the region and continues to do a
good job in the research and development of special products such as collectible wine, customized
wine, tourism products and commemorative wine; Innovate base management methods, strengthen
process control, scientifically judge the harvest period and marked-based pricing, and improve
product quality from the source. Strengthen quality supervision throughout the entire process,
accurately grasp consumer needs and strive to satisfy consumers.
The third is to strengthen the construction of talent team and continue to cultivate reserve forces.
The Company continues to strictly control the import of personnel, release the export of personnel,
streamline the allocation of management personnel and steadily reduce the number of front-line
employees in the production system on the premise of ensuring the basic stability of key personnel
in order to increase wages and efficiency by reducing staff. The Company tightens recruitment
standards, expands recruitment channels and vigorously introduces professional talents in
technology, sales, management, etc.; continue to implement the training plan for young talents,
strengthen professional training, improve ability, tap potential and increase the training and reserve
of young talents.
The fourth is to focus on enhancing the Company’s brand and strengthening the industrial tourism
industry. Further standardize the reception of tourists, strengthen professional training, improve
reception level, improve service quality, enhance tourists’ satisfaction, improve the Company’s
image and brand reputation, and strive to convert tourists into fans of the Company’s products and
brand. Committed to creating personalized new products with novel images and unique styles to
30
Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
impress and attract tourists; strengthen organizational reform, complete the integration of tourism
business, eliminate functional overlap and multiple management, increase per capita tourist
reception and per capita efficiency to promote tourism business to a higher level.
The fifth is to do a good job in basic management to ensure the healthy operation of the Company.
All operations and decisions of the Company must be analyzed for legal feasibility and legitimacy,
adhere to the bottom line of laws and systems, operate in compliance with laws and prevent legal
risks. Strictly follow and implement various safety management rules and regulations, strengthen
safety management, improve risk prevention and control and emergency response mechanisms and
ensure safe operation. Improve the scientificity and accuracy of budget preparation, strengthen
budget performance management. Strengthen the audit of the authenticity of profits, the authenticity
of inventory, the audit of key costs and expenses, the audit of investment projects in technological
transformation and advertising expenses, and increase accountability for economic losses. Further
improve the financial management system of overseas subsidiaries, strengthen dynamic monitoring
and operation analysis, continue to pay attention to the operation and capital risks of overseas
enterprises, and improve the risk prevention and control capabilities of overseas enterprises.
The sixth is to coordinate the preparations for the series of activities of Changyu’s 130th anniversary.
During the year, the Company will organize and carry out a series celebration of the Changyu’s
130th establishment anniversary together with various departments, leaders at all level, brother
enterprises, experts and scholars, distributors, consumers, domestic and foreign partners and the
Company’s employees, who support the development of Changyu, to improve the reputation and
influence of Changyu brand.
(5) Potential risks
① Risk 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 quantity and price of the grapes in this Company orders and add the
uncertainty to the Company’s production and operation. Therefore, the Company will lower the
risks that are likely to affect grape quality and result in price fluctuation by means of expanding the
self-run vineyards, strengthening the vineyard management and optimizing the layout of vineyards.
② Risk in uncertainty of market input and output
To cope with the cutthroat market competition and to meet the needs for market development, the
Company has input more and more capital in the market and the sales expense has taken up a higher
percentage point in the business revenue. The input-output ratio will affect the Company’s operating
results to a great extent and the risk that some investments may not reach the expectations is likely
to occur. Therefore, the Company will strengthen market research and analysis, enhance market
forecast accuracy and continue to perfect the input-output evaluation system to ensure the
investments in market to be satisfactory as expected.
③ Risk in product transport
The Company’s products are fragile and sent to different places all over the world, mostly by sea,
railway and expressway. The peak season of sales is usually in cold winter and close to the spring
festival when market has a great demand. At that time, the natural and human factors such as serious
shortage of transport capacity resulting from busy flow of people and goods, wind, snow, freezing as
well as traffic accidents make the transport departments difficult to send products to markets in time
and safely. As a result, it makes this Company have to face the risks of missing the peak season of
31
Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
sales. Therefore, the Company will adopt all methods possible like making precise sales prediction
and well designed connection of production and sales, reasonably arranging production and
transport means and making use of more available warehouses in different places to lower these
kinds of risks.
④ Risk in investment faults
The Company invested many projects in the previous periods and the investment amounts were
relatively large. For individual project, owing to the influence of various factors, it led to have the
risks of facing with the investment amount out of budget or hardly taking back the expected
investment earnings. The Company will take an adequate argument and scientific decision-making
for investment projects, try hard to reduce and avoid investment risks.
⑤ Risk in exchange rate
The Company’s overseas subsidiaries export products to many different countries and the export
amount is relatively large. There may be exchange losses or gains due to exchange rate fluctuation.
⑥ Risk in epidemic risk
The Company’s products are currently mainly used for people’s consumption at gatherings. If the
chance of gathering declines due to the epidemic, it may have a greater negative impact on the
Company’s product sales.
⑦ Other risks
During the production and sales of the Company’s products, it may be affected by force majeure
such as wars, typhoons, earthquakes, etc..
12. Activity registration form for receptions of research, communication, visit and other
activities during the report period
Available □Not available
Type of Main discussed
Reception Reception Reception Basic situation
reception Reception object contents and
time place pattern index of reception
object provided data
The recent
The website of
production and
www.quanj Shenzhen Stock
2021.05.12 Other Other Secondary market investors operation
ing.com Exchange
situation of the
(https://biz.szse.cn)
Company
Mr. Wang Peng from ICBCCS,
Mr.Wang Yongming from New
China Fund, Mr. Liu Aofei from
The recent
The Xiangcai Fund, Mr. Lei Kai The website of
production and
Company’s Field from New China Asset, Mr. Gao Shenzhen Stock
2021.05.18 Institution operation
meeting research Bo and Ms. Tang Chenchen Exchange
situation of the
room from Funding Capital (https://biz.szse.cn)
Company
Management Company and Ms.
Deng Tianjiao from BOC
International (China) Co., Ltd.
32
Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
IV. Corporate Governance
1. Current Corporate Governance Situation of the Company
(1) About shareholders and shareholders’ meeting
The Company has set up the Deliberation Rules of Shareholders’ Meeting, and convened the
shareholders’ meetings in strict accordance with requirements of standard opinions of shareholders’
meeting, made the great effort to provide convenient conditions for more shareholders to
participate the shareholders’ meeting, and ensured all shareholders to enjoy same equity and well
exercised their rights. The Company drew great attention to the communication and exchange with
shareholders, actively responded the shareholders’ inquiry and questions, and widely listened to the
suggestions and comments from shareholders.
(2) About the Company and holding shareholder
The Company has independent business and self-management capacity, which is independent from
the controlling shareholders in business, staffs, assets, institutions and finance. The Board of
Directors, Board of Supervisors, management teams and also internal institutions are able to
operate independently in the Company. The controlling shareholders of the Company could
regulate their behaviors without directly or indirectly interfering in the Company’s decision-making
and business activities beyond the shareholder’s meeting; meanwhile, there is no case of
encroaching on the Company’s assets and damaging the interest of the Company and minority
shareholders.
(3) About the director and board of directors
The Company strictly appoints all directors in light of Corporation Act and Articles of Associations.
The qualifications of all directors are in line with the requirements of laws and regulations. In
accordance with the requirements of Corporate Governance Guidelines, the Company has carried
out the cumulative voting system in the director selection. At present, the Company has five
independent directors accounting for above one third of all directors, and the number and personnel
composition of board of directors was basically in accord with requirements of regulations as well
as Articles of Associations. All directors of the Company were able to carry out work in accordance
with the Rules of Board of Directors’ Procedure and Working Rules for Independent Directors,
punctually attended the board of directors’ and shareholders’ meetings, actively took part in
relevant knowledge training, were familiar with the laws and regulations concerned, had a deep
knowledge and long experience of practitioners, and performed their duties according to the law
and regulations. The Board of Directors convened the meetings complies with relevant laws and
regulations.
(4) About supervisor and board of supervisors
The Company strictly elected all supervisors in light of the procedures stipulated in the Corporation
Act and Articles of Associations. At present, board of supervisors has three people among which one
supervisor is representative for staff. The number and composition of board of supervisor meet the
requirements of regulations and laws. All supervisors of the Company could follow the requirement
33
Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
of Rules of Board of Supervisors’ Procedure, insist the principle of responsibility to all shareholders,
seriously perform their duties, effectively supervise and present their independent opinions on
important issues, interrelated deals, financial status, the duty performance of directors and managers
of the Company.
(5) About performance evaluation and incentive system
The engagement of managers was open and transparent, and accorded with laws and regulations.
The Company has established and gradually improved the performance evaluation standard and
formed efficient incentive system, so as to ensure the salary of staff to be linked with work
performance.
(6) About stakeholders
The Company could fully respect and safeguard the legal rights of the party with relevant benefit,
cooperate actively with the stakeholders, jointly drive the Company to develop continually and
stably, pay great attention to the issues such as local environmental protection and public utilities
etc., and fully assume the due social responsibility.
(7) About the information disclosure and transparency
The Company has appointed the board secretary to be responsible as the head of investor relation
management including information disclosure, investor relations management and reception of
shareholders’ visit and consultation. The Company has also assigned China Securities Newspaper,
Securities Times, Honkong Commercial Daily and web site http://www.cninfo.com.cn/ to disclose
information, punctually, accurately and truly disclosed any information in the light of requirement
of relevant laws and rules, and also ensured all shareholders to have same opportunity to acquire
any information.
In order to further perfect the Company’s governance system, during the report period, the
Company formulated and improved the management systems including 2021 Product Quality
Assessment Measures, Requirements for Further Strengthening the Management of Packaging
Material Suppliers, Opinions on Standardizing the Management of Informal Employment in
Production and Tourism Systems and so on.
Whether or not there is significant variance between the Company’s actual situation of corporate
governance and the normative documents about listed company governance issued by China
Securities Regulatory Commission.
□Yes No
There is no significant variance between the Company’s actual situation of corporate governance
and the normative documents about listed company governance issued by China Securities
Regulatory Commission.
2. Relative to the controlling shareholder and actual controller, independence of the Company
on ensuring the company’s assets, personnel,finance, organization, business, etc.
(1) Personnel Arrangement
The Company’s general manager, deputy general managers and other senior officers, all of whom
were paid by the Company and did not hold any concurrent administrative ranks in the controlling
34
Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
units. The Company was entirely independent in personnel arrangement, conclusion and adjustment
of labor contracts thanks to its sound and independent system for labor, personal and salary
management.
(2) Assets
Tangible assets and Intangible assets including trademark, industrial property right and non-patent
technologies were all clearly divided between the Company and the controlling shareholders, and
all legal formalities were completed. As an independent legal entity, the Company operates
independently in accordance with the law, and does not provide any form of guarantee with its
assets for shareholders’ or individuals’ liabilities or other legal or natural persons. Due to the
historical issues, the ownership of trademarks such as “ 张 裕 ” (Changyu) that the Company is
permitted to use that are still remained with the controlling shareholder. Except for a very small
number of trademarks such as “张裕”(Changyu) , the Company has ownership rights of the vast
majority of trademarks being used by the Company, which ensures the independence and
completeness of the Company’s assets.
(3) Finance
The Company is equipped with independent finance department, financial administrator and
financial and accounting staff, as well as a complete, independent and standardized financial
accounting system. The Company also opened its own bank accounts, independent and legally
paying taxes and workers insurance fund. All financial individuals do not hold any concurrent posts
in associated companies and are able to make financial decisions independently. The Company has
its own audit department, which is especially responsible for the internal audit work of the
Company.
(4) Independent Institutions
The Company has set up a sound organizational framework, in which the Board of Directors and
Board of Supervisors operate independently, no superior and subordinate relationship exists
between the functional departments of the controlling shareholder. The Company has its own
independent production & business offices, and all functional departments are independent to
exercise their powers and carry out the production and business activities independently.
(5) Operations
The operations of the Company are independent of the controlling shareholders. The Company
owns itself completely independent systems covering research and development, financial
accounting, labor and human resource, quality control, raw materials purchase, production and sales,
has the independent management ability, and does not have the problem that entrusts the controlling
shareholders to buy and sell on commission, nor exist the horizontal competition with controlling
shareholders.
3. Situation for Horizontal Competition
□Available Not available
35
Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
4. 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 Convening Disclosure
Session Meeting type Meeting Resolution
of investors date date
The meeting deliberated and approved the 2020 Annual Board of Directors’ Work Report,
2020 Annual 2020 Annual Board of Supervisors’ Work Report, 2020 Annual Report, Proposal on 2020
Annual shareholders’
Shareholders’ 62.28% 2021.05.27 2021.05.28 Annual Profit Distribution, Proposal on Appointing Certified Public Accountants Firm and
Meeting
Meeting
Proposal on 2021 Annual Financial Budget.
(2) Request for convening interim shareholders’ meeting by priority shareholders owing recovered voting right
□Available Not available
5. Situation for Directors, Supervisors, Senior Executives and Staff
(1) Changes in shareholdings of directors, supervisors and senior executives
Shares held at Decreased Shares held at Reasons of the
Beginning date Ending date Increased shares Other changes of
Name Post Status Gender Age the beginning shares during the end of the increase and decrease
of tenure of tenure during the period shares held
of the period the period period change of shares held
Zhou Secondary market
Chairman Incumbent M 57 2002.05.20 2022.05.18 36,500 1,300 37,800
Hongjiang purchases
Leng Bin Director Incumbent M 59 2000.08.22 2022.05.18 0 0
Secondary market
Sun Jian Director Incumbent M 55 2019.05.17 2022.05.18 30,000 30,000 60,000
purchases
Li Jiming Director Incumbent M 55 2019.05.17 2022.05.18 0 0
36
Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
Chen
Director Incumbent F 55 2019.05.17 2022.05.18 0 0
Dianxin
Aldino
Director Incumbent M 69 2006.12.07 2022.05.18 0 0
Marzorati
Stefano
Director Incumbent M 63 2020.05.27 2022.05.18 0 0
Battioni
Enrico
Director Incumbent M 53 2019.05.17 2022.05.18 0 0
Sivieri
Chiang Yun Director Incumbent F 54 2020.06.19 2022.05.18 0 0
Luo Fei Independent director Incumbent M 69 2016.09.23 2022.05.18 0 0
Duan
Independent director Incumbent M 57 2019.05.17 2022.05.18 0 0
Changqing
Liu Huirong Independent director Incumbent F 58 2019.05.17 2022.05.18 0 0
Liu Qinglin Independent director Incumbent M 58 2019.07.02 2022.05.18 0 0
Yu Renzhu Independent director Incumbent M 43 2020.05.27 2022.05.18 0 0
Kong Chairman of the Board
Incumbent M 49 2013.05.14. 2020.05.18 0 0
Qingkun of Supervisors
Zhang
Supervisor Incumbent F 52 2013.05.14. 2020.05.18 0 0
Lanlan
Liu Zhijun Supervisor Incumbent M 41 2016.05.26 2020.05.18 0 0
Sun Jian General manager Incumbent M 55 2018.01.10 2022.05.18 0 0
Deputy general
Li Jiming Incumbent M 55 2019.05.28 2022.05.29 0 0
manager
Deputy general
Jiang Hua Incumbent M 58 2001.09.14 2022.05.29 0 0
manager
Deputy general
Peng Bin Incumbent M 55 2018.01.10 2022.05.29 0 0
manager
Deputy general
Jiang
manager and Board Incumbent M 55 2019.05.28 2022.05.29 0 0
Jianxun
secretary
General manager
Pan Jianfu Incumbent M 46 2018.04.19 2022.05.29 0 0
assistant
General manager
Liu Shilu Incumbent M 47 2018.04.19 2022.05.29 0 0
assistant
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Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
Xiao General manager
Incumbent M 45 2018.04.19 2022.05.29 0 0
Zhenbo assistant
Total -- -- -- -- -- -- 66,500 31,300 0 0 97,800 --
Is there any resignation of directors and supervisors and dismissal of senior management personnel during their term of office during the reporting
period
Yes No
Changes of directors, supervisors and senior managers of the company
Available Not available
(2) Situation for work experience
The professional background, main work experiences and present positions of the Company’s directors, supervisors and senior executives
① Members of Board of Directors
Mr. Zhou Hongjiang, male, 57, Chinese, with doctoral degree, senior engineer, used to be the General Manager of Yantai Changyu Pioneer Wine Sales
Co., Ltd., the Deputy General Manager, the General Manager and the Deputy Chairman of Yantai Changyu Pioneer Wine Co., Ltd.. He is incumbent as
the representative of the 13th National People’s Congress, the Chairman of Yantai Changyu Group Co., Ltd., and the board director and the Chairman
of the Company.
Mr. Leng Bin, male, 59, Chinese, with master degree, senior accountant, used to be the Deputy Section Chief and the Section Chief of Yantai Audit
Bureau, the board director and the Chief Accountant of Yantai Changyu Group Co., Ltd. and the board director and the Deputy General Manager of the
Company. He is incumbent as the board director of the Group Company and the Company, with an additional post of the General Manager of the
Group Company, and the Chairman and General Manager of Yantai Zhongya Medical Health Wine Co., Ltd..
Mr. Sun Jian, male, 55, Chinese, MBA, used to be the Deputy General Manager of the Company. He is incumbent as the board director and the
General Manager of the Company, and with an additional post of the board director of the Group Company.
Mr. Li Jiming, male, 55,Chinese, with doctoral degree, application researcher, used to be the Chief Engineer of the Company. He is incumbent as the
board director and the Deputy General Manager of the Company, and with an additional post of the board director of the Group Company.
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Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
Ms. Chen Dianxin, female, 55,Chinese, with master degree of the Party School; from July 1985 to
October 2018, she used to serve as staff of Yantai Chemical Purchasing and Supply Station, staff of
Yantai Stated-owned Assets Assessment Center, the Deputy Director of Yantai Stated-owned
Assets Assessment Center, the Deputy Section Chief of Assets Assessment Management
Department in Yantai State-owned Assets Bureau, the Deputy Section Chief of Assets Assessment
Management Department in Yantai State-owned Assets Supervision and Administration
Commission, full-time Deputy Secretary of Party branch in Yantai State-owned Assets Supervision
and Administration Commission, the Section Chief of Property Management Department in Yantai
State-owned Assets Supervision and Administration Commission, the Director of retired carders
work office and the Section Chief of Property Management Department in Yantai State-owned
Assets Supervision and Administration Commission, and the Director of retired carders work office
in Yantai State-owned Assets Supervision and Administration Commission. Since October 2018,
she has been served as the Deputy Secretary of Party branch and the General Manager of Yantai
Guofeng Investment Holding Group Co., Ltd. and the current board director of Yantai Changyu
Group Co., Ltd. and the Company.
Mr. Aldino Marzorati, male, 69, Italian, with bachelor degree, servescurrently as the General
Manager of Illva Saronno Holding S.p.A, the member of the board of directors of some branches
under the Group Company, and the board director of Changyu Group Co., Ltd. and the Company.
Mr. Stefano Battioni, male, 63, Italian, graduated with a bachelor’s degree. He has served as a
Senior Product Manager of Colgate Palmolive in Italy, the Marketing Director of Barilla Holding,
the International Marketing Director and the Spirits Business Unit Director-General Manager of
Illva Saronno S.p.A. (a spirit company as a wholly-owned subsidiary of Illva Saronno Holding
S.p.A.). He is currently the CEO of Illva Saronno S.p.A. and the board director of Changyu Group
Co,. Ltd. and the Company.
Mr. Enrico Sivieri, male, 53, Italian, with bachelor degree, served successively as the financial
controller of ARNEG S.p.a., the commercial analyst of SPILLERS FOODS ITALIA S.p.a., the
trade controller of Nestle’ Purina Petcare Europe, European marketing & sales controller of Nestle’
Purina Petcare Europe, the European supply chain controller of Nestle’ Purina Petcare Europe, the
Southern Europe regional controller of Nestle’ Purina Petcare Europe and the Director of group
financial controlling of Illva Saronno Holding S.p.A., and currently serving as a member of the
board of directors for Royal Oak Distillery Ltd. and the General Manager of Illva Saronno Holding
S.p.A., and the board director of the Company.
Ms. Chiang Yun, female, 54, successively obtained Bachelor of Science degree Magna Cum Laude
from Virginia Tech, Virginia, EMBA of The Kellogg School of Management at North Western
University, USA and EMBA of The Graduate School of Management, Hong Kong University of
Science and Technology, Hong Kong, China. She used to acted as Director at American
International Group (AIG) direct investment team, the Managing Partner of Pacific Alliance Group
(PAG). She currently serves as the INED and member of Audit Committee and Nomination
Committee in Las Vegas Sands China, the INED and member of Audit Committee, Remunerations
Committee and Nomination Committee in Goodbaby International Holding Ltd., the INED,
member of Audit Committee and Nomination Committee and Chairlady of Remunerations
Committee in Pacific Century Premium Developments Ltd., the INED and member of Audit
Committee and Health, Safety and Security Committee in Merlin Entertainments plc., the CEO and
39
Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
Founding Partner of Prospere Capital, and the board director of the Group Company and the
Company.
Mr. Luo Fei, male, 69, Chinese, with doctoral degree, visiting scholar of University of Toronto,
doctoral supervisors, Government Special Allowance expert, first batch of trans-century subject
(academic) leading personals of Financial Department. He successively served as the Dean of
Accounting Institute in Zhongnan University of Economics and the Dean of Accounting Institute in
Zhongnan University of Economics and Law. He focuses on the study of Financial Accounting,
Cost Accounting, Financial Management, and so on. He has worked in companies for many years
and has practical working experience with companies. Now he is serving as an independent director
of the Company.
Mr. Duan Changqing, male, 57, Chinese, with doctoral degree, professor, doctoral and master’s
supervisor, and the national senior winemaker and senior wine taster.He currently serves as the
chief scientist of national grape industry technology system and the Director of Wine Processing
Key Laboratory of Ministry of Agriculture and Rural Affairs. Meanwhile, he holds concurrent posts
of the Director of China Wine Technology Committee, the Director of China Wine and Fruit Wine
Expert Committee, the Executive President and the Secretary General of Grape and Wine Branch of
Chinese Horticultural Society and the Vice President of China Agricultural Society Grape Branch.
His major research fields are the basic theoretical research and related high and new technology
research and development as well as application promotion work in the direction of suitability
between ecology in producing area and grape variety and liquor variety, evolvement mechanism
and directional brewing of wine flavor formation, grape fruit flavor metabolism regulation and
product flavor quality evaluation and so on. He is a current independent director of the Company.
Ms. Liu Huirong, female, 58, Chinese, with doctoral degree, the former Deputy Dean and Dean of
the Institute of Political Science and Law of Ocean University of China. She used to serve as an
independent director of Sailun Group Co., Ltd., Longda Meat and Sacred Sun Co., Ltd. and
Shandong Sacred Sun Power Sources Co., Ltd.. Currently, she is a second-level professor and
doctoral supervisor of Ocean University of China and with additional post as a researcher of the
“Belt and Road Initiative” Judicial Research Center of the Supreme People’s Court, an expert at the
Supreme People’s Court for foreign-related commercial and maritime action expert database, the
Deputy Chairman of the sixth Shandong Law Society and the Deputy Director of the Academic
Committee, and the Chairman of the Qingdao Law-based Government Research Institute. Her
research fields are International Law and Legislative Science. She has won the title of Shandong
Top Ten Outstanding Young and Middle-aged Jurists, the third prize of Excellent Social Science
Achievement of the Ministry of Education, the third prize of Shandong Excellent Social Science
Achievement, the second prize of Shandong Excellent Philosophy and Social Science Achievement,
the first prize of Excellent Achievement of Shandong Education Department and the Top Talent in
Qingdao City. She is a current an independent director of the Company.
Mr. Liu Qinglin, male, 58, doctoral degree of Management, Chinese, no overseas permanent
residence. He is currently a professor and doctoral supervisor of Economics Faculty of Shandong
University, the Director of Institute for World Economy Studies of Shandong University, the
Executive Deputy President of Shandong Institute of Development of Shandong University, a
member of a council of China Society of World Economics, an executive member of a council of
The Association for Canadian Studies in China and Shandong Youth Scholars Association, a
member of a council of Shandong Association for Business Economics and Shandong Price
40
Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
Association. He currently serves as an independent director of Shandong Xinneng Taishan Power
Generation Co., Ltd., an independent director of Weihai Huadong Automation Co., Ltd., and an
independent director of the Company.
Mr. Yu Renzhu, male, 43, Chinese, doctor of management, high-level talents of Jinan, used to act as
the Deputy Director of Huanglong National Scenic Area Administration in Aba prefecture of
Sichuan province as a member of the 18th doctoral team of the Central Organization Department
and the Communist Youth League of China and also ever acted as managing director of Shandong
Agricultural Economy Society. Currently, he serves as a professor and a master supervisor in
School of Business Administration in Shandong University of Finance and Economics, the
managing director of Chinese Marketing Association of Universities and an independent director of
this company.
② Members of board of supervisors
Mr. Kong Qingkun, male, 49, Chinese, MBA and economist, successively served as a section
member of production department in the healthy liquor branch office, a clerk and the
DeputyDirector and the Director of general manager office.
Ms. Zhang Lanlan, female, 52, bachelor degree and economist, successively served as the Deputy
Manager of the import and export branch of the Company and the Manager of import department of
the Company. She now is the Director of board of directors’ office.
Mr. Liu Zhijun, male, 41, Chinese, bachelor degree; from July 2003 to February 2019, he used to
serve as the staff of worked in foreign fund department of Economy and Trade Bureau in Longkou
Economic Development Zone, a news section member of propaganda department in Longkou
Municipal Committee, a member of propaganda and mass work section, a member of planning
section, the Deputy Director Member of programming development and enterprise distribution
section, the Deputy Director Member and the Deputy Chief of programming development section,
the supervisor (section chief rank) of the Dongfang Electronics Corporation Co., Ltd., Shandong
Laidong Engine Co., Ltd. and Yantai Public Transportation Group Co., Ltd., and a section chief
rank of Yantai Municipal Audit Bureau; from March 2019 to June 2020, he served as the had of the
equity management department of Yantai Guofeng Investment Holding Group Co., Ltd.; from June
2020 to present, he serves as a member of the Party Committee, the deputy general manager and
secretary of the board of director of Yantai Guofeng Investment Holding Group Co., Ltd. He now is
a supervisor of the Company.
③ Other senior executives
Mr. Jiang Hua, male, 58, Chinese, with master degree, senior engineer, has been serving as the
Deputy General Manager of the Company since 14th September, 2001.
Mr. Peng Bin, male, 55, MBA, senior engineer, ever successively served as the Department Chief
of Technical Transformation Department and the Minister of Investment and Development
Department as well as the Deputy General Manager of Yantai Changyu Group Co., Ltd. and the
General Manager Assistant of Yantai Changyu Group Co., Ltd.. He currently serves as the Deputy
General Manager of the Company.
Mr. Jiang Jianxun, male, 55, Chinese, MBA and accountant, served as the Financial Manager of the
Company from 20th May, 2002 to 10th January, 2018. He serves as the Deputy General Manager and
Board Secretary of the Company.
Mr. Pan Jianfu, male, Han ethnic, Chinese, 46, MBA and senior economist, used to serve as the
General Manager of the Jiangxi Branch of the Company, the General Manager of the Shanghai
41
Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
marketing management company and the General Manager of Beijing marketing management
center. Currently, he is the General Manager Assistant of the Company and the General Manager of
Beijing marketing management center and Beijing Chateau AFIP.
Mr. Liu Shilu, male, Han ethnic, Chinese, 47, master degree, used to be the Manager of Tianjin
branch of the Company, the Competence Manager of North China market, the General Manger of
Beijing marketing management company, the General Manager of Guangdong marketing
management center and the General Manager of e-commerce branch of the Company. Currently, he
serves as the General Manager Assistance of the Company and the General Manager of Yantai
Changyu Pioneer Wine Sales Co., Ltd..
Mr. Xiao Zhenbo, male, Han ethnic, Chinese, 45, MBA, served as the Deputy Manager of the
Company’s market strategy development center, the General Manager of Shandong marketing
management company and Yantai Changyu liquor company. He currently serves as the General
Manager Assistant of the Company and the General Manager of Zhejiang marketing management
company.
Post in the shareholder’s company
Available □Not available
Beginning date Ending date of Paid by shareholder’s
Name Shareholder’s Company Post
of the post the post company or not
Zhou Hongjiang Yantai Changyu Group Co., Ltd. Chairman 2018.01.10 2026.01.11 No
Leng Bin Yantai Changyu Group Co., Ltd. Director 2018.01.10 2026.01.11 Yes
Leng Bin Yantai Changyu Group Co., Ltd. General manager 2018.01.10 2026.01.11 Yes
Sun Jian Yantai Changyu Group Co., Ltd. Director 2018.01.10 2026.01.11 No
Li Jiming Yantai Changyu Group Co., Ltd. Director 2018.01.10 2026.01.11 No
Chen Dianxin Yantai Changyu Group Co., Ltd. Director 2018.11.15 2026.01.11 No
Aldino Marzorati Yantai Changyu Group Co., Ltd. Director 2018.01.10 2026.01.11 No
Enrico Sivieri Yantai Changyu Group Co., Ltd. Director 2018.01.10 2026.01.11 No
Stefano Battioni Yantai Changyu Group Co., Ltd. Director 2020.04.09 2026.01.11 No
Chiang Yun Yantai Changyu Group Co., Ltd. Director 2020.05.12 2026.01.11 No
Explanation for the post in Mr. Leng Bin also holds concurrent post as the Chairman and General Manager of Yantai Zhongya Medical Health
the shareholder’s company Wine Co., Ltd., which is a subsidiary of Yantai Changyu Group Co., Ltd..
Post at other companies
□Available Not available
Disciplinary actions taken by securities regulators in recent 3 years to the Company’s directors,
supervisors and senior management both on the job and left during the report period
Available □Not Available
In 2019, the Shandong Regulatory Bureau of China Securities Regulatory Commission issued a
“Decision on Measures to Issue Warning Letters to Mr. Zhou Hongjiang and Mr. Qu Weimin”, but
it did not impose administrative penalty on Mr. Zhou Hongjiang and Mr. Qu Weimin.
42
Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
(3) Salary of directors, supervisors and senior executives
The situation of decision-making process, the basis of determination and the actual payment of
directors, supervisors and senior executives
The salary for the independent directors is paid according to the resolution of shareholders’ meeting.
The salary for the chairman, directors with administration duty, supervisors, managers and other
senior management should be paid on basis of the evaluation result according to the Yantai
Changyu Pioneer Wine Co., Ltd. Executive Compensation and Performance Design, which was
passed during the Board of Directors’ meeting.
Salary of directors, supervisors and senior executives during the report period
Unit: CNY’0000
Total reward from the Whether get reward from
Name Post Gender Age Status
Company before tax related parties of the Company
Zhou Hongjiang Chairman M 57 Incumbent 176.42 No
Leng Bin Director M 59 Incumbent 0 Yes
Sun Jian Director and General Manager M 55 Incumbent 160.38 No
Li Jiming Director and Deputy General Manager M 55 Incumbent 122.17 No
Chen Dianxin Director F 55 Incumbent 0 No
Aldino Marzorati Director M 69 Incumbent 0 No
Stefano Battioni Director M 63 Incumbent 0 No
Enrico Sivieri Director M 53 Incumbent 0 No
Chiang Yun Director F 54 Incumbent 0 No
Luo Fei Independent Director M 69 Incumbent 8 No
Duan Changqing Independent Director M 57 Incumbent 8 No
Liu Huirong Independent Director F 58 Incumbent 8 No
Liu Qinglin Independent Director M 58 Incumbent 8 No
Yu Renzhu Independent Director M 43 Incumbent 8 No
Kong Qingkun Chairman of the Board of Supervisors M 49 Incumbent 80.69 No
Zhang Lanlan Supervisor F 52 Incumbent 19.38 No
Liu Zhijun Supervisor M 41 Incumbent 0 No
Jiang Hua Deputy General Manager M 58 Incumbent 120.79 No
Peng Bin Deputy General Manager M 55 Incumbent 121.58 No
Deputy General Manager and Board
Jiang Jianxun M 55 Incumbent 113.39 No
Secretary
Pan Jianfu General Manager Assistant M 46 Incumbent 69.96 No
Liu Shilu General Manager Assistant M 47 Incumbent 80.19 No
Xiao Zhenbo General Manager Assistant M 45 Incumbent 70.48 No
Total -- -- -- -- 1,175.43 --
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Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
6. Performance of directors during the report period
(1) The situation of the board of directors’ meetings during this reporting period
Holding Disclosure
The session of meetings Meeting resolution
date date
The meeting deliberated and approved 2020 Annual Board of Directors’ Work Report, 2020 Annual General
Manager’s Work Report, 2020 Annual Report, Proposal on 2020 Annual Performance Assessment Result of
the Company’s Senior Executives, Draft Proposal on 2020 Annual Profit Distribution, 2020 Annual Self
The Eighth Session Board of
2021.04.26 2021.04.28 Assessment Report on Internal Control, 2020 Annual Social Responsibility Report, Proposal on Relevant
Directors 7th Meeting
Issues of Convening 2020 Annual Shareholders’ Meeting, Proposal on 2021 Annual Financial Budget,
Proposal on 2021 Annual Capital Expenditure Plan, Proposal on 2021 Annual Routine Related Transaction,
Proposal on Change in Accounting Policy and Proposal on Appointing Certified Public Accountants Firm.
The Eighth Session Board of
2021.04.28 2021.04.29 The meeting deliberated and approved 2021 First Quarter Report.
Directors 8th Meeting
The Eighth Session Board of The meeting deliberated and approved 2021 Semi-Annual Report and Proposal on 2021 Semi-Annual Profit
2021.08.24 2021.08.26
Directors 9th Meeting Distribution.
The Eighth Session Board of
2021.10.26 2021.10.28 The meeting deliberated and approved 2021 Third Quarter Report.
Directors 10th Meeting
44
Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
(2) Attendance of directors for the board of directors’ and the shareholders’ meetings
Attendance of directors for the board of directors
Required attendance Personal Communication Authorized Whether or not to attend the meetings Attendance time for the
Name Absence
time attendance attendance attendance personally for successive twice shareholders’ meeting
Zhou Hongjiang 4 2 2 No 1
Leng Bin 4 2 2 No 1
Sun Jian 4 2 2 No 1
Li Jiming 4 2 2 No 1
Chen Dianxin 4 2 2 No 1
Aldino Marzorati 4 2 2 No 0
Stefano Battioni 4 2 2 No 0
Enrico Sivieri 4 2 2 No 0
Chiang Yun 4 2 2 No 0
Luo Fei 4 2 2 No 0
Duan Changqing 4 2 2 No 0
Liu Huirong 4 2 2 No 0
Liu Qinglin 4 2 2 No 0
Yu Renzhu 4 2 2 No 0
Explanation for failed to personally attend the Board of Directors’ meetings for successive two times
During the report period, there were no directors who did not attend the shareholders’ meetings in person for two consecutive times.
(3) Any objections for the Company’s projects from the directors
Whether or not the directors raised any objection for the Company’s projects
□Yes No
During the report period, the directors did not raise any objections for the Company’s projects.
45
Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
(4) Other explanations on directors’ performance
Whether or not the directors’ propositions are accepted by the Company
Yes □No
Explanation on acceptance or refusal of the independent directors’ propositions to the Company
Some directors proposed to increase investment in the market, and the Company had adopted relevant suggestions and increased investment in
marketing during the reporting period.
7. Performance of the special committees under the Board of Directors during the report period
Numbers of Other Specific
Committees Important comments and
Members meeting Held date Meeting contents performance circumstances of the
name suggestions made
held of duties objection (if have)
The meeting deliberated and approved the During the reporting period, the
2020 Annual Report, Draft Proposal on members of the Audit Committee
2020 Annual Profit Distribution, Proposal provided advice and suggestions in
Luo fei, Duan
on Appointing Certified Public Accountants guiding the internal audit work,
Changqing, Liu
Firm, 2020 Annual Self Assessment Report supervising and evaluating external
Huirong, Liu 2021.04.26 No No
on Internal Control, 2021 Annual Internal audit institutions, establishing an
Auditing Qinglin, Yu
2 Audit Plan. All the committee members effective internal control system and
Committee Renzhu, Chen
unanimously agreed to submit the above prompting major business risks, and
Dianxin, Leng
proposals to the board of directors of the actively safeguarded the interests of
Bin, Enrico
company for deliberation. the company and all shareholders.
Sivieri
The meeting deliberated and approved the
2021.08.24 2021 Semi-Annual Report and Proposal on No No
2021 Semi-Annual Profit Distribution.
Luo fei, Duan The meeting deliberated and approved the During the reporting period, the
Emolument
Changqing, Liu 1 2021.04.26 Proposal on 2020 Annual Performance Emolument Committee put forward No No
Committee
Huirong, Liu Assessment Results of the Company’s relevant suggestions on further
46
Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
Qinglin, Yu Senior Executives. strengthening the performance
Renzhu, Chiang assessment of senior executives and
Yun, Leng Bin, improving the way of remuneration.
Aldino
Marzorati
8. The work of the Board of Supervisors
Whether or not the Board of Supervisors found any existence risk to the Company in oversight activities during the report period
□Yes No
The Board of Supervisors has no objections to supervision matters during the report period.
47
Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
9. Staff of the Company
(1) Staff number, specialty constitution and education degree
Incumbent staff number of parent company at the end of reporting period(people) 1,131
Incumbent staff number of major subsidiary companies at the end of reporting period
1,166
(people)
Total incumbent staff at the end of reporting period (people) 2,297
Total staff getting paid in current period (people) 2,297
Retired staff number whose expenses are undertaken by parent company or subsidiary
0
companies (people)
Specialty constitution
Category Number of people (people)
Production staff 742
Sales staff 1,091
Technical staff 149
Financial staff 119
Administrative staff 196
Total 2,297
Education degree
Category Number (People)
Postgraduate and above 86
Bachelor 819
Junior College 691
Technical secondary school or Senior high school 475
Junior high school and below 226
Total 2,297
(2) Remuneration policy
The Company has established and improved the remuneration and welfare system, including salary
system, incentive mechanism, social security and medical insurance and so on, to ensure the
participation of all employees. In accordance with the law, the Company purchases social
endowment insurance, medical insurance, occupational injury insurance, unemployment insurance
and maternity insurance, and pays housing fund for the employees. Based on the principle of
“distribution according to work and equal pay for equal work”, the Company pays the staff’s
remuneration timely. With the improvement of the Company’s profitability, the Company steadily
improves the staff’s remuneration and welfare, and provides its employees the competitive salary
and equal opportunity for development.
(3) Training plan
① Senior and Middle-level Managers
1) General training
48
Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
Choose training topics related to the company industry development, management direction and
management concept in order to exploit strategic thinking of senior and middle-level
administrative staff, promoting operation principle, and improve scientific decision-making
ability and management ability.
Hold meetings instead of training, learn national and local policy, analyze domestic and foreign
political situation and economic situation, study and understand the influence of related policies
and regulations in the company’s development, analyze the development trend of production,
technology, management and marketing in domestic and foreign industries.
2)Professional training
Based on their respective work, organize them to attend Entrepreneur High-end Forum and
Summit Meeting and go to domestic and foreign successful enterprise for visit and study.
Encourage middle-level administrative staff to attend university correspondence, self-study
examination, MBA or other further education for master degree; organize professional
management cadres, involved in human resources, finance, facility, safety and technology
quality etc., to attend vocational qualification examination for professional certificate. Attend
special training such as safety, human resource, law, technology, facility, finance and tourism
etc., which are organized by special management department.
② Administrative Staff in Production, Tourism and Administrative Systems Whose Level are or
Below Section Chief
1) General training
Hire a professional lecturer or university teacher to teach courses that are aiming at improving
employee management ability, innovation ability and executive ability at the company.
Attend common-sense general training including company culture, regulatory framework and
various liquor products knowledge, reinforce training in the aspect of human resource
management and safety production.
Organize employee to attend outdoor quality expansion training in order to improve
administrative staff physical quality and teamwork ability.
2) Professional training
Encourage eligible general administrative staff to attend university correspondence, self-study
examination, MBA or other further education for master degree; organize professional
administrative staff, involved in human resources, finance, facility, safety and technology quality
etc., to attend vocational qualification examination for professional certificate.
Based on personnel work, attending special training such as safety, technology, facility, finance,
human resource, legal, tourism, sales and integrated management etc., which are organized by
special management department.
③ Front-line Workers in Production and Tourism System
1) General training
Attend common-sense general training including company culture, regulatory framework and
various liquor products knowledge; reinforce training in the aspect of human resources
management.
2) Professional training
For special types of work, organize to attend training which can improve professional skill and
operation level. Organize job skill competitions to popularize professional knowledge and safety
knowledge of different positions to relevant employees through edutainment.
49
Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
Attend special training such as safety, technology, facility, comprehensive management etc.,
which are organized by the company.
④ Marketing Personnel
1) General training
Independently study marketing textbooks, mainly focusing on ‘Growth’, as well as training
materials including the company’s related management system, production knowledge, sales
responsibility system etc..
2) Professional training
Professional lecturers would be employed to the company or through remote internet videos to
give lectures about successful liquor cases, current economic trend research for domestic and
foreign wine industry and other topics.
Strengthen the training for city marketing managers. Recruit lecturers with professional wine
knowledge to provide professional wine knowledge, tasting knowledge and wine tasting etiquette
training to the company’s internal management and sales staffs.
For business directors and other personnel, each marketing management company should
convene all marketing personnel to carry out marketing training and sharing through monthly
video conferences, online sharing, WeChat interaction, on-site meetings, etc., so as to make
progress together.
⑤ New Entry University Students
Senior and middle-level administrative staff in the company would be invited to train
undergraduate for enterprise culture, regulatory framework, safety production, product quality,
marketing strategy, emolument and evaluation system and so on in order for these undergraduate
to understand the company’s conditions in the shortest time.
Professional lecturers would be employed to conduct exterior training courses to undergraduate,
such as role transition, workplace etiquette and team cooperation and so on.
(4) Labor outsourcing
Available Not available
10. The Company’s profit distribution and increasing equity with capital reserve
Profit distribution policies especially promulgation, implementation or adjustment of cash dividends
policies during the report period
Available □Not available
Deliberated and passed by the 2020 Annual Shareholders’ Meeting convened on May 27th, 2021 by
the Company, the Company’s 2020 annual profit distribution scheme is shown as follows: based on
total 685,464,000 shares (including 453,460,800 A shares and 232,003,200 B shares) up to
December 31st, 2020, the Company would pay cash dividend to all shareholders registered on the
share registration day: CNY4（including tax）in cash per ten shares. This time the Company would
neither dispatch bonus shares nor increase equity with capital reserve.
Total amount of shares has not changed since the disclosure of the distribution plan to the
implementation period.
On July 6th, 2021, the Company published the Implementation Announcement of 2020 Annual
Equity Distribution on China Securities Journal, Securities Times and www.cninfo.com.cn,
50
Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
determining that the share registration day and the ex-dividend day of A Share was respectively on
July 12th, 2021 and on July 13th, 2021; the last trading day, the ex-dividend day and the share
registration day of B Share was respectively on July 12th, 2021, on July 13th, 2021 and on July 15th,
2021.
This time the dispatching objects contain all A Share shareholders registered at China Securities
Depository and Clearing Corporation Limited Shenzhen Company (hereinafter referred to as CSDC
Shenzhen Company) after closing of Shenzhen Stock Exchange in the afternoon of July 12th, 2021
and all B Share shareholders registered at CSDC Shenzhen Company after closing of Shenzhen
Stock Exchange in the afternoon of July 15th, 2021 (the last trading day is July 12th, 2021).
This dispatching has already been completed in mid-July 2021. The profit distribution scheme
implemented this time is consistent with the scheme deliberated and passed by the shareholders’
meeting. The implementation of the profit distribution scheme for this time is not more than two
months after the shareholders' meeting passing it.
Special explanation for the cash dividends policy
Whether it is in accordance with the requirements of the regulation in the Articles of Association and Yes
the resolution of shareholders’ meeting
Whether the distribution standard and proportion is clear and definite Yes
Whether the relevant decision process and mechanism is complete Yes
Whether the independent directors perform their responsibilities and play the roles Yes
Whether the small and middle shareholders have the chance to express their opinions and appeals, as Yes
well as their lawful right and interest is in an enough protection
Whether it is legal and transparent for the condition and process while adjusting and amending the Yes
cash dividends policy
During the report period, the Company earned profit, the profit of the parent company that could be
distributed to shareholders was positive but without proposing cash dividend distribution
preliminary scheme.
□Available Not available
The Company’s preliminary scheme of profit distribution and preliminary scheme of increasing
equity with capital reserve for the report period
Available □Not available
Number of sending bonus shares per ten shares (share) 0
Number of dividend payout per ten shares (CNY) (including tax) 4.50
The cardinal number of the capital stocks for the preliminary distribution scheme (share) 685,464,000
Total cash dividend distribution（CNY）(including tax) 308,458,800
Amount of cash dividends (eg. shares buy-back)（CNY）in other ways 0
Total cash dividend distribution（CNY）(including other ways) 308,458,800
Attributable profit（CNY） 500,126,606
51
Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
The proportion of cash dividend distribution in the total profit distribution (including other ways) 100
Cash dividend distribution this time
If the Company’s development is in growth stage and major capital expenditure is arranged, while making profit distribution,
the proportion of cash dividends should takes up no less than 20% in this profit distribution.
Detailed explanation for the preliminary scheme of profit distribution or increasing equity with capital reserve
According to the audit result from KMPG Huazhen LLP, the net profit belonging to the parent company’s shareholders in the
consolidated statement in 2021 is CNY500,102,606 and the net profit of the parent company in financial statement in 2021 is
CNY855,053,982. According to PRC accounting standard, the situation for attributable profits of the consolidation and the
parent company at the end of 2021 as following:
Unit: CNY
Consolidation Parent company
Year-end undistributed profit 8,929,426,600 9,141,561,665
Among which: Total comprehensive income in 2021 500,102,606 855,053,982
Undistributed profit carried forward from beginning of the year 8,703,509,594 8,560,693,283
Dividends distribution of 2020 274,185,600 274,185,600
Legal earned surplus reserve to be drawn 0 0
According to regulation of 157 item in the Articles of Association, which is that “the Company can distribute dividends either
th
in cash or by stock, the profit to be distributed each year is not less than 25% of the distributable profit realized in the same
year and the accumulated sum of profit to be distributed in cash in the last three years is not less than 30% of the yearly
average distributable profit to be realized in the last three years”. Meanwhile, considering the large amount on the capital
expenditure in 2022, under the condition of not influencing the normal production and operation, the Company put forward
preliminary scheme on profit distribution in 2021 as following:
Because the left amount of legal earned surplus reserve reaches 50% of registered capital, while making profit distribution, the
legal earned surplus reserve will not be drawn. Based on the Company’s 685,464,000 shares at total up to December 31st,
2021, the Company plans to pay CNY4.5 in cash as dividends for every ten share (including tax) to the Company’s all
shareholders, totaling up to CNY308,458,800. The retained and undistributed net profit will be reserved for distribution in the
next year.
The cash dividend distributed to shareholders of domestic listed foreign shares (B share) is paid in HKD converted based on
the middle rate between CNY and HKD issued by the People’s Bank of China on the first working day after the resolution
date of 2021 shareholders’ meeting.
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. Construction and implementation of internal control system during the reporting period
(1) Construction and implementation of internal control
For the construction and implementation of the company’s internal control, please refer to the 2021
Annual Self-Assessment Report on Internal Control disclosed in Securities Times, China Securities
Journal and www.cninfo.com.cn on April 27, 2022.
52
Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
(2) Specific situations for significant defects of the internal control found during the report period
□Yes No
13. The company’s management and control over subsidiaries during the reporting period
Company name Integration plan Integration progress Problems encountered in integration Actions taken Resolve progress Follow-up resolution plan
None None None None None None None
14. Internal control self-assessment report or internal control audit report
（1）Internal control self-assessment report
Disclosure date for full text of the internal control self-assessment report 2022.04.27
Disclosure index for full text of the internal control self-assessment report 2021 Annual Self-Assessment Report on Internal Control disclosed on Securities Times,China Securities Journal and
www.cninfo.com.cn by the Company on April 27, 2022
Percentage of total unit assets included in scope of the assessment accounting for the
85.13%
Company’s total assets of consolidated financial statements
Percentage of unit operating income included in scope of the assessment accounting
92.54%
for the Company’s operating income of consolidated financial statements
Standards of Defect Identification
Category Financial report Non-financial report
Significant defects: one defect of internal control, individually or together with Significant defects: Any situations listed below appears, it can be
other defects, has the reasonable probability to cause the significant misstatements, regarded as significant defects. Operation: Unable to achieve all
which cannot be promptly prevented, or found and corrected timely in the financial operation target or key business index, widely out of budget in
Qualitative criteria report. For example: Company’s Directors, Supervisors and Senior Management various aspects. Safety accident effects: Cause no less than one
have fraudulent practices; The Company makes corrections for the published person death, or more than 3 person serious injuries. Major
financial report; The audit of external intermediary agent finds significant negative effects: Negative information frequently appears in the
misstatement existing in the current financial report, but the Company does not medias with involving a wide scope in the international and national
53
Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
realize it during the operation process; Negative information frequently appears mainstream media. Environment effects: Create irreparable
in the medias with involving a wide scope; The Company’s audit committee and damages to environment, and cause massive public complains.
internal audit department makes an inefficient supervision for internal control; Major defects: Any situations listed below appears, it can be
Other situations maybe cause significant misdirection which guides the report users regarded as major defects. Operation: Unable to achieve partly
to make the right judgment. operation target, a big margin out of budget in various aspects.
Major defects ： The defect of internal control, individually or together with other Safety accident effects: Without reaching the person loss or the
defects, has the reasonable probability to cause the significant misstatements, which number of serious injury of significant defects. Major negative
cannot be promptly prevented, or found and corrected timely in the financial report, effects: Negative news appears in the media with influencing a wide
although the misstatements neither achieves nor exceeds the importance level but scope in the provincial mainstream media. Environment effects:
still arising the attention of Board of Directors and management team. Failure to Cause heavy environment damages and massive public complains,
select and apply accounting regulations in accordance with generally accepted ought to carry out the significant remedial measures.
accounting principles; Failure to establish the anti-fraud procedures and control General defects: Any situations listed below appears, it can be
measures; Failure to set up corresponding control mechanism or to carry out and regarded as general defects. Operation: Other effects unable to
take corresponding compensating control for the accounting treatments with constitute the significant defects or major defects. Safety accident
irregular and special deal; Negative news appears in the media with influencing a effects: Personal injury less than the quantitative standards of major
wide scope; One or more defects exist in the control during the process of the defects. Major negative effects: Other defects unable to constitute
ending financial report, and the target of achieving truthfulness and integrality the significant defects or major defects. Environment effects:
cannot be reasonably guaranteed in the financial report; General defects refer to Other environment effects unable to constitute the significant defects
the other control defects, which do not constitute the significant and major defects. or major defects.
For total assets/Owner’s equity: For direct property loss:
Significant defects: misstatements ≧1%, or Significant defects: More than CNY10million
Major defects: 0.5%≦misstatements<1%, or Major defects: CNY1million-CNY10million (including
General defects: misstatements<0.5% CNY1million)
For operation revenue: General defects: Less than CNY1million
Quantitative criterion
significant defects: misstatements ≧1%, or
Major defects: 0.5%≦misstatements<1%, or
General defects: misstatements<0.5%
For pretax profit:
Significant defects: misstatements≧5%,or
54
Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
Major defects: 2%≦misstatements<5%,or
General defects: misstatements<2%
Number of major defect in financial report 0
Number of major defect in non-financial report 0
Number of significant defect in financial report 0
Number of significant defect in non-financial report 0
(2) Internal control audit report
Available □Not available
Audit opinions of the internal control audit report
We believe that, the company maintained effective internal control over financial reporting in all material aspects in accordance with the Basic Norms for Corporate Internal Control and related regulations on
December 31st, 2021.
Disclosure of the internal control audit report Disclosure
Disclosure date for the full text of the internal control audit report 2022.04.27
2021 Annual Self-Assessment Report on Internal Control disclosed on Securities Times, China Securities Journal and www.cninfo.com.cn by the
Disclosure index for the full text of the internal control audit report
Company on April 27, 2022.
Opinion type of the internal control audit report Standard without reserved opinion
Whether or not exists significant defects in non-financial reports No
Whether or not the accounting firm issued non-standard opinions for the audit report of internal control
□Yes No
Whether the audit report of internal control issued by the accounting firm is in consistency with the self-assessment report of the board of
directors
Yes No
15. Self-inspection and rectification of problems in the special action on governance of listed company
No.
55
Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
V. Environmental and Social Responsibility
1. Major Environmental issues
Whether the listed company and its subsidiaries belong to major polluters published by the environmental protection department
Yes No
Name of major Quantity Total Condition
Name of Distribution Total
pollutants and Mode of of Discharge Implemented approved of
company or situation of volume of
particular discharge discharg concentration pollution discharge standard volume of excessive
subsidiary discharge outlet discharge
pollutants e outlet discharge discharge
Emission Standard for Air Pollutants
Discharge Confirmed in line of Boiler (GB13271-2014), Emission
Organized outlet of with national Standard for Odor Pollutants
Liaoning exhaust gas, boiler standard Graphical (GB14554-93), 4a in Class 2 of
Meeting the
Changyu inorganized chimney and Signs for Emission Standard for Environmental
2 national 35m3/d 120m3/d No
Icewine Chateau exhaust gas, discharge Environmental Noise at the Boundary of Industrial
standards
Co., Ltd. waster water, outlet of Protection Enterprises (GB12348-2008),
noise factory (GB15562.1-1995) Comprehensive Wastewater Discharge
waste water (GB15562.2-1995) Standard of Liaoning Province
(DB21/1627-2008)
56
Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
Construction and operation of pollution prevention facilities
The exhaust gas, SO2 and NOX produced by this company's boiler are discharged through ceramic
tube dust removers and bag dust removers. A wastewater treatment station has been constructed.
The wastewater treatment process adopts the treatment process of hydrolys is aerobiont. Production
wastewater and domestic sewage are treated by the in-plant wastewater treatment station and then
discharged into the waste water treatment plant in Beidianzixiang Town.
Environmental impact assessment of construction projects and other environmental protection
administrative permits
It has been approved in the Huanhuanjianzi (2016) No.24 issued by the Environmental Protection
Bureau of Huanren Manchu Autonomous County.
Emergency plan for emergent environmental incident
The Company has formulated a comprehensive emergency plan for emergent environmental
incident.
Environmental self-monitoring program
The Company has formulated a complete environmental self-monitoring program.
Administrative penalties for environmental issues during the reporting period
Company or The impact on the production The company’s
Reason for Penalty
subsidiary Violation and operation of listed rectification
penalty result
name companies measures
None None None None None None
Other environmental information that should be made public
No
Measures taken to reduce carbon emissions and their effects during the reporting period
Available Not available
Other related environmental information
No
2. Social responsibility performance
Please refer to 2021 Annual Social Responsibility Report disclosed on Securities Times, China
Securities Newspaper and www.cninfo.com.cn by the Company.
3. Consolidate and expand the achievements of poverty alleviation and rural revitalization
The Company actively responds to the call of the state, served the rural revitalization well, adopted
the mode of “company + farmer” or “company + cooperative + farmer”, reformed the sloping fields
of Jiaodong Peninsular and the northwestern area including Ningxia and Xinjiang and so on, the
uncultivated land or the barren land into graperies. By means of providing capital and technology of
57
Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
viticulture to fruit growers, scientific management level of vineyard had been improved. The
Company spared no effort to popularize the non-pollution and mechanized planting methods,
continuously improved production efficiency of grape base and quality of grape, and reduced
production cost of grape and labor intensity. Through the above measures, on the one hand, it
promotes the effective use of land resources and improve the local ecological environment; on the
other hand, it brings about CNY800million of economic income to fruit farmers across the country
every year and practically helps rural revitalization and common prosperity.
The Company conducted point-to-point anti-poverty project to Huangchengyang Village in Shiliang,
Longkou and purchased agricultural products worth more than CNY570thousand, to help solve the
problem of slow sales; through the charity foundation, donated CNY300thousand in cash to
Wushan in Chongqing for poverty alleviation.
58
Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
VI. Major issues
1. Implementation of commitments
(1) 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
Commitments Commitment content Implementation
party type time period
Commitments at share reform
Commitments made in
acquisition report or equity
changes report
Commitments at asset
restructuring
Solve
Yantai Changyu
horizontal Non-horizontal competition 1997.05.18 Forever Has been performing
Group Co., Ltd.
competition
59
Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
According to Trademark License Contract, the trademark
According to Trademark License Contract, the trademark
use fee annually paid by the Company to Changyu Group
royalty of Changyu and other trademarks paid by the
1997.05.18 shall be mainly used by Changyu Group to publicize
Company to Yantai Changyu Group Co., Ltd. every year is
Commitments at the initial 1997.05.18 - trademarks including Changyu and contract products.
mainly used for advertising
public offering or refinancing 2019.04.04 Except 2013 to 2017 during which the commitment was
Changyu and other trademarks and this contract products by
not strictly performed, Yantai Changyu Group Co., Ltd.
Yantai Changyu Clear the use Yantai Changyu Group Co., Ltd.
has been performing its commitment.
Group Co.,Ltd. of trademark
royalty
Equity incentive
commitments
The CNY231,768,615 that was not used for publicity of
trademarks and contract products as promised will be offset
Commitments at middle and Compensating 2019.04.04
Yantai Changyu by the four-year trademark use fee from 2019 to 2022. If
small shareholders of the unredeemed 2019.04.04 - Has been performing
Group Co.,Ltd. insufficient, the shortfall would be filled in one time in 2023.
Company commitment 2023.12.31
If there is any excess, the excess portion of the trademark use
fee would be collected from the year with excess occurrence.
Commitment under timely
Yes
implementation or not
According to the Trademark License Contract (hereafter referred to as “the Contract”), Changyu Group promises that the trademark use fee annually paid by the Company to Changyu
Whether or not to have
Group shall be mainly used by Changyu Group to publicize trademarks and contract products. But above-mentioned ‘mainly’ is not a specific number, which is easy to cause divergence
specific reasons of the
due to different understanding and leads to problem appearance during the implementation process.
unimplemented commitment
From 2013 to 2017, Changyu Group collected a total of CNY420,883,902 trademark use fee, of which 51% was used to publicize trademarks including Changyu and contract products with
and next steps
amount of CNY214,650,790. The amount has been used to publicize trademarks including Changyu and contract products is CNY50,025,181, with a balance of CNY164,625,609. In 2018
60
Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
and 2019, the trademark use fee collected of 2017 and 2018 is CNY155,623,907, of which 51% is used to publicize 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. From 2013 to 2018,
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 detailed information, please refer to Announcement on Commitment Issues of Yantai Changyu Group Co., Ltd. disclosed on April 4th, 2019.
(2) The Company should make a statement on the achieved original profit forecast of assets or projects and its reason if there is profit forecast
of Company’s assets or projects and the report period is still in the profit forecast period
□Available Not available
2. Non-operating capital occupying of listed company by controlling shareholder and its related parties
□Available Not available
There are no non-operating capitals occupying of listed company by controlling shareholder and its related parties during the report period.
3. Illegal external guarantee
□Available Not available
There is no illegal guarantee situation during the report period.
4. Explanation of board of directors on the latest Non-standard Audit Report
□Available Not available
5. Explanation of Non-standard Audit Report given by accounting firm in the report period from board of directors, board of supervisors
and independent directors (if have)
□Available Not available
61
Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
6. Compared with the last year’s financial report, explanation of the changes in accounting
policy, accounting estimation or correction of significant accounting errors
Available Not available
There is no changes of accounting policy, accounting estimation or correction of significant
accounting errors during the report period.
7. Compared with the last year’s financial report, explanation for the changes of the
consolidated statements scope
Available Not available
For details of the the changes of the consolidated statements scope this year, please refer to Note 6:
“Change in consolidation scope” to the financial report of this report .
8. The appointment and dismissal of certified public accountants
Currently appointed accounting firm
Domestic accounting firm name KPMG Hua Zhen LLP
Remuneration for domestic accounting firm (CNY‘0000) 205
Consecutive period for the audit service of domestic accounting firm 3
Name of certified public accountant for the audit service of domestic accounting firm Ms. Wang Ting, Ms. Xu Weiran
Consecutive period for the certified public accountant’s audit service of domestic
3
accounting firm
Overseas accounting firm name (if have) —
Remuneration for overseas accounting firm (CNY‘0000) (if have) 0
Consecutive period for the audit service of overseas accounting firm (if have) —
Name of certified public accountant for the audit service of overseas accounting firm
—
(if have)
Consecutive period for the certified public accountant’s audit service of overseas
—
accounting firm (if have)
Whether or not to employ a new accounting firm during the report period
Yes No
To employ internal control audit accounting firms, financial adviser or sponsor.
Available Not available
This year, KPMG Huazhen LLP was hired as the internal control audit institution. The audit fee was not
determined separately, but was CNY2.05million together with the financial report audit fee.
9. Face of suspension and termination of listing after the disclosure of annual report
Available Not available
10. Bankruptcy reorganization
□Available Not available
There is no bankruptcy reorganization during the report period.
62
Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
11. Material litigation and arbitration
□Available Not available
There are no material litigation and arbitration during the report period.
12. Penalty and rectification
Available Not available
There are no penalty and rectification during the report period
13. Credit of the Company, holding shareholders and actual controllers
□Available Not available
14. Significant related transactions
(1) Related transactions in relation to daily operations
Available □Not available
63
Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
Proportion Whether
Approved Available
accounting exceed
Related Pricing Amount transaction Clearing market price Disclosure Disclosure
Relationship Type Content Price for amount approved
party principle (CNY‘0000) quota form of similar date index
of similar transaction
(CNY‘0000) transactions
transactions quota
Announcem
ent on 2021
Annual
Routine
Purchase Related
Yantai Controlled Purchase and Transaction
Shenma by the same and commission Agreement Determined April 28th, disclosed in
8,076 14.20% 10,200 No Cash No
Packaging parent commission processing pricing by agreement 2021 China
Co., Ltd. company processing packaging Securities
materials Journal,Sec
uritiesTimes
and
CNINFO in
2021
Total -- -- 8,076 -- 10,200 -- -- -- -- --
Details of the return of large sales No
Actual performance of the estimated total amount for
daily operations related transactions by category that will No
occur during this period. (if have)
Reason for the deference between transaction price and Not available
market reference price(if available)
64
Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
(2) Related transactions in relation to acquisition and sales of assets or equity
Available Not available
There is 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 is no related transactions in relation to common foreign investment during the report period.
(4) Related current credit and debt transactions
Available □Not available
Whether or not existing non-operating related credit and debt transactions
□Yes No
There is no non-operating related credit and debt transactions during the report period.
(5) Transactions with related financial companies
Available Not available
There is no deposit, loan, credit or other financial business between the Company and related financial
companies and related parties.
(6) Transactions between the related parties and financial companies controlled by the Company
Available Not available
There is no deposit, loan, credit or other financial business between the related parties and the financial
companies controlled by the Company.
(7) Other major related transactions
Available □Not available
For other major related transactions, please refer to the Section X “ Related Parties and Related
Transaction” of the Financial Report of this report.
Disclosure website of interim report for major related transaction
Disclosure date of interim Name of disclosure website for
Name of interim announcement
announcement interim announcement
None None
15. Major and important contracts and execution results
(1) Trusteeship, contract and leasehold issues
Trusteeship situation
Available Not available
65
Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
There is no trusteeship situation during the report period
Contract situation
Available Not available
There is no contract situation during the report period.
Leasehold situation
□Available Not available
There is no leasehold situation during the report period.
(2) Major guarantee
Available □Not available
Unit: CNY’0000
External guarantee of the Company and its subsidiaries（excluding guarantee to subsidiaries）
Disclosure date of
Actual date of Whether or not Whether or not belong
related Guarantee Actual guarantee Guarantee Collateral Counterguarantee Guarantee
Guarantee object name occurrence (date of complete to related-party
announcement about quota amount type (if have) situation (if have) Period
agreement) implementation guarantee
guarantee quota
Yantai Economic and Joint liability
Technological Development 2016.12.22 34,160 2016.12.21 34,160 assurance; - - 10 years No No
Zone Management Council. Mortgage
Total of the external guarantee quota approved Total of the actual external guarantee amount during the
0 0
during the report period (A1) report period (A2)
Total of the external guarantee quota approved by Balance of the actual external guarantee by the end of the
34,160 34,160
the end of the report period (A3) report period (A4)
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Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
Guarantee situations between the Company and subsidiaries
Disclosure date of
Whether or not Whether or not belong
related Guarantee Actual date of Actual guarantee Guarantee Counterguarantee Guarantee
Guarantee object name Collateral complete to related-party
announcement about quota occurrence amount type situation Period
implementation guarantee
guarantee quota
Yantai Changyu Wine Joint liability
Research and Development 2016.12.22 72,176 2016.12.21 72,176 assurance; - - 10 years No Yes
Company Limited Mortgage
Joint liability
Kilikanoon Estate Pty Ltd 2018.12.05 8,528 2018.12.13 7,518 - - 5 year No Yes
assurance
Total of the guarantee quota approved to Total of the actual guarantee amount for subsidiaries during
0 0
subsidiaries during the report period (B1) the report period (B2)
Total of the guarantee quota approved to Balance of the actual guarantee for subsidiaries by the end
80,704 79,694
subsidiaries by the end of the report period (B3) of the report period (B4)
Guarantee situations between subsidiaries
Disclosure date of
Whether or not Whether or not belong
related Guarantee Actual date of Actual guarantee Guarantee Counterguarantee Guarantee
Guarantee object name Collateral complete to related-party
announcement about quota occurrence amount type situation Period
implementation guarantee
guarantee quota
- - - - - - - - - - -
Total of the guarantee quota approved to Total of the actual guarantee amount for subsidiaries during
0 0
subsidiaries during the report period (C1) the report period (C2)
Total of the guarantee quota approved to Balance of the actual guarantee for subsidiaries by the end
0 0
subsidiaries by the end of the report period (C3) of the report period (C4)
Total guarantee amount of the Company（Total of above three major items）
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Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
Total of the approved guarantee quota during the Total of the actual guarantee amount during the report
0 0
report period（A1+B1+C1） period（A2+B2+C2）
Total of the approved guarantee quota by the end Balance of the actual guarantee by the end of the report
114,864 113,854
of the report period（A3+B3+C3） period（A4+B4+C4）
The proportion of actual total guarantee amount (A4+B4+C4) accounting for the Company’s net asset 10.90%
Among :
The amount of guarantee for shareholders, actual controllers and their related parties（D） 0
The amount of debt guarantee for the guaranteed objects whose asset-liability ratio is more than 70%
0
directly or indirectly（E）
Total amount of guarantee of the part that exceeds 50% of net assets（F） 0
Total amount of the above-mentioned three items（D+E+F） 0
Explanation for undue guarantees that have happened warranty liability or may take joint payback
No
liabilities during the report period (if have)
Explanation for violating due process to provide external guarantee (if have) No
Description of the specific situation of using compound guarantee
No.
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Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
(3) Entrusting others to manage cash assets
Financial management entrustment
□Available Not available
There is no financial management entrustment during the report period.
Loan entrustment
□Available Not available
There is no loan entrustment during the report period.
(4) Other important contracts
□Available Not available
There are no other important contracts during the report period.
16. Other Major issues
□Available Not available
There are no other major issues need to be explained during the report period.
17. Major issues of Company’s subsidiaries
□Available Not available
69
Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
VII. Changes in Shares and the Shareholders’ Situation
1. Changes in shares
(1) Changes in shares
Unit: share
Amount before this change Change (+, -) Amount after this change
Transfer other capital to share
Amount Percentage % Allot new share Distribute bonus share Others Subtotal Amount Percentage %
capital
I. Shares with trading limited condition
1. State-owned holdings
2. State-owned legal person holdings
3. Other domestic holdings
Among which: domestic legal person
domestic natural person
4. Foreign-owned holdings
Among which: foreign legal person
foreign natural person
II. Shares without trading limited condition 685,464,000 100% 685,464,000 100%
1. A shares 453,460,800 66.15% 453,460,800 66.15%
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Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
2. B shares 232,003,200 33.85% 232,003,200 33.85%
3. Oversea listed foreign shares
4. Others
III. Total shares 685,464,000 100% 685,464,000 100%
Cause of share change
□Available Not available
Approval of share change
□Available Not available
Transfer ownership of changed shares
□Available Not available
The influence of share change on the financial indicators such as basic earnings per share, diluted earnings per share of the latest year and the latest
period, net asset per share belonging to the Company’s common shareholders, etc..
□Available Not available
Other contents the Company thinks necessary or securities regulatory departments ask to make public.
□Available Not available
(2) Changes in restricted shares
□Available Not available
2. Securities issuance and listing situation
(1) Securities issuance (exclude preferred share) during report period
71
Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
□Available Not available
(2) Explanation of change in Company’s total shares and shareholding structure and change in Company’s assets and liability structure
□Available Not available
(3) Current internal employee shares
□Available Not available
3. Situation for shareholders and the actual controllers
(1) The number of shareholders of the Company and the shareholdings
Unit：share
Total number of preferred shareholder
Total number of shareholders by Total number of preferred shareholder
Total shareholders in the recovering voting power by the end of
51,552 the end of last month before the 50,528 recovering voting power by the end of 0 0
report period last month before the disclosure day of
disclosure day of the annual report report period (if have) (see note 8)
the annual report (if have) (see note 8)
Shareholders holding more than 5% or the top 10 shareholders holding situation
Shares held until Number of Number of Pledged or frozen
Percentage Changes during
Name of Shareholders Character of shareholders the end of the restricted unrestricted
(%) the report period Share status Amount
report period shares shares
Domestic non-state legal
YANTAI CHANGYU GROUP CO., LTD. 50.40% 345,473,856 0 0 345,473,856 - -
person
GAOLING FUND, L.P. Foreign legal person 3.08% 21,090,219 0 0 21,090,219 - -
BBH BOS S/A FIDELITY FD - CHINA FOCUS
Foreign legal person 1.33% 9,140,216 -5135489 0 9,140,216 - -
FD
SHENWAN HONGYUAN Foreign legal person 1.08% 7,413,952 -817781 0 7,413,952 - -
72
Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
SECURITIES(HONGKONG) LIMITED
FIDELITY PURITAN TRUST: FIDELITY
Foreign legal person 0.93% 6,350,762 0 0 6,350,762 - -
SERIES INTRINSIC OPPORTUNITIES FUND
Haitong International Securities Company
Foreign legal person 0.74% 5,060,702 -421243 0 5,060,702 - -
Limited-Account Client
GUOTAI JUNAN SECURITIES (HONGKONG)
Foreign legal person 0.73% 5,011,871 -470074 0 5,011,871 - -
LIMITED
Fengdi JIANG Domestic natural person 0.71% 4,854,000 4369300 0 4,854,000 - -
China Merchants Futures (Hong Kong) Co.,
Foreign legal person 0.67% 4,589,660 1380939 0 4,589,660 - -
Limited
VANGUARD EMERGING MARKETS STOCK
Foreign legal person 0.61% 4,170,863 362414 0 4,170,863 - -
INDEX FUND
Strategic investors or legal result of the placement of new shares to become a
No
top 10 shareholders
Among the top 10 shareholders, Yantai Changyu Group Company Limited has no associated relationship or accordant
The explanation for the associated relationship and accordant action
action relationship with the other 9 listed shareholders, while the relationship among the other shareholders is unknown.
Explanation of the above-mentioned shareholders’ entrustment/ fiduciary
No
voting rights and waiver of the voting rights
Special explanation for the existence of a special repurchase account among the
No
top 10 shareholders
The top 10 shareholders with shares without trading limited condition
Type of share
Name of Shareholders Number of shares without trading limited condition held until the end of the year
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
BBH BOS S/A FIDELITY FD - CHINA FOCUS FD 9,140,216 B 9,140,216
SHENWAN HONGYUAN SECURITIES(HONGKONG) LIMITED 7,413,952 B 7,413,952
73
Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
FIDELITY PURITAN TRUST: FIDELITY SERIES INTRINSIC
6,350,762 B 6,350,762
OPPORTUNITIES FUND
Haitong International Securities Company Limited-Account Client 5,060,702 B 5,060,702
GUOTAI JUNAN SECURITIES (HONGKONG) LIMITED 5,011,871 B 5,011,871
Fengdi JIANG 4,854,000 A 4,854,000
China Merchants Futures (Hong Kong) Co., Limited 4,589,660 B 4,589,660
VANGUARD EMERGING MARKETS STOCK INDEX FUND 4,170,863 B 4,170,863
The explanation for the associated relationship and accordant action of the top
10 shareholders with unrestricted shares, the the associated relationship and Among the top 10 shareholders, Yantai Changyu Group Company Limited has no associated relationship or accordant action
accordant action between the top 10 shareholders with unrestricted shares and relationship with the other 9 listed shareholders, and the relationship among the other shareholders is unknown.
the top 10 shareholders
Explanation for the top 10 shareholders who involved in financing activities
The top 10 shareholders do not involve in financing activities and stock trade business.
and stock trading business (if have)(see note 4)
Whether or not the Company’s top 10 common shareholders and shareholders with shares without trading limited condition take agreed repurchase
trading during the report period
□Yes No
There is no agreed repurchase trading taken by the Company’s top 10 common shareholders and shareholders with shares without trading limited
condition during the report period.
（2）Situation for the controlling shareholders of the Company
Property of holding shareholders: Property of holding main body undefined
Type of holding shareholders: Legal representative
Name of controlling shareholder Legal representative Establishment date Organization code Main business
Yantai Changyu Group Co., Ltd. Zhou Hongjiang 1997.04.27 913706002656458244 Production of wine, healthy liquor, distilled liquor and
74
Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
beverages( only produced by subsidiaries, shareholding companies
and branches), sales of the above-mentioned products, cultivation
of agricultural products and export business under the scope of
permission.
Equity situation for the other domestic listed companies controlled
No.
or shared by the controlling shareholders during the report period
Changes in the controlling shareholder during the report period
Available Not available
There are no changes in the controlling shareholder during the report period.
(3) Situation for the actual controllers of the Company an its persons acting in concert
Property of actual controllers: domestic other institutions; foreign other institutions
Type of actual controllers: Legal representative
Name of actual controllers Legal representative Establishment date Organization code Main business
Under state permission, property investment, tenancy of machine and facility, wholesale and retail of
Yantai Yuhua Investment &
Jiang Hua 2004.10.28 76779294-7 construction material, chemical products (chemical hazard products excluded), hardware and electronical
Development Co., Ltd.
products, grape plantation.
Directly or indirectly conduct the production and distribution of food products (alcoholic products included) as
ALDINO
ILLVA Saronno Holding S.p.a. 1984.07.25 － well as industrial, commercial, financial and service activities of any other kinds through joint-stock
MARZORATI
companies and organizations.
International Finance Corporation is one of the members of World Bank, mainly dedicated to investment in
private sectors of developing countries while providing technical support and consultation service. The
Philippe LE
International Finance Corporation 1956.07.25 － corporation is a multilateral financial institution that ranks first in the world in terms of providing capital stock
HOUEROU
and loans to developing countries. Its purpose is to promote sustainable investments of private sectors of
developing countries in order to alleviate poverty and improve people’s life.
75
Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
Operating management of state-owned property right (stock right) authorized by State-owned Assets
Supervision and Administration Commission of Yantai Municipal Government; Financing, investment and
operating management of government projects, such as strategic investment and industrial investment and so
on; Capital operation (including acquisition, reintegration and transfer, etc) of state-owned property right and
state-owned stock right within the scope of authorization; Venture capital investment business; Agency of
venture capital investment business of other venture investment enterprises or individuals; Participation in the
Yantai Guofeng Investment establishment of venture capital investment enterprises and venture capital investment management consultant
Rong Feng 2009.02.12 00426068-6
Holdings Group Co., Ltd. institutions; Investment and financing service and consulting business; Investment and financing consultant
business; Other business authorized by State-owned Assets Supervision and Administration Commission of
Yantai Municipal Government; wholesale and retail of non-ferrous metal mineral products, gold (spot good),
silver (spot good), chemical products (excluding dangerous goods), battery materials (excluding dangerous
chemicals); import and export of goods and technologies. (The business scope does not include national
pre-approval projects and projects restricted by national industrial policies; projects that are subject to approval
according to law can only carry out business activities after approval by relevant departments).
Yantai Yuhua Investment & Development Co., Ltd. did not control the equity of other domestic and foreign listed companies except the Company
Equity situation for the other domestic listed companies
during the reporting period; It is not clear that other actual controllers control the equity of other domestic and foreign listed companies other than the
controlled by the actual controller during the report period
Company during the reporting period.
Changes of the actual controllers during the report period
Available Not available
There are no changes in actual controllers during the report period.
76
Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
Introduction for property right and control relations between the Company and its actual controllers
Actual controller controls the Company through a trust or other asset management ways
□Available Not available
77
Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
(4) The company’s controlling shareholder or the largest shareholder and its concerted action
person’s cumulative pledged shares account for 80% of the company’s shares held by them
□Available Not available
(5) Other institutional shareholders holding more than 10% shares
□Available Not available
(6) Shares reduction situations of holding shareholders, actual controllers, restructuring side
and other commitment subjects
□Available Not available
4. The specific implementation of share repurchase during the reporting period
Implementation progress of share repurchase
□Available Not available
Implementation progress of reducing share repurchased by centralized bidding
□Available Not available
78
Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
VIII. Related Situation of Preferred Shares
□Available Not available
There are no preferred shares during the report period.
IX. Related Situation of Bonds
□Available Not available
X. Financial Report
1. Audit Report
Type of audit opinion Standard unqualified audit opinion
Date signed on audit report April 25, 2022
KPMG HuazhenCertified Public Accountants
Audit agency name
Co., Ltd. (special general partnership)
Audit report No. KPMG Huazhen ShenZi No. 2205034
Certified public accountant’s name Ms. Wang Ting, Ms. Xu Weiran
79
Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
AUDITOR’S REPORT
KPMG Huazhen Shen Zi No. 2205034
All Shareholders of Yantai Changyu Pioneer Wine Company Limited:
Opinion
We have audited the accompanying financial statements of Yantai Changyu Pioneer Wine
Company Limited (“Yantai Changyu”), which comprise the consolidated balance sheet and
company balance sheet as at 31 December 2021, the consolidated income statement and
company income statement, the consolidated cash flow statement and company cash flow
statement, the consolidated statement of changes in shareholders’ equity and company
statement of changes in shareholders’ equity for the year then ended, and notes to the
financial statements.
In our opinion, the accompanying financial statements present fairly, in all material respects,
the consolidated financial position and company financial position of Yantai Changyu as at 31
December 2021, and of its consolidated financial performance and company financial
performance and its consolidated cash flows and company cash flows for the year then ended
in accordance with Accounting Standards for Business Enterprises issued by the Ministry of
Finance of the People’s Republic of China.
Basis for Opinion
We conducted our audit in accordance with China Standards on Auditing for Certified Public
Accountants (“CSAs”). Our responsibilities under those standards are further described in
the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report.
We are independent of Yantai Changyu in accordance with the China Code of Ethics for
Certified Public Accountants (“the Code”), and we have fulfilled our other ethical
responsibilities in accordance with the Code. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our opinion.
80
Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
AUDITOR’S REPORT (continued)
KPMG Huazhen Shen Zi No. 2205034
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most
significance in our audit of the financial statements for the year. These matters were
addressed in the context of our audit of the financial statements as a whole, and in forming
our opinion thereon, and we do not provide a separate opinion on these matters.
Recognition of Sales Revenue from Distributors
Refer to the accounting policies set out in the notes to the financial statements “III.
Significant accounting policies and accounting estimates” 22 and “V. Notes to the
consolidated financial statements” 37.
How the Matter was Addressed in Our
Key Audit Matters
Audit
The principal activities of Yantai Changyu and Our audit procedures to evaluate revenue
its subsidiaries (hereinafter referred to as recognition of sales revenue from
“Yantai Changyu Group”) include manufacture distributors included the following:
and sales of wine, brandy and sparkling wine.
Understand and evaluate the
The revenue of Yantai Changyu Group is mainly Management’s design and operation
derived from sales of distributors. All effectiveness of key internal controls
distributor transaction terms adopt the unified related to distributor sales revenue
transaction terms formulated by Yantai recognition;
Changyu Group.
Selecting the sales contracts Yantai
Based on the contractual agreement and the Changyu signed with distributors in
business arrangement, Yantai Changyu sells order to examine whether Yantai
products to distributors and the transfer of Changyu has adopted the unified
product ownership is completed and the transaction terms, and evaluate
revenue is recognised when the goods are whether the accounting policy of
delivered to distributors and signed for revenue recognition meets the
acceptance. requirements of the Accounting
Standards for Business Enterprises;
As revenue is one of the key performance
indicators of Yantai Changyu Group, there is a On a sampling basis, reconcile the
risk that management may recognise revenue revenue recorded for the year to
earlier or later in order to meet specific relevant supporting files such as
performance targets or expectations, therefore, relevant orders and signed delivery
the risk of cut-off misstatement arising from notes, etc. to evaluate whether
distributors’ sales revenue is identified as a key revenue is recognised in accordance
audit matter. with the accounting policy of Yantai
Changyu;
81
Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
AUDITOR’S REPORT (continued)
KPMG Huazhen Shen Zi No. 2205034
Key Audit Matters (continued)
Recognition of Sales Revenue from Distributors (continued)
Refer to the accounting policies set out in the notes to the financial statements “III.
Significant accounting policies and accounting estimates” 22 and “V. Notes to the
consolidated financial statements” 37.
How the matter was addressed in our
The Key Audit Matters
audit
On a sampling basis, reconcile the sales
transaction before and after balance sheet
date to relevant supporting files such as
relevant orders, signed delivery notes,
etc. to evaluate whether revenue is
recognised in appropriate accounting
period;
Check the sales record after the balance
sheet date to identify significant sales
returns and check relevant supporting
files (If applicable) in order to evaluate
whether relevant revenue is recorded in
the appropriate accounting period;
Select revenue accounting entries that
meet specific risk criteria and check
related supporting documents.
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Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
AUDITOR’S REPORT (continued)
KPMG Huazhen Shen Zi No. 2205034
Other Information
Management of Yantai Changyu is responsible for the other information. The other
information comprises all the information included in the 2021 annual report, other than the
financial statements and our auditor’s report thereon.
Our opinion on the financial statements does not cover the other information and we do not
express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the audit or otherwise appears to
be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement
of this other information, we are required to report that fact. We have nothing to report in this
regard.
Responsibilities of Management and Those Charged with Governance for the Financial
Statements
Management is responsible for the preparation and fair presentation of the financial
statements in accordance with the Accounting Standards for Business Enterprises, and for
the design, implementation and maintenance of such internal control necessary to enable that
the financial statements are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing Yantai
Changyu’s ability to continue as a going concern, disclosing, as applicable, matters related to
going concern and using the going concern basis of accounting unless management either
intends to liquidate Yantai Changyu or to cease operations, or has no realistic alternative but
to do so.
Those charged with governance are responsible for overseeing Yantai Changyu’s financial
reporting process.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as
a whole are free from material misstatement, whether due to fraud or error, and to issue an
auditor’s report that includes our opinion. Reasonable assurance is a high level of
assurance, but is not a guarantee that an audit conducted in accordance with CSAs will
always detect a material misstatement when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these financial
statements.
83
Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
AUDITOR’S REPORT (continued)
KPMG Huazhen Shen Zi No. 2205034
Auditor’s Responsibilities for the Audit of the Financial Statement (continued)
As part of an audit in accordance with CSAs, we exercise professional judgement and
maintain professional scepticism throughout the audit. We also:
(1) Identify and assess the risks of material misstatement of the financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those
risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for
our opinion. The risk of not detecting a material misstatement resulting from fraud is
higher than for one resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal control.
(2) Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances.
(3) Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by the management.
(4) Conclude on the appropriateness of management’s use of the going concern basis of
accounting and, basis of accounting and, based on the audit evidence obtained,
whether a material uncertainty exists related to events or conditions that may cast
significant doubt on Yantai Changyu’s ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to draw attention in our
auditor’s report to the related disclosures in the financial statements or, if such
disclosures are inadequate, to modify our opinion. Our conclusions are based on the
audit evidence obtained up to the date of our auditor’s report. However, future events
or conditions may cause Yantai Changyu to cease to continue as a going concern.
(5) Evaluate the overall presentation, structure and content of the financial statements,
including the disclosures, and whether the financial statements represent the underlying
transactions and events in a manner that achieves fair presentation.
(6) Obtain sufficient appropriate audit evidence regarding the financial information of the
entities or business activities within the Group to express our audit opinion on the
financial statements. We are responsible for the direction, supervision and
performance of the group audit. We remain solely responsible for our audit opinion.
84
Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
AUDITOR’S REPORT (continued)
KPMG Huazhen Shen Zi No. 2205034
Auditor’s Responsibilities for the Audit of the Financial Statement (continued)
We communicate with those charged with governance regarding, among other matters, the
planned scope and timing of the audit and significant audit findings, including any significant
deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with
relevant ethical requirements regarding independence, and communicate with them all
relationships and other matters that may reasonably be thought to bear on our independence
and, where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those
matters that were of most significance in the audit of the financial statements of the year and
are therefore the key audit matters. We describe these matters in our auditor’s report unless
law or regulation precludes public disclosure about the matter or when, in extremely rare
circumstances, we determine that a matter should not be communicated in our report
because the adverse consequences of doing so would reasonably be expected to outweigh
the public interest benefits of such communication.
KPMG Huazhen LLP Certified Public Accountants Registered
(Stamp) in the People’s Republic of China
Wang Ting (Engagement Partner)
(Signature and stamp)
Beijing, China Xu Weiran
(Signature and stamp)
Date: 25 April 2022
85
Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
Yantai Changyu Pioneer Wine Company Limited
Consolidated balance sheet
as at 31 December 2021
(Expressed in Renminbi Yuan)
31 December 31 December
Note
2021 2020
Assets
Current assets
Cash at bank and on hand V.1 1,567,095,993 1,194,214,929
Bills receivable V.2 42,827,666 -
Accounts receivable V.3 291,006,410 183,853,362
Receivables under financing V.4 364,457,497 338,090,187
Prepayments V.5 75,235,879 71,296,416
Other receivables V.6 30,125,270 22,428,956
Inventories V.7 2,802,622,520 2,945,548,651
Other current assets V.8 217,152,601 234,118,715
Total current assets 5,390,523,836 4,989,551,216
Non-current assets
Long-term equity investments V.9 46,496,510 48,263,507
Investment properties V.10 24,502,258 27,057,730
Fixed assets V.11 5,687,867,314 5,724,935,846
Construction in progress V.12 590,172,099 635,495,152
Bearer biological assets V.13 193,712,942 192,173,536
Right-of-use assets V.14 134,569,039 -
Intangible assets V.15 617,866,879 660,989,065
Goodwill V.16 112,374,541 132,938,212
Long-term deferred expenses V.17 284,593,163 314,465,855
Deferred tax assets V.18 245,210,731 206,241,275
Other non-current assets V.19 144,120,442 170,370,147
Total non-current assets 8,081,485,918 8,112,930,325
Total assets 13,472,009,754 13,102,481,541
The notes on pages 105 to 196 form part of these financial statements.
86
Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
Yantai Changyu Pioneer Wine Company Limited
Consolidated balance sheet
as at 31 December 2021 (continued)
(Expressed in Renminbi Yuan)
31 December 31 December
Note
2021 2020
Liabilities and shareholders’ equity
Current liabilities
Short-term loans V.20 622,066,457 689,090,715
Accounts payable V.21 493,453,816 484,347,958
Contract liabilities V.22 147,120,716 135,073,280
Employee benefits payable V.23 195,019,441 188,779,911
Taxes payable V.24 342,322,300 213,412,813
Other payables V.25 453,033,491 386,105,526
Other current liabilities V.26 18,374,193 14,820,653
Non-current liabilities due within
V.27 110,865,126 133,311,890
one year
Total current liabilities 2,382,255,540 2,244,942,746
Non-current liabilities
Long-term loans V.28 176,047,043 200,352,968
Lease liabilities V.14 101,811,588 -
Long-term payables V.29 64,000,000 86,000,000
Deferred income V.30 41,295,338 52,653,609
Deferred tax liabilities V.18 11,803,970 12,022,613
Other non-current liabilities V.31 2,119,671 2,078,971
Total non-current liabilities 397,077,610 353,108,161
Total liabilities 2,779,333,150 2,598,050,907
The notes on pages 105 to 196 form part of these financial statements.
87
Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
Yantai Changyu Pioneer Wine Company Limited
Consolidated balance sheet
as at 31 December 2021 (continued)
(Expressed in Renminbi Yuan)
31 December 31 December
Note
2021 2020
Liabilities and shareholders’ equity
(continued)
Shareholders’ equity
Share capital V.32 685,464,000 685,464,000
Capital reserve V.33 524,968,760 524,968,760
Other comprehensive income V.34 (34,707,177) 576,129
Surplus reserve V.35 342,732,000 342,732,000
Retained earnings V.36 8,929,426,600 8,714,091,755
Total equity attributable to shareholders of
10,447,884,183 10,267,832,644
the Company
Non-controlling interests 244,792,421 236,597,990
Total owners’ equity 10,692,676,604 10,504,430,634
Total liabilities and shareholders’ equity 13,472,009,754 13,102,481,541
These financial statements were approved by the Board of Directors of the Company on 25
April 2022.
Zhou Hongjiang Jiang Jianxun Guo Cuimei (Company stamp)
Legal Representative The person in charge The head of the
of accounting affairs accounting department
(Signature and stamp) (Signature and stamp) (Signature and stamp)
The notes on pages 105 to 196 form part of these financial statements.
88
Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
Yantai Changyu Pioneer Wine Company Limited
Company balance sheet
as at 31 December 2021
(Expressed in Renminbi Yuan)
31 December 31 December
Note
2021 2020
Assets
Current assets
Cash at bank and on hand 562,588,819 267,548,326
Bills receivable XIV.1 9,800,000 -
Receivables under financing XIV.2 62,411,636 13,920,000
Prepayments 406,500 171,709
Other receivables XIV.3 398,072,976 580,131,798
Inventories 383,294,208 482,442,935
Other current assets 20,637,860 24,842,325
Total current assets 1,437,211,999 1,369,057,093
Non-current assets
Long-term equity investments XIV.4 7,599,421,494 7,599,778,880
Investment properties 24,502,258 -
Fixed assets 231,284,799 270,692,477
Construction in progress 255,996 2,865,243
Bearer biological assets 114,753,306 115,103,753
Right-of-use assets 36,826,342 -
Intangible assets 78,043,888 80,789,731
Deferred tax assets 18,033,185 18,285,685
Other non-current assets 2,023,500,000 1,530,700,000
Total non-current assets 10,126,621,268 9,618,215,769
Total assets 11,563,833,267 10,987,272,862
The notes on pages 105 to 196 form part of these financial statements.
89
Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
Yantai Changyu Pioneer Wine Company Limited
Company balance sheet
as at 31 December 2021 (continued)
(Expressed in Renminbi Yuan)
31 December 31 December
Note
2021 2020
Liabilities and shareholders’ equity
Current liabilities
Short-term loans 150,000,000 150,000,000
Accounts payable 90,339,903 76,470,081
Employee benefits payable 66,770,838 67,808,910
Taxes payable 32,588,429 9,123,959
Other payables 445,874,937 521,505,947
Non-current liabilities due within
1,485,190 -
one year
Total current liabilities 787,059,297 824,908,897
Non-current liabilities
Lease liabilities 43,312,517 -
Deferred income 2,268,527 5,507,708
Deferred tax liabilities 88,555 -
Other non-current liabilities 1,164,471 1,164,471
Total non-current liabilities 46,834,070 6,672,179
Total liabilities 833,893,367 831,581,076
The notes on pages 105 to 196 form part of these financial statements.
90
Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
Yantai Changyu Pioneer Wine Company Limited
Company balance sheet
as at 31 December 2021 (continued)
(Expressed in Renminbi Yuan)
31 December 31 December
Note
2021 2020
Liabilities and shareholders’ equity
(continued)
Shareholders’ equity
Share capital 685,464,000 685,464,000
Capital reserve 560,182,235 560,182,235
Surplus reserve 342,732,000 342,732,000
Retained earnings 9,141,561,665 8,567,313,551
Total owners’ equity 10,729,939,900 10,155,691,786
Total liabilities and shareholders’ equity 11,563,833,267 10,987,272,862
These financial statements were approved by the Board of Directors of the Company on 25
April 2022.
Zhou Hongjiang Jiang Jianxun Guo Cuimei (Company stamp)
Legal Representative The person in charge The head of the
of accounting affairs accounting department
(Signature and stamp) (Signature and stamp) (Signature and stamp)
The notes on pages 105 to 196 form part of these financial statements.
91
Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
Yantai Changyu Pioneer Wine Company Limited
Consolidated income statement
for the year ended 31 December 2021
(Expressed in Renminbi Yuan)
Note 2021 2020
I. Operating income V.37 3,953,067,583 3,395,402,001
Less: Operating cost V.37 1,647,789,874 1,503,877,407
Taxes and surcharges V.38 264,057,570 203,789,274
Selling and distribution
V.39 998,954,105 788,252,485
expenses
General and administrative
V.40 299,076,376 290,646,466
expenses
Research and development
10,919,262 4,531,418
expenses
Financial expenses V.41 21,178,727 20,441,713
Including: Interest expenses 28,851,606 32,890,621
Interest income 19,558,354 14,247,274
Add: Other income V.42 48,240,741 73,063,620
Investment losses V.43 (2,784,997) (2,217,623)
Including: Losses from
investment in joint
(2,784,997) (2,217,623)
ventures and
associates
Credit (losses)/reversal V.44 (7,937,144) 4,348,309
Impairment losses V.45 (19,874,251) (3,215,978)
Losses from disposal of assets V.46 (11,939,284) (1,180,655)
The notes on pages 105 to 196 form part of these financial statements.
92
Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
Yantai Changyu Pioneer Wine Company Limited
Consolidated income statement
for the year ended 31 December 2021 (continued)
(Expressed in Renminbi Yuan)
Note 2021 2020
II. Operating profit 716,796,734 654,660,911
Add: Non-operating income V.47 5,214,304 11,908,510
Less: Non-operating expenses V.47 6,311,844 1,702,858
III. Total profit 715,699,194 664,866,563
Less: Income tax expenses V.48 209,020,821 191,804,500
IV. Net profit 506,678,373 473,062,063
(1) Net profit classified by
continuity of operations:
1. Net profit from continuing
506,678,373 473,062,063
operations
2. Net profit from discontinued
- -
operations
(2) Net profit classified by
ownership:
1. Net profit attributable to
500,102,606 470,860,587
owners of the Company
2. Non-controlling interests 6,575,767 2,201,476
V. Other comprehensive income, net of
(39,307,949) 5,171,635
tax
(1) Other comprehensive income
(net of tax) attributable to (35,283,306) 4,811,712
shareholders of the Company
Translation differences arising
from translation of foreign (35,283,306) 4,811,712
currency financial statements
(2) Other comprehensive income
(net of tax) attributable to (4,024,643) 359,923
non-controlling interests
The notes on pages 105 to 196 form part of these financial statements.
93
Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
Yantai Changyu Pioneer Wine Company Limited
Consolidated income statement
for the year ended 31 December 2021 (continued)
(Expressed in Renminbi Yuan)
Note 2021 2020
VI. Total comprehensive income for the
467,370,424 478,233,698
year
(1) Attributable to shareholders of
464,819,300 475,672,299
the Company
(2) Attributable to non-controlling
2,551,124 2,561,399
interests
VII. Earnings per share:
(1) Basic earnings per share V.49 0.73 0.69
(2) Diluted earnings per share V.49 0.73 0.69
These financial statements were approved by the Board of Directors of the Company on 25
April 2022.
Zhou Hongjiang Jiang Jianxun Guo Cuimei (Company stamp)
Legal Representative The person in charge The head of the
of accounting affairs accounting department
(Signature and stamp) (Signature and stamp) (Signature and stamp)
The notes on pages 105 to 196 form part of these financial statements.
94
Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
Yantai Changyu Pioneer Wine Company Limited
Company income statement
for the year ended 31 December 2021
(Expressed in Renminbi Yuan)
Note 2021 2020
I. Operating income XIV.5 578,895,802 512,303,553
Less: Operating cost XIV.5 472,158,738 452,368,512
Taxes and surcharges 38,263,612 19,841,835
General and administrative
74,948,200 74,929,302
expenses
Research and development
907,975 728,793
expenses
Financial expenses 2,193,348 (602,459)
Including: Interest expenses 5,870,092 4,875,912
Interest income 7,122,455 5,594,285
Add: Other income 6,108,832 5,339,898
Investment income XIV.6 867,523,178 449,504,721
Credit reversal - 601,610
II. Operating profit 864,055,939 420,483,799
Add: Non-operating income 997,416 3,961,267
Less: Non-operating expenses 3,295,694 1,050,415
The notes on pages 105 to 196 form part of these financial statements.
95
Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
Yantai Changyu Pioneer Wine Company Limited
Company income statement
for the year ended 31 December 2021 (continued)
(Expressed in Renminbi Yuan)
Note 2021 2020
III. Total profit 861,757,661 423,394,651
Less: Income tax expenses 6,703,679 (3,766,123)
IV. Net profit 855,053,982 427,160,774
(i) Net profit from continuing
855,053,982 427,160,774
operations
(ii) Net profit from discontinued
- -
operations
V. Other comprehensive income, net of
- -
tax
VI. Total comprehensive income for the
855,053,982 427,160,774
year
These financial statements were approved by the Board of Directors of the Company on 25
April 2022.
Zhou Hongjiang Jiang Jianxun Guo Cuimei (Company stamp)
Legal Representative The person in charge The head of the
of accounting affairs accounting department
(Signature and stamp) (Signature and stamp) (Signature and stamp)
The notes on pages 105 to 196 form part of these financial statements.
96
Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
Yantai Changyu Pioneer Wine Company Limited
Consolidated cash flow statement
for the year ended 31 December 2021
(Expressed in Renminbi Yuan)
Note 2021 2020
I. Cash flows from operating activities:
Proceeds from sale of goods and
3,674,741,084 3,259,057,195
rendering of services
Refund of taxes and surcharges 48,716,047 45,642,498
Proceeds from other operating
V.50(1) 89,142,251 81,197,248
activities
Sub-total of cash inflows 3,812,599,382 3,385,896,941
Payment for goods and services 957,499,905 1,095,500,438
Payment to and for employees 507,532,110 529,304,037
Payment of various taxes 659,986,692 704,054,796
Payment for other operating activities V.50(2) 562,198,017 551,890,997
Sub-total of cash outflows 2,687,216,724 2,880,750,268
Net cash flows from operating
V.51(1) 1,125,382,658 505,146,673
activities
II. Cash flows from investing activities:
Proceeds from disposal of
93,553,062 135,647,402
investments
Investment returns received 2,587,932 1,730,511
Net proceeds from disposal of fixed
assets, intangible assets and other 7,923,724 49,200,301
long-term assets
Sub-total of cash inflows 104,064,718 186,578,214
Payment for acquisition of fixed
assets, intangible assets and other 225,502,766 155,918,502
long-term assets
Payment for acquisition of
54,218,000 83,508,393
investments
Net cash paid for the acquisition of
subsidiaries and other business V.51(2) - 89,519,789
units
Sub-total of cash outflows 279,720,766 328,946,684
Net cash flows from investing
(175,656,048) (142,368,470)
activities
The notes on pages 105 to 196 form part of these financial statements.
97
Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
Yantai Changyu Pioneer Wine Company Limited
Consolidated cash flow statement
for the year ended 31 December 2021 (continued)
(Expressed in Renminbi Yuan)
Note 2021 2020
III. Cash flows from financing activities:
Proceeds from investors 7,840,000 -
Proceeds from borrowings 847,358,786 987,668,379
Sub-total of cash inflows 855,198,786 987,668,379
Repayments of borrowings 1,036,788,771 1,098,773,637
Payment for dividends, profit
302,051,763 531,697,065
distributions or interest
Payment for other financing activities V.50(3) 15,904,567 62,966,747
Sub-total of cash outflows 1,354,745,101 1,693,437,449
Net cash flows from financing
(499,546,315) (705,769,070)
activities
IV. Effect of foreign exchange rate
changes on cash and cash (518,371) (1,743,498)
equivalents
V. Net increase/(decrease) in cash and
V.51(1) 449,661,924 (344,734,365)
cash equivalents
Add: Cash and cash equivalents at
1,052,665,105 1,397,399,470
the beginning of the year
VI. Cash and cash equivalents at the end
V.51(3) 1,502,327,029 1,052,665,105
of the year
These financial statements were approved by the Board of Directors of the Company on 25
April 2022.
Zhou Hongjiang Jiang Jianxun Guo Cuimei (Company stamp)
Legal Representative The person in charge The head of the
of accounting affairs accounting department
(Signature and stamp) (Signature and stamp) (Signature and stamp)
The notes on pages 105 to 196 form part of these financial statements.
98
Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
Yantai Changyu Pioneer Wine Company Limited
Company cash flow statement
for the year ended 31 December 2021
(Expressed in Renminbi Yuan)
Note 2021 2020
I. Cash flows from operating activities:
Proceeds from sale of goods and
514,762,698 365,804,968
rendering of services
Proceeds from other operating
47,112,100 19,507,538
activities
Sub-total of cash inflows 561,874,798 385,312,506
Payment for goods and services 313,397,323 261,854,964
Payment to and for employees 76,053,780 65,247,752
Payment of various taxes 39,248,076 6,778,231
Payment for other operating activities 71,110,685 139,442,785
Sub-total of cash outflows 499,809,864 473,323,732
Net cash flows from operating
62,064,934 (88,011,226)
activities
II. Cash flows from investing activities:
Proceeds from disposal of
38,200,000 58,238,750
investments
Investment returns received 1,068,448,220 450,538,570
Net proceeds from disposal of fixed
assets, intangible assets and other 408,885 131,260
long-term assets
Proceeds from borrowings to
162,200,000 9,000,000
subsidiaries
Sub-total of cash inflows 1,269,257,105 517,908,580
Payment for acquisition of fixed
assets, intangible assets and other 22,919,289 51,762,211
long-term assets
Payment for acquisition of
38,200,000 131,408,115
investments
Net cash paid for the acquisition of
subsidiaries and other business - 89,519,789
units
Cash paid to subsidiaries 655,000,000 112,000,000
Sub-total of cash outflows 716,119,289 384,690,115
Net cash flows from investing
553,137,816 133,218,465
activities
The notes on pages 105 to 196 form part of these financial statements.
99
Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
Yantai Changyu Pioneer Wine Company Limited
Company cash flow statement
for the year ended 31 December 2021 (continued)
(Expressed in Renminbi Yuan)
Note 2021 2020
III. Cash flows from financing activities:
Proceeds from borrowings 150,000,000 150,000,000
Sub-total of cash inflows 150,000,000 150,000,000
Repayments of borrowings 150,000,000 150,000,000
Payment for dividends or interest 280,055,692 486,200,712
Payment for other financing
3,460,687 -
activities
Sub-total of cash outflows 433,516,379 636,200,712
Net cash flows from financing
(283,516,379) (486,200,712)
activities
IV. Effect of foreign exchange rate
changes on cash and cash - -
equivalents
V. Net increase/(decrease) in cash and
331,686,371 (440,993,473)
cash equivalents
Add: Cash and cash equivalents at
182,123,069 623,116,542
the beginning of the year
VI. Cash and cash equivalents at the
513,809,440 182,123,069
end of the year
These financial statements were approved by the Board of Directors of the Company on 25
April 2022.
Zhou Hongjiang Jiang Jianxun Guo Cuimei (Company stamp)
Legal Representative The person in charge The head of the
of accounting affairs accounting department
(Signature and stamp) (Signature and stamp) (Signature and stamp)
The notes on pages 105 to 196 form part of these financial statements.
100
Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
Yantai Changyu Pioneer Wine Company Limited
Consolidated statement of changes in shareholders’ equity
for the year ended 31 December 2021
(Expressed in Renminbi Yuan)
Attributable to shareholders of the Company
Total
Other Non-controlling
Note Retained shareholders’
Share capital Capital reserve comprehensive Surplus reserve Sub-total interests
earnings equity
income
I. Balance at the beginning of the
685,464,000 524,968,760 576,129 342,732,000 8,714,091,755 10,267,832,644 236,597,990 10,504,430,634
year
Add: Changes in accounting
- - - - (10,582,161) (10,582,161) - (10,582,161)
policies
Adjusted balance at the beginning
685,464,000 524,968,760 576,129 342,732,000 8,703,509,594 10,257,250,483 236,597,990 10,493,848,473
of the year
II. Changes in equity during the year
(1) Total comprehensive income - - (35,283,306) - 500,102,606 464,819,300 2,551,124 467,370,424
(2) Shareholders’ contributions
Establishment of subsidiaries - - - - - - 7,840,000 7,840,000
(3) Appropriation of profits V.36
Distributions to shareholders - - - - (274,185,600) (274,185,600) (2,196,693) (276,382,293)
III. Balance at the end of the year 685,464,000 524,968,760 (34,707,177) 342,732,000 8,929,426,600 10,447,884,183 244,792,421 10,692,676,604
These financial statements were approved by the Board of Directors of the Company on 25 April 2022.
Zhou Hongjiang Jiang Jianxun Guo Cuimei (Company stamp)
Legal Representative The person in charge of The head of the accounting
accounting affairs department
(Signature and stamp) (Signature and stamp) (Signature and stamp)
The notes on pages 105 to 196 form part of these financial statements.
101
Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
Yantai Changyu Pioneer Wine Company Limited
Consolidated statement of changes in shareholders’ equity
for the year ended 31 December 2020
(Expressed in Renminbi Yuan)
Attributable to shareholders of the Company
Total
Other Non-controlling
Note Retained shareholders’
Share capital Capital reserve comprehensive Surplus reserve Sub-total interests
earnings equity
income
I. Balance at the beginning of the
685,464,000 642,775,360 (4,235,583) 342,732,000 8,735,513,044 10,402,248,821 271,876,064 10,674,124,885
year
II. Changes in equity during the year
(1) Total comprehensive income - - 4,811,712 - 470,860,587 475,672,299 2,561,399 478,233,698
(2) Shareholders’ contributions
Acquisitions of non-controlling
- (28,286,811) - - - (28,286,811) (34,679,936) (62,966,747)
interests
(3) Appropriation of profits V.36
Distributions to shareholders - - - - (492,281,876) (492,281,876) (3,159,537) (495,441,413)
(4) Business combination under
- (89,519,789) - - - (89,519,789) - (89,519,789)
common control
III. Balance at the end of the year 685,464,000 524,968,760 576,129 342,732,000 8,714,091,755 10,267,832,644 236,597,990 10,504,430,634
These financial statements were approved by the Board of Directors of the Company on 25 April 2022.
Zhou Hongjiang Jiang Jianxun Guo Cuimei (Company stamp)
Legal Representative The person in charge of The head of the accounting
accounting affairs department
(Signature and stamp) (Signature and stamp) (Signature and stamp)
The notes on pages 105 to 196 form part of these financial statements.
102
Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
Yantai Changyu Pioneer Wine Company Limited
Company statement of changes in shareholders’ equity
for the year ended 31 December 2021
(Expressed in Renminbi Yuan)
Total
Retained
Note Share capital Capital reserve Surplus reserve shareholders’
earnings
equity
I. Balance at the
685,464,000 560,182,235 342,732,000 8,567,313,551 10,155,691,786
beginning of the year
Add: Changes in
III.33 (6,620,268) (6,620,268)
accounting policies
Adjusted balance at the
685,464,000 560,182,235 342,732,000 8,560,693,283 10,149,071,518
beginning of the year
II. Changes in equity
during the year
(1) Total
comprehensive - - - 855,053,982 855,053,982
income
(2) Appropriation of
profits
Distributions to
- - - (274,185,600) (274,185,600)
shareholders
III. Balance at the end of
685,464,000 560,182,235 342,732,000 9,141,561,665 10,729,939,900
the year
These financial statements were approved by the Board of Directors of the Company on 25
April 2022.
Zhou Hongjiang Jiang Jianxun Guo Cuimei (Company stamp)
Legal Representative The person in charge The head of the
of accounting affairs accounting department
(Signature and stamp) (Signature and stamp) (Signature and stamp)
The notes on pages 105 to 196 form part of these financial statements.
103
Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
Yantai Changyu Pioneer Wine Company Limited
Company statement of changes in shareholders’ equity
for the year ended 31 December 2020 (continued)
(Expressed in Renminbi Yuan)
Total
Retained
Note Share capital Capital reserve Surplus reserve shareholders’
earnings
equity
I. Balance at the
685,464,000 557,222,454 342,732,000 8,619,977,577 10,205,396,031
beginning of the year
II. Changes in equity
during the year
(1) Total
comprehensive - - - 427,160,774 427,160,774
income
(2) Shareholders’
contributions
Purchase of share
equity of Yantai
Changyu Culture
- 2,959,781 - - 2,959,781
Development Co.,
Ltd (“Culture
Development”)
(3) Appropriation of
profits
Distributions to
- - - (479,824,800) (479,824,800)
shareholders
III. Balance at the end of
685,464,000 560,182,235 342,732,000 8,567,313,551 10,155,691,786
the year
These financial statements were approved by the Board of Directors of the Company on 25
April 2022.
Zhou Hongjiang Jiang Jianxun Guo Cuimei (Company stamp)
Legal Representative The person in charge The head of the
of accounting affairs accounting department
(Signature and stamp) (Signature and stamp) (Signature and stamp)
The notes on pages 105 to 196 form part of these financial statements.
104
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Yantai Changyu Pioneer Wine Company Limited
Notes to the financial statements
(Expressed in Renminbi Yuan unless otherwise indicated)
I. Company status
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 a reorganisation carried out by Yantai Changyu
Group Co., Ltd. ("Changyu Group"), in which Changyu Group Company injected certain
assets and liabilities in relation to the brandy, wine, and sparkling wine production and sales
businesses to the Company. The Company and its subsidiaries (the "Group") are principally
engaged in the production and sales of wine, brandy, sparkling wine, grape growing and
acquisition, as well as travel resource development, etc. Registration place of the Company
is Yantai, Shandong. Headquarter of the Company is located at No. 56 Da Ma Lu, Zhifu
District, Yantai, Shandong, PRC.
As at 31 December 2021 the total shares issued by the Company amounts to 685,464,000
shares. Please refer to Note V. 32 in detail.
The holding company of the Group is Changyu Group Company, which is jointly controlled by
Yantai GuoFeng Investment Holding Ltd, ILLVA SARONNO HOLDING SPA, International
Finance Corporation and Yantai Yuhua Investment and Development Company Limited.
The financial statements have been authorised by the board of directors on 25 April 2022.
According to the Company's articles of association, the financial statements will be reviewed
by shareholders on the shareholder's meeting.
For consolidation scope of the year, please refer to Note VI "Equity in other entities" in detail.
II. Basis of preparation
The financial statements have been prepared on the going concern basis.
The Group has adopted the revised “Accounting Standard for Business Enterprises No. 22 –
Financial Instruments: Recognition and Measurement” and related new financial instruments
standards and “Accounting Standard for Business Enterprises No. 14 – Revenue”, issued by
the Ministry of Finance (“MOF”) of the People’s Republic of China in 2017, since 1 January
2019 and 1 January 2020 respectively. In addition, it has adopted the revised “Accounting
Standard for Business Enterprises No. 21 – Leases” issued by the MOF in 2018 since 1
January 2021 (see Note III.33(1)).
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III. Significant accounting policies and accounting estimates
1 Statement of compliance
The financial statements have been prepared in accordance with the requirements of
Accounting Standards for Business Enterprises or referred to as China Accounting Standards
(“CAS”) issued by the MOF. These financial statements present truly and completely the
consolidated financial position and financial position of the Company as at 31 December
2021, and the consolidated financial performance and financial performance and the
consolidated cash flows and cash flows of the Company for the year then ended.
These financial statements also comply with the disclosure requirements of “Regulation on
the Preparation of Information Disclosures by Companies Issuing Securities, No. 15: General
Requirements for Financial Reports” as revised by the China Securities Regulatory
Commission (“CSRC”) in 2014.
2 Accounting period
The accounting period is from 1 January to 31 December.
3 Operating cycle
The Company takes the period from the acquisition of assets for processing to until the
ultimate realisation of cash or cash equivalents as a normal operating cycle. The operating
cycle of the Company is 12 months.
4 Functional currency
Renminbi ("RMB") is the currency of the primary economic environment in which the
Company and its domestic subsidiaries operate. Therefore, the Company and its domestic
subsidiaries choose RMB as their functional currency. Overseas subsidiaries of the
Company adopt Euro, Chilean Peso and Australian Dollar as their functional currencies on the
basis of the primary economic environment in which they operate. The Company adopts
RMB to prepare its financial statements.
5 Accounting treatments for business combinations involving entities under common control
and not under common control
A transaction constitutes a business combination when the Group obtains control of one or
more entities (or a group of assets or net assets). Business combination is classified as
either business combinations involving enterprises under common control or business
combinations not involving enterprises under common control.
For a transaction not involving enterprises under common control, the acquirer determines
whether acquired set of assets constitute a business. The Group may elect to apply the
simplified assessment method, the concentration test, to determine whether an acquired set
of assets is not a business. If the concentration test is met and the set of assets is
determined not to be a business, no further assessment is needed. If the concentration test
is not met, the Group shall perform the assessment according to the guidance on the
determination of a business.
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When the set of assets the group acquired does not constitute a business, acquisition costs
should be allocated to each identifiable assets and liabilities at their acquisitiondate fair
values. It is not required to apply the accounting of business combination described as
below.
(1) Business combinations involving entities under common control
A business combination involving entities under common control is a business combination in
which all of the combining entities are ultimately controlled by the same party or parties both
before and after the business combination, and that control is not transitory. The assets
acquired and liabilities assumed are measured based on their carrying amounts in the
consolidated financial statements of the ultimate controlling party at the combination date.
The difference between the carrying amount of the net assets acquired and the consideration
paid for the combination (or the total par value of shares issued) is adjusted against share
premium in the capital reserve, with any excess adjusted against retained earnings. Any
costs directly attributable to the combination are recognised in profit or loss when incurred.
The combination date is the date on which one combining entity obtains control of other
combining entities.
(2) Business combinations involving entities not under common control
A business combination involving entities not under common control is a business
combination in which all of the combining entities are not ultimately controlled by the same
party or parties both before and after the business combination. Where (1) the aggregate of
the acquisition-date fair value of assets transferred (including the acquirer’s previously held
equity interest in the acquiree), liabilities incurred or assumed, and equity securities issued by
the acquirer, in exchange for control of the acquiree, exceeds (2) the acquirer’s interest in the
acquisition-date fair value of the acquiree’s identifiable net assets, the difference is
recognised as goodwill (see Note III.18). If (1) is less than (2), the difference is recognised in
profit or loss for the current period. Other acquisition-related costs are expensed when
incurred. The acquiree’s identifiable asset, liabilities and contingent liabilities, if the
recognition criteria are met, are recognised by the Group at their acquisition-date fair value.
The acquisition date is the date on which the acquirer obtains control of the acquiree.
For a business combination involving entities not under common control and achieved in
stages, the Group remeasures its previously-held equity interest in the acquiree to its
acquisition-date fair value and recognises any resulting difference between the fair value and
the carrying amount as investment income or other comprehensive income for the current
period. In addition, any amount recognised in other comprehensive income that may be
reclassified to profit or loss, in prior reporting periods relating to the previously-held equity
interest, and any other changes in the owners’ equity under equity accounting, are transferred
to investment income in the period in which the acquisition occurs (see Note III.11(2)(b)). If
equity interests of the acquiree held before acquisition-date were equity instrument
investments measured at fair value through other comprehensive income, other
comprehensive income recognised shall be moved to retained earnings on acquisition-date.
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6 Consolidated financial statements
(1) General principles
The scope of consolidated financial statements is based on control and the consolidated
financial statements comprise the Company and its subsidiaries. Control exists when the
investor has all of following: power over the investee; exposure, or rights, to variable returns
from its involvement with the investee and has the ability to affect those returns through its
power over the investee. When assessing whether the Group has power, only substantive
rights (held by the Group and other parties) are considered. The financial position, financial
performance and cash flows of subsidiaries are included in the consolidated financial
statements from the date that control commences until the date that control ceases.
Non-controlling interests are presented separately in the consolidated balance sheet within
shareholders’ equity. Net profit or loss attributable to non-controlling shareholders is
presented separately in the consolidated income statement below the net profit line item.
Total comprehensive income attributable to non-controlling shareholders is presented
separately in the consolidated income statement below the total comprehensive income line
item.
When the amount of loss for the current period attributable to the non-controlling shareholders
of a subsidiary exceeds the non-controlling shareholders’ share of the opening owners’ equity
of the subsidiary, the excess is still allocated against the non-controlling interests.
When the accounting period or accounting policies of a subsidiary are different from those of
the Company, the Company makes necessary adjustments to the financial statements of the
subsidiary based on the Company’s own accounting period or accounting policies.
Intra-group balances and transactions, and any unrealised profit or loss arising from
intra-group transactions, are eliminated when preparing the consolidated financial statements.
Unrealised losses resulting from intra-group transactions are eliminated in the same way as
unrealised gains, unless they represent impairment losses that are recognised in the financial
statements.
(2) Subsidiaries acquired through a business combination
Where a subsidiary was acquired during the reporting period, through a business combination
involving entities under common control, the financial statements of the subsidiary are
included in the consolidated financial statements based on the carrying amounts of the assets
and liabilities of the subsidiary in the financial statements of the ultimate controlling party as if
the combination had occurred at the date that the ultimate controlling party first obtained
control. The opening balances and the comparative figures of the consolidated financial
statements are also restated.
Where a subsidiary was acquired during the reporting period, through a business combination
involving entities not under common control, the identifiable assets and liabilities of the
acquired subsidiaries are included in the scope of consolidation from the date that control
commences, based on the fair value of those identifiable assets and liabilities at the
acquisition date.
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(3) Disposal of subsidiaries
When the Group loses control over a subsidiary, any resulting disposal gains or losses are
recognised as investment income for the current period. The remaining equity investment is
re-measured at its fair value at the date when control is lost, any resulting gains or losses are
also recognised as investment income for the current period.
When the Group loses control of a subsidiary in multiple transactions in which it disposes of
its long-term equity investment in the subsidiary in stages, the following are considered to
determine whether the Group should account for the multiple transactions as a bundled
transaction:
- arrangements are entered into at the same time or in contemplation of each other;
- arrangements work together to achieve an overall commercial effect;
- the occurrence of one arrangement is dependent on the occurrence of at least one other
arrangement;
- one arrangement considered on its own is not economically justified, but it is economically
justified when considered together with other arrangements.
If each of the multiple transactions does not form part of a bundled transaction, the
transactions conducted before the loss of control of the subsidiary are accounted for in
accordance with the accounting policy for partial disposal of equity investment in subsidiaries
where control is retained (see Note III.6(4)).
If each of the multiple transactions forms part of a bundled transaction which eventually
results in the loss of control in the subsidiary, these multiple transactions are accounted for as
a single transaction. In the consolidated financial statements, the difference between the
consideration received and the corresponding proportion of the subsidiary’s net assets
(calculated continuously from the acquisition date) in each transaction prior to the loss of
control shall be recognised in other comprehensive income and transferred to profit or loss
when the parent eventually loses control of the subsidiary.
(4) Changes in non-controlling interests
Where the Company acquires a non-controlling interest from a subsidiary’s non-controlling
shareholders or disposes of a portion of an interest in a subsidiary without a change in control,
the difference between the proportion interests of the subsidiary’s net assets being acquired
or disposed and the amount of the consideration paid or received is adjusted to the capital
reserve (share premium) in the consolidated balance sheet, with any excess adjusted to
retained earnings.
7 Cash and cash equivalents
Cash and cash equivalents comprise cash on hand, deposits that can be readily withdraw on
demand, and short-term, highly liquid investments that are readily convertible into known
amounts of cash and are subject to an insignificant risk of change in value.
8 Foreign currency transactions and translation of foreign currency financial statements
When the Group receives capital in foreign currencies from investors, the capital is translated
to Renminbi at the spot exchange rate at the date of the receipt. Other foreign currency
transactions are, on initial recognition, translated to Renminbi at the spot exchange rates.
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Monetary items denominated in foreign currencies are translated to Renminbi at the spot
exchange rate at the balance sheet date. The resulting exchange differences are generally
recognised in profit or loss, unless they arise from the re-translation of the principal and
interest of specific borrowings for the acquisition and construction of qualifying assets (see
Note III. 15). Non-monetary items that are measured at historical cost in foreign currencies
are translated to Renminbi using the exchange rate at the transaction date.
In translating the financial statements of a foreign operation, assets and liabilities of foreign
operation are translated to Renminbi at the spot exchange rate at the balance sheet date.
Equity items, excluding retained earnings and the translation differences in other
comprehensive income, are translated to Renminbi at the spot exchange rates at the
transaction dates. Income and expenses in the income statement are translated to
Renminbi at the spot exchange rates at the transaction dates. The resulting translation
differences are recognised in other comprehensive income. The translation differences
accumulated in other comprehensive income with respect to a foreign operation are
transferred to profit or loss in the period when the foreign operation is disposed.
9 Financial instruments
Financial instruments include cash at bank and on hand, investments in debt and equity
securities other than those classified as long-term equity investments (see Note III.11),
receivables, payables, loans and borrowings and share capital.
(1) Recognition and initial measurement of financial assets and financial liabilities
A financial asset or financial liability is recognised in the balance sheet when the Group
becomes a party to the contractual provisions of a financial instrument.
A financial assets (unless it is a trade receivable without a significant financing component)
and financial liabilities is measured initially at fair value. For financial assets and financial
liabilities at fair value through profit or loss, any related directly attributable transaction costs
are charged to profit or loss; for other categories of financial assets and financial liabilities,
any related directly attributable transaction costs are included in their initial costs. A trade
receivable, without significant financing component or practical expedient applied for one year
or less contracts, is initially measured at the transaction price in accordance with Note III.22.
(2) Classification and subsequent measurement of financial assets
(a) Classification of financial assets
The classification of financial assets is generally based on the business model in which
a financial asset is managed and its contractual cash flow characteristics. On initial
recognition, a financial asset is classified as measured at amortised cost, at fair value
through other comprehensive income (“FVOCI”), or at fair value through profit or loss
(“FVTPL”).
Financial assets are not reclassified subsequent to their initial recognition unless the
Group changes its business model for managing financial assets in which case all
affected financial assets are reclassified on the first day of the first reporting period
following the change in the business model.
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A financial asset is measured at amortised cost if it meets both of the following
conditions and is not designated as at FVTPL:
- it is held within a business model whose objective is to hold assets to collect
contractual cash flows; and
- its contractual terms give rise on specified dates to cash flows that are solely
payments of principal and interest on the principal amount outstanding.
A debt investment is measured at FVOCI if it meets both of the following conditions and
is not designated as at FVTPL:
- it is held within a business model whose objective is achieved by both collecting
contractual cash flows and selling financial assets; and
- its contractual terms give rise on specified dates to cash flows that are solely
payments of principal and interest on the principal amount outstanding.
On initial recognition of an equity investment that is not held for trading, the Group may
irrevocably elect to present subsequent changes in the investment’s fair value in other
comprehensive income. This election is made on an investment-by-investment basis.
The instrument meets the definition of equity from the perspective of the issuer.
All financial assets not classified as measured at amortised cost or FVOCI as described
above are measured at FVTPL. On initial recognition, the Group may irrevocably
designate a financial asset that otherwise meets the requirements to be measured at
amortised cost or at FVOCI as at FVTPL if doing so eliminates or significantly reduces
an accounting mismatch that would otherwise arise.
The business model refers to how the Group manages its financial assets in order to
generate cash flows. That is, the Group’s business model determines whether cash
flows will result from collecting contractual cash flows, selling financial assets or both.
The Group determines the business model for managing the financial assets according
to the facts and based on the specific business objective for managing the financial
assets determined by the Group’s key management personnel.
In assessing whether the contractual cash flows are solely payments of principal and
interest, the Group considers the contractual terms of the instrument. For the
purposes of this assessment, ‘principal’ is defined as the fair value of the financial asset
on initial recognition. ‘Interest’ is defined as consideration for the time value of money
and for the credit risk associated with the principal amount outstanding during a
particular period of time and for other basic lending risks and costs, as well as a profit
margin. The Group also assesses whether the financial asset contains a contractual
term that could change the timing or amount of contractual cash flows such that it would
not meet this condition.
(b) Subsequent measurement of financial assets
- Financial assets at FVTPL
These financial assets are subsequently measured at fair value. Net gains and
losses, including any interest or dividend income, are recognised in profit or loss
unless the financial assets are part of a hedging relationship.
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- Financial assets at amortised cost
These assets are subsequently measured at amortised cost using the effective
interest method. A gain or loss on a financial asset that is measured at amortised
cost and is not part of a hedging relationship shall be recognised in profit or loss
when the financial asset is derecognised, reclassified, through the amortisation
process or in order to recognise impairment gains or losses.
- Debt investments at FVOCI
These assets are subsequently measured at fair value. Interest income calculated
using the effective interest method, impairment and foreign exchange gains and
losses are recognised in profit or loss. Other net gains and losses are recognised in
other comprehensive income. On derecognition, gains and losses accumulated in
other comprehensive income are reclassified to profit or loss.
- Equity investments at FVOCI
These assets are subsequently measured at fair value. Dividends are recognised
as income in profit or loss. Other net gains and losses are recognised in other
comprehensive income. On derecognition, gains and losses accumulated in other
comprehensive income are reclassified to retained earnings.
(3) Classification and subsequent measurement of financial liabilities
Financial liabilities are classified as measured at FVTPL or amortised cost by the Group.
- Financial liabilities at FVTPL
A financial liability is classified as at FVTPL if it is classified as held-for-trading (including
derivative financial liability) or it is designated as such on initial recognition.
Financial liabilities at FVTPL are subsequently measured at fair value and net gains and
losses, including any interest expense, are recognised in profit or loss, unless the financial
liabilities are part of a hedging relationship.
- Financial liabilities at amortised cost
These financial liabilities are subsequently measured at amortised cost using the effective
interest method.
(4) Offsetting
Financial assets and financial liabilities are generally presented separately in the balance
sheet, and are not offset. However, a financial asset and a financial liability are offset and
the net amount is presented in the balance sheet when both of the following conditions are
satisfied:
- The Group currently has a legally enforceable right to set off the recognised amounts;
- The Group intends either to settle on a net basis, or to realise the financial asset and settle
the financial liability simultaneously.
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(5) Derecognition of financial assets and financial liabilities
Financial asset is derecognised when one of the following conditions is met:
- the Group’s contractual rights to the cash flows from the financial asset expire;
- the financial asset has been transferred and the Group transfers substantially all of the
risks and rewards of ownership of the financial asset; or;
- the financial asset has been transferred, although the Group neither transfers nor retains
substantially all of the risks and rewards of ownership of the financial asset, it does not
retain control over the transferred asset.
Where a transfer of a financial asset in its entirety meets the criteria for derecognition, the
difference between the two amounts below is recognised in profit or loss:
- the carrying amount of the financial asset transferred measured at the date of
derecognition;
- the sum of the consideration received from the transfer and, when the transferred financial
asset is a debt investment at FVOCI, any cumulative gain or loss that has been recognised
directly in other comprehensive income for the part derecognised.
The Group derecognises a financial liability (or part of it) only when its contractual obligation
(or part of it) is extinguished.
(6) Impairment
The Group recognises loss allowances for expected credit loss (ECL) on:
- financial assets measured at amortised cost;
- financial investments at fair value through other comprehensive income
Financial assets measured at fair value, including debt investments or equity securities at
FVPL, equity securities designated at FVOCI and derivative financial assets, are not subject
to the ECL assessment.
Measurement of ECLs
ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as
the present value of all cash shortfalls (i.e. the difference between the cash flows due to the
entity in accordance with the contract and the cash flows that the Group expects to receive).
The maximum period considered when estimating ECLs is the maximum contractual period
(including extension options) over which the Group is exposed to credit risk.
Lifetime ECLs are the ECLs that result from all possible default events over the expected life
of a financial instrument.
12-month ECLs are the portion of ECLs that result from default events that are possible within
the 12 months after the balance sheet date (or a shorter period if the expected life of the
instrument is less than 12 months).
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For accounts receivable, loss allowance are always measured at an amount equal to lifetime
ECLs. ECLs on these financial assets are estimated using a provision matrix based on the
Group’s historical credit loss experience, adjusted for factors that are specific to the debtors
and an assessment of both the current and forecast general economic conditions at the
balance sheet date.
For assets other than accounts receivable that meet one of the following conditions, loss
allowance are measured at an amount equal to 12-month ECLs. For all other financial
instruments, the Group recognises a loss allowance equal to lifetime ECLs:
- If the financial instrument is determined to have low credit risk at the balance sheet date;
- If the credit risk on a financial instrument has not increased significantly since initial
recognition.
Financial instruments that have low credit risk
The credit risk on a financial instrument is considered low if the financial instrument has a low
risk of default, the borrower has a strong capacity to meet its contractual cash flow obligations
in the near term and adverse changes in economic and business conditions in the longer term
may, but will not necessarily, reduce the ability of the borrower to fulfil its contractual cash flow
obligations.
Significant increases in credit risk
In assessing whether the credit risk of a financial instrument has increased significantly since
initial recognition, the Group compares the risk of default occurring on the financial instrument
assessed at the balance sheet date with that assessed at the date of initial recognition.
When determining whether the credit risk of a financial asset has increased significantly since
initial recognition and when estimating ECL, the Group considers reasonable and supportable
information that is relevant and available without undue cost or effort, including
forward-looking information. In particular, the following information is taken into account:
- failure to make payments of principal or interest on their contractually due dates;
- an actual or expected significant deterioration in a financial instrument’s external or internal
credit rating (if available);
- an actual or expected significant deterioration in the operating results of the debtor; and
- existing or forecast changes in the technological, market, economic or legal environment
that have a significant adverse effect on the debtor’s ability to meet its obligation to the
Group.
Depending on the nature of the financial instruments, the assessment of a significant increase
in credit risk is performed on either an individual basis or a collective basis. When the
assessment is performed on a collective basis, the financial instruments are grouped based
on shared credit risk characteristics, such as past due status and credit risk ratings.
The Group assumes that the credit risk on a financial asset has increased significantly if it is
more than 30 days past due.
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Credit-impaired financial assets
At each balance sheet date, the Group assesses whether financial assets carried at
amortised cost and debt investments at FVOCI are credit-impaired. A financial asset is
‘credit-impaired’ when one or more events that have a detrimental impact on the estimated
future cash flows of the financial asset have occurred. Evidence that a financial asset is
credit-impaired includes the following observable data:
- significant financial difficulty of the borrower or issuer;
- a breach of contract, such as a default or delinquency in interest or principal payments;
- for economic or contractual reasons relating to the borrower’s financial difficulty, the Group
having granted to the borrower a concession that would not otherwise consider;
- it is probable that the borrower will enter bankruptcy or other financial reorganisation; or
- the disappearance of an active market for that financial asset because of financial
difficulties.
Presentation of allowance for ECL
ECLs are remeasured at each balance sheet date to reflect changes in the financial
instrument’s credit risk since initial recognition. Any change in the ECL amount is
recognised as an impairment gain or loss in profit or loss. The Group recognises an
impairment gain or loss for all financial instruments with a corresponding adjustment to their
carrying amount through a loss allowance account, except for debt investments that are
measured at FVOCI, for which the loss allowance is recognised in other comprehensive
income.
Write-off
The gross carrying amount of a financial asset is written off (either partially or in full) to the
extent that there is no realistic prospect of recovery. A write-off constitutes a derecognition
event. This is generally the case when the Group determines that the debtor does not have
assets or sources of income that could generate sufficient cash flows to repay the amounts
subject to the write-off. However, financial assets that are written off could still be subject to
enforcement activities in order to comply with the Group’s procedures for recovery of amounts
due.
Subsequent recoveries of an asset that was previously written off are recognised as a
reversal of impairment in profit or loss in the period in which the recovery occurs.
(7) Equity instrument
The consideration received from the issuance of equity instruments net of transaction costs is
recognised in shareholders’ equity. Consideration and transaction costs paid by the
Company for repurchasing self-issued equity instruments are deducted from shareholders’
equity.
When the Company repurchases its own shares, those shares are treated as treasury shares.
All expenditure relating to the repurchase is recorded in the cost of the treasury shares, with
the transaction recording in the share register. Treasury shares are excluded from profit
distributions and are presented as a deduction under shareholders’ equity in the balance
sheet.
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10 Inventories
(1) Classification and cost
Inventories include raw materials, work in progress and reusable materials. Inventories are
initially measured at cost. Cost of inventories comprises all costs of purchase, costs of
conversion and other expenditure incurred in bringing the inventories to their present location
and condition. In addition to the purchase cost of raw materials, work in progress and
finished goods include direct labour costs and an appropriate allocation of production
overheads.
Agricultural products harvested are reported in accordance with the CAS No.1 - Inventories.
(2) Measurement method of cost of inventories
Cost of inventories is calculated using the weighted average method.
Consumables including low-value consumables and packaging materials are amortised when
they are used. The amortisation charge is included in the cost of the related assets or
recognised in profit or loss for the current period.
(3) Basis for determining the net realisable value and method for provision for obsolete
inventories
At the balance sheet date, inventories are carried at the lower of cost and net realisable value.
Net realisable value is the estimated selling price in the ordinary course of business less the
estimated costs of completion and the estimated costs necessary to make the sale and
relevant taxes. The net realisable value of materials held for use in the production is
measured based on the net realisable value of the finished goods in which they will be
incorporated. The net realisable value of the inventory held to satisfy sales or service
contracts is measured based on the contract price, to the extent of the quantities specified in
sales contracts, and the excess portion of inventories is measured based on general selling
prices.
Any excess of the cost over the net realisable value of each item of inventories is recognised
as a provision for impairment, and is recognised in profit or loss.
(4) Inventory count system
The Group maintains a perpetual inventory system.
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11 Long-term equity investments
(1) Investment cost of long-term equity investments
(a) Long-term equity investments acquired through a business combination
- The initial cost of a long-term equity investment acquired through a business
combination involving entities under common control is the Company’s share of the
carrying amount of the subsidiary’s equity in the consolidated financial statements of
the ultimate controlling party at the combination date. The difference between the
initial investment cost and the carrying amount of the consideration given is adjusted
to the share premium in the capital reserve, with any excess adjusted to retained
earnings. For a long-term equity investment in a subsidiary acquired through a
business combination achieved in stages which do not form a bundled transaction
and involving entities under common control, the Company determines the initial cost
of the investment in accordance with the above policies. The difference between
this initial cost and the sum of the carrying amount of previously-held investment and
the consideration paid for the shares newly acquired is adjusted to capital premium in
the capital reserve, with any excess adjusted to retained earnings.
- For a long-term equity investment obtained through a business combination not
involving enterprises under common control, the initial cost comprises the aggregate
of the fair value of assets transferred, liabilities incurred or assumed, and equity
securities issued by the Company, in exchange for control of the acquiree. For a
long-term equity investment obtained through a business combination not involving
entities under common control and achieved through multiple transactions in stages
which do not form a bundled transaction, the initial cost comprises the carrying
amount of the previously-held equity investment in the acquiree immediately before
the acquisition date, and the additional investment cost at the acquisition date.
(b) Long-term equity investments acquired other than through a business combination
- A long-term equity investment acquired other than through a business combination is
initially recognised at the amount of cash paid if the Group acquires the investment
by cash, or at the fair value of the equity securities issued if an investment is acquired
by issuing equity securities.
(2) Subsequent measurement of long-term equity investment
(a) Investments in subsidiaries
In the Company’s separate financial statements, long-term equity investments in
subsidiaries are accounted for using the cost method unless the investment is classified
as held for sale (See Note III. 28). Except for cash dividends or profit distributions
declared but not yet distributed that have been included in the price or consideration
paid in obtaining the investments, the Company recognises its share of the cash
dividends or profit distributions declared by the investee as investment income for the
current period.
The investments in subsidiaries are stated in the balance sheet at cost less
accumulated impairment losses.
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For the impairment of the investments in subsidiaries, refer to Note III.20.
In the Group’s consolidated financial statements, subsidiaries are accounted for in
accordance with the policies described in Note III.6.
(b) Investment in joint ventures and associates
A joint venture is an arrangement whereby the Group and other parties have joint
control (see Note III.11(3)) and rights to the net assets of the arrangement.
Associated enterprises refer to enterprises to which the Group can exercise significant
influence (see Note III.11(3)).
A long-term equity investment in a joint venture is accounted for using the equity
method for subsequent measurement, unless the investment is classified as held for
sale (see Note III.28).
The accounting treatments under the equity method adopted by the Group are as
follows:
- Where the initial cost of a long-term equity investment exceeds the Group’s interest
in the fair value of the investee’s identifiable net assets at the date of acquisition, the
investment is initially recognised at cost. Where the initial investment cost is less
than the Group’s interest in the fair value of the investee’s identifiable net assets at
the date of acquisition, the investment is initially recognised at the investor’s share of
the fair value of the investee’s identifiable net assets, and the difference is
recognised in profit or loss.
- After the acquisition of the investment, the Group recognises its share of the
investee’s profit or loss and other comprehensive income as investment income or
losses and other comprehensive income respectively, and adjusts the carrying
amount of the investment accordingly. Once the investee declares any cash
dividends or profit distributions, the carrying amount of the investment is reduced by
the amount attributable to the Group. Changes in the Group’s share of the
investee’s owners’ equity, other than those arising from the investee’s net profit or
loss, other comprehensive income or profit distribution (referred to as “other changes
in owners’ equity”), is recognised directly in the Group’s equity, and the carrying
amount of the investment is adjusted accordingly.
- In calculating its share of the investee’s net profits or losses, other comprehensive
income and other changes in owners’ equity, the Group recognises investment
income and other comprehensive income after making appropriate adjustments to
align the accounting policies or accounting periods with those of the Group based on
the fair value of the investee’s identifiable net assets at the date of acquisition.
Unrealised profits and losses resulting from transactions between the Group and its
associates or joint ventures are eliminated to the extent of the Group’s interest in the
associates or joint ventures. Unrealised losses resulting from transactions between
the Group and its associates or joint ventures are eliminated in the same way as
unrealised gains but only to the extent that there is no impairment.
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- The Group discontinues recognising its share of further losses of the investee after
the carrying amount of the long-term equity investment and any long-term interest
that in substance forms part of the Group’s net investment in the associate is
reduced to zero, except to the extent that the Group has an obligation to assume
additional losses. If the joint venture subsequently reports net profits, the Group
resumes recognising its share of those profits only after its share of the profits equals
the share of losses not recognised.
For the impairment of the investments in joint ventures and associates, refer to Note
III.20.
(3) Criteria for determining the existence of joint control over an investee
Joint control is the contractually agreed sharing of control of an arrangement, which exists
only when decisions about the relevant activities (activities with significant impact on the
returns of the arrangement) require the unanimous consent of the parties sharing control.
The following factors are usually considered when assessing whether the Group can exercise
joint control over an investee:
- Whether no single participant party is in a position to control the investee’s related activities
unilaterally;
- Whether strategic decisions relating to the investee’s related activities require the
unanimous consent of all participant parties that sharing of control.
Significant influence is the power to participate in the financial and operating policy decisions
of an investee but does not have control or joint control over those policies.
12 Investment properties
Investment properties are properties held either to earn rental income or for capital
appreciation or for both. Investment properties are accounted for using the cost model and
stated in the balance sheet at cost less accumulated depreciation, amortisation and
impairment losses, and adopts a depreciation or amortisation policy for the investment
property which is consistent with that for buildings or land use rights, unless the investment
property is classified as held for sale (see Note III.28). For the impairment of the investment
properties, refer to Note III.20.
Estimated useful Residual value rate Depreciation rate
Category
life (years) (%) (%)
Plant and buildings 20 - 40 years 0 - 5% 2.4% - 5.0%
13 Fixed assets
(1) Recognition of fixed assets
Fixed assets represent the tangible assets held by the Group for use in production of goods,
supply of services, for rental or for administrative purposes with useful lives over one
accounting year.
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The cost of a purchased fixed asset comprises the purchase price, related taxes, and any
directly attributable expenditure for bringing the asset to working condition for its intended
use. The cost of self-constructed assets is measured in accordance with the policy set out in
Note III.14.
Where the parts of an item of fixed assets have different useful lives or provide benefits to the
Group in a different pattern, thus necessitating use of different depreciation rates or methods,
each part is recognised as a separate fixed asset.
Any subsequent costs including the cost of replacing part of an item of fixed assets are
recognised as assets when it is probable that the economic benefits associated with the costs
will flow to the Group, and the carrying amount of the replaced part is derecognised. The
costs of the day-to-day maintenance of fixed assets are recognised in profit or loss as
incurred.
Fixed assets are stated in the balance sheet at cost less accumulated depreciation and
impairment losses.
(2) Depreciation of fixed assets
The cost of a fixed asset, less its estimated residual value and accumulated impairment
losses, is depreciated using the straight-line method over its estimated useful life, unless the
fixed asset is classified as held for sale (see Note III.28).
The estimated useful lives, residual value rates and depreciation rates of each class of fixed
assets are as follows:
Estimated useful Residual value rate Depreciation rate
Class
life (years) (%) (%)
Plant and buildings 20 - 40 years 0 - 5% 2.4% - 5.0%
Machinery equipment 5 - 30 years 0 - 5% 3.2% - 20.0%
Motor vehicles 4 - 12 years 0 - 5% 7.9% - 25.0%
Useful lives, estimated residual values and depreciation methods are reviewed at least at
each year-end.
(3) For the impairment of the fixed assets, refer to Note III.20.
(4) Disposal of fixed assets
The carrying amount of a fixed asset is derecognised:
- when the fixed asset is holding for disposal; or
- when no future economic benefit is expected to be generated from its use or disposal.
Gains or losses arising from the retirement or disposal of an item of fixed asset are
determined as the difference between the net disposal proceeds and the carrying amount of
the item, and are recognised in profit or loss on the date of retirement or disposal.
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14 Construction in progress
The cost of self-constructed assets includes the cost of materials, direct labour, capitalised
borrowing costs (see Note III.15), and any other costs directly attributable to bringing the
asset to working condition for its intended use.
A self-constructed asset is classified as construction in progress and transferred to fixed asset
when it is ready for its intended use. No depreciation is provided against construction in
progress.
Construction in progress is stated in the balance sheet at cost less accumulated impairment
losses (see Note III.20).
15 Borrowing costs
Borrowing costs incurred directly attributable to the acquisition, and construction or production
of a qualifying asset are capitalised as part of the cost of the asset. Other borrowing costs
are recognised as financial expenses when incurred.
During the capitalisation period, the amount of interest (including amortisation of any discount
or premium on borrowing) to be capitalised in each accounting period is determined as
follows:
- Where funds are borrowed specifically for the acquisition and construction or production of
a qualifying asset, the amount of interest to be capitalised is the interest expense
calculated using effective interest rates during the period less any interest income earned
from depositing the borrowed funds or any investment income on the temporary
investment of those funds before being used on the asset.
- To the extent that the Group borrows funds generally and uses them for the acquisition and
construction or production of a qualifying asset, the amount of borrowing costs eligible for
capitalisation is determined by applying a capitalisation rate to the weighted average of the
excess amounts of cumulative expenditure on the asset over the above amounts of
specific borrowings. The capitalisation rate is the weighted average of the interest rates
applicable to the general-purpose borrowings.
The effective interest rate is determined as the rate that exactly discounts estimated future
cash flow through the expected life of the borrowing or, when appropriate, a shorter period to
the initially recognised amount of the borrowings.
During the capitalisation period, exchange differences related to the principal and interest on
a specific-purpose borrowing denominated in foreign currency are capitalised as part of the
cost of the qualifying asset. The exchange differences related to the principal and interest on
foreign currency borrowings other than a specific-purpose borrowing are recognised as a
financial expense when incurred.
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The capitalisation period is the period from the date of commencement of capitalisation of
borrowing costs to the date of cessation of capitalisation, excluding any period over which
capitalisation is suspended. Capitalisation of borrowing costs commences when
expenditure for the asset is being incurred, borrowing costs are being incurred and activities
of acquisition, construction or production that are necessary to prepare the asset for its
intended use are in progress, and ceases when the assets become ready for their intended
use. Capitalisation of borrowing costs should cease when the qualifying asset being
constructed or produced has reached its expected usable or saleable condition.
Capitalisation of borrowing costs is suspended when the acquisition, construction or
production activities are interrupted abnormally for a period of more than three months.
16. Biological assets
The Group's biological assets are bearer biological assets.
Bearer biological assets are those that are held for the purposes of producing agricultural
produce, rendering of services or rental. Bearer biological assets in the Group are vines.
Bearer biological assets are initially measured at cost. The cost of self-grown or self-bred
bearer biological assets represents the necessary directly attributable expenditure incurred
before satisfying the expected production and operating purpose, including capitalised
borrowing costs.
Bearer biological assets, after reaching the expected production and operating purpose, are
depreciated using the straight-line method over its estimated useful life. The estimated
useful lives, estimated net residual value rates and depreciation rates of bearer biological
assets are as follows:
Estimated useful Estimated net Depreciation rate
Category
life (years) residual value rate (%)
Vines 20 years 0% 5.0%
The Group evaluates the useful life and expected net salvage value by considering the normal
producing life of the bearer biological assets.
Useful lives, estimated residual values and depreciation methods of bearer biological assets
are reviewed at least at each year-end. Any changes should be treated as changes in
accounting estimates.
For a bearer biological asset that has been sold, damaged, dead or destroyed, any difference
between the disposal proceeds and the carrying amount of the asset should be recognised in
profit or loss for the period in which it arises.
17 Intangible assets
Intangible assets are stated in the balance sheet at cost less accumulated amortization
(where the estimated useful life is finite) and impairment losses (see Note III.20). For an
intangible asset with finite useful life, its cost estimated less residual value and accumulated
impairment losses is amortised on the straight-line method over its estimated useful life,
unless the intangible asset is classified as held for sale (see Note III.28).
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The respective amortisation periods for intangible assets are as follows:
Item Amortisation period (years)
Land use rights 40 - 50 years
Software licenses 5 - 10 years
Trademarks 10 years
Useful lives and amortisation methods of intangible asset with finite useful life are reviewed at
least at each year-end.
An intangible asset is regarded as having an indefinite useful life and is not amortised when
there is no foreseeable limit to the period over which the asset is expected to generate
economic benefits for the Group. At the balance sheet date, the Group had intangible assets
with infinite useful lives including the land use rights and trademarks. Land use rights with
infinite useful lives are permanent land use rights with permanent ownership held by the
Group under the relevant Chile and Australian laws arising from the Group’s acquisition of
Via Indómita, S.A., Via Dos Andes, S.A., and Bodegas Santa Alicia SPA. (collectively
referred to as the "Chile Indomita Wine Group"), and the acquisition of Kilikanoon Estate Pty
Ltd. (hereinafter referred to as the "Australia Kilikanoon Estate"), therefore there was no
amortisation. The right to use trademark refers to the trademark held by the Group arising
from the acquisition of the Chile Indomita Wine Group and the Australia Kilikanoon Estate with
infinite useful lives. The valuation of trademark was 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 an
uncertain period. The useful life is indefinite as it was hard to predict the period that the
trademark would bring economic benefits to the Group.
18 Goodwill
The initial cost of goodwill represents the excess of cost of acquisition over the acquirer’s
interest in the fair value of the identifiable net assets of the acquiree under a business
combination not involving entities under common control.
Goodwill is not amortised and is stated in the balance sheet at cost less accumulated
impairment losses (see Note III.20). On disposal of an asset group or a set of asset groups,
any attributable goodwill is written off and included in the calculation of the profit or loss on
disposal.
19 Long-term deferred expenses
Long-term deferred expenses are amortised using a straight-line method within the benefit
period. The respective amortisation periods for such expenses are as follows:
Item Amortisation period
Land requisition fee 50 years
Land lease prepayment 50 years
Greening fee 5 - 20 years
Leasehold improvement 3 - 5 years
Others 3 years
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20 Impairment of assets other than inventories and financial assets
The carrying amounts of the following assets are reviewed at each balance sheet date based
on internal and external sources of information to determine whether there is any indication of
impairment:
- fixed assets
- construction in progress
- right-of-use assets
- intangible assets
- bearer biological assets
- investment properties measured using a cost model
- long-term equity investments
- goodwill
- long-term deferred expenses, etc.
If any indication exists, the recoverable amount of the asset is estimated. In addition, the
Group estimates the recoverable amounts of goodwill and intangible assets with infinite useful
lives at each year-end, irrespective of whether there is any indication of impairment.
Goodwill is allocated to each asset group, or set of asset groups, that is expected to benefit
from the synergies of the combination for the purpose of impairment testing.
The recoverable amount of an asset (or asset group, set of asset groups) is the higher of its
fair value (see Note III.21) less costs to sell and its present value of expected future cash
flows.
An asset group is composed of assets directly related to cash-generation and is the smallest
identifiable group of assets that generates cash inflows that are largely independent of the
cash inflows from other assets or asset groups.
The present value of expected future cash flows of an asset is determined by discounting the
future cash flows, estimated to be derived from continuing use of the asset and from its
ultimate disposal, to their present value using an appropriate pre-tax discount rate.
An impairment loss is recognised in profit or loss when the recoverable amount of an asset is
less than its carrying amount. A provision for impairment of the asset is recognised
accordingly. Impairment losses related to an asset group or a set of asset groups are
allocated first to reduce the carrying amount of any goodwill allocated to the asset group or
set of asset groups, and then to reduce the carrying amount of the other assets in the asset
group or set of asset groups on a pro rata basis. However, such allocation would not reduce
the carrying amount of an asset below the highest of its fair value less costs to sell (if
measurable), its present value of expected future cash flows (if determinable) and zero.
Once an impairment loss is recognised, it is not reversed in a subsequent period.
21 Fair value measurement
Unless otherwise specified, the Group measures fair value as follows:
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement date.
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When measuring fair value, the Group takes into account the characteristics of the particular
asset or liability (including the condition and location of the asset and restrictions, if any, on
the sale or use of the asset) that market participants would consider when pricing the asset or
liability at the measurement date, and uses valuation techniques that are appropriate in the
circumstances and for which sufficient data and other information are available to measure
fair value. Valuation techniques mainly include the market approach, the income approach
and the cost approach.
22 Revenue recognition
Revenue is the gross inflow of economic benefits arising in the course of the Group’s ordinary
activities when the inflows result in increase in shareholders’ equity, other than increase
relating to contributions from shareholders.
Revenue is recognised when the Group satisfies the performance obligation in the contract by
transferring the control over relevant goods or services to the customers.
Where a contract has two or more performance obligations, the Group determines the
stand-alone selling price at contract inception of the distinct good or service underlying each
performance obligation in the contract and allocates the transaction price in proportion to
those stand-alone selling prices. The Group recognises as revenue the amount of the
transaction price that is allocated to each performance obligation. The stand-alone selling
price is the price at which the Group would sell a promised good or service separately to a
customer. If a stand-alone selling price is not directly observable, the Group considers all
information that is reasonably available to the entity, maximises the use of observable inputs
to estimate the stand-alone selling price.
For the contract with a warranty, the Group analyses the nature of the warranty provided, if
the warranty provides the customer with a distinct service in addition to the assurance that the
product complies with agreed-upon specifications, the Group recognises for the promised
warranty as a performance obligation. Otherwise, the Group accounts for the warranty in
accordance with the requirements of CAS No.13 – Contingencies.
The transaction price is the amount of consideration to which the Group expects to be entitled
in exchange for transferring promised goods or services to a customer, excluding amounts
collected on behalf of third parties. The Group recognises the transaction price only to the
extent that it is highly probable that a significant reversal in the amount of cumulative revenue
recognised will not occur when the uncertainty associated with the variable consideration is
subsequently resolved. Where the contract contains a significant financing component, the
Group recognises the transaction price at an amount that reflects the price that a customer
would have paid for the promised goods or services if the customer had paid cash for those
goods or services when (or as) they transfer to the customer. The difference between the
amount of promised consideration and the cash selling price is amortised using an effective
interest method over the contract term. The Group does not adjust the consideration for any
effects of a significant financing component if it expects, at contract inception, that the period
between when the Group transfers a promised good or service to a customer and when the
customer pays for that good or service will be one year or less.
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The Group satisfies a performance obligation over time if one of the following criteria is met;
or otherwise, a performance obligation is satisfied at a point in time:
- the customer simultaneously receives and consumes the benefits provided by the Group’s
performance as the Group performs;
- the customer can control the asset created or enhanced during the Group’s performance;
or
- the Group’s performance does not create an asset with an alternative use to it and the
Group has an enforceable right to payment for performance completed to date.
For performance obligation satisfied over time, the Group recognises revenue over time by
measuring the progress towards complete satisfaction of that performance obligation. When
the outcome of that performance obligation cannot be measured reasonably, but the Group
expects to recover the costs incurred in satisfying the performance obligation, the Group
recognises revenue only to the extent of the costs incurred until such time that it can
reasonably measure the outcome of the performance obligation.
For performance obligation satisfied at a point in time, the Group recognises revenue at the
point in time at which the customer obtains control of relevant goods or services. To
determine whether a customer has obtained control of goods or services, the Group considers
the following indicators:
- the Group has a present right to payment for the goods or services;
- the Group has transferred physical possession of the goods to the customer;
- the Group has transferred the legal title of the goods or the significant risks and rewards of
ownership of the goods to the customer; and
- the customer has accepted the goods or services.
For the sale of a product with a right of return, the Group recognises revenue when the Group
obtains control of that product, in the amount of consideration to which the Group expects to
be entitled in exchange for the product transferred (i.e. excluding the amount of which
expected to be returned), and recognises a refund liability for the products expected to be
returned. Meanwhile, an asset is recognised in the amount of carrying amount of the product
expected to be returned less any expected costs to recover those products (including
potential decreases in the value of returned products), and carry forward to cost in the amount
of carrying amount of the transferred products less the above costs. At the end of each
reporting period, the Group updates its assessment of future sales return. If there is any
change, it is accounted for as a change in accounting estimate.
A contract asset is the Group’s right to consideration in exchange for goods or services that it
has transferred to a customer when that right is conditional on something other than the
passage of time. The Group recognises loss allowances for expected credit loss on contract
assets (see Note III.9(6)). Accounts receivable is the Group’s right to consideration that is
unconditional (only the passage of time is required). A contract liability is the Group’s
obligation to transfer goods or services to a customer for which the Group has received
consideration (or an amount of consideration is due) from the customer.
The following is the description of accounting policies regarding revenue from the Group’s
principal activities:
The Group's sales revenue is mainly derived from dealer sales. Revenue is recognised
when the Group transfers control of the related products to the customer. Based on the
business contract, the Group recognised the sales revenue of these transfers when the
product is confirmed and signed for acceptance by the customers.
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23 Contract costs
Contract costs are either the incremental costs of obtaining a contract with a customer or the
costs to fulfil a contract with a customer.
Incremental costs of obtaining a contract are those costs that the Group incurs to obtain a
contract with a customer that it would not have incurred if the contract had not been obtained
e.g. an incremental sales commission. The Group recognises as an asset the incremental
costs of obtaining a contract with a customer if it expects to recover those costs. Other costs
of obtaining a contract are expensed when incurred.
If the costs to fulfil a contract with a customer are not within the scope of inventories or other
accounting standards, the Group recognises an asset from the costs incurred to fulfil a
contract only if those costs meet all of the following criteria:
- the costs relate directly to an existing contract or to a specifically identifiable anticipated
contract, including direct labour, direct materials, allocations of overheads (or similar
costs), costs that are explicitly chargeable to the customer and other costs that are
incurred only because the Group entered into the contract
- the costs generate or enhance resources of the Group that will be used in satisfying (or in
continuing to satisfy) performance obligations in the future; and
- the costs are expected to be recovered.
Assets recognised for the incremental costs of obtaining a contract and assets recognised for
the costs to fulfil a contract (the “assets related to contract costs”) are amortised on a
systematic basis that is consistent with the transfer to the customer of the goods or services to
which the assets relate and recognised in profit or loss for the current period. The Group
recognises the incremental costs of obtaining a contract as an expense when incurred if the
amortisation period of the asset that the entity otherwise would have recognised is one year or
less.
The Group recognises an impairment loss in profit or loss to the extent that the carrying
amount of an asset related to contract costs exceeds:
- remaining amount of consideration that the Group expects to receive in exchange for the
goods or services to which the asset relates; less
- the costs that relate directly to providing those goods or services that have not yet been
recognised as expenses.
24 Employee benefits
(1) Short-term employee benefits
Employee wages or salaries, bonuses, social security contributions such as medical
insurance, work injury insurance, maternity insurance and housing fund, measured at the
amount incurred or accured at the applicable benchmarks and rates, are recognised as a
liability as the employee provides services, with a corresponding charge to profit or loss or
included in the cost of assets where appropriate.
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(2) Post-employment benefits – defined contribution plans
Pursuant to the relevant laws and regulations of the People’s Republic of China, the Group
participated in a defined contribution basic pension insurance plan in the social insurance
system established and managed by government organisations. The Group makes
contributions to basic pension insurance plans based on the applicable benchmarks and rates
stipulated by the government. Basic pension insurance contributions payable are
recognised as a liability as the employee provides services, with a corresponding charge to
profit or loss or included in the cost of assets where appropriate.
(3) Termination benefits
When the Group terminates the employment with employees before the employment
contracts expire, or provides compensation under an offer to encourage employees to accept
voluntary redundancy, a provision is recognised with a corresponding expense in profit or loss
at the earlier of the following dates:
- When the Group cannot unilaterally withdraw the offer of termination benefits because of
an employee termination plan or a curtailment proposal;
- When the Group has a formal detailed restructuring plan involving the payment of
termination benefits and has raised a valid expectation in those affected that it will carry out
the restructuring by starting to implement that plan or announcing its main features to those
affected by it.
25 Government grants
Government grants are non-reciprocal transfers of monetary or non-monetary assets from the
government to the Group except for capital contributions from the government in the capacity
as an investor in the Group.
A government grant is recognised when there is reasonable assurance that the grant will be
received and that the Group will comply with the conditions attaching to the grant.
If a government grant is in the form of a transfer of a monetary asset, it is measured at the
amount received or receivable. If a government grant is in the form of a transfer of a
non-monetary asset, it is measured at fair value.
Government grants related to assets are grants whose primary condition is that the Group
qualifying for them should purchase, construct or otherwise acquire long-term assets.
Government grants related to income are grants other than those related to assets. A
government grant related to an asset is recognised as deferred income and amortised over
the useful life of the related asset on a reasonable and systematic manner as other income or
non-operating income. A grant that compensates the Company for expenses or losses to be
incurred in the future is recognised as deferred income, and included in other income or
non-operating income in the periods in which the expenses or losses are recognised. Or
included in other income or non-operating income directly.
26 Income tax
Current tax and deferred tax are recognised in profit or loss except to the extent that they
relate to a business combination or items recognised directly in equity (including other
comprehensive income).
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Current tax is the expected tax payable calculated at the applicable tax rate on taxable
income for the year, plus any adjustment to tax payable in respect of previous years.
At the balance sheet date, current tax assets and liabilities are offset only if the Group has a
legally enforceable right to set them off and also intends either to settle on a net basis or to
realise the asset and settle the liability simultaneously.
Deferred tax assets and deferred tax liabilities arise from deductible and taxable temporary
differences respectively, being the differences between the carrying amounts of assets and
liabilities for financial reporting purposes and their tax bases, which include the deductible
losses and tax credits carried forward to subsequent periods. Deferred tax assets are
recognised to the extent that it is probable that future taxable profits will be available against
which deductible temporary differences can be utilised.
Deferred tax is not recognised for the temporary differences arising from the initial recognition
of assets or liabilities in a transaction that is not a business combination and that affects
neither accounting profit nor taxable profit (or deductible loss). Deferred tax is not
recognised for taxable temporary differences arising from the initial recognition of goodwill.
At the balance sheet date, deferred tax is measured based on the tax consequences that
would follow from the expected manner of recovery or settlement of the carrying amounts of
the assets and liabilities, using tax rates enacted at the balance sheet date that are expected
to be applied in the period when the asset is recovered or the liability is settled.
The carrying amount of a deferred tax asset is reviewed at each balance sheet date, and is
reduced to the extent that it is no longer probable that the related tax benefits will be utilised.
Such reduction is reversed to the extent that it becomes probable that sufficient taxable profits
will be available.
At the balance sheet date, deferred tax assets and deferred tax liabilities are offset if all of the
following conditions are met:
- the taxable entity has a legally enforceable right to offset current tax liabilities and current
tax assets;
- they relate to income taxes levied by the same tax authority on either:
- the same taxable entity; or
- different taxable entities which intend either to settle the current tax liabilities and current
tax assets on a net basis, or to realise the assets and settle the liabilities simultaneously,
in each future period in which significant amounts of deferred tax liabilities or deferred
tax assets are expected to be settled or recovered.
27 Leases
A contract is lease if the lessor conveys the right to control the use of an identified asset to
lessee for a period of time in exchange for consideration.
At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A
contract is, or contains, a lease if the contract conveys the right to control the use of an
identified asset for a period of time in exchange for consideration.
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To assess whether a contract conveys the right to control the use of an identified asset, the
Group assesses whether:
- the contract involves the use of an identified asset. An identified asset may be specified
explicitly or implicitly speicied in a contrat and should be physically distinct, or capacity
portion or other portion of an asset that is not physically distinct but it represents
substantially all of the capacity of the asset and thereby provides the customer with the
right to obtain substantially all of the ecomonic benefits from the use of the asset. If the
supplier has a substantive substitution right throughout the period of use, then the asset is
not identified;
- the lessee has the right to obtain substantially all of the economic benefits from use of the
asset throughout the period of use;
- the lessee has the right to direct the use of the asset.
For a contract that contains more separate lease componets, the lessee and the lessor
separate lease components and account for each lease component as a lease separately. For
a contract that contains lease and non-lease components, the lessee and the lessor separate
lease components from non-lease components. For a contract that contains lease and
non-lease components, the lessee allocates the consideration in the contract to each lease
component on the basis of the relative stand-alone price of the lease component and the
aggregate stand-alone price of the non-lease components. The lessor allocates the
consideration in the contract in accordance with the accounting policy in Note III.22.
(1) As a lessee
The Group recognises a right-of-use asset and a lease liability at the lease commencement
date. The right-of-use asset is initially measured at cost, which comprises the initial amount of
the lease liability, any lease payments made at or before the commencement date (less any
lease incentives received), any initial direct costs incurred and an estimate of costs to
dismantle and remove the underlying asset or to restore the site on which it is located or
restore the underlying asset to the condition required by the terms and conditions of the lease.
The right-of-use asset is depreciated using the straight-line method. If the lessee is
reasonably certain to exercise a purchase option by the end of the lease term, the right-of-use
asset is depreciated over the remaining useful lives of the underlying asset. Otherwise, the
right-of-use asset is depreciated from the commencement date to the earlier of the end of the
useful life of the right-of-use asset or the end of the lease term. Impairment losses of
right-of-use assets are accounted for in accordance with the accounting policy described in
Note III.20.
The lease liability is initially measured at the present value of the lease payments that are not
paid at the commencement date, discounted using the interest rate implicit in the lease or, if
that rate cannot be readily determined, the Group’s incremental borrowing rate.
A constant periodic rate is used to calculate the interest on the lease liability in each period
during the lease term with a corresponding charge to profit or loss or included in the cost of
assets where appropriate. Variable lease payments not included in the measurement of the
lease liability is charged to profit or loss or included in the cost of assets where appropriate as
incurred.
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Under the following circumstances after the commencement date, the Group remeasures
lease liabilities based on the present value of revised lease payments:
- there is a change in the amounts expected to be payable under a residual value guarantee;
- there is a change in future lease payments resulting from a change in an index or a rate
used to determine those payments;
- there is a change in the assessment of whether the Group will exercise a purchase,
extension or termination option, or there is a change in the exercise of the extension or
termination option.
When the lease liability is remeasured, a corresponding adjustment is made to the carrying
amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the
right-of-use asset has been reduced to zero.
The Group has elected not to recognise right-of-use assets and lease liabilities for short-term
leases that have a lease term of 12 months or less and leases of low-value assets. The Group
recognises the lease payments associated with these leases in profit or loss or as the cost of
the assets where appropriate using the straight-line method over the lease term.
(2) As a lessor
The Group determines at lease inception whether each lease is a finance lease or an
operating lease. A lease is classified as a finance lease if it transfers substantially all the risks
and rewards incidental to ownership of an underlying asset irrespective of whether the legal
title to the asset is eventually transferred. An operating lease is a lease other than a finance
lease.
When the Group is a sub-lessor, it assesses the lease classification of a sub-lease with
reference to the right-of-use asset arising from the head lease, not with reference to the
underlying asset. If a head lease is a short-term lease to which the Group applies practical
expedient described above, then it classifies the sub-lease as an operating lease.
Under a finance lease, at the commencement date, the Group recognises the finance lease
receivable and derecognises the finance lease asset. The finance lease receivable is initially
measured at an amount equal to the net investment in the lease. The net investment in the
lease is measured at the aggregate of the unguaranteed residual value and the present value
of the lease receivable that are not received at the commencement date, discounted using the
interest rate implicit in the lease.
The Group recognises finance income over the lease term, based on a pattern reflecting a
constant periodic rate of return. The derecognition and impairment of the finance lease
receivable are recognised in accordance with the accounting policy in Note III.9. Variable
lease payments not included in the measurement of net investment in the lease are
recognised as income as they are earned.
Lease receipts from operating leases is recognised as income using the straight-line method
over the lease term. The initial direct costs incurred in respect of the operating lease are
initially capitalised and subsequently amortised in profit or loss over the lease term on the
same basis as the lease income. Variable lease payments not included in lease receipts are
recognised as income as they are earned.
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28 Assets held for sale
The Group classified a non-current asset or disposal group as held for sale when the carrying
amount of a non-current asset or disposal group will be recovered through a sale transaction
rather than through continuing use.
A disposal group refers to a group of assets to be disposed of, by sale or otherwise, together
as a whole in a single transaction and liabilities directly associated with those assets that will
be transferred in the transaction.
A non-current asset or disposal group is classified as held for sale when all the following
criteria are met:
- According to the customary practices of selling such asset or disposal group in similar
transactions, the non-current asset or disposal group must be available for immediate sale
in their present condition subject to terms that are usual and customary for sales of such
assets or disposal groups;
- Its sale is highly probable, that is, the Group has made a resolution on a sale plan and has
obtained a firm purchase commitment. The sale is to be completed within one year.
Non-current assets or disposal groups held for sale are stated at the lower of carrying amount
and fair value (see Note III.21) less costs to sell (except financial assets (see Note III.9),
deferred tax assets (see Note III.26) and investment properties subsequent measured at fair
value (see Note III. 12) initially and subsequently. Any excess of the carrying amount over
the fair value (see Note III.21) less costs to sell is recognised as an impairment loss in profit or
loss.
29 Profit distributions
Dividends or profit distributions proposed in the profit appropriation plan, which will be
approved after the balance sheet date, are not recognised as a liability at the balance sheet
date but are disclosed in the notes separately.
30 Related parties
If a party has the power to control, jointly control or exercise significant influence over another
party, or vice versa, or where two or more parties are subject to common control or joint
control from another party, they are considered to be related parties. Related parties may be
individuals or enterprises. Enterprises with which the Company is under common control
only from the State and that have no other related party relationships are not regarded as
related parties.
In addition to the related parties stated above, the Company determines related parties based
on the disclosure requirements of Administrative Procedures on the Information Disclosures
of Listed Companies issued by the CSRC.
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31 Segment reporting
The Group is principally engaged in the production and sales of wine, brandy, and sparkling
wine in China, France, Spain, Chile and Australia. In accordance with the Group's internal
organisation structure, management requirements and internal reporting system, the Group's
operation is divided into five parts: China, Spain, France, Chile and Australia. The
management periodically evaluates segment results, in order to allocate resources and
evaluate performances. In 2021, over 87% of revenue, more than 94% of profit and over
92% of non-current assets derived from China/are located in China. Therefore the Group
does not need to disclose additional segment report information.
32 Significant accounting estimates and judgements
The preparation of the financial statements requires management to make estimates and
assumptions that affect the application of accounting policies and the reported amounts of
assets, liabilities, income and expenses. Actual results may differ from these estimates.
Estimates as well as underlying assumptions and uncertainties involved are reviewed on an
ongoing basis. Revisions to accounting estimates are recognised in the period in which the
estimate is revised and in any future periods affected.
(1) Significant accounting estimates
Except for accounting estimates relating to depreciation and amortisation of assets such as
investment properties, fixed assets, bearer biological assets and intangible assets (see Notes
III. 13 and 16) and provision for impairment of various types of assets (see Notes V.3, 7, 11,
15 and 16). Other significant accounting estimates are as follows:
(i) Note V. 18 - Recognition of deferred tax asset;
(ii) Note VIII. - Fair value measurements of financial instruments.
33 Changes in significant accounting policies and accounting estimates
(1) Description and reasons of changes in accounting policies
In 2021, the Group has adopted the following newly revised accounting standards and
implementation guidance and illustrative examples issued by the MOF:
- CAS No.21 - Lease (Revised) (Caikuai [2018] No.35) (“the new leases standard”)
- The Accounting Treatment of COVID-19-Related Rent Concessions (Caikuai [2020]
No.10) and Notice of Extending the Applicable Period of ‘Accounting Treatment of
COVID-19 Related Rent Concessions’ (Caikuai [2021] No.9)
- CAS Bulletin No.14 (Caikuai [2021] No.1) (“Bulletin No. 14”)
(a) New leases standard
New leases standard has revised CAS No.21 - Leases issued by the MOF in 2006
(“previous leases standard”). The Group has applied new leases standard since 1
January 2021 and has adjusted the related accounting policies.
New leases standard refines the definition of a lease. The Group assesses whether a
contract is or contains a lease in accordance with the definition in new leases standard.
For contracts which existed before the date of initial application, the Group has elected
not to reassess whether a contract is or contains a lease at the date of initial application.
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As a lessee
Under previous leases standard, the Group classifies leases as operating or finance
leases based on its assessment of whether the lease transfers significantly all of the risks
and rewards incidental to ownership of the underlying asset to the Group.
Under new leases standard, the Group no longer distinguishes between operating
leases and finance leases. The Group recognises right-of-use assets and lease
liabilities for all leases (except for short-term leases and leases of low-value assets
which are accounted for using the practical expedient).
For a contract that contains lease and non-lease components, the Group allocates
the consideration in the contract to each lease component on the basis of the relative
stand-alone price of the lease component and the aggregate stand-alone price of the
non-lease components.
The Group has elected to recognise the cumulative effect of adopting new leases
standard as an adjustment to the opening balances of retained earnings and other
related items in the financial statements in the initial year of application. Comparative
information has not been restated.
For leases classified as operating leases before the date of initial application, lease
liabilities were measured at the present value of the remaining lease payments,
discounted using the Group’s incremental borrowing rate at the date of initial
application. Right-of-use assets are measured at either:
- their carrying amount as if new leases standard had been applied since the
commencement date, discounted using the Group’s incremental borrowing rate at
the date of initial application; or
The Group uses the following practical expedients to account for leases classified as
operating leases before the date of initial application:
- accounted for the leases for which the lease term ends within 12 months of the
date of initial application as short-term leases;
- applied a single discount rate to leases with similar characteristics when
measuring lease liabilities;
- excluded initial direct costs from measuring the right-of-use assets;
- determined the lease term according to the actual implementation or other
updates of options before the date of initial application if the contract contains
options to extend or terminate the lease;
- As an alternative to the impairment test of the right-of-use assets, the right-of-use
assets shall be adjusted according to the amount of loss provision from onerous
contracts included in the balance sheet in accordance with Accounting Standards
for Business Enterprises No. 13 - Contingencies before the date of initial
application;
- No retrospective adjustment shall be made to the lease changes that occurred
before the beginning of the year when the new leases standard is initially applied,
and instead, the new leases standard shall be applicable for the accounting
treatment based on the final arrangement of the lease changes.
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For leases classified as finance leases before the date of initial application, the
right-of-use asset and the lease liability are measured at the original carrying amount
of the assets under finance lease and obligations under finance leases at the date of
initial application.
As a lessor
The Group is not required to make any adjustments to the opening balances of
retained earnings and other related items in the financial statements in the initial year
of application and surplus for leases for which it acts as a lessor. The Group has
applied new leases standard since the date of initial application.
Effect of the application of new leases standard since 1 January 2021 on financial
statements
When measuring lease liabilities, the Group discounted lease payments using its
incremental borrowing rate at 1 January 2021. The weighted-average rate applied by
the Group and the Company is 4.65%.
The impact of the adoption of the new leases standard on the consolidated and
company balance sheets as at 1 January 2021 are summarised as follows:
The Group
The amounts of
31 December 2020 1 January 2021
adjustments
Assets
Non-current assets:
Right-of-use assets - 130,293,427 130,293,427
Long-term deferred
314,465,855 273,547,599 (40,918,256)
expenses
Deferred tax assets 206,241,275 207,199,400 958,125
Total non-current assets 520,707,130 611,040,426 90,333,296
Total assets 520,707,130 611,040,426 90,333,296
The Group
The amounts of
31 December 2020 1 January 2021
adjustments
Liabilities and shareholders’
equity
Current liabilities:
Accounts payable 484,347,958 479,305,382 (5,042,576)
Non-current liabilities due
133,311,890 140,629,742 7,317,852
within one year
Total current liabilities 617,659,848 619,935,124 2,275,276
Non-current liabilities:
Lease liabilities - 98,401,900 98,401,900
Deferred tax liabilities 12,022,613 12,260,894 238,281
Total non-current liabilities 12,022,613 110,662,794 98,640,181
Total liabilities 629,682,461 730,597,918 100,915,457
Shareholders’ equity:
Retained earnings 8,714,091,755 8,703,509,594 (10,582,161)
Total equity attributable to
shareholders of the 8,714,091,755 8,703,509,594 (10,582,161)
Company
Total owners’ equity 8,714,091,755 8,703,509,594 (10,582,161)
Total liabilities and
9,343,774,216 9,434,107,512 90,333,296
shareholders’ equity
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The Company
The amounts of
31 December 2020 1 January 2021
adjustments
Assets
Non-current assets:
Right-of-use assets - 39,589,486 39,589,486
Total non-current assets - 39,589,486 39,589,486
Total assets - 39,589,486 39,589,486
Liabilities and shareholders’
equity
Current liabilities:
Non-current liabilities due
- 2,048,380 2,048,380
within one year
Total current liabilities - 2,048,380 2,048,380
Non-current liabilities:
Lease liabilities - 44,072,819 44,072,819
Deferred tax liabilities - 88,555 88,555
Total non-current liabilities - 44,161,374 44,161,374
Total liabilities - 46,209,754 46,209,754
Shareholders’ equity:
Retained earnings 8,567,313,551 8,560,693,283 (6,620,268)
Total equity attributable to
shareholders of the 8,567,313,551 8,560,693,283 (6,620,268)
Company
Total owners’ equity 8,567,313,551 8,560,693,283 (6,620,268)
Total liabilities and
8,567,313,551 8,606,903,037 39,589,486
shareholders’ equity
(b) Caikuai [2020] No.10 and Caikuai [2021] No.9
The Accounting Treatment of COVID-19 Related Rent Concessions (Caikuai [2020]
No.10) provides practical expedient under certain conditions for rent concessions
occurring as a direct consequence of the COVID-19 pandemic. If the company chooses
to adopt the practical expedient, then there is no need to assess whether there is a
lease change or reassess the lease classification. In combination of the requirements of
Caikuai [2021] No.9, such practical expedient is only applicable to any reduction in
lease payments due before 30 June 2022. Cumulative effects of adopting the above
regulations are adjusted to the opening retained earnings or other comprehensive
income for the year 2021. Comparative information is not restated.
The adoption of the above regulations does not have significant effect on the financial
position and financial performance of the Group.
(c) Bulletin No.14
Bulletin No.14 takes effect on 26 January 2021 (implementation date).
(i) “Public-private partnership” (PPP) arrangements
Bulletin No.14 and the Q&A and practical examples for accounting treatment of
PPP project contract social capital clarifies the features and conditions of PPP
arrangements, sets out the accounting and disclosure requirements of a private
entity in PPP arrangements. Item 5 of CAS Bulletin No.2 (Caikuai [2008] No.11)
on “How to account for entities participating in public infrastructure construction
businesses under build-operate-transfer arrangement” is repealed accordingly.
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PPP arrangements which are commenced before 31 December 2020 and not
completed on the implementation date and new PPP arrangements occurred
during 1 January 2021 to the implementation date are subject to retrospective
adjustments. Cumulative effects are adjusted to the opening retained earnings
and other relevant line items in the financial statements for the year 2021.
Comparative information is not restated.
The adoption of Bulletin No.14 does not have significant effect on the financial
position and financial performance of the Group.
(ii) Benchmark interest rate reform
Bulletin No.14 introduces the accounting and disclosure requirements for the
modification of financial instruments and lease liabilities resulting from the
benchmark interest rate reform. Transactions related to the benchmark interest
rate reform that occurred before 31 December 2020 and during 1 January 2021 to
the implementation date are subject to retrospective adjustments. Cumulative
effects are adjusted to the opening retained earnings or other comprehensive
income for the year 2021. Comparative information is not restated.
The adoption of Bulletin No.14 does not have significant effect on the financial position
and financial performance of the Group.
IV. Taxation
1 Main types of taxes and corresponding tax rates
Output VAT is calculated on
product sales and taxable
13%, 9%, 6% (China), 20% (France),
Value-added tax services revenue. The
21% (Spain), 19% (Chile) and 10%
(VAT) basis for VAT payable is to
(Australia)
deduct input VAT from the
output VAT for the period
10% of the price, 20% of the price and
Consumption tax Based on taxable revenue
RMB1,000 each ton (China)
Urban maintenance
and construction Based on VAT paid 7% (China)
tax
25% (China), 26.5% (France, 2021),
Corporate income
Based on taxable profits 28% (France, 2020), 28% (Spain),
tax
27% (Chile), 30% (Australia)
Other than tax incentives stated in Note IV. 2, applicable tax rates of the Group in 2021 and
2020 are all stated as above.
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2 Tax preferential treatments
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 the Corporate Income Tax Law of the People’s Republic
of China and clause 86 of the Implementation Rules of Enterprise Income Tax Law of the
People’s Republic of China, 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. According to clause 27 of the Corporate Income Tax Law of the
People’s Republic of China and clause 86 of the Implementation Rules of Enterprise Income
Tax Law of the People’s Republic of China, Grape Growing enjoys an exemption of corporate
income tax.
Yantai Changyu Wine Research & Development Centre Co., Ltd. (“R&D Centre”), a branch of
the Company, is an enterprise engaged in grape growing in the Economic and Technological
Development Zone of Yantai City, Shandong Province. Pursuant to Article 27 of the
Enterprise Income Tax Law of the People’s Republic of China and Article 86 of the
Implementation Regulations of the Enterprise Income Tax Law of the People’s Republic of
China, R&D Centre enjoys the preferential policy of exemption of enterprise income tax on
income from grape growing.
Beijing Changyu AFIP Agriculture Development Co., Ltd (“Agriculture Development”), a
subsidiary of the Group, whose principal activity is grape growing is incorporated in Miyun,
Beijing. According to clause 27 of the Corporate Income Tax Law of the People’s Republic
of China and clause 86 of the Implementation Rules of Enterprise Income Tax Law of the
People’s Republic of China, Agriculture Development enjoys an exemption of corporate
income tax.
Xinjiang Tianzhu Wine 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 relevant provisions of the Announcement on Continuation
of CIT Policies for Large-scale Development in the Western Region (Announcement [2020]
No.23 of the Ministry of Finance), Ningxia Chateau Changyu Moser is entitled to preferential
tax policies. Therefore, during the period from 1 January 2021 to 31 December 2030, its
corporate income tax shall be levied at a reduced tax rate of 15%.
Xinjiang Chateau Changyu Baron Balboa Co., Ltd. (“Chateau Shihezi”), a subsidiary of the
Company, is an enterprise of wine production and sales incorporated in Shihezi city, Xinjiang
Weizu Autonomous. In accordance with relevant provisions of the Announcement on
Continuation of CIT Policies for Large-scale Development in the Western Region
(Announcement [2020] No.23 of the Ministry of Finance), Ningxia Chateau Changyu Moser is
entitled to preferential tax policies. Therefore, during the period from 1 January 2021 to 31
December 2030, its corporate income tax shall be levied at a reduced tax rate of 15%.
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Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
Ningxia Chateau Changyu Moser XV Co., Ltd. (“Chateau Ningxia”), a subsidiary of the
Company, is an enterprise engaged in wine production and sales, incorporated in Shihezi
City, Xinjiang Uygur Autonomous Region. In accordance with relevant provisions of the
Announcement on Continuation of CIT Policies for Large-scale Development in the Western
Region (Announcement [2020] No.23 of the Ministry of Finance), Ningxia Chateau Changyu
Moser is entitled to preferential tax policies. Therefore, during the period from 1 January 2021
to 31 December 2030, its corporate income tax shall be levied at a reduced tax rate of 15%.
Changyu (Ningxia) Wine Co., Ltd. (“Ningxia Wine”), a subsidiary of the Company, is an
enterprise engaged in wine production and sales, incorporated in Shihezi City, Xinjiang Uygur
Autonomous Region. In accordance with relevant provisions of the Announcement on
Continuation of CIT Policies for Large-scale Development in the Western Region
(Announcement [2020] No.23 of the Ministry of Finance), Changyu (Ningxia) Wine is entitled
to preferential tax policies. Therefore, during the period from 1 January 2021 to 31 December
2030, its corporate income tax shall be levied at a reduced tax rate of 15%.
Pursuant to the Announcement on Tax Policies to Support Prevention and Control of
Covid-19 Pandemic (Announcement [2020] No.8 of the Ministry of Finance and the State
Administration of Taxation), from 1 January 2020, income derived by taxpayers from provision
of public transportation services and living services, as well as express delivery services
involving residents' necessities, shall be exempted from VAT. Furthermore, according to the
Announcement on Continued Implementation of Some Preferential Tax/Fee Policies for
Responding to the COVID-19 Pandemic (Announcement [2021] No. 7 of the Ministry of
Finance and the State Administration of Taxation), the above tax preferential tax policy is
extended to 31 March 2021. The Company has certain subsidiaries, such as Yantai
Zhangyu Wine Culture Museum Co., Ltd. ("the Museum"), which provides catering,
accommodation, tourism and other living services, so, the income obtained from the provision
of such living services shall be exempted from VAT, from 1 January 2020 to 31 March 2021.
Xinjiang Changyu Sales Co., Ltd. Vermouth Tasting Centre Branch (“Xinjiang Vermouth
Tasting Centre”), a subsidiary of the Company, is an enterprise engaged in large-scale
restaurant services, located in Shihezi City, Xinjiang Uygur Autonomous Region. According to
the Announcement on Value-added Tax Policies for Supporting Individual Businesses in
Resumption of Business (Announcement [2020] No.13 of the Ministry of Finance and the
State Taxation Administration) and the Announcement on Continued Implementation of Some
Preferential Tax/Fee Policies for Responding to the COVID-19 Pandemic (Announcement
[2021] No. 7 of the Ministry of Finance State Taxation Administration), Xinjiang Vermouth
Tasting Centre, qualified as a small-scale VAT taxpayer, is entitled to pay VAT at the
reduced levy rate of 1% for the year ended 31 December 2021.
Based on the Notice of the Department of Finance of Shaanxi Province and the Shaanxi
Provincial Taxation Bureau under the State Taxation Administration on Matters Concerning
the Relief and Exemption of Urban Land Use Tax and Real Estate Tax in Fighting the
Epidemic (Shaan Cai Shui [2020] No.4), the Department of Finance and the Taxation Bureau
shall approve the application for tax relief and exemption submitted by taxpayers who have
difficulties to pay urban land use tax and real estate tax owing to the suspension of production
and business for more than 30 days (inclusive) arising from the epidemic. Shaanxi Chateau
Changyu Rena Co., Ltd. and Changyu (Jingyang) Wine Co., Ltd., two subsidiaries of the
Company, meet the application requirements and will be exempted from real estate tax and
urban land use tax in the first quarter of 2020.
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Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
Pursuant to the Notice of the Taxation Bureau in Ningxia Hui Autonomous Region under the
State Taxation Administration and the Department of Finance in Ningxia Hui Autonomous
Region on Implementing the Policies of Real Estate Tax and Urban Land Use Tax by the
People’s Government in Autonomous Region in response to the impact from Covid-19
Epidemic (Ning Shui Han [2020] No.19), the Taxation Bureau shall approve the application for
tax relief submitted by enterprises that have difficulties to pay real estate tax and urban land
use tax owing to the epidemic. Shaanxi Chateau Changyu Rena Co., Ltd. and Changyu
(Ningxia) Wine Co., Ltd., two subsidiaries of the Company, meet the application requirements
and will be exempted from real estate tax and urban land use tax for five months in 2020.
V. Notes to the consolidated financial statements
1 Cash at bank and on hand
Item 2021 2020
Cash on hand 71,486 19,637
Bank deposits 1,558,134,072 1,128,882,937
Other monetary funds 8,890,435 65,312,355
Total 1,567,095,993 1,194,214,929
Including: Total overseas deposits 28,691,521 47,674,019
As at 31 December 2021, the balance of restricted cash of the Group is as follows:
Item 2021 2020
House maintenance funds 2,678,529 2,684,407
As at 31 December 2021, the Group’s term deposits with previous maturity of more than three
months is RMB53,200,000 with interest rate 1.75% - 2.25% (31 December 2020:
RMB73,553,062).
As at 31 December 2021, the Group’s other monetary assets is as follows:
Item 2021 2020
Yantai Changyu Pioneer Wine Company Limited
Research and Development Co., Ltd. (“R&D - 20,000,000
Centre”) pledged deposit for long-term payables
Deposits for letters of credit 7,900,850 44,540,850
Alipay account balance 859,558 761,505
Deposit for ICBC platform 10,000 10,000
Deposits for the customs 120,027 -
Total 8,890,435 65,312,355
As at 31 December 2021, the Group did not have any special interest arrangements such as
the establishment of joint fund management accounts with related parties.
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2 Bills receivable
Classification of bills receivable
Item 2021 2020
Bank acceptance bills 42,827,666 -
Total 42,827,666 -
All of the above bills are due within one year.
3 Accounts receivable
(1) Accounts receivable by customer type are as follows:
Type 31 December 2021 31 December 2020
Amounts due from related parties 287,788 2,268,311
Amounts due from other customers 310,982,372 193,911,657
Sub-total 311,270,160 196,179,968
Less: Provision for bad and doubtful debts (20,263,750) (12,326,606)
Total 291,006,410 183,853,362
As at 31 December 2021, ownership restricted accounts receivable is RMB49,061,015 (31
December 2020: RMB28,557,991), referring to Note V. 52.
(2) The ageing analysis of accounts receivable is as follows:
Ageing 2021 2020
Within 1 year (inclusive) 302,602,474 190,047,491
Over 1 year but within 2 years (inclusive) 6,450,290 5,581,750
Over 2 years but within 3 years (inclusive) 1,830,913 366,053
Over 3 years 386,483 184,674
Sub-total 311,270,160 196,179,968
Less: Provision for bad and doubtful debts (20,263,750) (12,326,606)
Total 291,006,410 183,853,362
The ageing is counted starting from the date when accounts receivable are recognised.
(3) Accounts receivable by provisioning method
At all times the Group measures the impairment loss for accounts receivable at an amount
equal to lifetime ECLs, and the ECLs are based on the number of overdue days and the loss
given default. According to the historical experience of the Group, there are no significant
differences in the losses of different customer groups. Therefore, different customer groups
are not further distinguished when calculating impairment loss based on the overdue
information.
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Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
2021
Carrying amount at Impairment loss at
Loss given default
the end of the year the end of the year
Current 0.4% 266,055,047 951,403
Overdue for 1 to 30 days 3.3% 13,013,133 434,869
Overdue for 31 to 60 days 10.9% 8,115,584 886,023
Overdue for 61 to 90 days 23.9% 2,554,438 610,844
Overdue for 91 to 120 days 28.9% 531,696 153,780
Overdue for 121 to 150 days 40.0% 627,641 251,314
Overdue for 151 to 180 days 41.8% 1,670,068 698,131
Overdue for 181 to 210 days 50.0% 1,129,949 565,460
Overdue for 211 to 240 days 65.6% 1,415,345 928,263
Overdue for 241 to 270 days 65.7% 3,439,721 2,261,159
Overdue for 271 to 300 days 85.4% 1,340,055 1,145,021
Overdue for 301 to 330 days 100.0% 638,848 638,848
Overdue for 331 to 360 days 100.0% 244,178 244,178
Overdue for 360 days 100.0% 10,494,457 10,494,457
Total 6.5% 311,270,160 20,263,750
2020
Carrying amount at Impairment loss at
Loss given default
the end of the year the end of the year
Current 0.4% 146,425,314 650,298
Overdue for 1 to 30 days 3.4% 14,631,174 495,839
Overdue for 31 to 60 days 6.4% 6,678,504 424,266
Overdue for 61 to 90 days 10.3% 5,582,357 574,675
Overdue for 91 to 120 days 12.9% 2,054,400 265,530
Overdue for 121 to 150 days 15.6% 2,769,171 431,319
Overdue for 151 to 180 days 21.7% 3,970,361 859,903
Overdue for 181 to 210 days 30.3% 1,417,385 429,287
Overdue for 211 to 240 days 32.0% 5,413,890 1,731,246
Overdue for 241 to 270 days 35.7% 993,299 354,988
Overdue for 271 to 300 days 54.6% 111,636 60,963
Overdue for 301 to 330 days 88.7% 748,270 664,085
Overdue for 331 to 360 days 100.0% 323,563 323,563
Overdue for 360 days 100.0% 5,060,644 5,060,644
Total 6.3% 196,179,968 12,326,606
The loss given default is measured based on the actual credit loss experience in the past 12
months, and is adjusted taking into consideration the differences among the economic
conditions during the historical data collection period, the current economic conditions and the
economic conditions during the expected lifetime.
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(4) Movements of provisions for bad and doubtful debts:
2021 2020
Balance at the beginning of the year after
(12,326,606) (16,674,915)
adjustment
Charge for the year (17,855,222) (11,591,483)
Recoveries or reversals during the year 9,918,078 15,939,792
Balance at the end of the year (20,263,750) (12,326,606)
(5) Five largest accounts receivable by debtor at the end of the year:
Ending balance
Percentage of
Relationship with Balance at the of provision for
Name Ageing ending balance
the Group end of the year bad and doubtful
of others (%)
debts
Debtor One Third party 101,943,773 Within 1 year 32.8% 364,547
Debtor Two Third party 8,935,591 Within 1 year 2.9% 162,166
Debtor Three Third party 8,589,195 Within 1 year 2.8% 2,381,463
Debtor Four Third party 7,028,678 Within 1 year 2.3% 148,535
Over 1 year but
Debtor Five Third party 6,161,123 2.0% 6,082,785
within 2 years
Total 132,658,360 42.8% 9,139,496
4 Receivables under financing
Item Note 2021 2020
Bills receivable (1) 364,457,497 338,090,187
(1) The pledged bills receivable of the Group at the end of the year:
As at 31 December 2021, there was no pledged bills receivable (31 December 2020: Nil).
(2) Outstanding derecognised endorsed bills that have not matured at the end of the year:
Amount
Item derecognised at
year end
Bank acceptance bills 449,373,119
Total 449,373,119
As at 31 December 2021, derecognised bills endorsed by the Group to other parties which are
not yet due at the end of the period is RMB449,373,119 (31 December 2020:
RMB260,721,441). The notes are used for payment to suppliers and constructions. The
Group believes that due to good reputation of bank, the risk of notes not accepting by bank on
maturity is very low, therefore derecognise the note receivables endorsed. If the bank is
unable to pay the notes on maturity, according to the relevant laws and regulations of China,
the Group would undertake limited liability for the notes.
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5 Prepayments
(1) Prepayments by category:
Item 2021 2020
Prepayments 75,235,879 71,296,416
Total 75,235,879 71,296,416
(2) The ageing analysis of prepayments is as follows:
2021 2020
Ageing Percentage Percentage
Amount Amount
(%) (%)
Within 1 year (inclusive) 75,207,094 99.9% 70,977,636 99.6%
Over 1 year but within 2 years
28,785 0.1% 318,780 0.4%
(inclusive)
Total 75,235,879 100.0% 71,296,416 100.0%
The ageing is counted starting from the date when prepayments are recognised.
(3) Five largest prepayments by debtor at the end of the year:
Ending balance
Percentage of
Nature of the Balance at the of provision for
Name Ageing ending balance
receivable end of the year bad and doubtful
of others (%)
debts
Debtor One Prepayments 27,057,504 Within 1 year 36.0% -
Debtor Two Prepayments 23,934,593 Within 1 year 31.8% -
Debtor Three Prepayments 5,813,616 Within 1 year 7.7% -
Debtor Four Prepayments 2,311,027 Within 1 year 3.1% -
Debtor Five Prepayments 1,743,620 Within 1 year 2.3% -
Total 60,860,360 80.9% -
6 Other receivables
31 December 2021 31 December 2020
Others 30,125,270 22,428,956
Total 30,125,270 22,428,956
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(1) Interest receivable
(a) Others by customer type:
Customer type 31 December 2021 31 December 2020
Amounts due from related parties 341,880 522,936
Amounts due from other companies 29,783,390 21,906,020
Sub-total 30,125,270 22,428,956
Less: Provision for bad and doubtful debts - -
Total 30,125,270 22,428,956
(b) The ageing analysis is as follows:
Ageing 2021 2020
Within 1 year (inclusive) 27,191,986 10,738,225
Over 1 year but within 2 years (inclusive) 70,480 3,927,625
Over 2 years but within 3 years (inclusive) 190,857 787,908
Over 3 years 2,671,947 6,975,198
Sub-total 30,125,270 22,428,956
Less: Provision for bad and doubtful debts - -
Total 30,125,270 22,428,956
The ageing is counted starting from the date when other receivables are recognised.
(c) Movements of provisions for bad and doubtful debts
As at 31 December 2021, no bad and doubtful debt provision was made for other
receivables (31 December 2020: Nil).
As at 31 December 2021, the Group has no other receivables written off (31 December
2020: Nil).
(d) Others categorised by nature
Nature of other receivables 2021 2020
Deposit 4,568,157 10,287,959
Refund of consumption tax and VAT 7,204,557 8,254,195
Petty cash receivable 252,481 124,878
Land purchases and reserves receivable 11,550,000
Others 6,550,075 3,761,924
Sub-total 30,125,270 22,428,956
Less: Provision for bad and doubtful debts - -
Total 30,125,270 22,428,956
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(e) Five largest others-by debtor at the end of the year
Ending balance
Percentage of
Nature of the Balance at the of provision for
Name Ageing ending balance
receivable end of the year bad and doubtful
of others (%)
debts
Land purchases
Debtor One and reserves 11,550,000 Within 1 year 38.3% -
receivable
Debtor Two Refund of VAT 5,995,042 Within 1 year 19.9% -
Debtor Three Refund of VAT 1,209,515 Within 1 year 4.0% -
Over 1 year but
Debtor Four Deposits 675,000 2.2% -
within 2 years
Debtor Five Insurance 602,705 Within 1 year 2.0% -
Total 20,032,262 66.4% -
7 Inventories
(1) Inventories by category:
2021 2020
Provision for Provision for
Item Carrying Carrying
Book value impairment of Book value impairment of
amount amount
inventories inventories
Raw materials 245,114,403 - 245,114,403 70,165,666 - 70,165,666
Work in progress 1,937,081,109 - 1,937,081,109 2,236,815,423 - 2,236,815,423
Finished goods 634,212,222 (13,785,214) 620,427,008 653,042,196 (14,474,634) 638,567,562
Total 2,816,407,734 (13,785,214) 2,802,622,520 2,960,023,285 (14,474,634) 2,945,548,651
(2) Provision for impairment of inventories:
Increase during Decrease during
Item Opening balance the year the year Closing balance
Recognised Reversal
Finished goods 14,474,634 13,785,214 (14,474,634) 13,785,214
8 Other current assets
Item 2021 2020
Prepaid income taxes 16,697,663 16,087,815
Input tax to be credited 198,516,812 215,812,506
Deferred expenses 1,938,126 2,218,394
Total 217,152,601 234,118,715
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9 Long-term equity investments
(1) Long-term equity investments by category:
Item 2021 2020
Investments in joint ventures 39,652,834 42,019,654
Investments in associates 6,843,676 6,243,853
Sub-total 46,496,510 48,263,507
Less: Provision for impairment - -
Total 46,496,510 48,263,507
(2) Movements of long-term equity investments during the year are as follows:
Movements during the year
2021
Losses from
Balance at the 2021 Shareholding
Investee Increase in investments
beginning of the Closing balance percentage
capital under
year
equity-method
Joint ventures
SAS L&M Holdings (“L&M
42,019,654 - (2,366,820) 39,652,834 55%
Holdings”)
Associates
WEMISS (Shanghai)
Enterprise Development Co., 2,743,890 - (377,079) 2,366,811 30%
Ltd (“WEMISS Shanghai”)
Yantai Santai Real Estate
3,499,963 - 19,693 3,519,656 35%
Development Co., Ltd
Chengdu Yufeng Brand
518,000 (36,528) 481,472 10%
Management Co., Ltd. (Note)
Yantai Guolong Wine Industry
500,000 (24,263) 475,737 10%
Co., Ltd. (Note)
Sub-total 6,243,853 1,018,000 (418,177) 6,843,676
Total 48,263,507 1,018,000 (2,784,997) 46,496,510
Note: The Group has appointed one director to each of these investees.
10 Investment properties
Buildings and
plants
Cost
Balance as at 31 December 2020 and 31 December 2021 70,954,045
Accumulated depreciation
31 December 2020 (43,896,315)
Charge for the year (2,555,472)
31 December 2021 (46,451,787)
Carrying amount
31 December 2021 24,502,258
31 December 2020 27,057,730
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11 Fixed assets
(1) Fixed assets
Machinery &
Item Plant & buildings Motor vehicles Total
equipment
Cost
31 December 2020 5,136,758,695 2,787,309,487 27,566,592 7,951,634,774
Additions during the year
- Purchases 42,575,416 73,522,777 1,308,231 117,406,424
- Transfers from construction
115,583,725 6,463,487 - 122,047,212
in progress
Decrease during the year - - - -
Disposals or written-offs during
- (46,386,188) (1,692,947) (48,079,135)
the year
31 December 2021 5,294,917,836 2,820,909,563 27,181,876 8,143,009,275
Accumulated depreciation
31 December 2020 (892,581,856) (1,294,646,448) (21,992,597) (2,209,220,901)
Charge for the year (125,310,315) (141,287,142) (2,001,135) (268,598,592)
Disposals or written-offs during
- 38,769,695 1,385,864 40,155,559
the year
31 December 2021 (1,017,892,171) (1,397,163,895) (22,607,868) (2,437,663,934)
Provision for impairment
31 December 2020 - (17,478,027) - (17,478,027)
Charge for the year - - - -
31 December 2021 - (17,478,027) - (17,478,027)
Carrying amount
31 December 2021 4,277,025,665 1,406,267,641 4,574,008 5,687,867,314
31 December 2020 4,244,176,839 1,475,185,012 5,573,995 5,724,935,846
As at 31 December 2021, ownership restricted net value of fixed assets is RMB313,012,605
(31 December 2020: RMB333,748,819), referring to Note V. 52.
(2) Fixed assets leased out under operating leases
Accumulated Provision for
Item Cost Carrying amount
depreciation impairment
Buildings 47,821,026 (17,759,826) - 30,061,200
Machinery equipment 73,592,531 (55,620,641) (17,478,027) 493,863
Motor vehicles 3,344,518 (3,185,307) - 159,211
Total 124,758,075 (76,565,774) (17,478,027) 30,714,274
(3) Fixed assets leased out under operating leases
Carrying amount at
Item
the end of the year
Machinery equipment 8,627
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(4) Fixed assets pending certificates of ownership
Reason why the
Item Carrying amount
certificates are pending
Dormitories, main building and reception
276,574,493 Processing
building of Changan Chateau
European town, main building and service
170,296,377 Processing
building of Chateau Beijing
Fermentation shop and warehouse of Xinjiang
15,835,763 Processing
Tianzhu
Office and packaging shop of Golden Icewine
9,073,335 Processing
Valley
Fermentation shop of Zhangyu (Jingyang) 5,101,910 Processing
Office, experiment building and workshop of
3,147,779 Processing
Fermentation Centre
Finished goods warehouse and workshop of
2,124,816 Processing
Kylin Packaging
Others 284,591 Processing
The buildings without property certificate above have no significant impact on the Group’s
management.
12 Construction in progress
(1) Construction in progress
2021 2020
Project Provision for Carrying Provision for Carrying
Book value Book value
impairment amount impairment amount
R&D Centre (“Changyu
577,328,351 - 577,328,351 589,010,299 - 589,010,299
Wine Complex”) Project
Ningxia Chateau
2,835,598 - 2,835,598 420,440 - 420,440
Construction Project
Sales Company
- - - 738,462 - 738,462
Construction Project
Changan Chateau
1,245,742 - 1,245,742 7,626,393 - 7,626,393
Construction Project
Shihezi Chateau
1,028,512 - 1,028,512 5,000 - 5,000
Construction Project
Other Companies’
7,733,896 - 7,733,896 37,694,558 - 37,694,558
Construction Project
Total 590,172,099 - 590,172,099 635,495,152 - 635,495,152
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(2) Movements of major construction projects in progress during the year
Percentage Attributable to: Interest
Accumulated
Budget Opening Additions Transfers to Other transfers Closing of actual Interest rate for Sources of
Item capitalised
(RMB million) balance during the year fixed assets out balance cost to capitalised for capitalisation funding
interest
budget (%) the year in 2020 (%)
Loans from
financial
Changyu Wine Complex 4,506 589,010,299 102,663,881 (114,345,829) - 577,328,351 82.2% 17,155,308 945,185 1.2%and4.3% institutions
and
self-raised
Ningxia Chateau Construction Project 428 420,440 2,415,158 - - 2,835,598 100.0% Self-raised
Changan Chateau Construction
698 7,626,393 6,419,524 (3,197,455) (9,602,720) 1,245,742 100.0% Self-raised
Project
Shihezi Chateau Construction Project 780 5,000 2,662,193 (1,638,681) - 1,028,512 96.7% Self-raised
150
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13 Bearer biological assets
Bearer biological assets are vines, which measured in cost method.
Immature Mature biological
Item Total
biological assets assets
Original book value
31 December 2020 7,607,557 248,758,101 256,365,658
Additions during the year
- Increase in cultivated 17,215,775 - 17,215,775
- Transferred to mature (6,913,350) 6,913,350 -
Decrease during the year - (3,317,500) (3,317,500)
31 December 2021 17,909,982 252,353,951 270,263,933
Accumulated amortisation
31 December 2020 - (64,192,122) (64,192,122)
Charge for the year - (13,721,424) (13,721,424)
Decrease during the year - 1,362,555 1,362,555
31 December 2021 - (76,550,991) (76,550,991)
Carrying amount
31 December 2021 17,909,982 175,802,960 193,712,942
31 December 2020 7,607,557 184,565,979 192,173,536
As at 31 December 2021, there is no biological asset with ownership restricted (31 December
2020: Nil).
As at 31 December 2021, no provision for impairment of biological asset of the Group was
recognised as there is no any indication exists (31 December 20120: Nil).
14 Leases
(1) As a lessee
Right-of-use assets
Item Plant&buildings Lands Others Total
Cost
Balance at the beginning of
42,159,688 132,140,502 1,697,986 175,998,176
the year
Additions during the year 15,209,132 5,839,907 - 21,049,039
Balance at the end of the year 57,368,820 137,980,409 1,697,986 197,047,215
Accumulated depreciation
Balance at the beginning of
(7,201,147) (38,164,005) (339,597) (45,704,749)
the year
Charge for the year (10,697,382) (5,736,448) (339,597) (16,773,427)
Balance at the end of the year (17,898,529) (43,900,453) (679,194) (62,478,176)
Carrying amounts
At the end of the year 39,470,291 94,079,956 1,018,792 134,569,039
At the beginning of the year 34,958,541 93,976,497 1,358,389 130,293,427
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Lease liabilities
Item Note 31 December 2021 1 January 2021
Long-term lease liabilities 116,156,677 105,719,752
Less: lease liabilities due within
V,27 14,345,089 7,317,852
one year
Total 101,811,588 98,401,900
(2) As a lessor
Operating lease
Item 2021
Lease income 2,015,486
15 Intangible assets
Item Land use rights Software licenses Trademarks Total
Original book value
31 December 2020 532,069,913 98,975,807 189,269,287 820,315,007
Additions during the year
- Purchase 1,796,701 1,688,892 222,331 3,707,924
- Transfers from construction
(33,299,900) - - (33,299,900)
in progress
31 December 2021 500,566,714 100,664,699 189,491,618 790,723,031
Accumulated amortisation
31 December 2020 (100,498,469) (44,325,044) (14,502,429) (159,325,942)
Additions during the year
- Charge for the year (10,508,435) (9,200,894) (205,640) (19,914,969)
Decrease during the year 6,384,759 - - 6,384,759
31 December 2021 (104,622,145) (53,525,938) (14,708,069) (172,856,152)
Carrying amount
31 December 2021 395,944,569 47,138,761 174,783,549 617,866,879
31 December 2020 431,571,444 54,650,763 174,766,858 660,989,065
As at 31 December 2021, the Group has land use right with infinite useful lives of
RMB32,640,119 (31 December 2020: RMB30,746,186), representing the freehold land held
by Chile Indomita Wine Group and Australia Kilikanoon Estate under relevant Chile and
Australia laws, on which the amortisation is not required.
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As at 31 December 2021, the Group has trademark with infinite useful lives of
RMB155,355,846 (31 December 2020: RMB154,901,004), which is held by Chile Indomita
Wine Group and Australia Kilikanoon Estate. The recoverable amount of the trademark is
determined according to the present value of the expected future cash flows generated from
the asset group to which the single assets of trademark right belongs. The management
prepares the cash flow projection for future 5 years (the “projecting period”) based on the
latest financial budget assumption, and estimates the cash flows after the future 5 years (the
“subsequent period”). The pretax discount rates used in the cash flow projections are 11.0%
and 12.8%, respectively. A key assumption in the estimate of future cash flows is the
revenue growth rate in the projecting period. Such revenue growth rate is determined based
on the industry and the expected growth rate of Chile Indomita Wine Group and Australia
Kilikanoon Estate.
The Group recognises the trademark with infinite useful lives as intangible assets, the
impairment assessment of which is made at the end of each reporting year. The
management believes that any reasonable change of the above assumptions will not result in
the total book value of the asset group to which the single assets of trademark right belongs
exceeding its recoverable amount.
According to the result of impairment assessment, by the end of 31 December 2021, the
management believes there is no impairment loss on those trademarks with infinite useful
lives of the Group.
As at 31 December 2021, ownership restricted net value of intangible assets is
RMB201,345,477 (31 December 2020: RMB206,920,456), referring to Note V. 52.
16 Goodwill
(1) Changes in goodwill
Name of investee or events from 31 December Additions during Disposals during 31 December
Note
which goodwill arose 2020 the year the year 2021
Original book value
Etablissements Roullet Fransac
(a) 13,112,525 - - 13,112,525
(“Roullet Fransac”)
Dicot Partners, S.L (“Dicot”) (a) 92,391,901 - - 92,391,901
Chile Indomita Wine Group (a) 6,870,115 - - 6,870,115
Australia Kilikanoon Estate (a) 37,063,130 - - 37,063,130
Sub-total 149,437,671 - - 149,437,671
Impairment provision (16,499,459) (20,563,671) - (37,063,130)
Carrying amount 132,938,212 (20,563,671) - 112,374,541
(a) The Group acquired Fransac Sales, Dicot and Mirefleurs, Chile Indomita Wine Group and
Australia Kilikanoon Estate in December 2013, September 2015, July 2017 and January
2018 respectively, resulting in respective goodwill amounting to RMB13,112,525,
RMB92,391,901, RMB 6,870,115 and RMB37,063,130. The goodwill had been
allocated to corresponding asset groups for impairment testing.
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(2) Provision for impairment of goodwill
The Group has allocated the above goodwill to relevant asset groups for impairment testing.
The recoverable amount of the asset group is determined according to the present value of
the expected future cash flows. The management prepares the cash flow projection for
future 5 years (the “projecting period”) based on the latest financial budget assumption, and
estimates the cash flows after the future 5 years (the “subsequent period”). The pretax
discount rate used in calculating the recoverable amounts of Fransac Sales, Dicot, Mirefleurs,
Indomita Wine and Australia Kilikanoon Estate are 12.1%, 11.2%, 11.0% and 12.8%,
respectively (2020: 12.6%, 11.2%, 11.5% and 12.8%). The key assumption is the growth
rate of annual revenue growth rate of relevant subsidiaries, which is computed based on the
expected growth rate of each subsidiary and long-term average growth rates of relevant
industries. Other relevant key assumption is budget gross profit margin, which is determined
based on the historical performance of each subsidiary and its expectations for market
development. According to the results of the impairment test, the Group found that the
recoverable amount of the asset group including goodwill of Australia Kilikanoon Estate is
lower than its book value. Therefore, on 31 December 2021, the provision for impairment of
goodwill was RMB37,063,130. The impairment loss amounting to RMB20,563,671 was
recognised in asset impairment loss in 2021.
17 Long-term deferred expenses
Adjustments
Additions Written back
31 December at the 1 January Amortisation 31 December
Item during the during the
2020 beginning of 2021 for the year 2021
year year
the period
Land lease prepayment 40,918,256 (40,918,256) - - - - -
Land requisition fee 48,601,667 - 48,601,667 - (1,778,943) - 46,822,724
Greening fee 138,185,253 - 138,185,253 211,223 (8,748,458) (1,961,912) 127,686,106
Leasehold improvement 80,446,179 - 80,446,179 32,052,432 (8,218,980) - 104,279,631
Others 6,314,500 - 6,314,500 - (509,798) - 5,804,702
Total 314,465,855 (40,918,256) 273,547,599 32,263,655 (19,256,179) (1,961,912) 284,593,163
18 Deferred tax assets and deferred tax liabilities
(1) Deferred tax assets and liabilities
31 December 2021 31 December 2020
Deductible or Deductible or
Deferred tax Deferred tax
Item taxable taxable
assets/ assets/
temporary temporary
(liabilities) (liabilities)
differences differences
Deferred tax assets:
Provision for impairment of assets 51,526,991 11,522,575 44,279,268 9,732,098
Unrealised profits of intra-group
481,484,528 120,371,131 313,043,226 78,260,807
transactions
Unpaid bonus 150,325,085 37,581,271 147,824,610 36,956,152
Termination benefits 14,132,191 3,533,048 16,274,352 4,068,588
Deductible tax losses 266,833,106 63,160,456 268,074,301 65,844,999
Deferred income 41,295,338 8,642,716 52,653,609 11,378,631
Others 1,598,132 399,534 - -
Sub-total 1,007,195,371 245,210,731 842,149,366 206,241,275
Deferred tax liabilities:
Revaluation due to business
combinations involving entities 46,411,478 11,300,970 49,156,771 12,022,613
not under common control
Others 2,012,000 503,000 - -
Sub-total 48,423,478 11,803,970 49,156,771 12,022,613
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Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
(2) Details of unrecognised deferred tax assets
Item 2021 2020
Deductible tax losses 234,250,359 187,130,828
(3) Expiration of deductible tax losses for unrecognised deferred tax assets
Year 2021 2020
2021 - 25,008,263
2022 21,367,869 21,367,869
2023 22,801,737 22,801,737
2024 42,088,453 42,088,453
2025 75,794,409 75,864,506
2026 72,197,891 -
Total 234,250,359 187,130,828
19 Other non-current assets
Item 2021 2020
Royalty 144,120,442 170,370,147
Pursuant to a royalty agreement dated 18 May 1997, starting from 18 September 1997, the
Company may use certain trademarks of Changyu Group Company, which have been
registered with the PRC Trademark Office. An annual royalty fee at 2% of the Group’s
annual sales is payable to Changyu Group. The license is effective until the expiry of the
registration of the trademarks.
According to the above royalty agreement, Changyu Group collected a total of
RMB576,507,809 for royalty from 2013 to 2019, of which 51% was used to promote
trademarks such as Changyu and the product of this contract, totalling RMB294,018,093.
The amount is used for promotion of Changyu and other trademarks and the products of this
contract, totalling RMB62,250,368, the difference is RMB231,768,615 (including tax).
On 18 May 2019, the general meeting of shareholders approved the proposal of the
amendment to the royalty agreement. Article 6.1 of the royalty agreement with Changyu
Group was amended to: During the validity period of this contract, the Group pays Changyu
Group royalty on an annual basis. The royalty is calculated based on 0.98% of the sales
volume of the Group ‘s contract products using this trademark. The article is amended to:
The royalty paid to the Changyu Group by the Group shall not be used to promote this
trademark and the contract products.
Changyu Group promised to offset the difference of RMB231,768,615 above with the royalty
for four years, i.e. from 2019 to 2022.If it is not sufficient for deduction, the rest will be repaid
in a one-off manner in 2023. If there is surplus, the surplus part of the royalty will be
charged from the year when the surplus occurs. As the amount is a long-term prerpayment,
the Company recognises the amount as other non-current assets and meanwhile offset the
sales fee, i.e. royalty.
As at 31 December 2021, the Group’s royalty in 2021 was RMB26,249,705 (VAT included).
When the difference is deducted by the above-mentioned amount, the balance of royalty due
from Changyu Group was RMB144,120,442.
155
Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
20 Short-term loans
Short-term loans by category:
Item 2021 2020
Unsecured loans 478,331,156 619,149,908
Mortgaged loans 118,469,193 55,724,891
Guaranteed loans 25,266,108 14,215,916
Total 622,066,457 689,090,715
As at 31 December 2021, details of short-term borrowings were as follows:
Interest rate at the
Exchange Amount Nature of Interest rate
Amount end of the year
rate interest rate
RMB % %
1 year
Credit loans (RMB) 150,000,000 1.0000 150,000,000 Floating 3.35%
LPR-0.005
Annual benchmark
Credit loans (RMB) 300,000,000 1.0000 300,000,000 Floating 3.35%
interest rate
Credit loans (USD) 4,490,000 6.3098 28,331,156 Fixed 1.48% 1.48%
Mortgaged loans
6,795,437 7.2197 49,061,015 Fixed 0.35% - 0.9% 0.35% - 0.9%
(EUR)
Mortgaged loans
11,000,000 6.3098 69,408,178 Fixed 1.12% - 1.55% 1.12% - 1.55%
(USD)
Guaranteed loans
5,466,488 4.6220 25,266,108 Fixed 2.50% 2.50%
(AUD)
Total 622,066,457
As at 31 December 2021, mortgaged loans (EUR) were Hacienda y Viedos Marques del
Atrio, S.L.U (“ Atrio “) factoring of accounts receivable from banks including Banco de
Sabadell, S.A. of EUR6,795,437 (equivalent of RMB49,061,015) (31 December 2020:
EUR3,558,629, equivalent of RMB28,557,993.
On 31 December 2021, Chile Indomita Wine Group pledged its fixed assets to Banco
Scotiabank to borrow USD11,000,000 (equivalent to RMB69,408,178) (31 December
2020: USD4,000,000, equivalent to RMB26,162,960).
On 31 December 2021, the secured loan represented the secured loan of Australia
Kilikanoon Estate of AUD5,466,488 (equivalent to RMB25,266,108) (31 December 2020:
AUD2,833,945, equivalent to RMB14,215,916).
21 Accounts payable
Ageing 2021 2020
Within 1 year (inclusive) 486,006,974 477,926,275
Over 1 year but within 2 years (inclusive) 4,435,786 2,173,356
Over 2 years but within 3 years (inclusive) 1,405,133 1,277,767
Over 3 years 1,605,923 2,970,560
Total 493,453,816 484,347,958
There is no significant accounts payable with ageing of more than one year.
156
Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
22 Contract liabilities
As at As at
Item
31 December 2021 1 January 2021
Receipt in advance 144,013,594 118,210,799
Withholding sales rebates 3,107,122 16,862,481
Total 147,120,716 135,073,280
Contract liabilities primarily relate to the Group’s advances from sales contracts of specific
customers and the withholding sales rebates. Relevant contract liabilities are recognised as
revenue when the control of the goods is transferred to the customer.
23 Employee benefits payable
(1) Employee benefits payable:
Additions during Decrease during
Note 31 December 2020 31 December 2021
the year the year
Short-term employee
(2) 172,176,085 463,134,665 (454,752,853) 180,557,897
benefits
Post-employment
benefits - defined (3) 329,474 45,027,626 (45,027,747) 329,353
contribution plans
Termination benefits 16,274,352 5,609,349 (7,751,510) 14,132,191
Total 188,779,911 513,771,640 (507,532,110) 195,019,441
(2) Short-term employee benefits
Additions during Decrease during
31 December 2020 31 December 2021
the year the year
Salaries, bonuses,
170,277,311 414,204,352 (405,639,128) 178,842,535
allowances
Staff welfare 1,734,723 17,963,364 (18,057,122) 1,640,965
Social insurance 340,733 15,251,455 (15,288,352) 303,836
Medical insurance 340,733 13,693,635 (13,730,532) 303,836
Work-related injury
- 1,534,970 (1,534,970) -
insurance
Maternity insurance - 22,850 (22,850) -
Housing fund 27,497 12,722,935 (12,711,850) 38,582
Labour union fee, staff and
1,874,792 3,033,259 (3,056,401) 1,851,650
workers’ education fee
Sub-total 174,255,056 463,175,365 (454,752,853) 182,677,568
Less: Non-current liabilities 2,078,971 40,700 - 2,119,671
Total 172,176,085 463,134,665 (454,752,853) 180,557,897
(3) Post-employment benefits - defined contribution plans
Additions during Decrease during
31 December 2020 31 December 2021
the year the year
Basic pension insurance 329,464 43,803,058 (43,804,402) 328,120
Unemployment insurance 10 1,224,568 (1,223,345) 1,233
Total 329,474 45,027,626 (45,027,747) 329,353
157
Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
24 Taxes payable
Item 2021 2020
Value-added tax 54,103,944 25,853,102
Consumption tax 70,563,701 42,076,231
Corporate income tax 194,566,746 130,621,524
Individual income tax 872,252 614,344
Tax on the use of urban land 2,441,121 2,327,666
Education surcharges 5,199,891 2,498,374
Urban maintenance and construction tax 7,128,647 3,429,038
Others 7,445,998 5,992,534
Total 342,322,300 213,412,813
25 Other payables
Note 31 December 2021 31 December 2020
Interest payable 323,074 553,471
Dividends payable 68,392 1,003,125
Others (1) 452,642,025 384,548,930
Total 453,033,491 386,105,526
(1) Others
(a) Details of others by nature are as follows:
Item 2021 2020
Deposit payable to dealer 241,414,134 177,129,582
Advertising fee payable 41,264,460 50,444,091
Equipment and construction fee payable 44,345,312 51,381,563
Freight charges payable 29,192,798 26,061,359
Deposits due to suppliers 12,966,789 14,836,302
Contracting fee payable 8,668,872 9,656,066
Staff deposit 5,037,925 359,282
Others 69,751,735 54,680,685
Total 452,642,025 384,548,930
(b) There are no significant others aged over one year accured this year.
26 Other current liabilities
As at 31 December As at 31 December
Item
2021 2020
Tax to be transferred out as sales 18,374,193 14,820,653
158
Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
27 Non-current liabilities due within one year
Non-current liabilities due within one year by category are as follows:
Item 2021 2020
Long-term loans due within one year 74,520,037 111,311,890
Long-term payables due within one year 22,000,000 22,000,000
Long-term lease liabilities due within one year 14,345,089 -
Total 110,865,126 133,311,890
28 Long-term loans
(1) Long-term loans by category
Item 2021 2020
Credit loans 193,475,080 220,219,258
Guaranteed loans 57,092,000 91,445,600
Less: Long-term loans due within one year 74,520,037 111,311,890
Total 176,047,043 200,352,968
As at 31 December 2021, details of long-term borrowings were as follows:
Interest rate at the Long-term Long-term
Exchange Amount Nature of Interest rate
Amount end of the year loans due loans due after
rate interest rate
RMB % % within one year one year
Credit loans (EUR) 26,798,216 7.2197 193,475,080 Fixed 0.95% - 3.28% 0.95% - 3.28% 68,270,037 125,205,043
90% of 5-year
Guaranteed loans (RMB) 6,250,000 1.0000 6,250,000 Floating 4.275% 6,250,000 -
LPR
Guaranteed loans (AUD) 11,000,000 4.6220 50,842,000 Floating BBSY+1.10% 1.40% - 50,842,000
Total 250,567,080 74,520,037 176,047,043
As at 31 December 2021, Credit loans (EUR) were EUR26,798,216 borrowed by Banco
Sabadell, Bankia, Banco Santander, BBVA, Caja Rural de Navarr etc. (equivalent of
RMB193,475,080) (31 December 2020: EUR27,441,652, equivalent of RMB220,219,258).
Guaranteed loans (RMB) were long-term borrowings of RMB6,250,000 of the R&D Centre, a
subsidiary of the Company (31 December 2020: RMB31,250,000). Australia Kilikanoon
Estate has borrowed AUD11,000,000 (equivalent of RMB50,842,000) (31 December 2020:
AUD12,000,000, equivalent of RMB60,195,600) from ANZ Bank and it was guaranteed by the
Company.
29 Long-term payables
Item 2021 2020
Agricultural Development Fund of China (“CADF”) 86,000,000 108,000,000
Less: Long-term payables due within one year 22,000,000 22,000,000
Balance of long-term payables 64,000,000 86,000,000
In 2016, RMB305,000,000 from CADF was invested in R&D Centre, CADF accounted for
37.9% of the registered capital. According to the investment agreement, CADF will recovery
investment funds over 10 years, the investment income received equal to 1.2% of the
remaining unpaid principal per annum. In addition to the fixed income, CADF will no longer
enjoy other profits or bear the loss of R&D Centre. Therefore, although the investment in
R&D Centre, nominally equity investment, is actually a debt investment (financial discount
loan). The Group take this investment as long-term payables, which measured in amortized
cost. The Group repays the principal of RMB22,000,000in 2021. Refer to Note V. 52 for
details of mortgaged and pledged assets.
159
Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
Balance of long-term
Return on Termination date Due within one year Due after one year Mortgaged and
payables Investment date
investment of repayment pledged assets
RMB RMB RMB
29 February 28 February Fixed assets and
86,000,000 1.2%
2016 2025
22,000,000 64,000,000 intangible assets
30 Deferred income
Additions during Decrease during the
Item 31 December 2020 31 December 2021
the year year
Government grants 52,653,609 2,452,011 (13,810,282) 41,295,338
Government grants:
Amounts
Additions of
recognised in other Related to
Liability 31 December 2020 government grants 31 December 2021
income during assets/income
during the year
the year
Government
Industrial development support
24,600,000 - (4,100,000) 20,500,000 grants related
project
to assets
Government
Fixed asset investment reward
2,436,600 - (2,280,000) 156,600 grants related
of Shihezi Chateau project
to assets
Shandong Peninsula Blue Government
Economic Area construction 2,000,000 - (2,000,000) - grants related
funds to assets
Xinjiang industrial revitalisation Government
and technological 12,798,000 - (1,422,000) 11,376,000 grants related
transformation project to assets
Government
Special government grant for
2,120,000 - (1,060,000) 1,060,000 grants related
infrastructure
to assets
Government
Raw wine fermentation project 434,700 - (434,700) - grants related
to assets
Wine fermentation capacity Government
construction (Huanren) 2,400,000 - (400,000) 2,000,000 grants related
project to assets
Engineering technology Government
transformation of information 1,740,000 - (580,000) 1,160,000 grants related
system project to assets
Government
Liquor electronic tracking
1,191,150 - (667,055) 524,095 grants related
project
to assets
Government
Special fund for efficient
1,315,000 - (162,000) 1,153,000 grants related
water-saving irrigation project
to assets
Subsidy for economic and Government
energy-saving technological 769,800 - (128,300) 641,500 grants related
transformation projects to assets
Government
Wine industry development
186,000 - (186,000) - grants related
project
to assets
Subsidy for mechanic Government
development of Penglai 238,858 - (13,270) 225,588 grants related
Daliuhang Base to assets
Government
Coal subsidy - 2,079,711 - 2,079,711 grants related
to assets
Cross-border e-commerce Related to
201,801 - (201,801) -
project income
Subsidy for boiler Related to
70,000 - (10,000) 60,000
reconstruction and demolition income
Prize from Industrial Design
Related to
Competition of Yantai 50,000 50,000 (50,000) 50,000
income
Mayor’s Cup
Special Funds for
Related to
Innovation-Driven 101,700 322,300 (115,156) 308,844
income
Development of Yantai City
Total 52,653,609 2,452,011 (13,810,282) 41,295,338
160
Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
31 Other non-current liabilities
Item 31 December 2021 31 December 2020
Employee benefits payable 2,119,671 2,078,971
As at 31 December 2021, employee benefit represents deposit from bonus accrued for
managers and above. The bonus is expected to be paid in 2023.
32 Share capital
At 31 December
2020 and
31 December 2021
Unrestricted A shares 453,460,800
B shares 232,003,200
Total of unrestricted shares 685,464,000
33 Capital reserve
Additions during the Decrease during
Item 31 December 2020 31 December 2021
year the year
Share premium 519,052,172 - - 519,052,172
Others 5,916,588 - - 5,916,588
Total 524,968,760 - - 524,968,760
34 Other comprehensive income
Accrued during the year
Balance at the
Less: Balance at the
beginning of Net-of-tax Net-of-tax
Previously end of the year
the year Less: amount amount
Item Before-tax recognised attributable to
attributable to Income tax attributable to attributable to
amount amount shareholders of
shareholders of expenses shareholders of non-controlling
transferred to the Company
the Company the Company interests
profit or loss
Items that may be
reclassified to profit
or loss
Translation
differences arising
from translation of
576,129 (39,307,949) - - (35,283,306) (4,024,643) (34,707,177)
foreign currency
financial
statements
161
Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
35 Surplus reserve
Item 31 December 2021 31 December 2020
Statutory surplus reserve 342,732,000 342,732,000
In accordance with the Company Law and the Articles of Association Company, the Company
appropriated 10% of its net profit to statutory surplus reserve. The appropriation to the
statutory surplus reserve may be ceased when the accumulated appropriation reaches over
50% of the registered capital of the Company. The Company does not appropriate net profit
to the surplus reserve in 2021 as surplus reserve of the Company is above 50% of the
registered capital.
The Company can appropriate discretionary surplus reserve after appropriation of the
statutory surplus reserve. Discretionary surplus reserve can be utilised to offset the deficit or
increase the share capital after approval.
36 Retained earnings
Item Note 2021 2020
Retained earnings at the beginning of the
8,714,091,755 8,735,513,044
year (before adjustment)
Impact of retrospective adjustment of
(1) (10,582,161) -
accounting standards
Retained earnings at the beginning of the
8,703,509,594 8,735,513,044
year (after adjustment)
Add: Net profits for the year attributable to
500,102,606 470,860,587
shareholders of the Company
Less: Dividends to ordinary shares (2) (274,185,600) (479,824,800)
Distribution of dividends to existing
shareholders from Culture - (12,457,076)
Development
Retained earnings at the end of the year (3) 8,929,426,600 8,714,091,755
(1) Adjustments on beginning retained earnings are as follows:
As a result of the implementation of the new financial instrument standards by the Group in
2021, the undistributed profit at the beginning of 2021 was reduced by RMB10,582,161.
(2) Dividends in respect of ordinary shares declared during the year
Pursuant to the shareholders’ approval at the shareholders’ general meeting on 27 May 2021,
a cash dividend of RMB0.4 per share (2020: RMB0.7 per share), totalling RMB274,185,600
(2020: RMB479,824,800).
(3) Retained earnings at the end of the year
As at 31 December 2021, the consolidated retained earnings attributable to the Company
included an appropriation of RMB58,041,628 (2020: RMB58,021,644) to surplus reserve
made by the subsidiaries.
162
Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
37 Operating income and operating costs
2021 2020
Item
Income Cost Income Cost
Principal activities 3,879,875,396 1,604,954,772 3,325,812,768 1,479,923,326
Other operating activities 73,192,187 42,835,102 69,589,233 23,954,081
Total 3,953,067,583 1,647,789,874 3,395,402,001 1,503,877,407
Including:Revenue from
contracts with 3,951,052,097 1,646,424,782 3,393,386,515 1,502,467,908
customers
Rent income 2,015,486 1,365,092 2,015,486 1,409,499
(1) Disaggregation of revenue from contracts with customers:
Type of contract 2021 2020
By type of goods or services
- Liquor 3,879,875,396 3,325,812,768
- Others 71,176,701 67,573,747
By timing of transferring goods or services
- Revenue recognised at a point in time 3,951,052,097 3,393,386,515
38 Taxes and surcharges
Item 2021 2020
Consumption tax 164,791,894 120,563,955
Urban maintenance and construction tax 30,604,422 23,169,608
Education surcharges 22,147,840 16,756,851
Property tax 28,005,705 26,843,414
Tax on the use of urban land 11,654,759 11,332,778
Stamp duty 6,488,829 3,650,250
Others 364,121 1,472,418
Total 264,057,570 203,789,274
163
Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
39 Selling and distribution expenses
Item 2021 2020
Salaries and benefits 308,876,899 289,527,114
Marketing fee 251,443,176 200,259,537
Labour service fee 96,864,855 58,723,298
Depreciation expense 48,014,605 41,224,340
Storage rental 28,110,876 35,744,058
Advertising fee 91,168,885 22,724,095
Royalty 24,763,872 21,985,068
Travelling expenses 21,624,100 20,065,075
Design and production fee 30,247,672 15,427,023
Conference fee 20,088,371 15,387,699
Water, electricity and gas fee 14,988,125 13,427,340
Others 62,762,669 53,757,838
Total 998,954,105 788,252,485
40 General and administrative expenses
Item 2021 2020
Salaries and benefits 73,920,103 73,329,053
Depreciation expenses 79,928,195 72,637,754
Repair costs 16,467,478 23,714,008
Administrative expenses 26,124,859 20,927,794
Amortisation expenses 19,354,205 19,568,760
Amortisation of greening fee 19,186,231 18,187,244
Rental charge 5,735,121 9,969,494
Safety production costs 11,190,158 7,831,443
Security and cleaning fee 7,455,965 7,650,813
Contracting fee 9,192,907 7,603,536
Others 30,521,154 29,226,567
Total 299,076,376 290,646,466
41 Financial expenses
Item 2021 2020
Interest expenses from loans and payables 24,504,339 35,187,642
Interest expenses from lease liabilities 5,292,452 -
Less: Borrowing costs capitalised 945,185 797,021
Less: Financial expenses offset by fiscal interest
- 1,500,000
subsidy
Interest income from deposits and receivables (19,558,354) (14,247,274)
Net exchange losses/(gains) 8,296,888 (274,140)
Other financial expenses 3,588,587 2,072,506
Total 21,178,727 20,441,713
Fiscal interest subsidy during reporting period has been included in non-recurring gains and
losses.
164
Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
42 Other income
Related to
Item 2021 2020
assets/income
Government grants
Reward on the fixed asset investment - 2,280,000
related to assets
Shandong Peninsula Blue Economic Government grants
2,000,000 2,000,000
Area construction funds related to assets
Government grants
Industrial development support project 4,100,000 4,100,000
related to assets
Others - Government grants related to Government grants
7,333,325 7,018,292
assets related to assets
Special funds for the development of
6,815,339 23,068,826 Related to income
enterprises
Tax refunds 13,747,870 12,324,440 Related to income
Strong industrial city special funds - 792,600 Related to income
Others - Government grants related to
14,244,207 21,479,462 Related to income
income
Total 48,240,741 73,063,620
Other income during reporting period has been included in non-recurring gains and losses.
43 Investment losses
Investment losses by item
Item 2021 2020
Long-term equity investment losses under equity
(2,784,997) (2,217,623)
method
Total (2,784,997) (2,217,623)
44 Credit (losses)/reversal
Item 2021 2020
Accounts receivable (7,937,144) 4,348,309
Total (7,937,144) 4,348,309
45 Impairment losses
Item 2021 2020
Inventories 689,420 5,705,003
Goodwill (20,563,671) (8,920,981)
Total (19,874,251) (3,215,978)
46 Loss from asset disposals
Item 2021 2020
Loss from disposal of fixed assets 11,939,284 1,180,655
Loss from disposal of assets during reporting period has been included in non-recurring gains
and losses.
165
Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
47 Non-operating income and non-operating expenses
(1) Non-operating income by item is as follows:
Item 2021 2020
Inventory stocktake surplus 1,019,314 3,823,905
Insurance compensation 1,069,670 3,067,670
Net income from fine 1,068,169 3,098,877
Others 2,057,151 1,918,058
Total 5,214,304 11,908,510
Non-operating income during reporting period has been included in non-recurring gains and
losses.
(2) Non-operating expenses
Item 2021 2020
Compensation, penalty and fine expenses 1,761,266 347,635
Donations provided 900,000 1,048,300
Losses from damage or scrapping of non current
3,425,709 -
assets
Others 224,869 306,923
Total 6,311,844 1,702,858
Non-operating expenses during reporting period has been included in non-recurring gains and
losses.
48 Income tax expenses
Item Note 2021 2020
Current tax expense for the year based on
248,208,920 135,163,243
tax law and regulations
Changes in deferred tax assets/liabilities (1) (39,188,099) 56,641,257
Total 209,020,821 191,804,500
(1) The analysis of changes in deferred tax is set out below:
Item 2021 2020
Origination of temporary differences (39,188,099) 56,641,257
Total (39,188,099) 56,641,257
166
Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
(2) Reconciliation between income tax expenses and accounting profit:
Item 2021 2020
Profit before taxation 715,699,194 664,866,563
Estimated income tax at 25% 178,924,799 166,216,641
Effect of different tax rates applied by subsidiaries 7,223,819 1,310,363
Effect of non-deductible costs, expense and losses 9,480,180 7,185,074
Effect of deductible losses of deferred tax assets not
12,159,985 16,417,337
recognised for the year
Deferred tax assets written-off 1,232,038 675,085
Income tax expenses 209,020,821 191,804,500
49 Basic earnings per share and diluted earnings per share
(1) Basic earnings per share
Basic earnings per share is calculated as dividing consolidated net profit attributable to
ordinary shareholders of the Company by the weighted average number of ordinary shares
outstanding:
2021 2020
Consolidated net profit attributable to ordinary
500,102,606 470,860,587
shareholders of the Company
Weighted average number of ordinary shares
685,464,000 685,464,000
outstanding
Basic earnings per share (RMB/share) 0.73 0.69
Weighted average number of ordinary shares is calculated as follows:
2021 2020
Issued ordinary shares at the beginning of the year 685,464,000 685,464,000
Weighted average number of ordinary shares at the
685,464,000 685,464,000
end of the year
(2) The Group does not have any potential dilutive ordinary shares for the listed years.
50 Cash flow statement
(1) Proceeds relating to other operating activities:
Item 2021 2020
Government grants 36,882,470 56,515,941
Penalty income 1,068,169 3,098,877
Interest income from bank 19,558,354 14,396,201
Others 31,633,258 7,186,229
Total 89,142,251 81,197,248
167
Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
(2) Payments relating to other operating activities:
Item 2021 2020
Selling and distribution expenses 430,962,311 399,973,695
General and administrative expenses 128,747,237 127,666,411
Others 2,488,469 24,250,891
Total 562,198,017 551,890,997
(3) Proceeds relating to other financing activities:
Item 2021 2020
Cash paid for acquisition of minority interests - 62,966,747
Cash paid for lease 15,904,567 -
Total 15,904,567 62,966,747
51 Supplementary information on cash flow statement
(1) Supplement to cash flow statement
a. Reconciliation of net profit to cash flows from operating activities:
Item 2021 2020
Net profit 506,678,373 473,062,063
Add: Provisions for impairment of assets 19,874,251 3,215,978
Credit losses/(reversal) 7,937,144 (4,348,309)
Depreciation of fixed assets and
271,154,064 298,224,327
investment property
Amortisation of intangible assets 19,914,969 20,413,627
Amortisation of long-term deferred
19,256,179 16,578,465
expenses
Amortisation of biological assets 13,721,424 13,270,614
Depreciation of ROU assets 16,773,427 -
Losses from disposal of fixed assets,
intangible assets, and other long-term 15,364,993 1,338,570
assets
Financial expenses 26,782,042 36,134,118
Royalty 24,763,872 21,985,068
Investment losses 2,784,997 2,217,623
(Increase)/Decrease in deferred tax
(38,969,456) 59,310,068
assets
Decrease in deferred tax liabilities (218,643) (2,668,811)
Decrease/(Increase) in gross
143,615,551 (38,192,093)
inventories
Increase in operating receivables (187,412,623) (41,443,296)
Increase/(Decrease) in operating
263,362,094 (353,951,339)
payables
Net cash flows from operating activities 1,125,382,658 505,146,673
168
Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
b. Significant investing and financing activities not requiring the use of cash:
Item 2021 2020
Payment of construction in progress and other
60,224,230 141,440,165
long-term assets by bank acceptances
c. Change in cash and cash equivalents:
Item 2021 2020
Cash equivalents at the end of the year 1,502,327,029 1,052,665,105
Less: Cash equivalents at the beginning of the
1,052,665,105 1,397,399,470
year
Net increase/(dercrease) in cash and cash
449,661,924 (344,734,365)
equivalents
(2) Information on acquisition or disposal of subsidiaries and other business units during the year:
Information on acquisition of subsidiaries and other business units:
2021 2020
Consideration for acquiring subsidiaries and other
- 89,519,789
business units
Cash or cash equivalents paid during the year
for acquiring subsidiaries and other business units - 89,519,789
during the year
Including: Culture Development - 89,519,789
Less: Cash and cash equivalents held by disposed
- -
subsidiaries and other business units
Net cash paid for the acquisition - 89,519,789
(3) Details of cash and cash equivalents
Item 2021 2020
Cash at bank and on hand
Including: Cash on hand 71,486 19,637
Bank deposits available on demand 1,502,255,543 1,052,645,468
Closing balance of cash and cash equivalents 1,502,327,029 1,052,665,105
52 Assets with restrictive ownership title or right of use
169
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Balance at the
Item Opening balance Reason for restriction
end of the year
The Company deposits for
Cash at bank and on hand 67,996,762 11,568,964
letters of credit etc.
Short-term borrowings
Account receivable (i) 28,557,991 49,061,015
mortgage from Atrio
R&D Centre mortgage for
long-term payables and
Fixed assets 333,748,819 313,012,605
long-term and short-term
borrowings
R&D Centre mortgage for
Intangible assets 206,920,456 201,345,477
long-term payables
Total 637,224,028 574,988,061
(i) As at 31 December 2021, the amount of accounts receivable with restricted ownership
is EUR6,795,436, which refers to accounts receivable Atrio conducted for factoring from
Banco de Sabadell, S.A. Etc. (31 December 2020: EUR3,558,628, equivalent of
RMB28,557,991)
170
Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
VI. Interests in other entities
1 Interests in subsidiaries
(1) Composition of the Group
Shareholding ratio
Principal place of Business (%)
Name of the Subsidiary Registered place Registered capital Acquisition method
business nature (or similar equity
interest)
Business combinations
Xinjiang Tianzhu Wine Co., Ltd. Shihezi, Xinjiang, Shihezi, Xinjiang,
Manufacturing RMB75,000,000 60 - involving entities not under
(“Xinajing Tianzhu”) China China
common control
Business combinations
Etablissements Roullet Fransac
Cognac, France Cognac, France Trading EUR2,900,000 - 100 involving entities not under
(“Roullet Fransac”)
common control
Business combinations
Marketing and
Dicot Partners, S.L (“Dicot”) Navarre, Spain Navarre, Spain EUR2,000,000 90 - involving entities not under
sales
common control
Via Indómita, S.A., Via Dos Andes, S.A.,
Marketing and Acquired through
and Bodegas Santa Alicia SpA. (“Chile Santiago, Chile Santiago, Chile CLP31,100,000,000 85 -
sales establishment or investment
Indomita Wine Group”)
Business combinations
Kilikanoon Estate Pty Ltd. Marketing and
Adelaide, Australia Adelaide, Australia AUD6,420,000 97.5 - involving entities not under
(“Australia Kilikanoon Estate”) sales
common control
Beijing Changyu Sales and Distribution Marketing and Acquired through
Beijing, China Beijing, China RMB1,000,000 100 -
Co., Ltd (“Beijing Sales”) sales establishment or investment
Yantai Kylin Packaging Co., Ltd. Yantai, Shandong, Yantai, Shandong, Acquired through
Manufacturing RMB15,410,000 100 -
(“Kylin Packaging”) China China establishment or investment
Yantai Chateau Changyu-Castel Co., Ltd Yantai, Shandong, Yantai, Shandong, Acquired through
Manufacturing USD5,000,000 70 -
(“Chateau Changyu”) (c) China China establishment or investment
Changyu (Jingyang) Wine Co., Ltd. Xianyang, Shaanxi, Xianyang, Shaanxi, Acquired through
Manufacturing RMB1,000,000 90 10
(“Jingyang Wine”) China China establishment or investment
Yantai Changyu Pioneer Wine Sales Yantai, Shandong, Yantai, Shandong, Marketing and Acquired through
RMB8,000,000 100 -
Co., Ltd. (“Sales Company”) China China sales establishment or investment
Langfang Development Zone
Langfang, Hebei, Langfang, Hebei, Acquired through
Castel-Changyu Wine Co., Ltd Manufacturing USD6,108,818 39 10
China China establishment or investment
(“Langfang Castel”)
Changyu (Jingyang) Wine Sales Co., Ltd. Xianyang, Shaanxi, Xianyang, Shaanxi, Marketing and Acquired through
RMB1,000,000 10 90
(“Jingyang Sales”) China China sales establishment or investment
Langfang Changyu Pioneer Wine Sales Langfang, Hebei, Langfang, Hebei, Marketing and Acquired through
RMB1,000,000 10 90
Co., Ltd (“Langfang Sales”) China China sales establishment or investment
171
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Shareholding ratio
Principal place of Business (%)
Name of the Subsidiary Registered place Registered capital Acquisition method
business nature (or similar equity
interest)
Shanghai Changyu Sales and Distribution Marketing and Acquired through
Shanghai, China Shanghai, China RMB1,000,000 100 -
Co., Ltd. (“Shanghai Sales”) sales establishment or investment
Beijing Changyu AFIP Agriculture
Miyun, Beijing, Marketing and Acquired through
development Co., Ltd (“Agriculture Miyun, Beijing, China RMB1,000,000 - 100
China sales establishment or investment
Development”)
Beijing Chateau Changyu AFIP Global Acquired through
Beijing, China Beijing, China Manufacturing RMB642,750,000 91.53 -
Co., Ltd. (“AFIP”) (d) establishment or investment
Yantai Changyu Wine Sales Co., Ltd. Yantai, Shandong, Yantai, Shandong, Marketing and Acquired through
RMB5,000,000 90 10
(“Wines Sales”) China China sales establishment or investment
Yantai Changyu Pioneer International Yantai, Shandong, Yantai, Shandong, Marketing and Acquired through
RMB5,000,000 70 30
Co., Ltd. (“Pioneer International”) China China sales establishment or investment
Hangzhou Changyu Wine Sales Co., Ltd. Hangzhou, Zhejiang, Hangzhou, Zhejiang, Marketing and Acquired through
RMB500,000 - 100
(“Hangzhou Changyu”) China China sales establishment or investment
Ningxia Changyu Grape Growing Co., Ltd. Yinchuan, Ningxia, Acquired through
Ningxia, China Plating RMB1,000,000 100 -
(“Ningxia Growing”) China establishment or investment
Huanren Changyu National Wines Sales Benxi, Liaoning, Marketing and Acquired through
Benxi, Liaoning, China RMB2,000,000 100 -
Co., Ltd. (“National Wines”) China sales establishment or investment
Liaoning Changyu Golden Icewine Valley Benxi, Liaoning, Acquired through
Benxi, Liaoning, China Manufacturing RMB59,687,300 51 -
Co., Ltd. (“Golden Icewine Valley”) (e) China establishment or investment
Yantai Development Zone Changyu Trading Yantai, Shandong, Yantai, Shandong, Marketing and Acquired through
RMB5,000,000 - 100
Co., Ltd (“Development Zone Trading”) China China sales establishment or investment
Yantai Changyu Fushan Trading Company Yantai, Shandong, Yantai, Shandong, Marketing and Acquired through
RMB5,000,000 - 100
(“Fushan Trading”)(a) China China sales establishment or investment
Beijing AFIP Meeting Center Miyun, Beijing, Acquired through
Miyun, Beijing, China Services RMB500,000 - 100
(“Meeting Center”) China establishment or investment
Beijing AFIP Tourism and Culture Miyun, Beijing, Acquired through
Miyun, Beijing, China Tourism RMB500,000 - 100
(“AFIP Tourism”) China establishment or investment
Changyu (Ningxia) Wine Co., Ltd. Acquired through
Ningxia, China Ningxia, China Manufacturing RMB1,000,000 100 -
(“Ningxia Wine”) establishment or investment
Yantai Changyu Chateau Tinlot Co., Ltd. Yantai, Shandong, Yantai, Shandong, Wholesale and Acquired through
RMB400,000,000 65 35
(“Chateau Tinlot”) China China retail establishment or investment
Xinjiang Chateau Changyu Baron Balboa Shihezi, Xinjiang, Shihezi, Xinjiang, Acquired through
Manufacturing RMB550,000,000 100 -
Co., Ltd. (“Chateau Shihezi”) China China establishment or investment
Ningxia Chateau Changyu Moser XV Yinchuan, Ningxia, Yinchuan, Ningxia, Acquired through
Manufacturing RMB2,000,000 100 -
Co., Ltd. (“Chateau Ningxia”) China China establishment or investment
Shaanxi Chateau Changyu Rena Co., Ltd. Xianyang, Shaanxi, Xianyang, Shaanxi, Acquired through
Manufacturing RMB20,000,000 100 -
(“Chateau Changan”) China China establishment or investment
172
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Shareholding ratio
Principal place of Business (%)
Name of the Subsidiary Registered place Registered capital Acquisition method
business nature (or similar equity
interest)
Yantai Changyu Wine Research &
Yantai, Shandong, Yantai, Shandong, Acquired through
Development Centre Co., Ltd. Manufacturing RMB805,000,000 85.32 -
China China establishment or investment
(“R&D Centre”) (f)
Wine
Changyu (HuanRen) Wine Co., Ltd Benxi, Liaoning, Acquired through
Benxi, Liaoning, China production RMB5,000,000 100 -
(“Huan Ren Wine”) China establishment or investment
projecting
Xinjiang Changyu Sales Co., Ltd Shihezi, Xinjiang, Shihezi, Xinjiang, Marketing and Acquired through
RMB10,000,000 - 100
(“Xinjiang Sales”) China China sales establishment or investment
Ningxia Changyu Trading Co., Ltd Yinchuan, Ningxia, Yinchuan, Ningxia, Marketing and Acquired through
RMB1,000,000 - 100
(“Ningxia Trading”) China China sales establishment or investment
Shaanxi Changyu Rena Wine Sales Xianyang, Shaanxi, Xianyang, Shaanxi, Marketing and Acquired through
RMB3,000,000 - 100
Co., Ltd (“Shaanxi Sales”) China China sales establishment or investment
Penglai Changyu Wine Sales Co., Ltd Penglai, Shandong, Penglai, Shandong, Marketing and Acquired through
RMB5,000,000 - 100
(“Penglai Sales”) China China sales establishment or investment
Laizhou Changyu Wine Sales Co., Ltd Laizhou, Shandong, Laizhou, Shandong, Marketing and Acquired through
RMB1,000,000 - 100
(“Laizhou Sales”) China China sales establishment or investment
Francs Champs Participations SAS Investment Acquired through
Cognac, France Cognac, France EUR32,000,000 100 -
(“Francs Champs”) and trading establishment or investment
Yantai Roullet Fransac Wine Sales Co., Ltd. Yantai, Shandong, Yantai, Shandong, Marketing and Acquired through
RMB1,000,000 - 100
(“Yantai Roullet Fransac”) China China sales establishment or investment
Yantai Changyu Wine Sales Co., Ltd. (“Wine Yantai, Shandong, Yantai, Shandong, Marketing and Acquired through
RMB5,000,000 100 -
Sales Company”) China China sales establishment or investment
Shaanxi Chateau Changyu Rena Tourism Xianxin, Shaanxi, Xianxin, Shaanxi, Acquired through
Tourism RMB1,000,000 - 100
Co., Ltd (“Chateau Tourism”) China China establishment or investment
Longkou Changyu Wine Sales Co., Ltd Yantai, Shandong, Yantai, Shandong, Marketing and Acquired through
RMB1,000,000 - 100
(“Longkou Sales”) China China sales establishment or investment
Yantai, Shandong, Yantai, Shandong, Acquired through
Culture Development Tourism RMB10,000,000 100 -
China China establishment or investment
Yantai, Shandong, Yantai, Shandong, Acquired through
Museum Tourism RMB500,000 - 100
China China establishment or investment
Yantai Changyu Culture Tourism Production Yantai, Shandong, Yantai, Shandong, Acquired through
Tourism RMB5,000,000 - 100
Sales Co., Ltd. (“Culture Sales”) China China establishment or investment
Yantai Changyu International Window of the
Yantai, Shandong, Yantai, Shandong, Acquired through
Wine City Co., Ltd. (“Window of the Wine Tourism RMB60,000,000 - 100
China China establishment or investment
City”)
Yantai KOYA Brandy Chateau Co., Ltd Yantai, Shandong, Yantai, Shandong, Acquired through
Manufacturing RMB10,000,000 100 -
(“Chateau KOYA”) China China establishment or investment
173
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Shareholding ratio
Principal place of Business (%)
Name of the Subsidiary Registered place Registered capital Acquisition method
business nature (or similar equity
interest)
Changyu (Shanghai) International Digital
Marketing and Acquired through
Marketing Center Limited Shanghai, China Shanghai, China RMB50,000,000 100 -
sales establishment or investment
(“Digital Marketing”)
Shanghai Changyu Guoqu Digital
Marketing and Acquired through
Technology Co., Ltd. Shanghai, China Shanghai, China RMB6,000,000 - 51
sales establishment or investment
(“Shanghai Guoqu”)(b)
Tianjin Changyu Yixin Digital Technology Marketing and Acquired through
Tianjin, China Tianjin, China RMB10,000,000 - 51
Co., Ltd. (“Tianjin Yixin”)(b) sales establishment or investment
Shanghai Changyu Yixin Digital Technology Marketing and Acquired through
Shanghai, China Shanghai, China RMB10,000,000 - 51
Co., Ltd. (“Shanghai Yixin”)(b) sales establishment or investment
(a) Companies above were deregistered in 2021.
(b) The companies above are newly established companies in 2021.
Reasons for the inconsistency between the proportion of shareholdings in a subsidiary and the proportion of voting rights:
(c) Chateau Changyu is a Sino-foreign joint venture established by the Company and a foreign investor, accounting for 70% of Changyu
Chateau’s equity interest. Through agreement arrangement, the Company has the full power to control Changyu Chateau’s strategic
operating, investing and financing policies. The agreement arrangement will be terminated on 31 December 2022.
(d) AFIP is a limited liability company established by Yantai Dean and Beijing Qinglang. In June 2019, Yantai Dean transferred 1.31% of its
equity to Yantai Changyu.After the equity change, the Company holds 91.53% of its equity. Through agreement arrangement, the
Company has the full power to control AFIP’s strategic operating, investing and financing policies. The agreement arrangement will be
terminated on 2 September 2024.
(e) Golden Icewine Valley is a Sino-foreign joint venture established by the Company and a foreign investor, accounting for 51% of Golden
Icewine Valley’s equity interest. Through agreement arrangement, the Company has the full power to control Golden Icewine Valley’s
strategic operating, investing and financing policies. The agreement arrangement will be terminated on 31 December 2021.
(f) R&D Centre is a joint venture established by the Company and CADF, accounting for 85.32% of R&D Centre’s equity interest. Through
agreement arrangement in Note V. 28, the Company has the full power to control R&D Centre’s strategic operating, investing and financing
policies. The agreement arrangement will be terminated on 28 February 2025. As at 31 December 2021, remaining investment of CADF
accounts for 14.68% of the registered capital.
174
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(2) Material non-wholly owned subsidiaries
Comprehensive
Proportion of
income Dividend declared Balance of
ownership
attributable to to non-controlling non-controlling
Name of the Subsidiary interest held by
non-controlling shareholders interests at the
non-controlling
interests for the during the year end of the year
interests
year
Xinjiang Tianzhu 40% 1,392,110 - (44,725,990)
AFIP 8.47% - - (56,409,393)
Golden Icewine Valley 49% - - (33,319,062)
IWCC 15% (492,609) 1,788,975 (54,712,980)
175
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(3) Key financial information about material non-wholly owned subsidiaries
The following table sets out the key financial information of the above subsidiaries without offsetting internal transactions, but with
adjustments made for the fair value adjustment at the acquisition date and any differences in accounting policies:
Xinjiang Tianzhu AFIP Golden Icewine Valley Chile Indomita Wine Group
2021 2020 2021 2020 2021 2020 2021 2020
Current assets 22,333,906 24,223,370 249,865,391 248,357,550 24,018,451 27,638,263 196,488,084 231,503,343
Non-current assets 43,852,510 45,465,308 414,851,163 434,045,076 24,450,344 24,246,983 314,756,823 291,345,642
Total assets 66,186,416 69,688,678 664,716,554 682,402,626 48,468,795 51,885,246 511,244,907 522,848,985
Current liabilities (39,567) (17,583) 27,459,352 41,910,462 12,976,418 9,967,686 130,027,677 132,100,755
Non-current liabilities 5,336,114 5,336,115 - - - - 8,906,387 9,794,949
Total liabilities 5,296,547 5,318,532 27,459,352 41,910,462 12,976,418 9,967,686 138,934,064 141,895,704
Operating income - - 191,463,783 168,184,273 24,236,758 20,488,946 226,856,381 225,121,450
Net (loss)/ profit (3,480,276) (3,665,095) 2,326,063 2,092,230 (6,425,183) (7,431,328) 19,716,978 18,196,663
Total comprehensive income (3,480,276) (3,665,095) 2,326,063 2,092,230 (6,425,183) (7,431,328) 3,284,057 18,420,833
Cash flows from operating
(1,292,713) (105,873) (4,754,748) 3,821,964 4,744,413 4,654,744 99,234,532 37,132,027
activities
176
Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
VII. Risk related to financial instruments
The Group has exposure to the following main risks from its use of financial instruments in the
normal course of the Group’s operations:
- Credit risk
- Liquidity risk
- Interest rate risk
- Foreign currency risk
The following mainly presents information about the Group’s exposure to each of the above
risks and their sources, their changes during the year, and the Group’s objectives, policies
and processes for measuring and managing risks, and their changes during the year.
The Group aims to seek appropriate balance between the risks and benefits from its use of
financial instruments and to mitigate the adverse effects that the risks of financial instruments
have on the Group’s financial performance. Based on such objectives, the Group’s risk
management policies are established to identify and analyse the risks faced by the Group, to
set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk
management policies and systems are reviewed regularly to reflect changes in market
conditions and the Group’s activities.
1 Credit risk
Credit risk is the risk that one party to a financial instrument will cause a financial loss for the
other party by failing to discharge an obligation. The Group’s credit risk is primarily
attributable to cash at bank, receivables, debt investments and derivative financial
instruments entered into for hedging purposes. Exposure to these credit risks are monitored
by management on an ongoing basis.
The cash at bank of the Group is mainly held with well-known financial institutions.
Management does not foresee any significant credit risks from these deposits and does not
expect that these financial institutions may default and cause losses to the Group.
As at 31 December 2021, the Group’s maximum exposure to credit risk which will cause a
financial loss to the Group due to failure to discharge an obligation by the counterparties.
In order to minimise the credit risk, the Group has adopted a policy to ensure that all sales
customers have good credit records. According to the policy of the Group, credit review is
required for clients who require credit transactions. In addition, the Group continuously
monitors the balance of account receivable to ensure there’s no exposure to significant bad
debt risks. For transactions that are not denominated in the functional currency of the
relevant operating unit, the Group does not offer credit terms without the specific approval of
the Department of Credit Control in the Group. In addition, the Group reviews the
recoverable amount of each individual trade debt at each balance sheet date to ensure that
adequate impairment losses are made for irrecoverable amounts. In this regard, the
management of the Group considers that the Group’s credit risk is significantly reduced.
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Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
Since the Group trades only with recognised and creditworthy third parties, there is no
requirement for collateral. Concentrations of credit risk are managed by
customer/counterparty, by geographical region and by industry sector. As at 31 December
2021, 42.8% of the Group trade receivables are due from top five customers (31 December
2020: 20.3%). There is no collateral or other credit enhancement on the balance of the trade
receivables of the Group.
2 Liquidity risk
Liquidity risk is the risk that an enterprise will encounter difficulty in meeting obligations that
are settled by delivering cash or another financial asset. The Company and its individual
subsidiaries are responsible for their own cash management, including short-term investment
of cash surpluses and the raising of loans to cover expected cash demands (subject to
approval by the Company’s board when the borrowings exceed certain predetermined levels).
The Group’s policy is to regularly monitor its liquidity requirements and its compliance with
lending covenants, to ensure that it maintains sufficient reserves of cash, readily realisable
marketable securities and adequate committed lines of funding from major financial
institutions to meet its liquidity requirements in the short and longer term.
The following tables set out the remaining contractual maturities at the balance sheet date of
the Group’s financial liabilities, which are based on contractual undiscounted cash flows
(including interest payments computed using contractual rates or, if floating, based on rates
current at the balance sheet date) and the earliest date the Group can be required to pay:
2021 Contractual undiscounted cash flow
Carrying amount
Item More than at balance sheet
Within 1 year or More than
1 to 2 years 2 years but less Total date
on demand 5 years
than 5 years
Short-term loans 630,717,486 - - - 630,717,486 622,066,457
Accounts payable 493,453,816 - - - 493,453,816 493,453,816
Other payables 452,642,025 - - - 452,642,025 452,642,025
Long-term loans (including the
20,586,762 125,114,353 112,380,675 15,506,135 273,587,925 250,567,080
portion due within one year)
Long-term payables (including
the portion due within one 22,810,674 22,546,674 42,322,126 - 87,679,474 86,000,000
year)
Lease liability (including the
19,753,555 17,690,615 39,763,489 75,510,332 152,717,991 116,156,677
portion due within one year)
Total 1,639,964,318 165,351,642 194,466,290 91,016,467 2,090,798,717 2,020,886,055
2020 Contractual undiscounted cash flow
Carrying amount
Item More than at balance sheet
Within 1 year or More than
1 to 2 years 2 years but less Total date
on demand 5 years
than 5 years
Short-term loans 698,571,997 - - - 698,571,997 689,090,715
Accounts payable 484,347,958 - - - 484,347,958 484,347,958
Other payables 386,105,526 - - - 386,105,526 386,105,526
Long-term loans (including the
33,175,345 24,182,478 149,719,792 135,013,150 342,090,765 311,664,858
portion due within one year)
Long-term payables (including
the portion due within one 23,074,674 22,810,674 64,868,800 - 110,754,148 108,000,000
year)
Total 1,625,275,500 46,993,152 214,588,592 135,013,150 2,021,870,394 1,979,209,057
178
Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
3 Interest rate risk
Interest-bearing financial instruments at variable rates and at fixed rates expose the Group to
cash flow interest rate risk and fair value interest risk, respectively. The Group determines
the appropriate weightings of the fixed and floating rate interest-bearing instruments based on
the current market conditions and performs regular reviews and monitoring to achieve an
appropriate mix of fixed and floating rate exposure.
(1) As at 31 December, the Group held the following interest-bearing financial instruments:
Fixed rate instruments:
2021 2020
Item Effective interest Effective interest
Amounts Amounts
rate rate
Financial assets
- Cash at bank 1.75% - 2.25% 53,200,000 1.5% - 2.75% 93,553,062
Financial liabilities
- Short-term loans 0.35% - 3.35% (172,066,457) 0.35% - 3.28% (139,090,715)
- Long-term loans (including the
0.95% - 3.28% (193,475,080) 1% - 3.28% (280,414,858)
portion due within one year)
- Long-term payables (including the
1.20% (86,000,000) 1.20% (108,000,000)
portion due within one year)
- Lease liability (including the
4.65% (116,156,677) - -
portion due within one year)
Total (514,498,214) (433,952,511)
Variable rate instruments:
2021 2020
Item Effective interest Effective interest
Amounts Amounts
rate rate
Financial assets
- Cash at bank 0.3% - 1.82% 1,513,824,507 0.3% - 1.0% 1,100,642,230
Financial liabilities
- Short-term loans 1 year LPR 0.005 (450,000,000) 1 year LPR 0.005 (550,000,000)
- Long-term loans (including the 90% of 90% of
(6,250,000) (31,250,000)
portion due within one year) 5 year LPR 5 year LPR
- Long-term loans (including the
BBSY+1.10% (50,842,000) - -
portion due within one year)
Total 1,006,732,507 519,392,230
(2) Sensitivity analysis
Management of the Group believes interest rate risk on bank deposit is not significant,
therefore does not disclose sensitivity analysis for interest rate risk.
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Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
As at 31 December 2021, based on assumptions above, it is estimated that a general
increase of 50 basis points in interest rates, with all other variables held constant, would
decrease the Group’s equity by RMB1,901,595 (2020: RMB2,179,688), and net profit by
RMB1,901,595 (2020: RMB2,179,688).
The sensitivity analysis above indicates the instantaneous change in the net profit and equity
that would arise assuming that the change in interest rates had occurred at the balance sheet
date and had been applied to re-measure those financial instruments held by the Group which
expose the Group to fair value interest rate risk at the balance sheet date. In respect of the
exposure to cash flow interest rate risk arising from floating rate non-derivative instruments
held by the Group at the balance sheet date, the impact on the net profit and equity is
estimated as an annualised impact on interest expense or income of such a change in interest
rates.
4 Foreign currency risk
In respect of cash at bank and on hand, accounts receivable and payable, short-term loans
denominated in foreign currencies other than the functional currency, the Group ensures that
its net exposure is kept to an acceptable level by buying or selling foreign currencies at spot
rates when necessary to address short-term imbalances.
(1) As at 31 December, the Group’s exposure to main currency risk arising from recognised
assets or liabilities denominated in foreign currencies is presented in the following tables.
For presentation purposes, the amounts of the exposure are shown in Renminbi, translated
using the spot rate at the balance sheet date. Differences resulting from the translation of
the financial statements denominated in foreign currency are excluded.
2021 2020
Balance at foreign Balance at RMB Balance at foreign Balance at RMB
currency equivalent currency equivalent
Cash at bank and on hand 2,090,539 13,406,984 2,029,849 14,053,435
- USD 1,984,323 12,640,136 1,492,923 9,744,604
- EUR 106,216 766,848 536,926 4,308,831
Short-term loans 15,490,000 98,759,593 12,490,000 81,524,728
- USD 15,490,000 98,759,593 12,490,000 81,524,728
(2) The following are the exchange rates for Renminbi against foreign currencies applied by the
Group:
Balance sheet date
Average rate
mid-spot rate
2021 2020 2021 2020
USD 6.4512 6.8884 6.3757 6.5272
EUR 7.6186 7.9065 7.2197 8.0250
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(3) Sensitivity analysis
Assuming all other risk variables remained constant, a 5% strengthening of the Renminbi
against the US dollar and Euro dollar at 31 December would have impact on the Group’s
equity and net profit by the amount shown below. whose effect is in Renminbi and translated
using the spot rate at the year-end date:
Equity Net profit
31 December 2021
USD 4,305,973 4,305,973
EUR (38,342) (38,342)
Total 4,267,631 4,267,631
31 December 2020
USD 3,589,006 3,589,006
EUR (215,442) (215,442)
Total 3,373,564 3,373,564
A 5% weakening of the Renminbi against the US dollar and Euro dollar at 31 December would
have had the equal but opposite effect to the amounts shown above, on the basis that all
other variables remained constant.
VIII. Fair value disclosure
All financial assets and financial liabilities held by the Group are carried at amounts not
materially different from their fair value at 31 December 2021 and 31 December 2020.
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IX. Related parties and related party transactions
1 Information about the parent of the Company
Registered Shareholding Percentage of Ultimate controlling party of the
Company name Business nature Registered capital
place percentage (%) voting rights (%) Company
Jointly controlled by Yantai GuoFeng
Investment Holding Ltd, ILLVA
SARONNO HOLDING SPA,
Changyu Group Yantai Manufacturing 50,000,000 50.4% 50.4%
International Finance Corporation and
Yantai Yuhua Investment and
Development Company Limited.
There are no changes on the registered capital and shareholding percentage/percentage of voting rights of the parent company.
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2 Information about the subsidiaries of the Company
For information about the subsidiaries of the Company, refer to Note VI.1.
3 Information on other related parties
Name of other related parties Related party relationship
Yantai Shenma Packaging Co., Ltd. Controlled by the same parent
(“Shenma Packaging”) company
Yantai Zhongya Pharmaceutical Tonic Wine Co., Ltd. Controlled by the same parent
(“Zhongya Pharmaceutical”) company
WEMISS Shanghai Associate of the Group
Chengdu Yufeng Associate of the Group
Mirefleurs Subsidiaries of the joint venture
CHATEAU DE LIVERSAN (“LIVERSAN”) Subsidiaries of the joint venture
4 Transactions with related parties
(1) Product procurement
Related parties Nature of transaction 2021 2020
Shenma Packaging Product procurement 80,754,599 78,520,694
Zhongya Pharmaceutical Product procurement 591,522 850,478
Mirefleurs Product procurement 6,822,330 9,261,722
LIVERSAN Product procurement 3,269,146 3,746,069
Total 91,437,597 92,378,963
(2) Sales of goods
Related parties Nature of transaction 2021 2020
Zhongya Pharmaceutical Sales of goods 3,872,660 3,920,047
WEMISS Shanghai Sales of goods 2,677,707 1,374,616
Chengdu Yufeng Sales of goods 5,365,061 -
Shenma Packaging Sales of goods 287,930 293,488
Total 12,203,358 5,588,151
(3) Services
Related parties Nature of transaction 2021 2020
Shenma Packaging Services - 106,195
Total - 106,195
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(4) Purchase of fixed assets
Related parties of the Company Nature of transaction 2021 2020
Purchase of fixed
Shenma Packaging 4,101,232 -
assets
Total 4,101,232 -
(5) Sale of fixed assets
Related parties of the Company Nature of transaction 2021 2020
Changyu Group Sale of fixed assets - 44,845,989
Total - 44,845,989
(6) Leases
(a) As the lessor
Lease income Lease income
Name of lessee Type of assets leased
recognised in 2021 recognised in 2020
Shenma Packaging Offices and plants 1,492,550 1,492,550
Zhongya Pharmaceutical Offices and plants 522,936 522,936
Total 2,015,486 2,015,486
(b) As the lessee
Type of assets Lease expense Lease expense
Name of lessor
leased recognised in 2021 recognised in 2020
Changyu Group Office buildings 1,612,118 1,612,118
Changyu Group Offices and plants 1,394,762 1,394,762
Changyu Group Offices and plants 4,184,286 4,184,286
Offices and
Changyu Group 7,057,143 1,050,000
commercial building
Changyu Group Office buildings - 714,286
Total 14,248,309 8,955,452
(7) Remuneration of key management personnel
Item 2021 2020
Remuneration of key management personnel 12,495,933 6,975,110
(8) Other related party transactions
Related parties Nature of transaction Note 2021 2020
Changyu Group Royalty (a) 24,763,872 21,985,068
Transfer of trademark use
Changyu Group
rights
(b) - 18,334,528
Transfer of Culture
Changyu Group
Development
- 89,519,789
Zhongya Equity transfer of Changyu
Pharmaceutical Museum
- 1,033,912
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(a) Contract of trademarks usage
Pursuant to a royalty agreement dated 18 May 1997, starting from 18 September 1997,
the Company may use certain trademarks of Changyu Group Company, which have
been registered with the PRC Trademark Office. An annual royalty fee at 2% of the
Group’s annual sales is payable to Changyu Group. The license is effective until the
expiry of the registration of the trademarks.
According to the above royalty agreement, Changyu Group collected a total of
RMB576,507,809 for royalty from 2013 to 2019, of which 51% was used to promote
trademarks such as Changyu and the product of this contract, totalling
RMB294,018,093. The amount is used for promotion of Changyu and other
trademarks and the products of this contract, totalling RMB62,250,368, the difference is
RMB231,768,615(tax inclusive).
On 18 May 2019, the general meeting of shareholders approved the proposal of the
amendment to the royalty agreement. Article 6.1 of the royalty agreement with
Changyu Group was amended to: During the validity period of this contract, the Group
pays Changyu Group royalty on an annual basis. The royalty is calculated based on
0.98% of the sales volume of the Group ‘s contract products using this trademark. The
article 6.3 is amended to: The royalty paid to the Changyu Group by the Group shall not
be used to promote this trademark and the contract products.
In addition, in accordance with agreement the Group signed with Changyu Group in
November 2019, Changyu Group promised to offset the difference of RMB231,768,615
above with the royalty for four years, i.e. from 2019 to 2022.If it is not sufficient for
deduction, the rest will be repaid in a one-off manner in 2023. If there is surplus, the
surplus part of the royalty will be charged from the year when the surplus occurs.
The Group incurred a trademark usage fee of RMB24,763,872 this year.
(b) Transfer of trademark use rights
On 22 April 2020, the Fourth Meeting of the Eighth Board of Directors of the Group
reviewed and approved the Proposal on Transferring the “KOYA” and Other
Trademarks of Yantai Changyu Group Co., Ltd.. On 16 June 2020, the Group and
Changyu Group signed the Trademark Transfer Agreement to transfer the ownership of
43 trademarks owned by Changyu Group, including KOYA, ZENITHWIRL, FRANLLET,
WEMISS and PIONEER at an estimated price of RMB19,434,600 (tax inclusive).
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5 Receivables from and payables to related parties
Receivables from related parties
2021 2020
Provision for Provision for
Item Related party
Book value bad and Book value bad and
doubtful debts doubtful debts
Zhongya
Accounts receivable 287,788 956 714,995 3,175
Pharmaceutical
WEMISS
Accounts receivable - - 1,553,316 6,898
Shanghai
Shenma
Prepayments - - 126,818 -
Packaging
Other non-current assets Changyu Group 144,120,442 - 170,370,147 -
Shenma
Other receivables 341,880 - - -
Packaging
Zhongya
Other receivables - - 522,936 -
Pharmaceutical
Payables to related parties
Item Related party 2021 2020
Accounts payable Shenma Packaging 30,184,072 33,421,165
Accounts payable Zhongya
Pharmaceutical
- 455,176
Accounts payable Chengdu Yufeng 344,464 -
Accounts payable Changyu Group 19,434,600 19,434,600
Zhongya
Contract liability 653 -
Pharmaceutical
Other payables Shenma Packaging - 450,000
X. Capital management
The Group’s primary objectives when managing capital are to safeguard its ability to continue
as a going concern, so that it can continue to provide returns for shareholders, by pricing
products and services commensurately with the level of risk and by securing access to
finance at a reasonable cost.
The Group’s capital structure is regularly reviewed and managed to achieve an optimal
structure and return for shareholders. Factors for the Group’s consideration include: its
future funding requirements, capital efficiency, actual and expected profitability, expected
cash flows, and expected capital expenditure. Adjustments are made to the capital structure
in light of changes in economic conditions affecting the Group.
Neither the Company nor any of its subsidiaries are subject to externally imposed capital
requirements.
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XI. Commitments and contingencies
1 Significant commitment
(1) Capital commitments
Item 2021 2020
Long-term assets acquisition commitment 84,963,700 249,379,500
Total 84,963,700 249,379,500
(2) Operating lease commitments
As at 31 December, the total future minimum lease payments under non-cancellable
operating leases of the Group’s properties were payable as follows:
Item 2021 2020
Within 1 year (inclusive) 651,000 24,076,000
Over 1 year but within 2 years (inclusive) - 17,735,000
Over 2 years but within 3 years (inclusive) - 15,564,000
Over 3 years - 106,278,000
Total 651,000 163,653,000
2 Contingencies
The Group do not have any significant contingencies as at balance sheet date.
XII. Subsequent events
Distribution of dividends on ordinary shares approved after the balance sheet date
According to the proposal of the Board of Directors on 25 April 2022, the Company intends to
distribute cash dividend totaling RMB308,458,800 to all shareholders of 685,464,000 capital
shares for the year ended 31 December 2021 on the basis of RMB4.5 (including tax) for
every 10 shares. The proposal is subject to the approval by the Shareholders’ meeting.
This distribution of profit in cash has not been recognised as a liability at the balance sheet
date.
XIII. Other significant items
1 Segment reporting
The Group is principally engaged in the production and sales of wine, brandy, and sparkling
wine in China, France, Spain, Chile and Australia. In accordance with the Group’s internal
organisation structure, management requirements and internal reporting system, the Group’s
operation is divided into five parts: China, Spain, France, Chile and Australia. The
management periodically evaluates segment results, in order to allocate resources and
evaluate performances. In 2021, over 87% of revenue, more than 94% of profit and over
92% of non-current assets derived from China/are located in China. Therefore, the Group
does not need to disclose additional segment report information.
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XIV. Notes to the Company’s financial statements
1 Bills receivable
Classification of bills receivable
Item 2021 2020
Bank acceptance bills 9,800,000 -
Total 9,800,000 -
All of the above bills are due within one year.
2 Receivables under financing
Item Note 2021 2020
Bills receivable (1) 62,411,636 13,920,000
Total 62,411,636 13,920,000
(1) The pledged bills receivable of the Company at the end of the year
As at 31 December 2021, there was no pledged bills receivable (31 December 2020: Nil).
(2) Outstanding derecognised endorsed bills that have not matured at the end of the year
Amount
Item derecognised at
year end
Bank acceptance bills 65,893,889
Total 65,893,889
As at 31 December 2021, derecognised bills endorsed by the Company to other parties which
are not yet due at the end of the period is RMB65,893,889 (31 December 2020:
RMB49,849,895). The notes are used for payment to suppliers. The Company believes
that due to good reputation of bank, the risk of notes not accepting by bank on maturity is very
low, therefore derecognise the note receivables endorsed. If the bank is unable to pay the
notes on maturity, according to the relevant laws and regulations of China, the Company
would undertake limited liability for the notes.
3 Other receivables
Note 31 December 2021 31 December 2020
Dividends receivable (1) - 200,000,000
Others (2) 398,072,976 380,131,798
Total 398,072,976 580,131,798
(1) Dividends receivable
Item 31 December 2021 31 December 2020
Dividends to subsidiaries - 200,000,000
Total - 200,000,000
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(2) Others
(a) Others by customer type:
Customer type 31 December 2021 31 December 2020
Amounts due from subsidiaries 397,998,281 379,375,427
Amounts due from related parties - 522,936
Others 74,695 233,435
Sub-total 398,072,976 380,131,798
Less: Provision for bad and doubtful debts - -
Total 398,072,976 380,131,798
(b) The ageing analysis is as follows:
Ageing 2021 2020
Within 1 year (inclusive) 397,936,651 378,307,160
Over 1 year but within 2 years (inclusive) 11,853 1,804,638
Over 2 years but within 3 years (inclusive) 104,472 -
Over 3 years 20,000 20,000
Sub-total 398,072,976 380,131,798
Less: Provision for bad and doubtful debts - -
Total 398,072,976 380,131,798
The ageing is counted starting from the date when other receivables are recognised.
(c) Others by method of provisioning
2021 2020
Provision for bad and doubtful Provision for bad and doubtful
Book value Book value
debts Carrying debts Carrying
Category
Percentage Percentage amount Percentage Percentage amount
Amount Amount Amount Amount
(%) (%) (%) (%)
Individual
assessment
- Total other
- - - - - - - - - -
receivables
Collective
assessment
- Amounts due
from 397,998,281 99.98 - - 397,998,281 379,375,427 99.80 - - 379,375,427
subsidiaries
- Amounts due
from related - - - - - 522,936 0.14 - - 522,936
parties
- Amounts due
from third 74,695 0.02 - - 74,695 233,435 0.06 - - 233,435
parties
Total 398,072,976 100.00 - - 398,072,976 380,131,798 100.00 - - 380,131,798
(d) Movements of provisions for bad and doubtful debts
As at 31 December 2021, no bad and doubtful debt provision was made for other
receivables (31 December 2020: Nil).
As at 31 December 2021, the Company has no other receivables written off (31
December 2020: Nil).
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(e) Others categorised by nature
Nature of other receivables 2021 2020
Amounts due from subsidiaries 397,998,281 379,375,427
Amounts due from related parties - 522,936
Others 74,695 233,435
Sub-total 398,072,976 380,131,798
Less: Provision for bad and doubtful debts - -
Total 398,072,976 380,131,798
(f) Five largest others-by debtor at the end of the year
Ending balance
Percentage of
Nature of the Balance at the of provision for
Debtor Ageing ending balance
receivable end of the year bad and doubtful
of others (%)
debts
Amounts due
Sales Company 113,621,178 Within 1 year 28.5 -
from subsidiaries
Amounts due
R&D Centre 36,611,978 Within 1 year 9.2 -
from subsidiaries
Amounts due
Digital Marketing 14,925,497 Within 1 year 3.7 -
from subsidiaries
Amounts due
Chateau KOYA 1,458,255 Within 1 year 0.4 -
from subsidiaries
Amounts due
Chateau Changyu 419,481 Within 1 year 0.1 -
from subsidiaries
Total 167,036,389 41.9 -
4 Long-term equity investments
(1) Long-term equity investments by category:
2021 2020
Item Provision for Carrying Provision for Carrying
Book value Book value
impairment amount impairment amount
Investments in
7,593,535,027 - 7,593,535,027 7,593,535,027 - 7,593,535,027
subsidiaries
Investments in
5,886,467 - 5,886,467 6,243,853 - 6,243,853
associates
Total 7,599,421,494 - 7,599,421,494 7,599,778,880 - 7,599,778,880
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(2) Investments in subsidiaries:
Balance at the
Additions during Decrease during Balance at the
Subsidiary beginning of
the year the year end of the year
the year
Xinjiang Tianzhu 60,000,000 - - 60,000,000
Kylin Packaging 23,176,063 - - 23,176,063
Chateau Changyu 28,968,100 - - 28,968,100
Pioneer International 3,500,000 - - 3,500,000
Ningxia Growing 36,573,247 - - 36,573,247
National Wines 2,000,000 - - 2,000,000
Golden Icewine Valley 30,440,500 - - 30,440,500
Chateau Beijing 588,389,444 - - 588,389,444
Sales Company 7,200,000 - - 7,200,000
Langfang Sales 100,000 - - 100,000
Langfang Castel 19,835,730 - - 19,835,730
Wine Sales 4,500,000 - - 4,500,000
Shanghai Marketing 1,000,000 - - 1,000,000
Beijing Sales 850,000 - - 850,000
Jingyang Sales 100,000 - - 100,000
Jingyang Wine 900,000 - - 900,000
Ningxia Wine 222,309,388 - - 222,309,388
Chateau Ningxia 453,463,500 - - 453,463,500
Chateau Tinlot 212,039,586 - - 212,039,586
Chateau Shihezi 812,019,770 - - 812,019,770
Chateau Changan 803,892,258 - - 803,892,258
R&D Centre 3,288,906,445 - - 3,288,906,445
Huanren Wine 22,200,000 - - 22,200,000
Wine Sales Company 5,000,000 - - 5,000,000
Francs Champs 236,025,404 - - 236,025,404
Dicot 233,142,269 - - 233,142,269
Chile Indomita Wine Group 274,248,114 - - 274,248,114
Australia Kilikanoon Estate 129,275,639 - - 129,275,639
Digital Marketing 1,000,000 - - 1,000,000
Culture Development 92,479,570 - - 92,479,570
Total 7,593,535,027 - - 7,593,535,027
For information about the subsidiaries of the Company, refer to Note VI.
(3) Investments in associates:
Balance at the
Additions during Decrease during Balance at the
Subsidiary beginning of the
the year the year end of the year
year
WEMISS Shanghai 2,743,890 - (377,079) 2,366,811
Yantai Santai Real Estate
3,499,963 19,693 - 3,519,656
Development Co., Ltd
Total 6,243,853 19,693 (377,079) 5,886,467
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5 Operating income and operating costs
2021 2020
Item
Income Cost Income Cost
Principal activities 576,706,055 470,719,232 510,205,498 450,876,445
Other operating activities 2,189,747 1,439,506 2,098,055 1,492,067
Total 578,895,802 472,158,738 512,303,553 452,368,512
Including:Revenue from contracts
576,706,055 470,719,232 510,205,498 450,876,445
with customers
Rent income 2,189,747 1,439,506 2,098,055 1,492,067
(1) Disaggregation of revenue from contracts with customers:
Type of contract 2021 2020
By type of goods or services
- Liquor 576,706,055 510,205,498
By timing of transferring goods or services
- Revenue recognised at a point in time 576,706,055 510,205,498
6 Investment income
Item 2021 2020
Income from long-term equity investments
867,880,564 449,760,868
accounted for using cost method
Loss from long-term equity investments accounted
(357,386) (256,147)
for using equity method
Total 867,523,178 449,504,721
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7 Transactions with related parties
(1) Product procurement
Related parties Nature of transaction 2021 2020
Subsidiary of the parent
Product procurement 117,808,977 107,663,061
company
Other related parties of the
Product procurement 30,002,566 36,249,251
Company
Total 147,811,543 143,912,312
(2) Sales of goods
Related parties Nature of transaction 2021 2020
Subsidiary of the parent
Sales of goods 576,708,399 504,080,073
company
Other related parties of the
Sales of goods 3,017,548 2,952,493
Company
Total 579,725,947 507,032,566
(3) Guarantee
The Company as the guarantor
Amount of Inception date of Maturity date of Guarantee
Guarantee holder Currency
guarantee guarantee guarantee expired (Y/N)
R&D Centre RMB 500,000,000 08 March 2017 08 March 2022 N
Australia Kilikanoon
AUD 25,000,000 13 December 2018 13 December 2023 N
Estate
(4) Leases
(a) As the lessor
Lease income Lease income
Name of lessee Type of assets leased
recognised in 2021 recognised in 2020
Other related parties of
Offices and plants 2,015,486 2,015,486
the Company
Subsidiary of the parent
Offices buildings 85,714 82,569
company
Total 2,101,200 2,098,055
(b) As the lessee
Lease expense Lease expense
Name of lessor Type of assets leased
recognised in 2021 recognised in 2020
Other related parties of
Office buildings 1,394,762 1,394,762
the Company
Total Office buildings 1,394,762 1,394,762
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(5) Other related party transactions
Related parties Nature of transaction 2021 2020
Transfer of trademark
Changyu Group - 18,334,528
use rights
Transfer of Culture
Changyu Group - 89,519,789
Development
8 Receivables from and payables to related parties
Receivables from related parties
2021 2020
Provision for Provision for
Item Related party
Book value bad and Book value bad and
doubtful debts doubtful debts
Other related parties
Prepayments - - 126,818 -
of the Company
Subsidiary of the
Other receivables 397,998,281 - 379,375,427 -
parent company
Other related parties
Other receivables - - 522,936 -
of the Company
Subsidiary of the
Other non-current assets 2,023,500,000 - 1,530,700,000 -
parent company
Payables to related parties
Item Related party 2021 2020
Other related parties of
Accounts payable 28,014,000 29,634,723
the Company
Subsidiary of the
Other payables 362,651,747 319,936,973
parent company
Other related parties of
Other payables - 450,000
the Company
XV. Non-recurring profit and loss statement in 2021
Item Amount
(1) Profit and loss from disposal of non-current assets (15,364,993)
Government grants recognised through profit or loss (excluding those
(2) having close relationships with the Group’s operation and enjoyed in 48,240,741
fixed amount or quantity according to uniform national standard)
(3) Other non-operating income and expenses besides items above 2,328,169
Sub-total 35,203,917
(4) Tax effect (7,306,787)
(5) Effect on non-controlling interests after taxation (30,486)
Total 27,866,644
Note 1: Extraordinary gain and loss items (1) to (3) listed above are presented in the amount
before taxation.
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XVI. Return on net assets and earnings per share
1 Calculation of earnings per share
(1) Basic earnings per share
For calculation of the basic earnings per share, please refer to Note V.49.
(2) Basic earnings per share excluding extraordinary gain and loss
Basic earnings per share excluding extraordinary gain and loss is calculated as dividing
consolidated net profit excluding extraordinary gain and loss attributable to ordinary
shareholders of the Company by the weighted average number of ordinary shares
outstanding:
2021 2020
Consolidated net profit attributable to ordinary
500,102,606 470,860,587
shareholders of the Company
Extraordinary gains and losses attributable to
27,866,644 73,205,400
ordinary shareholders of the Company
Consolidated net profit excluding extraordinary gain
and loss attributable to the Company’s ordinary 472,235,962 397,655,187
equity shareholders
Weighted average number of ordinary shares
685,464,000 685,464,000
outstanding
Basic earnings per share excluding extraordinary
0.69 0.58
gain and loss (RMB/share)
(3) Diluted earnings per share
During the reporting period, the Company did not have dilutive potential ordinary shares.
2 Calculation of weighted average return on net assets
(1) Weighted average return on net assets
Weighted average return on net assets is calculated as dividing consolidated net profit
attributable to ordinary shareholders of the Company by the weighted average amount of
consolidated net assets:
2021 2020
Consolidated net profit attributable to ordinary
500,102,606 470,860,587
shareholders of the Company
Weighted average amount of consolidated net
10,329,718,533 10,304,733,743
assets
Weighted average return on net assets 4.84% 4.57%
195
Yantai Changyu Pioneer Wine Co., Ltd. 2021 Annual Report
Calculation of weighted average amount of consolidated net assets is as follows:
2021 2020
Consolidated net assets at the beginning of the year 10,267,832,644 10,402,248,821
Impact of changes in accounting policies (10,582,161) -
Business combination involving entities under
- (37,299,912)
common control
Effect of consolidated net profit attributable to
232,409,650 237,836,150
ordinary shareholders of the Company
The impact of the purchase of minority
- (8,046,940)
shareholders’ equity
Effect of shares repurchased (Note V.36) (159,941,600) (290,004,376)
Weighted average amount of consolidated net
10,329,718,533 10,304,733,743
assets
(2) Weighted average return on net assets excluding extraordinary gain and loss
Weighted average return on net assets excluding extraordinary gain and loss is calculated as
dividing consolidated net profit excluding extraordinary gain and loss attributable to ordinary
shareholders of the Company by the weighted average amount of consolidated net assets:
2021 2020
Consolidated net profit excluding extraordinary gain
and loss attributable to the Company’s ordinary 472,235,962 397,655,187
equity shareholders
Weighted average amount of consolidated net
10,329,718,533 10,243,190,738
assets (Note)
Weighted average return on net assets excluding
4.57% 3.88%
extraordinary gain and loss
Note: When a business combination under common control occurs during the reporting
period, the net assets of the combining party shall be weighted from the month
following the acquisition date when calculating the weighted average return on net
assets after deducting non-recurring gains and losses. When calculating the
weighted average return on net assets after deducting non-recurring gains and losses
during the comparative period, the net assets of the combining party shall not be
weighted.
Yantai Changyu Pioneer Wine Co., Ltd.
Board of Directors
April 27, 2022
196
