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张 裕B:2022年年度审计报告(英文版)2023-04-13  

                                   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
                                     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.




                                          Page 1 of 6
                              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                   Management’s design and operation
mainly 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;




                                           Page 2 of 6
                              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.




                                           Page 3 of 6
                              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.




                                          Page 4 of 6
                             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.




                                          Page 5 of 6
                             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




                                          Page 6 of 6
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 20 to 103 form part of these financial statements.



                                             1
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 20 to 103 form part of these financial statements.



                                             2
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 20 to 103 form part of these financial statements.



                                                3
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 20 to 103 form part of these financial statements.



                                             4
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 20 to 103 form part of these financial statements.



                                             5
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 20 to 103 form part of these financial statements.



                                               6
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 20 to 103 form part of these financial statements.



                                              7
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 20 to 103 form part of these financial statements.



                                                8
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 20 to 103 form part of these financial statements.



                                              9
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                                 1281047     3,295,694




The notes on pages 20 to 103 form part of these financial statements.



                                            10
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 20 to 103 form part of these financial statements.




                                             11
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 20 to 103 form part of these financial statements.




                                             12
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
                                               V.51(2)    1,612,753,600      1,502,327,029
         end 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 20 to 103 form part of these financial statements.



                                              13
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 20 to 103 form part of these financial statements.



                                             14
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 20 to 103 form part of these financial statements.



                                              15
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 20 to 103 form part of these financial statements.




                                                                                            16
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 20 to 103 form part of these financial statements.




                                                                                           17
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 20 to 103 form part of these financial statements.




                                                           18
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 20 to 103 form part of these financial statements.



                                                                19
       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.




                                                       20
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.




                                                    21
(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.




                                                     22
      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)).




                                                     23
      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.




                                                     24
(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.




                                                       25
      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.




                                                 26
(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.




                                                        27
(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.




                                                     28
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.




                                               29
      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.




                                                      30
      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.




                                                    31
(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 in owners’ equity”), is recognised directly in the Group’s equity, and the
              carrying amount of the investment is adjusted accordingly.




                                                      32
            - 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.

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%




                                                     33
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%
       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.




                                                     34
     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.

     - 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.



                                                    35
      The capitalisation period is the period from the date of commencement of capitalisation of
      borrowing costs to the date of cessation of capitalisation, excluding any period over which
      capitalisation is suspended. Capitalisation of borrowing costs commences when expenditure
      for the asset is being incurred, borrowing costs are being incurred and activities of
      acquisition, construction or production that are necessary to prepare the asset for its
      intended use are in progress, and ceases when the assets become ready for their intended
      use. Capitalisation of borrowing costs should cease when the qualifying asset being
      constructed or produced has reached its expected usable or saleable condition.
      Capitalisation of borrowing costs is suspended when the acquisition, construction or
      production activities are interrupted abnormally for a period of more than three months.

16.   Biological assets

      The Group's biological assets are bearer biological assets.

      Bearer biological assets are those that are held for the purposes of producing agricultural
      produce, rendering of services or rental. Bearer biological assets in the Group are vines.
      Bearer biological assets are initially measured at cost. The cost of self-grown or self-bred
      bearer biological assets represents the necessary directly attributable expenditure incurred
      before satisfying the expected production and operating purpose, including capitalised
      borrowing costs.

      Bearer biological assets, after reaching the expected production and operating purpose, are
      depreciated using the straight-line method over its estimated useful life. The estimated
      useful lives, estimated net residual value rates and depreciation rates of bearer biological
      assets are as follows:

                                         Estimated useful         Estimated net    Depreciation rate
       Category
                                              life (years)   residual value rate                 (%)
       Vines                                     20 years                    0%                5.0%

      The Group evaluates the useful life and expected net salvage value by considering the
      normal producing life of the bearer biological assets.

      Useful lives, estimated residual values and depreciation methods of bearer biological assets
      are reviewed at least at each year-end. Any changes should be treated as changes in
      accounting estimates.

      For a bearer biological asset that has been sold, damaged, dead or destroyed, any
      difference between the disposal proceeds and the carrying amount of the asset should be
      recognised in profit or loss for the period in which it arises.




                                                    36
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.




                                                     37
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.




                                                     38
     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.




                                                      39
The transaction price is the amount of consideration to which the Group expects to be
entitled in exchange for transferring promised goods or services to a customer, excluding
amounts collected on behalf of third parties. The Group recognises the transaction price only
to the extent that it is highly probable that a significant reversal in the amount of cumulative
revenue recognised will not occur when the uncertainty associated with the variable
consideration is subsequently resolved. Where the contract contains a significant financing
component, the Group recognises the transaction price at an amount that reflects the price
that a customer would have paid for the promised goods or services if the customer had paid
cash for those goods or services when (or as) they transfer to the customer. The difference
between the amount of promised consideration and the cash selling price is amortised using
an effective interest method over the contract term. The Group does not adjust the
consideration for any effects of a significant financing component if it expects, at contract
inception, that the period between when the Group transfers a promised good or service to a
customer and when the customer pays for that good or service will be one year or less.

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.




                                               40
     A contract asset is the Group’s right to consideration in exchange for goods or services that it
     has transferred to a customer when that right is conditional on something other than the
     passage of time. The Group recognises loss allowances for expected credit loss on contract
     assets (see Note III.9(6)). Accounts receivable is the Group’s right to consideration that is
     unconditional (only the passage of time is required). A contract liability is the Group’s
     obligation to transfer goods or services to a customer for which the Group has received
     consideration (or an amount of consideration is due) from the customer.

     The following is the description of accounting policies regarding revenue from the Group’s
     principal activities:

     The Group's sales revenue is mainly derived from dealer sales. Revenue is recognised
     when the Group transfers control of the related products to the customer. Based on the
     business contract, the Group recognised the sales revenue of these transfers when the
     product is confirmed and signed for acceptance by the customers.

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.



                                                     41
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.

(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.




                                                    42
     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).

     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.




                                                     43
      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:

      - 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.




                                                      44
      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;
      - 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.




                                                     45
     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.

     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.




                                                     46
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
      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.
      -




                                                     47
      -    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 basis
                                                               21% (Spain), 19% (Chile) and 10%
           (VAT)               for VAT payable is to deduct
                                                               (Australia)
                               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
      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




                                                     48
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
(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.




                                             49
     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.

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).




                                                   50
      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:

                                                                  31 December      31 December
       Type
                                                                         2022             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

      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.




                                                        51
(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.




                                                   52
(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.




                                                         53
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                   31 December
                                                                                 2022                          2021
       Others                                                               70,542,398                    30,125,270
       Total                                                                70,542,398                    30,125,270

(1)   Interest receivable

      (a)   Others by customer type:

                                                                          31 December                   31 December
              Customer type
                                                                                 2022                           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




                                                         54
(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%                     -




                                                  55
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




                                                             56
(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)                     39055                      55%
       Associates                                                                                                                                                                                             
       WEMISS (Shanghai) Enterprise Development
                                                                 2,366,811                         -                           -                    (48,460)                        28                       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)                              4                  10%
        Ltd. (Note2)
       Yantai Guolong Wine Industry Co., Ltd.
                                                                   475,737                         -                           -                     186,393                              6                  10%
        (Note2)
       Sub-total                                                 6,843,676                         -               (3,519,656)                        76,830                        30                        
       Total                                                    46,496,510                                         (3,519,656)                    (1,605,469)                     43135                       


      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.




                                                                                              57
                                                                                 Yantai Changyu Pioneer Wine Company Limited
                                                                      Financial statements for the year ended 31 December 2022




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




                                                             58
                                                                                  Yantai Changyu Pioneer Wine Company Limited
                                                                       Financial statements for the year ended 31 December 2022




(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




                                                                59
                                                                                                                                                                    Yantai Changyu Pioneer Wine Company Limited
                                                                                                                                                         Financial statements for the year ended 31 December 2022




(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




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                                                                Financial statements for the year ended 31 December 2022




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




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                                                                  Financial statements for the year ended 31 December 2022




      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.




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                                                                Financial statements for the year ended 31 December 2022




      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.




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                                                                       Financial statements for the year ended 31 December 2022




      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
      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




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                                                            Financial statements for the year ended 31 December 2022




(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.




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                                                            Financial statements for the year ended 31 December 2022




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




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                                                                 Financial statements for the year ended 31 December 2022




      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)                   -
       Total                                 180,557,897        443,469,022         (450,829,428)          173,197,491




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                                                            Financial statements for the year ended 31 December 2022




(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

                                                                         31 December              31 December
                                                      Note
                                                                                 2022                     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.

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



                                                      68
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                                                                                  Financial statements for the year ended 31 December 2022




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
     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.




                                                                       69
                                                                                              Yantai Changyu Pioneer Wine Company Limited
                                                                                   Financial statements for the year ended 31 December 2022




     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
       Item                                 31 December 2021                                                            31 December 2022
                                                                                  the year                     the 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 water-
                                                    1,153,000                        -            (162,000)                    991,000     grants related
        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 Innovation-
                                                                                                                                               Related to
         Driven Development of                        308,844                        -            (136,438)                    172,406
                                                                                                                                                 income
         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




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                                                                                     Financial statements for the year ended 31 December 2022




31   Other non-current liabilities

                                                                                                  31 December                        31 December
      Item
                                                                                                         2022                               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             Decrease during
      Item                                    31 December 2021                                                         31 December 2022
                                                                                  the 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

                                   Balance at the                                 Accrued during the year
                                                                                                                                             Balance at the
                                     beginning of                            Less:                           Net-of-tax
                                                                                                                                Net-of-tax   end of the year
                                         the year                      Previously                              amount
                                                                                               Less:                              amount      attributable to
      Item                         attributable to    Before-tax      recognised                        attributable to
                                                                                         Income tax                        attributable to     shareholders
                                    shareholders        amount             amount                        shareholders
                                                                                           expenses                       non-controlling              of the
                                            of the                 transferred to                                of the
                                                                                                                                 interests         Company
                                        Company                      profit or loss                          Company
      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

                                                                                                  31 December                        31 December
      Item
                                                                                                         2022                               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.




                                                                           71
                                                                        Yantai Changyu Pioneer Wine Company Limited
                                                             Financial statements for the year ended 31 December 2022




      The Company can appropriate discretionary surplus reserve after appropriation of the
      statutory surplus reserve. Discretionary surplus reserve can be utilised to offset the deficit or
      increase the share capital after approval.

36    Retained earnings

       Item                                             Note                        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




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                                                    Financial statements for the year ended 31 December 2022




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




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                                                       Financial statements for the year ended 31 December 2022




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)




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                                                                    Yantai Changyu Pioneer Wine Company Limited
                                                         Financial statements for the year ended 31 December 2022




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.




                                                    75
                                                                     Yantai Changyu Pioneer Wine Company Limited
                                                          Financial statements for the year ended 31 December 2022




48    Income tax expenses

       Item                                          Note                        2022                      2021
       Current tax expense for the year based
                                                                       176,922,552               248,208,920
          on 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               26,681,652
                                                                                                   12,159,985
         not 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.




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                                                                     Yantai Changyu Pioneer Wine Company Limited
                                                          Financial statements for the year ended 31 December 2022




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




                                                     77
                                                                     Yantai Changyu Pioneer Wine Company Limited
                                                          Financial statements for the year ended 31 December 2022




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
                                                                         40,584,152                60,224,230
              other 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
                                                                     1,502,327,029             1,052,665,105
                   the year
            Net increase in cash and cash equivalents                  110,426,571               449,661,924




                                                     78
                                                                      Yantai Changyu Pioneer Wine Company Limited
                                                           Financial statements for the year ended 31 December 2022




(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-
        Fixed assets                      313,012,605           303,897,124   term payables and 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)




                                                      79
                                                                                                                                          Yantai Changyu Pioneer Wine Company Limited
                                                                                                                               Financial statements for the year ended 31 December 2022




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 Castel-
                                                     Langfang, Hebei,       Langfang, Hebei,                                                                              Acquired through
         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




                                                                                           80
                                                                                                                                   Yantai Changyu Pioneer Wine Company Limited
                                                                                                                        Financial statements for the year ended 31 December 2022




                                                                                                                               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)




                                                                                     81
                                                                                                                                          Yantai Changyu Pioneer Wine Company Limited
                                                                                                                               Financial statements for the year ended 31 December 2022




                                                                                                                                      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.               Yantai, Shandong,      Yantai, Shandong,      Marketing and                                                             Acquired through
                                                                                                                   RMB5,000,000           100               -
  (“Wine 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”)




                                                                                           82
                                                                                                                                 Yantai Changyu Pioneer Wine Company Limited
                                                                                                                      Financial statements for the year ended 31 December 2022




                                                                                                                             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.




                                                                                   83
                                                                     Yantai Changyu Pioneer Wine Company Limited
                                                          Financial statements for the year ended 31 December 2022




(2)   Material non-wholly owned subsidiaries

                                                        Comprehensive
                                      Proportion of
                                                                 income Dividend declared        Balance of non-
                                        ownership
                                                    attributable to non- to non-controlling            controlling
       Name of the Subsidiary      interest held by
                                                              controlling     shareholders        interests at the
                                    non-controlling
                                                        interests for the   during the year      end 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)




                                                    84
                                                                                                                                Yantai Changyu Pioneer Wine Company Limited
                                                                                                                     Financial statements for the year ended 31 December 2022




(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




                                                                                   85
                                                                        Yantai Changyu Pioneer Wine Company Limited
                                                             Financial statements for the year ended 31 December 2022




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.




                                                        86
                                                                                        Yantai Changyu Pioneer Wine Company Limited
                                                                             Financial statements for the year ended 31 December 2022




    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




                                                                        87
                                                                               Yantai Changyu Pioneer Wine Company Limited
                                                                    Financial statements for the year ended 31 December 2022




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.




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                                                             Financial statements for the year ended 31 December 2022




      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 Balance at RMB               Balance at Balance at RMB
                                       foreign currency      equivalent        foreign 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




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(3)     Sensitivity analysis

        Assuming all other risk variables remained constant, a 5% strengthening of the Renminbi
        against the US dollar and Euro dollar at 31 December would have impact on the Group’s
        equity and net profit by the amount shown below. whose effect is in Renminbi and translated
        using the spot rate at the year-end date:

                                                                                 Equity                 Net profit
         31 December 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.




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IX.   Related parties and related party transactions

1     Information about the parent of the Company

                            Registered                                              Shareholding     Percentage of             Ultimate controlling party of the
        Company name                      Business nature   Registered capital
                                 place                                            percentage (%)   voting rights (%)                                  Company
                                                                                                                         Jointly controlled by Yantai GuoFeng
                                                                                                                                Investment Holding Ltd, ILLVA
                                                                                                                                   SARONNO HOLDING SPA,
       Changyu Group             Yantai    Manufacturing          50,000,000              50.4%              50.4%
                                                                                                                        International Finance Corporation and
                                                                                                                                 Yantai Yuhua Investment and
                                                                                                                              Development Company Limited.

      There are no changes on the registered capital and shareholding percentage/percentage of voting rights of the parent company.




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2     Information about the subsidiaries of the Company

      For information about the subsidiaries of the Company, refer to Note VI.1.

3     Information on other related parties

       Name of other related parties                                            Related party relationship
       Yantai Shenma Packaging Co., Ltd.                                    Controlled by the same parent
         (“Shenma Packaging”)                                                                    company
       Yantai Zhongya Pharmaceutical Tonic Wine Co., Ltd.                   Controlled by the same parent
         (“Zhongya Pharmaceutical”)                                                              company
       WEMISS Shanghai                                                             Associate of the Group
       Chengdu Yufeng                                                              Associate of the Group
       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




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                                                              Financial statements for the year ended 31 December 2022




(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).




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                                                                  Financial statements for the year ended 31 December 2022




             On 18 May 2019, the general meeting of shareholders approved the proposal of the
             amendment to the royalty agreement. Article 6.1 of the royalty agreement with
             Changyu Group was amended to: During the validity period of this contract, the Group
             pays Changyu Group royalty on an annual basis. The royalty is calculated based on
             0.98% of the sales volume of the Group ‘s contract products using this trademark. The
             article 6.3 is amended to: The royalty paid to the Changyu Group by the Group shall
             not be used to promote this trademark and the contract products.

             In addition, in accordance with agreement the Group signed with Changyu Group in
             November 2019, Changyu Group promised to offset the difference of RMB231,768,615
             above with the royalty for four years, i.e. from 2019 to 2022.If it is not sufficient for
             deduction, the rest will be repaid in a one-off manner in 2023. If there is surplus, the
             surplus part of the royalty will be charged from the year when the surplus occurs.

             The Group incurred a trademark usage fee of 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



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                                                                      Yantai Changyu Pioneer Wine Company Limited
                                                           Financial statements for the year ended 31 December 2022




       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.

       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.




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                                                            Financial statements for the year ended 31 December 2022




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




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                                                             Financial statements for the year ended 31 December 2022




                                                                         31 December               31 December
                                                     Note
                                                                                2022                      2021
       Dividends receivable                           (1)                 250,000,000                         -
       Others                                         (2)                 470,176,320               398,072,976
       Total                                                              720,176,320               398,072,976

(1)   Dividends receivable

                                                                         31 December               31 December
       Item
                                                                                2022                      2021
       Dividends to subsidiaries                                          250,000,000                        -
       Total                                                              250,000,000                        -

(2)   Others

      (a)   Others by customer type:

                                                                         31 December               31 December
               Customer type
                                                                                2022                      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).




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                                                                            Financial statements for the year ended 31 December 2022




      (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




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                                                                      Financial statements for the year ended 31 December 2022




(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




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                                                             Financial statements for the year ended 31 December 2022




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




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                                                                         Financial statements for the year ended 31 December 2022




(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




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                                                                         Yantai Changyu Pioneer Wine Company Limited
                                                              Financial statements for the year ended 31 December 2022




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.




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                                                                      Yantai Changyu Pioneer Wine Company Limited
                                                           Financial statements for the year ended 31 December 2022




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
                                                                    10,447,884,183            10,267,832,644
        year
       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




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