Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
Yantai Changyu Pioneer Wine Co., Ltd.
2022 Annual Report
Final 2023-01
April 13, 2023
1
Yantai Changyu Pioneer Wine Co., Ltd. 2022 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 ..........................................................................................................34
V、Environmental and Social Responsibility .............................................................................43
VI、Major issues ........................................................................................................................... 61
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
2
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
2022 Annual Report
I. Important Notice, Contents and Definition
The board of directors，the board of Supervisors，directors, supervisors and senior executives of the
Company guarantee the truthfulness, accuracy and completeness of the contents contained in the
report with no false records, misleading statements or significant omissions, and undertake
individual and joint legal liabilities.
Mr. Hongjiang Zhou (Person in charge of the Company), Mr. Jianxun Jiang (Person in charge of
accounting work) and Ms. Cuimei Guo (Person in charge of accounting organ & Accountant in
charge) assure the truthfulness, accuracy and completeness of the financial report in the annual
report.
Except for the following director, 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 On a business trip Enrico Sivieri
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.
3
Yantai Changyu Pioneer Wine Co., Ltd. 2022 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
Accountant in charge.
(3)The Prospectus and Public Offering Announcement for Stock B issued in 1997; The Prospectus
of Intent and The Shares’ Change & A Share’s Public Offering Announcement for Stock A issued
by the capital increase 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.
4
Yantai Changyu Pioneer Wine Co., Ltd. 2022 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
5
Yantai Changyu Pioneer Wine Co., Ltd. 2022 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 Hongjiang Zhou
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. Jianxun Jiang Mr. Tingguo Li
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
6
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
4. Registration changes
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 Annual 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 May 12th, 2010, approved by the 2009 Annual
Shareholders’ Meeting, the Company’s business scope was changed to
production, processing and sales of wine, distilled liquor, medicinal
Changes for the main businesses liquor, fruit liqueur, non-alcohol beverage, fruit jam, packing material
of the Company since it was listed and its products and winemaking machinery; licensed import and
export; external investment subject to national policy. On September
23rd, 2016, approved by The 1st Interim Shareholders’ Meeting in 2016,
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, Beijing
Name of signatory accountants Ms. Ting Wang, Ms. Hui Jiang
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
7
Yantai Changyu Pioneer Wine Co., Ltd. 2022 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
2022 2021 2020
with last year (%)
Operating revenue (CNY) 3,918,941,160 3,953,067,583 -0.86% 3,395,402,001
Net profit attributed to shareholders
428,681,411 500,102,606 -14.28% 470,860,587
of the listed company (CNY)
Net profit attributed to shareholders
of the listed company after
413,831,359 472,235,962 -12.37% 397,655,187
deducting non-recurring profits and
losses (CNY)
Net cash flows from operating
868,876,647 1,125,382,658 -22.79% 505,146,673
activities (CNY)
Basic earnings per share (CNY) 0.63 0.73 -13.70% 0.69
Diluted earnings per share (CNY) 0.63 0.73 -13.70% 0.69
Weighted average for earning rate
4.09% 4.84% -0.75% 4.57%
of net assets (CNY)
December 31, December 31, Increase/decrease compared December 31,
2022 2021 with last year-end (%) 2020
Total assets (CNY) 13,171,506,378 13,472,009,754 -2.23% 13,102,481,541
Net assets attributed to shareholders
10,579,053,733 10,447,884,183 1.26% 10,267,832,644
of the listed company (CNY)
The lower of the net profits before non-recurring gains and losses 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 profits before non-recurring gains and losses and after non-recurring gains and
losses is negative
□Yes No
7. Differences in accounting data under PRC accounting standards and international
accounting standards
8
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
(1) Differences for net profit and net assets in the financial report disclosed according to both
international accounting standards and PRC accounting standards
□Available Not available
There are no differences for net profit and net assets in the financial report disclosed according to
both international accounting standards and PRC accounting standards during the report period.
(2) Differences for net profit 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 for net profit 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 1,165,989,959 787,102,176 857,930,890 1,107,918,135
Net profit attributed to shareholders of the
290,587,744 67,871,859 75,890,351 -5,668,543
listed company
Net profit attributed to shareholders of the
listed company after deducting non-recurring 284,168,658 60,140,364 68,081,711 1,440,626
profits and losses
Net cash flows from operating activities 299,300,737 306,972,858 132,417,260 130,185,792
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 2022 2021 2020 Explanation
Profits and losses on disposal of non-current assets (including
-18,902,024 -15,364,993 -1,165,162
the provision for asset impairment write-off part)
Government grants recorded into the current profits and
losses(except for those government grants that are closely
related to the enterprise’s normal operation, in line with national 33,145,440 48,240,741 73,180,848
policy provisions and in accordance with certain standard quota
or ration continued to enjoy)
Income generated from when the investment cost of the
subsidiary, affiliated business and joint venture is less than the 0
fair value of identifiable net assets of the invested entity should
9
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
be enjoyed when the investment is acquired
Current net profit or loss from the beginning of the period to the
merger date of subsidiaries arising from merger under the same 12,715,544
control
Other non-operating revenues and expenditures in addition to
4,750,614 2,328,169 10,098,551
the aforementioned items
Less：Income tax effect 4,695,173 7,306,787 21,595,671
Minority shareholders’ equity effect (after taxes) -551,195 30,486 28,710
Total 14,850,052 27,866,644 73,205,400 --
Specific situation of other profit and loss items conforming to the definition of non-recurring profit
and loss
□Available Not available
There does not exist specific situation of other profit and loss items 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.
10
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
III. Management Discussion and Analysis
1. Situation of industry in which the Company operates during the report period
In 2022, the domestic wine market continued to decline due to the impact of the pressure from other
liquors such as Baijiu and beers. The sales volume of imported wine and domestic wine continued
the trend of “double decline”, and the rising costs of raw material and packaging further dragged
down the profitability of enterprises. The vast majority of wine enterprises were in difficulty, and
the domestic wine industry was still on the edge of loss.
In the face of difficulties and challenges, 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 large single product” and the marketing philosophy of “obtaining growth from the
terminal and nurturing consumers”, took market-oriented action to accelerate the pace of business
division reform, actively carry out circle marketing and continue to promote digital transformation .
In 2022, the Company realized the operating revenue of CNY3918.94million with a year-on-year
decrease of 0.86% and the net profit attributable to the parent company’s shareholders of
CNY428.68million with a year-on-year decrease of 14.28%, 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 business was production and operation of wine and
brandy, thus providing domestic and foreign consumers with healthy and fashionable
alcoholic drinks. Compared with earlier stage, there were no significant changes happened to the
Company’s main business. The wine industry that the Company involved in was still in growth
stage. Being affected by many factors including slowing domestic economic growth and strong
pressure from alternatives in recent years, the competition in the market was fierce, the wine
consumption continuously declined, and a large number of wine production enterprises were on the
brink of loss, even some wine enterprises were eliminated from the market. However, seen from the
long term, the existing consumption concept might change with the increase of people’s income
level and their pursuit of a relaxed, romantic and healthy lifestyle. More domestic wine would be
drunk by people, and wine would enter more and more household consumption. The situation of
current low average consumption of domestic wine would gradually improve. The Company was at
the forefront in the domestic wine market and was significantly ahead of major domestic
competitors.
11
Yantai Changyu Pioneer Wine Co., Ltd. 2022 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) The production licenses of main products obtained by the Company in China
Food Food production license
Producer name Obtaining time Obtaining method
category number
Yantai Changyu Pioneer Wine Co., Approval from SC11537060100050
Alcohol 2021.06.01
Ltd. government authority
Beijing Chateau Changyu AFIP Approval from SC11511280920745
Alcohol 2022.08.22
Global Co., Ltd. government authority
Liaoning Changyu Golden Icewine Approval from SC11521052200370
Alcohol 2021.03.25
Valley Co., Ltd. government authority
Ningxia Chateau Changyu Moser Approval from SC11564010500657
Alcohol 2018.01.25
XV Co., Ltd. government authority
Xinjiang Chateau Changyu Baron Approval from SC11565900100392
Alcohol 2017.08.25
Balboa Co., Ltd. government authority
Yantai Chateau Changyu-Castel Approval from SC11537063600172
Alcohol 2021.06.08
Co., Ltd. government authority
Shaanxi Chateau Changyu Rena Approval from SC11561040400532
Alcohol 2020.10.19
Co., Ltd. government authority
Yantai Chateau Koya Brandy Co., Approval from SC11537063601165
Alcohol 2021.01.11
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.
12
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
Distribution mode
Available □Not available
(1) Situation of change in the number of distributors
Number at the Increased number during Number at the
Region
beginning of 2022 this report period end of 2022
1857 79 1936
Eastern China
565 40 605
South China
476 -29 447
Central China
365 -7 358
North China
184 -14 170
Northwest China
493 -10 483
Southwest China
318 -6 312
Northeast China
HongKong, Macao,Taiwan 573 29 602
China and overseas
4831 82 4913
Total
(2) The Company and distributors took cash spot settlement, 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
2022 2021
Sales model Operating income Operating cost Operating income Operating cost Gross
Gross margin
(CNY) (CNY) (CNY) (CNY) margin
Distribution 3,272,506,752 1,396,195,485 57.34% 3,263,303,800 1,349,422,481 58.65%
Direct sales 646,434,408 284,599,247 55.97% 689,763,784 298,367,393 56.74%
Total 3,918,941,160 1,680,794,732 57.11% 3,953,067,584 1,647,789,874 58.32%
13
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
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 66,633.60
Tender/Price determined by quality comparison with standard price items Packaging materials 41,755.50
Tender/Price determined by quality comparison with standard price items Brewing materials 2,364.30
Tender/Price determined by quality comparison with standard price items Vineyard supplies 1,140.30
Contract Fuel and power 4,739.90
Price determined by quality comparison with standard price items Other wines and derivatives 2,736
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 competition 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.
14
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
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 strong 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 and Liaoning, 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
15
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
Increase or decrease at
Description the end of the period Cause of significant changes
over the end of last year
Operating revenue -0.86%Mainly because of decrease in sales volume
Mainly because of increase in the procurement cost of raw
Operating cost 2.88%
materials and packaging materials
Mainly because of increased marketing expense and service
Sales expense 3%
fee resulting from increased market investment
Mainly because of the year-on-year decrease in rental
Management expense -3.84%
expense and contract fee
Mainly because of increase in research input, purchasing
R&D expense 41.32%
and updating scientific equipment
Mainly because of increase in interest income and decrease
Financial expense -65.74%
in expenditure
Net amount of cash flow generated Mainly because of the year-on-year increase in the cash
-22.79%
in operating activities paid for purchasing commodity and receiving labor service
Net amount of cash flow generated Mainly because of the year-on-year increase in cash
18%
in investment activities received from investment recovery
Net amount of cash flow generated Mainly because of the year-on-year decrease in cash
-23.06%
in financing activities received from loan
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 needs in the domestic wine industry was still small and the market
competition was very intense. This Company realized the operating revenue of CNY3918.94million
with a decrease of 0.86% compared with last year, lowing than the target fixed at the beginning of
the year of realizing operating revenue no less than CNY4.3billion, and realized the net profit
attributable to the parent company’s shareholders of CNY428.68million with a decrease of 14.28%
compared with last year. The main works during the report period were shown as followed:
Firstly, the Company accelerated the construction of business division system and improved
marketing measures. The Longyu Business Division strengthened its organizational construction,
developed and launched Long series products, reset the price system, focused on certain marketing
methods, and persisted in developing group buyers and consumers to directly reach the C-end. The
Chateau Wine Business Division increased the marketing efforts, reorganized the brands and
products of each chateau, developed the master-co-signed AFIP Jiangya Yunhai gift box and the
Castel Huakai Fugui product and so on, and formulated and promoted the overall layout planning.
The Noble Dragon Business Division implemented city classification management, strengthened
product delivery control, vigorously promoted banquet promotion, and formulated distributor file
management measures, improving the market environment and distributor confidence. The
16
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
Imported Wine Business Division focused on some brands, further optimized the product structure,
set up classified cities, and launched new products such as Kilikanoon Crown and IWCC Aoma,
which promoted the good development of the market brands. The Brandy Business Division
insisted on high-end focus, market focus and marketing action focus, constantly improved the
distributor system, accelerated the layout of Koya distributors, continued to summarize and
promote the successful marketing cases of Koya, steadily promoted the construction of Koya XO
Cultural Experience Museum, developed and launched 43 ° Master version of Koya Men-40
products, Koya 12-years, Koya 20-years and Koya 1915 Panama Memorial products. The Online
Business Division increased the sales proportion of middle-and-high-end products, ranked first
among five e-commerce platforms such as T-mall, Jingdong, Pinduoduo, Douyin and Kuaishou
during the period of Double Eleven. The Tourism Division assisted in the completion of the
museum upgrading project, actively promoted the strategic cooperation with well-known cultural
and tourism group company in China, and further reduced the number of management personnel of
tourism units in allopatric places.
Secondly, the Company strengthened the quality details management and constantly improved
product quality. The Company fully implemented the “Provisions on the Supervision and
Management of Enterprises’ Implementation of Food Safety Subject Responsibility”, and further
improved the quality and safety management structure. The Company obtained 3 new national
invention patents and 1 utility model patent. Two scientific and technological achievements, such
as “Research on Flavor and Style Characteristics of Chinese Brandy”, were identified as
“international leading level” by China National Light Industry Council. The project of “Research
on Key Common Indexes of High Quality Brandy Flavor and Its Application in National Standards
and Industrialization” was listed in the science and technology innovation projects of Shandong
Province. The project “Research and Industrialization Application in Key Brewing and
Wine-making Technology of Chinese Characteristic ‘Cabernet Gernischt’ Grape Strain” won the
first prize of Science and Technology Progress of China Alcoholic Drinks Association. The
Company participated in 20 international and domestic wine and spirits competitions, and won 25
grand gold awards and 75 gold awards, which were significantly higher than that in 2021.
Thirdly, the Company orderly implemented series of activities for the 130th anniversary, enhancing
the brand influence. The Company systematically organized activities related to China Wine
Culture Month and the 130th anniversary, including the unveiling ceremony of “China Wine Time
Art Exhibition”, the opening of China Wine Technology and Quality Development Conference &
China Alcoholic Drinks Association’s 2022 Annual Meeting of National Wine Evaluation
Committee, the reopening of the revitalized and upgraded Wine Culture Museum, the CCTV
“Chinese Typical Scenery and Objects Collection” into Changyu, the first Vineyard concert in
China especially for the 130th anniversary of Changyu, and staff photography/painting/essay
contest. Moreover, it actively took participation in the creation of the large-scale urban
development convergence media program “Central City of Young - Tipsy YantaiSharing Night”
co-sponsored by Yangshipin of Central Radio and Television Station and Yantai City, in which the
Company implanted Changyu contents in multiple aspects and further enhanced the influence of
century-old Changyu brand.
17
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
Fourthly, the Company further improved financial management and strengthened audit supervision.
The Company completed the key expenses audit, the assets integrity and effectiveness audit, the
resignation audit to 40 business unit managers, the investigation in bad assets and economic
responsibility and other special audit, and conducted responsibility investigation and punishment to
the person liable. It also strengthened fund management, took various measures to save financing
costs, and increased financial interest income through structured deposits and agreed deposits etc..
The intelligent reimbursement system of Maycur was carried out to promote the integrated
development of business/finance, which improved operating efficiency. The Company strengthened
financial supervision and management in overseas enterprises whose annual investment scale was
strictly controlled, actively coordinated with banks to relieve the financing pressure of overseas
enterprises, and saved interest expenses.
Fifthly, the Company abode by the concept of safety, and conducted prevention and safety work in
an orderly manner. During the report period, all the company personnel consolidated their thinking
and understanding, clarified the main responsibility of prevention and control, adhered to the
principle of “checking the entrance qualification, managing the personnel, controlling the materials,
making the backup plan”, and strengthened closed-loop management, achieving the expected effect
of prevention and control and ensuring the stable development of the market and the normal
operation of the company’s business. The Company firmly established the concept of safety
development, adhered to the policy of “safety first, prevention oriented, comprehensive
management”, effectively strengthened safety management, and put an end to the occurrence of
major safety accidents.
Sixthly, the Company carefully organized and successfully completed the acquisition of grape raw
materials. Through scientific organization and planning, the Company overcame the difficulties of
multiple distribution points of grape bases, large geographical span, tight time in grape acquisition
and processing, heavy tasks, large labor intensity, long duration, limited personnel flow and serious
shortage of manpower during the control period and so on, and completed the purchase work of
grape raw materials with high quality and specified quantity, providing reliable raw material
guarantee for future production and management.
(2) Revenue and cost
① Composition of operating revenue
Unit: CNY
2022 2021 Year-on-year
Proportion in Proportion in increase or
Amount Amount
operating revenue operating revenue decrease (%)
Total operating revenue 3,918,941,160 100% 3,953,067,583 100% -0.86%
Sector-classified
Sector of liquor and
3,918,941,160 100% 3,953,067,583 100% -0.86%
alcoholic beverage
Product-classified
18
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
Wine 2,841,437,996 72.51% 2,834,114,276 71.69% 0.26%
Brandy 990,847,691 25.28% 1,036,164,837 26.22% -4.37%
Tourism 76,422,314 1.95% 73,192,187 1.85% 4.41%
Others 10,233,159 0.26% 9,596,283 0.24% 6.64%
Area-classified
Domestic 3,320,757,555 84.74% 3,421,775,481 85.09% -2.95%
Overseas 598,183,605 15.26% 531,292,102 14.91% 12.59%
Sales model- classified
Distribution 3,272,506,752 83.50% 3,263,303,800 82.55% 0.28%
Direct sales 646,434,408 16.50% 689,763,783 17.45% -6.28%
② The industry, product, region and sales model that account for over 10% of 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 3,918,941,160 1,680,794,732 57.11% -0.86% 2% 1.21%
beverage
Product-classified
Wine 2,841,437,996 1,234,184,571 56.76% 0.26% 4.07% -2.74%
Brandy 990,847,691 406,386,918 58.99% -4.37% -2.09% -1.59%
Tourism 76,422,314 34,842,151 54.41% 4.41% -18.66% 31.18%
Others 10,233,159 5,381,092 47.42% 6.64% 33.13% -18.08%
Area-classified
Domestic 3,320,757,555 1,275,274,611 61.60% -2.95% -2.61% -0.16%
Overseas 598,183,605 405,520,121 32.21% 12.59% 16.34% -3.93%
Sales model- classified
Distribution 3,272,506,752 1,396,195,485 57.34% 0.28% 3.47% -1.31%
Direct sales 646,434,408 284,599,247 55.97% -6.28% -4.61% -0.77%
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
19
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
③ Whether the Company’s sales revenue for material object is more than labor service
revenue
Yes □No
Sector Item Unit 2022 2021 Year-on-year increase or decrease (%)
Alcohol and Sales volume Ton 93,004 97,499 -4.61%
alcoholic beverage Yield Ton 90,099 100,737 -10.56%
industry Inventory Ton 27,427 30,412 -9.81%
Sales volume Ton 65,540 67,700 -3.19%
Wine Yield Ton 66,269 67,342 -1.59%
Inventory Ton 16,441 16,104 2.09%
Sales volume Ton 27,464 29,799 -7.84%
Brandy Yield Ton 23,830 33,394 -28.64%
Inventory Ton 10,986 14,308 -23.22%
Explanation on the causes of over 30% year-on-year changes of the related comparison data
□Available Not available
④ The fulfillment of significant sales contract and purchase contract signed by the Company
up to the report period
□Available Not available
⑤ Composition of operating costs
Classification of sector and product
Unit: CNY
2022 2021 Year-on-year
Sector Item Proportion in the Proportion in the increase or
Amount Amount
operating cost (%) operating cost (%) decrease (%)
Blending liquor 878,602,506 53.21% 833,479,062 51.93% 5.41%
Liquor
Packing material 470,509,666 28.50% 477,555,065 29.76% -1.48%
and
Wages 61,024,162 3.70% 59,063,486 3.68% 3.32%
alcoholic
Manufacturing
beverage 241,018,089 14.60% 234,857,160 14.63% 2.62%
expenses
Blending liquor 647,858,697 52.49% 611,321,504 51.55% 5.98%
Packing material 348,031,956 28.20% 328,926,668 27.74% 5.81%
Wine Wages 39,226,057 3.18% 50,206,319 4.23% -21.87%
Manufacturing
199,067,861 16.13% 195,416,595 16.48% 1.87%
expenses
Blending liquor 210,008,018 51.68% 220,058,439 53.02% -4.57%
Brandy Packing material 143,071,661 35.21% 147,425,674 35.52% -2.95%
Wages 9,166,666 2.26% 8,708,416 2.10% 5.26%
20
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
Manufacturing cost 44,140,573 10.86% 38,849,077 9.36% 13.62%
Explanation
No
⑥ Whether there are changes of consolidation scope during the report period
Yes □No
During the report period, the newly-established Yantai Kelidun Catering Co., Ltd was included in
the scope of consolidation. For other changes, please refer to ‘1. Interests in subsidiaries’ in Note
‘VI Interests in other entities’ in the financial statements.
⑦ Major changes or adjustments of the Company’s businesses, products or service during
the report period
□Available Not available
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） 291,092,248
The proportion that total sales amount of the top five customers accounting for the annual total
7.43%
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 180,422,614 4.61%
2 Rank 2 nd 40,497,501 1.03%
3 Rank 3rd 27,313,392 0.70%
4 Rank 4th 25,801,683 0.66%
5 Rank 5 th 17,057,058 0.44%
Total -- 291,092,248 7.43%
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 310,187,581
The proportion of the total purchase amount of the top 5 suppliers in the annual purchase 25.99%
21
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
amount
The proportion of the related party purchase amount in the top 5 supplier purchase amount
6.89%
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 84,456,054 7.08%
2 Rank 2nd 82,187,388 6.89%
3 Rank 3 rd 62,415,788 5.23%
4 Rank 4 th 43,590,163 3.65%
5 Rank 5 th 37,538,189 3.14%
Total -- 310,187,581 25.99%
Other situation explanations of main suppliers
□Available Not available
(3) Expense
Unit: CNY
Year-on-year increase
2022 2021 Explanation of significant changes
or decrease (%)
Mainly due to the increased marketing
Sales expense 1,028,966,138 998,954,105 3% investment and the year-on-year increased
marketing expenses and labor cost
Management Mainly due to the decrease of leasing cost
287,605,531 299,076,376 -3.84%
expense and contract fees
Mainly due to the increase of the
Financial
7,256,207 21,178,727 -65.74% Company’s interest income and decrease
expense
of expenses
Research and Mainly due to the increase in R&M input,
Development 15,431,310 10,919,262 41.32% purchasing and updating scientific research
expense equipment
The Company needs to comply with the disclosure requirements of the food and wine
manufacturing industry as set out in the Guidance on Self-Regulation of Listed Companies of
Shenzhen Stock Exchange No.3- Industry Information Disclosure.
(4) Research and development investment
Available □Not available
Name of main
Project Project Predicted influence in the Company’s
research and Target
purpose progress future development
development
22
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
project
Research and
development and It could enrich the Company's product
Development of
industrialization Developing Project profile, meet consumer demand and
sealwort wine mixed
of sealwort wine new product approval cultivate new revenue growth points for
with fruit juice
mixed with fruit the Company.
juice
The Company’s research and development personnel
2022 2021 Percentage of changes (%)
Number of R&D personnel (person) 139 137 1.46%
The proportion of the number of R&D personnel 6.12% 5.96% 0.16%
Educational structure of R&D personnel
Bachelor 48 48 0%
Postgraduate 25 23 8.70%
Doctor 1 1 0%
Below Bachelor 65 65 0%
Age structure of R&D personnel
Under 30-year-old 35 33 6.06%
30-to 40-year-old 41 41 0%
Above 40-year-old 63 63 0%
The investment of the Company’s R&D
2022 2021 Percentage of changes (%)
R&D investment amount (CNY) 15,431,310 10,919,262 41.32%
R&D investment as a percentage of operating income 0.39% 0.28% 0.11%
Amount of R&D investment capitalized (CNY) 0 0 0%
Capitalized R&D investment as a percentage of R&D
0% 0% 0%
investment
Reasons and effects of major changes in the composition of the company’s R&D personnel
□Available Not available
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
23
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
(5) Cash flow
Unit: CNY
Year-on-year increase
Item 2022 2021
or decrease (%)
Subtotal of cash inflow in operating activities 3,929,156,504 3,812,599,382 3.06%
Subtotal of cash outflow in operating activities 3,060,279,857 2,687,216,724 13.88%
Net amount of cash flow generated in operating activities 868,876,647 1,125,382,658 -22.79%
Subtotal of cash inflow in investment activities 162,953,148 104,064,718 56.59%
Subtotal of cash outflow in investment activities 306,991,362 279,720,766 9.75%
Net amount of cash flow generated in investment activities -144,038,214 -175,656,048 18%
Subtotal of cash inflow in financing activities 641,331,495 855,198,786 -25.01%
Subtotal of cash outflow in financing activities 1,256,089,072 1,354,745,101 -7.28%
Net amount of cash flow generated in financing activities -614,757,577 -499,546,315 -23.06%
Net increase of cash and cash equivalents 110,426,571 449,661,924 -75.44%
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
24
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
6. Assets and liabilities
(1) Significant changes of assets composition
Unit: CNY
At the end of 2022 At the beginning of 2022
Proportion increase or Explanation on
Proportion in the total assets Proportion in the total assets
Amount Amount decrease (%) significant changes
(%) (%)
Monetary funds 1,651,454,115 12.54% 1,567,095,993 11.63% 0.91% No significant changes
Receivables 343,982,985 2.61% 291,006,410 2.16% 0.45% No significant changes
Contract assets 0% 0% 0% No significant changes
Inventory 2,903,398,515 22.04% 2,802,622,520 20.80% 1.24% No significant changes
Investment real estate 22,115,318 0.17% 24,502,258 0.18% -0.01% No significant changes
Long-term equity investments 41,371,385 0.31% 46,496,510 0.35% -0.04% No significant changes
Fixed assets 6,028,137,972 45.77% 5,687,867,314 42.22% 3.55% No significant changes
Construction in progress 40,934,161 0.31% 590,172,099 4.38% -4.07% No significant changes
Right-of-use asset 139,887,159 1.06% 134,569,039 1% 0.06% No significant changes
Short-term borrowings 389,378,480 2.96% 622,066,457 4.62% -1.66% No significant changes
Contract liability 165,727,991 1.26% 147,120,716 1.09% 0.17% No significant changes
Long-term borrowings 128,112,115 0.97% 176,047,043 1.31% -0.34% No significant changes
Lease liability 109,505,093 0.83% 101,811,588 0.76% 0.07% No significant changes
Foreign asset has a high proportion
Available □Not available
25
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
Control measures for Proportion of overseas Whether there are
Formation Operation Earning
Details of assets Assets scale Location safeguarding of assets in the significant
reasons mode condition
asset security Company’s net assets impairment risks
The Company participates in
Hacienda Y
Acquisition of Independent making important decisions through
Vinedos Marques Spain 17,497,532 4.14% No
equity 545,439,787 operation board of directors and appoints CFO
Del Atrio. SL
on financial management.
Indomita Wine The Company participates in
Establishment of Independent
Company Chile, Chile making important decisions through 23,561,992 4.11% No
joint venture 541,425,857 operation
S.p.A. board of directors.
The Company participates in
Kilikanoon Estate Acquisition of Independent
Australia making important decisions through 687,415 1.42% No
Pty., Ltd. equity 186,656,024 operation
board of directors.
Sole The Company participates in
FrancsChampsPart Independent
proprietorship France making important decisions through -1,931,487 1.68% No
icipations SAS 220,786,729 operation
establishment board of directors.
Other explanation None
(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.
7. Investment condition analysis
(1) Overall situation
26
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
Available □Not available
Investment amount during the report period (CNY) Investment amount of the same period of last year (CNY) Variation
126,590,000 148,020,000 -14.48%
(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 during Capital Project Estimated Disclosure index (if
Project name amount up to the earnings up to planning schedule date (if
mode fixed assets investment the report source progress earnings have)
end of the report the end of the and estimated have)
investment projects period
period report period earnings
Yantai Please refer to
Changyu Resolution
Liquor and
International Announcement of
Self-constr alcoholic Owned
Wine City Yes 14,980,000 1,700,004,100 100% 0 0 — 2017.04.22 Seventh Session
ucted beverage fund
Blending and Board of Directors
sector
Cooling 4th Meeting,
Center Resolution
27
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
Yantai Announcement of
Changyu Seventh Session
International Self-constr Owned Board of Directors
Yes 45,260,000 1,135,370,000 100% 0 0 — 2017.04.22
Wine City ucted fund 8th Meeting,
Bottling Resolution
Center Announcement of
Oak Barrel Seventh Session
Self-constr Owned
Procurement Yes 30,550,000 178,634,200 90% 0 0 — 2021.04.28 Board of Directors
ucted fund
Project 10th Meeting,
Resolution
Announcement of
Eighth Session
Board of Directors
Intellectualize 4th Meeting and
d Upgrade Resolution
and Announcement of
Renovation Self-constr Owned Eighth Session
Yes 35,800,000 50,113,000 100% 0 0 — 2022.04.27
Project of ucted fund Board of Directors
Changyu 11th Meeting
Wine Culture disclosed on China
Museum Securities Journal,
Securities Times and
CNINFO
(http://www.cninfo.
com.cn/)
Total -- -- -- 126,590,000 3,064,121,300 -- -- 0 0 -- -- --
28
Yantai Changyu Pioneer Wine Co. Ltd. 2022 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 819,840,140 90,700,021 2,465,372,547 445,740,455 364,418,188
Co., Ltd.
Yantai Changyu Wine
Subsidiary Sales CNY5million 134,105,090 128,804,718 835,130,328 36,447,058 27,533,456
Sales Co., Ltd.
Changyu Trading Co.,
Ltd. in Development Subsidiary Sales CNY5million 76,045,487 14,401,839 175,831,921 63,533,120 47,681,793
Zone of Yantai
Laizhou Changyu
Subsidiary Sales CNY1million 72,131,787 1,000,000 264,248,002 46,181,296 34,716,488
Wine Sales Co., Ltd.
29
Yantai Changyu Pioneer Wine Co. Ltd. 2022 Annual Report
Acquisition and disposal of subsidiaries during the report period
□Available Not available
Explanation on main holding and joint stock companies
No
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, the wine consumption scene is blocked, and the market space is
obviously squeezed by other alcoholic products and is getting smaller and smaller. Most wine
companies have small scales with poor profitability and do not have much resources for cultivating
the market. The whole industry has been in the rough for a long time, and 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, as always, we believe that
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 large single product” and the marketing philosophy of “obtaining growth
from the terminal and nurturing consumers”, deepen the reform of marketing system, increase
innovation efforts, firm the confidence in development, find problems and gaps from its own, do
30
Yantai Changyu Pioneer Wine Co. Ltd. 2022 Annual Report
everything possible to give full pay to its own advantages and seek market breakthroughs in
difficulties.
(3) Management plan for the new year
In 2023, the Company will try its best to realize operating revenue of not less than CNY4.2billion
and control the main operating costs and three period expenses below CNY3.3billion.
(4) Measures to be adopted by the Company
In the New Year, affected by the economic situation from the beginning of January 2023, the
Company, distributors, suppliers and logistics enterprises could not work normally due to the
infected employees, resulting in a year-on-year decline in sales volume. Furthermore, the adverse
factors faced by China’s economic development, such as the demand contraction, the supply impact
and the weakening of expectation, have not been fundamentally eliminated, and the development
situation of the wine industry is still not optimistic. The Company will lead and unite all employees
to face challenges and difficulties, enhance confidence, seize opportunities, and strive to achieve
greater development with high morale.
First, it is to improve the assessment system and perfect the incentive mechanism. The Company
will strengthen the profit-oriented performance assessment, pay attention to the assessment in
comprehensive gross profit rate and the gross profit rate of main products, and guide large amounts
of resources to put into middle-and-high-end products and products with high gross profit in order
to further enhance the profitability. The current incentive mechanism mainly based on salary and
bonus will be improved, and other long-term incentive mechanisms will be actively studied and
promoted, so as to further mobilize the enthusiasm and initiative of employees.
Second, it is to continue to reform the organizational structure to better serve the market and
consumers. The Company will deepen and improve the system of business divisions, establish
clearer boundaries of responsibilities and rights for business divisions in terms of product research
and development, product production, product distribution, human resource management, market
order and inspection management, financial risk control and standardized management, media
release and other business functions, fully delegate power to the six sales business division to
further mobilize their enthusiasm, and form a good competition mechanism and reward and
punishment mechanism among all business divisions, so as to make the business division system
operate more efficient, better close to the market and consumers, improve the speed of response to
the market and improve the quality of service.
Third, it is to adhere to technological innovation and develop products with more Chinese
characteristics. The Company will further improve the products’ body design, appearance design,
launch marketing and other operational capacity, further reduce the cost and better meet the taste
and packaging requirements of young Chinese consumers through technological innovation in order
to invigorate the market of entry-level wine and new variety alcoholic drinks and cultivate and
expand wine consumption groups, and further emancipate the mind, closely centre on the product
research and development and technological innovation projects, and highlight the “Chinese
31
Yantai Changyu Pioneer Wine Co. Ltd. 2022 Annual Report
terroir” from the brewing/aging technology, blending technology and post-treatment technology
and other aspects.
Fourth, it is to continue to promote digital transformation and inject new impetus into market
expansion. The Company will make full use of consumer core data from various sources and
convert it into consumer digital assets. By studying consumer behavior preferences, the Company
will better guide business activities such as market segmentation, product research and
development, media investment, channel promotion, brand marketing and combination sales
methods, so as to truly empower business and enhance enterprise development momentum.
Fifth, it is to continue to promote the reform of online business channels and strive to expand the
scale of e-commerce business. The Company will continue to vigorously support the traditional
e-commerce business, consolidate and improve the existing market advantages. It will also strongly
develop new channels and new business forms such as Douyin and private domain in order to
occupy a dominant position in the critical period of rapid development of new e-commerce
business. In addition, effective ways to continuously enlarge the scale of online business will be
explored, and gross profit margin management and financial standardized management will be
strengthened, so as to assure the prudent operation and strive to achieve steady growth of
e-commerce business.
Sixth, it is to strengthen financial management and audit supervision to avoid business risks. The
Company will use Maycur system to standardize and sort out key expenses from the source of
applying for reimbursement in order to avoid tax-related risks. The capital planning and centralized
control in corporate funds will be intensified to ensure capital safety, improve the efficiency of
capital use and reduce financing costs. The supervision of funds and operation of overseas
subsidiaries will be strengthened to prevent financial risks. Moreover, the Company will enhance
the comprehensive audit supervision, adhere to flight audit, focus on the profit authenticity audit,
accounts receivable authenticity audit, advertising input effect audit and distributor inventory audit,
so as to avoid potential losses and prevent the Company from the risks of internal control, tax and
law.
(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
32
Yantai Changyu Pioneer Wine Co. Ltd. 2022 Annual Report
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
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 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
https://ww Investors participating the production and
Shenzhen Stock
2022.06.15 w.ironline.c Other Other Company’s 2021 annual operation
Exchange
n/ online performance presentation situation of the
(https://biz.szse.cn)
Company
33
Yantai Changyu Pioneer Wine Co. Ltd. 2022 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
34
Yantai Changyu Pioneer Wine Co. Ltd. 2022 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, appointment of an accounting firm and the duty
performance of directors and managers of the Company.
(5) About performance evaluation and incentive system
The appointment 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 The Implementation Plan on Strengthening the Safety Management of “Three
Kinds of External Personnel”, The Inspection and Evaluation Measures on Grape Base
Informatization and Acquisition System, Yantai Production Unit Reform Plan and Remote
Production Unit Reform Plan, and revised The Assessment Measures of Financial Management for
2022 Annual Production System, Assessment Measures for 2022 Quality Management, The
Monitoring Measures for the Product Quality and Safety Risk, The Assessment Measures for the
Responsibility System of the 2022 Contract Base’ s Responsible Personnel and The Assessment
Measures for the Responsibility System of the 2022 Self-run Grape Base’ s Personnel.
Whether or not there is significant variance between the Company’s actual situation of corporate
governance and laws, administrative regulations and the regulations 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 laws, administrative regulations and the regulations 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.
35
Yantai Changyu Pioneer Wine Co. Ltd. 2022 Annual Report
(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
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
36
Yantai Changyu Pioneer Wine Co. Ltd. 2022 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 2021 Annual Board of Directors’ Work Report,
2021 Annual Board of Supervisors’ Work Report, 2021 Annual Report, Proposal on 2021
2021 Annual Annual Profit Distribution, Proposal on 2022 Annual Financial Budget, Proposal on
Annual shareholders’
Shareholders’ 60.42% 2022.05.27 2022.05.28
Meeting Changing License Use Mode of ‘Changyu’ Trademarks, Proposal on Appointing Certified
Meeting
Public Accountants Firm, Proposal on Reelection of Board of Directors, Proposal on
Appointing Independent Directors and Proposal on Reelection of Board of Supervisors.
(2) Request for convening interim shareholders’ meeting by preferred 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 Increased Decreased Other Shares held at
Beginning date Ending date Reasons of the increase and
Name Post Status Gender Age the beginning shares during shares during changes of the end of the
of tenure of tenure decrease change of shares held
of the period the period the period shares held period
ZHOU
Chairman Incumbent M 58 2002.05.20 2025.05.28 37,800 0 0 0 37,800
Hongjiang
LENG Bin Director Outgoing M 60 2000.08.22 2022.05.27
SUN Jian Director Incumbent M 56 2019.05.17 2025.05.28 60,000 30,000 0 0 90,000 Secondary market purchases
37
Yantai Changyu Pioneer Wine Co. Ltd. 2022 Annual Report
LI Jiming Director Incumbent M 56 2019.05.17 2025.05.28
CHEN
Director Incumbent F 56 2019.05.17 2025.05.28
Dianxin
Aldino
Director Incumbent M 70 2006.12.07 2025.05.28
Marzorati
JIANG
Director Incumbent M 56 2022.05.27 2025.05.28
Jianxun
Stefano
Director Incumbent M 64 2020.05.27 2025.05.28
Battioni
Enrico
Director Incumbent M 54 2019.05.17 2025.05.28
Sivieri
CHIANG
Director Incumbent F 55 2020.06.19 2025.05.28
Yun
LUO Fei Independent director Outgoing M 70 2016.09.23 2022.05.27
DUAN
Independent director Incumbent M 58 2019.05.17 2025.05.28
Changqing
LIU
Independent director Incumbent F 59 2019.05.17 2025.05.28
Huirong
LIU Qinglin Independent director Incumbent M 59 2019.07.02 2025.05.28
YU Renzhu Independent director Incumbent M 44 2020.05.27 2025.05.28
WANG
Independent director Incumbent M 57 2022.05.27 2025.05.28
Zhuquan
KONG Chairman of the Board
Outgoing M 50 2013.05.14 2022.05.27
Qingkun of Supervisors
ZHANG
Supervisor Outgoing F 53 2013.05.14 2022.05.27
Lanlan
Chairman of the Board
LENG Bin Incumbent M 60 2022.05.27 2025.05.28
of Supervisors
LIU Zhijun Supervisor Incumbent M 42 2016.05.26 2025.05.28
ZHENG
Supervisor Incumbent F 54 2022.05.27 2025.05.28
Wenping
SUN Jian General manager Incumbent M 56 2018.01.10 2025.06.10
Deputy general
LI Jiming Incumbent M 56 2019.05.28 2025.06.10
manager
38
Yantai Changyu Pioneer Wine Co. Ltd. 2022 Annual Report
Deputy general
JIANG Hua Incumbent M 59 2001.09.14 2025.06.10 0 10,000 10,000 Secondary market purchases
manager
Deputy general
PENG Bin Incumbent M 56 2018.01.10 2025.06.10
manager
Deputy general
JIANG
manager and Board Incumbent M 56 2019.05.28 2025.06.10
Jianxun
secretary
General manager
PAN Jianfu Incumbent M 47 2018.04.19 2025.06.10
assistant
KONG General manager
Incumbent M 50 2022.06.09 2025.06.10
Qingkun assistant
General manager
LIU Shilu Incumbent M 48 2018.04.19 2025.06.10
assistant
XIAO General manager
Incumbent M 46 2018.04.19 2025.06.10
Zhenbo assistant
Total -- -- -- -- -- -- 97,800 40,000 0 0 137,800 --
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
Mr. Bin Leng no longer served as a director of the Company due to the change of position upon expiration of his term of office; Mr. Fei Luo no longer
served as an independent director of the Company due to his age upon expiration of his term of office; Mr. Qingkun Kong no longer served as the
Chairman of the Board of Supervisors of the Company due to the change of position upon expiration of his term of office; Ms. Lanlan Zhang no longer
served as a supervisor of the Company due to her age upon expiration of her term of office.
Changes of directors, supervisors and senior managers of the company
Available Not available
Name Post Status Date Reasons
LENG Bin Director Outgoing due to expiration of term 2022.05.27 No longer served as a director due to the change of position upon expiration of term
39
Yantai Changyu Pioneer Wine Co. Ltd. 2022 Annual Report
Chairman of the Board of Be elected as a supervisor of the Company by the General Shareholders’ Meeting, and be
LENG Bin Be elected 2022.05.27
Supervisors elected as the Chairman of the Board of Supervisors by the Company’s Board of Supervisors
LUO Fei Independent director Outgoing due to expiration of term 2022.05.27 No longer served as an independent director due to his age upon expiration of term
WANG Zhuquan Independent director Be elected 2022.05.27 Be elected as an independent director of the Company by the General Shareholders’ Meeting
JIANG Jianxun Director Be elected 2022.05.27 Be elected as a director of the Company by the General Shareholders’ Meeting
Chairman of the Board of No longer served as the Chairman of the Board of Supervisors due to the change of position
KONG Qingkun Outgoing due to expiration of term 2022.05.27
Supervisors upon expiration of term
KONG Qingkun General manager assistant Be appointed 2022.06.09 Be elected as a general manager assistant by the Company’s Board of Directors
ZHANG Lanlan Supervisor Outgoing due to expiration of term 2022.05.27 No longer served as a supervisor of the Company due to her age upon expiration of term
ZHENG Wenping Supervisor Be elected 2022.05.27 Be elected as a supervisor by the Company’s Congress of Workers and Staff
(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. Hongjiang Zhou, male, 58, 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. Jian Sun, male, 56, 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. Jiming Li, male, 56,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.
Mr. Jianxun Jiang, male, 56, Chinese, MBA and accountant, served as the Financial Manager of the Company from May 20th, 2002 to January 10th,
2018. He now serves as the board director, Deputy General Manager and Board Secretary of the Company.
40
Yantai Changyu Pioneer Wine Co. Ltd. 2022 Annual Report
Ms. Dianxin Chen, female, 56,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, 70, Italian, with bachelor degree, serves currently 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, 64, 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, 54, 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. Yun Chiang, female, 55, 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
41
Yantai Changyu Pioneer Wine Co. Ltd. 2022 Annual Report
Founding Partner of Prospere Capital, and the board director of the Group Company and the
Company.
Mr. Qinglin Liu, male, 59, 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
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. Changqing Duan, male, 58, 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. Huirong Liu, female, 59, 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. Renzhu Yu, male, 44, 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
42
Yantai Changyu Pioneer Wine Co. Ltd. 2022 Annual Report
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.
Mr. Zhuquan Wang, male, 57, Chinese, doctor of management (accountancy), first batch of
national accounting academic leading personals of Financial Department, the entrant of accountant
master cultivation project of Financial Department, outstanding teacher of Shandong province,
Government Special Allowance expert, acted as independent director from May 13th, 2010 to May
12th, 2013 and from May 23rd, 2014 to May 17th, 2019. Now he is the professor and the doctoral
supervisors of the Ocean University of China and also holds a concurrent post of independent
director of this company and Qingdao DoubleStar Co., Ltd..
② Members of board of supervisors
Mr. Bin Leng, male, 60, 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 and the General Manager of Yantai
Changyu Group Co., Ltd. and the chairman of Board of Supervisor of the Company, with an
additional post of the Chairman and General Manager of Yantai Zhongya Medical Health Wine Co.,
Ltd..
Mr. Zhijun Liu, male, 42, 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.
Ms. Wenping Zheng, female, Chinese, 54, bachelor degree. Currently, she is the head of the Audit
Department of the Company.
③ Other senior executives
Mr. Hua Jiang, male, 59, Chinese, master degree, senior engineer, has been serving as the Deputy
General Manager of the Company since September 14th, 2001.
Mr. Bin Peng, male, 56, MBA, senior engineer, ever successively served as the Department Chief
of Technical Transformation Department and the Minister of Investment and Development
Department of the Company, as well as the General Manager Assistant of Yantai Changyu Group
Co., Ltd.. He currently serves as the Deputy General Manager of the Company.
Mr. Jianfu Pan, male, Han ethnic, Chinese, 47, MBA and senior economist, used to serve as the
General Manager of the Jiangxi Branch of the Company, the General Manager of the Shanghai
marketing management company and the General Manager of Beijing marketing management
43
Yantai Changyu Pioneer Wine Co. Ltd. 2022 Annual Report
center. Currently, he is a General Manager Assistant of the Company and the General Manager of
Beijing marketing management center and Beijing Chateau AFIP.
Mr. Qingkun Kong, male, 50, Chinese, MBA and economist, used to serve as a section member of
production department in the healthy liquor branch office, a clerk and the Deputy Director and the
Director of general manager office, and the chairman of the Company’s Board of Supervisor.
Currently, he serves as a General Manager Assistant of the Company.
Mr. Shilu Liu, male, Han ethnic, Chinese, 48, 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. Zhenbo Xiao, male, Han ethnic, Chinese, 46, 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.
Post in the shareholder’s company
Available □Not available
Beginning date Ending date Paid by shareholder’s
Name Shareholder’s Company Post
of the post of 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. Director & 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. Bin Leng 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
(3) Salary of directors, supervisors and senior executives
44
Yantai Changyu Pioneer Wine Co. Ltd. 2022 Annual Report
The situation of decision-making process, the basis of determination and the actual payment of
remuneration for 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, 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 58 Incumbent 149.62 No
SUN Jian Director and General Manager M 56 Incumbent 115.77 No
LI Jiming Director and Deputy General Manager M 56 Incumbent 85.05 No
Director, Deputy General Manager and
JIANG Jianxun M 56 Incumbent 87.90 No
Board secretary
CHEN Dianxin Director F 56 Incumbent 0 Yes
Aldino Marzorati Director M 70 Incumbent 0 No
Stefano Battioni Director M 64 Incumbent 0 No
Enrico Sivieri Director M 54 Incumbent 0 No
CHIANG Yun Director F 55 Incumbent 0 No
DUAN Changqing Independent Director M 58 Incumbent 10 No
LIU Huirong Independent Director F 59 Incumbent 10 No
LIU Qinglin Independent Director M 59 Incumbent 10 No
YU Renzhu Independent Director M 44 Incumbent 10 No
WANG Zhuquan Independent Director M 57 Incumbent 6 No
LUO Fei Independent Director M 70 Outgoing 5 No
LENG Bin Supervisor M 60 Incumbent 0 Yes
ZHENG Wenping Supervisor F 54 Incumbent 24.09 No
Liu Zhijun Supervisor M 42 Incumbent 0 Yes
Zhang Lanlan Supervisor F 53 Outgoing 14.11 No
JIANG Hua Deputy General Manager M 59 Incumbent 98.70 No
PENG Bin Deputy General Manager M 56 Incumbent 82.45 No
PAN Jianfu General Manager Assistant M 47 Incumbent 63.81 No
KONG Qingkun General Manager Assistant M 50 Incumbent 58.43 No
LIU Shilu General Manager Assistant M 48 Incumbent 58.80 No
XIAO Zhenbo General Manager Assistant M 46 Incumbent 63.31 No
Total -- -- -- -- 953.04 --
45
Yantai Changyu Pioneer Wine Co. Ltd. 2022 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 2021 Annual Board of Directors’ Work Report, 2021 Annual General
Manager’s Work Report, 2021 Annual Report, Draft Proposal on 2021 Annual Profit Distribution, Proposal
on 2021 Annual Performance Assessment Result of the Company’s Senior Executives, 2021 Annual Self
Assessment Report on Internal Control, 2021 Annual Social Responsibility Report, Proposal on Relevant
The Eighth Session Board of Issues of Convening 2021 Annual Shareholders’ Meeting, Proposal on Reelection of Board of Directors,
2022.04.25 2022.04.27
Directors 11th Meeting Proposal on Appointing Independent Directors, Proposal on Appointment of Certified Public Accounting
Firm, Proposal on 2022 Annual Capital Expenditure Plan, Proposal on 2022 Annual Routine Related
Transaction, Proposal on 2022 Annual Financial Budget, Proposal on Changing License Use Mode of
‘Changyu’ Trademarks and Proposal on Liquidation of Joint Venture Company Yantai Santai Real Estate
Development Co., Ltd..
The First Interim Board of Directors
2022.04.28 - The meeting deliberated and approved 2022 First Quarter Report.
Meeting in 2022
The meeting deliberated and approved Proposal on Electing Chairman of the Company, Proposal on Electing
The Ninth Session Board of Auditing Committee Members, Proposal on Electing Emolument Committee Members, Proposal on
2022.06.09 2022.06.10
Directors 1st Meeting Appointing General Manager and Other Senior Management and 2022-2024 Performance Evaluation and
Remuneration Incentive Measures for Senior Management.
The Ninth Session Board of The meeting deliberated and approved 2022 Semi-Annual Report and Proposal on 2022 Semi-Annual Profit
2022.08.24 2022.08.26
Directors 2nd Meeting Distribution.
46
Yantai Changyu Pioneer Wine Co. Ltd. 2022 Annual Report
The Ninth Session Board of
2022.10.26 - The meeting deliberated and approved 2022 Third Quarter Report.
Directors 3rd Meeting
(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 5 2 3 0 0 No 1
LENG Bin 2 1 1 0 0 No 0
SUN Jian 5 2 3 0 0 No 1
LI Jiming 5 2 3 0 0 No 1
JIANG Jianxun 3 1 2 0 0 No 1
CHEN Dianxin 5 2 3 0 0 No 0
Aldino Marzorati 5 1 3 1 0 No 0
Stefano Battioni 5 2 3 0 0 No 0
Enrico Sivieri 5 1 3 1 0 No 0
CHIANG Yun 5 2 3 0 0 No 0
LUO Fei 2 1 1 0 0 No 0
DUAN Changqing 5 2 3 0 0 No 0
LIU Huirong 5 2 3 0 0 No 0
LIU Qinglin 5 2 3 0 0 No 0
YU Renzhu 5 2 3 0 0 No 0
WANG Zhuquan 3 1 2 0 0 No 0
Explanation for failed to personally attend the Board of Directors’ meetings for successive two times
47
Yantai Changyu Pioneer Wine Co. Ltd. 2022 Annual Report
During the report period, there were no directors who did not attend the Board of Directors’ 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.
(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
The following recommendations of directors to the Company were adopted:
① Increase the degree of business development of online business (i.e. e-commerce) when offline marketing activities were difficult to carry out.
② Further strengthen and improve the disclosure of the Company’s social responsibility information.
7. Performance of the special committees under the Board of Directors during the report period
Other Specific
Committees Numbers of Important comments and
Members Held date Meeting contents performance circumstances of the
name meeting held suggestions made
of duties objection (if have)
The meeting deliberated and approved the During the reporting
DUAN Changqing, LIU
2021 Annual Report, Draft Proposal on period, the members of the
Huirong, LIU Qinglin, Yu
Auditing 2021Annual Profit Distribution, Proposal Audit Committee provided
Renzhu, LUO Fei, CHEN 1 2022.04.25 No No
Committee on Appointing Certified Public advice and suggestions in
Dianxin, LENG Bin, Enrico
Accountants Firm, 2021 Annual Self guiding the internal audit
Sivieri
Assessment Report on Internal Control, work, supervising and
48
Yantai Changyu Pioneer Wine Co. Ltd. 2022 Annual Report
2022 Annual Internal Audit Plan. All the evaluating external audit
committee members unanimously agreed institutions, establishing
to submit the above proposals to the board an effective internal
of directors of the company for control system and
deliberation. prompting major business
risks, and actively
DUAN Changqing, LIU safeguarded the interests
Huirong, LIU Qinglin, Yu The meeting deliberated and approved the of the company and all
Renzhu, WANG Zhuquan, 1 2022.06.09 2022 Semi-Annual Report and Proposal shareholders.
CHEN Dianxin, JIANG on 2022 Semi-Annual Profit Distribution.
Jianxun, Enrico Sivieri
During the reporting
period, the Emolument
DUAN Changqing, LIU Committee put forward
The meeting deliberated and approved the
Huirong, LIU Qinglin, Yu relevant suggestions on
Emolument Proposal on 2021 Annual Performance
Renzhu, LUO Fei, CHIANG 1 2022.04.25 further strengthening the No No
Committee Assessment Results of the Company’s
Yun, LENG Bin, Enrico performance assessment
Senior Executives.
Sivieri of senior executives and
improving the way of
remuneration.
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.
49
Yantai Changyu Pioneer Wine Co. Ltd. 2022 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) 637
Incumbent staff number of major subsidiary companies at the end of reporting period
1,633
(people)
Total incumbent staff at the end of reporting period (people) 2,270
Total staff getting paid in current period (people) 2,270
Retired staff number whose expenses are undertaken by parent company or subsidiary
0
companies (people)
Specialty constitution
Category Number of people (people)
Production staff 705
Sales staff 1,087
Technical staff 137
Financial staff 108
Administrative staff 233
Total 2,270
Education degree
Category Number (People)
Postgraduate and above 92
Bachelor 867
Junior College 688
Technical secondary school or Senior high school 432
Junior high school and below 191
Total 2,270
(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
50
Yantai Changyu Pioneer Wine Co. Ltd. 2022 Annual Report
Participate in the training for directors and supervisors of listed companies organized by
securities regulatory authorities; regularly hold the theoretical study of the leadership team and
the study of the central group; study Party documents and current political spirit seriously;
strengthen human resources management training, and pay real-time attention to the policies and
regulations by the national, provincial and municipal governments
2) Professional training
Encourage self-study; Participated in Entrepreneur Exchange Forum and Summit Meeting and
go to domestic successful enterprise for visit and study; encourage middle-level administrative
staff to attend university correspondence, self-study examination, or other further education for
high-level degree; organize professional management cadres, involved in human resources,
finance, safety and quality etc., to attend vocational qualification examination; attend special
training such as safety, human resource, law, technology, facility, finance, etc., which are
organized by the Company’s special management department.
② Administrative Staff in Production, Tourism and Administrative Systems Whose Level are or
Below Section Chief
1) General training
Hire professional lecturers or university teachers to teach to improve employees’ professional
ability, innovation ability and thinking expansion ability; carry out training on enterprise
development history, rules and regulations and basic knowledge of wine, and strengthen training
on human resource management, production safety and quality and safety; organize employees
to participated in outward-bound training.
2) Professional training
Select two books for individual self-study; 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,
safety and quality etc., to attend vocational qualification examination for professional certificate;
based on personnel work, attending special training such as safety, technology, finance, human
resource, legal etc., which are organized by special management department.
③ Front-line Workers in Production and Tourism System
1) General training
Attend trainings including company culture, regulatory framework and various liquor products
knowledge, and reinforce training in the aspect of human resources management.
2) Professional training
For special types of work, organize and participate in the corresponding job training ; attend
special training such as safety, technology, facility, comprehensive management etc..
④ Marketing Personnel
1) General training
Study training materials such as marketing textbooks, the country’s relevant policy documents,
post responsibility system and so on
2) Professional training
Hire professional lecturers or invite industry leaders to give lectures on successful wine
marketing cases, wine industry development trend, business direction for sales business division
manager assistant-level personnel and above.
51
Yantai Changyu Pioneer Wine Co. Ltd. 2022 Annual Report
The training for sales business division management personnel whose level are or below section
chief focuses on organizational structure, department responsibilities, rules and regulations,
brand positioning, product knowledge, marketing method, etc..
⑤ New Entry University Students
Conduct training for enterprise culture, rules and regulations, safety production, product quality,
marketing strategy, emolument and evaluation system; carry out outward-bound training courses
such as role transition, execution, collaboration and win-win content and so on; organize to rotate
to the wine production position for internship.
(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 2021 Annual Shareholders’ Meeting convened on May 27th, 2022 by
the Company, the Company’s 2021 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, 2021, the Company would pay cash dividend to all shareholders registered on the
share registration day: CNY4.5（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, 2022, the Company published the Implementation Announcement of 2021 Annual
Equity Distribution on China Securities Journal, Securities Times and www.cninfo.com.cn,
determining that the share registration day and the ex-dividend day of A Share was respectively on
July 12th, 2022 and on July 13th, 2022; the last trading day, the ex-dividend day and the share
registration day of B Share was respectively on July 12th, 2022, on July 13th, 2022 and on July 15th,
2022.
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, 2022
and all B Share shareholders registered at CSDC Shenzhen Company after closing of Shenzhen
Stock Exchange in the afternoon of July 15th, 2022 (the last trading day is July 12th, 2022).
This dispatching has already been completed in mid-July 2022. 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
52
Yantai Changyu Pioneer Wine Co. Ltd. 2022 Annual Report
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
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） 428,681,411
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 2022 is CNY428,681,411 and the net profit of the parent company in financial statement in 2022 is
CNY749,757,149. According to PRC accounting standard, the situation for attributable profits of the consolidation and the
parent company at the end of 2022 as following:
Unit: CNY
Consolidation Parent company
Year-end undistributed profit 9,049,649,211 9,582,860,014
Among which: Total comprehensive income in 2022 428,681,411 749,757,149
Undistributed profit carried forward from beginning of the year 8,929,426,600 9,141,561,665
53
Yantai Changyu Pioneer Wine Co. Ltd. 2022 Annual Report
Dividends distribution of 2021 308,458,800 308,458,800
Legal earned surplus reserve to be drawn 0 0
According to regulation of 157th item in the Articles of Association, which is that “the Company can distribute dividends either
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 amount on the capital
expenditure in 2023, under the condition of not influencing the normal production and operation, the Company put forward
preliminary scheme on profit distribution in 2022 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,
2022, 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 2022 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 2022
Annual Self-Assessment Report on Internal Control disclosed in Securities Times, China Securities
Journal and www.cninfo.com.cn on April 13th, 2023.
54
Yantai Changyu Pioneer Wine Co. Ltd. 2022 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 2023.04.13
Disclosure index for full text of the internal control self-assessment report 2022 Annual Self-Assessment Report on Internal Control disclosed on Securities Times,China Securities Journal and
www.cninfo.com.cn by the Company on April 13th, 2023
Percentage of total unit assets included in scope of the assessment accounting for the
84.93%
Company’s total assets of consolidated financial statements
Percentage of unit operating income included in scope of the assessment accounting
92.41%
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 one person and
have fraudulent practices; The Company makes corrections for the published above 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
55
Yantai Changyu Pioneer Wine Co. Ltd. 2022 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 number of person loss
defects, has the reasonable probability to cause the significant misstatements, which or serious injury of significant defects. Major negative effects:
cannot be promptly prevented, or found and corrected timely in the financial report, Negative news appears in the media with influencing a wide scope
although the misstatements neither achieves nor exceeds the importance level but in the provincial mainstream media. Environment effects: Cause
still arising the attention of Board of Directors and management team. Failure to heavy environment damages and massive public complains, ought to
select and apply accounting regulations in accordance with generally accepted 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
56
Yantai Changyu Pioneer Wine Co. Ltd. 2022 Annual Report
Major defects: 2%≦misstatements<5%,or
General defects: misstatements<2%
Number of significant defect in financial report 0
Number of significant defect in non-financial report 0
Number of major defect in financial report 0
Number of major 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, 2022.
Disclosure of the internal control audit report Disclosure
Disclosure date for the full text of the internal control audit report 2023.04.13
2022 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 13th, 2023.
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.
57
Yantai Changyu Pioneer Wine Co. Ltd. 2022 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
Policies and industry standards related to environmental protection
The Environmental Protection Law of People’s Republic of China, The Water Pollution’s Prevention and Control Law of People’s Republic of China,
The Air Pollution’s Prevention and Control Law of People’s Republic of China, The Environmental Noise Pollution’s Prevention and Control Law of
People’s Republic of China, The Environmental Solid Waste Pollution’s Prevention and Control Law of People’s Republic of China and The
Environmental Protection Regulations of Liaoning Province; the national’s General Principles of Hazardous Waste Identification Standards, Surface
Water Environmental Quality Standards, Groundwater Environmental Quality Standards, Environmental Air Quality Standards, Acoustic
Environmental Quality Standards, Emission Standard for Environmental Noise at the Boundary of Industrial Enterprises, Comprehensive Discharge
Standard for Boiler Air Pollutants, The Limiting Value of Occupational Exposure to Hazardous Factors in the Workplace (Chemical Hazardous
Factors) and Comprehensive Wastewater Discharge Standard of Liaoning Province.
Administrative permit for environmental protection
It has been approved in the Huanhuanjianzi (2016) No.24 issued by the Environmental Protection Bureau of Huanren Manchu Autonomous County.
Industrial emission standards and specific information on the discharge of pollutants involved in production and business activities
Name of major Name of major Quantity Total Condition
Name of Total
pollutants and pollutants and Mode of of Distribution situation Discharge Implemented approved of
company or volume of
particular characteristic discharge discharge of discharge outlet concentration pollution discharge standard volume of excessive
subsidiary discharge
pollutants pollutants outlet discharge discharge
Liaoning Organized Discharge outlet Confirmed in line Emission Standard for Air Pollutants of Boiler
Changyu exhaust gas, exhaust gas, of boiler with national Meeting the (GB13271-2014), Emission Standard for Odor
Icewine inorganized waster water, chimney and 2 standard Graphical national Pollutants (GB14554-93), 4a in Class 2 of 35m3/d 120m3/d No
Chateau Co., exhaust gas, noise discharge outlet Signs for standards Emission Standard for Environmental Noise at
Ltd. waster water, of factory waste Environmental the Boundary of Industrial Enterprises
58
Yantai Changyu Pioneer Wine Co. Ltd. 2022 Annual Report
noise water Protection (GB12348-2008), Comprehensive Wastewater
(GB15562.1-1995) Discharge Standard of Liaoning Province
(GB15562.2-1995) (DB21/1627-2008)
Treatment of pollutants
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.
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.
Investment in environmental governance and protection and payment of environmental protection tax
The Company has made sufficient investment in environmental protection, done a good job in environmental governance and protection and paid
environmental protection tax in full and timely according to law.
Measures taken to reduce carbon emissions and their effects during the reporting period
Available Not available
Administrative penalties for environmental issues during the reporting period
Company or subsidiary Reason for The impact on the production and The company’s
Violation Penalty result
name penalty operation of listed companies rectification measures
None None None None None None
Other environmental information that should be made public
No
59
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
Other related environmental information
No
2. Social responsibility performance
Please refer to 2022 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 helped the old revolutionary base areas get rid of poverty and get rich by purchasing
1898 boxes of millet and 3796 boxes of apples produced by Huangchengyang Village, which worth
CNY611,200, and given them to Company’s employees. It not only increase the welfare of
employees, but also expands the popularity of the agricultural products of the village and increases
the income of people in the old revolutionary base areas.
60
Yantai Changyu Pioneer Wine Co., Ltd. 2022 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
Solve
Yantai Changyu
horizontal Non-horizontal competition 1997.05.18 Forever Has been performing
Group Co., Ltd.
competition
According to Trademark License Contract, the trademark
According to Trademark License Contract, the trademark
Commitments at the initial use fee annually paid by the Company to Changyu Group
royalty of Changyu and other trademarks paid by the
public offering or refinancing Clear the use 1997.05.18 shall be mainly used by Changyu Group to publicize
Yantai Changyu Company to Yantai Changyu Group Co., Ltd. every year is
of trademark 1997.05.18 - trademarks including Changyu and contract products.
Group Co.,Ltd. mainly used for advertising
royalty 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 Group Co., Ltd.
has been performing its commitment.
The CNY231,768,615 that was not used for publicity of
trademarks and contract products as promised will be offset
Compensating 2019.04.04
Yantai Changyu by the four-year trademark use fee from 2019 to 2022. If
Other commitments unredeemed 2019.04.04 - Has been performing
Group Co.,Ltd. insufficient, the shortfall would be filled in one time in 2023.
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
61
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
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
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
due to different understanding and leads to problem appearance during the implementation process.
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
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
Whether or not to have
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
specific reasons of the
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,
unimplemented commitment
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
and next steps
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)
62
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
□Available Not available
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
During the reporting period, the newly established Yantai Kelidun Catering Co., Ltd. was included in the
scope of consolidated statement; For other details of the the changes, please refer to “1. Interests in
subsidiaries” in Note “VI Interests in other entities” 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 4
Name of certified public accountant for the audit service of domestic accounting firm Ms. Ting Wang, Ms. Hui Jiang
Consecutive period for the certified public accountant’s audit service of domestic
4
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.
11. Material litigation and arbitration
□Available Not available
63
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
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
Proportion Whether
Approved Available
Amount accounting for exceed Cleari
Related Relationsh Pricing transaction market price Disclosur
Type Content Price (CNY‘000 amount of approved ng Disclosure index
party ip principle quota of similar e date
0) similar transaction form
(CNY‘0000) transactions
transactions quota
Expected
Announcement on
Purchase 2022 Annual
Yantai Controlled
Purchase and Routine Related
Shenma by the Determine
and commission Agreemen 2022.04. Transaction
Packagin same d by 8,219 16.43% 9,000 No Cash No
commission processing t pricing 27 disclosed in China
g Co., parent agreement
processing packaging Securities
Ltd. company
materials Journal,Securities
Timesand
CNINFO in 2022
Total -- -- 8,219 -- 9,000 -- -- -- -- --
Details of the return of large sales No
64
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
Actual performance of the estimated total amount for
daily operations related transactions by category that No
will occur during this period.
Reason for the deference between transaction price Not available
and market reference price(if available)
(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.
65
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
(7) Other major related transactions
Available □Not available
For other major related transactions, please refer to the Section IX “ 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
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
Explanation of leasehold situation
For the major leasehold situation during the reporting period, please refer to the “(4) Related
Leases” of “4. Related Transaction” in “IX. Related Parties and Related Transaction” in the
financial report of this report.
The project brought the profit and loss to the Company that reached more than 10% of the total
profit of the Company during the reporting period
Available Not available
There is no lease project brought the profit and loss to the Company that reached more than 10% of
the total profit of the Company during the reporting period.
66
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
(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)
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 7,858 - - 5 year No Yes
assurance
67
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
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 80,034
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 guarantee amount of the Company（Total of above three major items）
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
114,864 114,194
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 10.79%
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
68
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
Description of the specific situation of using compound guarantee
No.
(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. 2022 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%
70
Yantai Changyu Pioneer Wine Co., Ltd. 2022 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
□Available Not available
71
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
(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 Total number of preferred shareholder
Total number of shareholders by the
Total shareholders in the shareholder recovering voting recovering voting power by the end of
44,371 end of last month before the disclosure 42,682 0 0
report period power by the end of report period last month before the disclosure day of
day of the annual report
(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 /marked or frozen
Character of Percentage Changes during the
Name of Shareholders the end of the restricted unrestricted
shareholders (%) report period Share status Amount
report period shares shares
Domestic non-state legal
YANTAI CHANGYU GROUP CO., LTD. 50.40% 345,471,556 -2,300 0 345,471,556 0
person
GAOLING FUND, L.P. Foreign legal person 3.08% 21,090,219 0 0 21,090,219 0
BBH BOS S/A FIDELITY FD - CHINA FOCUS FD Foreign legal person 1.12% 7,683,016 -1,457,200 0 7,683,016 0
SHENWAN HONGYUAN SECURITIES (HONGKONG)
Foreign legal person 1.06% 7,293,952 -120,000 0 7,293,952 0
LIMITED
#JIANG Fengdi Domestic natural person 0.77% 5,295,000 837,800 0 5,295,000 0
GUOTAI JUNAN SECURITIES (HONGKONG) LIMITED Foreign legal person 0.73% 4,998,831 -13,040 0 4,998,831 0
72
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
Haitong International Securities Company Limited-Account
Foreign legal person 0.73% 4,986,502 -25,369 0 4,986,502 0
Client
HONG KONG SECURITIES CLEARING COMPANY
Foreign legal person 0.64% 4,420,086 1,341,261 0 4,420,086 0
LIMITED
VANGUARD EMERGING MARKETS STOCK INDEX
Foreign legal person 0.59% 4,026,863 -144,000 0 4,026,863 0
FUND
FIDELITY CHINA SPECIAL SITUATIONS PLC Foreign legal person 0.55% 3,779,202 0 0 3,779,202 0
Strategic investors or legal result of the placement of new shares to become a top 10
No
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 voting
No
rights and waiver of the voting rights
Special explanation for the existence of a special repurchase account among the top
No
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. 345,471,556 A 345,471,556
GAOLING FUND, L.P. 21,090,219 B 21,090,219
BBH BOS S/A FIDELITY FD - CHINA FOCUS FD 7,683,016 B 7,683,016
SHENWAN HONGYUAN SECURITIES (HONGKONG) LIMITED 7,293,952 B 7,293,952
#JIANG Fengdi 5,295,000 A 5,295,000
GUOTAI JUNAN SECURITIES (HONGKONG) LIMITED 4,998,831 B 4,998,831
Haitong International Securities Company Limited-Account Client 4,986,502 B 4,986,502
HONG KONG SECURITIES CLEARING COMPANY LIMITED 4,420,086 A 4,420,086
VANGUARD EMERGING MARKETS STOCK INDEX FUND 4,026,863 B 4,026,863
73
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
FIDELITY CHINA SPECIAL SITUATIONS PLC 3,779,202 B 3,779,202
The explanation for the associated relationship and accordant action of the top 10
shareholders with unrestricted shares, the the associated relationship and accordant Among the top 10 shareholders, Yantai Changyu Group Company Limited has no associated relationship or accordant
action between the top 10 shareholders with unrestricted shares and the top 10 action relationship with the other 9 listed shareholders, and the relationship among the other shareholders is unknown.
shareholders
Explanation for the top 10 shareholders who involved in financing activities and
The top 10 shareholders do not involve in financing activities and stock trade business.
stock trading business
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
Production of wine, healthy liquor, distilled liquor and beverages( only
produced by subsidiaries, shareholding companies and branches), sales
Yantai Changyu Group Co., Ltd. ZHOU Hongjiang 1997.04.27 913706002656458244
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 or shared by the controlling shareholders during the report period No.
Changes in the controlling shareholder during the report period
Available Not available
74
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
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
International Finance Corporation Makhtar Diop 1956.07.25 － corporation is a multilateral financial institution that ranks first in the world in terms of providing capital stock
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.
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
Yantai Guofeng Investment
RONG Feng 2009.02.12 00426068-6 state-owned stock right within the scope of authorization; Venture capital investment business; Agency of
Holdings Group Co., Ltd.
venture capital investment business of other venture investment enterprises or individuals; Participation in the
establishment of venture capital investment enterprises and venture capital investment management consultant
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
75
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
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. 2022 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. 2022 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. 2022 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 11th, 2023
KPMG Huazhen Certified Public Accountants
Audit agency name
Co., Ltd. (special general partnership)
Audit report No. KPMG Huazhen ShenZi No. 2304287
Certified public accountant’s name Ms. Ting Wang, Ms. Hui Jiang
79
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
YANTAI CHANGYU PIONEER WINE COMPANY LIMITED
ENGLISH TRANSLATION OF FINANCIAL STATEMENTS
FOR THE YEAR 1 JANUARY 2022 TO 31 DECEMBER 2022
IF THERE IS ANY CONFLICT BETWEEN THE CHINESE VERSION AND ITS ENGLISH
TRANSLATION, THE CHINESE VERSION WILL PREVAIL
80
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
AUDITOR’S REPORT
KPMG Huazhen Shen Zi No. 2304287
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 2022, 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 2022, 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.
81
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
AUDITOR’S REPORT (continued)
KPMG Huazhen Shen Zi No. 2304287
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
The 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;
82
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
AUDITOR’S REPORT (continued)
KPMG Huazhen Shen Zi No. 2304287
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.
83
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
AUDITOR’S REPORT (continued)
KPMG Huazhen Shen Zi No. 2304287
Other Information
Management of Yantai Changyu is responsible for the other information. The other
information comprises all the information included in the 2022 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.
84
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
AUDITOR’S REPORT (continued)
KPMG Huazhen Shen Zi No. 2304287
Auditor’s Responsibilities for the Audit of the Financial Statements (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.
85
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
AUDITOR’S REPORT (continued)
KPMG Huazhen Shen Zi No. 2304287
Auditor’s Responsibilities for the Audit of the Financial Statements (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 Jiang Hui
(Signature and stamp)
Date: 11 04 2023
86
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
Yantai Changyu Pioneer Wine Company Limited
Consolidated balance sheet
as at 31 December 2022
(Expressed in Renminbi Yuan)
31 December 31 December
Note
2022 2021
Assets
Current assets
Cash at bank and on hand V.1 1,651,454,115 1,567,095,993
Bills receivable V.2 2,712,460 42,827,666
Accounts receivable V.3 343,982,985 291,006,410
Receivables under financing V.4 309,329,918 364,457,497
Prepayments V.5 60,415,508 75,235,879
Other receivables V.6 70,542,398 30,125,270
Inventories V.7 2,903,398,515 2,802,622,520
Other current assets V.8 185,337,393 217,152,601
Total current assets 5,527,173,292 5,390,523,836
Non-current assets
Long-term equity investments V.9 41,371,385 46,496,510
Investment properties V.10 22,115,318 24,502,258
Fixed assets V.11 6,028,137,972 5,687,867,314
Construction in progress V.12 40,934,161 590,172,099
Bearer biological assets V.13 184,420,741 193,712,942
Right-of-use assets V.14 139,887,159 134,569,039
Intangible assets V.15 578,240,846 617,866,879
Goodwill V.16 107,163,616 112,374,541
Long-term deferred expenses V.17 274,699,232 284,593,163
Deferred tax assets V.18 227,362,656 245,210,731
Other non-current assets V.19 - 144,120,442
Total non-current assets 7,644,333,086 8,081,485,918
Total assets 13,171,506,378 13,472,009,754
The notes on pages 106 to 189 form part of these financial statements.
87
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
Yantai Changyu Pioneer Wine Company Limited
Consolidated balance sheet
as at 31 December 2022 (continued)
(Expressed in Renminbi Yuan)
31 December 31 December
Note
2022 2021
Liabilities and shareholders’ equity
Current liabilities
Short-term loans V.20 389,378,480 622,066,457
Accounts payable V.21 503,323,746 493,453,816
Contract liabilities V.22 165,727,991 147,120,716
Employee benefits payable V.23 182,951,538 195,019,441
Taxes payable V.24 239,695,902 342,322,300
Other payables V.25 372,608,689 453,033,491
Other current liabilities V.26 18,945,706 18,374,193
Non-current liabilities due within
V.27 144,020,834 110,865,126
one year
Total current liabilities 2,016,652,886 2,382,255,540
Non-current liabilities
Long-term loans V.28 128,112,115 176,047,043
Lease liabilities V.14 109,505,093 101,811,588
Long-term payables V.29 42,000,000 64,000,000
Deferred income V.30 38,389,058 41,295,338
Deferred tax liabilities V.18 11,266,932 11,803,970
Other non-current liabilities V.31 - 2,119,671
Total non-current liabilities 329,273,198 397,077,610
Total liabilities 2,345,926,084 2,779,333,150
The notes on pages 106 to 189 form part of these financial statements.
88
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
Yantai Changyu Pioneer Wine Company Limited
Consolidated balance sheet
as at 31 December 2022 (continued)
(Expressed in Renminbi Yuan)
31 December 31 December
Note
2022 2021
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 (23,760,238) (34,707,177)
Surplus reserve V.35 342,732,000 342,732,000
Retained earnings V.36 9,049,649,211 8,929,426,600
Total equity attributable to shareholders of
10,579,053,733 10,447,884,183
the Company
Non-controlling interests 246,526,561 244,792,421
Total owners’ equity 10,825,580,294 10,692,676,604
Total liabilities and shareholders’ equity 13,171,506,378 13,472,009,754
These financial statements were approved by the Board of Directors of the Company on 11 04
2023.
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 106 to 189 form part of these financial statements.
89
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
Yantai Changyu Pioneer Wine Company Limited
Company balance sheet
as at 31 December 2022
(Expressed in Renminbi Yuan)
31 December 31 December
Note
2022 2021
Assets
Current assets
Cash at bank and on hand 874,241,771 562,588,819
Accounts receivable 2,301,505 -
Bills receivable XIV.1 - 9,800,000
Receivables under financing XIV.2 41,061,417 62,411,636
Prepayments 3,518,783 406,500
Other receivables XIV.3 720,176,320 398,072,976
Inventories 335,031,522 383,294,208
Other current assets 20,080,844 20,637,860
Total current assets 1,996,412,162 1,437,211,999
Non-current assets
Long-term equity investments XIV.4 7,705,853,378 7,599,421,494
Investment properties 22,115,318 24,502,258
Fixed assets 216,651,596 231,284,799
Construction in progress 375,969 255,996
Bearer biological assets 108,370,882 114,753,306
Right-of-use assets 36,153,799 36,826,342
Intangible assets 75,298,044 78,043,888
Deferred tax assets 12,120,605 18,033,185
Other non-current assets 1,850,200,000 2,023,500,000
Total non-current assets 10,027,139,591 10,126,621,268
Total assets 12,023,551,753 11,563,833,267
The notes on pages 106 to 189 form part of these financial statements.
90
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
Yantai Changyu Pioneer Wine Company Limited
Company balance sheet
as at 31 December 2022 (continued)
(Expressed in Renminbi Yuan)
31 December 31 December
Note
2022 2021
Liabilities and shareholders’ equity
Current liabilities
Short-term loans 100,000,000 150,000,000
Accounts payable 100,583,550 90,339,903
Employee benefits payable 68,112,832 66,770,838
Taxes payable 39,101,259 32,588,429
Other payables 499,751,275 445,874,937
Non-current liabilities due within
5,129,607 1,485,190
one year
Total current liabilities 812,678,523 787,059,297
Non-current liabilities
Lease liabilities 38,757,167 43,312,517
Deferred income 877,814 2,268,527
Deferred tax liabilities - 88,555
Other non-current liabilities - 1,164,471
Total non-current liabilities 39,634,981 46,834,070
Total liabilities 852,313,504 833,893,367
The notes on pages 106 to 189 form part of these financial statements.
91
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
Yantai Changyu Pioneer Wine Company Limited
Company balance sheet
as at 31 December 2022 (continued)
(Expressed in Renminbi Yuan)
31 December 31 December
Note
2022 2021
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 9,582,860,014 9,141,561,665
Total owners’ equity 11,171,238,249 10,729,939,900
Total liabilities and shareholders’ equity 12,023,551,753 11,563,833,267
These financial statements were approved by the Board of Directors of the Company on 11 04
2023.
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 106 to 189 form part of these financial statements.
92
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
Yantai Changyu Pioneer Wine Company Limited
Consolidated income statement
for the year ended 31 December 2022
(Expressed in Renminbi Yuan)
Note 2022 2021
I. Operating income V.37 3,918,941,160 3,953,067,583
Less: Operating costs V.37 1,680,794,732 1,647,789,874
Taxes and surcharges V.38 289,656,627 264,057,570
Selling and distribution
V.39 1,028,966,138 998,954,105
expenses
General and administrative
V.40 287,605,531 299,076,376
expenses
Research and development
15,431,310 10,919,262
expenses
Financial expenses V.41 7,256,207 21,178,727
Including: Interest expenses 26,856,890 28,851,606
Interest income 24,186,351 19,558,354
Add: Other income V.42 33,145,440 48,240,741
Investment losses V.43 (3,447,794) (2,784,997)
Including: Losses from
investment
(3,447,794) (2,784,997)
associates and in
joint ventures
Credit reversal/(losses) V.44 4,752,797 (7,937,144)
Impairment losses V.45 (5,789,670) (19,874,251)
Losses from disposal of assets V.46 (16,191,903) (11,939,284)
The notes on pages 106 to 189 form part of these financial statements.
93
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
Yantai Changyu Pioneer Wine Company Limited
Consolidated income statement
for the year ended 31 December 2022 (continued)
(Expressed in Renminbi Yuan)
Note 2022 2021
II. Operating profit 621,699,485 716,796,734
Add: Non-operating income V.47 6,832,809 5,214,304
Less: Non-operating expenses V.47 2,949,991 6,311,844
III. Total profit 625,582,303 715,699,194
Less: Income tax expenses V.48 194,233,589 209,020,821
IV. Net profit 431,348,714 506,678,373
(1) Net profit classified by
continuity of operations:
1. Net profit from continuing
431,348,714 506,678,373
operations
2. Net profit from discontinued
- -
operations
(2) Net profit classified by
ownership:
1. Net profit attributable to
428,681,411 500,102,606
owners of the Company
2. Non-controlling interests 2,667,303 6,575,767
V. Other comprehensive income, net of
12,282,545 (39,307,949)
tax
(1) Other comprehensive income
(net of tax) attributable to 10,946,939 (35,283,306)
shareholders of the Company
Translation differences arising
from translation of foreign 10,946,939 (35,283,306)
currency financial statements
(2) Other comprehensive income
(net of tax) attributable to 1,335,606 (4,024,643)
non-controlling interests
The notes on pages 106 to 189 form part of these financial statements.
94
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
Yantai Changyu Pioneer Wine Company Limited
Consolidated income statement
for the year ended 31 December 2022 (continued)
(Expressed in Renminbi Yuan)
Note 2022 2021
VI. Total comprehensive income for the
443,631,259 467,370,424
year
(1) Attributable to shareholders of
439,628,350 464,819,300
the Company
(2) Attributable to non-controlling
4,002,909 2,551,124
interests
VII. Earnings per share:
(1) Basic earnings per share V.49 0.63 0.73
(2) Diluted earnings per share V.49 0.63 0.73
These financial statements were approved by the Board of Directors of the Company on 11 04
2023.
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 106 to 189 form part of these financial statements.
95
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
Yantai Changyu Pioneer Wine Company Limited
Company income statement
for the year ended 31 December 2022
(Expressed in Renminbi Yuan)
Note 2022 2021
I. Operating income XIV.5 675,062,421 578,895,802
Less: Operating cost XIV.5 577,316,851 472,158,738
Taxes and surcharges 27,984,695 38,263,612
General and administrative expenses 58,441,386 74,948,200
Research and development expenses 2,674,191 907,975
Financial expenses (4,912,837) 2,193,348
Including: Interest expenses 3,238,235 5,870,092
Interest income 10,840,336 7,122,455
Add: Other income 5,318,209 6,108,832
Investment income XIV.6 736,516,479 867,523,178
Proceeds from the disposal of assets 33,453 -
II. Operating profit 755,426,276 864,055,939
Add: Non-operating income 3,665,752 997,416
Less: Non-operating expenses 1,281,047 3,295,694
The notes on pages 106 to 189 form part of these financial statements.
96
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
Yantai Changyu Pioneer Wine Company Limited
Company income statement
for the year ended 31 December 2022 (continued)
(Expressed in Renminbi Yuan)
Note 2022 2021
III. Total profit 757,810,981 861,757,661
Less: Income tax expenses 8,053,832 6,703,679
IV. Net profit 749,757,149 855,053,982
(i) Net profit from continuing
749,757,149 855,053,982
operations
(ii) Net profit from discontinued
- -
operations
V. Other comprehensive income, net of
- -
tax
VI. Total comprehensive income for the
749,757,149 855,053,982
year
These financial statements were approved by the Board of Directors of the Company on 11 04
2023.
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 106 to 189 form part of these financial statements.
97
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
Yantai Changyu Pioneer Wine Company Limited
Consolidated cash flow statement
for the year ended 31 December 2022
(Expressed in Renminbi Yuan)
Note 2022 2021
I. Cash flows from operating activities:
Proceeds from sale of goods and
3,681,133,282 3,674,741,084
rendering of services
Refund of taxes 186,197,815 48,716,047
Proceeds from other operating
V.50(1) 61,825,407 89,142,251
activities
Sub-total of cash inflows 3,929,156,504 3,812,599,382
Payment for goods and services 1,266,006,299 957,499,905
Payment to and for employees 493,589,542 507,532,110
Payment of various taxes 718,434,215 659,986,692
Payment for other operating activities V.50(2) 582,249,801 562,198,017
Sub-total of cash outflows 3,060,279,857 2,687,216,724
Net cash flows from operating
V.51(1) 868,876,647 1,125,382,658
activities
II. Cash flows from investing activities:
Proceeds from disposal of
133,200,000 93,553,062
investments
Investment returns received 1,340,518 2,587,932
Net proceeds from disposal of fixed
assets, intangible assets and other 28,412,630 7,923,724
long-term assets
Sub-total of cash inflows 162,953,148 104,064,718
Payment for acquisition of fixed
assets, intangible assets and other 198,791,362 225,502,766
long-term assets
Payment for acquisition of
108,200,000 54,218,000
investments
Sub-total of cash outflows 306,991,362 279,720,766
Net cash flows from investing
(144,038,214) (175,656,048)
activities
The notes on pages 106 to 189 form part of these financial statements.
98
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
Yantai Changyu Pioneer Wine Company Limited
Consolidated cash flow statement
for the year ended 31 December 2022 (continued)
(Expressed in Renminbi Yuan)
Note 2022 2021
III. Cash flows from financing activities:
Proceeds from investors - 7,840,000
Proceeds from borrowings 641,331,495 847,358,786
Sub-total of cash inflows 641,331,495 855,198,786
Repayments of borrowings 903,179,998 1,036,788,771
Payment for dividends, profit
333,134,330 302,051,763
distributions or interest
Payment for other financing activities V.50(3) 19,774,744 15,904,567
Sub-total of cash outflows 1,256,089,072 1,354,745,101
Net cash flows from financing
(614,757,577) (499,546,315)
activities
IV. Effect of foreign exchange rate
changes on cash and cash 345,715 (518,371)
equivalents
V. Net increase in cash and cash
V.51(1) 110,426,571 449,661,924
equivalents
Add: Cash and cash equivalents at
1,502,327,029 1,052,665,105
the beginning of the year
VI. Cash and cash equivalents at the end
V.51(2) 1,612,753,600 1,502,327,029
of the year
These financial statements were approved by the Board of Directors of the Company on 11 04
2023.
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 106 to 189 form part of these financial statements.
99
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
Yantai Changyu Pioneer Wine Company Limited
Company cash flow statement
for the year ended 31 December 2022
(Expressed in Renminbi Yuan)
Note 2022 2021
I. Cash flows from operating activities:
Proceeds from sale of goods and
610,597,839 514,762,698
rendering of services
Tax returns received 1,597,879 -
Proceeds from other operating activities 84,262,490 47,112,100
Sub-total of cash inflows 696,458,208 561,874,798
Payment for goods and services 401,136,965 313,397,323
Payment to and for employees 67,906,188 76,053,780
Payment of various taxes 50,709,754 39,248,076
Payment for other operating activities 23,452,120 71,110,685
Sub-total of cash outflows 543,205,027 499,809,864
Net cash flows from operating activities 153,253,181 62,064,934
II. Cash flows from investing activities:
Proceeds from disposal of investments 118,200,000 38,200,000
Investment returns received 489,479,719 1,068,448,220
Net proceeds from disposal of fixed
assets, intangible assets and other 1,853,309 408,885
long-term assets
Proceeds from borrowings to
312,000,000 162,200,000
subsidiaries
Sub-total of cash inflows 921,533,028 1,269,257,105
Payment for acquisition of fixed assets,
intangible assets and other long-term 21,831,779 22,919,289
assets
Payment for acquisition of investments 218,200,000 38,200,000
Cash paid to subsidiaries 138,700,000 655,000,000
Sub-total of cash outflows 378,731,779 716,119,289
Net cash flows from investing activities 542,801,249 553,137,816
The notes on pages 106 to 189 form part of these financial statements.
100
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
Yantai Changyu Pioneer Wine Company Limited
Company cash flow statement
for the year ended 31 December 2022 (continued)
(Expressed in Renminbi Yuan)
Note 2022 2021
III. Cash flows from financing activities:
Proceeds from borrowings 100,000,000 150,000,000
Sub-total of cash inflows 100,000,000 150,000,000
Repayments of borrowings 150,000,000 150,000,000
Payment for dividends or interest 311,697,035 280,055,692
Payment for other financing activities 4,796,838 3,460,687
Sub-total of cash outflows 466,493,873 433,516,379
Net cash flows from financing activities (366,493,873) (283,516,379)
IV. Effect of foreign exchange rate
changes on cash and cash - -
equivalents
V. Net increase in cash and cash
329,560,557 331,686,371
equivalents
Add: Cash and cash equivalents at the
513,809,440 182,123,069
beginning of the year
VI. Cash and cash equivalents at the end
843,369,997 513,809,440
of the year
These financial statements were approved by the Board of Directors of the Company on 11 04
2023.
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 106 to 189 form part of these financial statements.
101
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
Yantai Changyu Pioneer Wine Company Limited
Consolidated statement of changes in shareholders’ equity
for the year ended 31 December 2022
(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 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
II. Changes in equity during the year
(1) Total comprehensive income - - 10,946,939 - 428,681,411 439,628,350 4,002,909 443,631,259
(2) Appropriation of profits V.36
Distributions to shareholders - - - - (308,458,800) (308,458,800) (2,268,769) (310,727,569)
III. Balance at the end of the year 685,464,000 524,968,760 (23,760,238) 342,732,000 9,049,649,211 10,579,053,733 246,526,561 10,825,580,294
These financial statements were approved by the Board of Directors of the Company on 11 04 2023.
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 106 to 189 form part of these financial statements.
102
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
Yantai Changyu Pioneer Wine Company Limited
Consolidated statement of changes in shareholders’ equity (continued)
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 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
Add: Changes in accounting policies - - - - (10,582,161) (10,582,161) - (10,582,161)
Adjusted balance at the beginning of
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
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 11 04 2023.
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 106 to 189 form part of these financial statements.
103
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
Yantai Changyu Pioneer Wine Company Limited
Company statement of changes in shareholders’ equity
for the year ended 31 December 2022
(Expressed in Renminbi Yuan)
Total
Capital Surplus Retained
Note Share capital shareholders’
reserve reserve earnings
equity
I. Balance at the beginning of the
685,464,000 560,182,235 342,732,000 9,141,561,665 10,729,939,900
year
II. Changes in equity during the year
(1) Total comprehensive income - - - 749,757,149 749,757,149
(2) Appropriation of profits
Distributions to shareholders - - - (308,458,800) (308,458,800)
III. Balance at the end of the year 685,464,000 560,182,235 342,732,000 9,582,860,014 11,171,238,249
These financial statements were approved by the Board of Directors of the Company on 11 04
2023.
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 106 to 189 form part of these financial statements.
104
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
Yantai Changyu Pioneer Wine Company Limited
Company statement of changes in shareholders’ equity
for the year ended 31 December 2021 (continued)
(Expressed in Renminbi Yuan)
Total
Surplus Retained
Note Share capital Capital reserve shareholders’
reserve earnings
equity
I. Balance at the beginning of
685,464,000 560,182,235 342,732,000 8,567,313,551 10,155,691,786
the year
Add: Changes in accounting
III.33 - - - (6,620,268) (6,620,268)
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 the year 685,464,000 560,182,235 342,732,000 9,141,561,665 10,729,939,900
These financial statements were approved by the Board of Directors of the Company on 11 04
2023.
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 106 to 189 form part of these financial statements.
105
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
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 wine, brandy, 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 2022 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 11 04 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.
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
2022, 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.
106
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
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.
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.
107
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
(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.
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.
108
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
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.
(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)).
109
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
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.
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.
110
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
(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.
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.
111
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
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.
- 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.
112
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
(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.
(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.
113
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
(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).
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.
114
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
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.
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.
115
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
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.
10 Inventories
(1) Classification and cost
Inventories include raw materials, work in progress and finished goods. 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.
116
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
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.
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.
117
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
(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.
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 or an associate 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
118
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
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.
- 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 or the associate 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.
119
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
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.
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%
120
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
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.
When an enterprise sells products or by-products produced before a fixed asset is available
for its intended use, the proceeds and related cost are accounted for in accordance with CAS
14 – Revenue and CAS 1 – Inventories respectively, and recognised in profit or loss for the
current period.
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.
121
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
- 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.
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.
122
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
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).
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.
123
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
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
Greening fee 5 - 20 years
Leasehold improvement 3 - 5 years
Others 3 years
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.
124
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
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.
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
125
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
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.
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:
126
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
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.
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.
127
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
(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).
128
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
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.
To assess whether a contract conveys the right to control the use of an identified asset, the
Group assesses whether:
129
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
- 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.
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;
130
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
- 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.
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.
131
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
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.
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 2022, over 82% of revenue, more than 91% of profit and over
91% 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
132
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
ongoing basis. Revisions to accounting estimates are recognised in the period in which the
estimate is revised and in any future periods affected.
Significant accounting estimates see Notes V.3 7 11 and 16.
33 Changes in significant accounting policies and accounting estimates
(1) Description and reasons of changes in accounting policies
In 2022, the Group has adopted the following newly revised accounting standards and
implementation guidance and illustrative examples issued by the MOF:
- “Interpretation No. 15 of the Accounting Standards for Business Enterprises” (No. 35
[2021] of the Ministry of Finance) (“Interpretation No. 15”) “Accounting treatment for the
sale of products or by-products produced by the enterprise before the fixed assets reach
the intended usable state or during the research and development process”;
- “Determining whether a contract is onerous” in CAS Bulletin No.15;
-
- “Accounting for the income tax consequences of dividends on financial instruments
classified as equity instruments by the issuer” in CAS Bulletin No.16 (Caikuai [2022]
No.31); and
- “Accounting for the modification of a share-based payment transaction that changes the
classification of the transaction from cash-settled to equity-settled” in CAS Bulletin No.16.
-
- The adoption of the above regulations 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
Type of tax Taxation basis Tax rate
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), 25% (France, 2022),
Corporate income
Based on taxable profits 26.5% (France, 2021), 28% (Spain),
tax
27% (Chile), 30% (Australia)
Other than tax incentives stated in Note IV. 2, applicable tax rates of the Group in 2022 and
2021 are all stated as above.
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
133
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
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%.
Ningxia Changyu Longyu Chateau Co., Ltd. ("Ningxia Chateau"), a subsidiary of the
Company, is an enterprise of wine production and sales incorporated in Yinchuan, Ningxia
Hui Autonomous Region. In accordance with the Notice on Continuing the Enterprise Income
Tax Policies for the Large-Scale Development of Western China (Notice of the Ministry of
Finance [2020] No. 23), Ningxia Chateau is qualified to enjoy preferential taxation policies,
which means it can pay corporate income tax at a preferential rate of 15% for the period from
2021 to 2030.
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
134
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
(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%.
In accordance with the Notice of the Ministry of Finance and the State Administration of
Taxation on the Further Implementation of Preferential Enterprise Income Tax Policies for
Small and Micro Enterprises (Notice of the Ministry of Finance and State Taxation
Administration [2022] No. 13), for the annual taxable income of small-scale and low-profit
enterprises exceeding RMB 1 million, but is not more than RMB 3 million, the amount of
taxable income shall be reduced by 25%, and the applicable rate of corporate income tax
shall be 20%.Beijing Changyu Wine Sales Co., Ltd. (“Beijing Sales”) is recognised as qualified
small-scale and low-profit enterprises
In accordance with the Notice of the Ministry of Finance and the State Administration of
Taxation on the Exemption of Value-Added Tax for Small-Scale Value-Added Tax Taxpayers
(Notice of the Ministry of Finance and State Taxation Administration [2022] No. 15), from 1
April 2022 to 31 December 2022, VAT small-scale taxpayers with tax rate of 3% of taxable
sales revenue should be exempted from VAT. Xinjiang Changyu Wine Sales Co., Ltd., a
subsidiary of the Company, is qualified to enjoy the exemption.
In accordance with the Notice of the Ministry of Finance and the State Administration of
Taxation on Further Stepping up the Implementation of the Policy for the Refund of Term-End
Excess Input Value-Added Tax Credits (Notice of the Ministry of Finance and State Taxation
Administration [2022] No. 14), the government should further step up the implementation of
the policy for the refund of term-end excess input value-added tax credits and expand the
scope of industries applicable to this policy. The Company and its qualified subsidiaries have
enjoyed this policy.
In accordance with the Notice of the Ministry of Finance and the State Administration of
Taxation on the Further Implementation of Reduction and Exemption in Six Taxes and Two
Fees for Small-Scale and Micro Enterprises (Notice of the Ministry of Finance and State
Taxation Administration [2022] No. 10), from 1 January 2022 to 31 December 2024, People's
Governments of all provinces, autonomous regions and municipalities can reduce the
resource tax, urban maintenance and construction tax, property tax, Urban and township land
use tax, stamp duty (excluding stamp duty on securities transaction), farmland occupation tax,
education surcharges, and local education surcharges within a 50% tax range for small-scale
VAT taxpayers, small-scale and low-profit enterprises, and individually-owned businesses
based on the actual situation in the region. Shandong, Xinjiang, Ningxia, Shaanxi, and other
provinces (regions, cities) are all subject to a 50% reduction in "six taxes and two fees", and
some subsidiaries of the Company are qualified to enjoy the tax reduction.
In accordance with the Notice of the Shaanxi Provincial Department of Finance and Shaanxi
Provincial Office of the State Administration of Taxation on the Issues Concerning the
Reduction and Exemption for Taxpayers Having Difficulties in Payment of Urban and
Township Land Use Tax and Property Tax (Shaan Cai Shui [2022] No. 6), for taxpayers
whose sales in the first quarter of 2022 have decreased by more than 30% year-on-year or
quarter-on-quarter and who have difficulties in paying urban and township land use tax and
property tax, finance and taxation authorities should approve their applications for reduction
and exemption. Shaanxi Changyu Rena Chateau Co., Ltd. and Changyu (Jingyang) Wine
Co., Ltd., subsidiaries of the Company, meet the application requirements and can be
exempted from the first quarter property tax and urban and township land use tax in 2022.
135
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
V. Notes to the consolidated financial statements
1 Cash at bank and on hand
Item 2022 2021
Cash on hand 47,954 71,486
Bank deposits 1,643,577,420 1,558,134,072
Other monetary funds 7,828,741 8,890,435
Total 1,651,454,115 1,567,095,993
Including: Total overseas deposits 17,073,210 28,691,521
As at 31 December 2022, the balance of restricted cash of the Group is as follows:
Item 2022 2021
House maintenance funds 2,671,774 2,678,529
As at 31 December 2022, the Group’s term deposits with previous maturity of more than three
months is RMB 28,200,000 with interest rate 2.025%-2.25% (31 December 2021:
RMB53,200,000).
As at 31 December 2022, the Group’s other monetary assets is as follows:
Item 2022 2021
Deposits for letters of credit 6,000,000 7,900,850
Alipay account balance 1,695,245 859,558
Deposit for ICBC platform 10,000 10,000
Deposits for the customs 123,496 120,027
Total 7,828,741 8,890,435
As at 31 December 2022, the Group did not have any special interest arrangements such as
the establishment of joint fund management accounts with related parties.
2 Bills receivable
Classification of bills receivable
Item 2022 2021
Bank acceptance bills 2,712,460 42,827,666
Total 2,712,460 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 2022 31 December 2021
Amounts due from related parties 2,827,473 287,788
Amounts due from other customers 355,711,618 310,982,372
Sub-total 358,539,091 311,270,160
Less: Provision for bad and doubtful debts (14,556,106) (20,263,750)
Total 343,982,985 291,006,410
136
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
As at 31 December 2022, ownership restricted accounts receivable is RMB59,982,807 (31
December 2021: RMB49,061,015), referring to Note V. 52.
(2) The ageing analysis of accounts receivable is as follows:
Ageing 2022 2021
Within 1 year (inclusive) 356,064,300 302,602,474
Over 1 year but within 2 years (inclusive) 2,085,677 6,450,290
Over 2 years but within 3 years (inclusive) 152,254 1,830,913
Over 3 years 236,860 386,483
Sub-total 358,539,091 311,270,160
Less: Provision for bad and doubtful debts (14,556,106) (20,263,750)
Total 343,982,985 291,006,410
The ageing is counted starting from the date when accounts receivable are recognised.
137
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
(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.
2022
Carrying amount at Impairment loss at
Loss given default
the end of the year the end of the year
Current 0.3% 320,680,504 987,421
Overdue for 1 to 30 days 4.6% 14,539,415 670,713
Overdue for 31 to 60 days 12.1% 5,412,870 654,202
Overdue for 61 to 90 days 22.9% 1,755,591 401,918
Overdue for 91 to 120 days 25.5% 852,924 217,910
Overdue for 121 to 150 days 32.3% 3,243,366 1,047,097
Overdue for 151 to 180 days 40.0% 469,054 187,704
Overdue for 181 to 210 days 42.0% 217,218 91,181
Overdue for 211 to 240 days 44.4% 636,479 282,588
Overdue for 241 to 270 days 51.7% 654,567 338,403
Overdue for 271 to 300 days 71.0% 1,058,407 751,067
Overdue for 301 to 330 days 87.7% 753,174 660,380
Overdue for 331 to 360 days 100.0% 15,263 15,263
Overdue for 360 days 100.0% 8,250,259 8,250,259
Total 4.1% 358,539,091 14,556,106
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
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.
138
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
(4) Movements of provisions for bad and doubtful debts:
2022 2021
Balance at the beginning of the year after (20,263,750) (12,326,606)
Charge for the year (15,084,381) (17,855,222)
Recoveries or reversals during the year 19,837,178 9,918,078
Transfers out during the year 954,847 -
Balance at the end of the year (14,556,106) (20,263,750)
(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 149,053,783 Within 1 year 41.6% 458,958
Debtor Two Third party 6,835,106 Within 1 year 1.9% 385,547
Debtor Three Third party 6,816,495 Within 1 year 1.9% 384,497
Debtor Four Third party 6,193,118 Within 1 year 1.7% 349,334
Debtor Five Third party 6,070,804 Within 1 year 1.7% 18,693
Total 174,969,306 48.8% 1,597,029
4 Receivables under financing
Item Note 2022 2021
Bills receivable (1) 309,329,918 364,457,497
(1) As at 31 December 2022, there was no pledged bills receivable (31 December 2021: Nil).
(2) Outstanding endorsed or discounted bills that have not matured at the end of the year
Amount
Item derecognised
at year end
Bank acceptance bills 500,480,279
Total 500,480,279
As at 31 December 2022, bills endorsed by the Group to other parties which are not yet due at
the end of the period is RMB 500,480,279 (31 December 2021: RMB 449,373,119). 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.
139
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
5 Prepayments
(1) Prepayments by category:
Item 2022 2021
Prepayments 60,415,508 75,235,879
Total 60,415,508 75,235,879
(2) The ageing analysis of prepayments is as follows:
2022 2021
Ageing Percentage Percentage
Amount Amount
(%) (%)
Within 1 year (inclusive) 59,426,080 98.4% 75,207,094 99.9%
Over 1 year but within 2 years
989,428 1.6% 28,785 0.1%
(inclusive)
Total 60,415,508 100.0% 75,235,879 100.0%
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 12,123,832 Within 1 year 20.1% -
Debtor Two Prepayments 9,768,618 Within 1 year 16.2% -
Debtor Three Prepayments 8,796,180 Within 1 year 14.6% -
Debtor Four Prepayments 3,441,960 Within 1 year 5.7% -
Debtor Five Prepayments 1,350,000 Within 1 year 2.2% -
Total 35,480,590 58.8% -
6 Other receivables
31 December 2022 31 December 2021
Others 70,542,398 30,125,270
Total 70,542,398 30,125,270
(1) Interest receivable
(a) Others by customer type:
Customer type 31 December 2022 31 December 2021
Amounts due from related parties - 341,880
Amounts due from other companies 70,542,398 29,783,390
Sub-total 70,542,398 30,125,270
Less: Provision for bad and doubtful debts - -
Total 70,542,398 30,125,270
140
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
(b) The ageing analysis is as follows:
Ageing 2022 2021
Within 1 year (inclusive) 67,221,713 27,191,986
Over 1 year but within 2 years (inclusive) 1,208,361 70,480
Over 2 years but within 3 years (inclusive) 57,928 190,857
Over 3 years 2,054,396 2,671,947
Sub-total 70,542,398 30,125,270
Less: Provision for bad and doubtful debts - -
Total 70,542,398 30,125,270
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 2022, no bad and doubtful debt provision was made for other
receivables (31 December 2021: Nil).
As at 31 December 2022, the Group has no other receivables written off (31 December
2021: Nil).
(d) Others categorised by nature
Nature of other receivables 2022 2021
Land purchases and reserves receivable 41,268,902 11,550,000
Refund of consumption tax and VAT 12,509,201 7,204,557
Deposit 5,578,001 4,568,157
Petty cash receivable 440,759 252,481
Others 10,745,535 6,550,075
Sub-total 70,542,398 30,125,270
Less: Provision for bad and doubtful debts - -
Total 70,542,398 30,125,270
(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 41,268,902 Within 1 year 58.5% -
receivable
Debtor Two Refund of VAT 10,927,015 Within 1 year 15.5% -
Debtor Three Deposits 2,002,000 Within 1 year 2.8% -
Debtor Four Refund of VAT 1,582,186 Within 1 year 2.2% -
Debtor Five Advance items 1,452,991 Within 1 year 2.1% -
Total 57,233,094 81.1% -
141
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
7 Inventories
(1) Inventories by category:
2022 2021
Provision for Provision for
Item Carrying Carrying
Book value impairment of Book value impairment of
amount amount
inventories inventories
Raw materials 258,200,178 - 258,200,178 245,114,403 - 245,114,403
Work in progress 1,986,391,270 - 1,986,391,270 1,937,081,109 - 1,937,081,109
Finished goods 673,171,026 (14,363,959) 658,807,067 634,212,222 (13,785,214) 620,427,008
Total 2,917,762,474 (14,363,959) 2,903,398,515 2,816,407,734 (13,785,214) 2,802,622,520
(2) Provision for impairment of inventories:
Increase during Decrease during
Item Opening balance the year the year Closing balance
Recognised Reversal
Finished goods 13,785,214 14,363,959 (13,785,214) 14,363,959
8 Other current assets
Item 2022 2021
Royalty (Note V. 19) 120,930,641 -
Input tax to be credited 44,270,238 198,516,812
Prepaid income taxes 19,102,111 16,697,663
Deferred expenses 1,034,403 1,938,126
Total 185,337,393 217,152,601
9 Long-term equity investments
(1) Long-term equity investments by category:
Item 2022 2021
Investments in joint ventures 37,970,535 39,652,834
Investments in associates 3,400,850 6,843,676
Sub-total 41,371,385 46,496,510
Less: Provision for impairment - -
Total 41,371,385 46,496,510
142
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
(2) Movements of long-term equity investments during the year are as follows:
Movements during the year
2022
2022 Shareholding
Investee Balance at the Losses from investments
Increase in capital Decrease in capital Closing balance percentage
beginning of the year under equity-method
Joint ventures
SAS L&M Holdings (“L&M Holdings”) 39,652,834 - - (1,682,299) 37,970,535 55%
Associates
WEMISS (Shanghai) Enterprise Development
2,366,811 - - (48,460) 2,318,351 30%
Co., Ltd (“WEMISS Shanghai”)
Yantai. Santai Real Estate Development Co.,
3,519,656 - (3,519,656) - - 35%
Ltd.(Note1)
Chengdu Yufeng Brand Management Co.,
481,472 - - (61,103) 420,369 10%
Ltd. (Note2)
Yantai Guolong Wine Industry Co., Ltd.
475,737 - - 186,393 662,130 10%
(Note2)
Sub-total 6,843,676 - (3,519,656) 76,830 3,400,850
Total 46,496,510 (3,519,656) (1,605,469) 41,371,385
Note 1: In April 2022, the Board of Directors of the Company resolved to agree the liquidation of Yantai Santai Real Estate Development Co., Ltd.
(“Santai Real Estate”). In May 2022, Yantai Santai Real Estate Development Co., Ltd. held a shareholders’ general meeting, the Company and
Shandong Greentown Investment Property Co., Ltd. and China Continents and Oceans Construction Co., Ltd. have reach agreement on the
liquidation of Yantai Santai Real Estate Development Co., Ltd. Santai Real Estate has completed the deregistration procedures in August 2022.
After the liquidation, the Company recovered RMB 1,677,331 in total, resulting in investment losses of RMB 1,842,325.
Note 2: The Group has appointed one director to each of these investees.
143
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
10 Investment properties
Buildings and
plants
Cost
Balance as at 31 December 2021 and 31 December 2022 70,954,045
Accumulated depreciation
31 December 2021 (46,451,787)
Charge for the year (2,386,940)
31 December 2022 (48,838,727)
Carrying amount
31 December 2022 22,115,318
31 December 2021 24,502,258
11 Fixed assets
(1) Fixed assets
Machinery &
Item Plant & buildings Motor vehicles Total
equipment
Cost
31 December 2021 5,294,917,836 2,820,909,563 27,181,876 8,143,009,275
Additions during the year
- Purchases 19,223,038 62,551,100 1,423,629 83,197,767
- Transfers from construction
608,452,694 4,638,003 - 613,090,697
in progress
Disposals or written-offs during
(44,394,513) (94,370,491) (2,716,953) (141,481,957)
the year
31 December 2022 5,878,199,055 2,793,728,175 25,888,552 8,697,815,782
Accumulated depreciation
31 December 2021 (1,017,892,171) (1,397,163,895) (22,607,868) (2,437,663,934)
Charge for the year (157,770,688) (151,791,806) (2,088,585) (311,651,079)
Disposals or written-offs during
8,567,494 71,691,834 2,063,424 82,322,752
the year
31 December 2022 (1,167,095,365) (1,477,263,867) (22,633,029) (2,666,992,261)
Provision for impairment
31 December 2021 -- (17,478,027) - (17,478,027)
Reversal during the year -- 14,792,478 - 14,792,478
31 December 2022 -- (2,685,549) - (2,685,549)
Carrying amount
31 December 2022 4,711,103,690 1,313,778,759 3,255,523 6,028,137,972
31 December 2021 4,277,025,665 1,406,267,641 4,574,008 5,687,867,314
As at 31 December 2022, ownership restricted net value of fixed assets is RMB303,897,124
(31 December 2021: RMB313,012,605), referring to Note V. 52.
(2) Fixed assets leased out under operating leases
Accumulated Provision for
Item Cost Carrying amount
depreciation impairment
Buildings 24,150,108 (11,271,447) - 12,878,661
Machinery equipment 19,121,524 (16,384,009) (2,685,549) 51,966
Motor vehicles 3,213,054 (3,060,512) - 152,542
Total 46,484,686 (30,715,968) (2,685,549) 13,083,169
144
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
(3) Fixed assets leased out under operating leases
Carrying amount at
Item
the end of the year
Machinery equipment 4,365
(4) Fixed assets pending certificates of ownership
Reason why the
Item Carrying amount
certificates are pending
Dormitories, main building and reception
268,686,071 Processing
building of Changan Chateau
Buildings and boiler houses of KOYA Brand 173,899,231 Processing
European town, main building and service
164,540,005 Processing
building of AFIP
Office and packaging shop of Golden Icewine
9,436,822 Processing
Valley
Fermentation shop of Zhangyu (Jingyang) 4,698,998 Processing
Office, experiment building and workshop of
3,147,779 Processing
Fermentation Centre
Finished goods warehouse and workshop of
2,034,138 Processing
Kylin Packaging
Others 276,938 Processing
The buildings without property certificate above have no significant impact on the Group’s
management.
12 Construction in progress
(1) Construction in progress
2022 2021
Project Provision for Carrying Provision for Carrying
Book value Book value
impairment amount impairment amount
Museum construction
32,981,419 - 32,981,419 37,093 - 37,093
project
Shihezi Chateau
7,065,744 - 7,065,744 1,028,512 - 1,028,512
Construction Project
Ningxia Chateau
- - - 2,835,598 - 2,835,598
Construction Project
Changan Chateau
- - - 1,245,742 - 1,245,742
Construction Project
R&D Centre (“Changyu
- - - 577,328,351 - 577,328,351
Wine Complex”) Project
Other Companies’
886,998 - 886,998 7,696,803 - 7,696,803
Construction Project
Total 40,934,161 - 40,934,161 590,172,099 - 590,172,099
145
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
(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 2022 (%)
Museum construction project 51 37,093 32,944,326 - - 32,981,419 65% - Self-raised
Shihezi Chateau Construction Project 780 1,028,512 6,037,232 - - 7,065,744 97% - Self-raised
Ningxia Chateau Construction Project 428 2,835,598 1,363,790 (4,199,388) - - 100% - Self-raised
Changan Chateau Construction 698 1,245,742 718,344 (1,964,086) - - 100% - - -
Self-raised
Project
Loans from
financial
Changyu Wine Complex 3,740 577,328,351 39,794,848 (606,407,063) (10,716,136) - 100% 17,155,308 - institutions
and
self-raised
146
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
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 2021 17,909,982 252,353,951 270,263,933
Additions during the year
- Increase in cultivated 5,730,348 8,750 5,739,098
- Transferred to mature (121,173) 121,173 -
Decrease during the year (113,600) (12,500) (126,100)
31 December 2022 23,405,557 252,471,374 275,876,931
Accumulated amortisation
31 December 2021 - (76,550,991) (76,550,991)
Charge for the year - (14,911,694) (14,911,694)
Decrease during the year - 6,495 6,495
31 December 2022 - (91,456,190) (91,456,190)
Carrying amount
31 December 2022 23,405,557 161,015,184 184,420,741
31 December 2021 17,909,982 175,802,960 193,712,942
As at 31 December 2022, there is no biological asset with ownership restricted (31 December
2021: Nil).
As at 31 December 2022, no provision for impairment of biological asset of the Group was
recognised as there is no any indication exists (31 December 2021: Nil).
14 Leases
(1) As a lessee
Right-of-use assets
Item Plant&buildings Lands Others Total
Cost
Balance at the beginning of 57,368,820 137,980,409 1,697,986 197,047,215
the year
Additions during the year 27,449,712 - - 27,449,712
Balance at the end of the year 84,818,532 137,980,409 1,697,986 224,496,927
Accumulated depreciation
Balance at the beginning of
(17,898,529) (43,900,453) (679,194) (62,478,176)
the year
Charge for the year (16,025,426) (5,766,568) (339,598) (22,131,592)
Balance at the end of the year (33,923,955) (49,667,021) (1,018,792) (84,609,768)
Carrying amounts
At the end of the year 50,894,577 88,313,388 679,194 139,887,159
At the beginning of the year 39,470,291 94,079,956 1,018,792 134,569,039
147
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
Lease liabilities
Item Note 31 December 2022 1 January 2022
Long-term lease liabilities 128,514,033 116,156,677
Less: lease liabilities due within
V,27 19,008,940 14,345,089
one year
Total 109,505,093 101,811,588
(2) As a lessor
Operating lease
Item 2022 2021
Lease income 2,341,226 2,015,486
15 Intangible assets
Item Land use rights Software licenses Trademarks Total
Original book value
31 December 2021 500,566,714 100,664,699 189,491,618 790,723,031
Additions during the year
- Purchase - 1,314,730 83,450 1,398,180
Decrease during the year
- Disposals (24,795,833) - - (24,795,833)
31 December 2022 475,770,881 101,979,429 189,575,068 767,325,378
Accumulated amortisation
31 December 2021 (104,622,145) (53,525,938) (14,708,069) (172,856,152)
Additions during the year
- Charge for the year (15,613,814) (9,309,645) (842,812) (25,766,271)
Decrease during the year
- Disposal 9,537,891 - - 9,537,891
31 December 2022 (110,698,068) (62,835,583) (15,550,881) (189,084,532)
Carrying amount
31 December 2022 365,072,813 39,143,846 174,024,187 578,240,846
31 December 2021 395,944,569 47,138,761 174,783,549 617,866,879
As at 31 December 2022, the Group has land use right with infinite useful lives of
RMB32,376,235 (31 December 2021: RMB32,640,119), 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.
As at 31 December 2022, the Group has trademark with infinite useful lives of
RMB155,345,421 (31 December 2021: RMB155,355,846), 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 13.0%
and 14.1%, 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.
148
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
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 2022, the
management believes there is no impairment loss on those trademarks with infinite useful
lives of the Group.
As at 31 December 2022, ownership restricted net value of intangible assets is RMB
169,385,254 (31 December 2021: RMB201,345,477), 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 2021 the year the year 2022
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
Chile Indomita Wine Group (37,063,130) - - (37,063,130)
Dicot Partners, S.L (“Dicot”) - (5,210,925) - (5,210,925)
Sub-total (37,063,130) (5,210,925) - (42,274,055)
Carrying amount 112,374,541 (5,210,925) - 107,163,616
(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.
(2) Provision for impairment of goodwill
The Group has allocated the above goodwill to relevant asset groups for impairment testing.
As at 31 December 2022, Australia Kilikanoon Estate has made full provision for impairment
of goodwill and Atrio has made provision for impairment amounted to RMB 5,210,925 for the
current period.
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 Roullet Fransac, Dicot, and
Mirefleurs, Indomita Wine are 11.4%, 11.8%, and 13.0%, respectively (2021: 12.1%, 11.2%,
and 11.0%). 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
149
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
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 Dicot Partners, S.L is lower than its book value. Therefore, on 31
December 2022, the provision for impairment of goodwill of this year was RMB 5,210,925.
The impairment loss amounting to RMB5,210,925 was recognised in asset impairment loss in
2022.
17 Long-term deferred expenses
Additions during the
Item 31 December 2021 Amortisation for the year 31 December 2022
year
Land requisition fee 46,822,724 - (1,778,943) 45,043,781
Greening fee 127,686,106 - (8,690,102) 118,996,004
Leasehold improvement 104,279,631 7,864,611 (8,248,878) 103,895,364
Others 5,804,702 1,582,204 (622,823) 6,764,083
Total 284,593,163 9,446,815 (19,340,746) 274,699,232
18 Deferred tax assets and deferred tax liabilities
(1) Deferred tax assets and liabilities
31 December 2022 31 December 2021
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 31,605,614 8,024,903 51,526,991 11,522,575
Unrealised profits of intra-group
431,328,252 107,832,063 481,484,528 120,371,131
transactions
Unpaid bonus 132,673,269 33,168,317 150,325,085 37,581,271
Termination benefits 9,422,154 2,355,538 14,132,191 3,533,048
Deductible tax losses 285,560,642 67,483,931 266,833,106 63,160,456
Deferred income 38,389,058 8,288,411 41,295,338 8,642,716
Others 837,972 209,493 1,598,132 399,534
Sub-total 929,816,961 227,362,656 1,007,195,371 245,210,731
Deferred tax liabilities:
Revaluation due to business
combinations involving entities 43,651,105 10,577,065 46,411,478 11,300,970
not under common control
Others 2,759,468 689,867 2,012,000 503,000
Sub-total 46,410,573 11,266,932 48,423,478 11,803,970
150
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
(2) Details of unrecognised deferred tax assets
Item 2022 2021
Deductible tax losses 352,775,161 234,250,359
(3) Expiration of deductible tax losses for unrecognised deferred tax assets
Year 2022 2021
2022 - 21,367,869
2023 22,801,737 22,801,737
2024 42,088,453 42,088,453
2025 75,724,538 75,794,409
2026 72,197,891 72,197,891
2027 139,962,542 -
Total 352,775,161 234,250,359
19 Other non-current assets
Item 2022 2021
Royalty - 144,120,442
Pursuant to a royalty agreement dated 18 May 1997, starting from 18 September 1997, the
Group 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.
The Group’s royalty in 2022 was RMB 23,189,801 (VAT included). When the difference is
deducted by the above-mentioned amount, the balance of royalty due from Changyu Group
was RMB 120,930,641 . Classified it to other current assets on 31 December 2022.
151
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
20 Short-term loans
Short-term loans by category:
Item 2022 2021
Unsecured loans 227,866,802 478,331,156
Mortgaged loans 127,908,137 118,469,193
Guaranteed loans 33,603,541 25,266,108
Total 389,378,480 622,066,457
As at 31 December 2022, 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 % %
Credit loans (RMB) 200,000,000 1.0000 200,000,000 Floating 1 Year LPR - 0.5% 3.20%
Credit loans (USD) 4,000,000 6.9646 27,866,802 Fixed 4.15% - 5.95% 4.15% - 5.95%
Mortgaged loans
8,080,778 7.4229 59,982,807 Fixed 0.65% - 1.60% 0.65% - 1.60%
(EUR)
Mortgaged loans
9,750,000 6.9646 67,925,330 Fixed 4.15% - 6.76% 4.15% - 6.76%
(USD)
Guaranteed loans
7,128,758 4.7138 33,603,541 Floating 1.81% - 2.54% 1.81% - 2.54%
(AUD)
Total 389,378,480
As at 31 December 2022, 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 EUR8,080,778 (equivalent of RMB59,982,807) (31 December 2021:
EUR6,795,437, equivalent of RMB49,061,015).
On 31 December 2022, Chile Indomita Wine Group pledged its fixed assets to Banco
Scotiabank to borrow USD9,750,000 (equivalent to RMB67,925,330) (31 December 2021:
USD11,000,000, equivalent to RMB69,408,178).
On 31 December 2022, the secured loan represented the secured loan of Australia
Kilikanoon Estate of AUD7,128,758 (equivalent to RMB33,603,541) (31 December 2021:
AUD5,466,488, equivalent to RMB25,266,108).
21 Accounts payable
Ageing 2022 2021
Within 1 year (inclusive) 466,035,065 486,006,974
Over 1 year but within 2 years (inclusive) 34,588,275 4,435,786
Over 2 years but within 3 years (inclusive) 1,637,390 1,405,133
Over 3 years 1,063,016 1,605,923
Total 503,323,746 493,453,816
152
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
Significant accounts payable with ageing of more than one year:
Balance at the end of Reason for no
Item
the year repayment
Payable to parent
Entity 1 19,434,600 company
Credit period of more
than 1 year from
Entity 2 13,185,095 overseas original wine
suppliers
Total 32,619,695
22 Contract liabilities
As at As at
Item
31 December 2022 1 January 2022
Receipt in advance 164,437,033 144,013,594
Withholding sales rebates 1,290,958 3,107,122
Total 165,727,991 147,120,716
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 2021 31 December 2022
the year the year
Short-term employee
(2) 180,557,897 443,469,022 (450,829,428) 173,197,491
benefits
Post-employment
benefits - defined (3) 329,353 36,634,508 (36,631,968) 331,893
contribution plans
Termination benefits 14,132,191 1,418,109 (6,128,146) 9,422,154
Total 195,019,441 481,521,639 (493,589,542) 182,951,538
(2) Short-term employee benefits
Additions during Decrease during
31 December 2021 31 December 2022
the year the year
Salaries, bonuses,
178,842,535 392,427,646 (401,626,779) 169,643,402
allowances
Staff welfare 1,640,965 17,421,550 (17,602,345) 1,460,170
Social insurance 303,836 16,415,455 (16,412,047) 307,244
Medical insurance 303,836 14,763,764 (14,760,356) 307,244
Work-related injury
- 1,632,827 (1,632,827) -
insurance
Maternity insurance - 18,864 (18,864) -
Housing fund 38,582 12,431,795 (12,431,795) 38,582
Labour union fee, staff and
1,851,650 4,772,576 (4,876,133) 1,748,093
workers’ education fee
Sub-total 182,677,568 443,469,022 (452,949,099) 173,197,491
Less: Non-current liabilities 2,119,671 - (2,119,671) -
153
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
Total 180,557,897 443,469,022 (450,829,428) 173,197,491
(3) Post-employment benefits - defined contribution plans
Additions during Decrease during
31 December 2021 31 December 2022
the year the year
Basic pension insurance 328,120 35,439,551 (35,437,011) 330,660
Unemployment insurance 1,233 1,194,957 (1,194,957) 1,233
Total 329,353 36,634,508 (36,631,968) 331,893
24 Taxes payable
Item 2022 2021
Value-added tax 42,260,465 54,103,944
Consumption tax 45,524,174 70,563,701
Corporate income tax 131,264,991 194,566,746
Individual income tax 1,199,990 872,252
Tax on the use of urban land 1,899,840 2,441,121
Education surcharges 2,731,857 5,199,891
Urban maintenance and construction tax 6,168,990 7,128,647
Others 8,645,595 7,445,998
Total 239,695,902 342,322,300
25 Other payables
Note 31 December 2022 31 December 2021
Interest payable 88,889 323,074
Dividends payable 70,317 68,392
Others (1) 372,449,483 452,642,025
Total 372,608,689 453,033,491
(1) Others
(a) Details of others by nature are as follows:
Item 2022 2021
Deposit payable to dealer 207,492,570 241,414,134
Advertising fee payable 40,244,601 41,264,460
Equipment and construction fee payable 15,976,573 44,345,312
Freight charges payable 25,894,816 29,192,798
Deposits due to suppliers 13,549,010 12,966,789
Contracting fee payable 7,407,093 8,668,872
Staff deposit 508,175 743,460
Others 61,376,645 74,046,200
Total 372,449,483 452,642,025
(b) There are no significant others aged over one year accured this year.
154
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
26 Other current liabilities
As at 31 As at 31
Item
December 2022 December 2021
Tax to be transferred out as sales 18,945,706 18,374,193
Total 18,945,706 18,374,193
27 Non-current liabilities due within one year
Non-current liabilities due within one year by category are as follows:
Item 2022 2021
Long-term loans due within one year 103,011,894 74,520,037
Long-term payables due within one year 22,000,000 22,000,000
Long-term lease liabilities due within one year 19,008,940 14,345,089
Total 144,020,834 110,865,126
28 Long-term loans
Long-term loans by category
Item 2022 2021
Credit loans 186,342,909 193,475,080
Guaranteed loans 44,781,100 57,092,000
Less: Long-term loans due within one year 103,011,894 74,520,037
Total 128,112,115 176,047,043
As at 31 December 2022, details of long-term borrowings were as follows:
Interest rate at the end Long-term loans
Exchange Amount Nature of Interest rate Long-term loans
Amount of the year due within one
rate interest rate due after one year
RMB % % year
Credit loans (EUR) 24,698,121 7.4229 183,331,681 Fixed 1.50%-3.65% 1.50%-3.65% 103,011,894 80,319,787
Guaranteed loans (RMB) 405,667 7.4229 3,011,228 Floating 2.85%-3.35% 2.85%-3.35% - 3,011,228
Guaranteed loans (AUD) 9,500,000 4.7138 44,781,100 Floating BBSY+1.10% 2.29% - 44,781,100
Total 231,124,009 103,011,894 128,112,115
As at 31 December 2022, Credit loans (EUR) were EUR 25,103,788 borrowed by Banco
Sabadell, Bankia, Banco Santander, BBVA, Caja Rural de Navarr etc. (equivalent of
RMB186,342,909 (31 December 2021: EUR26,798,216, equivalent of RMB193,475,080).
Australia Kilikanoon Estate has borrowed AUD9,500,000 (equivalent of RMB44,781,100) (31
December 2021: AUD11,000,000, equivalent of RMB50,842,000) from ANZ Bank and it was
guaranteed by the Company.
29 Long-term payables
Item 2022 2021
Agricultural Development Fund of China (“CADF”) 64,000,000 86,000,000
Less: Long-term payables due within one year 22,000,000 22,000,000
Balance of long-term payables 42,000,000 64,000,000
In 2016, RMB305,000,00, 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
155
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
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 RMB22,000,000 in 2022. Refer to Note V. 52 for
details of mortgaged and pledged assets.
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
64,000,000 1.20%
2016 2025
22,000,000 42,000,000 intangible assets
30 Deferred income
Additions during Decrease during the
Item 31 December 2021 31 December 2022
the year year
Government grants 41,295,338 9,153,000 (12,059,280) 38,389,058
Government grants:
Amounts
Additions of
recognised in other Related to
Liability 31 December 2021 government grants 31 December 2022
income during assets/income
during the year
the year
Government
Industrial development support
20,500,000 - (4,100,000) 16,400,000 grants related
project
to assets
Xinjiang industrial revitalisation Government
and technological 11,376,000 - (1,422,000) 9,954,000 grants related
transformation project to assets
Government
Retaining wall subsidies - 6,380,000 (406,667) 5,973,333 grants related
to assets
Government
Coal subsidy 2,079,711 - - 2,079,711 grants related
to assets
Wine fermentation capacity Government
construction (Huanren) 2,000,000 - (400,000) 1,600,000 grants related
project to assets
Government
Special fund for efficient
1,153,000 - (162,000) 991,000 grants related
water-saving irrigation project
to assets
Engineering technology Government
transformation of information 1,160,000 - (580,000) 580,000 grants related
system project to assets
Subsidy for economic and Government
energy-saving technological 641,500 - (128,300) 513,200 grants related
transformation projects to assets
Subsidy for mechanic Government
development of Penglai 225,588 - (135,180) 90,408 grants related
Daliuhang Base to assets
Government
Special government grant for
1,060,000 - (1,060,000) - grants related
infrastructure
to assets
Government
Liquor electronic tracking
524,095 - (524,095) - grants related
project
to assets
Government
Fixed asset investment reward
156,600 - (156,600) - grants related
of Shihezi Chateau project
to assets
Government
Subsidy for boiler
60,000 - (60,000) - grants related
reconstruction and demolition
to assets
Special Funds for
Related to
Innovation-Driven 308,844 - (136,438) 172,406
income
Development of Yantai City
Prize from Industrial Design
Related to
Competition of Yantai 50,000 - (15,000) 35,000
income
Mayor’s Cup
Wine industry development Related to
- 2,773,000 (2,773,000) -
project income
Total 41,295,338 9,153,000 (12,059,280) 38,389,058
156
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
31 Other non-current liabilities
Item 31 December 2022 31 December 2021
Employee benefits payable - 2,119,671
32 Share capital
At 31 December
2021 and
31 December 2022
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 2021 31 December 2022
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
(34,707,177) 12,282,545 - - 10,946,939 1,335,606 (23,760,238)
foreign currency
financial
statements
35 Surplus reserve
Item 31 December 2022 31 December 2021
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 2022 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.
157
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
36 Retained earnings
Item Note 2022 2021
Retained earnings at the beginning of the
8,929,426,600 8,714,091,755
year (before adjustment)
Impact of retrospective adjustment of
- (10,582,161)
accounting standards
Retained earnings at the beginning of the
8,929,426,600 8,703,509,594
year (after adjustment)
Add: Net profits for the year attributable to
428,681,411 500,102,606
shareholders of the Company
Less: Dividends to ordinary shares (1) (308,458,800) (274,185,600)
Retained earnings at the end of the year (2) 9,049,649,211 8,929,426,600
(1) Dividends in respect of ordinary shares declared during the year
Pursuant to the shareholders’ approval at the shareholders’ general meeting on 27 May 2022,
a cash dividend of RMB 0.45 per share (2021: RMB0.4 per share), totalling RMB308,458,800
(2021: RMB274,185,600).
(2) Retained earnings at the end of the year
As at 31 December 2022, the consolidated retained earnings attributable to the Company
included an appropriation of RMB58,180,889 (2021: RMB58,041,628 ) to surplus reserve
made by the subsidiaries.
37 Operating income and operating costs
2022 2021
Item
Income Cost Income Cost
Principal activities 3,860,311,318 1,651,154,424 3,879,875,396 1,604,954,772
Other operating activities 58,629,842 29,640,308 73,192,187 42,835,102
Total 3,918,941,160 1,680,794,732 3,953,067,583 1,647,789,874
Including:Revenue from
contracts with 3,916,599,934 1,679,459,968 3,951,052,097 1,646,424,782
customers
Rent income 2,341,226 1,334,764 2,015,486 1,365,092
(1) Disaggregation of revenue from contracts with customers:
Type of contract 2022 2021
By type of goods or services
- Liquor 3,860,311,318 3,879,875,396
- Others 56,288,616 71,176,701
By timing of transferring goods or services
- Revenue recognised at a point in time 3,916,599,934 3,951,052,097
158
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
38 Taxes and surcharges
Item 2022 2021
Consumption tax 198,284,289 164,791,894
Urban maintenance and construction tax 28,067,931 30,604,422
Education surcharges 19,554,864 22,147,840
Property tax 28,150,521 28,005,705
Tax on the use of urban land 11,403,394 11,654,759
Stamp duty 3,230,856 6,488,829
Others 964,772 364,121
Total 289,656,627 264,057,570
39 Selling and distribution expenses
Item 2022 2021
Salaries and benefits 282,395,182 308,876,899
Marketing fee 322,593,973 251,443,176
Labour service fee 108,784,934 96,864,855
Depreciation expense 47,509,217 48,014,605
Storage rental 25,572,282 28,110,876
Advertising fee 75,862,425 91,168,885
Royalty 21,877,171 24,763,872
Travelling expenses 23,759,493 21,624,100
Design and production fee 30,594,519 30,247,672
Conference fee 8,735,659 20,088,371
Water, electricity and gas fee 16,438,410 14,988,125
Others 64,842,873 62,762,669
Total 1,028,966,138 998,954,105
40 General and administrative expenses
Item 2022 2021
Salaries and benefits 73,824,670 73,920,103
Depreciation expenses 85,366,361 79,928,195
Repair costs 11,853,538 16,467,478
Administrative expenses 23,586,680 26,124,859
Amortisation expenses 18,057,909 19,354,205
Amortisation of greening fee 17,846,265 19,186,231
Rental charge 122,097 5,735,121
Safety production costs 11,539,602 11,190,158
Security and cleaning fee 8,530,050 7,455,965
Contracting fee 4,309,290 9,192,907
Others 32,569,069 30,521,154
Total 287,605,531 299,076,376
159
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
41 Financial expenses
Item 2022 2021
Interest expenses from loans and payables 22,174,501 24,504,339
Interest expenses from lease liabilities 4,682,389 5,292,452
Less: Borrowing costs capitalised - 945,185
Interest income from deposits (24,186,351) (19,558,354)
Net exchange losses 3,301,716 8,296,888
Other financial expenses 1,283,952 3,588,587
Total 7,256,207 21,178,727
Fiscal interest subsidy during reporting period has been included in non-recurring gains and
losses.
42 Other income
Related to
Item 2022 2021
assets/income
Government grants
Industrial development support project 4,100,000 4,100,000
related to assets
Wine production capacity construction Government grants
400,000 400,000
project related to assets
Xinjiang Industrial Revitalization and Government grants
1,422,000 1,422,000
Technological Transformation Project related to assets
Special subsidies for infrastructure Government grants
1,060,000 1,060,000
support related to asse
Shandong Peninsula Blue Economic Government grants
- 2,000,000
Area construction funds related to assets
Others - Government grants related to Government grants
2,152,842 4,451,324
assets related to assets
Special funds for the development of
8,380,737 6,815,339 Related to income
enterprises
Tax refunds 7,592,342 13,747,870 Related to income
Wine Industry Development Project 2,773,000 186,000 Related to income
Others - Government grants related to
5,264,519 14,058,208 Related to income
income
Total 33,145,440 48,240,741
Other income during reporting period has been included in non-recurring gains and losses.
43 Investment losses
Investment losses by item
Item 2022 2021
Long-term equity investment losses under equity
(1,605,469) (2,784,997)
method
Investment loss arising from disposal of long-term
(1,842,325) -
equity investments
Total (3,447,794) (2,784,997)
160
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
44 Credit reversal/(losses)
Item 2022 2021
Accounts receivable 4,752,797 (7,937,144)
Total 4,752,797 (7,937,144)
45 Impairment losses
Item 2022 2021
Inventories (578,745) 689,420
Goodwill (5,210,925) (20,563,671)
Total (5,789,670) (19,874,251)
46 Loss from asset disposals
Item 2022 2021
Loss from disposal of fixed assets 16,191,903 11,939,284
Loss from disposal of assets during reporting period has been included in non-recurring gains
and losses.
47 Non-operating income and non-operating expenses
(1) Non-operating income by item is as follows:
Item 2022 2021
Insurance compensation 3,038,560 1,069,670
Net income from fine 566,334 1,068,169
Inventory stocktake surplus - 1,019,314
Others 3,227,915 2,057,151
Total 6,832,809 5,214,304
Non-operating income during reporting period has been included in non-recurring gains and
losses.
(2) Non-operating expenses
Item 2022 2021
Compensation, penalty and fine expenses 723,161 1,761,266
Donations provided 693,625 900,000
Losses from damage or scrapping of non current
867,796 3,425,709
assets
Others 665,409 224,869
Total 2,949,991 6,311,844
Non-operating expenses during reporting period has been included in non-recurring gains and
losses.
161
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
48 Income tax expenses
Item Note 2022 2021
Current tax expense for the year based on
176,922,552 248,208,920
tax law and regulations
Changes in deferred tax assets/liabilities (1) 17,311,037 (39,188,099)
Total 194,233,589 209,020,821
(1) The analysis of changes in deferred tax is set out below:
Item 2022 2021
Origination of temporary differences 17,311,037 (39,188,099)
Total 17,311,037 (39,188,099)
(2) Reconciliation between income tax expenses and accounting profit:
Item 2022 2021
Profit before taxation 625,582,303 715,699,194
Estimated income tax at 25% 156,395,576 178,924,799
Effect of different tax rates applied by subsidiaries 3,875,636 7,223,819
Effect of non-deductible costs, expense and losses 6,207,982 9,480,180
Effect of deductible losses of deferred tax assets not 26,681,652
12,159,985
recognised for the year
Deferred tax assets written-off 1,072,743 1,232,038
Income tax expenses 194,233,589 209,020,821
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:
2022 2021
Consolidated net profit attributable to ordinary
428,681,411 500,102,606
shareholders of the Company
Weighted average number of ordinary shares
685,464,000 685,464,000
outstanding
Basic earnings per share (RMB/share) 0.63 0.73
Weighted average number of ordinary shares is calculated as follows:
2022 2021
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.
162
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
50 Cash flow statement
(1) Proceeds relating to other operating activities:
Item 2022 2021
Government grants 30,239,160 36,882,470
Penalty income 566,334 1,068,169
Interest income from bank 22,845,833 19,558,354
Others 8,174,080 31,633,258
Total 61,825,407 89,142,251
(2) Payments relating to other operating activities:
Item 2022 2021
Selling and distribution expenses 443,486,326 430,962,311
General and administrative expenses 92,510,326 128,747,237
Others 46,253,149 2,488,469
Total 582,249,801 562,198,017
(3) Proceeds relating to other financing activities:
Item 2022 2021
Cash paid for lease 19,774,744 15,904,567
Total 19,774,744 15,904,567
163
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
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 2022 2021
Net profit 431,348,714 506,678,373
Add: Credit/asset impairment losses 1,036,873 27,811,395
Depreciation of fixed assets and
314,038,019 271,154,064
investment property
Amortisation of intangible assets 25,766,271 19,914,969
Amortisation of long-term deferred
19,340,746 19,256,179
expenses
Amortisation of biological assets 14,911,694 13,721,424
Depreciation of ROU assets 22,131,592 16,773,427
Losses from disposal of fixed assets,
intangible assets, and other long-term 17,059,699 15,364,993
assets
Financial expenses 25,170,658 26,782,042
Royalty 21,877,171 24,763,872
Investment losses 3,447,794 2,784,997
Decrease/(Increase) in deferred tax
17,848,075 (38,969,456)
assets
Decrease in deferred tax liabilities (537,038) (218,643)
(Increase)/Decrease in gross
(101,354,740) 143,615,551
inventories
Decrease/(Increase) in operating
165,687,398 (187,412,623)
receivables
(Dncrease)/Iecrease in operating
(108,896,279) 263,362,094
payables
Net cash flows from operating activities 868,876,647 1,125,382,658
b. Significant investing and financing activities not requiring the use of cash:
Item 2022 2021
Payment of construction in progress and other
40,584,152 60,224,230
long-term assets by bank acceptances
c. Change in cash and cash equivalents:
Item 2022 2021
Cash equivalents at the end of the year 1,612,753,600 1,502,327,029
Less: Cash equivalents at the beginning of the
1,502,327,029 1,052,665,105
year
Net increase in cash and cash equivalents 110,426,571 449,661,924
164
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
(3) Details of cash and cash equivalents
Item 2022 2021
Cash at bank and on hand
Including: Cash on hand 47,954 71,486
Bank deposits available on demand 1,612,705,646 1,502,255,543
Closing balance of cash and cash equivalents 1,612,753,600 1,502,327,029
52 Assets with restrictive ownership title or right of use
Balance at the
Item Opening balance Reason for restriction
end of the year
The Company deposits for
Cash at bank and on hand 11,568,964 10,500,515
letters of credit etc.
Short-term borrowings
Account receivable (i) 49,061,015 59,982,807
mortgage from Atrio
R&D Centre mortgage for
long-term payables and
Fixed assets 313,012,605 303,897,124
long-term and short-term
borrowings
R&D Centre mortgage for
Intangible assets 201,345,477 169,385,254
long-term payables
Total 574,988,061 543,765,700
(i) As at 31 December 2022, the amount of accounts receivable with restricted ownership
is EUR8,080,778, equivalent of RMB 59,982,807which refers to accounts receivable
Atrio conducted for factoring from Banco de Sabadell, S.A. Etc. (31 December 2021:
EUR6,795,437, equivalent of RMB49,061,015)
165
Yantai Changyu Pioneer Wine Co., Ltd. 2022 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
166
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
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
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
Yantai Changyu Wine Research &
Yantai, Shandong, Yantai, Shandong, Acquired through
Development Centre Co., Ltd. Manufacturing RMB805,000,000 88.65 -
China China establishment or investment
(“R&D Centre”) (f)
167
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
Shareholding ratio
Principal place of Business (%)
Name of the Subsidiary Registered place Registered capital Acquisition method
business nature (or similar equity
interest)
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 Changyu Cultural Tourism
Yantai, Shandong, Yantai, Shandong, Acquired through
Development Co., Ltd Tourism RMB10,000,000 100 -
China China establishment or investment
("Culture Development ")
Yantai Changyu Wine Culture Museum Co., Yantai, Shandong, Yantai, Shandong, Acquired through
Tourism RMB500,000 - 100
Ltd. ("Museum") 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
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”)
168
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
Shareholding ratio
Principal place of Business (%)
Name of the Subsidiary Registered place Registered capital Acquisition method
business nature (or similar equity
interest)
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
Yantai Creighton Catering Company Limited Yantai, Shandong, Yantai, Shandong, Acquired through
Services RMB1,000,000 100
("Creighton Catering") China China establishment or investment
Reasons for the inconsistency between the proportion of shareholdings in a subsidiary and the proportion of voting rights:
(a) 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 is terminated on 31 December 2022.
(b) 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.
(c) R&D Centre is a joint venture established by the Company and CADF, accounting for 88.65% 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 11.53% of the registered capital.
169
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
(2) Material non-wholly owned subsidiaries
Proportion of Comprehensive
Dividend declared Balance of
ownership income attributable
to non-controlling non-controlling
Name of the Subsidiary interest held by to non-controlling
shareholders interests at the end
non-controlling interests for the
during the year of the year
interests year
Xinjiang Tianzhu 40% 3,823,000 - (40,902,990)
AFIP 8.47% - - (56,409,393)
Golden Icewine Valley 49% 1,663,793 - (31,655,269)
IWCC 15% (4,458,010) 1,906,484 (57,264,506)
170
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
(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
2022 2021 2022 2021 2022 2021 2022 2021
Current assets 33,532,307 22,642,150 251,902,602 249,865,391 15,243,035 24,018,451 221,192,234 196,488,084
Non-current assets 23,267,653 43,852,510 399,165,555 414,851,163 24,918,242 24,450,344 320,233,623 314,756,823
Total assets 56,799,960 66,494,660 651,068,157 664,716,554 40,161,277 48,468,795 541,425,857 511,244,907
Current liabilities 131,477 130,108 22,424,425 27,459,352 8,064,396 12,976,418 140,793,252 130,027,677
Non-current liabilities 5,336,114 5,336,114 3,020,582 - - - 11,311,586 8,906,387
Total liabilities 5,467,591 5,466,222 25,445,007 27,459,352 8,064,396 12,976,418 152,104,838 138,934,064
Operating income - - 175,992,960 191,463,783 17,040,412 24,236,758 238,351,323 226,856,381
Net (loss)/ profit (9,557,501) (3,480,276) (3,366,711) 2,326,063 (3,395,496) (6,425,183) 23,561,992 19,716,978
Total comprehensive
(9,557,501) (3,480,276) (3,366,711) 2,326,063 (3,395,496) (6,425,183) 29,720,066 3,284,057
income
Cash flows from operating
11,772,488 (1,292,713) 8,265,568 (4,754,748) 6,541,363 4,744,413 18,971,851 99,234,532
activities
171
Yantai Changyu Pioneer Wine Co., Ltd. 2022 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.
172
Yantai Changyu Pioneer Wine Co., Ltd. 2022 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
2022, 48.8% of the Group trade receivables are due from top five customers (31 December
2021: 42.8%). 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:
2022 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 396,981,235 - - - 396,981,235 389,378,480
Accounts payable 503,323,746 - - - 503,323,746 503,323,746
Other payables 372,608,689 - - - 372,608,689 372,608,689
Long-term loans (including the
75,108,083 70,927,517 115,864,799 - 261,900,399 231,124,009
portion due within one year)
Long-term payables (including
the portion due within one 22,546,674 22,282,674 20,039,452 - 64,868,800 64,000,000
year)
Lease liability (including the
22,767,666 22,126,517 33,652,990 68,864,863 147,412,036 128,514,033
portion due within one year)
Total 1,393,336,093 115,336,708 169,557,241 68,864,863 1,747,094,905 1,688,948,957
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
173
Yantai Changyu Pioneer Wine Co., Ltd. 2022 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:
2022 2021
Item Effective interest Effective interest
Amounts Amounts
rate rate
Financial assets
- Cash at bank 2.00% - 2.25% 53,200,000 1.75% - 2.25% 53,200,000
Financial liabilities
- Short-term loans 0.65% - 6.76% (155,774,939) 0.35% - 3.35% (172,066,457)
- Long-term loans (including the
1.50% - 3.65% (183,331,680) 0.95% - 3.28% (193,475,080)
portion due within one year)
- Long-term payables (including the
1.20% (64,000,000) 1.20% (86,000,000)
portion due within one year)
- Lease liability (including the
4.65% (128,514,033) 4.65% (116,156,677)
portion due within one year)
Total (478,420,652) (514,498,214)
Variable rate instruments:
2022 2021
Item Effective interest Effective interest
Amounts Amounts
rate rate
Financial assets
- Cash at bank 0.25% - 1.61% 1,598,206,161 0.3% - 1.82% 1,513,824,507
Financial liabilities
- Short-term loans 1 year LPR 0.005 (200,000,000) 1 year LPR 0.005 (450,000,000)
- Short-term loans 1.81% - 2.54% (33,603,542) - -
- Long-term loans (including the - 90% of
- (6,250,000)
portion due within one year) 5 year LPR
- Long-term loans (including the
BBSY+1.10% (44,781,100) BBSY+1.10% (50,842,000)
portion due within one year)
- Long-term loans (including the
2.85% - 3.35% (3,011,228) - -
portion due within one year)
Total 1,316,810,291 1,006,732,507
(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.
174
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
As at 31 December 2022, 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 RMB1,055,235(2021: RMB1,901,595), and net profit by RMB1,055,235
(2021: RMB1,901,595).
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.
2022 2021
Balance at foreign Balance at RMB Balance at foreign Balance at RMB
currency equivalent currency equivalent
Cash at bank and on hand
- USD 10,922 76,068 1,984,323 12,640,136
- EUR 67 494 106,216 766,848
- HKD 208 186
Short-term loans 15,490,000 98,759,593
- USD 13,750,000 95,792,132 15,490,000 98,759,593
(2) The following are the exchange rates for Renminbi against foreign currencies applied by the
Group:
Balance sheet date
Average rate
mid-spot rate
2022 2021 2022 2021
USD 6.7573 6.4512 6.9646 6.3757
EUR 7.0985 7.6186 7.4229 7.2197
HKD 0.8583 0.8300 0.8933 0.8176
175
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
(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 2022
USD 3,589,352 3,589,352
EUR (19) (19)
HKD (7) (7)
Total 3,589,326 3,589,326
31 December 2021
USD 4,305,973 4,305,973
EUR (38,342) (38,342)
Total 4,267,631 4,267,631
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 2022 and 31 December 2021.
176
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
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.
177
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
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
Yantai Guolong Subsidiaries of the joint venture
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 2022 2021
Shenma Packaging Product procurement 82,187,388 80,754,599
Zhongya Pharmaceutical Product procurement 253,410 591,522
Mirefleurs Product procurement 7,054,664 6,822,330
LIVERSAN Product procurement 2,870,515 3,269,146
Total 92,365,977 91,437,597
(2) Sales of goods
Related parties Nature of transaction 2022 2021
Zhongya Pharmaceutical Sales of goods 5,384,362 3,872,660
WEMISS Shanghai Sales of goods 2,017,066 5,365,061
Chengdu Yufeng Sales of goods 614,302 2,677,707
Shenma Packaging Sales of goods 110,048 287,930
Yantai Guolong Sales of goods 26,816,648 -
Total 34,942,426 12,203,358
178
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
(3) Purchase of fixed assets
Related parties of the Company Nature of transaction 2022 2021
Purchase of fixed
Shenma Packaging 4,245,929 4,101,232
assets
Total 4,245,929 4,101,232
(4) Leases
(a) As the lessor
Lease income Lease income
Name of lessee Type of assets leased
recognised in 2022 recognised in 2021
Shenma Packaging Offices and plants 1,549,410 1,492,550
Zhongya Pharmaceutical Offices and plants 590,476 522,936
Total 2,139,886 2,015,486
(b) As the lessee
Type of assets Lease expense Lease expense
Name of lessor
leased recognised in 2022 recognised in 2021
Changyu Group Office buildings 1,425,735 1,612,118
Changyu Group Offices and plants 1,275,144 1,394,762
Changyu Group Offices and plants 3,825,433 4,184,286
Offices and 6,145,488
Changyu Group 7,057,143
commercial building
Total 1,425,735 14,248,309
(5) Remuneration of key management personnel
Item 2022 2021
Remuneration of key management personnel 10,265,674 12,495,933
(6) Other related party transactions
Related parties Nature of transaction 2022 2021
Changyu Group Royalty 21,877,171 24,763,872
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
179
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
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 RMB21,877,171 this year.
5 Receivables from and payables to related parties
Receivables from related parties
2022 2021
Provision for Provision for
Item Related party
Book value bad and Book value bad and
doubtful debts doubtful debts
Zhongya
Accounts receivable 2,627,473 8,091 287,788 956
Pharmaceutical
Other current assets Changyu Group 120,930,641 - - -
Other non-current assets Changyu Group - - 144,120,442 -
Shenma
Other receivables - - 341,880 -
Packaging
Accounts receivable Yantai Guolong l 2,627,473 8,091 - -
Payables to related parties
Item Related party 2022 2021
Zhongya
Accounts payable 36,600,233 30,184,072
Pharmaceutical
Zhongya
Accounts payable 5,365,862 -
Pharmaceutica
Accounts payable Chengdu Yufeng 143,659 344,464
Accounts payable Changyu Group 19,434,600 19,434,600
Zhongya
Contract liabilities 240 653
Pharmaceutica
Other payables Shenma Packaging 471,869 -
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.
180
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
XI. Commitments and contingencies
1 Significant commitment
(1) Capital commitments
Item 2022 2021
Long-term assets acquisition commitment 45,698,000 84,963,700
Total 45,698,000 84,963,700
(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 2022 2021
Within 1 year (inclusive) - 651,000
Total - 651,000
2 Contingencies
The Group do not have any significant contingencies as at balance sheet date.
XII. Subsequent events
1 Distribution of dividends on ordinary shares approved after the balance sheet date
According to the proposal of the Board of Directors on 11 April 2023, 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.
2 Transfer of the non-controlling interests after balance sheet date
On 16 January 2023, the 4th meeting of the 9th Board of Directors of the Company reviewed
and approved the Proposal on the Transfer of Equity of Liaoning Changyu Golden Valley
Icewine Chateau Co., Ltd.(“Icewine Chateau”). On 30 January 2023, the Company signed the
Equity Transfer Agreement with Canada Orose Icewine Co., Ltd.(“Orose Icewine Company”)
and Huanren Manchu Autonomous County Orose Chateau Co., Ltd.(Orose Chateau
Company)(桓仁满族自治县奥罗丝酒庄有限公司), the Company planned to transfer 25%
equity of the Icewine Chateau held by Orose Icewine Company, in the amount of RMB
16,671,800.00, and 24% equity of the Icewine Chateau held by Orose Chateau Company, in
the amount of RMB 16,075,000.00.
181
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
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 2022, over 82% of revenue, more than 91% of profit and over
91% of non-current assets derived from China/are located in China. Therefore, the Group
does not need to disclose additional segment report information.
XIV. Notes to the Company’s financial statements
1 Bills receivable
Classification of bills receivable
Item 2022 2021
Bank acceptance bills - 9,800,000
Total - 9,800,000
2 Receivables under financing
Item Note 2022 2021
Bills receivable (1) 41,061,417 62,411,636
Total 41,061,417 62,411,636
(1) The pledged bills receivable of the Company at the end of the year
As at 31 December 2022, there was no pledged bills receivable (31 December 2021: Nil).
(2) Outstanding derecognised endorsed bills that have not matured at the end of the year
Amount
Item recognised at year
end
Bank acceptance bills 105,149,583
Total 105,149,583
As at 31 December 2022, derecognised bills endorsed by the Company to other parties which
are not yet due at the end of the period is RMB 105,149,583 (31 December 2021:
RMB65,893,889). 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 2022 31 December 2021
Dividends receivable (1) 250,000,000 -
182
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
Others (2) 470,176,320 398,072,976
Total 720,176,320 398,072,976
(1) Dividends receivable
Item 31 December 2022 31 December 2021
Dividends to subsidiaries 250,000,000 -
Total 250,000,000 -
(2) Others
(a) Others by customer type:
Customer type 31 December 2022 31 December 2021
Amounts due from subsidiaries 470,128,362 397,998,281
Amounts due from related parties 47,958 74,695
Sub-total 470,176,320- 398,072,976
Less: Provision for bad and doubtful debts - -
Total 470,128,362 398,072,976
(b) The ageing analysis is as follows:
Ageing 2022 2021
Within 1 year (inclusive) 470,071,848 397,936,651
Over 1 year but within 2 years (inclusive) - 11,853
Over 2 years but within 3 years (inclusive) 104,472 104,472
Over 3 years - 20,000
Sub-total 470,176,320 398,072,976
Less: Provision for bad and doubtful debts - -
Total 470,176,320 398,072,976
The ageing is counted starting from the date.
(c) Movements of provisions for bad and doubtful debts
As at 31 December 2022, no bad and doubtful debt provision was made for other
receivables (31 December 2021: Nil).
As at 31 December 2022, the Company has no other receivables written off (31
December 2021: Nil).
183
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
(d) Others categorised by nature
Nature of other receivables 2022 2021
Amounts due from subsidiaries 470,128,362 397,998,281
Others 47,958 74,695
Sub-total 470,176,320 398,072,976
Less: Provision for bad and doubtful debts - -
Total 470,128,362 398,072,976
(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
Debtor Ageing ending balance of
receivable end of the year bad and
others (%)
doubtful debts
Amounts due 40.9 -
Sales Company 192,349,897 Within 1 year
from subsidiaries
Amounts due 3.4 -
R&D Centre 16,085,524 Within 1 year
from subsidiaries
Amounts due 2.7 -
Digital Marketing 12,513,258 Within 1 year
from subsidiaries
Amounts due 2.0 -
Chateau KOYA 9,455,430 Within 1 year
from subsidiaries
Amounts due 1.5 -
Chateau Changyu 7,040,550 Within 1 year
from subsidiaries
Total 237,444,659 50.5 -
4 Long-term equity investments
(1) Long-term equity investments by category:
2022 2021
Item Provision for Carrying Provision for Carrying
Book value Book value
impairment amount impairment amount
Investments in
7,703,535,027 - 7,703,535,027 7,593,535,027 - 7,593,535,027
subsidiaries
Investments in
2,318,351 - 2,318,351 5,886,467 - 5,886,467
associates
Total 7,705,853,378 - 7,705,853,378 7,599,421,494 - 7,599,421,494
184
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
(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
Chateau Koya - 110,000,000 - 110,000,000
Total 7,593,535,027 110,000,000 - 7,703,535,027
For information about the subsidiaries of the Company, refer to Note VI.
(3) Investments in associates:
Investment
Balance at the losses
Additions during Decrease Balance at the
Subsidiary beginning of recognized
the year during the year end of the year
the year under the
equity method
WEMISS Shanghai 2,366,811 - - (48,460) 2,318,351
Yantai Santai Real Estate
3,519,656 - (3,519,656) - -
Development Co., Ltd
Total 5,886,467 - (3,519,656) (48,460) 2,318,351
185
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
5 Operating income and operating costs
2022 2021
Item
Income Cost Income Cost
Principal activities 672,635,481 575,896,372 576,706,055 470,719,232
Other operating activities 2,426,940 1,420,479 2,189,747 1,439,506
Total 675,062,421 577,316,851 578,895,802 472,158,738
Including:Revenue from contracts
672,635,481 575,896,372 576,706,055 470,719,232
with customers
Rent income 2,426,940 1,420,479 2,189,747 1,439,506
(1) Disaggregation of revenue from contracts with customers:
Type of contract 2022 2021
By type of goods or services
- Liquor 672,635,481 576,706,055
By timing of transferring goods or services
- Revenue recognised at a point in time 672,635,481 576,706,055
6 Investment income
Item 2022 2021
Income from long-term equity investments
738,407,264 867,880,564
accounted for using cost method
Loss from long-term equity investments accounted
(48,460) (357,386)
for using equity method
Loss from long-term equity investments accounted
(1,842,325) -
for disposal of long-term equity investment
Total 736,516,479 867,523,178
7 Transactions with related parties
(1) Product procurement
Related parties Nature of transaction 2022 2021
Subsidiary of the parent
Product procurement 154,806,785 117,808,977
company
Other related parties of the
Product procurement 42,578,235 30,002,566
Company
Total 197,385,020 147,811,543
(2) Sales of goods
Related parties Nature of transaction 2022 2021
Subsidiary of the parent
Sales of goods 504,080,073 576,708,399
company
Other related parties of the
Sales of goods 2,952,493 3,017,548
Company
Total 507,032,566 579,725,947
186
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
(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 Y
Australia Kilikanoon
AUD 17,550,000 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 2022 recognised in 2021
Other related parties of
Offices and plants 2,139,886 2,015,486
the Company
Subsidiary of the parent
Offices buildings 85,714 85,714
company
Total 2,225,600 2,101,200
(b) As the lessee
Lease expense Lease expense
Name of lessor Type of assets leased
recognised in 2022 recognised in 2021
Other related parties of
Office buildings 1,275,144 1,394,762
the Company
Total Office buildings 1,275,144 1,394,762
8 Receivables from and payables to related parties
Receivables from related parties
2022 2021
Provision for Provision for
Item Related party
Book value bad and Book value bad and
doubtful debts doubtful debts
Other related parties
Accounts receivables 2,301,505 7,805 - -
of the Company
Subsidiary of the
Other receivables 720,128,362 - 397,998,281 -
parent company
Subsidiary of the
Other non-current assets 1,850,200,000 - 2,023,500,000 -
parent company
Payables to related parties
Item Related party 2022 2021
Other related parties of
Accounts payable 35,944,149 28,014,000
the Company
Subsidiary of the
Other payables 421,781,524 362,651,747
parent company
Other related parties of
Other payables 471,869 -
the Company
187
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
XV. Non-recurring profit and loss statement in 2022
Item Amount
(1) Profit and loss from disposal of non-current assets (18,902,024)
Government grants recognised through profit or loss (excluding those
(2) having close relationships with the Group’s operation and enjoyed in 33,145,440
fixed amount or quantity according to uniform national standard)
(3) Other non-operating income and expenses besides items above 4,750,614
Sub-total 18,994,030
(4) Tax effect (4,695,173)
(5) Effect on non-controlling interests after taxation 551,195
Total 14,850,052
Note 1: Extraordinary gain and loss items (1) to (3) listed above are presented in the amount
before taxation.
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:
2022 2021
Consolidated net profit attributable to ordinary
428,681,411 500,102,606
shareholders of the Company
Extraordinary gains and losses attributable to
14,850,052 27,866,644
ordinary shareholders of the Company
Consolidated net profit excluding extraordinary gain
and loss attributable to the Company’s ordinary 413,831,359 472,235,962
equity shareholders
Weighted average number of ordinary shares
685,464,000 685,464,000
outstanding
Basic earnings per share excluding extraordinary
0.60 0.69
gain and loss (RMB/share)
(3) Diluted earnings per share
During the reporting period, the Company did not have dilutive potential ordinary shares.
188
Yantai Changyu Pioneer Wine Co., Ltd. 2022 Annual Report
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:
2022 2021
Consolidated net profit attributable to ordinary
428,681,411 500,102,606
shareholders of the Company
Weighted average amount of consolidated net
10,487,764,058 10,329,718,533
assets
Weighted average return on net assets 4.09% 4.84%
Calculation of weighted average amount of consolidated net assets is as follows:
2022 2021
Consolidated net assets at the beginning of the year 10,447,884,183 10,267,832,644
Impact of changes in accounting policies - (10,582,161)
Effect of consolidated net profit attributable to
219,814,175 232,409,650
ordinary shareholders of the Company
Effect of shares repurchased (Note V.36) (179,934,300) (159,941,600)
Weighted average amount of consolidated net
10,487,764,058 10,329,718,533
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:
2022 2021
Consolidated net profit excluding extraordinary gain
and loss attributable to the Company’s ordinary 413,831,359 472,235,962
equity shareholders
Weighted average amount of consolidated net
10,487,764,058 10,329,718,533
assets (Note)
Weighted average return on net assets excluding
3.95% 4.57%
extraordinary gain and loss
Yantai Changyu Pioneer Wine Co., Ltd.
Board of Directors
April 13, 2023
189
