ANNUAL REPORT 2022 Company Code: 600132 Abbreviation of the Company: Chongqing Brewery CHONGQING BREWERY CO., LTD. ANNUAL REPORT 2022 This document is a translated version of the Chinese version 2022 Annual Report (《重庆啤酒股份有限公司 2022 年 年度报 告》 ). In case of any ambiguities in Chinese and English texts, Chinese text shall prevail. 1 / 246 ANNUAL REPORT 2022 IMPORTANT STATEMENTS I. The Board of Directors, Board of Supervisors, Directors, Supervisors and the Senior Management of the Company guarantee that the information presented in this report is free of any false records, misleading statements or material omissions, and shall bear individual and joint legal liabilities for the truthfulness, accuracy and completeness of its contents. II. All Directors of the Company have attended the board meeting. III. Pan-China Certified Public Accountants LLP has issued a standard unqualified audit report for the Company. IV. Joo Miguel Ventura Rego Abecasis, Legal Representative of the Company, Chin Wee Hua, the person in charge of accounting work and Liu Liping, the person in charge of accounting department (accounting supervisor) hereby warrant that the financial statements in this annual report are true, accurate and complete. V. The proposed profit distribution plan or the proposed plan of capitalization of capital reserves in the reporting period approved by the resolution of the Board of Directors The Company plans to distribute cash dividends to all shareholders based on the total share capital of 483,971,198 shares as of December 31, 2022. The total amount of cash dividends is CNY 1,258,325,114.80 (tax included). The cash dividends to be distributed is derived from the operating profit of daily operation and is a kind of ordinary dividends. The Company plans to distribute cash dividends of CNY 2.60 per share (tax included). After the implementation of the dividend distribution plan for 2022, the remaining undistributed profit in the consolidated statement of the Company is CNY 77.69 million, and the remaining undistributed profit in the statement of the parent company is CNY 302.83 million. The Company will not use capital reserve to increase share capital in 2022. VI. Statement on risks of forward-looking statement √ Applicable □ Not applicable The annual report involves forward-looking statement such as future plans, which does not form substantive promises to the investors by the Company. The investors shall pay attention to the investment risks. VII. Whether the controlling shareholders and their related parties occupy funds non-operationally No VIII. Whether there is guarantee provided to external entities in violation of the stipulated decision-making procedures No IX. Whether there are more than half of the directors who cannot guarantee the authenticity, accuracy and completeness of the annual report disclosed by the Company No X. Significant risk statements The Company has described the possible risks in detail in the report. Please refer to Section III “VI. Discussion and analysis on the future development of the Company”. 2 / 246 ANNUAL REPORT 2022 XI. Others □ Applicable √ Not applicable 3 / 246 ANNUAL REPORT 2022 CONTENTS SECTION I DEFINITIONS ........................................................................................................................... 5 SECTION II COMPANY BRIEF INTRODUCTION AND KEY FINANCIAL INDICATORS ............... 5 SECTION III MANAGEMENT’S DISCUSSION AND ANALYSIS ............................................................. 9 SECTION IV CORPORATE GOVERNANCE ............................................................................................. 28 SECTION V ENVIRONMENTAL AND SOCIAL RESPONSIBILITIES ................................................ 54 SECTION VI SIGNIFICANT EVENTS ........................................................................................................ 62 SECTION VII CHANGES IN SHARES AND INFORMATION ABOUT SHAREHOLDERS ................. 98 SECTION VIII INFORMATION ON PREFERRED STOCKS ................................................................... 104 SECTION IX INFORMATION ON BONDS............................................................................................... 104 SECTION X FINANCIAL REPORT .......................................................................................................... 104 Financial statements with the signatures and seal of the legal representative, the person in charge of accounting work and the person in charge of accounting department. Documents Original audit report with the seal of the accounting firm as well as the signature and the seal Available for of the certified public accountant. Inspection The originals of company documents and announcements disclosed publicly on the newspapers designated by CSRC during the reporting period. 4 / 246 ANNUAL REPORT 2022 SECTION I DEFINITIONS I. Definitions In the report, unless otherwise indicated in meanings, the following words have meanings as follows: Interpretation of common terms CSRC Refers to China Securities Regulatory Commission SSE Refers to Shanghai Stock Exchange Company, the Company, the Refers to Chongqing Brewery Co., Ltd. listed company Carlsberg Foundation Refers to Carlsberg Foundation Carlsberg Refers to Carlsberg A/S Carlsberg Breweries Refers to Carlsberg Breweries A/S Carlsberg Brewery HK Refers to Carlsberg Brewery HongKong Limited Carlsberg Consultancy Refers to Guangzhou Carlsberg Consultancy and Management Services Co., Ltd. Carlsberg Chongqing Refers to Carlsberg Chongqing Brewery Co., Ltd., original Chongqing Brewery, Chongqing Jianiang Brewery Co., Ltd. Jianiang Major assets restructuring, Refers to Major assets purchase of Chongqing Brewery Co., Ltd. and the joint MAR, the current capital increase in the joint venture & related-party transaction restructuring Asset Package A Refers to The collective name of 100% of equity in Carlsberg (China) Breweries and Trading Company Limited, 100% of equity in Carlsberg Beer Enterprise Management (Chongqing) Company Limited, 99% of equity in Carlsberg Brewery (Guangdong) Company Limited and 100% of equity in Kunming Huashi Brewery Company Limited held by Carlsberg Consultancy Asset Package B Refers to The collective name of 100% of equity in Xinjiang Wusu Breweries Company Limited and 70% of equity in Ningxia Xixia Jianiang Brewery Company Limited held by Carlsberg Breweries SECTION II COMPANY BRIEF INTRODUCTION AND KEY FINANCIAL INDICATORS I. Company Information Chinese Name of the Company 重庆啤酒股份有限公司 Chinese Abbreviation of the Company 重庆啤酒 English Name of the Company Chongqing Brewery Co., Ltd. English Abbreviation of the Company CBC Legal Representative of the Company Joo Miguel Ventura Rego Abecasis II. Contact Person and Contact Information Board Secretary Securities Affairs Representative Name Deng Wei Li Xiaoyu Contact Address Floor 13, Kingold Century, No.62, Jinsui Floor 13, Kingold Century, No.62, Jinsui 5 / 246 ANNUAL REPORT 2022 Road, Tianhe District, Guangzhou City, Road, Tianhe District, Guangzhou City, Guangdong Province Guangdong Province Tel. 4001600132 4001600132 Fax 020-28016518 020-28016518 E-mail CBCSMIR@carlsberg.asia CBCSMIR@carlsberg.asia III. Basic Information Company Registered Address No. 9, Hengshan East Road, Dazhulin Sub-district, High and New Tech Industry Park, Northern New District, Chongqing Company Business Address Floor 13, Kingold Century Finance Center, No. 62, Jinsui Road, Tianhe District, Guangzhou City, Guangdong Province Postal Code of Company Business Address 510623 Company Website www.carlsbergchina.com.cn E-mail CBCSMIR@carlsberg.asia IV. Information Disclosure and Storage Location Name and website of the media used by the Company China Securities Journal, Shanghai Securities News, for disclosure of annual report Securities Times, Securities Daily Website of stock exchange used by the Company for www.sse.com.cn disclosure of annual report Storage location of annual report of the Company Board Office of the Company V. Stock Profile of the Company Stock Profile of the Company Previous Stock Type of Sock Stock Exchange Stock Abbreviation Stock Code Abbreviation Shanghai Stock A-shares Chongqing Brewery 600132 None Exchange VI. Other Related Information Name Pan-China Certified Public Accountants LLP Business Address Tower B, China Resources Building, No. 1366, Accounting Firm Qianjiang Road, Shangcheng District, Hangzhou (Domestic) Engaged by the City, Zhejiang Province Company Name of Certified Public Huang Qiaomei, Zhao Xingming Accountants with Signatures VII. Key Accounting Data and Financial Indicators in the Past Three Years (I) Key Accounting Data Monetary unit: RMB Yuan YoY growth Items Year 2022 Year 2021 Year 2020 rate (%) Operating revenue 14,039,040,539.45 13,119,310,688.30 7.01 10,941,631,163.32 Net profit attributable to 1,263,604,930.09 1,166,243,415.91 8.35 1,076,838,516.18 6 / 246 ANNUAL REPORT 2022 YoY growth Items Year 2022 Year 2021 Year 2020 rate (%) shareholders of the Company Net profit attributable to shareholders of the Company after deducting 1,234,338,183.95 1,142,853,438.97 8.00 473,614,955.09 non-recurring profit or loss Net cash flows from 3,752,648,258.54 3,564,787,113.40 5.27 3,689,730,875.73 operating activities YoY growth December 31, 2022 December 31, 2021 December 31, 2020 rate (%) Net assets attributable to shareholders of the 2,056,155,782.63 1,754,545,104.23 17.19 585,289,188.94 Company Total assets 12,497,542,168.83 11,532,809,144.20 8.37 9,595,373,073.62 (II) Key Financial Indicators YoY growth rate Items Year 2022 Year 2021 Year 2020 (%) Basic EPS (yuan/share) 2.61 2.41 8.35 2.23 Diluted EPS (yuan/share) 2.61 2.41 8.35 2.23 Basic EPS after deducting non- 2.55 2.36 8.00 0.98 recurring profit or loss (yuan/share) Weighted average ROE (%) 69.25 99.69 -30.44 45.55 Weighted average ROE after deducting 67.65 97.69 -30.04 36.89 non-recurring profit or loss (%) Remarks on key accounting data and financial indicators in the past three years □ Applicable √ Not applicable VIII. Difference in accounting data under domestic and foreign accounting standards (I) Difference between the net profits and the net assets attributable to shareholders of the listed company in the financial reports disclosed simultaneously according to the international accounting standard and China accounting standard □ Applicable √ Not applicable (II) Difference between the net profits and the net assets attributable to shareholders of the listed company in the financial reports disclosed simultaneously according to the foreign accounting standard and China accounting standard □ Applicable √ Not applicable (III) Statement of differences between foreign and domestic accounting standards: □ Applicable √ Not applicable IX. Key quarterly financial data in 2022 Monetary unit: RMB Yuan First quarter Second quarter Third quarter Fourth quarter (January-March) (April-June) (July-September) (October-December) 7 / 246 ANNUAL REPORT 2022 Operating revenue 3,832,515,081.07 4,103,236,061.48 4,247,364,892.75 1,855,924,504.15 Net profit attributable to shareholders 340,584,126.98 386,990,647.80 454,728,429.61 81,301,725.70 of the Company Net profit attributable to shareholders of the Company after deducting non- 334,829,313.37 380,916,164.92 445,285,432.32 73,307,273.34 recurring profit or loss Net cash flows from operating 1,131,694,376.54 1,567,537,555.56 1,503,308,149.18 -449,891,822.74 activities Remarks on differences between quarterly data and data disclosed in periodic report □ Applicable √ Not applicable X. Non-recurring profits or loss √ Applicable □ Not applicable Monetary unit: RMB Yuan Note No. (if Items Year 2022 Year 2021 Year 2020 applicable) Gains/ Losses on disposal of non- -2,686,096.87 -9,751,391.35 34,164,203.38 current assets Government grants included in profit or loss (excluding those closely related to operating activities of the Company, 56,173,947.41 49,841,416.83 69,735,729.36 satisfying government policies and regulations, and continuously enjoyed with certain quantity/quota based on certain standards) Net profit on subsidiaries acquired through business combination under 1,133,174,334.09 common control from the beginning of the period to the combination date Gains or losses on changes in fair value of held-for-trading financial assets, derivative financial assets, held-for-trading financial liabilities and derivative financial liabilities, and investment income from disposal of held-for-trading 11,322,859.61 15,893,505.64 8,832,550.54 financial assets, derivative financial assets, held-for-trading financial liabilities, derivative financial liabilities and other debt investments, excluding those arising from hedging business related to operating activities The reversed provision for impairment of receivables and 368,172.05 contract assets based on impairment testing on an individual basis Other non-operating income or 4,495,553.47 6,356,848.71 -14,500,100.54 expenses Other profit or loss satisfying the 1,802,741.69 definition of non-recurring profit or 8 / 246 ANNUAL REPORT 2022 Note No. (if Items Year 2022 Year 2021 Year 2020 applicable) loss Less: Enterprise income tax 15,007,349.22 15,591,614.27 22,976,031.18 affected Non-controlling interest 27,203,082.00 23,358,788.62 605,207,124.56 affected (after tax) Total 29,266,746.14 23,389,976.94 603,223,561.09 Remarks on other profit or loss satisfying the definition of non-recurring profit or loss and remarks on defining non- recurring profit or loss listed in the “Interpretation Pronouncement on Information Disclosure Criteria for Public Companies No. 1 – Non-Recurring Profit or Loss” as recurring profit or loss. □ Applicable √ Not applicable XI. Items measured at fair value √ Applicable □ Not applicable Monetary unit: RMB Yuan Effect on current Items Opening balance Closing balance Increase/Decrease profit before tax Held-for-trading 501,088,888.89 -501,088,888.89 11,322,859.61 financial assets Other equity instrument 13,210,379.78 14,303,331.73 1,092,951.95 344,606.28 investments Derivative financial 3,829,356.40 3,829,356.40 assets Derivative financial 2,616,336.56 2,616,336.56 liabilities Total 514,299,268.67 20,749,024.69 -493,550,243.98 11,667,465.89 XII. Others □ Applicable √ Not applicable SECTION III MANAGEMENT’S DISCUSSION AND ANALYSIS I. Discussion and Analysis on Business Situation In 2022, external factors affected the Company’s production and sales in some of its key markets. While prioritizing the health and safety of employees, the Company took proactive measures to seize market opportunities, which yielded yet another growth in sales, revenue and profit, successfully concluding Sail 22 and laying a solid foundation for Sail 27. In 2022, beer enterprises above designated size in China produced 35.687 million kiloliters of beer, up sightly by 1.1% year on year (Data source: National Bureau of Statistics; statistic). In 2022, the Company’s sales volume outperformed the industry level with a year-on-year growth of 2.4%. (I) Brands. In 2022, the Company carried on Sail 22 with focused and extensive efforts. With diversified product mix and brands following the asset restructuring, and a brand portfolio featuring “International Premium Brands + Local Power Brands”, the Company has continued to drive product premiumization and innovate its sales model. In terms of local brands, the Company continued to enhance its core competitiveness in key markets and drive premiumization growth through R&D and innovation. In the first quarter of 2022, the Chongqing brand launched Prime Brew in the premium price zone, which achieved expected growth and received positive market response. An 9 / 246 ANNUAL REPORT 2022 experience store in collaboration between the brand and "Hou Hot Pot" began soft opening on East Nanjing Road, Shanghai at the end of 2022, which will further boost the consumption scenario of “eating Chongqing hot pot and drinking Chongqing beer”. It also represents the Company’s attempt to integrate the two industries—advanced manufacturing industry and modern service industry. The Wusu brand continued to strengthen its hardcore image. With Mr. Wu Jing as the new face of the brand, Wusu’s national visibility heightened rapidly, accelerating its pace of expansion nationwide. In the mean time, the brand’s product portfolio was further improved. The launch of Wusu Dark Lager and Wusu White Beer in the first quarter of 2022 effectively drove premiumization and captured new growth opportunities. Wusu Big Big Q started soft opening in Joy City, Shanghai at the end of 2022, using the concept of barbecue to create an offline experience scenario for customers to enjoy Wusu. The Company has continued to invest in the Shancheng brand and bring the brand closer to consumers through channel marketing activities such as “Beer Open to Win”. In 2022, Shancheng saw double-digit growth in the Chongqing region. In respect of international brands, through its new spokespersons and a variety of marketing campaigns with attitude, Tuborg conveyed its “WHY NOT” brand attitude to young people, expanding its market nationwide and establishing itself as a young international brand. Tuborg Pure Draft accelerated growth, driving Tuborg’s premiumization and establishing itself as another hit product alongside Tuborg Green. Carlsberg saw sustained volume growth by continuing to engage with young consumers through art and innovation. During the Spring Festival 2022, Carlsberg worked with a world-renowned artist to launch a limited edition packaging to celebrate the Year of the Tiger, further promoting its brand image as youthful and premium. Capitalizing on the occasion of its 175th anniversary, Carlsberg launched limited special brews in June 2022, which quickly sold out. The brand then collaborated with artists to create 175th anniversary commemorative packaging based on the concept of “City Torrent: Flowing from Denmark to China”, conveying the brand’s pursuit of better while meeting consumers’ needs for art and quality. Additionally, Carlsberg celebrated 30 years of its partnership with Liverpool FC by launching limited edition packs and marketing campaigns, which were well-received and drove consumer purchases. Kronenbourg 1664 saw heightened brand visibility thanks to its positioning as a symbol of French elegance and the influence of its global brand spokesperson, Ms. Dilireba. The brand’s “Good Taste with A Twist” positioning further took hold among consumers. 1664 Prestige, a beer brewed with French champagne yeast, was launched in 2022, further boosting French romance. The product was awarded the “Premium Selection White Beer New Arrival Award” by Hurun Report, making it the only award-winning beer in this category. Somersby saw rapid growth in 2022. The launch of three new flavors—mango lime, watermelon, and elderflower lime—brought the total number of flavors on offer to five. Its brand awareness continued to grow thanks to a combination of diverse and effective marketing campaigns. Craft brands continued to enhance their brand volume and visibility through personalized social media communication and campaigns. Among them, Jing-A held a Spring Festival Challenge on Douyin (The Chinese version of Tiktok), Grimbergen revitalized its image. Brooklyn created an American-style dining scene in partnership with Shake Shack, an Internet-famous hamburger brand, thereby attracting young consumers while expanding channels and encouraging product tryouts. (II) Sales. The Company’s position in core markets was strengthened with continued growth in revenue/hl. The Big City Plan accelerated with the addition of 15 new big cities. Sub-premium and above products accounted for more than 80% of the total therein. Despite some big cities being affected by external factors, the overall growth of the Big City Plan was in line with the Company’s expectation. Notably, the average growth rate of the newly added big cities was higher than that of the overall Big City Plan. With respect to new retail, e-commerce has enabled brand resources to be maximized. Based on consolidated partnership with Tmall and JD.com, the Company achieved rapid growth by accelerating business expansion on Douyin and community group purchase. In addition, the Company innovated its marketing strategy by embracing 10 / 246 ANNUAL REPORT 2022 e-commerce as an important brand-building window. Focusing on effect-based media operations, audience operations, content operations and creation of platform marketing IP, the Company turned e-commerce events into brand events, which not only improved brand recognition and favorability, but also greatly increased the number of new users and conversions. O2O saw rapid growth in GMV, with business increase observed across catering&takeaway O2O, modern channel O2O and traditional channel O2O. The Company continued to attract new business partners by collaborating with different industries. The Company achieved a record high market share in traditional channels by the end of the year. While strengthening its on-trade channel, the Company also increased its market share in the off-trade channel through various initiatives, including consumer events, promotional packs, portfolio displays, and improved in-store implementation standards. The digitization of the Company’s business processes and sales channels has been accelerated to drive more business opportunities. (III) Supply chain. The Company further optimized its supply network layout. In 2022, Xichang Brewery and Korla Brewery completed capacity expansion, and Wanzhou Brewery resumed production, which effectively supported the growing market demand. With an additional investment of 462 million yuan, Foshan Brewery will be built into a new, modern brewery that is green, safe, advanced, and efficient. Committing to providing consumers with higher quality beer, the Company held a taste evaluation competition. A number of metrics, including the optimization of fermentation process, yeast activity management, and improving carbon dioxide purity, were used to improve the result of taste evaluation and meet consumers’ taste for high-quality beer. For the second year in a row, the Company won the most awards in the International Beer Challenge held by China Alcoholic Drinks Association, with 11 products awarded, including Chongqing Extra Malt, which was on the awarded list for the third time. (IV) ESG. In 2022, the Company successfully completed all tasks under its sustainable development programme “Together Towards Zero” and launched the ESG programme “Together Towards Zero and Beyond (TTZAB)”. In terms of “ZERO Accidents Culture”, the Company actively promoted risk assessments for high-risk operations, implemented work permit requirements and monitored construction sites. A three-level safety training system was introduced by the Company to enhance employee safety awareness and ability. In 2022, its total number of lost- time accidents decreased by 92% compared with 2018, effectively ensuring the safety of employees. In terms of “ZERO Carbon Footprint”, the Company’s breweries have reduced CO2 emissions by 75% per hectolitres (hl) of beer produced since 2015, exceeding the Group’s target of a 50% reduction by 2022. This achievement is thanks to the use of 100% renewable electricity at the Company’s breweries since 2020, as well as improvements in combined energy (thermal and electricity) efficiency. Between 2015 and 2022, the Company reduced a total of 230,000 tons of CO2, which is equivalent to planting more than 9,000 mu (an equivalent of around 600 hectares) of trees and taking more than 80,000 cars off the road for a year. In terms of “ZERO Farming Footprint”, the Company attached great importance to grains recycling. By leveraging the law of nature and ecosystemic approaches to maximize the potential of spent grains and waste yeast, and recycling by-products from brewing for agriculture and husbandry purposes, a harmony between the Company and nature was realized. In 2022, about 190,000 tons of spent grains and approximately1.66 million tons of waste yeast were collected and recycled by the Company. In terms of “ZERO Packaging Waste”, the Company used glass bottles made from 60% recycled materials, along with labels made from eco-friendly ink and PVC-free materials, which minimized environmental pollution caused by materials. Also, more lightweight glass bottles were sourced during the procurement process, which reduced 10,000 tons of glass consumption and more than 3,000 tons of carbon emissions throughout the year. In terms of “ZERO Water Waste”, the Company’s breweries have cut water consumption to 2.24 hectolitres (hl)/hl in 2022 from 3.87 hl/hl in 2015. That is a 42.12 % reduction, beating our 25% target for 2022. In general, its major breweries reduced their water use to 2.1 hl/hl in 2022, far lower than the industry average of 3.5 hl/hl. Water efficiency at Dazhulin Brewery in Chongqing was down to 1.77 hl/hl, reaching an industry-leading level globally. 11 / 246 ANNUAL REPORT 2022 In terms of “ZERO Irresponsible Drinking”, the Company participated in the National Responsible Drinking Awareness Week, and actively communicated responsible drinking messages through brand events such as the Tuborg Music Festival. In 2022, Chongqing and Tuborg spokespersons jointly advocated for responsible drinking, urging minors not to drink, and further spreading the idea of responsible drinking to over 4.5 million consumers. II. Information on the Company's Industry during the Reporting Period The data of National Bureau of Statistics showed that the output of national above brewery enterprise was 35.687 million kiloliters in 2022, with year-on-year growth of 1.1%. III. Information on the Companys Business Conditions during the Reporting Period The Company is mainly engaged in the business of manufacturing and sales of beer products. In terms of operation mode, the Company implements regional management. In the link of purchase, it adopts the centralized purchase and scattered orders; in the link of supply, it organizes the production and inventory according to “determining production based on sales”, and in the link of sales, distributor agency dominates, and the direct marketing assist. IV. Analysis of Core Competitiveness during the Reporting Period √ Applicable □ Not applicable The company is the operating platform in China of the world-leading Carlsberg Group Denmark. China is the largest market of Carlsberg Group in the world. According to the Sail 27 strategy towards 2027, "Keep Wining in China" is listed as one of the strategic priorities of Carlsberg Group to become a successful, professional and attractive beer company in China. In terms of market channels, the company has a marketing network covering all provinces, regions and cities across the country. We have high-quality customer resources, strong brand advantages and stable sales channels in each dominant market area. In terms of brand portfolio, the company can meet the diversified needs of consumers for high-quality beer relying on the strong brand portfolio of "International Premium Brands + Local Power Brands". International brands include Carlsberg, Tuborg, Kronenbourg 1664, Grimbergen, Brooklyn, Somersby, etc., and local brands include Wusu, Chongqing, Shancheng, Xixia, Dali, WFSM, Jing-A, etc. In terms of supply chain network, the company possesses 26 breweries, forming a joint force for efficient operation by linkage in a wide area in the procurement, production, logistics and other links. In terms of marketing and promotion, the company improves the efficiency of marketing and promotion by complementing the overall operation and brand with clearer brand image and richer marketing methods. V. Main operating conditions during the reporting period In 2022, the Company sold 2.8566 million kiloliters of beer, an increase of 2.41% compared with 2.7894 million kiloliters in 2021. The operating revenue in 2022 was 14.039 billion yuan, an increase of 7.01% compared with 13.119 billion yuan in 2021. Net profit attributable to shareholders of the Company in 2022 amounted to 1.264 billion yuan, an increase of 8.35% compared with 1.166 billion yuan in 2021. Net profit attributable to shareholders of the Company after deducting non-recurring profit or loss in 2022 amounted to 1.234 billion yuan, an increase of 8.00% compared with 1.143 billion yuan in 2021. (I) Main business analysis 1. Analysis on changes in relevant items of income and cash flow statement Monetary unit: RMB Yuan 12 / 246 ANNUAL REPORT 2022 Current period Preceding period Percentage of Items cumulative comparative change (%) Operating revenue 14,039,040,539.45 13,119,310,688.30 7.01 Operation cost 6,952,428,993.91 6,436,358,227.59 8.02 Selling expenses 2,326,217,227.20 2,212,894,661.26 5.12 Administrative expenses 534,570,348.93 516,877,144.95 3.42 Financial expenses -56,102,848.78 -15,880,844.25 253.27 R&D expenses 110,747,936.06 163,151,284.60 -32.12 Net cash flows from operating 3,752,648,258.54 3,564,787,113.40 5.27 activities Net cash flows from investing -388,086,486.41 -1,151,748,524.33 -66.30 activities Net cash flows from financing -2,133,485,949.36 -2,013,680,615.14 5.95 activities Remarks: Changes in financial expenses is mainly due to the year-over-year increase in interest income. Changes in R&D expenses is mainly due to the decrease in R&D input. Changes in net cash flows from investing activities is mainly due to the withdrawal of unmatured structural deposit at the end of period of last year. Remarks on significant changes in business type, profit composition or source in the current period. □ Applicable √ Not applicable 2. Revenue and cost analysis √ Applicable □ Not applicable (1). Information on main businesses by industry, product, region and sales model Monetary unit: RMB Yuan Information on main businesses by industry Increase or Increase or Increase or decrease in decrease in decrease in Gross operating operating gross margin By industry Operating revenue Operating cost margin revenue cost compared (%) compared compared with the last with the last with the last year (%) year (%) year (%) -0.29 Beer 13,696,216,606.60 6,702,990,258.86 51.06 6.71 7.35 percentage point Information on main businesses by product Increase or Increase or Increase or decrease in decrease in decrease in Gross operating operating gross margin By product Operating revenue Operating cost margin revenue cost compared (%) compared compared with the last with the last with the last year (%) year (%) year (%) 13 / 246 ANNUAL REPORT 2022 -1.40 International 4,873,186,731.33 2,275,681,882.60 53.30 7.93 11.26 percentage brand points 0.28 Local brands 8,823,029,875.27 4,427,308,376.26 49.82 6.04 5.45 percentage point Information on main businesses by region Increase or Increase or Increase or decrease in decrease in decrease in Gross operating operating gross margin By region Operating revenue Operating cost margin revenue cost compared (%) compared compared with the last with the last with the last year (%) year (%) year (%) -1.83 Northwestern 3,979,442,915.78 2,191,358,850.08 44.93 -5.09 -1.84 percentage region points -0.05 Central region 5,905,954,274.57 3,025,074,418.25 48.78 11.10 11.21 percentage point -0.19 Southern 3,810,819,416.25 1,486,556,990.53 60.99 14.57 15.13 percentage region point Information on main businesses by sales model Increase or Increase or Increase or decrease in decrease in decrease in Gross operating operating gross margin Sales model Operating revenue Operating cost margin revenue cost compared (%) compared compared with the last with the last with the last year (%) year (%) year (%) Direct marketing -0.25 (including 67,790,493.66 31,085,716.59 54.14 -9.77 -9.29 percentage group point purchase) -0.30 Wholesale 13,628,426,112.94 6,671,904,542.27 51.04 6.80 7.44 percentage agency point Statement of main businesses by industry, product, region and sales model Not applicable (2). Analytical statement of production and sales volume √ Applicable □ Not applicable Main Unit Production Sales Inventory Increase or Increase or Increase or 14 / 246 ANNUAL REPORT 2022 products volume volume volume decrease of decrease decrease production of sales of volume volume inventory compared compared volume with that of with that compared last year of last year with that (%) (%) of last year (%) International kl 764,498.79 774,106.28 88,951.65 4.94 6.18 29.41 brand Local kl 2,017,694.30 2,082,511.24 197,665.82 0.13 1.08 12.29 brands Statement of production and sales volume Not applicable (3). Performance of major purchase contract and major sales contract □ Applicable √ Not applicable (4). Cost analysis statement Monetary unit: RMB Yuan By industry Proportion Proportion of changes Proportion of the in the of the amount in amount of amount in Amount of the Statement Amount of this the same this period By industry Cost items this period same period in of period period of compared out of the the last year situation last year out with the total cost of the total same period (%) cost (%) of last year (%) Alcohol, beverage and Raw refined tea material 4,353,191,926.22 64.94 4,130,177,575.61 66.15 5.40 manufacturing cost industry Alcohol, beverage and refined tea Labor cost 581,342,607.96 8.67 592,464,471.79 9.49 -1.88 manufacturing industry Alcohol, beverage and Production refined tea 672,881,885.81 10.04 624,542,924.69 10.00 7.74 costs manufacturing industry Alcohol, beverage and Others 1,095,573,838.87 16.34 896,764,387.39 14.36 22.17 refined tea 15 / 246 ANNUAL REPORT 2022 manufacturing industry Total 6,702,990,258.86 100.00 6,243,949,359.48 100.00 7.35 By products Proportion Proportion of changes Proportion of the in the of the amount in amount of amount in Amount of the Statement Amount of this the same this period By product Cost items this period same period in of period period of compared out of the the last year situation last year out with the total cost of the total same period (%) cost (%) of last year (%) Raw Beer material 4,353,191,926.22 64.94 4,130,177,575.61 66.15 5.40 cost Beer Labor cost 581,342,607.96 8.67 592,464,471.79 9.49 -1.88 Production Beer 672,881,885.81 10.04 624,542,924.69 10.00 7.74 costs Beer Others 1,095,573,838.87 16.34 896,764,387.39 14.36 22.17 Total 6,702,990,258.86 100.00 6,243,949,359.48 100.00 7.35 Statement of cost analysis and other situation None (5). The equity change of main subsidiaries during the reporting period caused change of the merge scope □ Applicable √ Not applicable (6). Significant changes or adjustment of business, products or services of the Company in the reporting period □ Applicable √ Not applicable (7). Information on major sales customers and suppliers A. Information on main sales customers of the Company √ Applicable □ Not applicable The sales volume of top five customers is RMB 637.7931 million, accounting for 4.54% of the total annual sales; Where, the sales volume of related party in the sales volume of top five customers is RMB 0, accounting for 0% of the total annual sales. The proportion of sales to a single customer during the reporting period exceeds 50% of the total amount; there are new customers among the top five customers or a few customers are heavily relied on □ Applicable √ Not applicable B. Information on main suppliers of the Company √ Applicable □ Not applicable The purchase amount of top five suppliers is RMB 1,266.98 million, accounting for 11.95% of the total annual purchase amount; wherein, the purchase amount of related party in the sales volume of top five suppliers is RMB 0, accounting for 0% of the total annual purchase amount. The proportion of purchase to a single supplier during the reporting period exceeds 50% of the total amount; there 16 / 246 ANNUAL REPORT 2022 are new suppliers among the top five suppliers or a few suppliers are heavily relied on. □ Applicable √ Not applicable Other remarks None 3. Expenses √ Applicable □ Not applicable The rise in selling expense is mainly due to increase of market advertising expense to drive the business development. The rise in administration expense is Mainly due to annual wage adjustment and increase of IT expense to offset the decrease of intermediary fee. 4. R&D input (1). Details on R&D input √ Applicable □ Not applicable Monetary unit: RMB Yuan Amount expensed in the current period 110,747,936.06 Amount capitalized in the current period 0.00 Total R&D input 110,747,936.06 % to total operating revenue 0.79 Proportion of R&D input capitalized (%) 0.00 (2). Information table of R&D personnel √ Applicable □ Not applicable Number of the Company’s R&D personnel 1,132 Percentage of the number of R&D personnel in the total 16.73 number of personnel of the Company (%) Educational background structure of R&D personnel Category of the educational background structure Number of persons of the educational background structure Doctoral candidate 0 Postgraduate 12 Undergraduate 167 Junior college 346 Senior high school and below 607 Age structure of R&D personnel Category of the age structure Number of persons of the age structure Below 30 years old (exclusive) 121 30-40 years old (including 30 years old but excluding 265 40 years old) 40-50 years old (including 40 years old but excluding 451 50 years old) 50-60 years old (including 50 years old but excluding 295 17 / 246 ANNUAL REPORT 2022 60 years old) 60 years old and above 0 (3). Statement of situation □ Applicable √ Not applicable (4). Reasons for significant changes in the composition of R&D personnel and their effects on the Company’s future development □ Applicable √ Not applicable 5. Cash flows √ Applicable □ Not applicable Net cash in operating activities: The net inflow increased by RMB 187.8611 million, mainly due to the increase in cash received due to sales of goods in this year compared to the same period of last year. Net cash in investment activities: The net outflow is decreased by RMB 763.662 million, mainly due to withdrawal of unmatured structural deposit at the end of period of last year. Net cash in financing activities: The net inflow is increased by RMB 119.8053 million, mainly due to repayment of bank loan in the same period of last year, absence of related issues this year but more profit distribution than that in the same period of last year. (II) Statement of major changes in profits resulted from non-main business □ Applicable √ Not applicable (III) Analysis on assets and liabilities √ Applicable □ Not applicable 1. Details on assets and liabilities Monetary unit: RMB Yuan Percentage of Items Closing balance % to total December 31, 2021 % to total Reasons for changes change (%) Improvement of operating Cash and bank balances 3,397,877,592.02 27.19 2,355,194,070.43 20.42 44.27 performance and operating efficiency. Held-for-trading Decrease in bank structured 501,088,888.89 4.34 -100.00 financial assets deposits. Mainly due to the new Derivative financial 3,829,356.40 0.03 aluminum hedging business assets in the current period. Mainly due to the improvement in the credit Accounts receivable 65,511,539.08 0.52 109,244,673.73 0.95 -40.03 management efficiency of accounts receivable. Mainly due to the increase Other receivables 17,619,026.18 0.14 11,830,136.29 0.10 48.93 in land disposal fees receivable. Mainly due to the increase Other current assets 109,533,473.56 0.88 83,454,893.33 0.72 31.25 in prepaid tax and input tax to be credited. Mainly due to the Foshan Construction in progress 395,295,204.91 3.16 162,076,985.24 1.41 143.89 Factory Project. Mainly due to the new lease of office in Kingold Century Right-of-use assets 100,306,926.11 0.80 39,218,000.00 0.34 155.77 Building in the current period. Mainly due to changes in Deferred tax assets 732,407,316.03 5.86 1,062,310,605.52 9.21 -31.06 income tax rates. 18 / 246 ANNUAL REPORT 2022 Mainly due to the prepayments for Other non-current assets 89,540,749.40 0.72 3,636,075.76 0.03 2,362.57 construction equipment of Foshan Factory Project. Mainly due to the new Derivative financial 2,616,336.56 0.02 aluminum hedging business liabilities in the current period. Mainly due to the decrease Tax payables 255,387,461.35 2.04 395,925,319.93 3.43 -35.50 in enterprise income tax payables. Mainly due to the new lease of office in Kingold Century Lease liabilities 77,928,597.87 0.62 16,951,000.00 0.15 359.73 Building in the current period. Other remarks None 2. Details on overseas assets □ Applicable √ Not applicable 3. Details on restrictions of main assets as of the end of the reporting period □ Applicable √ Not applicable 4. Other remarks □ Applicable √ Not applicable (IV) Industry operational information analysis √ Applicable □ Not applicable Please refers to the analysis of the operating information of the alcohol manufacturing industry for details. 19 / 246 ANNUAL REPORT 2022 Operational information analysis on the alcohol manufacturing industry 1 Basic information of the industry √ Applicable □ Not applicable Please refer to Section III “VI. Discussion and analysis on the future development of the Company” of this report for details. 2 Capacity situation Existing capacity √ Applicable □ Not applicable Unit: million kiloliter Name of main factory Design capacity Actual capacity Carlsberg (China) Brewery Industry and Trade Limited 50.00 32.00 Carlsberg Chongqing Brewery Co., Ltd. 40.00 35.00 Chongqing Brewery Yibin Co., Ltd. 35.00 32.00 Ningxia Xixia Jianiang Brewery Co., Ltd. 30.00 27.00 Jiulongpo Branch of Carlsberg Chongqing Brewery Co., Ltd. 28.00 18.00 Carlsberg Tianmuhu Brewery (Jiangsu) Co., Ltd. 26.00 23.00 Xinjiang Wusu Beer Co., Ltd. 25.00 23.00 Kunming Huashi Brewery Co., Ltd. 25.00 24.00 Hechuan Branch of Carlsberg Chongqing Brewery Co., Ltd. 18.00 11.00 Carlsberg Brewery (Anhui) Co., Ltd. 16.00 15.00 Capacity under construction √ Applicable □ Not applicable Monetary unit: RMB ten thousand Yuan Name of capacity under Planned investment Investment amount during Cumulative construction amount the reporting period investment amount Foshan newly built capacity 149,193 37,977 37,977 project Xichang packaging expansion 10,188 7,311 8,566 project Tianmuhu capacity expansion 3,291 1,780 2,886 project Tiandao capacity expansion project 1,950 1,062 1,844 Wusu saccharification capacity 927 614 901 expansion project Expansion project of Korla Factory 11,589 3,740 3,740 Resumption of production project 4,200 3,795 3,795 of Wanzhou Factory Capacity calculation standard √ Applicable □ Not applicable The capacity shall be comprehensively measured according to the time requirements of beer production process and the fixed assets allocation of the brewery. 3 Closing inventory volume of the product 20 / 246 ANNUAL REPORT 2022 √ Applicable □ Not applicable Unit: kl Finished beer Semi-finished beer (including basic beer) 286,617.48 153,398.08 Inventory impairment risk prompt □ Applicable √ Not applicable 4 Product situation √ Applicable □ Not applicable Monetary unit: RMB ten thousand Yuan Year- Year- Year- Major Product Sales on- Sales-output Sales on- Output (kl) on-year representative grade volume (kl) year ratio (%) revenue year (%) brands (%) (%) Wusu, Carlsberg, Premium 677,535.72 4.24 673,604.06 1.82 99.42 494,699.91 5.67 Kronenbourg 1664 Tuborg, Mainstream 1,598,442.21 -1.05 1,656,412.19 2.60 103.63 704,420.75 7.56 Chongqing, Dali Shancheng, Economic 506,215.16 5.89 526,601.27 2.57 104.03 170,501.00 6.25 Tianmuhu Product grade division standard √ Applicable □ Not applicable The product grade is divided according to the consumption price. If the consumption price is RMB 10 or above, it is premium; if the consumption price is RMB 6-10, it is mainstream; if the consumption price is below RMB 6, it is economic. Product structure change and business strategy √ Applicable □ Not applicable The company continued to promote the 6+6 brand strategy, actively coped with the influence of external adverse factors, and finally achieved the development of Carlsberg, Tuborg, Chongqing, Shancheng and other brand products in different regions through channel construction promotion, new retail and online sales channel expansion and other measures. 5 Information on raw materials purchase (1). Purchase model √ Applicable □ Not applicable The Company mainly adopts the purchase mode of centralized purchase and scattered orders. (2). Purchase amount √ Applicable □ Not applicable Monetary unit: RMB ten thousand Yuan Categories of raw Current purchase Purchase amount of the Proportion in the total purchase amount materials amount last period of the current period (%) 21 / 246 ANNUAL REPORT 2022 Raw materials for 154,047.40 137,031.00 29.48 brewing Packaging materials 343,183.76 312,042.00 65.66 Energy 25,403.60 23,748.10 4.86 Total 522,634.76 472,821.10 100.00 6 Information on sales (1). Sales model √ Applicable □ Not applicable The Company mainly adopts the sales model based on wholesale agency and supplemented by direct marketing. (2). Sales channel √ Applicable □ Not applicable Monetary unit: RMB ten thousand Yuan Operating revenue Operating revenue Sales volume of this Sales volume of the Channel type of this period of the last period period (kl) last period (kl) Direct marketing (including group 6,779.05 7,513.39 7,325.31 7,807.26 purchase) Wholesale agency 1,362,842.61 1,276,019.43 2,849,292.21 2,781,614.96 (3). Regional situation √ Applicable □ Not applicable Monetary unit: RMB ten thousand Yuan Operating Operating Proportion Sales volume Sales volume Proportion revenue of Region name revenue of of this of this period of the last of this the last this period period (%) (kl) period (kl) period (%) period Northwestern 397,944.29 419,298.92 29.06 786,139.91 891,921.00 27.52 region Central region 590,595.43 531,610.82 43.12 1,346,071.46 1,221,355.09 47.12 Southern 381,081.94 332,623.08 27.82 724,406.15 676,146.12 25.36 region Region division standard √ Applicable □ Not applicable According to the management area, the Company is divided into northwestern region, central region and southern region. (4). Information on distributors √ Applicable □ Not applicable Unit: Nr. The quantity of Decreased quantity Increased quantity during Region name distributors at the end of during the reporting the reporting period the reporting period period Northwestern region 1,248 453 421 22 / 246 ANNUAL REPORT 2022 Central region 1,329 216 536 Southern region 478 186 355 Statement of situation □ Applicable √ Not applicable Information on management of distributors √ Applicable □ Not applicable The Company attaches great importance to the capacity building of its distributors, leveraging its distributor network to implement market planning, channel operation strategies, product promotion strategies and other marketing strategies. The Company enhances distribution management through its distributor excellence program. The program assesses distributors based on eight competency indicators, and gradually forms a hierarchical system of distributors with corresponding management policies and enablement resources. The Company has established a channel mode and distributor ability quadrants suitable for local development, scientifically and reasonably set sales regions and channel segmentations, and gradually improved channel planning, channel coverage and terminal control capabilities through strategic cooperation and daily operation systems based on the win-win and common development goals, according to different market stages and competitive environments. This approach aims to expand the strength of distributors and improve their operational efficiency. (5). Information on online sales □ Applicable √ Not applicable Future online business strategy √ Applicable □ Not applicable The company will make full use of its rich brand resources and accelerate its business expansion in social e- commerce, community group purchase and O2O on the basis of consolidating the cooperation with Tmall and JD.com, and will give full play to the role of social e-commerce in creating new products and brand building. Through in-depth cooperation with various business divisions, the community group purchase and EB2B channels will be further explored to become the most important supplement to the coverage of traditional offline channels and the new driving force for channel digitalization. 7 Company revenue and cost analysis (1). Disclosure of main business compositions of the Company by different types √ Applicable □ Not applicable Monetary unit: RMB Yuan Year-on- Year-on- Gross Year-on- Division type Operating revenue Operating cost year (%) year (%) margin (%) year (%) By product grade Premium 4,946,999,115.28 5.67 1,917,997,267.76 7.09 61.23 -0.51 Mainstream 7,044,207,509.66 7.56 3,783,748,057.04 7.38 46.29 0.09 Economic 1,705,009,981.66 6.25 1,001,244,934.06 7.73 41.28 -0.80 Subtotal 13,696,216,606.60 - 6,702,990,258.86 - - - By sales channel Direct marketing (including 67,790,493.66 -9.77 31,085,716.59 -9.29 54.14 -0.25 group purchase) Wholesale agency 13,628,426,112.94 6.80 6,671,904,542.27 7.44 51.04 -0.30 Subtotal 13,696,216,606.60 - 6,702,990,258.86 - - - 23 / 246 ANNUAL REPORT 2022 By regional branch Northwestern region 3,979,442,915.78 -5.09 2,191,358,850.08 -1.84 44.93 -1.83 Central region 5,905,954,274.57 11.10 3,025,074,418.25 11.21 48.78 -0.05 Southern region 3,810,819,416.25 14.57 1,486,556,990.53 15.13 60.99 -0.19 Subtotal 13,696,216,606.60 - 6,702,990,258.86 - - - Statement of situation □ Applicable √ Not applicable (2). Information on cost √ Applicable □ Not applicable Monetary unit: RMB ten thousand Yuan Amount of Amount of Proportion of the amount in this Cost items the last Year-on-yea (%) this period period out of the total cost (%) period Raw material cost 435,319.19 413,017.76 64.94 5.40 Labor cost 58,134.26 59,246.45 8.67 -1.88 Production costs 67,288.19 62,454.29 10.04 7.74 Others 109,557.38 89,676.44 16.34 22.17 Total 670,299.03 624,394.94 100.00 7.35 Statement of situation □ Applicable √ Not applicable 8 Other situations □ Applicable √ Not applicable (V) Analysis of investment situation Overall analysis of external equity investment □ Applicable √ Not applicable 1. Major equity investment □ Applicable √ Not applicable 2. Major non-equity investment □ Applicable √ Not applicable 3. Financial assets measured at fair value √ Applicable □ Not applicable Financial assets measured at fair value mainly include held-for-trading financial assets, derivative financial assets, equity investment instruments and derivative financial liabilities of the Company. Please refer to item VII 2, 3, 18 and 34 of Section X for details. Details on security investment □ Applicable √ Not applicable Details on privately fund investment 24 / 246 ANNUAL REPORT 2022 □ Applicable √ Not applicable Details on derivative investments √ Applicable □ Not applicable Pursuant to the “Proposal on Conducting Aluminum Hedging by the Subsidiary of the Company” deliberated and approved by the Company’s First Extraordinary General Meeting of Shareholders in 2022 and the “Proposal on the Adjustment of Implementation Plan for Aluminum Hedging” deliberated and approved by the Company’s 2021 Annual General Meeting of Shareholders, the Company and its subsidiaries intend to, in legal compliance without affecting normal operations, invest in aluminum hedges at an appropriate time using self-owned funds of not more than USD 70.00 million. As of December 31, 2022, the Company’s position amounted to USD 28,145,570.00, which has not yet expired. 4. Information on special progress of major assets restructuring and consolidation during the reporting period □ Applicable √ Not applicable (VI) Sales of major assets and equity □ Applicable √ Not applicable (VII) Analysis on major entities controlled or invested by the Company √ Applicable □ Not applicable Monetary unit: RMB Yuan Name of Place of Business Registered Holding Operating Categories Business Scope Operating profit Net profit subsidiaries registration nature capital proportion revenue Carlsberg Production and Chongqing Holding Beer 850,000,0 sales of beer Chongqing 51.42% 14,039,040,539.45 3,387,476,921.46 2,675,360,157.56 Brewery subsidiary industry 00.00 manufacturing Co., Ltd. and sales (VIII) Information on structural subjects controlled by the Company □ Applicable √ Not applicable VI. Discussion and analysis on the future development of the Company (I) Industry structure and trend √ Applicable □ Not applicable After reaching its sales peak in 2014, China’s beer industry has been continuously declining. Despite a slight increase in production in 2021 and 2022, the industry capacity has decreased by 27.7% compared with 2014. Against this backdrop, the landscape of China’s beer industry exhibits the following characteristics: 1. Competition remains fierce. The five major beer companies in China hold a total market share of more than 90%. As they continue to expand their businesses in their respective traditional dominant markets, they also face intense competition in local markets. In addition, niche brands and imported beers are directly competing with the big five in certain segments of the market. 2. Consumption upgrades. Consumers are placing more emphasis on brand, quality, consumption experience and health impact. Premiumization is no longer just a commonly held belief within the industry, but has become the main focus of industry competition, driving sustained growth in sales of mid-to-high-end beers. 25 / 246 ANNUAL REPORT 2022 3. Diversification. Consumer demand has gone beyond what the traditional mainstream beers can offer and become more diverse. Major brewers are increasingly focusing on craft & specialty beers, cider, alcohol-free brews and other related products. 4. High-quality development. In recent years, China’s beer industry has embarked on the path of high-quality development by providing more premium beers to meet consumers’ demand for higher quality beer. Despite the impact of external factors in recent years, major brewers have shown good resilience and achieved overall good top and bottom line performance. With respect to industry trends, the Company’s management remains confident that high-quality development is both the goal and the path for China’s beer industry. In the new normal of economic development, beer enterprises can only achieve long-term steady growth if they adhere to a path of high-quality development. (II) Development strategy of the Company √ Applicable □ Not applicable As a member of Carlsberg Group, the company conducts its business under the guidance of Carlsberg Sail 27 strategy. The Sail 27 strategy towards 2027 is built on the solid foundation of Sail 22 and aims to make the company a successful, professional, and attractive beer company in the markets in which it does business. Sail 27 has five strategic priorities: 1. Portfolio choices: Step up in premium; Strengthen mainstram core beer; Accelerate AFB; Grow beyond beer; 2. Geographic priorities: Keep wining in China; Build more large profit strongholds; Accelerate high-potential markets; 3. Execution excellence: Build wining portfolios; Excel at point of purchase; Master digital connections; Manage supply chain E2E; Drive next generation data, process and tecenology; 4. Wining culture: Purpose and performance driven people; Together Towards Zero and Beyond; Live by our compass. 5. Finding our journey: freeing up resources, investing more in brands, allocating more investment to certain markets, strengthening investment in capacity building and the "Together Towards Zero and Beyond" plan, and mitigating the inflation. In keeping with Carlsberg Group's purpose purpose of brewing for a better today and tomorrow, the company is committed to addressing global challenges such as inequality, climate change and water scarcity through the sustainable development plan of "Together Towards Zero and Beyond", to achieve a series of goals, including "zero carbon footprint", "zero water waste", "zero farming footprint", "zero packaging waste", "zero irresponsible drinking" and "zero accidents culture". (III) Operating plan √ Applicable □ Not applicable As of the disclosure date of this report, the Company is cautiously optimistic about macroeconomic outlook and beer industry prospects for 2023. It is expected that China’s beer industry will enjoy a more favorable development environment in 2023 as the external environment gradually improves and pro-growth policies continue to be implemented. However, there remain challenges such as rising costs, intensifying competition, and consumption recovery not meeting expectations. The Company expects a mid-to-high single digit revenue growth in 2023. To achieve this business objective, the Company will carry on Sail 27 with focused and extensive efforts. With diversified product mix and brands following the asset restructuring, and a brand portfolio featuring “International Premium Brands + Local Power Brands”, the Company will continue to drive product premiumization and innovate its sales model. The Company will focus on the following aspects of work: 1. Brand. Local brands will continue to strengthen their local roots, develop distinct local features, expand product 26 / 246 ANNUAL REPORT 2022 portfolios, and keep driving premiumization. The Chongqing brand will keep exploring ways to interact with the Chongqing hotpot scene in new markets. Dali and Tianmuhu will keep enhancing premiumization and market share. The Wind Flower Snow Moon brand will be revitalized to strengthen its differentiated brand positioning. Wusu will continue to work with its spokesperson Mr. Wu Jing to enhance brand image and national visibility. The marketing campaign “WUSU Chanllenge” will be launched to increase interaction between the brand and young consumers. The campaign will invite influential figures of all walks of life to join the brand in initiating a challenge, aiming to attracting consumers who enjoy competitions and forming groups to participate in challenges with friends. Tuborg will continue to emphasize its “WHY NOT” brand attitude. Through a number of topical marketing campaigns, it will engage with young consumers across the country and create a cool, young and international brand image by exploring the field of music that young people enjoy. In respect of product portfolio, the Company will upgrade Tuborg Pure Draft to better serve various consumer segments and offer young people different brand experiences, meeting diverse consumer needs. Carlsberg will continue to reinforce its two pillars of art and innovation, strengthen its differentiated brand strength, and upgrade its theme marketing in peak seasons. A number of marketing campaigns, including collabration with artists, limited-edition packaging design, and offline immersive activities, will be used to build an international and premium brand image and meet the demands of young consumers for high-quality experience. This will also help accelerate the brand’s expansion in key markets and key channels. Kronenbourg 1664, as a leading super-premium brand, will increment the brand by expanding its product portfolio in 2023. Its visual identity system will be revamped to highlight the brand’s iconic elements. Top celebrity endorsement will be leveraged to grow brand visibility. Offline French-style marketing campaigns will be launched, including the release of limited editions in collaboration with French fashion brands and Chinese trendy brands. Online marketing events will be reinforced, including social-scene-based content and recommendations, to appeal to young people, and offer a more diversified brand experience as the brand continues to scale new heights in the industry. Somersby will enhance brand visibility across the country through a new brand-themed video featuring Ms. Zhao Lusi, the brand’s new spokesperson. The video will highlight how the brand blends perfectly with various settings, including responsible drinking demonstration and camping. In addition, Somersby will also actively leverage the camping trend to penetrate into its target consumers’ daily life from online to offline. It will continue to raise brand awareness through diverse and efficient marketing campaigns. Craft brands will continue to “break the circle” through creative marketing campaigns. Jing-A will boost its brand volume through crossover collaboration, Brooklyn will expand consumer groups and channels by launching brews with greater drinkability. Grimbergen will continue to build its premium image among young consumers by reviving its image. 2. Sales. In 2023, the Company will continue to follow the existing strategy to premiumize products in core market and consolidate market share of its core beer. The Company will continue to expand its Big City Plan while optimizing its product portfolio and strengthening its implementation in key markets. Additionally, the Company will continue to digitize its sales channels. In key on-trade markets, the Company will use its multi-brand product portfolio strategy to capitalize on the recovery and growth of dinning and entertainment sectors. The Company will actively expand a number of high- quality points of purchase, and develop effective products and packaging to boost the vibrancy and promotions of these points of purchase. Also, the Company will improve the capacity building of channel distributors to drive sales. In terms of traditional retail, the Company will continue to drive growth from off-trade channels while maintaining sales growth from large business formats and on-trade channels. Also, the Company will further optimize channel management and implement refined strategies and toolkits tailored to different markets. In respect of near field retail, in addition to convenience stores, community stores, small and medium-sized 27 / 246 ANNUAL REPORT 2022 community chain supermarkets and other small formats, there are also community group purchase and O2O. Community group purchase has effectively improved the distribution of the Company’s various brands in traditional channels, while O2O has enhanced sales. For B2C e-commerce, the focus in 2023 is to accelerate the development of social media e-commerce channels such as Douyin, and play a more important role in new product creation and brand building. The Company will build a more efficient and differentiated distributor management system, implementing refined management. At the same time, it will provide more diverse and differentiated training content for personnel at all levels within distributors, improve the learning system for distributors, and, in particular, strengthen direct communication with distributors by utilizing live streaming platforms. By setting up differentiated capacity building programs for distributors, management teams and sales staff, the operation and management capabilities of distributors will be improved. 3. Supply chain. The Company will further increase production capacity to supply products in close vicinity and improve logistics and transportation efficiency. The Company’s bottle recycling network will be optmized to enhance bottle recycling rate. With respect to safety, the Company will continue to promote the ZERO Accidents culture, improving the quality of its three-level safety retraining, and strengthening work safety analysis and work permit implementation. The Company will launch the “Hundred-Person Plan” for taste evaluation to improve the ability of its breweries in taste assessment. Reclaimed water recycling will be introduced by the Company at over five breweries as part of its commitment to reducing water consumption. Additional measures will be taken to further cut carbon emissions, including the use of renewable electricity, heat loss reduction, installing biogas boilers, and adopting solar panels. 4. ESG. In 2022, Carlsberg Group released TTZAB, an enhanced ESG programme designed to further address global challenges such as inequality, climate change and water scarcity. TTZAB builds upon its current focus on “ZERO Carbon Footprint,” “ZERO Water Waste,” “ZERO Irresponsible Drinking,” and “ZERO Accidents Culture” by adding “ZERO Farming Footprint” and “ZERO Packaging Waste.” In 2023, we will continue to promote Carlsberg’s TTZAB programme in the Company. (IV) Potential business risks √ Applicable □ Not applicable 1. Rising costs. Costs of raw materials, packaging materials, energy, labor and other operating costs are still on the rise, while marketing expenses will keep increasing as a result of premiumization. 2. Intensifying competition. Some national beer enterprises and emerging niche beer brands may further penetrate and expand into the Company’s market regions, intensifying competitions in mid-to-high-end markets. (V) Others □ Applicable √ Not applicable VII. Statement of situation and cause that the Company does not disclose according to the criterion due to inapplicable criteria or special causes concerning the state secret and business secret □ Applicable √ Not applicable SECTION IV CORPORATE GOVERNANCE I. Statement of the corporate governance √ Applicable □ Not applicable The Company continuously improved its corporate governance structure, established and improved its internal 28 / 246 ANNUAL REPORT 2022 management and control system, continued to carry out corporate governance activities, promoted the standardized operation of the Company and improved the level of corporate governance in strict accordance with the requirements of the Company Law, the Securities Law, the Governance Code for Listed Companies, and the Rules for Listing on Shanghai Stock Exchange, and other laws and regulations during the reporting period. 1. About shareholders and the General Meeting of Shareholders During the reporting period, the Company convened the Annual General Meeting of Shareholders once, and the Extraordinary General Meeting of Shareholders for 3 times. The Company adjusted and standardized the organizational behavior of the General Meeting of Shareholders, increased the efficiency of General Meeting of Shareholders, and ensured the shareholders, especially minority shareholders to exercise the rights of shareholders by law in strict accordance with the Articles of Association and Precedural Rules of the General Meeting of Shareholders. 2. About Directors and the Board of Directors The Company convened the Board Meeting for 11 times, Audit Committee meeting for 8 times, Nomination Committee meeting for 4 times, Strategy and Development Committee meeting for once, and Remuneration and Appraisal Committee meeting for 2 times during the reporting period. The Board of Directors performed relevant deliberation and decision-making procedures for major issues within the scope of its authority, and carefully implemented all resolutions made at the General Meeting of Shareholders in strict accordance with provisions of the Articles of Association and Precedural Rules of the Board of Directors. Each special committee is responsible for effectively promoting the standard operation and scientific decision-making of the Board of Directors by itself. During the reporting period, the Board of Directors completed the general election. The members of the Board of Directors have rich working experience in beer industry and knowledge in accounting, finance, law and other aspects, and are able to fully provide professional and constructive suggestions for the company’s important decisions, carefully perform duties, and fully safeguard the interests of the Company and all shareholders. 3. About Supervisors and the Board of Supervisors The Company convened the Meeting of Board of Supervisors for 5 times during the reporting period. During the reporting period, the Board of Supervisors of the Company completed the general election. Each member of the Board of Supervisors strictly abided by provisions of the laws and regulations, the Articles of Associations and the Procedural Rules of the Board of Supervisors by actively performing their supervision duties in the Company’s financial condition, related-party transactions, regular reports and performance of directors, senior management, etc., so as to maintain the interests of the Company and all shareholders. 4. About relationship between the controlling shareholders and the listed company: During the reporting period, the controlling shareholders of the company did not occupy non-operating funds with the listed company, and the listed company did not provide external guarantees for the controlling shareholders. 5. About stakeholders The Company fully respected and protected the legitimate interests and rights of banks and other creditors, employees, consumers, and suppliers, and actively carried out cooperation, coordinated and balanced the interests of relevant parties, and jointly promoted the sustainable, healthy and harmonious development of the Company in line with the principle of mutual benefit and good faith. 6. Related party transactions During the reporting period, the Company improved the internal control system, standardized the related-party transactions, and urged the controlling shareholders and actual controllers to perform commitment in strict accordance with the requirement of laws and regulations. The Company performed relevant decision-making procedures for related party transactions with related parties, and the independent director issued their objective and just independent opinions to ensure the justice and fairness of related party transactions not to damage the interests of investors, especially minority investors. 7. About information disclosure and transparency During the reporting period, the Company actively strengthened its contact with CSRC and Stock Exchange and 29 / 246 ANNUAL REPORT 2022 truly, accurately, completely and timely completed information disclosure of various regular reports and temporary announcement in strict accordance with the relevant provisions of the CSRC, the Stock Exchange and the Company’s Rules on Information Disclosure Management, etc., so as to ensure that all shareholders, especially minority shareholders, could fairly and timely obtain the Company’s information and assess risks. 8. About management of investor relations Board Office of the Company is responsible for management of the investor relationship by keeping the communication channel between the investors and the Company open through answering the investor hotline, receiving the investor visitors, attending the investor telephone conference, brokerage strategy meeting, or reverse roadshow, etc., so as to ensure that the investors could accurately and timely know the Company’s information and exercise their legal rights. During the reporting period, the Company held four investor conference for regular reports all year round, and obtained the effective expansion of breadth and depth of communicating with investors. 9. Management of inside information The Company kept the Company’s inside information confidential and implemented registration & filing of insiders in strict accordance with the requirements of CSRC and SSE, the Insiders Registration Management System and the Rules for Internal Reporting of Key Information. In addition, the company carried out relevant trainings to effectively prevent insider trading and other securities violations. 10. Optimization of corporate governance system During the reporting period, according to the demand for hedging business, the Company formulated the Hedging Business Management System and supporting rules to standardize the hedging business deliberation procedure, report system, risk control, etc. Whether the Company’s governance is significantly different from the laws, administrative regulations and the provisions of CSRC on governance of the listed company; If any, the reasons shall be given. □ Applicable √ Not applicable II. Special measures taken by the Company’s controlling shareholders and actual controllers to ensure the independence of the Company’s assets, personnel, finance, organization and business, etc., and solutions made to affect the Company’s independence and their working progress and follow-up work plans □ Applicable √ Not applicable Availability of the same or similar business engaged by the controlling shareholders, actual controllers and other units under its control as or to that of the Company, and the effect of horizontal competition or its significant changes on the Company, solutions taken, progress on solution and follow-up solution plan √ Applicable □ Not applicable At the end of 2020, the Company completed major asset restructuring, all beer assets and businesses (excluding the listed company and its holding subsidiaries) in China Mainland controlled by Carlsberg was injected into the listed company. Carlsberg did not control any beer assets or business (excluding the listed company and its holding subsidiaries) in China Mainland, nor would it directly or indirectly engage in businesses which are in competition with the listed company through entities under its control. At the same time, during the restructuring, Carlsberg and Carlsberg Breweries respectively made commitments as follows to avoid horizontal competition, (I) restated the obligation of avoiding horizontal competition that should be performed by the actual controllers and controlling shareholders of the listed company; (II) In order to fully avoid occurrence of future potential horizontal competition, Carlsberg and Carlsberg Breweries also made additional voluntary arrangements for the equity of subsidiaries not controlled by Carlsberg that was not included in restructuring and involved the beer assets and business in Chinese Mainland. Please refer to Section VI - “(I) Commitment matters of the Company’s actual controllers, shareholders, related parties, purchasers, the Company 30 / 246 ANNUAL REPORT 2022 and other related parties during the reporting period or lasting to the reporting period”. III. Brief introduction of the General Meeting of Shareholders Date for Query indexes on Session number of Holding disclosure of specified website for Resolutions made at the meeting meetings date published published resolutions resolutions The First 2022- www.sse.com.cn 2022-03-15 The detailed contents are shown in Extraordinary 03-14 the Announcement of Resolutions of General Meeting of the First Extraordinary General Shareholders in Meeting of Shareholders of 2022 Chongqing Brewery Co., Ltd. in 2022 (Announcement No.: 2022- 007) 2021 Annual 2022- www.sse.com.cn 2022-05-26 The detailed contents are shown in General Meeting of 05-25 the Announcement of Resolutions of Shareholders the 2021 Annual General Meeting of Shareholders of Chongqing Brewery Co., Ltd. (Announcement No.: 2022- 020) The Second 2022- www.sse.com.cn 2022-07-14 The detailed contents are shown in Extraordinary 07-13 the Announcement of Resolutions of General Meeting of the Second Extraordinary General Shareholders in Meeting of Shareholders of 2022 Chongqing Brewery Co., Ltd. in 2022 (Announcement No.: 2022- 031) The Third 2022- www.sse.com.cn 2022-12-03 The detailed contents are shown in Extraordinary 12-02 the Announcement of Resolutions of General Meeting of the Third Extraordinary General Shareholders in Meeting of Shareholders of 2022 Chongqing Brewery Co., Ltd. in 2022 (Announcement No.: 2022- 056) Preferred shareholders whose voting rights are restored request convening the Extraordinary General Meeting of Shareholders □ Applicable √ Not applicable Statement of the General Meeting of Shareholders □ Applicable √ Not applicable 31 / 246 ANNUAL REPORT 2022 IV. Information on directors, supervisors and senior executives (I) Information on changes in shareholding and compensation of directors, supervisors and senior executives currently in office and quitted during the reporting period √ Applicable □ Not applicable Unit: Share Number of Number of Increase or Reason for Total pre-tax compensation Whether receiving Starting date of Ending date of shares held at shares held at decrease of increase or acquired from the Company compensation from Name Title (Note) Gender Age tenure tenure the beginning the end of the shares within decrease during the reporting period related parties of of the year year the year changes (RMB ten thousand) the Company Joo Miguel Ventura Rego Chairman of the Male 51 December 2, May 25, 2025 0 0 0 0 Yes Abecasis Board of Directors 2022 Gavin Stuart Brockett Director Male 61 March 14, 2022 May 25, 2025 0 0 0 0 Yes Andrew Douglas Emslie Director Male 44 July 13, 2022 May 25, 2025 0 0 0 0 Yes Lee Chee Kong Director, President Male 51 Director: May 25, 2025 0 0 0 879.84 No January 23, 2019 President: January 1, 2021 Chin Wee Hua Director, Vice Male 51 Director: May 25, 2025 0 0 0 391.28 No President March 9, 2017 Vice president: January 1, 2021 Lv Yandong Director Male 48 May 6, 2016 May 25, 2025 0 0 0 297.74 No Yuan Yinghong Independent Female 57 May 25, 2022 May 25, 2025 0 0 0 6.77 No Director Sheng Xuejun Independent Male 53 May 25, 2022 May 25, 2025 0 0 0 6.77 No Director Zhu Qianyu Independent Female 47 May 25, 2022 May 25, 2025 0 0 0 6.77 No Director Kuang Qi Chairman of the Male 45 May 18, 2021 May 25, 2025 0 0 0 162.75 No Board of Supervisors Huang Minlin Supervisor Male 43 May 4, 2018 May 25, 2025 0 0 0 202.82 No Chen Changli Employee Male 59 May 6, 2016 May 25, 2025 1,171 1,171 0 204.14 No Representative Supervisor Deng Wei Board Secretary Male 50 August 22, 2006 May 25, 2025 0 0 0 136.88 No Leonard Cornelis Jorden Chairman of the Male 64 January 2, 2019 February 16, 0 0 0 0 Yes Evers (quitted) Board of Directors 2022 Ulrik Andersen (quitted) Chairman of the Male 58 February 16, June 9, 2022 0 0 0 0 Yes Board of Directors 2022 32 / 246 ANNUAL REPORT 2022 Ulrik Andersen (quitted) Director Male 59 January 13, 2021 November 15, 0 0 0 0 Yes 2022 Gong Yongde (Quitted due Independent Male 60 May 7, 2019 May 25, 2022 0 0 0 4.17 No to expiration of the term of Director office) Dai Zhiwen (Quitted due to Independent Male 51 May 7, 2019 May 25, 2022 0 0 0 4.17 No expiration of the term of Director office) Li Xianjun (Quitted due to Independent Male 55 May 6, 2016 May 25, 2022 0 0 0 4.17 No expiration of the term of Director office) Total / / / / / 1,171 1,171 0 / 2,308.27 / Name Main work experiences Joo Miguel Ventura 51 years old. Portuguese. Joo obtained Business Management Degree from Universidade Católica Portuguesa in 1995. He has been with Carlsberg since 2011 as CCO and Rego Abecasis later CEO of Super Bock in Portugal and then in 2016 as VP for Challenger Markets in the Western Europe region. In 2017, he became Managing Director of French business Kronenbourg, and in 2019, he became Group Chief Commercial Officer and a member of Executive Committee. Before joining Carlsberg, Joo held a range of sales and marketing roles at Unilever. He has been serving as EVP Asia in Carlsberg Group since September 2022. He is currently the Chairman of the Company. Gavin Stuart Brockett 61 years old. South African. He obtained the Bachelor’s Degree in Commerce and Bachelor’s Degree in Accounting from the University of the Witwatersrand (South Africa) respectively in 1983 and 1985 and qualified as a chartered accountant in 1988. He joined SABMiller in 1991 and successively held several senior financial leadership positions in South Africa and Europe, including the chief financial officer in Plzensky Pradroj (Czech Republic) and Birra Peroni (Italy). From 2010 to 2012, he held the VP Finance Asia role in Carlsberg, a period in the wine industry as the chief financial officer of Accolade Wines followed, and then a return to Carlsberg as the Chief Operating Officer of Carlsberg China in 2014. Most recently for Levi Strauss & Co he was the CFO of the Asia region from 2016 to 2017 and thereafter he served as the Senior Vice President and Global Controller for Levi Strauss & Co. in the United States until 2021. In January 2022, he rejoined Carlsberg to act as the VP Finance of Asia. He currently serves as the director of the Company. Andrew Douglas Emslie 44 years old. British. He obtained a BA (Hons) degree in Accounting & Law from the University of Manchester, England in 2001. He completed the Legal Practice Course from the College of Law in Chester, England in 2002 and qualified as a Solicitor in England and Wales in 2004. Andrew has since worked for a number of leading international law firms in the UK, Australia and Asia with a focus on cross-border mergers & acquisitions and joint ventures. During his career, Andrew has held senior leadership positions as in-house counsel, based in Asia, with listed multinational companies, including Ensco, Maersk and Olam. Before Carlsberg, Andrew was Vice President of Legal at Olam International from June 2016 to July 2019. In August 2019, he joined Carlsberg and currently serves as Vice President and Asia Head of Legal & Compliance. He currently serves as the director of the Company. Lee Chee Kong 51 years old. Malaysian. He graduated from University Utara Malaysia in Marketing. Before joining Carlsberg, he served as the President of Asia Region and Managing Director of China at HILDING ANDERS (SLUMBERLAND). Before that, he also worked as Managing Director of HEINZ China, and served managing roles in China and Asia Pacific Division at COLGATE-PALMOLIVE for a long time. Now he is the Director of the Company and President of the Company/Carlsberg China. Chin Wee Hua 51 years old. Malaysian. He graduated from the University of Western Australia with Bachelor of Commerce degree, majoring in Accounting and Finance and also obtained the MBA degree from University of Leicester UK. He is a registered Australian Certified Public Accountant. From 2001 to 2008, he served as Finance Director in Alstom Asia Pacific (Malaysia) Sdn Bhd. From 2009 to 2014, he held position as Finance Director of Wuhan Boiler Company Limited. From 2015 to 2016, 33 / 246 ANNUAL REPORT 2022 he was Asia Finance Director in GE Grid Solutions Pte Ltd. Now he is the Director of the Company and VP Finance of the Company / Carlsberg China. Lv Yandong 48 years old. Chinese. He obtained a master’s degree of Mechanical and Electronic Engineering from Harbin Institute of Technology. He served as the Director of Supply Chain in Carlsberg Huizhou and the Deputy General Manager of CBC successively. Before joining Carlsberg, he had engaged in technical and management in Harbin Electronic and Machinery Co. Ltd., Guangzhou P & G and Pepsi successively. He served as the Director of Supply Chain in Carlsberg Huizhou and the Deputy General Manager of CBC successively. He is currently serving as the VP Supply Chain of Carlsberg China. Now he is the Director of the Company and VP Supply Chain of Carlsberg China. Yuan Yinghong 57 years old. Chinese. She is a Bachelor of Management, Economics and Management, South China Normal. She has the professional qualifications of certified public accountant, certified internal auditor and the professional titles of accountant and auditor. She has over 30-year accounting experience and once served as deputy section chief of the Culture and Health Department and section chief of the Industry Department of the directly affiliated branch of the Guangdong Audit Office. She is the Deputy Secretary of Guangzhou Institute of Certified Public Accountants, Secretary of Industry Discipline Inspection Commission, and an expert in the evaluation expert database of SASAC of Guangdong Province. As present, she is concurrently serving as independent directors in Hao Lai Ke(603898.SH), GZ Hengyun A (000531.SZ), Winsun Bio (839729.BJ) and Jinhao Medical (872925.BJ). She is the independent director of the Company. Sheng Xuejun 53 years old. Chinese. He is a visiting Scholar of University of Oxford in Britain, Post Doctor of University of Aix-Marseille in France and Senior Research Scholar of The University of New South Wales. “New Century Excellent Talent Support Plan” candidate of Ministry of Education, Distinguished Professor of Bayu Scholar and Chongqing “Hundred-Thousand-Ten Thousand Project Leading Talent”. He ever served as the Vice Chairman of Academic Degree Committee of Southwest University of Political Science & Law, Dean of Economic Law School, and Deputy Chief Judge and Judge of the Second Court of Civil Trial of The Supreme People’s Court. Now he is the Professor and Doctoral Supervisor of Southwest University of Political Science & Law, and Academic Leader of National Key Discipline Economic Law. He serves as Managing Director of Chinese Society of International Economic Law (CSIEL), Managing Director of China Banking Law Society, Managing Director of Institute of Securities Law of CLS, Director of China Association for Legal Education, Vice Chairman of Chongqing Civil Law and Economic Law Institute, and Legislation Review Expert of Chongqing Municipal People’s Government as additional posts. Now he is the Independent Director of Chongqing Department Store (600279.SH) and Chongqing Iron & Steel (601005.SH). He is the independent director of the Company. Zhu Qianyu 47 years old. Chinese. She is a Doctor of Huazhong University of Science and Technology School of Economics, Post Doctor of Finance Department at Guanghua School of Management of Peking University, and Visiting Scholar of Griffith University Business School in Australia. He serves as the Associate Professor and Master supervisor of Renmin University of China, Researcher of Institute of Rural Economy and Finance of Renmin University of China, Researcher of National Academy of Development and Strategy, Renmin University of China, and Project Training and Evaluation Expert of The World Bank and The National Rural Revitalization Administration. He is the Independent Director of CSG A (000012.SZ) and Kingfa (600413.SH) as additional posts at present. She is the independent director of the Company. Kuang Qi 45 years old. Chinese. He graduated from Jinan University in 2000 with double bachelor’s degree in Economics and Laws and obtained the Chinese legal profession qualification certificate. His previous work experiences include the Deputy Director of legal affairs of Amway (China) Daily-Use Commodity Co., Ltd. and legal consultant of Heinz (China) Investment Company Co., Ltd. Before joining Carlsberg, he acted as the senior legal consultant of Mead Johnson Nutrition (China) Co., Ltd. He is the Senior Legal Director and Chairman of the Board of Supervisors of the Company now. Huang Minlin 43 years old. Chinese. He graduated from The Hong Kong University of Science and Technology with a Bachelor's Degree in Accounting and is a member of the Hong Kong Institute of Certified Public Accountants. He worked in KPMG Hong Kong as the Audit Manager from 2004 to 2010. He joined Carlsberg Asia in 2010 and successively served as the Regional Supply Chain Financial Director and regional Financial Director. He is currently the Senior Finance Director and Supervisor of the Company. Chen Changli 59 years old. Chinese. He previously served as the packaging workshop director and deputy general manager of the Company and the deputy general manager of Chongqing 34 / 246 ANNUAL REPORT 2022 Brewery Group Company, etc. He is currently the Party secretary of the Company, the Chairman of the Trade Union and the supervisor acted by the staff representative of the Company. Deng Wei 50 years old. Chinese. He owns the MBA Degree of the College of Business Administration of Chongqing University. From 1997 to 2000, he took part in sale and business team management work of Life Insurance Marketing Department of PING An Chongqing Branch; In October 2000, he joined Chongqing Brewery (Group) Co., Ltd., and was responsible for foreign acquisition and combination and integration of combination and acquisition enterprise together with assets management department and the team. From 2006 to present, he serves as Board Secretary of the Company. Roland Arthur Lawrence 64 years old. Australian. He obtained the Master’s Degree in Entrepreneurship from the University of Melbourne, Graduate Diploma in Business from Deakin University (Quitted) Australia, Graduate Diploma in Education Science and BA-Honours from the National University of Singapore, and the certification of CPA Australia (FCPA). He mainly worked in Coles Myer Group in Australia, served as General Manager of Financial Department of Coles Group and General Manager of Financial Department of Coles Supermarkets before 2008. He served as Senior Vice President and Chief Financial Officer of WalMart (China) from 2008 to 2011. After that, he joined Carlsberg Asia to act as the Vice President of Finance. In February 2022, he was retired from Carlsberg and thus resigned from the positions of Director & Chairman of the Company. Leonard Cornelis Jorden 58 years old. Dutch. He graduated from Erasmus University Rotterdam with the Master Degree of Business Administration in 1990. He had taken several management Evers positions in Heineken since 1990, including the director & general manager of Heineken in Vietnam from 2013 to 2019 and the director & general manager in Asian-Pacific (Quitted) region in 2019, and was responsible for the operation of Heineken in Singapore, Malaysia, Papua New Guinea, Australia, New Zealand, Laos, Sri Lanka, Philippines, New Caledonia and Solomon Islands. On July 1, 2021, he joined Carlsberg Group and served as the executive vice president of Asia and the member of the Executive Committee of Carlsberg Group. In June 2022, due to personal reasons, he quitted Carlsberg, and resigned the post of Director and President of the Company. Ulrik Andersen 59 years old, Danish. He obtained the Master of Law of University of Copenhagen in 1990, and obtained the Master of Law of University of Bristol England in 1998; He (Quitted) obtained the Danish legal profession qualification in 1992 to be a lawyer practicing in Denmark, and also practiced as a lawyer in the international law firms in London and Copenhagen. In 1998, he joined in Carlsberg Group, and was appointed as the General Counsel of Carlsberg Group in 2001. In November 2022, he resigned the post of Director of the Company due to adjustment on work content. Gong Yongde 60 years old, Member of The National Committee of the 14th Chinese People’s Political Consultative Conference, and Vice Chairman of Guangdong’s Association for (Quitted due to expiration Promotion of Cooperation between Guangdong, Hong Kong & Macao and Entrepreneurs Union of Guangdong-Hong Kong-Macao Greater Bay Area. Mr. Gong graduated of the term of office) from the University of Liverpool England in 1984. He is the member of the Institute of Chartered Accountants in England and Wales and the senior member of the Hong Kong Institute of Certified Public Accountants, and he is also the senior member of the Tax Institute of Hong Kong and served as its chairman from 2007 to 2009. Mr. Gong became a partner of the Klynveld Peat Marwick Goerdeler (“KPMG”) in 1997, the head of Chinese tax affairs in Hong Kong and Southern China in 2001, the chief partner of KPMG Shenzhen Institute in 2006 and the chief partner of KPMG South China in 2010. He served as the Vice Chairman of KPMG China from 2013 to 2017 and the Senior Consultant of KPMG from 2018 to 2019. Mr. Gong served as Independent Non-executive Director of ORIX (Asia) Co., Ltd. respectively from 2020; He has been serving as the member of the Board of Directors and the Audit Committee of Ebram International Online Dispute Resolution Center Limited and the independent non- executive director of Kingboard Laminates Holdings Limited respectively from May and June 2021. He was appointed as the independent non-executive director and chairman of A SPAC (HK) Acquisition Corp. and the independent non-executive director of SmarTone Telecommunications Holdings Ltd. In March 2022. He was an Independent Director of the 9th Board of Directors of the Company, and he quitted due to expiration of the term of office in May 2022. Dai Zhiwen 51 years old, the Master of Tax Law from the New York University U.S., the Master of Law from the University of Virginia U.S. and the Bachelor of Laws from the Peking (Quitted due to expiration University, a lawyer practicing in China and has passed New York lawyer qualification test. He is currently the partner of Beijing AnJie Law Firm, and also serves as a of the term of office) member of Professional Committee on Legal Affairs of Private Equity and Equity Investment of Beijing Lawyers Association, and a member of International Business Research Society of Beijing Chaoyang Lawyers Association. He served as the Chinese Law Consultant of Hayth & Kerly Law Firm U.S., a lawyer of Zhong Lun Law 35 / 246 ANNUAL REPORT 2022 Firm, legal adviser of Shell (China) Co., Ltd., a lawyer of Baker & McKenzie U.S., a lawyer of Morrison & Foerster U.S. and a partner of Llinks Law Offices and Zhong Lun Law Firm successively. He was an Independent Director of the 9th Board of Directors of the Company, and he quitted due to expiration of the term of office in May 2022. Li Xianjun 55 years old, he obtained the Doctor of Economic from School of Economics, Jilin University. He is currently the director of Automotive Development Research Center of (Quitted due to expiration School of Vehicle and Mobility, Tsinghua University, director of Industrial System Engineering Discipline, doctoral supervisor with the research direction of competitive of the term of office) strategy and innovation strategy; He is also an adviser to the strategic investment committee of China North Industries Group Corporation Limited, and a member of the modern management branch of China Society of Automotive Engineers. He served as the director of Consulting Center of China Enterprise Confederation, General Manager of Zhongqi Gongyi Enterprise Management Consulting Company, the Executive Director of China Enterprise Directors Association, an independent director of Tianjin FAW XIALI Automobile Co., Ltd., the director of Automotive Development Research Center of Automotive Engineering Department of Tsinghua University, and the director of Advanced R&D Center, the director of Industrial System Engineering Discipline successively. He is a Visiting Scholar of the University of California-Berkeley, Haas School of Business. He provided strategic and management consulting services for more than 30 domestic and foreign enterprises, including the German Volkswagen headquarters, Ford Asia-Pacific, SAIC Motor, FAW Group, Haier Group, China National Petroleum Corporation and Nomura Japan. He was an Independent Director of the 9th Board of Directors of the Company, and he quitted due to expiration of the term of office in May 2022. Statement of other information □ Applicable √ Not applicable 36 / 246 ANNUAL REPORT 2022 (II) Service of directors, supervisors and senior executives currently in office and quitted during the reporting period 1. Information on taking office at the shareholder units √ Applicable □ Not applicable Starting Ending Name of Title in shareholder Name of the shareholder unit date of date of employees units tenure tenure Joo Miguel Carlsberg Brewery Malaysia Berhad Director 2022-10 Ventura Rego Abecasis Joo Miguel Lao Brewery Co., Ltd. Director/Shareholder 2022-10 2025-10 Ventura Rego Representative Abecasis Joo Miguel Carlsberg Brewery Hong Kong Director 2022-11 Ventura Rego Limited Abecasis Joo Miguel Caretech Ltd. Director 2022-11 Ventura Rego Abecasis Joo Miguel Carlsberg Vietnam Breweries Ltd. Chairman 2023-01 2027-04 Ventura Rego Abecasis Gavin Stuart Myanmar Carlsberg Co., Ltd. Director 2022-01 Brockett Gavin Stuart Carlsberg Brewery Malaysia Berhad Director 2022-02 Brockett Gavin Stuart Lao Brewery Co., Ltd. Director 2022-04 Brockett Andrew Douglas CB Distribution Co., Ltd. Director 2020-07 Emslie Andrew Douglas Carlsberg Indochina Ltd. Director 2020-07 Emslie Andrew Douglas Myanmar Carlsberg Co., Ltd. Director 2020-11 Emslie Andrew Douglas Paduak Holding Pte. Ltd. Director 2020-12 Emslie Andrew Douglas Carlsberg Asia Pte. Ltd. Director 2020-12 Emslie Andrew Douglas Lao Brewery Co., Ltd. Director 2021-03 Emslie Andrew Douglas Carlsberg Vietnam Breweries Director 2021-04 Emslie Limited Andrew Douglas Cambrew Ltd. Director 2022-01 Emslie Lee Chee Kong Lanzhou Huanghe Jianiang Brewery Deputy Chairman 2019-07 Company Limited 37 / 246 ANNUAL REPORT 2022 Lee Chee Kong Jiuquan West Brewery Co., Ltd. Deputy Chairman 2019-07 Lee Chee Kong Qinghai Huanghe Jianiang Brewery Deputy Chairman 2019-07 Co., Ltd. Lee Chee Kong Tianshui Huanghe Jianiang Brewery Deputy Chairman 2019-07 Co., Ltd. Lee Chee Kong Capital Brewing Company Limited Director 2019-02 Lee Chee Kong G-Shell Asia Pacific Limited Director 2019-02 Lee Chee Kong Jing-A Brewing Company Limited Director 2019-02 Lee Chee Kong Beijing Shouniang Jinmai Trading Director 2019-02 Co., Ltd. Lee Chee Kong G-Shell Asia (Beijing) Catering Co., Director 2019-02 Ltd. Chin Wee Hua Lanzhou Huanghe Jianiang Brewery Director 2017-06 Company Limited Chin Wee Hua Jiuquan West Brewery Co., Ltd. Director 2017-03 Chin Wee Hua Qinghai Huanghe Jianiang Brewery Director 2017-06 Co., Ltd. Chin Wee Hua Tianshui Huanghe Jianiang Brewery Director 2017-04 Co., Ltd. Lv Yandong Guangzhou Carlsberg Consultancy Chairman 2020-12 and Management Services Co., Ltd. Kuang Qi Guangzhou Carlsberg Consultancy Supervisor 2021-12 and Management Services Co., Ltd. Kuang Qi Beijing Shouniang Jinmai Trading Supervisor 2022-01 Co., Ltd. Kuang Qi G-Shell Asia (Beijing) Catering Co., Supervisor 2022-01 Ltd. Roland Arthur Carlsberg Vietnam Breweries Director 2018-07 2022-02 Lawrence Limited Roland Arthur Carlsberg Brewery Hong Kong Director 2013-06 2022-01 Lawrence Roland Arthur Carlsberg Hong Kong Limited Director 2013-03 2022-01 Lawrence Roland Arthur Fine Sino Investment Limited Director 2013-05 2022-02 Lawrence Roland Arthur Carlsberg Brewery Malaysia Berhad Director 2012-08 2022-02 Lawrence Roland Arthur Gorkha Breweries Private Limited Director 2012-09 2022-02 Lawrence Roland Arthur Lao Brewery Co., Ltd. Director 2013-03 2022-04 Lawrence Roland Arthur Myanmar Carlsberg Co., Ltd. Director 2014-06 2022-02 Lawrence Roland Arthur MCCL Dis Co., Ltd. Director 2016-02 2022-02 Lawrence Roland Arthur Carlsberg Asia Pte Ltd. Director 2018-11 2022-02 38 / 246 ANNUAL REPORT 2022 Lawrence Roland Arthur Cambrew Limited Director 2018-09 2022-02 Lawrence Roland Arthur Angkor Beverage Co., Ltd. Director 2018-09 2022-02 Lawrence Roland Arthur Cambrew Pte Ltd. Director 2019-01 2022-02 Lawrence Roland Arthur Caretech Limited Director 2019-02 2022-01 Lawrence Leonard Cornelis Carlsberg Brewery Hong Kong Director 2021-08 2022-06 Jorden Evers Limited Leonard Cornelis Carlsberg Hong Kong Limited Director 2021-08 2022-06 Jorden Evers Leonard Cornelis Caretech Limited Director 2021-08 2022-06 Jorden Evers Leonard Cornelis Carlsberg Brewery Malaysia Berhad Director 2021-07 2022-06 Jorden Evers Leonard Cornelis Lao Brewery Co., Ltd. Director 2021-09 2022-06 Jorden Evers Ulrik Andersen Carlsberg Insurance A / S Director 2005-02 Ulrik Andersen Carlsberg Integrated Information Director 2015-11 Technology A / S Ulrik Andersen Carlsberg Shared Services Sp.z.o.o. Director 2007-01 Ulrik Andersen Carlsberg Chongqing Limited Director 2009-01 Ulrik Andersen Carlsberg Ejendomme Holding A / S Director 2009-12 Ulrik Andersen Carlsberg Finans A / S Chairman 2004-03 Ulrik Andersen Carlsberg Central Office A/S Chairman 2005-12 Ulrik Andersen Carlsberg Invest A / S Director 2002-03 Ulrik Andersen Carlsberg International A/S Chairman 2001-09 Ulrik Andersen Ejendomsaktieselskabet Tuborg Director 2009-12 Nord C Ulrik Andersen Boliginteressentskabet Tuborg Director 2015-12 Ulrik Andersen Carlsberg Supply Company AG Director 2013-03 Ulrik Andersen Baltika Brewery LLC Director 2013-03 2. Information on taking office at other units √ Applicable □ Not applicable Name of Position held in other Starting date Ending date Name of other units employees units of tenure of tenure Yuan Yinghong Guangzhou Institute of Certified Deputy Secretary 2001-08 Public Accountants General and Secretary of Industry Discipline Inspection Commission Yuan Yinghong Guangzhu Holike Creative Home Independent Director 2022-01 2023-08 Co., Ltd. 39 / 246 ANNUAL REPORT 2022 Yuan Yinghong Guangzhou Hengyun Enterprises Independent Director 2021-01 2024-03 Holding Ltd. Yuan Yinghong Guangdong Winsun Pharm Co., Independent Director 2020-04 2023-12 Ltd., Yuan Yinghong Huizhou Jinghao Medical Independent Director 2020-12 2023-12 Technology Co., Ltd. Sheng Xuejun Southwest University of Political Professor, Doctoral 2010-01 Science & Law Supervisor Sheng Xuejun Southwest University of Political Dean of Institute of 2018-12 Science & Law FinTech Law Research Sheng Xuejun Guilin Tourism Corporation Limited Independent Director 2023-03 2026-03 Sheng Xuejun Chongqing Department Store Co., Independent Director 2020-10 2023-10 Ltd. Sheng Xuejun Chongqing Iron & Steel Limited by Independent Director 2021-08 2024-06 Share Ltd. Zhu Qianyu Renmin University of China Associate professor 2010-03 and master supervisor; Researcher of Rural Economy and Finance; Researcher of National Academy of Development and Strategy Zhu Qianyu CSG Holding Co., Ltd. Independent Director 2019-04 2023-05 Zhu Qianyu KINGFA SCI. & TECH. CO., LTD. Independent Director 2021-01 2024-01 Gong Yongde National Committee of CPPCC Member 2018-02 Gong Yongde Supreme Genius Consulting Chairman 2019-08 Company Limited Gong Yongde Sun Hung Kai Development (China) Tax advisor of China 2019-10 Limited Gong Yongde ORIX ASIA LIMITED Independent Director 2020-09 Gong Yongde eBRAM International Online Director 2021-05 Dispute Resolution Centre Limited Gong Yongde Kingboard Laminates Holdings Independent Director 2021-06 Limited Gong Yongde SmarTone Telecommunications Independent Director 2022-03 Holdings Ltd. Gong Yongde ASPAC(HK)ACQUISITIONCORP. Independent Director 2022-03 Gong Yongde Tax Institute of Hong Kong Advisor 2019-09 Dai Zhiwen Beijing AnJie Law Firm Partner Dai Zhiwen Professional Committee on Legal Member Affairs of Private Equity and Equity Investment of Beijing Lawyers Association 40 / 246 ANNUAL REPORT 2022 Dai Zhiwen International Business Research Member Society of Beijing Chaoyang Lawyers Association Li Xianjun Automotive Development Research Director, doctoral Center of School of Vehicle and supervisor and Mobility, Tsinghua University and researcher Industrial System Engineering Discipline Li Xianjun Strategic Investment Committee of Advisor China North Industries Group Corporation Limited Li Xianjun The modern management branch of Member SAE-China (III) Information on remuneration of directors, supervisors and senior executives √ Applicable □ Not applicable Decision-making procedures on the During the reporting period, the allowance for independent directors remuneration of directors, supervisors was implemented in accordance with the provisions of the and senior executives Independent Director System of Chongqing Brewery Co., Ltd. deliberated and approved by the General Meeting of Shareholders; The allowance for directors was proposed by the Remuneration and Appraisal Committee of the Board of Directors, submitted to the Board of Directors for deliberation and approval, and then was implemented with the approval of the General Meeting of Shareholders; The allowance for supervisors was deliberated and approved by the Board of Supervisors of the Company and then was implemented with the approval of the General Meeting of Shareholders. The remuneration of senior executives was implemented based on the Administrative Measures for the Remuneration and Performance Appraisal of Senior Executives proposed by the Remuneration and Appraisal Committee of the Board of Directors, with the deliberation and approval of the Board of Directors of the Company. Basis of confirmation on the During the reporting period, the allowance for independent directors remuneration of directors, supervisors was implemented in accordance with the provisions of the and senior executives Independent Director System of Chongqing Brewery Co., Ltd. deliberated and approved by the General Meeting of Shareholders; Except for independent directors, other directors and supervisors are not paid for their positions as directors or supervisors in the company. The remuneration for senior executives shall be based on the Administrative Measures for the Remuneration and Performance Appraisal of Senior Executives approved by the Board of Directors and the business performance of the current year determined in the Audit Report issued by the accounting firm, and be assessed and confirmed by the Remuneration and Appraisal Committee of the Board of Directors. Information on compensation paid to During the reporting period, the allowances for independent directors 41 / 246 ANNUAL REPORT 2022 directors, supervisors and senior shall be paid by the Company monthly; The basic remuneration of executives senior executives was paid by the Company monthly. The performance remuneration was paid by the Company after the assessment by the Remuneration and Appraisal Committee of the Board of Directors. Total compensation paid to all the 23.0827 million directors, supervisors and senior executives at the end of the reporting period (IV) Information on changes in directors, supervisors and senior executives of the Company √ Applicable □ Not applicable Name Title held Status of change Reasons for change Joo Miguel Ventura Chairman Elected He became the member and Chairman Rego Abecasis of the tenth Board of Directors through by-election Gavin Stuart Brockett Director Elected He became the member of the ninth Board of Directors through by-election and the member of the tenth Board of Directors through general election Andrew Douglas Emslie Director Elected He became the member of the ninth Board of Directors through by-election Roland Arthur Lawrence Chairman Quitted Retired Leonard Cornelis Jorden Chairman Quitted Personal reasons Evers Ulrik Andersen Director Quitted Change of work contents Gong Yongde Independent Director Quitted Expiration of the term of office Dai Zhiwen Independent Director Quitted Expiration of the term of office Li Xianjun Independent Director Quitted Expiration of the term of office (V) Statement of the punishment from the securities regulatory institutions in last three years □ Applicable √ Not applicable (VI) Others □ Applicable √ Not applicable V. Information on the Board Meeting held during the reporting period Session number of meetings Holding date Resolutions made at the meeting The twenty-third meeting of 2022-02-16 Please refer to “L No. 2022-004” Announcement disclosed by the ninth Board of Directors the Company on the website (www.sse.com.cn) of Shanghai Stock Exchange on February 17th, 2022 for details. The twenty-fourth meeting 2022-03-14 Please refer to “L No. 2022-008” Announcement disclosed by of the ninth Board of the Company on the website (www.sse.com.cn) of Shanghai Directors Stock Exchange on March 15th, 2022 for details. The twenty-fifth meeting of 2022-03-31 Please refer to “L No. 2022-010” Announcement disclosed by the ninth Board of Directors the Company on the website (www.sse.com.cn) of Shanghai 42 / 246 ANNUAL REPORT 2022 Stock Exchange on April 2nd, 2022 for details. The twenty-sixth meeting of 2022-04-27 Please refer to “L No. 2022-015” Announcement disclosed by the ninth Board of Directors the Company on the website (www.sse.com.cn) of Shanghai Stock Exchange on April 27th, 2022 for details. The first Meeting of the 2022-05-26 Please refer to “L No. 2022-021” Announcement disclosed by tenth Board of Directors the Company on the website (www.sse.com.cn) of Shanghai Stock Exchange on May 27th, 2022 for details. The second Meeting of the 2022-06-20 Please refer to “L No. 2022-026” Announcement disclosed by tenth Board of Directors the Company on the website (www.sse.com.cn) of Shanghai Stock Exchange on June 21st, 2022 for details. The third meeting of the 2022-08-10 Please refer to “L No. 2022-033” Announcement disclosed by tenth Board of Directors the Company on the website (www.sse.com.cn) of Shanghai Stock Exchange on August 12th, 2022 for details. The fourth Meeting of the 2022-08-16 Please refer to “L No. 2022-035” Announcement disclosed by tenth Board of Directors the Company on the website (www.sse.com.cn) of Shanghai Stock Exchange on August 18th, 2022 for details. The fifth Meeting of the 2022-10-26 Please refer to “L No. 2022-037” Announcement disclosed by tenth Board of Directors the Company on the website (www.sse.com.cn) of Shanghai Stock Exchange on October 28th, 2022 for details. The sixth meeting of the 2022-11-15 Please refer to “L No. 2022-042” Announcement disclosed by tenth Board of Directors the Company on the website (www.sse.com.cn) of Shanghai Stock Exchange on November 16th, 2022 for details. The seventh Meeting of the 2022-12-02 Please refer to “L No. 2022-047” Announcement disclosed by tenth Board of Directors the Company on the website (www.sse.com.cn) of Shanghai Stock Exchange on December 3rd, 2022 for details. VI. Information on duty performance of directors (I) Information on directors attending the Board Meeting and General Meeting of Shareholders Information on attendance at the Information on attendance at the Board Meeting General Meeting of Whether to Shareholders Name of be an Whether Number directors independent to fail to of Board Number of director Number of attend Meeting Number of Number of Number attendance at attendance by the to be personal entrusted of the General communication meeting attended attendance attendance absence Meeting of way in person in this Shareholders twice in year a row Joo Miguel Ventura Rego No 1 1 1 0 0 No 1 Abecasis Gavin Stuart No 10 10 10 0 0 No 3 Brockett Andrew No 5 5 5 0 0 No 2 Douglas 43 / 246 ANNUAL REPORT 2022 Emslie LeeCheeKong No 11 11 3 0 0 No 4 ChinWeeHua No 11 11 1 0 0 No 4 Lv Yandong No 11 11 4 0 0 No 4 Yuan Yes 7 7 3 0 0 No 3 Yinghong Sheng Xuejun Yes 7 7 7 0 0 No 3 Zhu Qianyu Yes 7 7 7 0 0 No 2 Roland Arthur Lawrence No 0 0 0 0 0 No 0 (Quitted) Leonard Cornelis No 5 5 5 0 0 No 2 Jorden Evers (Quitted) Ulrik Andersen No 9 9 9 0 0 No 3 (Quitted) Gong Yongde (Quitted due to expiration of Yes 4 4 4 0 0 No 1 the term of office) Dai Zhiwen (Quitted due to expiration of Yes 4 4 4 0 0 No 1 the term of office) Li Xianjun (Quitted due to expiration of Yes 4 4 4 0 0 No 2 the term of office) Statement of failure to attend in person at the Board Meeting for two successive times □ Applicable √ Not applicable Number of convening the Board Meeting within one 11 year Including: Number of convening site meeting 0 Number of convening meeting by communication way 1 Number of convening meeting by site combining with 10 communication way (II) Information on objection to related issues of the Company raised by the directors □ Applicable √ Not applicable (III) Others □ Applicable √ Not applicable VII. Information on special committee under the Board of Directors √ Applicable □ Not applicable 44 / 246 ANNUAL REPORT 2022 (1). Information on members of special committee under the Board of Directors Category of special committee Name of members Audit Committee Audit Committee of the ninth Board of Directors: Gong Yongde, Dai Zhiwen, Li Xianjun, Chin Wee Hua, Roland Arthur Lawrence (Gavin Stuart Brockett was appointed as Member after Roland Arthur Lawrence quitted) Audit Committee of the tenth Board of Directors: Yuan Yinghong, Sheng Xuejun, Zhu Qianyu, Chin Wee Hua, Gavin Stuart Brockett Nomination Committee Nomination Committee of the ninth Board of Directors: Dai Zhiwen, Li Xianjun, Ulrik Andersen Nomination Committee of the tenth Board of Directors: Sheng Xuejun, Zhu Qianyu, Ulrik Andersen (Andrew Douglas Emslie was appointed as Member after Ulrik Andersen quitted) Remuneration and Appraisal Remuneration and Appraisal Committee of the ninth Board of Directors: Committee Gong Yongde, Dai Zhiwen, Leonard Cornelis Jorden Evers Remuneration and Appraisal Committee of the tenth Board of Directors: Zhu Qianyu, Yuan Yinghong, Leonard Cornelis Jorden Evers (Gavin Stuart Brockett was appointed as Member after Leonard Cornelis Jorden Evers quitted, and Joo Miguel Ventura Rego Abecasis was appointed as Member upon adjustment) Strategy Committee Strategy Committee of the ninth Board of Directors: Lee Chee Kong, Chin Wee Hua, Lv Yandong, Gong Yongde, Roland Arthur Lawrence (Leonard Cornelis Jorden Evers was appointed as Member after Roland Arthur Lawrence quitted) Strategy Commission of the tenth Board of Directors: Lee Chee Kong, Chin Wee Hua, Lv Yandong, Leonard Cornelis Jorden Evers, Yuan Yinghong (Gavin Stuart Brockett was appointed as Member after Leonard Cornelis Jorden Evers quitted, and Joo Miguel Ventura Rego Abecasis was appointed as Member upon adjustment). (2). During the reporting period, the Audit Committee held meetings for 8 times Holding date Meeting content Major opinions and Information on other recommendations performance of duties 2022-02-16 Proposal on Conducting Aluminum The Audit Committee Hedging by the Subsidiary of the agreed to submit these Company and Proposal on the proposals to the Board of Investment of Short-Term Bank Directors for deliberation Financial Products by the Subsidiary and reminded the of the Company were deliberated and management team of approved at the first meeting of the noticing the risk Audit Committee of the ninth Board management and control. of Directors in 2022. 2022-02-28 Pan-China Certified Public The Audit Committee Accountants reported and conducted a detailed communicated the major issues understanding and concerned and found at preliminary communication of key review stage of 2021 financial audit audit matters, other and internal control audit at the important matters, and 45 / 246 ANNUAL REPORT 2022 second meeting of the Audit internal control audits in Committee of the ninth Board of the audit work, and paid Directors in 2022. special attention to the completion of performance commitments. 2022-03-30 Summary Reports on Financial The Audit Committee The Audit Committee Statements Audit and Internal Control agreed to submit these focused on the progress of Audit Performed by Pan-China proposals to the Board of tax planning project. Certified Public Accountants LLP for Directors for deliberation. the Year of 2021; Proposal on Changes in Accounting Policy for the Year of 2021; CBC 2021 Annual Report and Executive Summary; CBC 2021 Final Account Report; Proposal on the Dividends Distribution Plan for the Year of 2021; Evaluation Report on the CBC Internal Control for the Year of 2021; Annual Performance Report of the Audit Committee of the 9th Board of Directors for the Year of 2021 and Proposal on the Appointment of Pan- China Certified Public Accountants LLP to be the Auditor of the Company’s Financial Report and Internal Control for the Year of 2022 were deliberated and approved at the third meeting of the Audit Committee of the ninth Board of Directors in 2022. 2022-04-27 CBC 2022Q1 Report; Proposal on the The Audit Committee The Audit Committee Adjustment of Implementation Plan agreed to submit these focused on the progress of for Aluminum Hedging, and Proposal proposals to the Board of tax planning project. on the Adjustment of the Estimation of Directors for deliberation. Daily Related Party Transactions of the Company for 2022 were deliberated and approved at the fourth meeting of the Audit Committee of the ninth Board of Directors in 2022. 2022-06-20 Proposal on the Adjustment of 1664 The Audit Committee Blanc Royalty Rate was deliberated agreed to submit the and approved at the first meeting of proposal to the Board of the Audit Committee of the tenth Directors for deliberation. Board of Directors in 2022. 2022-08-16 CBC 2022 Half Year Report was The Audit Committee deliberated and approved at the agreed to submit the 46 / 246 ANNUAL REPORT 2022 second meeting of the Audit proposal to the Board of Committee of the tenth Board of Directors for deliberation. Directors in 2022. 2022-10-26 CBC 2022 Q3 Report was deliberated The Audit Committee and approved at the third meeting of agreed to submit the the Audit Committee of the tenth proposal to the Board of Board of Directors in 2022. Directors for deliberation. 2022-11-15 Proposal on the 2022 Interim The Audit Committee Dividend Distribution Plan of agreed to submit the Carlsberg Chongqing Brewery proposal to the Board of Company Limited; Proposal on the Directors for deliberation. Estimation of Daily Related Party Transactions in 2023, and Proposal on the Investment of Short-Term Bank Financial Products in 2023 were deliberated and approved at the fourth meeting of the Audit Committee of the tenth Board of Directors in 2022. (3). During the reporting period, the Nomination Committee held 4 meetings. Holding date Meeting content Major opinions and Information on other recommendations performance of duties 2022-02-16 Proposal on the Nomination of Mr. The Nomination Gavin Brockett as the Director of the Committee considered ninth Board of Directors of the that the candidate’s Company was deliberated and qualification conforms to approved at the first meeting of the relevant provisions of the Nomination Committee of the ninth Company Law and the Board of Directors in 2022. Articles of Association and agreed to submit the nomination to the Board of Directors for deliberation. 2022-04-27 Proposal on the Nominations of The Nomination Director Candidates for the tenth Committee considered Board of Directors was deliberated that the candidates’ and approved at the second meeting of qualifications conform to the Nomination Committee of the relevant provisions of the ninth Board of Directors in 2022. Company Law and the Articles of Association and agreed to submit the nominations to the Board of Directors for deliberation. 2022-06-20 Proposal on the Nomination of Mr. The Nomination Andrew Emslie as the Director of the Committee considered Company was deliberated and that the candidate’s 47 / 246 ANNUAL REPORT 2022 approved at the first meeting of the qualification conforms to Nomination Committee of the tenth relevant provisions of the Board of Directors in 2022. Company Law and the Articles of Association and agreed to submit the nomination to the Board of Directors for deliberation. 2022-11-15 Proposal on the Nomination of Mr. The Nomination Joo Abecasis as the Director of the Committee considered tenth Board of Directors of the that the candidate’s Company was deliberated and qualification conforms to approved at the second meeting of the relevant provisions of the Nomination Committee of the tenth Company Law and the Board of Directors in 2022. Articles of Association and agreed to submit the nomination to the Board of Directors for deliberation. (4). During the reporting period, the Remuneration and Appraisal Committee held 2 meetings Holding date Meeting content Major opinions and Information on other recommendations performance of duties 2022-03-30 Proposal on the Annual The Remuneration and Evaluation of the Performance Appraisal Committee and Remuneration of the Senior considered that the Management for the Year of 2021 remuneration of the was deliberated and approved at company's senior the first meeting of Remuneration management in 2021 and Appraisal Committee of the conforms to the provisions ninth Board of Directors in 2022. of Administrative Measures for the Remuneration and Performance Appraisal of Senior Management, and agreed to submit the proposal to the Board of Directors for deliberation. 2022-08-16 Proposal on the Amendment of The Remuneration and Remuneration and Performance Appraisal Committee Appraisal Plan for Senior agreed to submit the Management was deliberated and proposal to the Board of approved at the first meeting of Directors for deliberation. the Remuneration and Appraisal Committee of the tenth Board of Directors in 2022. 48 / 246 ANNUAL REPORT 2022 (5). During the reporting period, the Strategy Committee held 1 meeting. Holding date Meeting content Major opinions and Information on other recommendations performance of duties 2022-03-30 Proposal on the CBC Financial The Strategy Committee Budget for the Year of 2022 was agreed to the proposal. deliberated and approved at the first meeting of Strategy Committee of the ninth Board of Directors in 2022. (6). Specific circumstances with objections □ Applicable √ Not applicable VIII. Statement of the Company’s risks found by the Board of Supervisors □ Applicable √ Not applicable The Board of Supervisors has no objection to the supervisory matters during the reporting period. IX. Information on employees of parent company and main subsidiaries at the end of reporting period (I) Information of employees Number of employees on active duty in the parent 46 company Number of employees on active duty in the main 6,719 subsidiaries Total number of employees on active duty 6,765 Number of retired employees of whom the cost shall be 4,271 undertaken by the parent company and main subsidiary Profession constitution Classification of profession constitution Number of profession constitution Production personnel 1,962 Sales personnel 2,988 Technical personnel 1,289 Financial personnel 256 Administrative personnel 88 Others 182 Total 6,765 Educational status Classification of educational status Quantity (Person) Postgraduate 177 Undergraduate 1,535 Junior college 2,250 Senior high school and below 2,803 Total 6,765 (II) Remuneration policy √ Applicable □ Not applicable 49 / 246 ANNUAL REPORT 2022 During the reporting period, the compensation policy for employees of the Company was based on the economic benefit and business performance of the Company. According to the Company’s annual beer production and sales volume and profit situation, and considering the market remuneration situation, the salary growth ratio of all employees was determined. The year-end incentive assessment linked to the Company’s performance was implemented to middle and above management personnel. KPI performance indicator assessment was implemented in the production workshop, which was combined with product quality, various consumption indicators and production efficiency. The salary of the Company’s employees consisted of fixed salary, performance assessment salary and year-end dividend. (III) Training plan √ Applicable □ Not applicable The Company has a perfect employee training mechanism, that is, it will make training plans according to business development needs every year, and organize to carry out trainings. During the reporting period, the Company opened the leadership courses such as 3A Leadership - Synergy, 3A Leadership - Daring to Take Responsibility, 3A Leadership - Putting Into Practice, New Generation Management, DDI copyright course Improvement of Management Execution Ability, Incentive Deployment and Retaining Talents and Target Selection for the ability improvement of the key talents and team manager, in which the targeted action learning project Tiger Program was held respectively for the sales director and manager levels and the CE Basic Module Optimization - Organization Management was held for the supply chain manager level; For the young talent ability building and development, the young talent item was upgraded, which was divided into three items of “Comprehensive Management Trainees”, “Supply Chain Management Trainees” and “Special Sales Talents” as the talent reserves of the organization, and the training of courses such as 7 Habits of Highly-Efficiency Talents, Time Management and Role Transition of Professionals, etc. was provided; For the ability improvement and development of all staff, such courses as Financial Training for Non-Financial Manager - Basic Edition, Financial Training for Non-Financial Manager – Intermediate Edition, Situational Leadership II, Effective Coaching, and CarlsTalk or other sharing were provided to help the Company’s rapid development. The sales team organized the theme training of Eight Driving Forces, Eight Steps of Visiting, Sales Skill, Distributor Improvement, Shift Practical Operation Teaching of Enabling Sales Specialists, Taste and Art of Beer, etc., to continue to build the ability of sales team; Launched more targeted training contents of Terminal Development and Management of Catering, Terminal Development and Management of Entertainment, Joint Business Plan of Key Terminal, etc.; At the same time, the Win-Win Negotiation, Big Shot Sharing and other training and sharing were provided to improve the negotiation ability of sales personnel and promote the completion of sales target. In terms of the supply chain, the Company continued to deepen the lean production, enhanced the systematic and standard awareness of factory construction, launched Training on Basic Awareness of Carlsberg Excellent System, Introduction of Four Supports of Carlsberg, Root Cause Analysis and Problem Solving, Sensory Taste Training and EHS Training, and improved the work efficiency while promoting the standard awareness of the front-line employees. (IV) Information on labor outsourcing √ Applicable □ Not applicable Sum of working hours of labor outsourcing 3,413,570h Remuneration sum paid for labor outsourcing RMB 160,581,100 X. Profit distribution or the plan of capital reserve converted into share capital (I) Information on preparation, implementation or adjustment of cash dividends policy √ Applicable □ Not applicable 50 / 246 ANNUAL REPORT 2022 According to the Corporation Law of the People's Republic of China, Accounting Standards and Articles of Association, the Company propose below dividend distribution plan after considering the operation and shareholder’s interest. The Company plans to distribute cash dividends to all shareholders based on the total share capital of 483,971,198 shares as of December 31, 2022. The total amount of cash dividends is CNY 1,258,325,114.80 (tax included). The cash dividends to be distributed is derived from the operating profit of daily operation and is a kind of ordinary dividends. The Company plans to distribute cash dividends of CNY 2.60 per share (tax included). After the implementation of the dividend distribution plan for 2022, the remaining undistributed profit in the consolidated statement of the Company is CNY 77.69 million, and the remaining undistributed profit in the statement of the parent company is CNY 302.83 million. The Company will not use capital reserve to increase share capital in 2022. (II) Special statement of cash dividend policies √ Applicable □ Not applicable Whether the provisions of the Articles of Association or the √Yes □ No requirements of resolutions made at the General Meeting of Shareholders are met Whether the dividend standards and proportion are specific and clear √Yes □ No Whether relevant decision-making procedures and mechanisms are √Yes □ No complete Whether independent directors fulfill their duties and exert their due √Yes □ No roles Whether minority shareholders have the opportunities to fully √Yes □ No express opinions and appeals and whether their legal rights and interests are protected fully (III) During the reporting period, the Company profited and the parent company’s profit for distribution to the shareholders was positive, but in case of no cash dividend distribution plan presented, the Company should, in details, disclose the cause, as well as the purpose and use plan of the undistributed profit □ Applicable √ Not applicable (IV) Information on profit distribution and capital accumulation fund transferred to capital stock during this reporting period √ Applicable □ Not applicable Monetary unit: RMB Yuan Number of distributed bonus share (s) every 10 shares (Share) Number of dividend payout every 10 shares (RMB) 26.00 (tax-inclusive) Number of increase by transferring every 10 shares (Share) Amount of cash dividends (tax-inclusive) 1,258,325,114.80 Net profits attributable to common shareholders of the listed company in consolidated statements in dividend- 1,263,604,930.09 receiving year Proportion (%) accounting for net profits attributable 99.58 51 / 246 ANNUAL REPORT 2022 to common shareholders of the listed company in consolidated statements (%) Amount of buy-back of share in cash to be included in the cash dividends Cumulative dividend amount (tax-inclusive) 1,258,325,114.80 Proportion of cumulative dividend amount to net profits attributable to common shareholders of the 99.58 listed company in consolidated statements (%) XI. Information on the Company’s equity incentive plan, employee shareholding plan or other employee incentives and its influence (I) Incentive matters are already disclosed in the interim announcement and without progress or changes of subsequent execution □ Applicable √ Not applicable (II) Information on incentives not disclosed in the interim announcement or with subsequent progress Information on equity incentive □ Applicable √ Not applicable Other remarks □ Applicable √ Not applicable Information on employee shareholding plan □ Applicable √ Not applicable Other incentive measures □ Applicable √ Not applicable (III) Information on equity incentive awarded to directors and senior executives during the reporting period □ Applicable √ Not applicable (IV) Information on the establishment and implementation of the evaluation system and incentive mechanism for the senior executives during the reporting period √ Applicable □ Not applicable According to the need to establish a modern corporate system, the Company implemented the appointment system to senior executives, and established a fair and transparent performance evaluation and incentive mechanism for directors, supervisors and senior executives, to urge executives to fulfill the obligation of good faith and diligence, clarify their rights and responsibilities, and give play to the positivity and creativity of senior executives. The management team supervised the daily performance of senior executives in accordance with Rules on the Work of General Manager and Company Financial Management System. The Company conducted year-end evaluation to senior executives, and awards and punishments according to the business objectives set at the beginning of the year and the remuneration system for senior executives approved by the General Meeting of Shareholders. XII. Information on establishment and implementation of internal control systems during the reporting period √ Applicable □ Not applicable 52 / 246 ANNUAL REPORT 2022 The Company evaluates and revises the control process related to business in this year. During the reporting period, the Company provides training in risk and internal control policy for internal control staffs. The internal audit department is responsible for auditing special processes such as assets management process, personal information protection compliance process, distributor management process, commodity futures hedging process and human resource process. Statement of great defects in internal control during the reporting period □ Applicable √ Not applicable XIII. Information on management control on the subsidiaries during the reporting period √ Applicable □ Not applicable According to enterprise internal control system, the Company continuously evaluates the effectiveness of internal control of subsidiaries, and supervises the internal control through special process audit. The Company has not purchased new subsidiaries during the reporting period. XIV. Statement on relevant situation of internal control audit report √ Applicable □ Not applicable Pan-China Certified Public Accountants LLP engaged by the Company conducted an audit on the effectiveness of internal control related to financial reports of the Company and issued a standard unqualified audit report. 2022 Internal Control Audit Report of the Company refers to the website of SSE. Whether internal control audit report is disclosed: Yes Type of internal control audit report opinion: Standard unqualified opinion XV. Information on rectification of problems found by the listed company through special governance actions In strict accordance with the List of Special Self-inspection of Governance for Listed Companies, the Company analyzes carefully, and the major assets restructuring that the horizontal competition among controlling shareholders, actual controllers and listed companies founded in self-inspection having been completed at the end of December 2020 is solved thoroughly. The circumstance with qualification of failure for cash dividend in 2020 was found in self-inspection, because the listed company should raise necessary fund for settling profit/loss of transitional period of reorganized and contributed assets and daily management expenditure with Carlsberg Chongqing Brewery (formerly known as “Chongqing Jianiang”), and after major assets restructuring was completed, the business of listed company has been totally injected into Carlsberg Chongqing Brewery without operating cash flow, and Carlsberg Chongqing Brewery could not pay dividend to the listed company temporarily due to negative profit available for distribution. Considering the robustness of company operation, adequacy of cash flow and long-term development, the Company didn’t distribute cash dividend in 2020. In 2021, the Company has distributed the cash dividend RMB 2.00 (tax- inclusive) per share, a total of RMB 968 million according to the provision and guideline of dividend of CSRC and SSE and company dividend policy. In addition, the circumstance that the independent director of the listed company works on site for less than 10 working days due to external restrictions was found in self-inspection, and the listed company would provide each convenient condition to safeguard the duty performance of independent directors on site. XVI. Others □ Applicable √ Not applicable 53 / 246 ANNUAL REPORT 2022 SECTION V ENVIRONMENTAL AND SOCIAL RESPONSIBILITIES I. Environmental information Whether the environmental protection mechanism has Yes been established Environmental protection fund (in unit of: RMB ten i.e., RMB 17,260,000. thousand) has been invested during the reporting period (I) Statement of the environment protection of the Company belonging to the heavy pollution units as prescribed by the environment protection department and its major subsidiaries √ Applicable □ Not applicable 1. Pollution discharge information √ Applicable □ Not applicable Name of Number Pollutant Total Total major Excessive Company Discharge of Distribution Discharge discharge amount discharge pollutants and discharge name mode discharge information concentration standards of amount characteristic information outlet implemented discharge approved pollutants Be GB19821- Wanzhou discharged 2005 COD: COD: COD: Branch of into the Discharge Northwest 101mg/l 0.05454t 22.91t Carlsberg urban pipe Standard of Non- Wastewater 1 of the Ammonia Ammonia Ammonia Chongqing network Pollutants for exceeding factory nitrogen: nitrogen: nitrogen: Brewery Co., after Beer Industry 3.2mg/l 0.01728t 4.3t Ltd. qualified pretreatment treatment standard Be GB19821- Carlsberg discharged 2005 Chongqing COD: COD: COD: into the Discharge Brewery Co., Northeast 100.99mg/L 17.325t 376.78t urban pipe Standard of Non- Ltd. Wastewater 1 corner of Ammonia Ammonia Ammonia network Pollutants for exceeding (Mawang the factory nitrogen: nitrogen: nitrogen: after Beer Industry Township 15.94mg/L 2.687t 33.91t qualified pretreatment Factory) treatment standard GB19821- 2005 Discharge Standard of Be Pollutants for Carlsberg discharged Beer Industry COD: COD: COD: Chongqing into the pretreatment 127.58mg/L 10.321t 116.33t Brewery Co., urban pipe North in the standard and Non- Wastewater 1 Ammonia Ammonia Ammonia Ltd. network factory GB31962- exceeding nitrogen: nitrogen: nitrogen: (Dazhulin after 2015 1.39mg/L 0.181t 21.81t Factory) qualified Wastewater treatment Quality Standards for Discharge to Municipal Sewers Be GB19821- Hechuan discharged 2005 COD: COD: COD: Branch of into the Pretreatment North gate 200mg/L 25.38t 66.26t Carlsberg urban pipe standards for Non- Wastewater 1 in the Ammonia Ammonia Ammonia Chongqing network beer exceeding factory nitrogen: nitrogen: nitrogen: Brewery Co., after enterprises 16.20mg/L 1.49t 5.96t Ltd. qualified Discharge treatment Standard of 54 / 246 ANNUAL REPORT 2022 Pollutants for Beer Industry GB19821- Be 2005 Liangping discharged COD: 240.94 Pretreatment COD: COD: Branch of into the mg/L standards for Out of the 27.25t 429.45t Carlsberg urban pipe Ammonia beer Non- Wastewater 1 gate of the Ammonia Ammonia Chongqing network nitrogen: enterprises exceeding factory nitrogen: nitrogen: Brewery Co., after 13.88 mg/L Discharge 1.57t 38.65t Ltd. qualified Standard of treatment Pollutants for Beer Industry Be discharged GB19821- COD: COD: COD: Chongqing into the 2005 99mg/L 17.3t 145t Brewery urban pipe South of the Discharge Non- Wastewater 1 Ammonia Ammonia Ammonia Yibin Co., network factory Standard of exceeding nitrogen: nitrogen: nitrogen: Ltd. after Pollutants for 2.1mg/L 0.3t 29t qualified Beer Industry treatment Be GB19821- discharged 2005 COD: COD: COD: Chongqing into the Discharge 110mg/L 1.1765t 286.36t Beer urban pipe West in the Standard of Non- Wastewater 1 Ammonia Ammonia Ammonia Panzhihua network factory Pollutants for exceeding nitrogen: nitrogen: nitrogen: Co., Ltd. after Beer Industry 14.88 mg/L 0.1734t 25.77t qualified pretreatment treatment standard Be discharged GB19821- into the 2005 urban pipe Pretreatment Hunan COD: COD: COD: network standards for Chongqing 166 mg/L 15.55t 55t after West of the beer Non- Brewery Wastewater 1 Ammonia Ammonia Ammonia pretreatment factory enterprises exceeding Grandmen nitrogen: nitrogen: nitrogen: and enter the Discharge Co., Ltd. 0.98 mg/L 0.16t 21t urban Standard of sewage Pollutants for treatment Beer Industry station Be discharged GB19821- into the 2005 Yongzhou urban pipe Pretreatment Branch of COD: COD: COD: network standards for Hunan 147 mg/L 1.834t 39t after South of the beer Non- Chongqing Wastewater 1 Ammonia Ammonia Ammonia pretreatment factory enterprises exceeding Brewery nitrogen: nitrogen: nitrogen: and enter the Discharge Grandmen 0.73 mg/L 0.344t 8t urban Standard of Co., Ltd. sewage Pollutants for treatment Beer Industry station GB19821- Be 2005 Chongqing discharged Pretreatment COD: COD: COD: Brewery into the standards for 105 mg/L 10.8t 356t Group urban pipe East of the beer Non- Wastewater 1 Ammonia Ammonia Ammonia Chengdu network factory enterprises exceeding nitrogen: nitrogen: nitrogen: Bock Beer after Discharge 3.0 mg/L 0.25t 32t Co., Ltd. qualified Standard of treatment Pollutants for Beer Industry Kunming Discharge Southwest COD: GB19821- COD: COD: Non- Huashi Wastewater after 1 of the 113.19mg/L 2005 16.50t 158.37t exceeding Brewery Co., qualified factory Ammonia Discharge Ammonia Ammonia 55 / 246 ANNUAL REPORT 2022 Ltd. treatment nitrogen: Standard of nitrogen: nitrogen: 9.12mg/L Pollutants for 1.33t 11.88t Beer Industry pretreatment standard and GB31962- 2015 Wastewater Quality Standards for Discharge to Municipal Sewers GB19821- Carlsberg 2005 COD: COD: COD: (China) Discharge Discharge Northwest 71.77mg/L 18.14t 312.59t Brewery after Standard of Non- Wastewater 1 of the Ammonia Ammonia Ammonia Industry and qualified Pollutants for exceeding factory nitrogen: nitrogen: nitrogen: Trade treatment Beer Industry 2.09 mg/L 0.526t 29.23t Limited pretreatment standard GB19821- 2005 Discharge COD: COD: Standard of COD: Carlsberg Discharge 15.27t Northwest 52 mg/L Pollutants for 11.2t Brewery after Ammonia Non- Wastewater 1 of the Ammonia Beer Industry Ammonia (Guangdong) qualified nitrogen: exceeding factory nitrogen: and DB44/26- nitrogen: Co., Ltd. treatment 2.86t 9.9 mg/L 2001 2.14t Discharge Limit of Water Pollutants GB19821- Discharge to COD: 2005 municipal COD: COD: Carlsberg 108 mg/L Discharge sewage 13.811t 118.82t Brewery West side of Ammonia Standard of Non- Wastewater treatment 1 Ammonia Ammonia (Jiangsu) the factory nitrogen: Pollutants for exceeding plant after nitrogen: nitrogen: Co., Ltd. 4.16 mg/L Beer Industry being up to 0.79t 15.36t pretreatment standard standard GB19821- COD: COD: COD: Carlsberg Discharge 2005 Northeast 62mg/L 13t 53.23t Brewery after Discharge Non- Wastewater 1 of the Ammonia Ammonia Ammonia (Anhui) Co., qualified Standard of exceeding factory nitrogen: nitrogen: nitrogen: Ltd. treatment Pollutants for 4.6mg/L 0.97t 3.44t Beer Industry Discharge to GB19821- Carlsberg municipal COD: COD: COD: 2005 Tianmuhu sewage 262.86mg/L 11.95t 71.7t West side of Discharge Non- Brewery Wastewater treatment 1 Ammonia Ammonia Ammonia the factory Standard of exceeding (Jiangsu) plant after nitrogen: nitrogen: nitrogen: Pollutants for Co., Ltd. being up to 15.47mg/L 3.69t 5.4t Beer Industry standard GB19821- 2005 Discharge Standard of COD: COD: COD: Discharge Pollutants for Xinjiang Northwest 105.12mg/L 22.5t 301t after Beer Industry Non- Wusu Beer Wastewater 1 corner in Ammonia Ammonia Ammonia qualified pretreatment exceeding Co., Ltd. the factory nitrogen: nitrogen: nitrogen: treatment standard and 12.33mg/L 2.42t 98t GB31962- 2015 Wastewater Quality 56 / 246 ANNUAL REPORT 2022 Standards for Discharge to Municipal Sewers GB19821- 2005 Discharge Standard of Pollutants for Beer Industry COD: Xinjiang Discharge pretreatment 23.49 t Wusu Northwest after COD: standard and COD: Ammonia Non- Brewery Wastewater 1 corner in qualified 36mg/L GB31962- 6.72t; nitrogen: exceeding (Wusu) Co., the factory treatment 2015 2.35 t Ltd. Wastewater Quality Standards for Discharge to Municipal Sewers GB19821- 2005 Discharge Standard of Pollutants for Beer Industry Xinjiang COD: COD: COD: Discharge pretreatment Wusu Southeast 75.93mg/L 3.606t 18t after standard and Non- Brewery Wastewater 1 of the Ammonia Ammonia Ammonia qualified GB31962- exceeding (Yining) Co., factory nitrogen: nitrogen: nitrogen: treatment 2015 Ltd. 0.635mg/L 1.2946t 11.025t Wastewater Quality Standards for Discharge to Municipal Sewers Negotiated discharge COD: Be standard in No total discharged Xinjiang COD: modification COD: output into the Wusu Southwest 2000mg/L list of 0.643t requirement urban pipe Non- Brewery Wastewater 1 of the Ammonia GB19821- Ammonia Ammonia network exceeding (Korla) Co., factory nitrogen: 2005 nitrogen: nitrogen: after Ltd. 25mg/L Discharge 0.005t No total qualified Standard of output treatment Pollutants for requirement Beer Industry GB19821- 2005 Discharge Standard of Pollutants for Beer Industry Xinjiang COD: COD: COD: Discharge pretreatment Wusu 61mg/L 8.75t 28t after West side of standard and Non- Brewery Wastewater 1 Ammonia Ammonia Ammonia qualified the factory GB31962- exceeding (Aksu) Co., nitrogen: nitrogen: nitrogen: treatment 2015 Ltd. 2.89mg/L 0.18t 5.25t Wastewater Quality Standards for Discharge to Municipal Sewers Ningxia Discharge Southwest COD: GB19821- COD: COD: Non- Wastewater 1 Xixia after of the 68.2mg/L 2005 13.113t 300t exceeding 57 / 246 ANNUAL REPORT 2022 Jianiang qualified factory Ammonia Discharge Ammonia Ammonia Brewery Co., treatment nitrogen: Standard of nitrogen: nitrogen: Ltd. 2.7mg/L Pollutants for 0.579t 9t Beer Industry pretreatment standard and GB31962- 2015 Wastewater Quality Standards for Discharge to Municipal Sewers 2. Information on construction and operation of pollution prevention and control facilities √ Applicable □ Not applicable In 2022, the Company's pollution control facilities operated stably, with all pollutants being discharged by meeting standards. All pollutants were qualified in the environmental protection inspection by environmental protection departments at all levels. 3. Information on environmental influence assessment of construction projects and other administrative licensing for environmental protection √ Applicable □ Not applicable Carlsberg (Foshan) Co., Ltd. newly built the beer project with 500,000kl annual output, and obtained the approval (FHSF [2022] No. 98) of environmental impact statement on December 19, 2022; Xinjiang Wusu Beer (Korla) Phase 3 Expansion Project was implemented, environmental impact assessment reply No. BHPJH [2022] No. 82; 4. Emergency plan for emergent environmental incidents √ Applicable □ Not applicable The Company has attached importance to environmental emergency early warning and risk prevention and control, and has established complete environmental risk prevention and control measures. Each brewery of the Company has formulated the Emergency Plan for Emergent Environmental Incidents and Environmental Risk Assessment Report, and put them on filing in relevant environmental protection departments. The Company can correctly cope with local or regional environmental pollution accidents caused by emergency environmental pollution and ecological damage, and ensure that the field emergency treatment can be quickly and effectively carried out to protect the brewery and surrounding environment as well as the life and property of the people in residential areas and prevent emergency environmental pollution accidents. 5. Environmental self-monitoring scheme √ Applicable □ Not applicable Each brewery of the Company has prepared the environmental protection self-monitoring scheme to conduct self- monitoring on various pollutant factors. The Company implements Discharge Standard of Pollutants for Beer Industry (GB19821-2005) and ISO14001 environmental management system and internal SHAPE system (environmental health and safety excellence assessment system). 6. Information on administrative penalties imposed for environmental problems during the reporting period □ Applicable √ Not applicable 58 / 246 ANNUAL REPORT 2022 7. Other environmental information that shall be made public □ Applicable √ Not applicable (II) Statement of environmental protection of companies other than key pollutant discharging units √ Applicable □ Not applicable Name of Number Pollutant Total Total major Excessive Company Discharge of Distribution Discharge discharge amount discharge pollutants and discharge name mode discharge information concentration standards of amount characteristic information outlet implemented discharge approved pollutants COD: GB19821-2005 COD: COD: Chongqing Discharge North and 3500mg/L Discharge 3.76t 105t Brewery after Non- Wastewater 1 south of the Ammonia Standard of Ammonia Ammonia Xichang qualified exceeding factory nitrogen: Pollutants for nitrogen: nitrogen: Co., Ltd. treatment 80 mg/L Beer Industry 0.49t 9.45t Be discharged into the Fuling urban pipe COD: 30.652 GB19821-2005 COD: COD: Branch of network Out of the mg/l Discharge 0.728t 143.18t Carlsberg after main Non- Wastewater 1 Ammonia Standard of Ammonia Ammonia Chongqing pretreatment entrance of exceeding nitrogen: Pollutants for nitrogen: nitrogen: Brewery and enter the the factory 0.515mg/l Beer Industry 0.0098t 12.89t Co., Ltd. urban sewage treatment station Be Shizhu discharged COD: GB19821-2005 COD: COD: Branch of into the park Northwest 199mg/L Discharge 26.62t 143.18t Carlsberg pipe Non- Wastewater 1 corner in Ammonia Standard of Ammonia Ammonia Chongqing network exceeding the factory nitrogen: Pollutants for nitrogen: nitrogen: Brewery after 1 mg/L Beer Industry 0.185t 12.88t Co., Ltd. qualified treatment 1. Information on administrative penalties imposed for environmental problems □ Applicable √ Not applicable 2. Disclosure of other environment information by referring to key pollutant discharging units □ Applicable √ Not applicable 3. Reasons for not disclosing other environmental information □ Applicable √ Not applicable (III) Information favorable to ecological protection, pollution prevention and control, and environmental responsibility performance √ Applicable □ Not applicable The Company paid high attention to rational utilization of water resources, and achieved the goal of unit water consumption in 2022 set by the Group falling by 25% in advance. Through lean production and management, we took a series of water saving measures, including water-saving transformation of bottle washer, packaged water reclamation project, water-saving vacuum pump and reclaimed water reuse project, and constantly reduced the unit water consumption. The water use efficiency reduced from 3.87HL/HL in 2015 to 2.24HL/HL in 2022, and the water consumption fell by 42%. The total water consumption in 2022 saved more than 2,070,000kl compared with that in 2015, equivalent to 8,000,000 standard swimming pools 59 / 246 ANNUAL REPORT 2022 of Olympic Games. In 2022, the water saving efficiency of the Company won multiple honors: 1. In 2022, Carlsberg (China) Brewery Industry and Trade Limited won national “Water Efficiency Leader” honor. 2. Carlsberg Chongqing Brewery Co., Ltd. (Dazhulin Brewery) and Carlsberg Chongqing Brewery Co., Ltd. Liangping Branch (Liangping Brewery) subordinated to the Company won 2022 Chongqing level “Water Efficiency Leader”. 3. Carlsberg Chongqing Brewery Co., Ltd. (Dazhulin Brewery) was awarded as “Chongqing Level Water Saving Enterprise”. 4. Carlsberg Brewery (Guangdong) Co., Ltd. (Huizhou Brewery) won “Huizhou Water Saving Enterprise” title. (IV) Measures taken for reducing carbon emissions during the reporting period and their effects Whether to take carbon reduction measures Yes Reduce emission of carbon dioxide equivalent (in unit 97,742 of: ton) Type of carbon emission reduction measures (such as Apply carbon emission reduction technology in power generation with clean energy, carbon emission production process and optimize the energy structure. reduction technology in production process, research and development and production of new products contributive to carbon emission reduction) Specific description √ Applicable □ Not applicable In order to reduce the carbon emission of beer production link, the Company actively takes the energy saving and emission reduction actions, and continues to increasing the energy saving and technological transformation of production technology and investment in energy structure optimization. Through performance benchmarking management, good practical application and lean production, the Company continues to improve the energy use efficiency and reduce the carbon emission of factory production link. Meanwhile, it actively develops the energy saving and technological transformation products, including application of low-voltage dynamic boiling technology, comprehensive utilization of thermal energy, boiler efficiency promotion, energy saving and transformation of bottle washer and sterilization machine. In contrast with that in 2018, the Company’s comprehensive energy consumption in 2022 reduced by 20%. The Company actively explores the alternative solution of clean energy, and tries to replace the traditional fossil energy with marsh gas and other new energies. In addition, the Company devotes to promoting the use ratio of renewable electricity of brewing link. In 2022, the Company used 157,142MWH green power in the proportion of 100%, and realized 97,742t carbon emission reduction. In 2022, the carbon emission of brewing of beer/HL reduced by more than 75% compared with that in 2015, and a total of 230,000t carbon dioxide was decreased, equivalent to 9,300mu trees planted. In order to reduce the carbon emission of logistics transportation link, the Company used electric forklift instead of diesel forklift in each brewery, and effectively reduced 2.24t carbon emission in contrast with that in 2021. While vigorously promoting the electrification of logistics fleet, the Company continues to propel the forklift battery replacement project, and replaces the traditional lead-acid battery with more eco-friendly lithium-ion battery. In addition, the Company cooperates with the logistics supplier, strictly monitors the use of fuel of logistics link, provides training for driver on fuel efficiency, and promotes the energy saving consciousness and environmental performance of suppliers. In the cooling storage link, the Company positively coordinates with the requirement of “any new refrigerator must be used with LED lighting and eco-friendly refrigerant” proposed by the group, and purchases the new refrigerator used with eco-friendly refrigerant. In addition, while the Company uses the refrigerant free of Freon and energy 60 / 246 ANNUAL REPORT 2022 saving freezer to effectively reduce the emission of greenhouse gas generated by refrigerant while reducing 10% terminal energy consumption. The Company began to carry out energy saving freezer project from 2021, and purchased about 18,000 energy saving freezers every year. II. Information on social responsibility (I) Whether to disclose the social responsibility report, sustainable development report or ESG report alone √ Applicable □ Not applicable For details, please refer to the 2022 Environmental, Social and Governance Report disclosed by the Company on the website of Shanghai Stock Exchange (www.sse.com.cn) on the same day. (II) Information on social responsibility works √ Applicable □ Not applicable External donation and public welfare project Quantity / content Statement of situation Total input (RMB ten thousand) 29.8 Please refer to the following specification. Including: Funds (RMB ten thousand) 29.8 Material discount (RMB ten thousand) Number of people (Person) Specific description √ Applicable □ Not applicable 1. On September 2, 2022, the 19th “Chongqing Brewery” Charity Grant Awarding Ceremony held by Yibin Municipal Party Committee of the Communist Youth League and Chongqing Brewery Yibin Co., Ltd. was held, and a total of RMB 0.2 million charity grant was awarded to 60 freshmen on site. 2. In the league and student union work brand cultivation and construction activity of “One Brand for One University” of universities in Chongqing, Chongqing Brewery Co., Ltd. invested expenditure in construction of each “Top 10 league and student union work brands” supporting project, a total of RMB 0.098 million, benefiting thousands of people. III. Information on consolidating and expanding the achievements in poverty alleviation and rural revitalization □ Applicable √ Not applicable Specific description □ Applicable √ Not applicable 61 / 246 ANNUAL REPORT 2022 SECTION VI SIGINIFICANT EVENTS I. Fulfillment of commitments (I) The commitment matters of the Company’s actual controllers, shareholders, related parties, purchasers, the Company and other related parties during the reporting period or lasting to the reporting period √ Applicable □ Not applicable Plan for the Whether Whether Time and next step in there is a timely and Specific reasons in Background of Types of Committing duration of case of Content of commitments duration of strict case of failure of commitments commitments parties commitme failure of the commitment timely fulfillment nts timely fulfillment is conducted fulfillment The listed company has the legal and The 36 registered complete ownership of the assets to trademarks of The listed be injected by Chongqing Brewery, Chongqing Brewery company and the listed company truly holds were seized on Dec. 2, will such assets, and is free from any 2020 due to continue to events of holding them for others or litigations, including following for the benefit of others by ten registered up the Commitments entrustment or trust; there are no trademarks of the trademark related to major Listed Asset injection other rights such as mortgages or Long-term No No “Shancheng” series transfer asset company pledges on such assets, no other and 26 registered procedures restructuring interest arrangements prohibiting or trademarks of the and update restricting transfer of such assets, nor “Chongqing” series. the progress any restrictions such as seizure, On Dec. 9, 2020, the after the sealing up or freeze of such assets by listed company completion law enforcement departments that obtained a ruling of the restrict the rights on such assets or issued by the transfer. other circumstances that hinder the Chongqing No. 1 62 / 246 ANNUAL REPORT 2022 transfer of ownership; the ownership Intermediate People’s of such assets is clear, with no Court, which ruled to ownership disputes or potential unseal the seized disputes of any kind, and with no assets of Chongqing internal decision-making obstacles Brewery. or substantive legal obstacles to the In order to ensure the assignment or transfer of such assets. normal use of such At the same time, the listed company trademarks by guarantees that this situation will Chongqing Jianiang continue until the assets intended to before the change of be injected to Chongqing Brewery registration of such are transferred to Chongqing trademarks to the Jianiang. name of Chongqing Jianiang (renamed as “Carlsberg Chongqing”), Chongqing Brewery signed a Trademark Licensing Contract with Chongqing Jianiang on Dec. 2, 2020, authorizing Chongqing Jianiang to use such trademarks during the period from the delivery date to the expiration date of such trademarks. 63 / 246 ANNUAL REPORT 2022 In January 2021, the Company received the Civil Ruling Paper and other documents issued by the Chongqing No. 1 Intermediate People’s Court, and according to the application for property preservation in the litigation filed by Chongqing Jiawei Beer Co. Ltd. to the Chongqing No. 1 Intermediate People’s Court, the Company’s trademarks seized in the litigation (hereinafter referred to as “Subsequently Restricted Trademarks”) included 15 registered trademarks of the “Shancheng” series and 88 registered trademarks of the “Chongqing” series held by the listed 64 / 246 ANNUAL REPORT 2022 company. The duration of seizure is three years (Jan. 4, 2021 –Jan. 3, 2024). In July 2022, the Company received the Enforcement Ruling Paper (No. 1 of Yu 01 ZB No. 528 (2020)) issued by the Chongqing No. 1 Intermediate People’s Court, which ruled to lift the seizure of the rights of the above- mentioned registered trademarks of the Company (including 15 registered trademarks of the “Shancheng” series and 88 registered trademarks of the “Chongqing” series) that were ruled in the Civil Ruling Paper (No. 2 of Yu 01 MC No. 988 (2020) and 65 / 246 ANNUAL REPORT 2022 the Notice on Assisting the Enforcement (No. 1 of Yu 01 ZB No. 528 (2020)). In July 2022, the Company submitted a request to the State Intellectual Property Administration for resuming the review of the transfer application. These trademarks are not core trademarks required for production and operation, and most of them are protective trademarks. Considering that the listed company has authorized Chongqing Jianiang to use such trademarks until the expiration date of such trademarks, and such trademarks have been in the process of 66 / 246 ANNUAL REPORT 2022 transfer, the above matters will not have a material adverse impact on the production and operation of the listed company, nor will they commit material breach of relevant commitments. 1. Carlsberg will ensure to maintain the independence of the listed company from Carlsberg and its affiliates in terms of business, assets, finance, personnel and institutions, will strictly abide by relevant regulations of CSRC on the independence of listed companies, Commitments and will not use the control of the related to major Others Carlsberg listed company to violate the Long-term No Yes asset standard operating procedures of the restructuring listed company, interfere in the business decisions of the listed company, or damage the legitimate rights and interests of the listed company and other shareholders; 2. The restructuring is conducive to improving the governance mechanism of the listed company, 67 / 246 ANNUAL REPORT 2022 improving the integrity of the assets of the listed company, enhancing the independence of the listed company, and helping the listed company maintain independence in terms of personnel, procurement, production, sales and intellectual property rights, which is in line with the interests of the listed company and all its shareholders. After the completion of the restructuring, Carlsberg will give full play to the active role of a controlling shareholder and assist the listed company to further strengthen and improve the governance structure of the listed company. Carlsberg commits that, if it violates the above commitments and thus causes losses to the listed company, it will bear corresponding compensations according to law. 1. Carlsberg Breweries will ensure to maintain the independence of the Commitments listed company from Carlsberg related to major Carlsberg Others Breweries and its affiliates in Long-term No Yes asset Breweries terms of business, assets, finance, restructuring personnel and institutions, will strictly abide by relevant regulations 68 / 246 ANNUAL REPORT 2022 of CSRC on the independence of listed companies, and will not use the control of the listed company to violate the standard operating procedures of the listed company, interfere in the business decisions of the listed company, or damage the legitimate rights and interests of the listed company and other shareholders; 2. The restructuring is conducive to improving the governance mechanism of the listed company, improving the integrity of the assets of the listed company, enhancing the independence of the listed company, and helping the listed company maintain independence in terms of personnel, procurement, production, sales and intellectual property rights, which is in line with the interests of the listed company and all its shareholders. After the completion of the restructuring, Carlsberg Breweries will give full play to the active role of a controlling shareholder and assist the listed company to further strengthen and improve the governance structure of 69 / 246 ANNUAL REPORT 2022 the listed company. Carlsberg Breweries also commits to urge Carlsberg Hong Kong and Carlsberg Chongqing to abide by and implement the above commitments to avoid harming the interests of the listed company and other shareholders. Carlsberg Breweries commits that, if it violates the above commitments and thus causes losses to the listed company, it will bear corresponding compensations according to law. During the period when the Carlsberg Foundation and Carlsberg Breweries control the listed company: 1. After the completion of the restructuring, Carlsberg and Commitments Carlsberg Carlsberg Breweries will minimize Resolution of related to major and and regulate related-party related-party Long-term No Yes asset Carlsberg transactions between Carlsberg, transactions restructuring Breweries Carlsberg Breweries and their affiliates and the listed company and enterprises controlled by the listed company in accordance with relevant laws and regulations; 2. For unavoidable or reasonable related-party transactions, Carlsberg 70 / 246 ANNUAL REPORT 2022 and Carlsberg Breweries commit to follow the principles of fairness, impartiality and openness of the market, sign agreements according to law, perform legal procedures, ensure the legality of the decision- making procedures of related-party transactions as well as the fairness and reasonableness of transaction prices and conditions and other terms of agreements, and not to harm the legitimate rights and interests of the listed company and other shareholders through related-party transactions. Carlsberg and Carlsberg Breweries commit that, if they violate the above commitments and thus cause losses to the listed company, they will bear corresponding compensations according to law. It is confirmed that Xinjiang plants intended to be shut down have Commitments completely ceased operations, and Resolution of related to major Carlsberg Carlsberg Consultancy commits that intra-industry Long-term No Yes asset Consultancy such Xinjiang plants will not directly competition restructuring or indirectly engage in businesses competing with Chongqing Brewery Co. Ltd. (the listed company) and 71 / 246 ANNUAL REPORT 2022 subsidiaries controlled by the listed company in China in the future. Carlsberg Consultancy commits that, if it violates the above commitments and thus causes losses to the listed company, it will bear corresponding compensations according to law. During the period when the Carlsberg Foundation controls the listed company or when Carlsberg Breweries is the controlling shareholder of the listed company: 1. From the date of completion of the restructuring, Carlsberg, Carlsberg Breweries and other enterprises controlled by them other than the Commitments Carlsberg listed company and subsidiaries Resolution of related to major and controlled by the listed company intra-industry Long-term No Yes asset Carlsberg shall not directly or indirectly competition restructuring Breweries engage in businesses competing with the listed company and subsidiaries controlled by it in mainland China. 2. For equities of subsidiaries not controlled by Carlsberg and Carlsberg Breweries, which are not included in the scope of the restructuring and involve beer assets and businesses in mainland China, Carlsberg and Carlsberg Breweries 72 / 246 ANNUAL REPORT 2022 commit as follows: (1) For companies not controlled by Carlsberg and Carlsberg Breweries, which are defined as Sino-foreign joint ventures as of the date of this letter (including Qinghai Huanghe Jianiang Beer Co. Ltd., Tianshui Huanghe Jianiang Beer Co. Ltd., Lanzhou Huanghe Jianiang Beer Co. Ltd., Jiuquan West Brewery Co. Ltd. and Tibet Lhasa Beer Co. Ltd.), a) if relevant joint venture parties agree in the future to acquire all or part of the equities directly and/or indirectly held by Carlsberg and Carlsberg Breweries in such companies on fair and reasonable terms, Carlsberg and Carlsberg Breweries commit to sell all or part of the equities held in such companies to the joint venture parties and not to increase their shareholding in such companies in the future, except as described in item c) below; b) if relevant joint venture parties agree in the future to sell all or part of the equities held by them in such companies to the listed company, and the business performance and asset quality of 73 / 246 ANNUAL REPORT 2022 relevant companies are qualified for the injection into the listed company, Carlsberg and Carlsberg Breweries commit to sell all the equities held by them to the listed company on the same terms or inject the equities into the listed company in other feasible ways at the same time as the joint venture parties sell all or part of the equities held by them in such companies to the listed company; c) if relevant joint venture parties agree in the future to sell all or part of the equities held by them but do not agree to sell such equities to the listed company, and the business performance and asset quality of relevant companies are qualified for the injection into the listed company, Carlsberg and Carlsberg Breweries commit to exercise the pre-emptive right in respect of the above- mentioned equities intended to be sold as instructed by the listed company, and sell the equities of relevant companies (including the above-mentioned equities acquired through the exercise of the pre- emptive right and the equities 74 / 246 ANNUAL REPORT 2022 originally held by Carlsberg and Carlsberg Breweries) to the listed company on the same terms (if relevant joint venture parties still hold part of the equities at that time, Carlsberg and Carlsberg Breweries will be subject to relevant joint venture parties’ waiver of the exercise of the pre-emptive right and the procedures stipulated in the Articles of Association) or inject the equities into the listed company in other feasible ways upon completion of the purchase; d) Except as described in item c) above, Carlsberg and Carlsberg Breweries commit not to seek control of such companies in any way. (2) For the company not controlled by Carlsberg and Carlsberg Breweries, which is defined as a wholly foreign-owned enterprise as of the date of this letter (i.e. Jing-A Brewing Co. Ltd.), if Carlsberg and Carlsberg Breweries acquire direct and/or indirect control of the company in the future and the company’s business performance and asset quality are qualified for the 75 / 246 ANNUAL REPORT 2022 injection into the listed company, Carlsberg and Carlsberg Breweries commit to sell the equities directly and/or indirectly held by them in the company to the listed company or inject the equities into the listed company in other feasible ways; if the listed company decides to waive the purchase according to its business development needs and through the internal decision-making process, Carlsberg and Carlsberg Breweries commit to sell the equities directly and/or indirectly held by them in the company to an unrelated third party. The fulfillment of the above commitments shall be subject to the national laws, regulations and industry policies, the requirements of administrative approval, and the internal decision-making procedures of the listed company. 3. If, after the completion of the restructuring, Carlsberg and Carlsberg Breweries (including wholly-owned enterprises, enterprises controlled by them and branches at all levels) obtain 76 / 246 ANNUAL REPORT 2022 investment opportunities directly competing with the main businesses or main products of the listed company in mainland China, which the listed company intends to participate in and has the ability to operate and relevant third parties agree to provide to the listed company on reasonable terms, Carlsberg and Carlsberg Breweries commit to prompt the third party to negotiate in good faith with the listed company so as to enable the listed company to implement such investment opportunities. If the aforesaid future investment opportunities in mainland China do not directly compete with the main businesses or main products of the listed company, or the listed company does not intend to or temporarily does not have the ability to operate such investment opportunities, or a third party refuses to provide such opportunities to the listed company, Carlsberg and Carlsberg Breweries may make investment or acquisition under the premise of complying with the 77 / 246 ANNUAL REPORT 2022 contents described in item 1 of this commitment letter. Carlsberg and Carlsberg Breweries also commit to urge Carlsberg Breweries Hong Kong Limited and Carlsberg Chongqing Ltd. to abide by and implement the above commitments so as to avoid harming the interests of the listed company and other shareholders. Carlsberg and Carlsberg Breweries commit that if they violate the above commitments and thus cause losses to the listed company, they will bear corresponding compensations according to law. The restructuring will greatly improve the profitability of the listed company, and it is expected that there will be no dilution of All directors Commitments immediate returns after the and senior related to major restructuring, but it cannot Others management Long-term No Yes asset completely rule out the possibility of the listed restructuring that its future profitability will be company less than expected. To further reduce the risk of the possible dilution of immediate returns of the listed company, all directors and senior 78 / 246 ANNUAL REPORT 2022 management of the listed company (individually and collectively referred to as “I”) hereby commit as follows: 1. I hereby commit not to transfer benefits to other units or individuals free of charge or on unfair terms, nor to harm the interests of the listed company in any other ways. 2. If I violate the above commitments and thus cause losses to the listed company or investors, I am willing to bear the liability of compensation to the listed company or investors according to law. The restructuring will greatly improve the profitability of the listed company, and it is expected that there will be no dilution of immediate returns after the Commitments restructuring, but it cannot related to major Carlsberg completely rule out the possibility Others Long-term No Yes asset Breweries that its future profitability will be restructuring less than expected. To further reduce the risk of the possible dilution of immediate returns of the listed company, Carlsberg Breweries, as the controlling shareholder of the listed company, hereby commits 79 / 246 ANNUAL REPORT 2022 that: 1. It will not interfere in the operation and management activities of the listed company beyond its authority, and will not encroach on the interests of the listed company. 2. In the restructuring, the listed company has signed the Profit Forecast and Compensation Agreement with effective conditions with relevant parties including Carlsberg Breweries, providing legally binding safeguards to avoid the dilution of immediate returns caused by the restructuring. 3. If Carlsberg Breweries violates the above commitments and thus cause losses to the listed company or investors, Carlsberg Breweries is willing to bear the liability of compensation to the listed company or investors according to law. The restructuring will greatly improve the profitability of the listed Commitments company, and it is expected that related to major Others Carlsberg there will be no dilution of Long-term No Yes asset immediate returns after the restructuring restructuring, but it cannot completely rule out the possibility 80 / 246 ANNUAL REPORT 2022 that its future profitability will be less than expected. To further reduce the risk of the possible dilution of immediate returns of the listed company, Carlsberg hereby commits that: 1. It will not interfere in the operation and management activities of the listed company beyond its authority, and will not encroach on the interests of the listed company. 2. In the restructuring, the listed company has signed the Profit Forecast and Compensation Agreement with effective conditions with relevant parties, providing legally binding safeguards to avoid the dilution of immediate returns caused by the restructuring. 3. If Carlsberg violates the above commitments and thus cause losses to the listed company or investors, Carlsberg is willing to bear the liability of compensation to the listed company or investors according to law. Commitments Resolution of In case of defects in the ownership or Carlsberg related to major defects of land related procedures of any buildings, Long-term No Yes Breweries asset and other structures, land use rights, 81 / 246 ANNUAL REPORT 2022 restructuring property rights construction projects and production lines owned or rented by companies of Package B and/or subsidiaries controlled by them before the completion of the restructuring, resulting in the failure of normal use of the above-mentioned buildings, structures, land, construction projects or production lines by companies of Package B and/or subsidiaries controlled by them, or causing litigations/arbitrations/disputes between companies of Package B and/or subsidiaries controlled by them and other third parties as well as administrative penalties imposed by relevant competent authorities, Carlsberg Breweries commits to bear all losses, damages and expenses incurred to Chongqing Jianiang Beer Co. Ltd. and the listed company according to law, including but not limited to all losses and expenses incurred due to litigations or arbitrations, fines, suspension of production or business, searching for alternative venues and relocation. Commitments Resolution of Carlsberg In case of defects in the ownership or Long-term No Yes 82 / 246 ANNUAL REPORT 2022 related to major defects of land Consultancy related procedures of any buildings, asset and other structures, land use rights, restructuring property rights construction projects and production lines owned or rented by companies of Package A and/or subsidiaries controlled by them before the completion of the restructuring, resulting in the failure of normal use of the above-mentioned buildings, structures, land, construction projects or production lines by companies of Package A and/or subsidiaries controlled by them, or causing litigations/arbitrations/disputes between companies of Package A and/or subsidiaries controlled by them and other third parties as well as administrative penalties imposed by relevant competent authorities, Carlsberg Consultancy commits to bear all losses, damages and expenses incurred to Chongqing Jianiang Beer Co. Ltd. and the listed company according to law, including but not limited to all losses and expenses incurred due to litigations or arbitrations, fines, suspension of production or business, searching for 83 / 246 ANNUAL REPORT 2022 alternative venues and relocation. In case of defects in the payment of five social insurances and the housing fund made by companies of Package B and/or subsidiaries controlled by them before the completion of the restructuring, resulting in recovery or supplementary payment required by Commitments relevant government departments, or related to major Carlsberg Others penalties imposed by relevant Long-term No Yes asset Breweries government departments or restructuring requirement of bearing any form of legal liability, thereby causing any losses, damages and expenses to Chongqing Jianiang Beer Co. Ltd. and the listed company, Carlsberg Breweries commits to bear the above losses and expenses according to law. In case of defects in the payment of five social insurances and the housing fund made by companies of Commitments Package A and/or subsidiaries related to major Carlsberg Others controlled by them before the Long-term No Yes asset Consultancy completion of the restructuring, restructuring resulting in recovery or supplementary payment required by relevant government departments, or 84 / 246 ANNUAL REPORT 2022 penalties imposed by relevant government departments or requirement of bearing any form of legal liability, thereby causing any losses, damages and expenses to Chongqing Jianiang Beer Co. Ltd. and the listed company, Carlsberg Consultancy commits to bear the above losses and expenses according to law. Carlsberg Hong Kong commits that the net profits of the 48.58% of the equity of Chongqing Jianiang realized in 2020, 2021 and 2022, which are attributable to the owners of the parent company after deducting non-recurring profits and losses, will be no less than Commitments Profit forecast RMB48.9771 million, RMB58.9149 related to major Carlsberg and million and RMB62.1098 million. 3 years Yes Yes asset Hong Kong compensation Upon the expiration of the restructuring performance commitment period, Chongqing Brewery shall engage an audit institution as provided in the Securities Law of the People’s Republic of China to conduct an impairment test (hereinafter referred to as the “Impairment Test”) on the underlying assets when issuing the 85 / 246 ANNUAL REPORT 2022 annual financial report, and issue a special audit report within 30 business days after issuing the annual financial report for the last year of the performance commitment period. After the Impairment Test: the total amount of the compensation made after the impairment test of the 48.58% of the equity of Chongqing Jianiang and the compensation made for the performance commitment shall not exceed the transaction price of the transfer of the equity of Chongqing Jianiang (i.e. RMB 643.4421 million), and if the ending impairment amount of the 48.58% of the equity of Chongqing Jianiang is greater than the accumulated amount of the compensation made by Carlsberg Hong Kong for the transfer of the equity of Chongqing Jianiang during the performance commitment period, then, subject to the aforementioned provisions, Carlsberg Hong Kong shall compensate Chongqing Brewery for the difference in cash in accordance with provisions of the Profit Forecast 86 / 246 ANNUAL REPORT 2022 and Compensation Agreement. Carlsberg Breweries and Carlsberg Consultancy commit that the aggregated net profits of all the underlying companies involved in asset Package A and asset Package B realized in 2020, 2021 and 2022, which are attributable to the owners of the parent company after deducting non-recurring profits and losses, will be no less than RMB565.4003 million, RMB767.6368 million and Carlsberg Commitments RMB808.9071 million. Upon the Profit forecast Breweries related to major expiration of the performance and and 3 years Yes Yes asset commitment period, Chongqing compensation Carlsberg restructuring Brewery shall engage an audit Consultancy institution as provided in the Securities Law of the People’s Republic of China to conduct an impairment test (hereinafter referred to as the “Impairment Test”) on the underlying assets when issuing the annual financial report, and issue a special audit report within 30 business days after issuing the annual financial report for the last year of the performance commitment period. After the 87 / 246 ANNUAL REPORT 2022 Impairment Test: the total amount of the compensation made after the impairment test of asset Package A and asset Package B and the compensation made for the performance commitment shall not exceed the total transaction price of asset Package A and asset Package B (i.e. RMB7,169,984,224.04). If the ending impairment amount of asset Package A and asset Package B is greater than the accumulated amount of the capital increased in Chongqing Jianiang and the compensation for the purchase of asset Package B by Carlsberg Breweries and Carlsberg Consultancy during the performance commitment period, then, subject to the aforementioned provisions, Carlsberg Breweries and Carlsberg Consultancy shall compensate Chongqing Jianiang for the difference in cash in accordance with provisions of the Profit Forecast and Compensation Agreement. 88 / 246 ANNUAL REPORT 2022 (II) Realization of profit forecasts for the Company’s assets or projects and its reasons if there are profit forecasts for assets or projects and the reporting period is still in the profit forecast period √ Realized □ Not Realized □ Not Applicable In 2020, the Company completed the major asset restructuring. For the performance commitments of the underlying assets in 2020, 2021 and 2022 as agreed in the restructuring report, the Company engaged Pan-China Certified Public Accountants LLP to issue the Commitments Verification Report numbered PCCPACVR [2023] 8-151 and PCCPACVR [2023] 8-152. Details are as follows. Monetary unit: RMB Ten Thousand Yuan Net profit after deducting Net profit after deducting Realization Items non-recurring profit and non-recurring profit and Differences rate (%) loss committed in 2022 loss realized in 2022 Asset Package A and Asset Package 80,890.71 170,907.06 90,016.35 211.28 B 48.58% of equity of Chongqing 6,210.98 16,830.97 10,619.99 270.99 Jianiang (III) Completion of performance commitments and its impact on goodwill impairment test □ Applicable √ Not applicable II. Non-operational occupation of funds by controlling shareholders and other related parties during the reporting period □ Applicable √ Not applicable III. Illegal guarantee situation □ Applicable √ Not applicable IV. Statement of the Company’s Board of Directors on the “Nonstandard Auditor’s Report” provided by the Accounting Firm □ Applicable √ Not applicable V. Analytical descriptions of the Company on the causes and influence of the Accounting Policy, Accounting Estimate Changes or Major Accounting Error Correction (I) Analytical Descriptions of the Company on the Causes and Influence of the Accounting Policy and Accounting Estimate Changes √ Applicable □ Not applicable Please refer to Section X Financial Report “V. Important accounting policies and accounting estimates 44” of the report for details. (II) Analytical Descriptions of the Company on the Causes and Influence of Major Accounting Error Correction □ Applicable √ Not applicable (III) Information on Communication with Former Certified Public Accountants □ Applicable √ Not applicable 89 / 246 ANNUAL REPORT 2022 (IV) Other remarks □ Applicable √ Not applicable VI. Engagement and dismissal of accounting firms Monetary unit: RMB Ten Thousand Yuan Current engagement Name of domestic accounting firms Pan-China Certified Public Accountants LLP Remuneration 180 Audit service period 10 Certified Public Accountants Huang Qiaomei, Zhao Xingming Certified Public Accountants’ continuous years for 4 years, 3 years audit services Name Remuneration Pan-China Certified Public Accounting firm of internal control audit 120 Accountants LLP Financial consultant Sponsor Remarks on engagement and dismissal of accounting firms √ Applicable □ Not applicable Pursuant to the “Proposal on the Appointment of Pan-China Certified Public Accountants LLP to be the Auditor of the Company’s Financial Report and Internal Control for the Year of 2022” deliberated and approved by the Company’s 2021 Annual General Meeting of Shareholders, the Company intended to pay remuneration of 1.80 million yuan for annual audit and remuneration of 1.20 million yuan for internal control audit, totaling 3.00 million yuan, to Pan-China Certified Public Accountants LLP. Remarks on the change of accounting firm during the audit period □ Applicable √ Not applicable VII. Information on facing delisting risk (I) Reasons of being given delisting risk warning □ Applicable √ Not applicable (II) Measures to be taken by the Company □ Applicable √ Not applicable (III) Information on and reasons for termination of listing □ Applicable √ Not applicable VIII. Relevant matters of bankruptcy reorganization □ Applicable √ Not applicable IX. Major litigation and arbitration matters 90 / 246 ANNUAL REPORT 2022 √ The Company has major litigation and arbitration matters in this year. □ The Company has no major litigation and arbitration matters in this year. (I) Litigation and arbitration matters already disclosed in the interim announcements and without subsequent progress √ Applicable □ Not applicable Summary and types of the matters Query index On September 27, 2020, Chongqing Jiawei, the Please refer to “L No. 2020-043”, “L No. 2021-005” shareholding subsidiary of the listed company, filed a and “L No. 2022-025” Announcements disclosed by the lawsuit against contract dispute of the Company to Company on the website (www.sse.com.cn) of Chongqing Municipal First Intermediate People’s Shanghai Stock Exchange on October 9, 2020, Court; February 5, 2021 and June 14, 2022 for details. On January 28, 2021, Chongqing Jiawei changed claim to RMB 822 million, and increased the joint defendants to 13; On March 30, 2021, Chongqing No. 1 Intermediate People's Court organized the first pretrial conference. Chongqing Jiawei submitted a new petition and a new defendant in court, with the claimed amount remaining unchanged. The pretrial conference didn’t conduct a substantial trial of the case, but only checked the situation of each party and made a brief inquiry on the procedural issues of the case. The second pretrial conference was held on July 7, 2021, at which the parties issued preliminary defense opinions, submitted evidences and checked the original evidences. The third pretrial conference was held during the period from October 26 to 28, 2021. The hearing was held from March 7 to March 8, 2022; On May 31, 2022, Chongqing Jiawei applied for withdrawing prosecution, and Chongqing Municipal First Intermediate People’s Court had ruled and approved it. 91 / 246 ANNUAL REPORT 2022 (II) Information on litigation and arbitration matters not disclosed in the interim announcements or with subsequent progress √ Applicable □ Not applicable Monetary unit: RMB million Yuan Whether the During the litigation Information on Party Type of Amount reporting (arbitration) Results of the execution of Defendant bearing litigation Basic information of the litigation involved in Information on litigation (arbitration) period: forms the litigation (arbitration) adjudication of (applied) joint and (arbitration) the litigation progress Plaintiff expected and impacts the litigation liabilities arbitration (arbitration) (applicant) liabilities and (arbitration) amounts The first hearing was held on May 7, 2021; The second hearing was held on On March 5, 2021, Chongqing July 15, 2021; The third hearing was Jianiang, a holding subsidiary of The final judgment of Chongqing held on October 20, 2021; On the listed company, filed a litigation the case does not affect Jianiang November 26, 2021, the Company to Chongqing No. 5 Intermediate the normal right of Brewery Co., received the ruling of the first instance Chongqing People's Court for Chongqing continuing distribution Ltd. (now for rejection of prosecution, but it Jiawei Distributed Jiawei, a joint-stock subsidiary of of right, and the renamed as 116.5 No refused to obey, so it instituted an Brewery profits Chongqing Jianiang refusing to Company will take Carlsberg appeal to Chongqing High People’s Co., Ltd. distribute the profits in 2019 and further measures to Chongqing Court; On January 6, 2023, it held a 2020. On June 11, 2021, Carlsberg require to distribute Brewery Co., hearing in the second instance. Chongqing Brewery changed the the undistributed Ltd.) Chongqing High People’s Court made amount of litigation to RMB 117 profit. a final judgment for rejecting an appeal million. and affirming original judgment on February 28, 2023. Chongqing Jiawei paid the principal amount of RMB 7,658,311.54 to the listed company on June 30, 2021. The listed company withdrew the claim for On January 13, 2021, the listed payment of the principal. On July 5, It was confirmed in the company filed a litigation to the Chongqing Chongqing 2021, the Court made a first-instance final judgment of this Chongqing People's Court of Dadukou District, Jiawei has paid Jiawei Contract judgment on the overdue interest case that Chongqing Brewery Co., requiring Chongqing Jiawei to pay 10.01 No overdue Brewery disputes payment and ordered Chongqing Jiawei was obligated Ltd. the sales expenses and interest on interests to the Co., Ltd. Jiawei to pay the overdue interest of to pay sales expenses overdue payment from June to Company. RMB 52,983.99. The listed company to the Company. December 2020. disobeyed the judgment of the first instance and then instituted an appeal to Chongqing No. 5 Intermediate People’s Court. On February 11, 2022, the 92 / 246 ANNUAL REPORT 2022 Company received the judgment of second instance, in which the appeal was rejected and the original judgment was held. On December 24, 2021, the Company received the ruling of the first instance On March 12, 2021, Carlsberg for rejection of prosecution, but it Chongqing Brewery, a subsidiary refused to obey, so it instituted an Chongqing controlled by the listed company, appeal to Chongqing High People’s Jianiang filed a lawsuit against Risun Group, Court; Brewery Co., Chongqing a major shareholder of Chongqing On August 26, 2022, the Company Ltd. (now Risun Jiawei for its long-term illegal Capital received the ruling of the last instance renamed as Industrial occupation of capital of Chongqing 711 No occupation for withdrawal of the first instance, and Carlsberg Group Co., Jiawei not through the resolution instructed Chongqing No. 5 Chongqing Ltd. procedures of Chongqing Jiawei, Intermediate People’s Court to hear the Brewery Co., requiring the latter to refund the case; Ltd.) capital of RMB 700 million it On April 14, 2023, Chongqing No. 5 occupied and interests to the third Intermediate People’s Court held a person Chongqing Jiawei. hearing for the case and the Company changed claim to RMB 711 million. 93 / 246 ANNUAL REPORT 2022 (III) Other remarks □ Applicable √ Not applicable X. Suspected violation of laws and regulations, penalty to and rectification of the listed company and its directors, supervisors, senior executives, controlling shareholders and actual controllers □ Applicable √ Not applicable XI. Statement of the honesty condition of the Company and its controlling shareholders and actual controllers during the reporting period □ Applicable √ Not applicable XII. Major related-party transactions (I) Related-party transactions relevant to daily operation 1. Events already disclosed in the interim announcements with no progress or changes in subsequent implementation √ Applicable □ Not applicable Summary of the matters Query index Pursuant to the “Proposal on the Estimation of Daily Please refer to the announcements of “L No. 2021- Related Party Transactions in 2022” deliberated and 038”, “L No. 2022-018” and “L 2022-027” approved by the Company’s Third Extraordinary Announcement disclosed by the Company on the General Meeting of Shareholders in 2021 dated website of Shanghai Stock Exchange (www.sse. December 1, 2021, the amount of daily related party com.cn) on November 13, 2021, April 29, 2022 and transactions in 2022 is expected to not exceed 326.372 June 21, 2022 respectively for details. million yuan. Later, due to the increase in the sales to or purchases from related parties in 2022, the amount of daily related party transactions for sales or purchases in 2022 is expected to increase by 40 million yuan pursuant to the “Proposal on the Adjustment of the Estimation of Daily Related Party Transactions of the Company for 2022” deliberated and approved by the Company’s 2021 Annual General Meeting of Shareholders dated May 26, 2022. Pursuant to the “Proposal on the Adjustment of 1664 Blanc Royalty Rate” deliberated and approved by the Company’s Second Extraordinary General Meeting of Shareholders in 2022 dated July 13, 2022, the license fees of daily related party transactions are expected to increase by 6.3 million yuan due to the adjustment of royalty rate of 1664 Blanc in the global market. 2. Events already disclosed in the interim announcements but with progress or changes in subsequent implementation □ Applicable √ Not applicable 3. Events not disclosed in the interim announcements □ Applicable √ Not applicable 94 / 246 ANNUAL REPORT 2022 (II) Related party transactions accrued from the assets or equity acquisition and sales 1. Events already disclosed in the interim announcements with no progress or changes in subsequent implementation □ Applicable √ Not applicable 2. Events already disclosed in the interim announcements but with progress or changes in subsequent implementation □ Applicable √ Not applicable 3. Events not disclosed in the interim announcements □ Applicable √ Not applicable 4. Where the performance is agreed, the achievements during the reporting period shall be disclosed √ Applicable □ Not applicable Please refer to (II) of Section VI “I. Fulfillment of commitments” of the report for details. (III) Major related-party transactions of joint investments abroad 1. Events already disclosed in the interim announcements with no progress or changes in subsequent implementation □ Applicable √ Not applicable 2. Events already disclosed in the interim announcements but with progress or changes in subsequent implementation □ Applicable √ Not applicable 3. Events not disclosed in the interim announcements □ Applicable √ Not applicable (IV) Related party creditor's rights and debt 1. Events already disclosed in the interim announcements with no progress or changes in subsequent implementation □ Applicable √ Not applicable 2. Events already disclosed in the interim announcements but with progress or changes in subsequent implementation □ Applicable √ Not applicable 3. Events not disclosed in the interim announcements □ Applicable √ Not applicable (V) Financial business between the Company and associated financial companies, and between financial companies controlled by the Company and its related party □ Applicable √ Not applicable (VI) Others □ Applicable √ Not applicable 95 / 246 ANNUAL REPORT 2022 XIII. Information on major contracts and its performance (I) Trusteeship, contracting and leasing matters 1. Information on trusteeship □ Applicable √ Not applicable 2. Information on contracting □ Applicable √ Not applicable 3. Information on leasing □ Applicable √ Not applicable (II) Information on guarantee □ Applicable √ Not applicable (III) Information on entrusting others with the management of cash assets 1. Information on entrusted wealth management (1) Situation of overall entrusted financial management √ Applicable □ Not applicable Monetary unit: RMB Yuan Type Source of fund Amount incurred Undue balance Overdue amount unrecovered Bank financing Self-owned funds 1,500,000,000 0 0 Other situations □ Applicable √ Not applicable (2) Information on single entrusted financial management √ Applicable □ Not applicable 96 / 246 ANNUAL REPORT 2022 Monetary unit: RMB Yuan Whether there is Withdrawal Types of Amount of Starting date Ending date Whether Investment Remuneration Annualized Expected Actual Information entrusted amount of entrusted entrusted of entrusted of entrusted Source go through Trustee direction of determination rate of revenue revenue or on actual finance impairment finance finance finance finance of fund legal funds method return (if any) loss recovery management provision management management management management procedures plan in the (if any) future Guaranteed RMB non- ANZ redeemable Bank Due principal HIBOR (China) November February 28, Bank and interest daily 500,000,000 Revenue 2.45% 3,096,527.78 3,096,527.78 Withdraw Yes Yes Co., Ltd. 29, 2021 2022 financing recovered in a interval Shanghai lump-sum cumulative Branch structured investment Standard Interval Due principal Chartered cumulative January 10, April 11, Bank and interest Bank 500,000,000 Revenue 2.45% 3,054,109.60 3,054,109.60 Withdraw Yes Yes structured 2022 2022 financing recovered in a (China) deposits lump-sum Limited Guaranteed RMB non- ANZ redeemable Bank Due principal HIBOR (China) March 22, Bank and interest daily 500,000,000 June 22, 2022 Revenue 2.45% 3,130,555.56 3,130,555.56 Withdraw Yes Yes Co., Ltd. 2022 financing recovered in a interval Shanghai lump-sum cumulative Branch structured investment Guaranteed RMB non- ANZ redeemable Bank Due principal HIBOR (China) September Bank and interest daily 500,000,000 June 22, 2022 Revenue 2.45% 3,130,555.56 3,130,555.56 Withdraw Yes Yes Co., Ltd. 22, 2022 financing recovered in a interval Shanghai lump-sum cumulative Branch structured investment 97 / 246 ANNUAL REPORT 2022 Other situations □ Applicable √ Not applicable (3) Impairment provision of entrusted financial management □ Applicable √ Not applicable 2. Information on entrusted loans (1) Information on overall entrusted loans □ Applicable √ Not applicable Other situations □ Applicable √ Not applicable (2) Information on single entrusted loans □ Applicable √ Not applicable Other situations □ Applicable √ Not applicable (3) Depreciation provisions of entrusted loans □ Applicable √ Not applicable 3. Other situations □ Applicable √ Not applicable (IV) Other material contracts □ Applicable √ Not applicable XIV. Description on other major matters that will significantly affect the value judgment and investment decisions made by investors □ Applicable √ Not applicable SECTION VII CHANGES IN SHARES AND INFORMATION ABOUT SHAREHOLDERS I. Information on changes in share capital (I) Table of share change 1. Table of share change During the reporting period, the sum of shares and share capital structure has no change. 2. Statement of changes in share □ Applicable √ Not applicable 3. Impact of the changes in shares of financial indexes of the recent year and the latest period, such as earnings per share, net assets per share (if any) □ Applicable √ Not applicable 98 / 246 ANNUAL REPORT 2022 4. Other contents disclosed according to the requirements of the Company or the securities regulatory institutions □ Applicable √ Not applicable (II) Information on changes in restricted shares □ Applicable √ Not applicable II. Information on securities issuance and listing (I) Information on issuance of securities as of the reporting period □ Applicable √ Not applicable Statement on the issuance of securities as of the reporting period (please specify separately for bonds with different interest rates during the duration): □ Applicable √ Not applicable (II) Information on changes in the Company's total shares and shareholder structure as well as in assets and liabilities structure □ Applicable √ Not applicable (III) Information on existing internal staff shares □ Applicable √ Not applicable III. Information on shareholders and actual controllers (I) Total number of shareholders Total number of shareholders of common stocks as 21,923 of the end of the reporting period (Nr.) Total number of common shareholders at the end 26,738 of the previous month before the annual report disclosure date (Nr.) Total number of preferred shareholders with the Not applicable voting rights recovered as of the end of reporting period (Nr.) Total number (Nr.) of preferred shareholders with Not applicable the voting right recovered at the end of the previous month before the disclosure date of annual report (II) Shareholding table of top ten shareholders and top ten shareholders of tradable shares (or shareholders without limited sales condition) as of the end of the reporting period Unit: Share Information on shareholdings of top ten shareholders Increase Quantity Information on pledge, Quantity of or of shares mark or freeze shares held Proportion Nature of Name (full names) of shareholders decrease with at the end of (%) shareholders during limited Share status Quantity the period the sales 99 / 246 ANNUAL REPORT 2022 reporting conditions period Overseas Carlsberg Brewery Hong Kong Limited 0 205,882,718 42.54 0 None legal person Overseas CARLSBERGCHONGQINGLIMITED 0 84,500,000 17.46 0 None legal person Hong Kong Securities Clearing Overseas -113,609 41,393,158 8.55 0 Unknown Company Limited legal person China Construction Bank Corporation – - Yinhua Fuyu Theme Hybrid Securities 10,897,612 2.25 0 Unknown Others 2,209,740 Investment Fund China Construction Bank Corporation – - Huitianfu Consumption Industry Hybrid 2,200,000 0.45 0 Unknown Others 2,800,000 Securities Investment Fund China Merchants Bank Company Co., Ltd. - Hongde Ruize Hybrid Securities 0 2,052,877 0.42 0 Unknown Others Investment Fund National Social Insurance Fund Portfolio 0 1,994,468 0.41 0 Unknown Others 118 China Merchants Bank Company Co., Ltd. – Hongde Ruiyuan Three-year 1,887,202 1,887,702 0.39 0 Unknown Others Holding Period Flexible Allocation Mixed Securities Investment Funds China Construction Bank Corporation – Penghua Zhongzheng Liquor trading 399,994 1,788,499 0.37 0 Unknown Others open-end index securities investment fund China Construction Bank Corporation- Huashang Intelligent Life Flexible 1,637,174 1,637,174 0.34 0 Unknown Others Configuration Hybrid Securities Investment Fund Information on shareholdings status of top ten shareholders without limited sales conditions Quantity of circulation shares without Category and quantity of shares Name of shareholders limited sales conditions Category Quantity Carlsberg Brewery Hong Kong Limited 205,882,718 RMB common shares 205,882,718 CARLSBERGCHONGQINGLIMITED 84,500,000 RMB common shares 84,500,000 Hong Kong Securities Clearing Company 41,393,158 RMB common shares 41,393,158 Limited China Construction Bank Corporation – Yinhua Fuyu Theme Hybrid Securities Investment 10,897,612 RMB common shares 10,897,612 Fund China Construction Bank Corporation – Huitianfu Consumption Industry Hybrid 2,200,000 RMB common shares 2,200,000 Securities Investment Fund China Merchants Bank Company Co., Ltd. - Hongde Ruize Hybrid Securities Investment 2,052,877 RMB common shares 2,052,877 Fund National Social Insurance Fund Portfolio 118 1,994,468 RMB common shares 1,994,468 China Merchants Bank Company Co., Ltd. – Hongde Ruiyuan Three-year Holding Period 1,887,702 RMB common shares 1,887,702 Flexible Allocation Mixed Securities Investment Funds China Construction Bank Corporation – Penghua Zhongzheng Liquor trading open-end 1,788,499 RMB common shares 1,788,499 index securities investment fund China Construction Bank Corporation- Huashang Intelligent Life Flexible 1,637,174 RMB common shares 1,637,174 Configuration Hybrid Securities Investment Fund Among the top ten shareholders without limited sales conditions, CARLSBERG Statement of related relationships or concerted CHONGQING LIMITED and Carlsberg Brewery HongKong Limited are both controlled by actions between above shareholders Carlsberg Brewery. China Merchants Bank Company Co., Ltd. - Hongde Ruize Hybrid Securities Investment Fund and China Merchants Bank Company Co., Ltd. – Hongde 100 / 246 ANNUAL REPORT 2022 Ruiyuan Three-year Holding Period Flexible Allocation Mixed Securities Investment Funds are both managed by Hongde Fund Management Co., Ltd. It is unknown if there is any related relationship between other shareholders or they are persons acting in concert. Number of shareholdings of top ten shareholders with limited sales conditions and limited sales conditions □ Applicable √ Not applicable (III) Strategic investor or general legal entity becoming top ten shareholders due to rights issue □ Applicable √ Not applicable IV. Information on controlling shareholders and actual controllers (I) Information on controlling shareholders 1 Legal person √ Applicable □ Not applicable Name Carlsberg Breweries A/S Principal or legal representative HenrikPoulsen Date of establishment June 29, 2000 Main business Brew, produce and sell beer in Denmark and foreign markets, provide process and technical services of beer business, and operate or participate in other industries related to beer business. 2 Natural person □ Applicable √ Not applicable 3 No special statement on the situation of controlling shareholders of the Company □ Applicable √ Not applicable 4 Statement on the situation of changes in controlling shareholders during the reporting period □ Applicable √ Not applicable 5 Block diagram of property right and control relationship between the Company and controlling shareholders √ Applicable □ Not applicable 101 / 246 ANNUAL REPORT 2022 (II) Situation of actual controllers 1 Legal person √ Applicable □ Not applicable Name Carlsberg Foundation Principal or legal representative Not applicable Date of establishment September 25, 1876 Main business Cultivate and support the natural sciences, mathematics, philosophy, anthropology and sociology and provide funds. Information on equities of other domestic and Hold 29% equities of Carlsberg foreign listed holding and equity participation companies during the reporting period 2 Natural person □ Applicable √ Not applicable 3 Special statement for the situation that the Company has no actual controllers □ Applicable √ Not applicable 4 Statement on change of the Company’s controls during the reporting period □ Applicable √ Not applicable 5 Block diagram of property right and control relationship between the Company and the actual controller √ Applicable □ Not applicable 102 / 246 ANNUAL REPORT 2022 6 The actual controllers control the Company by trust or other asset management methods □ Applicable √ Not applicable (III) Other situation about controlling shareholders and actual controllers □ Applicable √ Not applicable V. The cumulative shares pledged by the Company’s controlling shareholders or the first majority shareholder and other persons acting in concert with him/her accounted for more than 80% of the Company’s total shares □ Applicable √ Not applicable VI. Other corporate shareholders holding more than 10% of shares √ Applicable □ Not applicable Monetary unit: RMB Yuan Information on Name of Principal or main Date of Organization Registered corporate legal businesses or establishment code capital shareholder representative management activities, etc. CARLSBERG Not applicable June 12, 1995 Not applicable GBP 1 Hold and CHONGQING develop the LIMITED shares and businesses held by CARLSBERG CHONGQING LIMITED in Asia-Pacific 103 / 246 ANNUAL REPORT 2022 Region VII. Statement on shareholding reduction restriction □ Applicable √ Not applicable VIII. Information on implementation of share repurchase during the reporting period □ Applicable √ Not applicable SECTION VIII INFORMATION ON PREFERRED STOCKS □ Applicable √ Not applicable SECTION IX INFORMATION ON BONDS I. Corporate bonds, enterprise bonds and debt financing instruments of non-financial business □ Applicable √ Not applicable II. Information on convertible corporate bonds □ Applicable √ Not applicable SECTION X FINANCIAL REPORT I. Auditor’s Report √ Applicable □ Not applicable AUDITOR’S REPORT PCCPAAR [2023] No8-148. To the Shareholders of Chongqing Brewery Co., Ltd.: I. Audit Opinion We have audited the accompanying financial statements of Chongqing Brewery Co., Ltd. (the “Company”), which comprise the consolidated and parent company balance sheets as at December 31, 2022, the consolidated and parent company income statements, the consolidated and parent company cash flow statements, and the consolidated and parent company statements of changes in equity for the year then ended, as well as notes to financial statements. In our opinion, the attached financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2022, and of its financial performance and its cash flows for the year then ended in accordance with China Accounting Standards for Business Enterprises. 104 / 246 ANNUAL REPORT 2022 II. Basis for Audit Opinion We conducted our audit in accordance with China Standards on Auditing. Our responsibilities under those standards are further described in the Certified Public Accountant’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the China Code of Ethics for Certified Public Accountants, and we have fulfilled other ethical responsibilities. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. III. Key Audit Matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not express a separate opinion on these matters. (I) Revenue recognition 1. Key audit matters Please refer to item V 38 and VII 61 of this section for details. In 2022, the operating revenue of the Company amounted to 14,039,040,539.45 yuan, of which, 13,696,216,606.60 yuan was from main operations. As operating revenue is one of the key performance indicators of the Company, there might be inherent risks that the Company’s management (the “Management”) adopts inappropriate revenue recognition to achieve specific goals or expectations, we have identified revenue recognition as a key audit matter. 2. Responsive audit procedures Our main audit procedures for revenue recognition are as follows: (1) We obtained understandings of key internal controls related to revenue recognition and sales rebate, assessed the design of these controls, determined whether they had been executed, and tested the effectiveness of the operation; (2) We checked sales contracts by sampling method, identified terms related to the point in time when the customer obtained the control over relevant goods, and assessed whether the revenue recognition policy was in compliance with regulations of China Accounting Standards for Business Enterprises; (3) We performed analysis procedure on operating revenue and gross margin, so as to identify whether there are significant or abnormal fluctuations and find out the reason of fluctuations; (4) We checked supporting documents related to revenue recognition by sampling method, including sales contracts, orders, delivery lists, discount record and approval sheets, sales invoices, client acceptance receipts, etc.; (5) We performed confirmation procedures on current sales amount from main customers by sampling method in combination with confirmation procedure of accounts receivable and contract liabilities; 105 / 246 ANNUAL REPORT 2022 (6) We performed cut-off tests on the revenue recognized around the balance sheet date, and assessed whether the revenue was recognized in the appropriate period; and (7) We checked whether information related to operating revenue had been presented appropriately in the financial statements. (II) Impairment of goodwill 1. Key audit matters Please refer to item V 30 and VII 28 of this section for details. As of December 31, 2022, the cost of goodwill amounted to 718,230,066.13 yuan, with provision for impairment of 19,037,610.07 yuan, and the carrying amount amounted to 699,192,456.06 yuan. For asset group or asset group portfolio related to goodwill, if there is objective evidence indicating impairment loss, the Management performs impairment test on goodwill together with related asset group or asset group portfolio at the end of each period, and the recoverable amount of related asset group or asset group portfolio is determined based on the estimated present value of future cash flows. Key assumptions adopted in the impairment test include: revenue growth rate in detailed forecast period, growth rate in perpetual forecast period, gross margin, discount rate, etc. As the amount of goodwill is significant and impairment test involves significant judgment of the Management, we have identified impairment of goodwill as a key audit matter. 2. Responsive audit procedures Our main audit procedures for impairment of goodwill are as follows: (1) We obtained understandings of key internal controls related to impairment of goodwill, assessed the design of these controls, determined whether they had been executed, and tested the effectiveness of their operation; (2) We reviewed the present value of future cash flows estimated by the Management in previous years and the actual operating results, and assessed the accuracy of the Management’s historical estimations; (3) We obtained understandings of and assessed the competency, professional quality and objectivity of external appraisers engaged by the Management; (4) We assessed the reasonableness and consistency of impairment test method adopted by the Management; (5) We assessed the reasonableness of key assumptions used in impairment test and reviewed whether relevant assumptions were consistent with overall economy environment, industry condition, management situation, historical experience, etc.; (6) We tested the accuracy, completeness and relativity of data used by the Management in the impairment test and reviewed the internal consistency of related information in the impairment test; (7) We tested whether the calculation of estimated present value of future cash flows was accurate; and 106 / 246 ANNUAL REPORT 2022 (8) We checked whether information related to impairment of goodwill had been presented appropriately in the financial statements. IV. Other Information The Management is responsible for the other information. The other information comprises the information included in the Company’s annual report, but does not include the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of the other information, we are required to report that fact. We have nothing to report in this regard. V. Responsibilities of the Management and Those Charged with Governance for the Financial Statements The Management is responsible for preparing and presenting fairly the financial statements in accordance with China Accounting Standards for Business Enterprises, as well as designing, implementing and maintaining internal control relevant to the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the Management is responsible for assessing the Company’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 the Management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the Company’s financial reporting process. VI. Certified Public Accountant’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 China Standards on Auditing will always detect a material misstatement when it exists. Misstatement 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. We exercise professional judgment and maintain professional skepticism throughout the audit performed in accordance with China Standards on Auditing. We also: (I) Identify and assess the risks of material misstatement of the financial statements, whether due to fraud 107 / 246 ANNUAL REPORT 2022 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. (II) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. (III) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Management. (IV) Conclude on the appropriateness of the Management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’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 the Company to cease to continue as a going concern. (V) Evaluate the overall presentation, structure and content of the financial statements, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. (VI) Obtain sufficient and appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain sole responsibility for our audit opinion. We communicate with those charged with governance regarding the planned audit scope, time schedule and significant audit findings, including any deficiencies in internal control of concern 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 to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. 108 / 246 ANNUAL REPORT 2022 Pan-China Certified Public Accountants LLP Chinese Certified Public Accountant: Huang Qiaomei (Engagement Partner) Hangzhou China Chinese Certified Public Accountant: Zhao Xingming Date of Report: April 26, 2023 109 / 246 ANNUAL REPORT 2022 II. Financial Statements Consolidated balance sheet As at December 31, 2022 Prepared by: Chongqing Brewery Co., Ltd. Monetary unit: RMB Yuan Note Items December 31, 2022 December 31, 2021 No. Current assets: Cash and bank balances 1 3,397,877,592.02 2,355,194,070.43 Settlement funds Loans to other banks Held-for-trading financial assets 2 501,088,888.89 Derivative financial assets 3 3,829,356.40 Notes receivable Accounts receivable 5 65,511,539.08 109,244,673.73 Receivables financing Advances paid 7 43,187,607.98 45,117,660.67 Premiums receivable Reinsurance accounts receivable Reinsurance reserve receivable Other receivables 8 17,619,026.18 11,830,136.29 Including: Interest receivable Dividend receivable Financial assets under reverse repo Inventories 9 2,166,477,563.20 1,886,751,987.27 Contract assets Assets held for sale Non-current assets due within one year Other current assets 13 109,533,473.56 83,454,893.33 Total current assets 5,804,036,158.42 4,992,682,310.61 Non-current assets: Loans and advances Debt investments Other debt investments Long-term receivables Long-term equity investments 17 296,599,881.05 240,320,800.68 Other equity instrument investments 18 14,303,331.73 13,210,379.78 Other non-current financial assets Investment property Fixed assets 21 3,680,691,105.17 3,705,081,241.59 Construction in progress 22 395,295,204.91 162,076,985.24 Productive biological assets Oil & gas assets Right-of-use assets 25 100,306,926.11 39,218,000.00 Intangible assets 26 685,169,039.95 615,080,288.96 Development expenditures Goodwill 28 699,192,456.06 699,192,456.06 Long-term prepayments Deferred tax assets 30 732,407,316.03 1,062,310,605.52 Other non-current assets 31 89,540,749.40 3,636,075.76 Total non-current assets 6,693,506,010.41 6,540,126,833.59 Total assets 12,497,542,168.83 11,532,809,144.20 110 / 246 ANNUAL REPORT 2022 Note Items December 31, 2022 December 31, 2021 No. Current liabilities: Short-term borrowings Central bank loans Loans from other banks Held-for-trading financial liabilities Derivative financial liabilities 34 2,616,336.56 Notes payable Accounts payable 36 2,497,671,747.37 2,212,689,178.11 Advances received Contract liabilities 38 1,614,042,546.14 1,732,741,425.80 Financial liabilities under repo Absorbing deposit and interbank deposit Deposit for agency security transaction Deposit for agency security underwriting Employee benefits payable 39 399,367,324.65 512,763,340.97 Tax payables 40 255,387,461.35 395,925,319.93 Other payables 41 3,490,319,176.38 2,971,960,641.25 Including: Interest payable Dividend payable Handling fee and commission payable Reinsurance accounts payable Liabilities held for sale Non-current liabilities due within one 43 24,005,592.21 22,313,992.68 year Other current liabilities 44 27,809,237.78 33,979,353.25 Total current liabilities 8,311,219,422.44 7,882,373,251.99 Non-current liabilities: Insurance policy reserve Long-term borrowings Bonds payable Including: Preferred shares Perpetual bonds Lease liabilities 47 77,928,597.87 16,951,000.00 Long-term payables Long-term employee benefits payable 49 154,407,707.35 163,668,974.22 Provisions 50 31,657,899.75 31,862,723.02 Deferred income 51 256,611,695.14 254,683,905.82 Deferred tax liabilities 30 42,694,067.15 54,974,049.35 Other non-current liabilities Total non-current liabilities 563,299,967.26 522,140,652.41 Total liabilities 8,874,519,389.70 8,404,513,904.40 Equity: Share capital 53 483,971,198.00 483,971,198.00 Other equity instruments Including: Preferred shares Perpetual bonds Capital reserve 55 7,728,100.00 2,075,145.00 Less: Treasury shares Other comprehensive income 57 -13,542,920.53 -13,838,109.84 Special reserve 111 / 246 ANNUAL REPORT 2022 Note Items December 31, 2022 December 31, 2021 No. Surplus reserve 59 241,985,599.00 241,985,599.00 General risk reserve Undistributed profit 60 1,336,013,806.16 1,040,351,272.07 Total equity attributable to the parent 2,056,155,782.63 1,754,545,104.23 company Non-controlling interest 1,566,866,996.50 1,373,750,135.57 Total equity 3,623,022,779.13 3,128,295,239.80 Total liabilities & equity 12,497,542,168.83 11,532,809,144.20 Legal representative: Joo Miguel Ventura Rego Abecasis Person in charge of accounting work: Chin Wee Hua Person in charge of accounting department: Liu Liping Parent company balance sheet As at December 31, 2022 Prepared by: Chongqing Brewery Co., Ltd. Monetary unit: RMB Yuan Note Items December 31, 2022 December 31, 2021 No. Current assets: Cash and bank balances 705,386,630.22 606,616,362.91 Held-for-trading financial assets Derivative financial assets Notes receivable Accounts receivable Receivables financing Advances paid Other receivables 2 4,353,422.01 216,585.47 Including: Interest receivable Dividend receivable Inventories Contract assets Assets held for sale Non-current assets due within one year Other current assets 451,891.89 1,312,005.84 Total current assets 710,191,944.12 608,144,954.22 Non-current assets: Debt investments Other debt investments Long-term receivables Long-term equity investments 3 1,695,066,358.71 1,695,066,358.71 Other equity instrument investments Other non-current financial assets Investment property Fixed assets 597,383.01 1,452,968.55 Construction in progress Productive biological assets Oil & gas assets Right-of-use assets 3,612,273.62 Intangible assets 5,263,493.45 112 / 246 ANNUAL REPORT 2022 Note Items December 31, 2022 December 31, 2021 No. Development expenditures Goodwill Long-term prepayments Deferred tax assets Other non-current assets Total non-current assets 1,699,276,015.34 1,701,782,820.71 Total assets 2,409,467,959.46 2,309,927,774.93 Current liabilities: Short-term borrowings Held-for-trading financial liabilities Derivative financial liabilities Notes payable Accounts payable 1,970,831.46 8,307,002.70 Advances received Contract liabilities Employee benefits payable 16,766,079.43 17,413,484.57 Tax payables 992,135.97 588,351.37 Other payables 29,398,503.34 28,326,799.18 Including: Interest payable Dividend payable Liabilities held for sale Non-current liabilities due within one 345,803.89 year Other current liabilities Total current liabilities 49,473,354.09 54,635,637.82 Non-current liabilities: Long-term borrowings Bonds payable Including: Preferred shares Perpetual bonds Lease liabilities 3,384,255.31 Long-term payables Long-term employee benefits payable 58,798,007.24 59,116,000.00 Provisions Deferred income Deferred tax liabilities Other non-current liabilities Total non-current liabilities 62,182,262.55 59,116,000.00 Total liabilities 111,655,616.64 113,751,637.82 Equity: Share capital 483,971,198.00 483,971,198.00 Other equity instruments Including: Preferred shares Perpetual bonds Capital reserve 29,273,418.97 23,620,463.97 Less: Treasury shares Other comprehensive income -18,577,000.00 -17,195,000.00 Special reserve Surplus reserve 241,985,599.00 241,985,599.00 Undistributed profit 1,561,159,126.85 1,463,793,876.14 Total equity 2,297,812,342.82 2,196,176,137.11 Total liabilities & equity 2,409,467,959.46 2,309,927,774.93 113 / 246 ANNUAL REPORT 2022 Legal representative: Joo Miguel Ventura Rego Abecasis Person in charge of accounting work: Chin Wee Hua Person in charge of accounting department: Liu Liping Consolidated income statement For the year ended December 31, 2022 Monetary unit: RMB Yuan Note Current period Preceding period Items No. cumulative comparative I. Total operating revenue 14,039,040,539.45 13,119,310,688.30 Including: Operating revenue 61 14,039,040,539.45 13,119,310,688.30 Interest income Premiums earned Revenue from handling charges and commission II. Total operating cost 10,788,719,947.64 10,205,460,291.83 Including: Operating cost 61 6,952,428,993.91 6,436,358,227.59 Interest expenses Handling charges and commission expenditures Surrender value Net payment of insurance claims Net provision of insurance policy reserve Premium bonus expenditures Reinsurance expenses Taxes and surcharges 62 920,858,290.32 892,059,817.68 Selling expenses 63 2,326,217,227.20 2,212,894,661.26 Administrative expenses 64 534,570,348.93 516,877,144.95 R&D expenses 65 110,747,936.06 163,151,284.60 Financial expenses 66 -56,102,848.78 -15,880,844.25 Including: Interest expenses 3,696,843.83 14,186,774.78 Interest income 65,718,589.46 36,050,785.69 Add: Other income 67 57,632,082.82 51,070,054.28 Investment income (or less: losses) 68 67,946,546.26 58,104,550.46 Including: Investment income from 56,279,080.37 43,299,933.71 associates and joint ventures Gains from derecognition of financial assets at amortized cost Gains on foreign exchange (or less: losses) Gains on net exposure to hedging risk (or less: losses) Gains on changes in fair value (or less: 70 1,088,888.89 losses) Credit impairment loss 71 2,461,066.24 850,058.41 Assets impairment loss 72 -81,390,922.88 -79,260,753.58 Gains on asset disposal (or less: losses) 73 1,996,546.49 1,835,601.88 III. Operating profit (or less: losses) 3,298,965,910.74 2,947,538,796.81 Add: Non-operating income 74 7,148,130.08 8,498,314.32 Less: Non-operating expenses 75 7,335,219.97 14,957,096.30 IV. Profit before tax (or less: total loss) 3,298,778,820.85 2,941,080,014.83 Less: Income tax expenses 76 711,879,179.42 541,923,818.55 114 / 246 ANNUAL REPORT 2022 Note Current period Preceding period Items No. cumulative comparative V. Net profit (or less: net loss) 2,586,899,641.43 2,399,156,196.28 (I) Categorized by the continuity of operations 1. Net profit from continuing operations 2,585,541,660.55 2,402,132,679.21 (or less: net loss) 2. Net profit from discontinued 1,357,980.88 -2,976,482.93 operations (or less: net loss) (II) Categorized by the portion of equity ownership 1. Net profit attributable to shareholders 1,263,604,930.09 1,166,243,415.91 of parent company (or less: net loss) 2. Net profit attributable to non- 1,323,294,711.34 1,232,912,780.37 controlling shareholders (or less: net loss) VI. Other comprehensive income after tax 77 1,934,967.86 2,908,893.29 (I) Items attributable to the shareholders of 77 295,189.31 937,354.38 the parent company 1.Not to be reclassified subsequently to 77 -179,586.53 937,354.38 profit or loss (1) Remeasurements of the net defined 77 -601,083.45 560,629.38 benefit plan (2) Items under equity method that will not be reclassified to profit or loss (3) Changes in fair value of other equity 77 421,496.92 376,725.00 instrument investments (4) Changes in fair value of own credit risk 2. To be reclassified subsequently to profit or 77 474,775.84 loss (1) Items under equity method that may be reclassified to profit or loss (2) Changes in fair value of other debt investments (3) Profit or loss from reclassification of financial assets into other comprehensive income (4) Provision for credit impairment of other debt investments (5) Cash flow hedging reserve 77 474,775.84 (6) Translation reserve (7) Others (II) Items attributable to non-controlling 1,639,778.55 1,971,538.91 shareholders VII. Total comprehensive income 2,588,834,609.29 2,402,065,089.57 (I) Items attributable to the shareholders 1,263,900,119.40 1,167,180,770.29 of the parent company (II) Items attributable to non-controlling 1,324,934,489.89 1,234,884,319.28 shareholders VIII. Earnings per share (EPS): (I) Basic EPS (yuan per share) 2.61 2.41 (II) Diluted EPS (yuan per share) 2.61 2.41 Legal representative: Joo Miguel Ventura Rego Abecasis Person in charge of accounting work: Chin Wee Hua Person in charge of accounting department: Liu Liping 115 / 246 ANNUAL REPORT 2022 Parent company income statement For the year ended December 31, 2022 Monetary unit: RMB Yuan Note Current period Preceding period Items No. cumulative comparative I. Operating revenue Less: Operating cost Taxes and surcharges 630,058.00 917,244.16 Selling expenses Administrative expenses 88,601,849.69 71,238,699.14 R&D expenses Financial expenses 3,240,694.54 7,209,408.01 Including: Interest expenses 7,534,478.52 6,535,672.37 Interest income 6,516,985.30 1,363,094.76 Add: Other income 226,665.56 471,630.02 Investment income (or less: losses) 5 1,155,407,400.00 858,714,000.00 Including: Investment income from associates and joint ventures Gains from derecognition of financial assets at amortized cost Gains on net exposure to hedging risk (or less: losses) Gains on changes in fair value (or less: losses) Credit impairment loss -217,728.25 -1,143.55 Assets impairment loss -330.53 Gains on asset disposal (or less: losses) 2,313,747.57 II. Operating profit (or less: losses) 1,065,257,152.12 779,819,135.16 Add: Non-operating income 50,084.90 Less: Non-operating expenses 6,935.03 III. Profit before tax (or less: total loss) 1,065,307,237.02 779,812,200.13 Less: Income tax expenses -409.69 6,251,717.46 IV. Net profit (or less: net loss) 1,065,307,646.71 773,560,482.67 (I) Net profit from continuing operations (or 1,063,949,665.83 776,306,113.06 less: net loss) (II) Net profit from discontinued operations 1,357,980.88 -2,745,630.39 (or less: net loss) V. Other comprehensive income after tax -1,382,000.00 -1,141,000.00 (I) Not to be reclassified subsequently to -1,382,000.00 -1,141,000.00 profit or loss 1. Remeasurements of the net defined -1,382,000.00 -1,141,000.00 benefit plan 2. Items under equity method that will not be reclassified to profit or loss 3. Changes in fair value of other equity instrument investments 4. Changes in fair value of own credit risk (II) To be reclassified subsequently to profit or loss 1. Items under equity method that may be reclassified to profit or loss 2. Changes in fair value of other debt investments 3. Profit or loss from reclassification of 116 / 246 ANNUAL REPORT 2022 Note Current period Preceding period Items No. cumulative comparative financial assets into other comprehensive income 4. Provision for credit impairment of other debt investments 5. Cash flow hedging reserve 6. Translation reserve 7. Others VI. Total comprehensive income 1,063,925,646.71 772,419,482.67 VII. Earnings per share (EPS): (I) Basic EPS (yuan per share) (II) Diluted EPS (yuan per share) Legal representative: Joo Miguel Ventura Rego Abecasis Person in charge of accounting work: Chin Wee Hua Person in charge of accounting department: Liu Liping Consolidated cash flow statement For the year ended December 31, 2022 Monetary unit: RMB Yuan Note Current period Preceding period Items No. cumulative comparative I. Cash flows from operating activities: Cash receipts from sale of goods or 15,115,689,237.16 15,005,626,361.63 rendering of services Net increase of client deposit and interbank deposit Net increase of central bank loans Net increase of loans from other financial institutions Cash receipts from original insurance contract premium Net cash receipts from reinsurance Net increase of policy-holder deposit and investment Cash receipts from interest, handling charges and commission Net increase of loans from others Net increase of repurchase Net cash receipts from agency security transaction Receipts of tax refund 63,437,941.07 Other cash receipts related to operating 78 (1) 1,529,443,356.44 771,482,436.93 activities Subtotal of cash inflows from operating 16,708,570,534.67 15,777,108,798.56 activities Cash payments for goods purchased and 7,182,798,597.19 6,753,412,859.07 services received Net increase of loans and advances to clients Net increase of central bank deposit and interbank deposit Cash payments for insurance indemnities 117 / 246 ANNUAL REPORT 2022 Note Current period Preceding period Items No. cumulative comparative of original insurance contracts Net increase of loans to others Cash payments for interest, handling charges and commission Cash payments for policy bonus Cash paid to employees 1,638,870,963.42 1,409,253,997.79 Cash payments for taxes 2,385,111,985.13 2,348,862,111.52 Other cash payments related to operating 78 (2) 1,749,140,730.39 1,700,792,716.78 activities Subtotal of cash outflows from 12,955,922,276.13 12,212,321,685.16 operating activities Net cash flows from operating 3,752,648,258.54 3,564,787,113.40 activities II. Cash flows from investing activities: Cash receipts from withdrawal of 1,512,411,748.50 1,514,402,576.10 investments Cash receipts from investment income 344,606.28 50,041,498.38 Net cash receipts from the disposal of fixed assets, intangible assets and other long- 11,975,166.19 9,143,987.03 term assets Net cash receipts from the disposal of subsidiaries & other business units Other cash receipts related to investing activities Subtotal of cash inflows from investing 1,524,731,520.97 1,573,588,061.51 activities Cash payments for the acquisition of fixed assets, intangible assets and other long- 912,818,007.38 725,336,585.84 term assets Cash payments for investments 1,000,000,000.00 2,000,000,000.00 Net increase of pledged borrowings Net cash payments for the acquisition of subsidiaries & other business units Other cash payments related to investing activities Subtotal of cash outflows from 1,912,818,007.38 2,725,336,585.84 investing activities Net cash flows from investing -388,086,486.41 -1,151,748,524.33 activities III. Cash flows from financing activities: Cash receipts from absorbing investments Including: Cash received by subsidiaries from non-controlling shareholders as investments Cash receipts from borrowings Other cash receipts related to financing activities Subtotal of cash inflows from financing activities Cash payments for the repayment of 890,000,000.00 borrowings Cash payments for distribution of dividends or profits and for interest 2,099,760,024.96 856,857,615.14 expenses 118 / 246 ANNUAL REPORT 2022 Note Current period Preceding period Items No. cumulative comparative Including: Cash paid by subsidiaries to non-controlling shareholders as dividend 1,131,817,628.96 844,681,498.62 or profit Other cash payments related to financing 78 (6) 33,725,924.40 266,823,000.00 activities Subtotal of cash outflows from 2,133,485,949.36 2,013,680,615.14 financing activities Net cash flows from financing -2,133,485,949.36 -2,013,680,615.14 activities IV. Effect of foreign exchange rate changes on cash & cash equivalents V. Net increase in cash and cash 1,231,075,822.77 399,357,973.93 equivalents Add: Opening balance of cash and cash 2,165,733,418.37 1,766,375,444.44 equivalents VI. Closing balance of cash and cash 3,396,809,241.14 2,165,733,418.37 equivalents Legal representative: Joo Miguel Ventura Rego Abecasis Person in charge of accounting work: Chin Wee Hua Person in charge of accounting department: Liu Liping Parent company cash flow statement For the year ended December 31, 2022 Monetary unit: RMB Yuan Note Current period Preceding period Items No. cumulative comparative I. Cash flows from operating activities: Cash receipts from sale of goods or rendering of services Receipts of tax refund 2,176,563.95 Other cash receipts related to operating 43,233,880.87 14,838,249.87 activities Subtotal of cash inflows from operating 45,410,444.82 14,838,249.87 activities Cash payments for goods purchased and services received Cash paid to employees 54,988,880.90 47,333,466.40 Cash payments for taxes 3,110,071.44 20,140,570.51 Other cash payments related to operating 36,874,392.35 35,583,911.88 activities Subtotal of cash outflows from operating 94,973,344.69 103,057,948.79 activities Net cash flows from operating activities -49,562,899.87 -88,219,698.92 II. Cash flows from investing activities: Cash receipts from withdrawal of investments Cash receipts from investment income 1,155,407,400.00 858,714,000.00 Net cash receipts from the disposal of fixed assets, intangible assets and other long-term 5,481,653.12 assets Net cash receipts from the disposal of 119 / 246 ANNUAL REPORT 2022 Note Current period Preceding period Items No. cumulative comparative subsidiaries & other business units Other cash receipts related to investing activities Subtotal of cash inflows from investing 1,160,889,053.12 858,714,000.00 activities Cash payments for the acquisition of fixed assets, intangible assets and other long-term 526,883.95 assets Cash payments for investments 55,481,532.85 Net cash payments for the acquisition of subsidiaries & other business units Other cash payments related to investing activities Subtotal of cash outflows from investing 526,883.95 55,481,532.85 activities Net cash flows from investing activities 1,160,362,169.17 803,232,467.15 III. Cash flows from financing activities: Cash receipts from absorbing investments Cash receipts from borrowings Other cash receipts related to financing activities Subtotal of cash inflows from financing activities Cash payments for the repayment of 140,000,000.00 borrowings Cash payments for distribution of dividends 975,373,606.56 6,535,672.37 or profits and for interest expenses Other cash payments related to financing 215,250.32 activities Subtotal of cash outflows from financing 975,588,856.88 146,535,672.37 activities Net cash flows from financing activities -975,588,856.88 -146,535,672.37 IV. Effect of foreign exchange rate changes on cash and cash equivalents V. Net increase in cash and cash 135,210,412.42 568,477,095.86 equivalents Add: Opening balance of cash and cash 569,390,759.47 913,663.61 equivalents VI. Closing balance of cash and cash 704,601,171.89 569,390,759.47 equivalents Legal representative: Joo Miguel Ventura Rego Abecasis Person in charge of accounting work: Chin Wee Hua Person in charge of accounting department: Liu Liping 120 / 246 ANNUAL REPORT 2022 Consolidated statement of changes in equity For the year ended December 31, 2022 Monetary unit: RMB Yuan Current period cumulative Equity attributable to parent company Items Other equity instruments Less: Other General Non-controlling Capital Special Surplus Undistributed Total equity Share capital Preferred Perpetual Treasury comprehensive risk Others Subtotal interest Others reserve reserve reserve profit shares bonds shares income reserve I. Balance at the end of prior year 483,971,198.00 2,075,145.00 -13,838,109.84 241,985,599.00 1,040,351,272.07 1,754,545,104.23 1,373,750,135.57 3,128,295,239.80 Add: Cumulative changes of accounting policies Error correction of prior period Business combination under common control Others II. Balance at the beginning of current year 483,971,198.00 2,075,145.00 -13,838,109.84 241,985,599.00 1,040,351,272.07 1,754,545,104.23 1,373,750,135.57 3,128,295,239.80 III. Current period increase (or less: decrease) 5,652,955.00 295,189.31 295,662,534.09 301,610,678.40 193,116,860.93 494,727,539.33 (I) Total comprehensive income 295,189.31 1,263,604,930.09 1,263,900,119.40 1,324,934,489.89 2,588,834,609.29 (II) Capital contributed or withdrawn by 5,652,955.00 5,652,955.00 5,652,955.00 shareholders 1. Ordinary shares contributed by shareholders 2. Capital contributed by holders of other equity instruments 3. Amount of share-based payment included in 5,652,955.00 5,652,955.00 5,652,955.00 equity 4. Others (III) Profit distribution -967,942,396.00 -967,942,396.00 -1,131,817,628.96 -2,099,760,024.96 1. Appropriation of surplus reserve 2. Appropriation of general risk reserve 3. Appropriation of profit to shareholders -967,942,396.00 -967,942,396.00 -1,131,817,628.96 -2,099,760,024.96 4. Others (IV) Internal carry-over within equity 1. Transfer of capital reserve to capital 2. Transfer of surplus reserve to capital 3. Surplus reserve to cover losses 4. Changes in defined benefit plan carried over to retained earnings 5. Other comprehensive income carried over to retained earnings 6. Others (V) Special reserve 1. Appropriation of current period 2. Application of current period (VI) Others IV. Balance at the end of current period 483,971,198.00 7,728,100.00 -13,542,920.53 241,985,599.00 1,336,013,806.16 2,056,155,782.63 1,566,866,996.50 3,623,022,779.13 121 / 246 ANNUAL REPORT 2022 Preceding period comparative Equity attributable to parent company Items Other equity instruments Less: Other General Non-controlling Capital Special Surplus Undistributed Total equity Share capital Preferred Perpetual Treasury comprehensive risk Others Subtotal interest Others reserve reserve reserve profit shares bonds shares income reserve I. Balance at the end of prior year 483,971,198.00 -14,775,464.22 241,985,599.00 -125,892,143.84 585,289,188.94 983,547,314.91 1,568,836,503.85 Add: Cumulative changes of accounting policies Error correction of prior period Business combination under common control Others II. Balance at the beginning of 483,971,198.00 -14,775,464.22 241,985,599.00 -125,892,143.84 585,289,188.94 983,547,314.91 1,568,836,503.85 current year III. Current period increase (or less: 2,075,145.00 937,354.38 1,166,243,415.91 1,169,255,915.29 390,202,820.66 1,559,458,735.95 decrease) (I) Total comprehensive income 937,354.38 1,166,243,415.91 1,167,180,770.29 1,234,884,319.28 2,402,065,089.57 (II) Capital contributed or withdrawn 2,075,145.00 2,075,145.00 2,075,145.00 by shareholders 1. Ordinary shares contributed by shareholders 2. Capital contributed by holders of other equity instruments 3. Amount of share-based payment 2,075,145.00 2,075,145.00 2,075,145.00 included in equity 4. Others (III) Profit distribution -844,681,498.62 -844,681,498.62 1. Appropriation of surplus reserve 2. Appropriation of general risk reserve 3. Appropriation of profit to -844,681,498.62 -844,681,498.62 shareholders 4. Others (IV) Internal carry-over within equity 1. Transfer of capital reserve to capital 2. Transfer of surplus reserve to capital 3. Surplus reserve to cover losses 4. Changes in defined benefit plan carried over to retained earnings 5. Other comprehensive income carried over to retained earnings 6. Others (V) Special reserve 1. Appropriation of current period 2. Application of current period (VI) Others IV. Balance at the end of current 483,971,198.00 2,075,145.00 -13,838,109.84 241,985,599.00 1,040,351,272.07 1,754,545,104.23 1,373,750,135.57 3,128,295,239.80 period Legal representative: Joo Miguel Ventura Rego Abecasis Person in charge of accounting work: Chin Wee Hua Person in charge of accounting department: Liu Liping 122 / 246 ANNUAL REPORT 2022 Parent company statement of changes in equity For the year ended December 31, 2022 Monetary unit: RMB Yuan Current period cumulative Other equity instruments Less: Other Items Special Undistributed Share capital Preferred Perpetual Capital reserve Treasury comprehensive Surplus reserve Total equity Others reserve profit shares bonds shares income I. Balance at the end of prior year 483,971,198.00 23,620,463.97 -17,195,000.00 241,985,599.00 1,463,793,876.14 2,196,176,137.11 Add: Cumulative changes of accounting policies Error correction of prior period Others II. Balance at the beginning of current 483,971,198.00 23,620,463.97 -17,195,000.00 241,985,599.00 1,463,793,876.14 2,196,176,137.11 year III. Current period increase (or less: 5,652,955.00 -1,382,000.00 97,365,250.71 101,636,205.71 decrease) (I) Total comprehensive income -1,382,000.00 1,065,307,646.71 1,063,925,646.71 (II) Capital contributed or withdrawn by 5,652,955.00 5,652,955.00 shareholders 1. Ordinary shares contributed by shareholders 2. Capital contributed by holders of other equity instruments 3. Amount of share-based payment 5,652,955.00 5,652,955.00 included in equity 4. Others (III) Profit distribution -967,942,396.00 -967,942,396.00 1. Appropriation of surplus reserve 2. Appropriation of profit to shareholders -967,942,396.00 -967,942,396.00 3. Others (IV) Internal carry-over within equity 1. Transfer of capital reserve to capital 2. Transfer of surplus reserve to capital 3. Surplus reserve to cover losses 4. Changes in defined benefit plan carried over to retained earnings 5. Other comprehensive income carried over to retained earnings 6. Others (V) Special reserve 1. Appropriation of current period 2. Application of current period (VI) Others IV. Balance at the end of current period 483,971,198.00 29,273,418.97 -18,577,000.00 241,985,599.00 1,561,159,126.85 2,297,812,342.82 123 / 246 ANNUAL REPORT 2022 Preceding period comparative Share capital Less: Other Items Special Undistributed Share capital Preferred Perpetual Capital reserve Treasury comprehensive Surplus reserve Total equity Others reserve profit shares bonds shares income I. Balance at the end of prior year 483,971,198.00 21,545,318.97 -16,054,000.00 241,985,599.00 690,233,393.47 1,421,681,509.44 Add: Cumulative changes of accounting policies Error correction of prior period Others II. Balance at the beginning of current 483,971,198.00 21,545,318.97 -16,054,000.00 241,985,599.00 690,233,393.47 1,421,681,509.44 year III. Current period increase (or less: 2,075,145.00 -1,141,000.00 773,560,482.67 774,494,627.67 decrease) (I) Total comprehensive income -1,141,000.00 773,560,482.67 772,419,482.67 (II) Capital contributed or withdrawn 2,075,145.00 2,075,145.00 by shareholders 1. Ordinary shares contributed by shareholders 2. Capital contributed by holders of other equity instruments 3. Amount of share-based payment 2,075,145.00 2,075,145.00 included in equity 4. Others (III) Profit distribution 1. Appropriation of surplus reserve 2. Appropriation of profit to shareholders 3. Others (IV) Internal carry-over within equity 1. Transfer of capital reserve to capital 2. Transfer of surplus reserve to capital 3. Surplus reserve to cover losses 4. Changes in defined benefit plan carried over to retained earnings 5. Other comprehensive income carried over to retained earnings 6. Others (V) Special reserve 1. Appropriation of current period 2. Application of current period (VI) Others IV. Balance at the end of current period 483,971,198.00 23,620,463.97 -17,195,000.00 241,985,599.00 1,463,793,876.14 2,196,176,137.11 Legal representative: Joo Miguel Ventura Rego Abecasis Person in charge of accounting work: Chin Wee Hua Person in charge of accounting department: Liu Liping 124 / 246 ANNUAL REPORT 2022 III. Company profile 1. Overview √ Applicable □ Not Applicable Chongqing Brewery Co., Ltd. (the “Company”) was a limited liability company by shares transformed from Chongqing Brewery Plant and established by the sole initiator Chongqing Beer (Group) Co., Ltd. through private placement under the approval of Chongqing Economic System Reform Commission. The Company currently holds a business license with unified social credit code of 915000002028235667, with registered capital of 483.97 million yuan, total share of 483.97 million shares (each with par value of one yuan), all of which are unrestricted outstanding shares. The Company’s shares were listed on the Shanghai Stock Exchange in October 1997. The Company belongs to the alchol, beverage and refined tea manufacturing industry and is mainly engaged in production and sales of beer and non-alcoholic beverages (excluding restricted items); production and sales of beer equipment, packages, raw and auxiliary materials; general cargo transportation (excluding dangerous goods transportation). The financial statements were approved and authorized for issue by the eighth meeting of the tenth of the Board of Directors dated April 26, 2023. 2. Consolidation scope √ Applicable □ Not Applicable The Company has brought 22 subsidiaries including Carlsberg Chongqing Brewery Co., Ltd. into the consolidation scope. Please refer to item IX of this section for details. IV. Preparation basis of the financial statements 1. Preparation basis The financial statements have been prepared on the basis of going concern. 2. Going concern √ Applicable □ Not Applicable The Company has no events or conditions that may cast significant doubts upon the Company’s ability to continue as a going concern within the 12 months after the balance sheet date. V. Significant accounting policies and estimates Notes to specific accounting policies and estimates: √ Applicable □ Not Applicable Important note: The Company has set up accounting policies and estimates on transactions or events such as impairment of financial instruments, depreciation of fixed assets, depreciation of right-of-use assets, amortization of intangible assets, revenue recognition, etc., based on the Company’s actual production and operation features. 125 / 246 ANNUAL REPORT 2022 1. Statement of compliance The financial statements have been prepared in accordance with the requirements of China Accounting Standards for Business Enterprises (CASBEs), and present truly and completely the financial position, financial performance and cash flows of the Company. 2. Accounting period The accounting year of the Company runs from January 1 to December 31 under the Gregorian calendar. 3. Operating cycle √ Applicable □ Not Applicable The Company has a relatively short operating cycle for its business, an asset or a liability is classified as current if it is expected to be realized or due within 12 months. 4. Functional currency The Company’s functional currency is Renminbi (RMB) Yuan. 5. Accounting treatments of business combination under and not under common control √ Applicable □ Not Applicable 1. Accounting treatment of business combination under common control Assets and liabilities arising from business combination are measured at carrying amount of the combined party included in the consolidated financial statements of the ultimate controlling party at the combination date. Difference between carrying amount of the equity of the combined party included in the consolidated financial statements of the ultimate controlling party and that of the combination consideration or total par value of shares issued is adjusted to capital reserve, if the balance of capital reserve is insufficient to offset, any excess is adjusted to retained earnings. 2. Accounting treatment of business combination not under common control When combination cost is in excess of the fair value of identifiable net assets obtained from the acquiree at the acquisition date, the excess is recognized as goodwill; otherwise, the fair value of identifiable assets, liabilities and contingent liabilities, and the measurement of the combination cost are reviewed, then the difference is recognized in profit or loss. 6. Compilation method of consolidated financial statements √ Applicable □ Not Applicable The parent company brings all its controlled subsidiaries into the consolidation scope. The consolidated financial statements are compiled by the parent company according to “CASBE 33 – Consolidated Financial Statements”, based on relevant information and the financial statements of the parent company and its subsidiaries. 7. Classification of joint arrangements and accounting treatment of joint operations □ Applicable √ Not Applicable 126 / 246 ANNUAL REPORT 2022 8. Recognition criteria of cash and cash equivalents Cash as presented in cash flow statement refers to cash on hand and deposit on demand for payment. Cash equivalents refer to short-term, highly liquid investments that can be readily converted to cash and that are subject to an insignificant risk of changes in value. 9. Foreign currency translation √ Applicable □ Not Applicable Transactions denominated in foreign currency are translated into yuan at the spot exchange rate at the transaction date at initial recognition. At the balance sheet date, monetary items denominated in foreign currency are translated at the spot exchange rate at the balance sheet date with difference, except for those arising from the principal and interest of exclusive borrowings eligible for capitalization, included in profit or loss; non-cash items carried at historical costs are translated at the spot exchange rate at the transaction date, with the RMB amounts unchanged; non-cash items carried at fair value in foreign currency are translated at the spot exchange rate at the date when the fair value was determined, with difference included in profit or loss or other comprehensive income. 10. Financial instruments √ Applicable □ Not Applicable 1. Classification of financial assets and financial liabilities Financial assets are classified into the following three categories when initially recognized: (1) financial assets at amortized cost; (2) financial assets at fair value through other comprehensive income; (3) financial assets at fair value through profit or loss. Financial liabilities are classified into the following four categories when initially recognized: (1) financial liabilities at fair value through profit or loss; (2) financial liabilities that arise when a transfer of a financial asset does not qualify for derecognition or when the continuing involvement approach applies; (3) financial guarantee contracts not fall within the above categories (1) and (2), and commitments to provide a loan at a below-market interest rate, which do not fall within the above category (1); (4) financial liabilities at amortized cost. 2. Recognition criteria, measurement method and derecognition condition of financial assets and financial liabilities (1) Recognition criteria and measurement method of financial assets and financial liabilities When the Company becomes a party to a financial instrument contract, it is recognized as a financial asset or financial liability. The financial assets and financial liabilities initially recognized by the Company are measured at fair value; for the financial assets and liabilities at fair value through profit or loss, the transaction expenses thereof are directly included in profit or loss; for other categories of financial assets and financial liabilities, the transaction expenses thereof are included into the initially recognized amount. However, at initial recognition, for accounts receivable that do not contain a significant financing component or in circumstances where the Company does not consider the financing components in contracts within one year, they are measured at the transaction price in accordance with “CASBE 14 – Revenues”. (2) Subsequent measurement of financial assets 127 / 246 ANNUAL REPORT 2022 1) Financial assets measured at amortized cost The Company measures its financial assets at the amortized costs using effective interest method. Gains or losses on financial assets that are measured at amortized cost and are not part of hedging relationships shall be included into profit or loss when the financial assets are derecognized, reclassified, amortized using effective interest method or recognized with impairment loss. 2) Debt instrument investments at fair value through other comprehensive income The Company measures its debt instrument investments at fair value. Interests, impairment gains or losses, and gains and losses on foreign exchange that calculated using effective interest method shall be included into profit or loss, while other gains or losses are included into other comprehensive income. Accumulated gains or losses that initially recognized as other comprehensive income should be transferred out into profit or loss when the financial assets are derecognized. 3) Equity instrument investments at fair value through other comprehensive income The Company measures its equity instrument investments at fair value. Dividends obtained (other than those as part of investment cost recovery) shall be included into profit or loss, while other gains or losses are included into other comprehensive income. Accumulated gains or losses that initially recognized as other comprehensive income should be transferred out into retained earnings when the financial assets are derecognized. 4) Financial assets at fair value through profit or loss The Company measures its financial assets at fair value. Gains or losses arising from changes in fair value (including interests and dividends) shall be included into profit or loss, except for financial assets that are part of hedging relationships. (3) Subsequent measurement of financial liabilities 1) Financial liabilities at fair value through profit or loss Financial liabilities at fair value through profit or loss include held-for-trading financial liabilities (including derivatives that are liabilities) and financial liabilities designated as at fair value through profit or loss. The Company measures such kind of liabilities at fair value. The amount of changes in the fair value of the financial liabilities that are attributable to changes in the Company’s own credit risk shall be included into other comprehensive income, unless such treatment would create or enlarge accounting mismatches in profit or loss. Other gains or losses on those financial liabilities (including interests, changes in fair value that are attributable to reasons other than changes in the Company’s own credit risk) shall be included into profit or loss, except for financial liabilities that are part of hedging relationships. Accumulated gains or losses that originally recognized as other comprehensive income should be transferred out into retained earnings when the financial liabilities are derecognized. 2) Financial liabilities that arise when a transfer of a financial asset does not qualify for derecognition or when the continuing involvement approach applies The Company measures its financial liabilities in accordance with “CASBE 23 – Transfer of Financial Assets”. 3) Financial guarantee contracts not fall within the above categories 1) and 2), and commitments to provide a loan at a below-market interest rate, which do not fall within the above category 1) The Company measures its financial liabilities at the higher of: a. the amount of loss allowances in accordance with 128 / 246 ANNUAL REPORT 2022 impairment requirements of financial instruments; b. the amount initially recognized less the amount of accumulated amortization recognized in accordance with “CASBE 14 – Revenues”. 4) Financial liabilities at amortized cost The Company measures its financial liabilities at amortized cost using effective interest method. Gains or losses on financial liabilities that are measured at amortized cost and are not part of hedging relationships shall be included into profit or loss when the financial liabilities are derecognized and amortized using effective interest method. (4) Derecognition of financial assets and financial liabilities 1) Financial assets are derecognized when: a. the contractual rights to the cash flows from the financial assets expire; or b. the financial assets have been transferred and the transfer qualifies for derecognition in accordance with “CASBE 23 – Transfer of Financial Assets”. 2) Only when the underlying present obligations of a financial liability are relieved totally or partly may the financial liability be derecognized accordingly. 3. Recognition criteria and measurement method of financial assets transfer Where the Company has transferred substantially all of the risks and rewards related to the ownership of the financial asset, it derecognizes the financial asset, and any right or liability arising from such transfer is recognized independently as an asset or a liability. If it retained substantially all of the risks and rewards related to the ownership of the financial asset, it continues recognizing the financial asset. Where the Company does not transfer or retain substantially all of the risks and rewards related to the ownership of a financial asset, it is dealt with according to the circumstances as follows respectively: (1) if the Company does not retain its control over the financial asset, it derecognizes the financial asset, and any right or liability arising from such transfer is recognized independently as an asset or a liability; (2) if the Company retains its control over the financial asset, according to the extent of its continuing involvement in the transferred financial asset, it recognizes the related financial asset and recognizes the relevant liability accordingly. If the transfer of an entire financial asset satisfies the conditions for derecognition, the difference between the amounts of the following two items is included in profit or loss: (1) the carrying amount of the transferred financial asset as of the date of derecognition; (2) the sum of consideration received from the transfer of the financial asset, and the accumulative amount of the changes of the fair value originally included in other comprehensive income proportionate to the transferred financial asset (financial assets transferred refer to debt instrument investments at fair value through other comprehensive income). If the transfer of financial asset partially satisfies the conditions to derecognition, the entire carrying amount of the transferred financial asset is, between the portion which is derecognized and the portion which is not, apportioned according to their respective relative fair value, and the difference between the amounts of the following two items is included into profit or loss: (1) the carrying amount of the portion which is derecognized; (2) the sum of consideration of the portion which is derecognized, and the portion of the accumulative amount of the changes in the fair value originally included in other comprehensive income which is corresponding to the portion which is derecognized (financial assets transferred refer to debt instrument investments at fair value through other comprehensive income). 129 / 246 ANNUAL REPORT 2022 4. Fair value determination method of financial assets and liabilities The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data and information are available to measure fair value. The inputs to valuation techniques used to measure fair value are arranged in the following hierarchy and used accordingly: (1) Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company can access at the measurement date; (2) Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include: quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability, for example, interest rates and yield curves observable at commonly quoted intervals; market-corroborated inputs; (3) Level 3 inputs are unobservable inputs for the asset or liability. Level 3 inputs include interest rate that is not observable and cannot be corroborated by observable market data at commonly quoted intervals, historical volatility, future cash flows to be paid to fulfill the disposal obligation assumed in business combination, financial forecast developed using the Company’s own data, etc. 5. Impairment of financial instruments (1) Measurement and accounting treatment The Company, on the basis of expected credit loss, recognizes loss allowances of financial assets at amortized cost, debt instrument investments at fair value through other comprehensive income, leases receivable, loan commitments other than financial liabilities at fair value through profit or loss, financial guarantee contracts not belong to financial liabilities at fair value through profit or loss or financial liabilities that arise when a transfer of a financial asset does not qualify for derecognition or when the continuing involvement approach applies. Expected credit losses refer to the weighted average of credit losses with the respective risks of a default occurring as the weights. Credit loss refers to the difference between all contractual cash flows that are due to the Company in accordance with the contract and all the cash flows that the Company expects to receive (i.e. all cash shortfalls), discounted at the original effective interest rate. Among which, purchased or originated credit-impaired financial assets are discounted at the credit-adjusted effective interest rate. At the balance sheet date, the Company shall only recognize the cumulative changes in the lifetime expected credit losses since initial recognition as a loss allowance for purchased or originated credit-impaired financial assets. For accounts receivable and contract assets resulting from transactions regulated in “CASBE 14 – Revenues”, the Company chooses simplified approach to measure the loss allowance at an amount equal to lifetime expected credit losses. For financial assets other than the above, on each balance sheet date, the Company shall assess whether the credit risk on the financial instrument has increased significantly since initial recognition. The Company shall measure the loss allowance for the financial instrument at an amount equal to the lifetime expected credit losses if the credit risk on that financial instrument has increased significantly since initial recognition; otherwise, the Company shall measure the loss allowance for that financial instrument at an amount equal to 12-month expected credit loss. 130 / 246 ANNUAL REPORT 2022 Considering reasonable and supportable forward-looking information, the Company compares the risk of a default occurring on the financial instrument as at the balance sheet date with the risk of a default occurring on the financial instrument as at the date of initial recognition, so as to assess whether the credit risk on the financial instrument has increased significantly since initial recognition. The Company may assume that the credit risk on a financial instrument has not increased significantly since initial recognition if the financial instrument is determined to have relatively low credit risk at the balance sheet date. The Company shall estimate expected credit risk and measure expected credit losses on an individual or a collective basis. When the Company adopts the collective basis, financial instruments are grouped with similar credit risk features. The Company shall remeasure expected credit loss on each balance sheet date, and increased or reversed amounts of loss allowance arising therefrom shall be included into profit or loss as impairment losses or gains. For a financial asset measured at amortized cost, the loss allowance reduces the carrying amount of such financial asset presented in the balance sheet; for a debt investment measured at fair value through other comprehensive income, the loss allowance shall be recognized in other comprehensive income and shall not reduce the carrying amount of such financial asset. (2) Financial instruments with expected credit risk assessed on a collective basis and expected credit losses measured using three-stage model Basis for determination Method for measuring expected credit Items of portfolio loss Other receivables – Portfolio Based on historical credit loss experience, grouped with balances due Related parties brought into the current situation and the forecast of from related parties within the consolidation scope future economic conditions, the Company the consolidation scope calculates expected credit loss through Other receivables – Portfolio exposure at default and 12-month or Ages grouped with ages lifetime expected credit loss rate. (3) Accounts receivable with expected credit losses measured on a collective basis using simplified approach 1) Specific portfolios and method for measuring expected credit loss Basis for determination Method for measuring expected credit Items of portfolio loss Based on historical credit loss experience, the current situation and the forecast of future economic conditions, the Company Accounts receivable – Ages prepares the comparison table of ages and Portfolio grouped with ages lifetime expected credit loss rate of accounts receivable, so as to calculate expected credit loss. Based on historical credit loss experience, Accounts receivable – the current situation and the forecast of Portfolio grouped with Related parties brought future economic conditions, the Company balances due from related into the consolidation calculates expected credit loss through parties within the scope exposure at default and lifetime expected consolidation scope credit loss rate. 2) Accounts receivable – comparison table of ages and lifetime expected credit loss rate of portfolio grouped with ages 131 / 246 ANNUAL REPORT 2022 Ages Expected credit loss rate (%) Within 1 year (inclusive, the same hereinafter) 5 1-2 years 10 2-3 years 30 3-4 years 50 4-5 years 80 Over 5 years 100 6. Offsetting financial assets and financial liabilities Financial assets and financial liabilities are presented separately in the balance sheet and are not offset. However, the Company offsets a financial asset and a financial liability and presents the net amount in the balance sheet when, and only when, the Company: (1) currently has a legally enforceable right to set off the recognized amounts; and (2) intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously. For a transfer of a financial asset that does not qualify for derecognition, the Company does not offset the transferred asset and the associated liability. 11. Notes receivable Determination method and accounting treatment of expected credit loss of notes receivable □ Applicable √ Not Applicable 12. Accounts receivable Determination method and accounting treatment of expected credit loss of accounts receivable √ Applicable □ Not Applicable Please refer to item V 10 of this section for details. 13. Receivables financing □ Applicable √ Not Applicable 14. Other receivables Determination method and accounting treatment of expected credit loss of other receivables √ Applicable □ Not Applicable Please refer to item V 10 of this section for details. 15. Inventories √ Applicable □ Not Applicable 1. Classification of inventories Inventories include finished goods or goods held for sale in the ordinary course of business, work in process in the process of production, materials, supplies etc. to be consumed in the production process or in the rendering of services. 132 / 246 ANNUAL REPORT 2022 2. Accounting method for dispatching inventories: Inventories dispatched from storage are accounted for with weighted average method at the end of each month. 3. Basis for determining net realizable value and accrual method of provisions for inventory write-down At the balance sheet date, inventories (excluding packages lent out that expect to be irrecoverable. Please refer to item V 15.6 of this section for details on the accrual method of provisions for inventory write-down on these packages) are measured at the lower of cost and net realizable value; provisions for inventory write-down are made on the excess of its cost over the net realizable value. The net realizable value of inventories held for sale is determined based on the amount of the estimated selling price less the estimated selling expenses and relevant taxes and surcharges in the ordinary course of business; the net realizable value of inventories to be processed is determined based on the amount of the estimated selling price less the estimated costs of completion, selling expenses and relevant taxes and surcharges in the ordinary course of business; at the balance sheet date, when only part of the same item of inventories have agreed price, their net realizable value are determined separately and are compared with their costs to set the provision for inventory write-down to be made or reversed. 4. Inventory system Perpetual inventory method is adopted. 5. Amortization method of packages The recyclable beer bottles are included in the cost when losses incurred, and the turnover boxes and pallets are amortized over the expected useful life after deducting expected net residual value. 6. Accounting method of packages lent out The Company recognizes deposits for packages lent out as other payables. At the balance sheet date, based on the number of packages lent out in the current period, the number of irrecoverable packages is calculated at the current loss rate, which is estimated based on the market conditions and the historical recycling records. Provision for inventory write-down shall be made at the cost of irrecoverable packages, and allowances for other payables shall be accrued at the after-tax amount of non-refundable deposits, with the difference recognized as assets impairment loss through profit and loss. The packages lent out will be accounted for as a sale when there is objective evidence indicating that the packages are irrecoverable, and the carrying amount (cost less provisions for write-down) and corresponding deposits payable (cost less allowances) will be carried forward. 16. Contract assets (1) Recognition method and criteria for contract assets □ Applicable √ Not Applicable (2) Determination method and accounting treatment of expected credit loss of contract assets □ Applicable √ Not Applicable 133 / 246 ANNUAL REPORT 2022 17. Assets held for sale □ Applicable √ Not Applicable 18. Debt investments (1) Determination method and accounting treatment of expected credit loss of debt investments □ Applicable √ Not Applicable 19. Other debt investments (1) Determination method and accounting treatment of expected credit loss of other debt investments □ Applicable √ Not Applicable 20. Long-term receivables (1) Determination method and accounting treatment of expected credit loss of long-term receivables □ Applicable √ Not Applicable 21. Long-term equity investments √ Applicable □ Not Applicable 1. Judgment of joint control and significant influence Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control of these policies. 2. Determination of investment cost (1) For business combination under common control, if the consideration of the combining party is that it makes payment in cash, transfers non-cash assets, assumes its liabilities or issues equity securities, on the date of combination, it regards the share of the carrying amount of the equity of the combined party included in the consolidated financial statements of the ultimate controlling party as the initial cost of the investment. The difference between the initial cost of the long-term equity investments and the carrying amount of the combination consideration paid or the par value of shares issued offsets capital reserve; if the balance of capital reserve is insufficient to offset, any excess is adjusted to retained earnings. When long-term equity investments are obtained through business combination under common control achieved in stages, the Company determines whether it is a “bundled transaction”. If it is a “bundled transaction”, stages as a whole are considered as one transaction in accounting treatment. If it is not a “bundled transaction”, on the date of combination, investment cost is initially recognized at the share of the carrying amount of net assets of the combined party included the consolidated financial statements of the ultimate controlling party. The difference between the initial investment cost of long-term equity investments at the acquisition date and the carrying amount of the previously held long-term equity investments plus the carrying amount of the consideration paid for the newly acquired equity is adjusted to capital reserve; if the balance of capital reserve is insufficient to offset, any excess is adjusted to retained earnings. 134 / 246 ANNUAL REPORT 2022 (2) For business combination not under common control, investment cost is initially recognized at the acquisition- date fair value of considerations paid. When long-term equity investments are obtained through business combination not under common control achieved in stages, the Company determined whether they are stand-alone financial statements or consolidated financial statements in accounting treatment: 1) In the case of stand-alone financial statements, investment cost is initially recognized at the carrying amount of the previously held long-term equity investments plus the carrying amount of the consideration paid for the newly acquired equity. 2) In the case of consolidated financial statements, the Company determines whether it is a “bundled transaction”. If it is a “bundled transaction”, stages as a whole are considered as one transaction in accounting treatment. If it is not a “bundled transaction”, the carrying amount of the acquirer’s previously held equity interest in the acquiree is remeasured at the acquisition-date fair value, and the difference between the fair value and the carrying amount is recognized in investment income; when the acquirer’s previously held equity interest in the acquiree involves other comprehensive income under equity method, the related other comprehensive income is reclassified as income for the acquisition period, excluding other comprehensive income arising from changes in net liabilities or assets from remeasurement of defined benefit plan of the acquiree. (3) Long-term equity investments obtained through ways other than business combination: the initial cost of a long- term equity investment obtained by making payment in cash is the purchase cost which is actually paid; that obtained on the basis of issuing equity securities is the fair value of the equity securities issued; that obtained through debt restructuring is determined according to “CASBE 12 – Debt Restructuring”; and that obtained through non-cash assets exchange is determined according to “CASBE 7 – Non-cash Assets Exchange”. 3. Subsequent measurement and recognition method of profit or loss For a long-term equity investment with control relationship, it is accounted for with cost method; for a long-term equity investment with joint control or significant influence relationship, it is accounted for with equity method. 4. Disposal of a subsidiary in stages resulting in the Company’s loss of control (1) Stand-alone financial statements The difference between the carrying amount of the disposed equity and the consideration obtained thereof is recognized in profit or loss. If the disposal does not result in the Company’s loss of significant influence or joint control, the remained equity is accounted for with equity method; however, if the disposal results in the Company’s loss of control, joint control, or significant influence, the remained equity is accounted for according to “CASBE 22 – Financial Instruments: Recognition and Measurement”. (2) Consolidated financial statements 1) Disposal of a subsidiary in stages not qualified as “bundled transaction” resulting in the Company’s loss of control Before the Company’s loss of control, the difference between the disposal consideration and the proportionate share of net assets in the disposed subsidiary from acquisition date or combination date to the disposal date is adjusted to capital reserve (capital premium), if the balance of capital reserve is insufficient to offset, any excess is adjusted to retained earnings. 135 / 246 ANNUAL REPORT 2022 When the Company loses control, the remained equity is remeasured at the loss-of-control-date fair value. The aggregated value of disposal consideration and the fair value of the remained equity, less the share of net assets in the disposed subsidiary held before the disposal from the acquisition date or combination date to the disposal date is recognized in investment income in the period when the Company loses control over such subsidiary, and meanwhile goodwill is offset correspondingly. Other comprehensive income related to equity investments in former subsidiary is reclassified as investment income upon the Company’s loss of control. 2) Disposal of a subsidiary in stages qualified as “bundled transaction” resulting in the Company’s loss of control In case of “bundled transaction”, stages as a whole are considered as one transaction resulting in loss of control in accounting treatment. However, before the Company loses control, the difference between the disposal consideration at each stage and the proportionate share of net assets in the disposed subsidiary is recognized as other comprehensive income at the consolidated financial statements and reclassified as profit or loss in the period when the Company loses control over such subsidiary. 22. Investment property Not Applicable 23. Fixed assets (1) Recognition principles √ Applicable □ Not Applicable Fixed assets are tangible assets held for use in the production of goods or rendering of services, for rental to others, or for administrative purposes, and expected to be used during more than one accounting year. Fixed assets are recognized if, and only if, it is probable that future economic benefits associated with the assets will flow to the Company and the cost of the assets can be measured reliably. (2) Depreciation method √ Applicable □ Not Applicable Useful life Residual value Annual depreciation Categories Depreciation method (years) proportion rate Buildings and Straight-line method 20-40 0%-10% 2.25%-5.00% structures Machinery Straight-line method 5-15 0%-10% 6.00%-20.00% Transport facilities Straight-line method 5-10 0%-10% 9.00%-20.00% Other equipment Straight-line method 3-12 0%-10% 7.50%-33.33% (3) Basis for identification, valuation and depreciation method of fixed assets leased in under finance leases □ Applicable √ Not Applicable 24. Construction in progress √ Applicable □ Not Applicable 1. Construction in progress is recognized if, and only if, it is probable that future economic benefits associated with 136 / 246 ANNUAL REPORT 2022 the item will flow to the Company, and the cost of the item can be measured reliably. Construction in progress is measured at the actual cost incurred to reach its designed usable conditions. 2. Construction in progress is transferred into fixed assets at its actual cost when it reaches the designed usable conditions. When the auditing of the construction in progress was not finished while reaching the designed usable conditions, it is transferred to fixed assets using estimated value first, and then adjusted accordingly when the actual cost is settled, but the accumulated depreciation is not to be adjusted retrospectively. 25. Borrowing costs √ Applicable □ Not Applicable 1. Recognition principle of borrowing costs capitalization Where the borrowing costs incurred to the Company can be directly attributable to the acquisition and construction or production of assets eligible for capitalization, it is capitalized and included in the costs of relevant assets; other borrowing costs are recognized as expenses on the basis of the actual amount incurred, and are included in profit or loss. 2. Borrowing costs capitalization period (1) The borrowing costs are not capitalized unless the following requirements are all met: 1) the asset disbursements have already incurred; 2) the borrowing costs have already incurred; and 3) the acquisition and construction or production activities which are necessary to prepare the asset for its intended use or sale have already started. (2) Suspension of capitalization: where the acquisition and construction or production of a qualified asset is interrupted abnormally and the interruption period lasts for more than 3 months, the capitalization of the borrowing costs is suspended; the borrowing costs incurred during such period are recognized as expenses, and are included in profit or loss, till the acquisition and construction or production of the asset restarts. (3) Ceasing of capitalization: when the qualified asset under acquisition and construction or production is ready for the intended use or sale, the capitalization of the borrowing costs is ceased. 3. Capitalization rate and capitalized amount of borrowing costs For borrowings exclusively for the acquisition and construction or production of assets eligible for capitalization, the to-be-capitalized amount of interests is determined in light of the actual interest expenses incurred (including amortization of premium or discount based on effective interest method) of the special borrowings in the current period less the interest income on the unused borrowings as a deposit in the bank or as a temporary investment; where a general borrowing is used for the acquisition and construction or production of assets eligible for capitalization, the Company calculates and determines the to-be-capitalized amount of interests on the general borrowing by multiplying the weighted average asset disbursement of the part of the accumulative asset disbursements less the general borrowing by the capitalization rate of the general borrowing used. 26. Biological assets □ Applicable √ Not Applicable 137 / 246 ANNUAL REPORT 2022 27. Oil & gas assets □ Applicable √ Not Applicable 28. Right-of-use assets √ Applicable □ Not Applicable Please refer to item V 42 of this section for details. 29. Intangible assets (1) Pricing method, useful life, impairment test √ Applicable □ Not Applicable 1. Intangible assets include land use right, trademark, software, etc. The initial measurement of intangible assets is based on its cost. 2. For intangible assets with finite useful lives, their amortization amounts are amortized within their useful lives systematically and reasonably, if it is unable to determine the expected realization pattern reliably, intangible assets are amortized by the straight-line method with details as follows: Items Amortization period (years) Land use right 30.00-50.00 Trademark 10.00, 30.00, 28.33 software 3.00-10.00 Intangible assets with indefinite useful lives are not amortized, but their useful life is reviewed annually. Judgment basis for indefinite useful life is as follows: Items Judgment basis Since the life cycle of the product corresponding to the trademark cannot be determined and the validity period of Trademark trademark is more likely to be extended, its useful life is indefinite. (2) Accounting policies for expenditures on the research phase of an internal project √ Applicable □ Not Applicable Expenditures on the research phase of an internal project are recognized as profit or loss when they are incurred. An intangible asset arising from the development phase of an internal project is recognized if the Company can demonstrate all of the followings: (1) the technical feasibility of completing the intangible asset so that it will be available for use or sale; (2) its intention to complete the intangible asset and use or sell it; (3) how the intangible asset will generate probable future economic benefits, among other things, the Company can demonstrate the existence of a market for the output of the intangible asset or the intangible asset itself or, if it is to be used internally, the usefulness of the intangible asset; (4) the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and (5) its ability to measure reliably the expenditure attributable to the intangible asset during its development. 138 / 246 ANNUAL REPORT 2022 30. Impairment of long-term assets √ Applicable □ Not Applicable For long-term assets such as long-term equity investments, fixed assets, construction in progress, right-of-use assets, intangible assets with finite useful lives, etc., if at the balance sheet date there is indication of impairment, the recoverable amount is to be estimated. For goodwill recognized in business combination and intangible assets with indefinite useful lives, no matter whether there is indication of impairment, impairment test is performed annually. Impairment test on goodwill is performed on related asset group or asset group portfolio. When the recoverable amount of such long-term assets is lower than their carrying amount, the difference is recognized as provision for assets impairment through profit or loss. 31. Long-term prepayments □ Applicable √ Not Applicable 32. Contract liabilities (1) Recognition method √ Applicable □ Not Applicable The Company presents contract assets or contract liabilities in the balance sheet based on the relationship between its performance obligations and customers’ payments. Contract assets and contract liabilities under the same contract shall offset each other and be presented on a net basis. The Company presents an unconditional right to consideration (i.e., only the passage of time is required before the consideration is due) as a receivable, and presents a right to consideration in exchange for goods that it has transferred to a customer (which is conditional on something other than the passage of time) as a contract asset. The Company presents an obligation to transfer goods to a customer for which the Company has received consideration (or the amount is due) from the customer as a contract liability. 33. Employee benefits Employee benefits include short-term employee benefits, post-employment benefits, termination benefits and other long-term employee benefits. (1) Accounting treatment of short-term employee benefits √ Applicable □ Not Applicable The Company recognizes, in the accounting period in which an employee provides service, short-term employee benefits actually incurred as liabilities, with a corresponding charge to profit or loss or the cost of a relevant asset. (2) Accounting treatment of post-employment benefits √ Applicable □ Not Applicable The Company classifies post-employment benefit plans as either defined contribution plans or defined benefit plans. (1) The Company recognizes in the accounting period in which an employee provides service the contribution payable to a defined contribution plan as a liability, with a corresponding charge to profit or loss or the cost of a 139 / 246 ANNUAL REPORT 2022 relevant asset. (2) Accounting treatment by the Company for defined benefit plan usually involves the following steps: 1) In accordance with the projected unit credit method, using unbiased and mutually compatible actuarial assumptions to estimate related demographic variables and financial variables, measure the obligations under the defined benefit plan, and determine the periods to which the obligations are attributed. Meanwhile, the Company discounts obligations under the defined benefit plan to determine the present value of the defined benefit plan obligations and the current service cost; 2) When a defined benefit plan has assets, the Company recognizes the deficit or surplus by deducting the fair value of defined benefit plan assets from the present value of the defined benefit plan obligation as a net defined benefit plan liability or net defined benefit plan asset. When a defined benefit plan has a surplus, the Company measures the net defined benefit plan asset at the lower of the surplus in the defined benefit plan and the asset ceiling; 3) At the end of the period, the Company recognizes the following components of employee benefits cost arising from defined benefit plan: a. service cost; b. net interest on the net defined benefit plan liability (asset); and c. changes as a result of remeasurement of the net defined benefit liability (asset). Item a and item b are recognized in profit or loss or the cost of a relevant asset. Item c is recognized in other comprehensive income and is not to be reclassified subsequently to profit or loss. However, the Company may transfer those amounts recognized in other comprehensive income within equity. (3) Accounting treatment of termination benefits √ Applicable □ Not Applicable Termination benefits provided to employees are recognized as an employee benefit liability for termination benefits, with a corresponding charge to profit or loss at the earlier of the following dates: (1) when the Company cannot unilaterally withdraw the offer of termination benefits because of an employment termination plan or a curtailment proposal; or (2) when the Company recognizes cost or expenses related to a restructuring that involves the payment of termination benefits. (4) Accounting treatment of other long-term employee benefits √ Applicable □ Not Applicable When other long-term employee benefits provided to the employees satisfied the conditions for classifying as a defined contribution plan, those benefits are accounted for in accordance with the requirements relating to defined contribution plan, while other benefits are accounted for in accordance with the requirements relating to defined benefit plan. The Company recognizes the cost of employee benefits arising from other long-term employee benefits as the followings: (1) service cost; (2) net interest on the net liability or net assets of other long-term employee benefits; and (3) changes as a result of remeasurement of the net liability or net assets of other long-term employee benefits. As a practical expedient, the net total of the aforesaid amounts is recognized in profit or loss or included in the cost of a relevant asset. 34. Lease liabilities √ Applicable □ Not Applicable Please refer to item V 42 of this section for details. 140 / 246 ANNUAL REPORT 2022 35. Provisions √ Applicable □ Not Applicable 1. Provisions are recognized when fulfilling the present obligations arising from contingencies such as providing guarantee for other parties, litigation, products quality guarantee, onerous contract, etc., may cause the outflow of the economic benefit and such obligations can be reliably measured. 2. The initial measurement of provisions is based on the best estimated expenditures required in fulfilling the present obligations, and its carrying amount is reviewed at the balance sheet date. 36. Share-based payment √ Applicable □ Not Applicable 1. Types of share-based payment Share-based payment consists of equity-settled share-based payment and cash-settled share-based payment. 2. Accounting treatment for settlements, modifications and cancellations of share-based payment plans (1) Equity-settled share-based payment For equity-settled share-based payment transaction with employees, if the equity instruments granted vest immediately, the fair value of those equity instruments is measured at grant date and recognized as transaction cost or expense, with a corresponding adjustment in capital reserve; if the equity instruments granted do not vest until the counterparty completes a specified period of service or fulfils certain performance conditions, at the balance sheet date within the vesting period, the fair value of those equity instruments measured at grant date based on the best estimate of the number of equity instruments expected to vest is recognized as transaction cost or expense, with a corresponding adjustment in capital reserve. For equity-settled share-based payment transaction with parties other than employees, if the fair value of the services received can be measured reliably, the fair value is measured at the date the Company receives the service; if the fair value of the services received cannot be measured reliably, but that of equity instruments can be measured reliably, the fair value of the equity instruments granted measured at the date the Company receives the service is referred to, and recognized as transaction cost or expense, with a corresponding increase in equity. (2) Cash-settled share-based payment For cash-settled share-based payment transactions with employees, if share appreciation rights vest immediately, the fair value of the liability incurred as the acquisition of services is measured at grant date and recognized as transaction cost or expense, with a corresponding increase in liabilities; if share appreciation rights do not vest until the employees have completed a specified period of service or fulfils certain performance conditions, the liability is measured, at each balance sheet date until settled, at the fair value of the share appreciation rights measured at grant date based on the best estimate of the number of share appreciation right expected to vest. (3) Modifications and cancellations of share-based payment plan If the modification increases the fair value of the equity instruments granted, the Company includes the incremental fair value granted in the measurement of the amount recognized for services received as consideration for the equity instruments granted; similarly, if the modification increases the number of equity instruments granted, the Company 141 / 246 ANNUAL REPORT 2022 includes the fair value of the additional equity instruments granted, in the measurement of the amount recognized for services received as consideration for the equity instruments granted; if the Company modifies the vesting conditions in a manner that is beneficial to the employee, the Company takes the modified vesting conditions into account. If the modification reduces the fair value of the equity instruments granted, the Company does not take into account that decrease in fair value and continue to measure the amount recognized for services received as consideration for the equity instruments based on the grant date fair value of the equity instruments granted; if the modification reduces the number of equity instruments granted to an employee, that reduction is accounted for as a cancellation of that portion of the grant; if the Company modifies the vesting conditions in a manner that is not beneficial to the employee, the Company does not take the modified vesting conditions into account. If the Company cancels or settles a grant of equity instruments during the vesting period (other than that cancelled when the vesting conditions are not satisfied), the Company accounts for the cancellation or settlement as an acceleration of vesting, and therefore recognizes immediately the amount that otherwise would have been recognized for services received over the remainder of the vesting period. 37. Other financial instruments such as preferred shares and perpetual bonds □ Applicable √ Not Applicable 38. Revenue (1) Accounting polices for revenue recognition and measurement √ Applicable □ Not Applicable 1. Revenue recognition principles At contract inception, the Company shall assess the contracts and shall identify each performance obligation in the contracts, and determine whether the performance obligation should be satisfied over time or at a point in time. The Company satisfies a performance obligation over time if one of the following criteria is met, otherwise, the performance obligation is satisfied at a point in time: (1) the customer simultaneously receives and consumes the economic benefits provided by the Company’s performance as the Company performs; (2) the customer can control goods as they are created by the Company’s performance; (3) goods created during the Company’s performance have irreplaceable uses and the Company has an enforceable right to the payments for performance completed to date during the whole contract period. For each performance obligation satisfied over time, the Company shall recognize revenue over time by measuring the progress towards complete satisfaction of that performance obligation. In the circumstance that the progress cannot be measured reasonably, but the costs incurred in satisfying the performance obligation are expected to be recovered, the Company shall recognize revenue only to the extent of the costs incurred until it can reasonably measure the progress. For each performance obligation satisfied at a point in time, the Company shall recognize revenue at the time point that the customer obtains control of relevant goods or services. To determine whether the customer has obtained control of goods, the Company shall consider the following indications: (1) the Company has a present right to payments for the goods, i.e., the customer is presently obliged to pay for the goods; (2) the 142 / 246 ANNUAL REPORT 2022 Company has transferred the legal title of the goods to the customer, i.e., the customer has legal title to the goods; (3) the Company has transferred physical possession of the goods to the customer, i.e., the customer has physically possessed the goods; (4) the Company has transferred significant risks and rewards of ownership of the goods to the customer, i.e., the customer has obtained significant risks and rewards of ownership of the goods; (5) the customer has accepted the goods; (6) other evidence indicating the customer has obtained control over the goods. 143 / 246 ANNUAL REPORT 2022 2. Revenue measurement principle (1) Revenue is measured at the amount of the transaction price that is allocated to each performance obligation. The transaction price is the amount of consideration to which the Company expects to be entitled in exchange for transferring goods or services to a customer, excluding amounts collected on behalf of third parties and those expected to be refunded to the customer. (2) If the consideration promised in a contract includes a variable amount, the Company shall confirm the best estimate of variable consideration at expected value or the most likely amount. However, the transaction price that includes the amount of variable consideration only to the extent that it is high probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. (3) In the circumstance that the contract contains a significant financing component, the Company shall determine the transaction price based on the price that a customer would have paid for if the customer had paid cash for obtaining control over those goods or services. The difference between the transaction price and the amount of promised consideration is amortized under effective interest method over contractual period. The effects of a significant financing component shall not be considered if the Company expects, at the contract inception, that the period between when the customer obtains control over goods or services and when the customer pays consideration will be one year or less. (4) For contracts containing two or more performance obligations, the Company shall determine the stand-alone selling price at contract inception of the distinct good underlying each performance obligation and allocate the transaction price to each performance obligation on a relative stand-alone selling price basis. 3. Revenue recognition method The Company is mainly engaged in production and distribution of beer products. Revenue is recognized at the amount net of rebate after the distributor obtains the control over the products, i.e., the Company delivers the beer products to the distributor or its designated carrier based on contractual agreements. (2) Differences in accounting policies for revenue recognition due to the adoption of different business models for similar businesses □ Applicable √ Not Applicable 39. Contract costs √ Applicable □ Not Applicable Assets related to contract costs include costs of obtaining a contract and costs to fulfil a contract. The Company recognizes as an asset the incremental costs of obtaining a contract if those costs are expected to be recovered. The costs of obtaining a contract shall be included into profit or loss when incurred if the amortization period of the asset is one year or less. If the costs incurred in fulfilling a contract are not within the scope of standards related to inventories, fixed assets or intangible assets, etc., the Company shall recognize the costs to fulfil a contract as an asset if all the following criteria are satisfied: 144 / 246 ANNUAL REPORT 2022 1. The costs relate directly to a contract or to an anticipated contract, including direct labor, direct materials, manufacturing overhead cost (or similar cost), cost that are explicitly chargeable to the customer under the contract, and other costs that are only related to the contract; 2. The costs enhance resources of the Company that will be used in satisfying performance obligations in the future; and 3. The costs are expected to be recovered. An asset related to contract costs shall be amortized on a systematic basis that is consistent with related goods or services, with amortization included into profit or loss. The Company shall make provision for impairment and recognize an impairment loss to the extent that the carrying amount of an asset related to contract costs exceeds the remaining amount of consideration that the Company expects to receive in exchange for the goods or services to which the asset relates less the costs expected to be incurred. The Company shall recognize a reversal of an impairment loss previously recognized in profit or loss when the impairment conditions no longer exist or have improved. The carrying amount of the asset after the reversal shall not exceed the amount that would have been determined on the reversal date if no provision for impairment had been made previously. 40. Government grants √ Applicable □ Not Applicable 1. Government grants shall be recognized if, and only if, the following conditions are all met: (1) the Company will comply with the conditions attaching to the grants; (2) the grants will be received. Monetary government grants are measured at the amount received or receivable. Non-monetary government grants are measured at fair value, and can be measured at nominal amount in the circumstance that fair value cannot be assessed. 2. Government grants related to assets Government grants related to assets are government grants with which the Company purchases, constructs or otherwise acquires long-term assets under requirements of government. In the circumstances that there is no specific government requirement, the Company shall determine based on the primary condition to acquire the grants, and government grants related to assets are government grants whose primary condition is to construct or otherwise acquire long-term assets. They offset carrying amount of relevant assets, or they are recognized as deferred income. If recognized as deferred income, they are included in profit or loss on a systematic basis over the useful lives of the relevant assets. Those measured at notional amount are directly included into profit or loss. For assets sold, transferred, disposed or damaged within the useful lives, balance of unamortized deferred income is transferred into profit or loss of the period in which the disposal occurred. 145 / 246 ANNUAL REPORT 2022 3. Government grants related to income Government grants related to income are government grants other than those related to assets. For government grants that contain both parts related to assets and parts related to income, in which those two parts are blurred, they are thus collectively classified as government grants related to income. For government grants related to income used for compensating the related future cost, expenses or losses, they are recognized as deferred income and included in profit or loss or used to offset relevant cost during the period in which the relevant cost, expenses or losses are recognized; for government grants related to income used for compensating the related cost, expenses or losses incurred to the Company, they are directly included in profit or loss or used to offset relevant cost. 4. Government grants related to the ordinary course of business shall be included into other income or used to offset relevant cost based on business nature, while those not related to the ordinary course of business shall be included into non-operating income or expenses. 5. Policy interest subvention (1) In the circumstance that government appropriates interest subvention to lending bank, who provides loans for the Company with a policy subsidised interest rate, borrowings are carried at the amount received, with relevant borrowings cost computed based on the principal and the policy subsidised interest rate. (2) In the circumstance that government directly appropriates interest subvention to the Company, the subsidised interest shall offset relevant borrowing cost. 41. Deferred tax assets/Deferred tax liabilities √ Applicable □ Not Applicable 1. Deferred tax assets or deferred tax liabilities are calculated and recognized based on the difference between the carrying amount and tax base of assets and liabilities (and the difference of the carrying amount and tax base of items not recognized as assets and liabilities but with their tax base being able to be determined according to tax laws) and in accordance with the tax rate applicable to the period during which the assets are expected to be recovered or the liabilities are expected to be settled. 2. A deferred tax asset is recognized to the extent of the amount of the taxable income, which is most likely to obtain and which can be deducted from the deductible temporary difference. At the balance sheet date, if there is any exact evidence that it is probable that future taxable income will be available against which deductible temporary differences can be utilized, the deferred tax assets unrecognized in prior periods are recognized. 3. At the balance sheet date, the carrying amount of deferred tax assets is reviewed. The carrying amount of a deferred tax asset is reduced to the extent that it is no longer probable that sufficient taxable income will be available to allow the benefit of the deferred tax asset to be utilized. Such reduction is subsequently reversed to the extent that it becomes probable that sufficient taxable income will be available. 4. The income tax and deferred tax for the period are treated as income tax expenses or income through profit or loss, excluding those arising from the following circumstances: (1) business combination; and (2) the transactions or items directly recognized in equity. 146 / 246 ANNUAL REPORT 2022 42. Leases (1) Accounting treatment of operating lease √ Applicable □ Not Applicable 1. The Company as lessee At the commencement date, the Company recognizes a lease that has a lease term of 12 months or less as a short- term lease, which shall not contain a purchase option; the Company recognizes a lease as a lease of a low-value asset if the underlying asset is of low value when it is new. If the Company subleases an asset, or expects to sublease an asset, the head lease does not qualify as a lease of a low-value asset. For all short-term leases and leases of low-value assets, lease payments are recognized as cost or profit or loss with straight-line method over the lease term. Apart from the above-mentioned short-term leases and leases of low-value assets with simplified approach, the Company recognizes right-of-use assets and lease liabilities at the commencement date. (1) Right-of-use assets The right-of-use asset is measured at cost and the cost shall comprise: 1) the amount of the initial measurement of the lease liabilities; 2) any lease payments made at or before the commencement date, less any lease incentives received; 3) any initial direct costs incurred by the lessee; and 4) an estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset, restoring the site on which it is located or restoring the underlying asset to the condition required by the terms and conditions of the lease. The Company depreciates the right-of-use asset using the straight-line method. If it is reasonable to be certain that the ownership of the underlying asset can be acquired by the end of the lease term, the Company depreciates the right-of-use asset from the commencement date to the end of the useful life of the underlying asset. Otherwise, the Company depreciates the right-of-use asset 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. (2) Lease liabilities At the commencement date, the Company measures the lease liability at the present value of the lease payments that are not paid at that date, discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, the Company’s incremental borrowing rate shall be used. Unrecognized financing expenses, calculated at the difference between the lease payment and its present value, are recognized as interest expenses over the lease term using the discount rate which has been used to determine the present value of lease payment and included in profit or loss. Variable lease payments not included in the measurement of lease liabilities are included in profit or loss in the periods in which they are incurred. After the commencement date, if there is a change in the following items: (a) actual fixed payments; (b) amounts expected to be payable under residual value guarantees; (c) an index or a rate used to determine lease payments; (d) assessment result or exercise of purchase option, extension option or termination option, the Company remeasures the lease liability based on the present value of lease payments after changes, and adjusts the carrying amount of the right-of-use asset accordingly. If the carrying amount of the right-of-use asset is reduced to zero but there shall be a further reduction in the lease liability, the remaining amount shall be recognized into profit or loss. 147 / 246 ANNUAL REPORT 2022 2. The Company as lessor At the commencement date, the Company classifies a lease as a finance lease if it transfers substantially all the risks and rewards incidental to ownership of an underlying asset. Otherwise, it is classified as an operating lease. (1) Operating lease Lease receipts are recognized as lease income with straight-line method over the lease term. Initial direct costs incurred shall be capitalized, amortized on the same basis as the recognition of lease income, and included into profit or loss by installments. Variable lease payments related to operating lease which are not included in the lease payment are charged as profit or loss in the periods in which they are incurred. (2) Finance lease At the commencement date, the Company recognizes the finance lease payment receivable based on the net investment in the lease (sum of the present value of unguaranteed residual value and lease receipts that are not received at the commencement date, discounted by the interest rate implicit in the lease), and derecognizes assets held under the finance lease. The Company calculates and recognizes interest income using the interest rate implicit in the lease over the lease term. Variable lease payments not included in the measurement of the net investment in the lease are charged as profit or loss in the periods in which they are incurred. (2) Accounting treatment of finance lease □ Applicable √ Not Applicable (3) Determination method and accounting treatment of leases under the revised lease standard √ Applicable □ Not Applicable Please refer to item V 42 (1) of this section for details. 43. Other significant accounting policies and estimates √ Applicable □ Not Applicable 1. Segment reporting Operating segments are determined based on the structure of the Company’s internal organization, management requirements and internal reporting system. An operating segment is a component of the Company: (1) that engages in business activities from which it may earn revenues and incur expenses; (2) whose financial performance is regularly reviewed by the Management to make decisions about resource to be allocated to the segment and to assess its performance; and (3) for which accounting information regarding financial position, financial performance and cash flows is available through analysis. 2. Recognition criteria and accounting treatment of discontinued operations A component of the Company that has been disposed of, or is classified as held for sale and can be clearly distinguished is recognized as a discontinued operation when it fulfills any of the following conditions: (1) it represents a separate major line of business or a separate geographical area of operations; 148 / 246 ANNUAL REPORT 2022 (2) it is part of a related plan to dispose of a separate major line of business or a separate geographical area of operations; or (3) it is a subsidiary acquired exclusively with a review to resale. Please refer to item XVI 5 of this section for details. 3. Basis of the adoption of hedge accounting and its accounting treatment (1) Hedge includes cash flow hedge. (2) A hedging relationship qualifies for hedge accounting if all of the following conditions are met: 1) the hedging relationship consists only of eligible hedging instruments and eligible hedged instruments; 2) at the inception of the hedge there is formal designation of hedging instruments and hedged item, and documentation of the hedging relationship and the Company’s risk management objective and strategy for undertaking the hedge; 3) the hedging relationship meets the hedging effectiveness requirements. The Company recognizes that the hedging relationship meets effectiveness requirements if the all of the followings are simultaneously satisfied: a. there is an economic relationship between the hedged item and the hedging instruments; b. the effect of credit risk does not dominate the value changes that result from that economic relationship between the hedged item and the hedging instruments; and c. the hedge ratio of the hedging relationship is the same as the ratio of the quantity of the hedged item that the Company actually hedges and the number of hedging instruments that the Company actually uses to hedge that quantity of hedged item, but does not reflect an imbalance between the weightings of the hedged item and the hedging instrument. The Company shall assess whether a hedging relationship meets the hedge effectiveness requirements at inception and on an ongoing basis. If a hedging relationship ceases to meet the hedge effectiveness requirement relating to the hedge ratio but the risk management objective for that designated hedging relationship remains the same, the hedging relationship shall be rebalanced. (3) Hedge accounting Cash flow hedges 1) The portion of the gain or loss on the hedging instrument that is determined to be an effective hedge shall be recognized in other comprehensive income as cash flow hedge reserve, while the ineffective portion shall be recognized in profit or loss. The cash flow hedge reserve shall be recognized at the lower of the following (in absolute amounts): (i) the cumulative gain or loss on the hedging instrument from inception of the hedge; and (ii) the cumulative change in present value of the expected future cash flows of the hedged item from inception of the hedge. 2) If a hedged forecast transaction subsequently results in the recognition of a non-financial asset or non-financial liability, or a hedged forecast transaction for a non-financial asset or non-financial liability becomes a firm commitment for which fair value hedge accounting is applied, the Company shall transfer out the amount of cash flow hedge reserve previously recognized in other comprehensive income, and include it in the initial cost of the asset or the liability. 3) For other cash flow hedges, the amount of cash flow hedge reserve previously recognized in other comprehensive 149 / 246 ANNUAL REPORT 2022 income shall be transferred out into profit or loss in the same period the hedged forecast sale affects profit or loss. 44. Significant changes in accounting policies and estimates (1) Significant changes in accounting policies √ Applicable □ Not Applicable Other remarks 1. The Company has adopted the regulations about accounting for sales of products or by-products produced by fixed assets before intended use or during the R&D process as stipulated the “Interpretation of China Accounting Standards for Business Enterprises No. 15” issued by the Ministry of Finance since January 1, 2022. Such change in accounting policies has no impact on the Company’s financial statements. 2. The Company has adopted the regulations about judgment on onerous contracts in the “Interpretation of China Accounting Standards for Business Enterprises No. 15” issued by the Ministry of Finance since January 1, 2022. Such change in accounting policies has no impact on the Company’s financial statements. 3. The Company has adopted the regulations about accounting for income tax consequences of dividends on a financial instrument classified by the issuer as an equity instrument in the “Interpretation of China Accounting Standards for Business Enterprises No. 16” issued by the Ministry of Finance since November 30, 2022. Such change in accounting policies has no impact on the Company’s financial statements. 4. The Company has adopted the regulations about accounting for modifications of share-based payment transactions from cash-settled to equity-settled in the “Interpretation of China Accounting Standards for Business Enterprises No. 16” issued by the Ministry of Finance since November 30, 2022. Such change in accounting policies has no impact on the Company’s financial statements. (2) Significant changes in accounting estimates □ Applicable √ Not Applicable (3) The adjustments on the financial statements of the beginning of the earliest period in which the Company adopts the revised standards or interpretations since 2022 □ Applicable √ Not Applicable 45. Others □ Applicable √ Not Applicable VI. Taxes 1. Main taxes and tax rates Details √ Applicable □ Not Applicable Taxes Tax bases Tax rates Under general calculation method, the output tax Value-added tax calculated based on the revenue from sales of goods 13%, 9%, 6%, 5% (simplified (VAT) or rendering of services in accordance with the tax levy rate) law, net of the input tax that is allowed to be deducted 150 / 246 ANNUAL REPORT 2022 in the current period; under simplified calculation method, VAT is calculated according to the sales volume and the simplified levy rate Consumption tax is calculated based on a percentage 220 yuan per ton, 250 yuan per Consumption tax of taxable sale income, or a rate of volume of sale ton, or 10% For housing property levied on the basis of price, housing property tax is levied at the rate of 1.2% of the balance after deducting 20% or 30% of the cost; Property tax 1.2%, 12% for housing property levied on the basis of rent, housing property tax is levied at the rate of 12% of lease income. Land use tax is levied by multiplying the taxable land Land use tax 2.5-16 yuan per square meter area actually occupied by the applicable tax amount Urban maintenance Turnover tax actually paid plus exempt-credit tax 5%, 7% and construction tax amount Turnover tax actually paid plus exempt-credit tax Education surcharge 3% amount Local education Turnover tax actually paid plus exempt-credit tax 2% surcharge amount Enterprise income Taxable income 15%, 25% tax [Note] Different enterprise income tax rates applicable to different taxpayers √ Applicable □ Not Applicable Taxpayers Income tax rate Carlsberg (China) Breweries and Trading Co., Ltd. headquarters and its Chengdu Branch, Xinjiang Branch 15% and Wusu Branch Ningxia Xixia Jianiang Brewery Co., Ltd. 15% Xinjiang Wusu Brewery Co., Ltd. 15% Xinjiang Wusu Beer Trading Co., Ltd. 15% Xinjiang Wusu Brewery (Korla) Co., Ltd. 15% Xinjiang Wusu Brewery (Yining) Co., Ltd. 15% Xinjiang Wusu Brewery (Aksu) Co., Ltd. 15% Xinjiang Wusu Brewery (Wusu) Co., Ltd. 15% Liangping Branch, Hechuan Branch, Fuling Branch and Shizhu Branch of Carlsberg Chongqing Brewery Co., 15% Ltd. Taxpayers other than the above-mentioned 25% 2. Tax preferential policies √ Applicable □ Not Applicable Note: Pursuant to the “Announcement on Continuing the Enterprise Income Tax Policy for the Western Development” (Announcement of the Ministry of Finance, the State Taxation Administration and the National Development and Reform Commission [2020] No. 23), from January 1, 2021 to December 31, 2030, enterprises incorporated in western region belonging to encouraged industries are subject to a reduced rate of 15% for enterprise income tax. The Company’s subsidiaries including Carlsberg (China) Breweries and Trading Co., Ltd. headquarters and its Chengdu Branch, Xinjiang Branch and Wusu Branch, Ningxia Xixia Jianiang Brewery Co., Ltd., Xinjiang 151 / 246 ANNUAL REPORT 2022 Wusu Brewery Co., Ltd., Xinjiang Wusu Beer Trading Co., Ltd., Xinjiang Wusu Brewery (Korla) Co., Ltd., Xinjiang Wusu Brewery (Yining) Co., Ltd., Xinjiang Wusu Brewery (Aksu) Co., Ltd., Xinjiang Wusu Brewery (Wusu) Co., Ltd., and Liangping Branch, Hechuan Branch, Fuling Branch and Shizhu Branch of Carlsberg Chongqing Brewery Co., Ltd. are entitled to enjoy such preferential policy and subject to a reduced rate of 15%. 3. Others □ Applicable √ Not Applicable VII. Notes to items of consolidated financial statements 1. Cash and bank balances √ Applicable □ Not Applicable Monetary unit: RMB Yuan Items Closing balance Opening balance Cash on hand Cash in bank 3,396,809,241.14 2,354,382,608.97 Accrued interest on seven-day 1,068,350.88 811,461.46 notice deposits Other cash and bank balances Total 3,397,877,592.02 2,355,194,070.43 Including: Deposited overseas Deposited in finance company Other remarks (1) Centralized fund management Pursuant to the agreement on centralized fund management and multi-party entrusted loans entered into between the Company and BNP Paribas (China) Limited, parent and primary bank accounts were under the name of the subsidiary Carlsberg Chongqing Brewery Co., Ltd., and the Company managed its funds and the funds of its affiliated entities in a centralized manner. (2) Other remarks Closing balance of interest accrued on seven-day notice deposits of 1,068,350.88 yuan was not considered as cash and cash equivalents and was excluded from cash and cash equivalents. 2. Held-for-trading financial assets √ Applicable □ Not Applicable Monetary unit: RMB Yuan Items Closing balance Opening balance Financial assets at fair value through profit 501,088,888.89 or loss Including: Others 501,088,888.89 Financial assets designated as at fair value through profit or loss Including: Total 501,088,888.89 152 / 246 ANNUAL REPORT 2022 Other remarks □ Applicable √ Not Applicable 3. Derivative financial assets √ Applicable □ Not Applicable Monetary unit: RMB Yuan Items Closing balance Opening balance Floating gains or losses on hedging 3,829,356.40 instruments Total 3,829,356.40 153 / 246 ANNUAL REPORT 2022 Other remarks Please refer to item VII 83 of this section for details on floating gains or losses on hedging instruments. 4. Notes receivable (1) Details on categories □ Applicable √ Not Applicable (2) Pledged notes at the balance sheet date □ Applicable √ Not Applicable (3) Endorsed or discounted but undue notes at the balance sheet date □ Applicable √ Not Applicable (4) Notes receivable transferred to accounts receivable due to non-performance of issuer □ Applicable √ Not Applicable (5) Details on categories of provision accrual methods □ Applicable √ Not Applicable Notes receivable with provision for bad debts made on an individual basis □ Applicable √ Not Applicable Notes receivable with provision for bad debts made on a collective basis □ Applicable √ Not Applicable For provision for bad debts made using three-stage model, please disclose relevant information referring to the disclosures in item VII 8 of this section □ Applicable √ Not Applicable (6) Provision for bad debts □ Applicable √ Not Applicable (7) Notes receivable actually written off in the current period □ Applicable √ Not Applicable Other remarks □ Applicable √ Not Applicable 5. Accounts receivable (1) Aging analysis √ Applicable □ Not Applicable Monetary unit: RMB Yuan Ages Closing book balance Within 1 year Including: Within 1 year 67,487,568.33 Subtotal 67,487,568.33 1-2 years 1,607,789.12 154 / 246 ANNUAL REPORT 2022 Ages Closing book balance 2-3 years Over 3 years 3-4 years 4-5 years Over 5 years 643,612.77 Total 69,738,970.22 (2) Details on categories of provision accrual methods √ Applicable □ Not Applicable Monetary unit: RMB Yuan Closing balance Opening balance Book balance Provision for bad debts Book balance Provision for bad debts Categories Provision Carrying Provision % to % to Carrying amount Amount Amount proportion amount Amount Amount proportion total total (%) (%) Receivables with provision made on an 694,834.92 1.00 694,834.92 100.00 919,846.69 0.79 919,846.69 100.00 individual basis Including: Receivables with provision made on a 69,044,135.30 99.00 3,532,596.22 5.12 65,511,539.08 115,462,616.79 99.21 6,217,943.06 5.39 109,244,673.73 collective basis Including: Total 69,738,970.22 100.00 4,227,431.14 6.06 65,511,539.08 116,382,463.48 100.00 7,137,789.75 6.13 109,244,673.73 Accounts receivable with provision made on an individual basis √ Applicable □ Not Applicable Monetary unit: RMB Yuan Closing balance Items Provision for bad Provision Reasons for provision Book balance debts proportion (%) made There is significant Ningbo New Daliangshan 643,612.77 643,612.77 100.00 uncertainty in Co., Ltd. recoverability. Uni-President There is significant Supermarket (Shanghai) 51,222.15 51,222.15 100.00 uncertainty in Convenience Co., Ltd. recoverability. Total 694,834.92 694,834.92 100.00 / Remarks on accounts receivable with provision made on an individual basis □ Applicable √ Not Applicable Accounts receivable with provision made on a collective basis √ Applicable □ Not Applicable Monetary unit: RMB Yuan Closing balance Items Accounts receivable Provision for bad debts Provision proportion (%) Portfolio grouped with 69,044,135.30 3,532,596.22 5.12 ages Total 69,044,135.30 3,532,596.22 5.12 Determination basis for provision for bad debts made on a collective basis □ Applicable √ Not Applicable For provision for bad debts made using three-stage model, please disclose relevant information referring to the disclosures in item VII 8 of this section. □ Applicable √ Not Applicable 155 / 246 ANNUAL REPORT 2022 (3) Provision for bad debts √ Applicable □ Not Applicable Monetary unit: RMB Yuan Current period movements Opening Closing Categories Recovery or Other balance Accrual Write-off balance reversal movements Receivables with provision made on 919,846.69 51,222.15 -189,172.05 -87,061.87 694,834.92 an individual basis Receivables with provision made on a 6,217,943.06 -2,957,209.16 271,862.32 3,532,596.22 collective basis Total 7,137,789.75 -2,905,987.01 82,690.27 -87,061.87 4,227,431.14 Significant provision for bad debts recovered or reversed in the current period □ Applicable √ Not Applicable (4) Accounts receivable actually written off in the current period √ Applicable □ Not Applicable Monetary unit: RMB Yuan Items Amount written off Accounts receivable actually written off 87,061.87 Significant accounts receivable written off □ Applicable √ Not Applicable Remarks on accounts receivable written off □ Applicable √ Not Applicable (5) Details of the top 5 debtors with largest balances √ Applicable □ Not Applicable Monetary unit: RMB Yuan Proportion to the total Provision for bad Debtors Closing balance balance of accounts debts receivable (%) Carlsberg Brewery Hong Kong 19,081,927.98 27.36 954,096.40 Limited Fujian Yonghui Logistics Co., 11,156,654.96 16.00 557,832.75 Ltd. Wal-Mart (China) Investment 7,327,908.12 10.51 366,395.41 Co., Ltd. Shanghai Hualian Lawson Co., 3,176,599.40 4.55 158,829.97 Ltd. Chongqing Firm New Century Department Store Chain 3,135,908.76 4.50 156,795.44 Operation Co., Ltd. Total 43,878,999.22 62.92 2,193,949.97 Other remarks None. (6) Accounts receivable derecognized due to financial assets transfer □ Applicable √ Not Applicable 156 / 246 ANNUAL REPORT 2022 (7) Assets and liabilities arising from transferred but still involved accounts receivable □ Applicable √ Not Applicable Other remarks □ Applicable √ Not Applicable 6. Receivables financing □ Applicable √ Not Applicable 7. Advances paid (1) Aging analysis √ Applicable □ Not Applicable Monetary unit: RMB Yuan Closing balance Opening balance Ages Amount % to total Amount % to total Within 1 year 43,187,607.98 100.00 45,117,660.67 100.00 1-2 years 2-3 years Over 3 years Total 43,187,607.98 100.00 45,117,660.67 100.00 Reasons for unsettlement on advances paid with age over one year and significant amount None. (2) Details of the top 5 debtors with largest balances √ Applicable □ Not Applicable Proportion to the total balance of Debtors Closing balance advances paid (%) PICC Property and Casualty 10,339,677.02 23.94 Company Limited Xinjiang Gas Group Co., Ltd. 6,813,687.39 15.78 Guangdong Nanyou Foreign 3,474,907.45 8.05 Service Co., Ltd. Yibin Xuzhou District Lianfa 2,921,429.40 6.76 Natural Gas Co., Ltd. Tianchang Natural Gas Co., Ltd. 2,131,742.00 4.94 Total 25,681,443.26 59.47 Other remarks None. Other remarks □ Applicable √ Not Applicable 8. Other receivables Details √ Applicable □ Not Applicable Monetary unit: RMB Yuan 157 / 246 ANNUAL REPORT 2022 Items Closing balance Opening balance Interest receivable Dividend receivable Other receivables 17,619,026.18 11,830,136.29 Total 17,619,026.18 11,830,136.29 Other remarks □ Applicable √ Not Applicable Interest receivable (1) Details on categories □ Applicable √ Not Applicable (2) Significant overdue interest □ Applicable √ Not Applicable (3) Provision for bad debts □ Applicable √ Not Applicable Other remarks □ Applicable √ Not Applicable (4) Dividend receivable □ Applicable √ Not Applicable (5) Significant dividend receivable with age over one year □ Applicable √ Not Applicable (6) Provision for bad debts □ Applicable √ Not Applicable Other remarks □ Applicable √ Not Applicable 158 / 246 ANNUAL REPORT 2022 Other receivables (7) Aging analysis √ Applicable □ Not Applicable Monetary unit: RMB Yuan Ages Closing book balance Within 1 year Including: Within 1 year 17,022,182.33 Subtotal 17,022,182.33 1-2 years 667,625.60 2-3 years 1,047,436.44 Over 3 years 3-4 years 411,793.61 4-5 years 38,971.40 Over 5 years 4,285,161.44 Total 23,473,170.82 (8) Other receivables categorized by nature √ Applicable □ Not Applicable Monetary unit: RMB Yuan Nature of receivables Closing book balance Opening book balance Advances paid on behalf of others 2,505,830.80 4,409,060.81 Deposits 9,982,565.46 7,526,579.68 Receivable from disposal of land use 4,300,000.00 right Advances to staff 119,085.67 871,263.70 Others 6,565,688.89 5,119,778.54 Total 23,473,170.82 17,926,682.73 (9) Provision for bad debts √ Applicable □ Not Applicable Monetary unit: RMB Yuan Stage 1 Stage 2 Stage 3 Provision for bad 12month Lifetime expected Lifetime expected Total debts expected credit credit losses (credit credit losses (credit losses not impaired) impaired) Opening balance 521,752.34 159,881.49 5,414,912.61 6,096,546.44 Opening balance in the current period --Transferred to -33,381.28 33,381.28 stage 2 --Transferred to -104,743.64 104,743.64 stage 3 --Reversed to stage 2 --Reversed to stage 1 Provision made in 357,841.77 -21,756.58 477,007.63 813,092.82 the current period Provision recovered 179,000.00 179,000.00 in the current period Provision reversed in the current period 159 / 246 ANNUAL REPORT 2022 Stage 1 Stage 2 Stage 3 Provision for bad 12month Lifetime expected Lifetime expected Total debts expected credit credit losses (credit credit losses (credit losses not impaired) impaired) Provision written off in the current 876,494.62 876,494.62 period Other changes Closing balance 846,212.83 66,762.55 4,941,169.26 5,854,144.64 Remarks on significant changes in book balance of other receivables with changes in provision for bad debts □ Applicable √ Not Applicable Determination basis for provision for bad debts made in the current period and whether credit risk has increased significantly □ Applicable √ Not Applicable (10) Provision for bad debts □ Applicable √ Not Applicable (11) Other receivables actually written off in the current period √ Applicable □ Not Applicable Monetary unit: RMB Yuan Items Amount written off Other receivables actually written off 876,494.62 Significant other receivables written off in the current period □ Applicable √ Not Applicable Remarks on other receivables written off □ Applicable √ Not Applicable (12) Details of the top 5 debtors with largest balances √ Applicable □ Not Applicable Monetary unit: RMB Yuan Proportion to the Nature of Closing total balance of Provision for Debtors Ages receivables balance other receivables bad debts (%) Receivable Chongqing Hongye from disposal Within 1 Asset Management 4,300,000.00 18.32 215,000.00 of land use year Co., Ltd. right Kingold Group Co., Within 1 Deposits 2,432,858.34 10.36 121,642.92 Ltd. [Note] year Chongqing Kaiyuan Deposits 1,866,700.00 Over 5 years 7.95 1,866,700.00 Oil and Gas Co., Ltd. Within 1 year, 1-2 Guangzhou Minghe Deposits 1,321,335.50 years, 2-3 5.63 230,205.31 Industrial Co., Ltd. years, over 5 years Shizhu Tujia Advances 1,142,263.17 Within 1 4.87 59,323.31 160 / 246 ANNUAL REPORT 2022 Proportion to the Nature of Closing total balance of Provision for Debtors Ages receivables balance other receivables bad debts (%) Autonomous County on behalf of year, 1-2 Economic and others years Information Commission Total / 11,063,157.01 / 47.13 2,492,871.54 Note: It includes its wholly-owned subsidiary Guangzhou Kingold Property Co., Ltd. (13) Other receivables related to government grants □ Applicable √ Not Applicable (14) Other receivables derecognized due to financial assets transfer □ Applicable √ Not Applicable (15) Assets and liabilities arising from transferred but still involved other receivables □ Applicable √ Not Applicable Other remarks □ Applicable √ Not Applicable 9. Inventories (1) Details on categories √ Applicable □ Not Applicable Monetary unit: RMB Yuan Closing balance Opening balance Provision for Provision for Items inventory write- inventory write- Book balance Carrying amount Book balance Carrying amount down/cost to down/cost to fulfill a contract fulfill a contract Raw materials 411,432,771.44 21,407,056.92 390,025,714.52 323,914,555.68 20,033,044.46 303,881,511.22 Packages 1,495,101,158.54 517,763,281.67 977,337,876.87 1,451,121,567.65 510,740,040.60 940,381,527.05 Work in process 95,329,587.61 95,329,587.61 81,166,867.10 81,166,867.10 Finished goods 706,598,387.34 2,814,003.14 703,784,384.20 562,948,411.37 1,626,329.47 561,322,081.90 Revolving materials Consumptive biological assets Costs to fulfill a contract Total 2,708,461,904.93 541,984,341.73 2,166,477,563.20 2,419,151,401.80 532,399,414.53 1,886,751,987.27 (2) Provision for inventory write-down/cost to fulfill a contract √ Applicable □ Not Applicable Monetary unit: RMB Yuan Increase Decrease Items Opening balance Reversal or write- Closing balance Accrual Others Others off Raw materials 20,033,044.46 1,886,156.47 512,144.01 21,407,056.92 Work in process Goods on hand 1,626,329.47 2,814,003.14 1,626,329.47 2,814,003.14 Revolving materials Consumptive biological assets Cost to fulfill a contract 161 / 246 ANNUAL REPORT 2022 Increase Decrease Items Opening balance Reversal or write- Closing balance Accrual Others Others off Idle packages 89,677,873.48 867,413.12 12,532,520.99 78,012,765.61 Packages lent out which expected to be irrecoverable 421,062,167.12 168,539,240.83 149,850,891.89 439,750,516.06 [Note] Total 532,399,414.53 174,106,813.56 164,521,886.36 541,984,341.73 Note: For packages lent out which were expected to be irrecoverable, the Company made provision for inventory write-down of 168,539,240.83 yuan, and accrued allowances for other payables assessed based on affected after- tax amount of deposits free from return of 95,258,194.29 yuan, with the difference of 73,281,046.54 yuan recognized as assets impairment loss; packages lent out are accounted for as a sale when there is objective evidence indicating that the packages are irrecoverable, and the Company wrote off provision for inventory write-down of 149,850,891.89 yuan, and wrote off allowances for other payables assessed based on affected after-tax amount of deposits free from return of 81,480,455.10 yuan, with the difference of 68,370,436.79 yuan recognized as operating cost. Please refer to item VII 41 of this section for details on accrual and write-off of allowances. Determination basis of net realizable value and reasons for the reversal or write-off of provision for inventory write- down Reasons for reversal of or Items Determination basis of net realizable value write-off provision for inventory write-down Estimated selling price of raw materials less relevant taxes and surcharges; estimated selling price of relevant finished Such inventories were used or Raw materials goods less cost to be incurred upon completion, estimated sold. selling expenses, and relevant taxes and surcharges Estimated selling price of disposal waste less relevant taxes Such inventories were sold or Idle packages and surcharges scrapped. For packages lent out which expected to be irrecoverable, Packages lent the Company made provision for inventory write-down There is objective evidence out which based on the carrying amount, and accrued allowances for indicating that the packages expected to be other payables assessed based on affected after-tax amount lent out would not be returned. irrecoverable of deposits free from return, with the difference recognized as assets impairment loss Estimated selling price less cost to be incurred upon Such inventories were used or Work in process completion, estimated selling expenses, and relevant taxes sold. and surcharges Estimated selling price less estimated selling expenses and Finished goods Such inventories were sold. relevant taxes and surcharges Other remarks Items Inventory age Closing book balance Provision for write-down Finished beer Within 1 year 706,598,387.34 2,814,003.14 Semi-finished beer (including Within 1 year 95,329,587.61 basic beer) Subtotal 801,927,974.95 2,814,003.14 (3) Remarks on the capitalized amount of borrowing costs □ Applicable √ Not Applicable (4) Remarks on the amortization of cost to fulfill a contract □ Applicable √ Not Applicable 162 / 246 ANNUAL REPORT 2022 Other remarks □ Applicable √ Not Applicable 10. Contract assets (1) Details □ Applicable √ Not Applicable (2) Reasons for significant changes in carrying amount of contract assets □ Applicable √ Not Applicable (3) Details on provision for impairment of contract assets □ Applicable √ Not Applicable For provision for bad debts made using three-stage model, please disclose relevant information referring to the disclosures in item VII 8 of this section □ Applicable √ Not Applicable Other remarks □ Applicable √ Not Applicable 11. Assets held for sale □ Applicable √ Not Applicable 12. Non-current assets due within one year □ Applicable √ Not Applicable Significant debt investments and other debt investments at the balance sheet date □ Applicable √ Not Applicable Other remarks 13. Other current assets √ Applicable □ Not Applicable Monetary unit: RMB Yuan Items Closing balance Opening balance Cost to obtain a contract Cost of goods expected to be returned Input VAT to be credited and prepaid 109,533,473.56 83,454,893.33 taxes Total 109,533,473.56 83,454,893.33 Other remarks None. 163 / 246 ANNUAL REPORT 2022 14. Debt investments (1) Details □ Applicable √ Not Applicable (2) Significant debt investments at the balance sheet date □ Applicable √ Not Applicable (3) Provision for impairment □ Applicable √ Not Applicable Determination basis for provision for impairment made in the current period and whether credit risk has increased significantly □ Applicable √ Not Applicable Other remarks □ Applicable √ Not Applicable 15. Other debt investments (1) Details □ Applicable √ Not Applicable (2) Significant other debt investments at the balance sheet date □ Applicable √ Not Applicable (3) Provision for impairment □ Applicable √ Not Applicable Determination basis for provision for impairment made in the current period and whether credit risk has increased significantly □ Applicable √ Not Applicable Other remarks □ Applicable √ Not Applicable 16. Long-term receivables (1) Details □ Applicable √ Not Applicable (2) Provision for bad debts □ Applicable √ Not Applicable Determination basis for provision for bad debts made in the current period and whether credit risk has increased significantly □ Applicable √ Not Applicable (3) Long-term receivables derecognized due to financial assets transfer □ Applicable √ Not Applicable 164 / 246 ANNUAL REPORT 2022 (4) Assets and liabilities arising from transferred but still involved long-term receivables □ Applicable √ Not Applicable Other remarks □ Applicable √ Not Applicable 17. Long-term equity investments √ Applicable □ Not Applicable Monetary unit: RMB Yuan Increase/Decrease Investment Clos Adjustment in Opening income Changes in Cash dividend/ Closing balan Investees Investments Investments other Provision for balance recognized other Profit declared Others balance provisi increased decreased comprehensive impairment under equity equity for distribution impair income method I. Joint ventures Subtotal II. Associates Chongqing Jiawei Beer Co., 240,320,800.68 56,279,080.37 296,599,881.05 Ltd. Subtotal 240,320,800.68 56,279,080.37 296,599,881.05 Total 240,320,800.68 56,279,080.37 296,599,881.05 Other remarks None. 165 / 246 ANNUAL REPORT 2022 18. Other equity instrument investments (1) Details √ Applicable □ Not Applicable Monetary unit: RMB Yuan Items Closing balance Opening balance Bank of Guizhou Co., Ltd. 14,303,331.73 13,210,379.78 Total 14,303,331.73 13,210,379.78 (2) Details on non-trading equity instrument investments □ Applicable √ Not Applicable Other remarks √ Applicable □ Not Applicable As the Company invested Bank of Guizhou Co., Ltd. not for trading, such investment was designated as an equity instrument investment at fair value through other comprehensive income. 19. Other non-current financial assets √ Applicable □ Not Applicable Monetary unit: RMB Yuan Items Closing balance Opening balance Financial assets classified as at fair value through profit or loss Including: Cost of investment in Xinjiang 1,000,000.00 1,000,000.00 Guozhiming Changes in fair value of investment in -1,000,000.00 -1,000,000.00 Xinjiang Guozhiming [Note] Total Other remarks √ Applicable □ Not Applicable Note: As the investee ceased operation in previous years and was not a public interest entity, provision for impairment was fully made on the investment. 20. Investment property Method for measuring investment property Not Applicable 21. Fixed assets Details √ Applicable □ Not Applicable Monetary unit: RMB Yuan Items Closing balance Opening balance Fixed assets 3,680,691,105.17 3,705,081,241.59 Disposal of fixed assets Total 3,680,691,105.17 3,705,081,241.59 Other remarks 166 / 246 ANNUAL REPORT 2022 □ Applicable √ Not Applicable Fixed assets (1) Details √ Applicable □ Not Applicable Monetary unit: RMB Yuan Buildings and Transport Items Machinery Other equipment Total structures facilities I. Cost 1. Opening balance 2,516,361,746.98 4,672,361,961.93 35,316,912.00 267,776,173.35 7,491,816,794.26 2. Increase 75,756,671.21 261,809,489.59 207,831.52 63,124,317.39 400,898,309.71 (1) Acquisition 3,135,131.11 207,831.52 25,870,461.72 29,213,424.35 (2) Transferred in from construction 75,756,671.21 258,674,358.48 37,253,855.67 371,684,885.36 in progress (3) Business combination 3. Decrease 4,697,467.07 73,729,521.26 3,664,495.45 20,885,465.08 102,976,948.86 (1) Disposal/ 4,697,467.07 73,729,521.26 3,664,495.45 20,885,465.08 102,976,948.86 Scrapping 4. Closing balance 2,587,420,951.12 4,860,441,930.26 31,860,248.07 310,015,025.66 7,789,738,155.11 II. Accumulated depreciation 1. Opening balance 827,195,222.62 2,623,543,756.18 28,884,533.57 166,242,412.43 3,645,865,924.80 2. Increase 94,201,980.19 282,604,728.58 1,612,731.80 35,596,814.10 414,016,254.67 (1) Accrual 94,201,980.19 282,604,728.58 1,612,731.80 35,596,814.10 414,016,254.67 3. Decrease 2,340,032.09 58,987,958.06 3,336,414.38 19,258,913.11 83,923,317.64 (1) Disposal/ 2,340,032.09 58,987,958.06 3,336,414.38 19,258,913.11 83,923,317.64 Scrapping 4. Closing balance 919,057,170.72 2,847,160,526.70 27,160,850.99 182,580,313.42 3,975,958,861.83 III. Provision for impairment 1. Opening balance 80,408,777.64 55,237,669.65 95,641.46 5,127,539.12 140,869,627.87 2. Increase 8,941.53 620,078.82 16,136.73 1,437,412.94 2,082,570.02 (1) Accrual 8,941.53 620,078.82 16,136.73 1,437,412.94 2,082,570.02 3. Decrease 1,508,512.62 7,546,564.00 63,089.24 745,843.92 9,864,009.78 (1) Disposal/ 1,508,512.62 7,546,564.00 63,089.24 745,843.92 9,864,009.78 Scrapping 4. Closing balance 78,909,206.55 48,311,184.47 48,688.95 5,819,108.14 133,088,188.11 IV. Carrying amount 1. Closing balance 1,589,454,573.85 1,964,970,219.09 4,650,708.13 121,615,604.10 3,680,691,105.17 2. Opening balance 1,608,757,746.72 1,993,580,536.10 6,336,736.97 96,406,221.80 3,705,081,241.59 (2) Fixed assets temporarily idle □ Applicable √ Not Applicable (3) Fixed assets leased in under finance leases □ Applicable √ Not Applicable (4) Fixed assets leased out under operating leases □ Applicable √ Not Applicable 167 / 246 ANNUAL REPORT 2022 (5) Fixed assets with certificate of titles being unsettled □ Applicable □ Not Applicable Monetary unit: RMB Yuan Items Carrying amount Reasons for unsettlement Buildings and structures etc. 55,966,680.15 In progress Subtotal 55,966,680.15 Other remarks □ Applicable √ Not Applicable Disposal of fixed assets □ Applicable √ Not Applicable 22. Construction in progress Details √ Applicable □ Not Applicable Monetary unit: RMB Yuan Items Closing balance Opening balance Construction in progress 395,295,204.91 162,076,985.24 Construction materials Total 395,295,204.91 162,076,985.24 Other remarks □ Applicable √ Not Applicable Construction in progress (1) Details √ Applicable □ Not Applicable Monetary unit: RMB Yuan Closing balance Opening balance Items Provision for Provision for Book balance Carrying amount Book balance Carrying amount impairment impairment New brewery project with an annual output of 202,505,414.75 202,505,414.75 500,000 kiloliters in Foshan Smart Core Project 43,309,341.19 43,309,341.19 15,996,259.89 15,996,259.89 Capacity expansion and transformation project with an 37,397,502.22 37,397,502.22 annual output of 150,000 kiloliters in Korla Production resumption project 20,428,646.40 20,428,646.40 in Wanzhou Relocation project of ammonia 10,468,200.65 10,468,200.65 refrigeration system of Kunming Huashi Product traceability 6,527,103.08 6,527,103.08 10,730,403.33 10,730,403.33 system engineering China Carlsberg 4,670,773.22 4,670,773.22 7,000,000.00 7,000,000.00 Analysis Platform 168 / 246 ANNUAL REPORT 2022 Closing balance Opening balance Items Provision for Provision for Book balance Carrying amount Book balance Carrying amount impairment impairment FBI detection 4,223,929.00 4,223,929.00 equipment Sales optimization 4,068,629.12 4,068,629.12 5,546,558.29 5,546,558.29 software system Carlsberg Tax Management 1,898,041.37 1,898,041.37 Platform Technical transformation and 1,872,699.36 1,872,699.36 12,548,056.23 12,548,056.23 capacity expansion project of Xichang Transformation and upgrading of bottle 1,780,655.08 1,780,655.08 1,104,943.35 1,104,943.35 depalletizer Refrigeration system 834,726.67 834,726.67 5,725,047.18 5,725,047.18 transformation Tiandao production line transformation 16,464,709.35 16,464,709.35 project Yibin Transformation project of bottled 11,348,660.23 11,348,660.23 beer production line of Pure Draft Tianmuhu brewing capacity 11,059,081.27 11,059,081.27 improvement project Transformation of carbon dioxide 7,119,917.69 7,119,917.69 recovery system Saccharification production capacity 2,870,000.00 2,870,000.00 improvement project of Wusu Huizhou production line transformation 2,495,977.87 2,495,977.87 project Sporadic 55,309,542.80 55,309,542.80 52,067,370.56 52,067,370.56 engineering Total 395,295,204.91 395,295,204.91 162,076,985.24 162,076,985.24 169 / 246 ANNUAL REPORT 2022 (2) Changes in significant projects √ Applicable □ Not Applicable Monetary unit: RMB Yuan Including: Accumulated Amount of Accumulated Completion amount of Annual Opening Transferred to Other Closing borrowing cost Projects Budgets Increase input to percentage borrowing capitalization Fund source balance fixed assets decreases balance capitalization budget (%) (%) cost rate (%) in the current capitalization period New brewery project with an annual output of 500,000 1,401,772,000.00 202,505,414.75 202,505,414.75 14.45 14.45 Self-raised kiloliters in Foshan Smart Core Project 99,811,000.00 15,996,259.89 27,313,081.30 43,309,341.19 43.40 43.40 Self-raised Capacity expansion and transformation project with 115,890,000.00 37,397,502.22 37,397,502.22 32.27 32.27 Self-raised an annual output of 150,000 kiloliters in Korla Production resumption 42,000,000.00 37,946,687.81 17,518,041.41 20,428,646.40 90.35 90.35 Self-raised project in Wanzhou Relocation project of ammonia refrigeration 16,300,000.00 10,468,200.65 10,468,200.65 64.22 64.22 Self-raised system of Kunming Huashi Product traceability system 10,730,403.33 11,031,099.46 4,535,632.62 10,698,767.09 6,527,103.08 Self-raised engineering China Carlsberg Analysis 7,000,000.00 4,588,887.31 6,918,114.09 4,670,773.22 Self-raised Platform FBI detection equipment 5,483,929.00 1,260,000.00 4,223,929.00 Self-raised Sales optimization software 5,546,558.29 4,098,724.04 5,576,653.21 4,068,629.12 Self-raised system Carlsberg Tax Management 2,955,412.95 1,057,371.58 1,898,041.37 Self-raised Platform Technical transformation and capacity expansion project of 101,877,795.00 12,548,056.23 73,111,021.28 83,786,378.15 1,872,699.36 84.08 84.08 Self-raised Xichang Transformation and upgrading of bottle 1,104,943.35 1,801,455.08 1,125,743.35 1,780,655.08 Self-raised depalletizer Refrigeration system 5,725,047.18 1,061,390.97 5,951,711.48 834,726.67 Self-raised transformation Tiandao production line 16,464,709.35 11,851,248.01 28,315,957.36 Self-raised transformation project Yibin transformation project of bottled beer production 32,417,467.00 11,348,660.23 19,568,806.78 30,917,467.01 100.00 100.00 Self-raised line of Pure Draft Tianmuhu brewing capacity 32,907,709.00 11,059,081.27 17,795,089.08 28,854,170.35 100.00 100.00 Self-raised improvement project Transformation of carbon 7,119,917.69 2,916,903.10 9,950,980.08 85,840.71 Self-raised dioxide recovery system Saccharification production 9,266,000.00 2,870,000.00 6,143,407.49 9,013,407.49 100.00 100.00 Self-raised 170 / 246 ANNUAL REPORT 2022 Including: Accumulated Amount of Accumulated Completion amount of Annual Opening Transferred to Other Closing borrowing cost Projects Budgets Increase input to percentage borrowing capitalization Fund source balance fixed assets decreases balance capitalization budget (%) (%) cost rate (%) in the current capitalization period capacity improvement project of Wusu Huizhou production line 2,495,977.87 2,648,200.80 5,144,178.67 Self-raised transformation project Sporadic engineering 52,067,370.56 168,593,601.94 145,311,217.39 20,040,212.31 55,309,542.80 Self-raised Total 1,852,241,971.00 162,076,985.24 649,280,064.02 371,684,885.36 44,376,958.99 395,295,204.91 / / / / 171 / 246 ANNUAL REPORT 2022 (3) Provisions for impairment of construction in progress □ Applicable √ Not Applicable Other remarks □ Applicable √ Not Applicable Construction materials (4) Details □ Applicable √ Not Applicable 23. Productive biological assets (1) Measured at cost □ Applicable √ Not Applicable (2) Measured at fair value □ Applicable √ Not Applicable Other remarks □ Applicable √ Not Applicable 24. Oil and gas assets □ Applicable √ Not Applicable 25. Right-of-use assets √ Applicable □ Not Applicable Monetary unit: RMB Yuan Buildings and Transport Other Items Machinery Total structures facilities equipment I. Cost 1. Opening balance 27,915,000.00 5,490,000.00 29,736,000.00 63,141,000.00 2. Increase 78,976,277.97 2,990,000.00 23,332,000.00 105,298,277.97 (1) Leased in 78,976,277.97 2,990,000.00 23,332,000.00 105,298,277.97 3. Decrease 22,424,000.00 2,840,000.00 13,303,000.00 38,567,000.00 (1) Disposal 22,424,000.00 2,840,000.00 13,303,000.00 38,567,000.00 4. Closing balance 84,467,277.97 5,640,000.00 39,765,000.00 129,872,277.97 II. Accumulated depreciation 1. Opening balance 12,736,000.00 1,764,000.00 9,423,000.00 23,923,000.00 2. Increase 16,466,351.86 2,323,000.00 12,820,000.00 31,609,351.86 (1) Accrual 16,466,351.86 2,323,000.00 12,820,000.00 31,609,351.86 3. Decrease 15,443,000.00 1,101,000.00 9,423,000.00 25,967,000.00 (1) Disposal 15,443,000.00 1,101,000.00 9,423,000.00 25,967,000.00 4. Closing balance 13,759,351.86 2,986,000.00 12,820,000.00 29,565,351.86 III. Provision for impairment 1. Opening balance 2. Increase (1) Accrual 172 / 246 ANNUAL REPORT 2022 Buildings and Transport Other Items Machinery Total structures facilities equipment 3. Decrease (1) Disposal 4. Closing balance IV. Carrying amount 1. Closing balance 70,707,926.11 2,654,000.00 26,945,000.00 100,306,926.11 2. Opening balance 15,179,000.00 3,726,000.00 20,313,000.00 39,218,000.00 Other remarks None. 173 / 246 ANNUAL REPORT 2022 26. Intangible assets (1) Details √ Applicable □ Not Applicable Monetary unit: RMB Yuan Patent Non-patented Items Land use right Trademark Software Total right technology I. Cost 1. Opening balance 631,444,174.90 369,674,547.00 165,923,612.46 1,167,042,334.36 2. Increase 90,228,000.00 45,704,098.05 135,932,098.05 (1) Acquisition 90,228,000.00 1,327,139.06 91,555,139.06 (2) Internal research and development (3) Business combination (4) Transferred in from construction in 44,376,958.99 44,376,958.99 progress 3. Decrease 7,193,840.00 905,681.97 8,099,521.97 (1) Disposal 7,193,840.00 905,681.97 8,099,521.97 4. Closing balance 714,478,334.90 369,674,547.00 210,722,028.54 1,294,874,910.44 II. Accumulated amortization 1. Opening balance 168,406,556.06 192,279,166.74 99,880,846.39 460,566,569.19 2. Increase 13,298,437.00 9,665,734.56 36,422,066.94 59,386,238.50 (1) Accrual 13,298,437.00 9,665,734.56 36,422,066.94 59,386,238.50 3. Decrease 2,002,284.93 99,862.07 2,102,147.00 (1) Disposal 2,002,284.93 99,862.07 2,102,147.00 4. Closing balance 179,702,708.13 201,944,901.30 136,203,051.26 517,850,660.69 III. Provision for impairment 1. Opening balance 3,905,124.59 87,200,600.00 289,751.62 91,395,476.21 2. Increase 459,733.59 459,733.59 (1) Accrual 459,733.59 459,733.59 3. Decrease (1) Disposal 4. Closing balance 3,905,124.59 87,200,600.00 749,485.21 91,855,209.80 IV. Carrying amount 1. Closing balance 530,870,502.18 80,529,045.70 73,769,492.07 685,169,039.95 2. Opening balance 459,132,494.25 90,194,780.26 65,753,014.45 615,080,288.96 (2) Land use right with certificate of titles being unsettled □ Applicable √ Not Applicable Other remarks □ Applicable √ Not Applicable 27. Development expenditures □ Applicable √ Not Applicable 174 / 246 ANNUAL REPORT 2022 28. Goodwill (1) Cost √ Applicable □ Not Applicable Monetary unit: RMB Yuan Increase Decrease Investees or events resulting in Opening balance Business Closing balance goodwill Others Disposal Others combination Xinjiang Wusu Brewery Co., Ltd. 639,141,956.06 639,141,956.06 [Note] Carlsberg (China) Breweries and 48,826,000.00 48,826,000.00 Trading Co., Ltd. [Note] Ningxia Xixia Jianiang Brewery 11,224,500.00 11,224,500.00 Co., Ltd. [Note] Carlsberg Chongqing Brewery Co., 19,037,610.07 19,037,610.07 Ltd. [Note] Total 718,230,066.13 718,230,066.13 Note: It refers to the goodwill arising from business combinations not under common control conducted by the ultimate controlling party or entities controlled by the ultimate controlling party. (2) Provision for impairment √ Applicable □ Not Applicable Monetary unit: RMB Yuan Investees or events Increase Decrease resulting in Opening balance Closing balance Accrual Others Disposal Others goodwill Carlsberg Chongqing Brewery 19,037,610.07 19,037,610.07 Co., Ltd. Total 19,037,610.07 19,037,610.07 (3) Related information of asset group or asset group portfolios which include goodwill √ Applicable □ Not Applicable Composition of asset group or asset group Carlsberg (China) Breweries and Trading Xinjiang Wusu Brewery Co., Ltd. portfolios Co., Ltd. Carrying amount of asset group or asset group 518,027,684.08 1,021,395,523.02 portfolios The carrying amount of goodwill The carrying amount of goodwill allocated to the asset group or asset allocated to the asset group or asset group group portfolios amounted to Carrying amount of goodwill allocated to the portfolios amounted to 983,295,317.02 48,826,000.00 yuan based on the asset group or asset group portfolios and the yuan based on the difference between the difference between the fair value of allocation method fair value of identifiable net assets and identifiable net assets and the the consideration paid at the acquisition consideration paid at the acquisition date. date. Carrying amount of asset group or asset group 1,501,323,001.10 1,070,221,523.02 portfolios that include goodwill Whether asset group or asset group portfolios are consistent with those at acquisition date or Yes Yes at goodwill impairment testing date in previous years (Continued) Composition of asset group or asset group Ningxia Xixia Jianiang Brewery Co., Ltd. Carlsberg Chongqing Brewery Co., Ltd. portfolios 175 / 246 ANNUAL REPORT 2022 Carrying amount of asset group or asset group 240,903,969.33 962,966,909.69 portfolios The carrying amount of goodwill The carrying amount of goodwill allocated to the asset group or asset group allocated to the asset group or asset Carrying amount of goodwill allocated to the portfolios amounted to 16,035,000.00 group portfolios amounted to 0.00 asset group or asset group portfolios and the yuan based on the difference between the yuan based on the difference between allocation method fair value of identifiable net assets and the fair value of identifiable net assets the consideration paid at the acquisition and the consideration paid at the date. acquisition date. Carrying amount of asset group or asset group 256,938,969.33 962,966,909.69 portfolios that include goodwill Whether asset group or asset group portfolios are consistent with those at acquisition date or Yes Yes at goodwill impairment testing date in previous years (4) Impairment test process, key parameters (e.g., forecast period growth rate, steady period growth rate, profit rate, discount rate, forecast period, etc. used when estimating the present value of future cash flows, if applicable), and determination method of goodwill impairment loss √ Applicable □ Not Applicable a. Xinjiang Wusu Brewery Co., Ltd. The recoverable amount of asset group or asset group portfolios which include goodwill is computed based on the present value of estimated future cash flows, which is based on the estimated annual cash flows for an explicit forecast period of 5 years approved by the Company (the “forecast period”), and the pre-tax discount rate used in estimating the annual cash flows is 15.67% (2021: 15.27%). The operating profit after the forecast period is basically consistent with the operating profit in the last year of the forecast period. Other key data used in the impairment test include: annual compound growth rate of operating revenue of 2.65% (2021: 5.14%) and budgeted gross margin of 42%-46% (2021: 40%-41%). Such key data are determined by the Company based on its experience and its prediction towards market development. The discount rate used by the Company is the pre-tax interest rate that reveals the time value of currency under the current market situation and special risks of certain asset group. The aforementioned estimation of the recoverable amount of goodwill suggests that the goodwill is not impaired. b. Carlsberg (China) Breweries and Trading Co., Ltd. The recoverable amount of asset group or asset group portfolios which include goodwill is computed based on the present value of estimated future cash flows, which is based on the estimated annual cash flows for an explicit forecast period of 5 years approved by the Company, and the pre-tax discount rate used in estimating the annual cash flows is 15.67% (2021: 15.27%). The operating profit after the forecast period is basically consistent with the operating profit in the last year of the forecast period. Other key data used in the impairment test include: annual compound growth rate of operating revenue of -0.81% (2021: 2.65%) and budgeted gross margin of 43%-44% (2021: 46%-49%). Such key data are determined by the Company based on its experience and its prediction towards market development. The discount rate used by the Company is the pre-tax interest rate that reveals the time value of currency under the current market situation and special risks of certain asset group. The aforementioned estimation of the recoverable amount of goodwill suggests that the goodwill is not impaired. c. Ningxia Xixia Jianiang Brewery Co., Ltd. The recoverable amount of asset group or asset group portfolios which include goodwill is computed based on the present value of estimated future cash flows, which is based on the estimated annual cash flows for an explicit 176 / 246 ANNUAL REPORT 2022 forecast period of 5 years approved by the Company, and the pre-tax discount rate used in estimating the annual cash flows is 15.67% (2021: 15.27%). The operating profit after the forecast period is basically consistent with the operating profit in the last year of the forecast period. Other key data used in the impairment test include: annual compound growth rate of operating revenue of 3.94% (2021: 3.63%) and budgeted gross margin of 43-44% (2021: 44%). Such key data are determined by the Company based on its experience and its prediction towards market development. The discount rate used by the Company is the pre-tax interest rate that reveals the time value of currency under the current market situation and special risks of certain asset group. The aforementioned estimation of the recoverable amount of goodwill suggests that the goodwill is not impaired. d. Carlsberg Chongqing Brewery Co., Ltd. In April 2012, the Company acquired Carlsberg Chongqing Brewery Co., Ltd., and recognized the goodwill at the difference between the fair value of identifiable net assets and the consideration paid at the acquisition date. Pursuant to the “Proposal on Accrual of Provision for Impairment of Assets” deliberated and approved by the ninth meeting of the seventh Board of Directors held in 2013, the Company performed impairment test on relevant assets group portfolios that included goodwill, and made provision for impairment of goodwill of 19,037,610.07 yuan at the difference between the recoverable amount of relevant asset group portfolios and the carrying amount. (5) Effect of goodwill impairment test □ Applicable √ Not Applicable Other remarks □ Applicable √ Not Applicable 29. Long-term prepayments □ Applicable √ Not Applicable 30. Deferred tax assets and deferred tax liabilities (1) Deferred tax assets before offset √ Applicable □ Not Applicable Monetary unit: RMB Yuan Closing balance Opening balance Items Deductible Deductible Deferred tax temporary temporary Deferred tax assets assets difference difference Provision for 333,287,740.30 67,535,763.71 338,385,920.45 84,596,479.57 impairment of assets Unrealized profit from 21,219,368.92 3,182,905.34 internal transactions Deductible losses 27,198,996.20 4,079,849.43 20,482,192.92 5,120,548.23 Employee benefits 259,582,897.27 52,761,793.01 476,942,171.41 119,235,542.85 payable Long-term employee 66,552,094.92 11,594,710.98 69,434,974.22 17,358,743.57 benefits payable Accrued expenses and 2,866,021,252.10 546,199,869.87 3,158,734,165.77 789,683,541.30 contract assets 177 / 246 ANNUAL REPORT 2022 Closing balance Opening balance Items Deductible Deductible Deferred tax temporary temporary Deferred tax assets assets difference difference Fixed assets 7,416,061.45 1,798,655.78 2,850,538.37 712,634.59 Intangible assets 23,044,686.80 3,952,404.00 21,136,658.46 5,284,164.62 Provisions 31,657,899.75 4,900,580.66 31,862,723.02 7,965,680.76 Other non-current 1,000,000.00 150,000.00 1,000,000.00 250,000.00 financial assets Deferred income 147,635,624.68 36,250,783.25 128,413,080.14 32,103,270.03 Total 3,784,616,622.39 732,407,316.03 4,249,242,424.76 1,062,310,605.52 (2) Deferred tax liabilities before offset √ Applicable □ Not Applicable Monetary unit: RMB Yuan Closing balance Opening balance Items Taxable temporary Deferred tax Taxable temporary Deferred tax difference liabilities difference liabilities Assets appraisal appreciation due to 60,713,990.24 9,107,098.54 69,387,140.24 17,346,785.05 business combination not under common control Changes in fair value of other debt investments Changes in fair value of other equity instrument 13,303,331.73 3,325,832.94 12,210,379.78 3,052,594.95 investments One-time deduction on fixed assets of less than 5 149,706,704.25 26,985,487.80 126,298,677.32 31,574,669.35 million yuan Intangible assets 12,000,000.00 3,000,000.00 12,000,000.00 3,000,000.00 Cash flow hedging 1,213,019.84 275,647.87 instruments Total 236,937,046.06 42,694,067.15 219,896,197.34 54,974,049.35 (3) Deferred tax assets or liabilities presented by net amount after offset □ Applicable √ Not Applicable (4) Details of unrecognized deferred tax assets √ Applicable □ Not Applicable Monetary unit: RMB Yuan Items Closing balance Opening balance Deductible temporary difference 191,072,887.28 91,407,055.40 Deductible losses 320,552,816.05 216,715,687.90 Total 511,625,703.33 308,122,743.30 (5) Maturity years of deductible losses of unrecognized deferred tax assets √ Applicable □ Not Applicable Monetary unit: RMB Yuan Maturity years Closing balance Opening balance Remarks Year 2022 12,865,456.04 Year 2023 23,393,028.65 23,445,548.14 178 / 246 ANNUAL REPORT 2022 Year 2024 17,917,412.10 17,917,412.10 Year 2025 20,863,693.25 20,863,693.25 Year 2026 126,994,927.34 141,623,578.37 Year 2027 131,383,754.71 Total 320,552,816.05 216,715,687.90 / Other remarks □ Applicable √ Not Applicable 31. Other non-current assets √ Applicable □ Not Applicable Monetary unit: RMB Yuan Closing balance Opening balance Provision Provision Items Book balance for Carrying amount Book balance for Carrying amount impairment impairment Cost to obtain a contract Cost to fulfill a contract Cost of goods expected to be returned Contract assets Prepayments for acquisition 89,540,749.40 89,540,749.40 3,636,075.76 3,636,075.76 of non-current assets Total 89,540,749.40 89,540,749.40 3,636,075.76 3,636,075.76 Other remarks None. 32. Short-term borrowings (1) Details on categories □ Applicable √ Not Applicable (2) Overdue short-term borrowings □ Applicable √ Not Applicable Significant overdue short-term borrowings □ Applicable √ Not Applicable Other remarks □ Applicable √ Not Applicable 33. Held-for-trading financial liabilities □ Applicable √ Not Applicable 34. Derivative financial liabilities √ Applicable □ Not Applicable 179 / 246 ANNUAL REPORT 2022 Monetary unit: RMB Yuan Items Closing balance Opening balance Floating gains or losses on hedging 2,616,336.56 instruments Total 2,616,336.56 Other remarks: Please refer to item VII 83 of this section for details on floating gains or losses on hedging instruments. 35. Notes payable (1) Details □ Applicable √ Not Applicable 36. Accounts payable (1) Details √ Applicable □ Not Applicable Monetary unit: RMB Yuan Items Closing balance Opening balance Payments for acquisition of materials 2,096,313,903.90 1,837,217,983.60 and receiving of services Payments for engineering equipment 401,357,843.47 375,471,194.51 Total 2,497,671,747.37 2,212,689,178.11 (2) Significant accounts payable with age over one year □ Applicable √ Not Applicable Other remarks □ Applicable √ Not Applicable 37. Advances received (1) Details □ Applicable √ Not Applicable (2) Significant advances received with age over one year □ Applicable √ Not Applicable Other remarks □ Applicable √ Not Applicable 38. Contract liabilities (1) Details √ Applicable □ Not Applicable Monetary unit: RMB Yuan Items Closing balance Opening balance Contract liabilities of distributors 1,614,042,546.14 1,732,741,425.80 Total 1,614,042,546.14 1,732,741,425.80 180 / 246 ANNUAL REPORT 2022 (2) Reasons for significant changes in carrying amount of contract assets □ Applicable √ Not Applicable Other remarks □ Applicable √ Not Applicable 181 / 246 ANNUAL REPORT 2022 39. Employee benefits payable (1) Details √ Applicable □ Not Applicable Monetary unit: RMB Yuan Items Opening balance Increase Decrease Closing balance I. Short-term employee 440,872,950.84 1,382,915,950.93 1,503,402,634.69 320,386,267.08 benefits II. Post-employment benefits - defined 34,300,299.10 120,032,669.85 109,770,266.91 44,562,702.04 contribution plan III. Termination benefits 37,590,091.03 10,079,863.07 13,251,598.57 34,418,355.53 IV. Other benefits due within one year Total 512,763,340.97 1,513,028,483.85 1,626,424,500.17 399,367,324.65 (2) Details of short-term employee benefits √ Applicable □ Not Applicable Monetary unit: RMB Yuan Items Opening balance Increase Decrease Closing balance I. Wage, bonus, allowance and 422,171,500.48 1,185,176,943.47 1,307,150,526.19 300,197,917.76 subsidy II. Employee welfare fund 31,094,554.19 31,094,554.19 III. Social insurance premium 7,311,339.41 68,685,543.66 67,333,097.86 8,663,785.21 Including: Medicare premium 6,571,835.99 58,317,441.52 56,679,019.94 8,210,257.57 Occupational injuries 739,503.42 9,544,082.66 9,830,058.44 453,527.64 premium Maternity premium 824,019.48 824,019.48 IV. Housing provident fund 6,948,453.85 68,587,097.75 69,288,104.24 6,247,447.36 V. Trade union fund and 4,441,657.10 29,371,811.86 28,536,352.21 5,277,116.75 employee education fund VI. Short-term paid leave VII. Short-term profit-sharing plan Total 440,872,950.84 1,382,915,950.93 1,503,402,634.69 320,386,267.08 (3) Details of defined contribution plan √ Applicable □ Not Applicable Monetary unit: RMB Yuan Items Opening balance Increase Decrease Closing balance 1. Basic endowment 32,530,830.28 116,981,082.67 106,123,475.62 43,388,437.33 insurance premium 2. Unemployment insurance 1,769,468.82 3,051,587.18 3,646,791.29 1,174,264.71 premium 3. Company annuity payment Total 34,300,299.10 120,032,669.85 109,770,266.91 44,562,702.04 Other remarks □ Applicable √ Not Applicable 182 / 246 ANNUAL REPORT 2022 40. Tax payables √ Applicable □ Not Applicable Monetary unit: RMB Yuan Items Closing balance Opening balance VAT 21,855,504.85 12,956,089.40 Consumption tax 80,493,196.43 30,892,567.28 Business tax Corporate income tax 131,669,002.41 340,441,532.09 Individual income tax 4,552,442.76 3,973,489.86 Urban maintenance and 6,854,142.51 3,031,860.79 construction tax Education surcharge 5,902,977.40 2,353,609.31 Property tax 902,167.35 730,610.13 Land use tax 852,494.98 702,608.48 Others 2,305,532.66 842,952.59 Total 255,387,461.35 395,925,319.93 Other remarks None. 41. Other payables Details √ Applicable □ Not Applicable Monetary unit: RMB Yuan Items Closing balance Opening balance Interest payable Dividend payable Other payables 3,490,319,176.38 2,971,960,641.25 Total 3,490,319,176.38 2,971,960,641.25 Other remarks □ Applicable √ Not Applicable Interest payable (1) Details on categories □ Applicable √ Not Applicable Dividend payable (2) Details on categories □ Applicable √ Not Applicable Other payables (1) Other receivables categorized by nature √ Applicable □ Not Applicable Monetary unit: RMB Yuan Items Closing balance Opening balance Accrued expenses 1,746,070,547.86 1,592,251,360.17 Deposits for packages 941,202,663.23 789,959,811.32 Allowances for deposits for -334,503,946.84 -320,726,207.65 packages 183 / 246 ANNUAL REPORT 2022 Items Closing balance Opening balance Other deposits 1,081,788,522.34 852,384,592.98 Trademark licensing fees payable 40,319,315.43 34,110,233.83 Others 15,442,074.36 23,980,850.60 Total 3,490,319,176.38 2,971,960,641.25 (2) Significant other payables with age over one year □ Applicable √ Not Applicable Other remarks √ Applicable □ Not Applicable Accrual and write-off of allowances for deposits Reversal or write- Items Opening balance Accrual Closing balance off Allowances for deposits for 320,726,207.65 95,258,194.29 81,480,455.10 334,503,946.84 packages Subtotal 320,726,207.65 95,258,194.29 81,480,455.10 334,503,946.84 42. Liabilities held for sale □ Applicable √ Not Applicable 43. Non-current liabilities due within one year √ Applicable □ Not Applicable Monetary unit: RMB Yuan Items Closing balance Opening balance Long-term borrowings due within one year Bonds payable due within one year Long-term payables due within one year Lease liabilities due within one 24,005,592.21 22,313,992.68 year Total 24,005,592.21 22,313,992.68 Other remarks 44. Other current liabilities Details √ Applicable □ Not Applicable Monetary unit: RMB Yuan Items Closing balance Opening balance Short-term bonds payable Payables for returned goods Output VAT to be recognized 27,809,237.78 33,979,353.25 Total 27,809,237.78 33,979,353.25 184 / 246 ANNUAL REPORT 2022 Increase or decrease of short-term bonds payable □ Applicable √ Not Applicable Other remarks □ Applicable √ Not Applicable 45. Long-term borrowings (1) Details on categories □ Applicable √ Not Applicable Other remarks on interest rate range, etc. □ Applicable √ Not Applicable 46. Bonds payable (1) Details □ Applicable √ Not Applicable (2) Current period movements (not including other financial instruments such as preferred shares/perpetual bonds classified as financial liabilities) □ Applicable √ Not Applicable (3) Converting conditions and time of convertible bonds □ Applicable √ Not Applicable (4) Other financial instruments classified as financial liabilities Basic information of other financial instruments such as preferred shares or perpetual bonds outstanding at the balance sheet date □ Applicable √ Not Applicable Current period movements of financial instruments such as preferred shares or perpetual bonds outstanding at the balance sheet date □ Applicable √ Not Applicable Other remarks on financial instruments classified as financial liabilities □ Applicable √ Not Applicable Other remarks □ Applicable √ Not Applicable 185 / 246 ANNUAL REPORT 2022 47. Lease liabilities √ Applicable □ Not Applicable Monetary unit: RMB Yuan Items Closing balance Opening balance Lease liabilities 77,928,597.87 16,951,000.00 Total 77,928,597.87 16,951,000.00 Other remarks None. 48. Long-term payables Details □ Applicable √ Not Applicable Other remarks □ Applicable √ Not Applicable Long-term payables (1) Long-term payables categorized by nature □ Applicable √ Not Applicable Special payables (2) Special payables categorized by nature □ Applicable √ Not Applicable 49. Long-term employee benefits payable √ Applicable □ Not Applicable (1) Details √ Applicable □ Not Applicable Monetary unit: RMB Yuan Items Closing balance Opening balance I. Termination benefits - Net defined benefit 145,921,476.85 153,743,974.22 liability II. Dismissal benefits III. Other long-term employee benefits 8,486,230.50 9,925,000.00 Total 154,407,707.35 163,668,974.22 186 / 246 ANNUAL REPORT 2022 (2) Movements in defined benefit plan Present value of obligations in defined benefit plan √ Applicable □ Not Applicable Monetary unit: RMB Yuan Items Current period cumulative Preceding period comparative I. Opening balance 153,743,974.22 164,376,908.47 II. Components of defined benefit costs -683,415.60 4,739,291.62 recognized in profit or loss 1. Current service cost 2,674,640.27 1,493,541.92 2. Past service cost -8,091,055.87 -2,160,250.30 3. Gains and losses on settlements 4. Net interest expense or income 4,733,000.00 5,406,000.00 III. Components of defined benefit costs recognized in other comprehensive 2,862,000.00 -5,673,342.76 income 1. Actuarial gains and losses 2,862,000.00 -5,673,342.76 IV. Other movements -10,001,081.77 -9,698,883.11 1. Consideration paid at settlement 2. Benefit paid -10,001,081.77 -9,698,883.11 V. Closing balance 145,921,476.85 153,743,974.22 Plan assets □ Applicable √ Not Applicable Net defined benefit liabilities (assets) √ Applicable □ Not Applicable Monetary unit: RMB Yuan Items Current period cumulative Preceding period comparative I. Opening balance 153,743,974.22 164,376,908.47 II. Components of defined benefit costs -683,415.60 4,739,291.62 recognized in profit or loss III. Components of defined benefit costs 2,862,000.00 -5,673,342.76 recognized in other comprehensive income IV. Other movements -10,001,081.77 -9,698,883.11 V. Closing balance 145,921,476.85 153,743,974.22 Contents and risks of defined benefit plan, and effect on amount, timing and uncertainty of future cash flows √ Applicable □ Not Applicable 187 / 246 ANNUAL REPORT 2022 The Company provides the following supplementary post-retirement benefits for existing and future retirees: a. supplementary pension benefits paid to certain existing and future retirees on a monthly or annual basis until their death, which would not be adjusted in the future; b. old age allowance paid to certain existing and future retirees on a monthly basis from the age of 70 until their death, which would not be adjusted in the future; c. one-time funeral benefits paid to existing and future retirees upon their death, which would not be adjusted in the future; d. basic medical insurance premium and critical illness medical premium paid on behalf of existing and future retirees until their death or expiry of minimum payment period (25 years for males and 20 years for females), which would be adjusted according to local policies; e. heating expenses paid to existing and future retirees until their death, which would be adjusted according to local policies; f. retirement allowance and family worker allowance paid to certain existing retirees until their death, which would not be adjusted in the future; and g. one-time incentives for one- child family paid to certain future retirees upon their retirement, which would not be adjusted in the future. Remarks on significant actuarial assumptions and sensitivity analysis results of defined benefit plan √ Applicable □ Not Applicable Items Closing balance Opening balance Post-retirement benefits: 3.00%; other long-term Post-retirement benefits: 3.25%; other long-term Discount rate employee benefits: 2.50% employee benefits: 2.50% China Life Insurance Mortality Table (2010- Death rate China Life Insurance Mortality Table (2010-2013) 2013) Estimated growth rate of 0, 1.6%, 3%, 6%, 7%, 8%, 10% 0, 6%, 7%, 8%, 10% employee benefits The Company entrusted Towers Watson Management and Consulting (Shenzhen) Co., Ltd. to perform actuarial evaluation on the present value of the above defined benefit plan, with an actuarial evaluation report issued thereon. Other remarks √ Applicable □ Not Applicable Other long-term employee benefits refer to long-term paid leaves. 50. Provisions √ Applicable □ Not Applicable Monetary unit: RMB Yuan Items Opening balance Closing balance Reasons for balance Guarantee provided for other entities Pending lawsuits 31,862,723.02 31,657,899.75 Including: Glass bottle 25,714,843.21 25,511,559.35 [Note 1] lawsuit Labor lawsuit 6,030,000.00 6,030,000.00 [Note 2] Others 117,879.81 116,340.40 Products quality guarantee Restructuring obligations Onerous contract to be implemented Payables for returned goods Others 188 / 246 ANNUAL REPORT 2022 Items Opening balance Closing balance Reasons for balance Total 31,862,723.02 31,657,899.75 / Other remarks on significant assumption on material provisions and estimates Note 1: Pursuant to the “Glass Beer Bottle Sales Contract” entered into between Xinjiang Wusu Brewery (Wusu) Co., Ltd. and Gaomi Shengtai Glass Products Co., Ltd. (the “Gaomi Company”) dated April 10, 2013, Gaomi Company produced and supply special glass beer bottles to Xinjiang Wusu Brewery (Wusu) Co., Ltd. In 2015, Xinjiang Wusu Brewery (Wusu) Co., Ltd. checked the glass beer bottles and found quality problems, and then refused to accept the bottles and did not make payments. In response, Gaomi Company brought a lawsuit against Xinjiang Wusu Brewery Co., Ltd. and Xinjiang Wusu Brewery (Wusu) Co., Ltd. to the Intermediate People’s Court of Xinjiang Autonomous Region in the same year. At the first instance, the court judged that Xinjiang Wusu Brewery (Wusu) Co., Ltd. should pay 19,214,843.21 yuan to Gaomi Company. Gaomi Company refused to accept the first- instance judgment and appealed to the Higher People’s Court of Xinjiang Autonomous Region on July 22, 2016, and subsequently obtained the final judgment of the Higher People’s Court of the Autonomous Region on January 17, 2017, which ruled that Xinjiang Wusu Brewery (Wusu) Co., Ltd. should pay the above-mentioned goods payment to Gaomi Company. Gaomi Company refused to accept the final judgment and planned to apply for a trial supervision procedure through the Supreme People’s Procuratorate. Xinjiang Wusu Brewery (Wusu) Co., Ltd. accrued provisions of 19,214,843.21 yuan based on the possible liquidated damages, compensation and litigation fees according to the first-instance judgment. As Gaomi Company appealed to the People’s Court of Wusu City and the People’s Court of Toutunhe District, Urumqi City on September 22, 2016 and November 20, 2021, respectively, for the losses arising from production line suspension caused by the glass beer bottle lawsuit, Xinjiang Wusu Brewery (Wusu) Co., Ltd. accrued provisions totaling 6,500,000.00 yuan based on the possible compensation and litigation fees. As of December 31, 2022, litigation costs incurred totaled 203,283.86 yuan, while the final amount to be paid is still pending. Note 2: Carlsberg (China) Breweries and Trading Co., Ltd. Guangzhou Branch had a labor lawsuit with its employees, and it accrued provisions for salaries of 5,230,000.00 yuan, which was calculated at 52,000.00 yuan per month from August 2013 to the resumption date in December 2020, and provisions of 800,000.00 yuan based on the estimated legal service fees, totaling 6,030,000.00 yuan. 189 / 246 ANNUAL REPORT 2022 51. Deferred income Details √ Applicable □ Not Applicable Monetary unit: RMB Yuan Opening Reasons for Items Increase Decrease Closing balance balance balance Government 254,683,905.82 30,040,700.00 28,112,910.68 256,611,695.14 grants Total 254,683,905.82 30,040,700.00 28,112,910.68 256,611,695.14 / Details of government grants √ Applicable □ Not Applicable Monetary unit: RMB Yuan Amount Amount Related to included into Other Items Opening balance Increase included into Closing balance assets/ non-operating movements other income income income Compensation for factory relocation and resettlement in Dali City Related to 107,522,700.44 6,870,646.71 100,652,053.73 – Carlsberg (China) assets Breweries and Trading Co., Ltd. Subsidies for relocation and reconstruction – Related to 94,913,050.05 9,457,528.12 85,455,521.93 Chongqing Beer Yibin assets Co., Ltd. Special subsidies for industrial development Related to 9,979,771.45 6,936,000.00 1,728,106.23 15,187,665.22 – Hunan Chongqing assets Beer Guoren Co., Ltd. Subsidies for equipment investments – Carlsberg Related to 8,103,038.91 665,493.16 7,437,545.75 Brewery (Anhui) Co., assets Ltd. Special subsidies for canning projects – Related to Carlsberg Tianmuhu 7,779,924.73 707,103.28 7,072,821.45 assets Brewery (Jiangsu) Co., Ltd. Compensation for relocation and construction of Related to 5,676,666.43 1,820,000.04 3,856,666.39 production sites – assets Carlsberg Brewery (Anhui) Co., Ltd. Subsidies for relocation and reconstruction – Related to 4,212,000.00 1,512,000.00 2,700,000.00 Chongqing Brewery assets Co., Ltd. Sixth Factory Special subsidies for sewage treatment – Related to Carlsberg Chongqing 2,220,000.00 518,000.00 1,702,000.00 assets Brewery Co., Ltd. Shizhu Branch Subsidies for key energy conservation and pollution control Related to 1,456,741.35 432,475.67 1,024,265.68 projects in Tacheng assets Prefecture – Xinjiang Wusu Brewery Co., Ltd. Government subsidies 12,840,000.00 757,874.09 12,082,125.91 Related to 190 / 246 ANNUAL REPORT 2022 Amount Amount Related to included into Other Items Opening balance Increase included into Closing balance assets/ non-operating movements other income income income for canning line of Yibin assets Xuzhou Chuangyi Industrial Investment Co., Ltd. – Chongqing Beer Yibin Co., Ltd. The first batch of subsidies for industrial technical transformation Related to in Chongqing Liang 3,720,000.00 69,232.87 3,650,767.13 assets Jiang New Area – Carlsberg Chongqing Brewery Co., Ltd. Subsidies for retrofit of boiler burners – Related to 2,780,000.00 133,597.80 2,646,402.20 Carlsberg Brewery assets (Jiangsu) Co., Ltd. Special funds for the development of advanced manufacturing Related to industries at the 1,953,000.00 66,802.90 1,886,197.10 assets municipal level in Yancheng City – Carlsberg Brewery (Jiangsu) Co., Ltd. Related to Other subsidies 12,820,012.46 1,811,700.00 3,374,049.81 11,257,662.65 assets Subtotal 254,683,905.82 30,040,700.00 28,112,910.68 256,611,695.14 Other remarks √ Applicable □ Not Applicable Please refer to item VII 84 of this section for details on government grants included in profit or loss. 52. Other non-current liabilities □ Applicable √ Not Applicable 191 / 246 ANNUAL REPORT 2022 53. Share capital √ Applicable □ Not Applicable Monetary unit: RMB Yuan Movements Opening balance Issue of Reserve Closing balance Bonus new transferred Others Subtotal shares shares to shares Total 483,971,198.00 483,971,198.00 shares Other remarks None. 54. Other equity instruments (1) Basic information of other financial instruments such as preferred shares or perpetual bonds outstanding as of the balance sheet date □ Applicable √ Not Applicable (2) Current period movements of financial instruments such as preferred shares or perpetual bonds outstanding at the balance sheet date □ Applicable √ Not Applicable Current period movements and reasons for the movements, and basis for relevant accounting treatments □ Applicable √ Not Applicable Other remarks □ Applicable √ Not Applicable 55. Capital reserve √ Applicable □ Not Applicable Monetary unit: RMB Yuan Items Opening balance Increase Decrease Closing balance Share/capital premium Other capital reserve 2,075,145.00 5,652,955.00 7,728,100.00 Total 2,075,145.00 5,652,955.00 7,728,100.00 Other remarks on current period movements and reasons for the movements etc. Increase in the current year was due to the recognition of equity incentives offered by Carlsberg Group to senior management free of charge. 56. Treasury shares □ Applicable √ Not Applicable 57. Other comprehensive income (OCI) √ Applicable □ Not Applicable Monetary unit: RMB Yuan 192 / 246 ANNUAL REPORT 2022 Current period cumulative Less: OCI Less: OCI previously previously recognized Pre-tax amount recognized Attributable Attributable to Items Opening balance but Closing balance occurred for but Less: Income to parent non-controlling transferred to the current transferred to tax expenses company shareholders retained period profit or loss after tax after tax earnings in in the current the current period period I. Items not to be reclassified -13,838,109.84 -1,769,048.05 -2,766,643.94 -179,586.53 1,177,182.42 -14,017,696.37 subsequently to profit or loss Including: Remeasurements -18,547,042.80 -2,862,000.00 -3,039,881.93 -601,083.45 778,965.38 -19,148,126.25 of the defined benefit plan OCI not to be transferred to profit or loss under equity method Changes in fair value of other 4,708,932.96 1,092,951.95 273,237.99 421,496.92 398,217.04 5,130,429.88 equity instrument investments Changes in fair value of the Company’s own credit risk II. Items to be reclassified 1,213,019.84 275,647.87 474,775.84 462,596.13 474,775.84 subsequently to profit or loss Including: OCI to be transferred to profit or loss under equity method Changes in fair value of other debt investments OCI arising from financial assets reclassification Provision for credit impairment loss of other debt investments Cash flow hedging 1,213,019.84 275,647.87 474,775.84 462,596.13 474,775.84 reserves Translation reserves Total -13,838,109.84 -556,028.21 -2,490,996.07 295,189.31 1,639,778.55 -13,542,920.53 Other remarks on reconciliation of the effective portion of gains and losses on cash flow hedging into the initially recognized amount of the hedged items, etc. None. 58. Special reserve □ Applicable √ Not Applicable 59. Surplus reserve √ Applicable □ Not Applicable Monetary unit: RMB Yuan 193 / 246 ANNUAL REPORT 2022 Items Opening balance Increase Decrease Closing balance Statutory surplus reserve 241,985,599.00 241,985,599.00 Discretionary surplus reserve Reserve fund Enterprise development fund Others Total 241,985,599.00 241,985,599.00 Remarks on surplus reserve, including current period movements and reasons for the movements None. 60. Undistributed profit √ Applicable □ Not Applicable Monetary unit: RMB Yuan Items Current period cumulative Preceding period comparative Balance before adjustment at the end of 1,040,351,272.07 -125,892,143.84 preceding period Add: Increase due to adjustment (or less: decrease) Opening balance after adjustment 1,040,351,272.07 -125,892,143.84 Add: Net profit attributable to 1,263,604,930.09 1,166,243,415.91 shareholders of the parent company Less: Appropriation of statutory surplus reserve Appropriation of discretionary surplus reserve Appropriation of general risk reserve Dividend payable on ordinary shares 967,942,396.00 Dividend on ordinary share converted to share capital Closing balance 1,336,013,806.16 1,040,351,272.07 194 / 246 ANNUAL REPORT 2022 61. Operating revenue and operating cost (1) Details √ Applicable □ Not Applicable 1) Details Monetary unit: RMB Yuan Current period cumulative Preceding period comparative Items Revenue Cost Revenue Cost Main operations 13,696,216,606.60 6,702,990,258.86 12,835,328,224.79 6,243,949,359.48 Other operations 342,823,932.85 249,438,735.05 283,982,463.51 192,408,868.11 Total 14,039,040,539.45 6,952,428,993.91 13,119,310,688.30 6,436,358,227.59 Including: Revenue from contracts 14,039,040,539.45 6,952,428,993.91 13,119,310,688.30 6,436,358,227.59 with customers 2) Details of the top 5 debtors with largest balances Debtors Operating revenue % to total Customer 1 143,572,480.25 1.02 Customer 2 135,897,893.72 0.97 Customer 3 125,545,391.33 0.89 Customer 4 122,549,857.80 0.87 Customer 5 110,227,439.36 0.79 Subtotal 637,793,062.46 4.54 3) Breakdown of revenue (a) Breakdown of revenue from contracts with customers by goods or services Current period cumulative Preceding period comparative Items Revenue Cost Revenue Cost Beer 13,696,216,606.60 6,702,990,258.86 12,835,328,224.79 6,243,949,359.48 Sale of packages, waste 342,823,932.85 249,438,735.05 283,982,463.51 192,408,868.11 materials, etc. Subtotal 14,039,040,539.45 6,952,428,993.91 13,119,310,688.30 6,436,358,227.59 (b) Breakdown of revenue from contracts with customers by operating regions Please refer to item XVI 6 of this section for details. (c) Breakdown of revenue from contracts with customers by time of transferring goods or rendering services Items Current period cumulative Preceding period comparative Recognized at a point in time 14,039,040,539.45 13,119,310,688.30 Subtotal 14,039,040,539.45 13,119,310,688.30 (2) Details of revenue from contracts □ Applicable √ Not Applicable Remarks on revenue from contracts □ Applicable √ Not Applicable (3) Remarks on performance obligation □ Applicable √ Not Applicable 195 / 246 ANNUAL REPORT 2022 (4) Remarks on transaction price allocated to the remaining performance obligations □ Applicable √ Not Applicable Other remarks None. 62. Taxes and surcharges √ Applicable □ Not Applicable Monetary unit: RMB Yuan Items Current period cumulative Preceding period comparative Consumption tax 688,784,854.98 672,943,471.94 Business tax Urban maintenance and 100,780,231.87 95,889,678.04 construction tax Education surcharge 77,533,745.75 73,213,504.82 Resources tax Property tax 19,376,483.61 18,211,683.26 Land use tax 20,351,805.44 19,453,314.65 Vehicle and vessel use tax Stamp duty 11,906,396.07 10,058,239.32 Others 2,124,772.60 2,289,925.65 Total 920,858,290.32 892,059,817.68 Other remarks None. 63. Selling expenses √ Applicable □ Not Applicable Monetary unit: RMB Yuan Items Current period cumulative Preceding period comparative Advertisement and marketing expenses 1,133,302,573.74 1,057,800,129.44 Employee benefits 725,946,110.37 725,297,746.38 Trademark licensing expenses 216,678,340.71 206,246,268.68 Travelling expenses 60,294,791.93 63,497,707.42 Depreciation 47,135,522.24 40,075,065.10 Rental expenses 26,917,139.50 17,153,270.75 Depreciation of right-of-use assets 19,475,000.00 17,122,000.00 Amortization of intangible assets 17,959,828.76 9,596,774.09 Others 78,507,919.95 76,105,699.40 Total 2,326,217,227.20 2,212,894,661.26 Other remarks None. 196 / 246 ANNUAL REPORT 2022 64. Administrative expenses √ Applicable □ Not Applicable Monetary unit: RMB Yuan Items Current period cumulative Preceding period comparative Employee benefits 258,726,828.28 239,233,635.37 Office expenses and intermediary service 97,126,555.74 131,436,004.90 expenses IT-related expenses 55,075,964.45 32,871,429.47 Amortization of intangible assets 25,339,748.16 20,107,555.83 Depreciation expenses 17,070,233.80 15,512,008.46 Security and fire prevention expenses 9,753,934.63 10,199,451.50 Depreciation of right-of-use assets 9,722,351.86 4,561,000.00 Pollution discharge fees 8,560,050.43 8,002,665.31 Travelling expenses 6,833,691.74 13,783,572.33 Share-based payments 6,701,520.00 5,825,704.81 Water and electricity expenses 4,941,871.28 3,822,258.23 Others 34,717,598.56 31,521,858.74 Total 534,570,348.93 516,877,144.95 Other remarks None. 65. R&D expenses √ Applicable □ Not Applicable Monetary unit: RMB Yuan Items Current period cumulative Preceding period comparative Employee benefits 53,300,332.47 71,824,082.90 Raw materials and revolving materials used 25,842,587.49 41,033,310.74 Power expenses 19,579,951.98 28,620,167.99 Depreciation expenses 9,119,195.96 12,007,674.07 Other expenses 2,905,868.16 9,666,048.90 Total 110,747,936.06 163,151,284.60 Other remarks None. 66. Financial expenses √ Applicable □ Not Applicable Monetary unit: RMB Yuan Items Current period cumulative Preceding period comparative Interest expenses 3,696,843.83 14,186,774.78 Less: Interest income 65,718,589.46 36,050,785.69 Exchange gain or loss 275,744.53 -88,519.77 Handling charges 691,152.32 408,686.43 Others [Note] 4,952,000.00 5,663,000.00 Total -56,102,848.78 -15,880,844.25 197 / 246 ANNUAL REPORT 2022 Other remarks Note: It refers to interest expenses on net defined benefit liabilities of 4,733,000.00 yuan and interest expenses on net long-term employee benefits liabilities of 219,000.00 yuan. 67. Other income √ Applicable □ Not Applicable Monetary unit: RMB Yuan Items Current period cumulative Preceding period comparative Government grants related to assets 28,112,910.68 26,018,705.97 [Note] Government grants related to income 28,061,036.73 23,822,710.86 [Note] Refund of handling fees for withholding 1,458,135.41 1,228,637.45 individual income tax Total 57,632,082.82 51,070,054.28 Other remarks Please refer to item VII 84 of this section for details on government grants included in other income. 68. Investment income √ Applicable □ Not Applicable Monetary unit: RMB Yuan Items Current period cumulative Preceding period comparative Investment income from long-term equity 56,279,080.37 43,299,933.71 investments under equity method Investment income from disposal of long- term equity investments Investment income from held-for-trading financial assets Dividend income from other equity 344,606.28 402,040.66 instrument investments Interest income from debt investments Interest income from other debt investments Investment income from disposal of held- 11,322,859.61 14,402,576.09 for-trading financial assets Investment income from disposal of other equity instrument investments Investment income from disposal of debt investments Investment income from disposal of other debt investments Income from debt restructuring Total 67,946,546.26 58,104,550.46 198 / 246 ANNUAL REPORT 2022 Other remarks (1) Investment income from long-term equity investments under equity method Investees Current period cumulative Preceding period comparative Chongqing Jiawei Beer Co., Ltd. 56,279,080.37 43,299,933.71 Subtotal 56,279,080.37 43,299,933.71 (2) There are no significant restrictions on remittance of investments. 69. Gains on net exposure to hedging risk □ Applicable √ Not Applicable 70. Gains on changes in fair value √ Applicable □ Not Applicable Monetary unit: RMB Yuan Items Current period cumulative Preceding period comparative Held-for-trading financial assets 1,088,888.89 Including: Gains on changes in fair value of derivative financial instruments Including: Gains on changes in fair value of financial assets classified as at fair 1,088,888.89 value through profit or loss Held-for-trading financial liabilities Investment property at fair value Total 1,088,888.89 Other remarks None. 71. Credit impairment loss √ Applicable □ Not Applicable Monetary unit: RMB Yuan Items Current period cumulative Preceding period comparative Impairment loss of debt investments Impairment loss of other debt investments Bad debts of long-term receivables Impairment loss of contract assets Bad debts 2,461,066.24 850,058.41 Total 2,461,066.24 850,058.41 Other remarks None. 72. Assets impairment loss √ Applicable □ Not Applicable Monetary unit: RMB Yuan Items Current period cumulative Preceding period comparative I. Bad debts II. Inventory write-down loss and -78,848,619.27 -74,796,238.85 199 / 246 ANNUAL REPORT 2022 impairment loss of cost to fulfill a contract III. Impairment loss of long-term equity investments IV. Impairment loss of investment property V. Impairment loss of fixed assets -2,082,570.02 -4,464,514.73 VI. Impairment loss of construction materials VII. Impairment loss of construction in progress VIII. Impairment loss of productive biological assets IX. Impairment loss of oil and gas assets X. Impairment loss of intangible assets -459,733.59 XI. Impairment loss of goodwill XII. Others Total -81,390,922.88 -79,260,753.58 Other remarks None. 73. Gains on asset disposal √ Applicable □ Not Applicable Monetary unit: RMB Yuan Items Current period cumulative Preceding period comparative Gains on asset disposal 1,996,546.49 1,835,601.88 Total 1,996,546.49 1,835,601.88 Other remarks None. 200 / 246 ANNUAL REPORT 2022 74. Non-operating income Details √ Applicable □ Not Applicable Monetary unit: RMB Yuan Current period Preceding period Amount included in non- Items cumulative comparative recurring profit or loss Gains on disposal of non-current 1,735,091.73 1,756,146.51 1,735,091.73 assets Including: Gains on disposal of 1,735,091.73 1,756,146.51 1,735,091.73 fixed assets Gains on disposal of intangible assets Gains on exchange of non-cash assets Receiving of donations Government grants Others 5,413,038.35 6,742,167.81 5,413,038.35 Total 7,148,130.08 8,498,314.32 7,148,130.08 Government grants included in profit or loss □ Applicable √ Not Applicable Other remarks □ Applicable √ Not Applicable 75. Non-operating expenses √ Applicable □ Not Applicable Monetary unit: RMB Yuan Current period Preceding period Amount included in non- Items cumulative comparative recurring profit or loss Losses on disposal of non-current 6,417,735.09 13,343,139.74 6,417,735.09 assets Including: Losses on disposal of 6,417,735.09 13,343,139.74 6,417,735.09 fixed assets Losses on disposal of intangible assets Losses on exchange of non-cash assets Donation expenses 500,000.00 1,289,648.91 500,000.00 Others 417,484.88 324,307.65 417,484.88 Total 7,335,219.97 14,957,096.30 7,335,219.97 Other remarks None. 201 / 246 ANNUAL REPORT 2022 76. Income tax expenses (1) Details √ Applicable □ Not Applicable Monetary unit: RMB Yuan Items Current period cumulative Preceding period comparative Current period income tax expenses 391,764,876.06 749,065,499.32 Deferred income tax expenses 320,114,303.36 -207,141,680.77 Total 711,879,179.42 541,923,818.55 (2) Reconciliation of accounting profit to income tax expenses √ Applicable □ Not Applicable Monetary unit: RMB Yuan Items Current period cumulative Profit before tax 3,298,778,820.85 Income tax expenses based on statutory/applicable 824,694,705.21 tax rate Effect of different tax rate applicable to subsidiaries -187,719,508.51 Effect of prior income tax reconciliation 4,927,674.04 Effect of non-taxable income -14,155,921.66 Effect of non-deductible costs, expenses and losses 4,432,374.65 Effect of utilization of deductible losses not -2,333,500.35 previously recognized as deferred tax assets Effect of deducible temporary differences or deductible losses not recognized as deferred tax 63,901,985.49 assets in the current period Effect of recognition of temporary difference or deductible losses not previously recognized as -6,577,121.38 deferred tax assets Extra deduction of R&D expenses -23,140,217.65 Effect of tax rate change on income tax expenses at 47,848,709.58 the beginning of the current period Income tax expenses 711,879,179.42 Other remarks □ Applicable √ Not Applicable 77. Other comprehensive income √ Applicable □ Not Applicable Please refer to item VII 57 of this section for details on other comprehensive income, net of income tax. 202 / 246 ANNUAL REPORT 2022 78. Notes to items of the cash flow statement (1) Other cash receipts related to operating activities √ Applicable □ Not Applicable Monetary unit: RMB Yuan Items Current period cumulative Preceding period comparative Cash receipts from security deposits 901,054,848.48 465,657,551.36 Cash receipts from deposits for 287,427,527.49 189,286,058.05 packaging Recovery of frozen funds [Note] 188,649,190.60 Cash receipts from government grants, refund of handling fees for withholding 59,559,872.14 39,813,120.31 individual income tax, etc. Cash receipts from interest income 65,461,700.04 38,001,722.62 Recovery of balances paid on behalf of 7,658,311.54 Chongqing Jiawei Beer Co., Ltd. Others 27,290,217.69 31,065,673.05 Total 1,529,443,356.44 771,482,436.93 Remarks on other cash receipts related to operating activities: Note: It includes frozen funds of 186,476,348.17 yuan. Chongqing Jiawei Beer Co., Ltd. filed a lawsuit against the Company for disputes over exclusive sales agreements with a claim amount of 822.15 million yuan. In May 2022, Chongqing Jiawei Beer Co., Ltd. applied to Chongqing First Intermediate People’s Court to withdraw the lawsuit. The Company received the “Civil Verdict” numbered (2020) Yu 01 Min Chu 988 from Chongqing First Intermediate People’s Court on June 10, 2022, and recovered the frozen funds in the case. (2) Other cash payments related to operating activities √ Applicable □ Not Applicable Monetary unit: RMB Yuan Items Current period cumulative Preceding period comparative Cash payments for advertising and 1,220,453,332.37 1,177,469,311.69 marketing expenses Cash payments for trademark licensing 210,352,345.55 202,753,682.80 fees Cash payments for office expenses and 163,966,792.66 160,354,966.08 other service fees Cash payments for business travelling 66,448,364.12 77,442,370.69 expenses Cash payments for service fees of 18,228,836.96 18,266,373.22 external warehouses Cash payments for leases 14,518,941.78 14,701,914.18 Others 55,172,116.95 49,804,098.12 Total 1,749,140,730.39 1,700,792,716.78 Remarks on other cash payments related to operating activities: None. (3) Other cash receipts related to investing activities □ Applicable √ Not Applicable 203 / 246 ANNUAL REPORT 2022 (4) Other cash payments related to investing activities □ Applicable √ Not Applicable (5) Other cash receipts related to financing activities □ Applicable √ Not Applicable (6) Other cash payments related to financing activities √ Applicable □ Not Applicable Monetary unit: RMB Yuan Items Current period cumulative Preceding period comparative Cash payments for lease liabilities 33,725,924.40 23,923,000.00 Repayment of borrowings from Guangzhou Carlsberg Consultancy and 242,900,000.00 Management Services Co., Ltd. Total 33,725,924.40 266,823,000.00 Remarks on other cash payments related to financing activities: None. 79. Supplementary information to the cash flow statement (1) Supplementary information to the cash flow statement √ Applicable □ Not Applicable Monetary unit: RMB Yuan Supplementary information Current period cumulative Preceding period comparative 1.Reconciliation of net profit to cash flows from operating activities: Net profit 2,586,899,641.43 2,399,156,196.28 Add: Provision for assets impairment 81,390,922.88 79,260,753.58 Provision for credit impairment loss -2,461,066.24 -850,058.41 Depreciation of fixed assets, oil and gas 414,016,254.67 383,388,734.84 assets, productive biological assets Amortization of right-of-use assets 31,609,351.86 23,923,000.00 Amortization of intangible assets 58,784,718.50 44,515,699.29 Amortization of long-term prepayments Losses on disposal of fixed assets, intangible assets and other long-term -1,996,546.49 -1,835,601.88 assets (Less: gains) Fixed assets retirement loss (Less: gains) 4,682,643.36 11,586,993.23 Losses on changes in fair value (Less: -1,088,888.89 gains) Financial expenses (Less: gains) 3,696,843.83 14,186,774.78 Investment losses (Less: gains) -67,946,546.26 -58,104,550.46 Decrease of deferred tax assets (Less: 329,903,289.49 -221,548,732.39 increase) Increase of deferred tax liabilities (Less: -12,828,868.06 18,148,358.35 decrease) Decrease of inventories (Less: increase) -453,832,389.49 -634,848,749.82 Decrease of operating receivables (Less: 23,260,578.28 -125,138,355.65 increase) Increase of operating payables (Less: 757,469,430.78 1,634,035,540.55 decrease) 204 / 246 ANNUAL REPORT 2022 Supplementary information Current period cumulative Preceding period comparative Others Net cash flows from operating activities 3,752,648,258.54 3,564,787,113.40 2.Significant investing and financing activities not related to cash receipts and payments: Conversion of debt into capital Convertible bonds due within one year Fixed assets leased in under finance leases 3.Net changes in cash and cash equivalents: Cash at the end of the period 3,396,809,241.14 2,165,733,418.37 Less: Cash at the beginning of the period 2,165,733,418.37 1,766,375,444.44 Add: Cash equivalents at the end of the period Less: Cash equivalents at the beginning of the period Net increase of cash and cash equivalents 1,231,075,822.77 399,357,973.93 (2) Net cash payments for the acquisition of subsidiaries □ Applicable √ Not Applicable (3) Net cash receipts from the disposal of subsidiaries □ Applicable √ Not Applicable (4) Composition of cash and cash equivalents √ Applicable □ Not Applicable Monetary unit: RMB Yuan Items Closing balance Opening balance I. Cash 3,396,809,241.14 2,165,733,418.37 Including: Cash on hand Cash in bank on demand for 3,396,809,241.14 2,165,733,418.37 payment Other cash and bank balances on demand for payment Central bank deposit on demand for payment Deposit in other banks Loans to other banks II. Cash equivalents Including: Bond investments maturing within three months III. Cash and cash equivalents at the end 3,396,809,241.14 2,165,733,418.37 of the period Including: Cash and cash equivalents of parent company or subsidiaries with use restrictions Other remarks: √ Applicable □ Not Applicable 205 / 246 ANNUAL REPORT 2022 1. Cash receipts from withdrawal of investments Items Current period cumulative Preceding period comparative Structured deposits 1,512,411,748.50 1,514,402,576.10 Total 1,512,411,748.50 1,514,402,576.10 2. Cash payments for investments Items Current period cumulative Preceding period comparative Structured deposits 1,000,000,000.00 2,000,000,000.00 Total 1,000,000,000.00 2,000,000,000.00 80. Notes to items of statement of changes in equity Remarks on “Others” with balances at the end of prior year adjusted and the adjusted amount: □ Applicable √ Not Applicable 81. Assets with title or use right restrictions □ Applicable √ Not Applicable 82. Monetary items in foreign currencies (1) Monetary items in foreign currencies □ Applicable √ Not Applicable (2) Remarks on overseas operations. For significant overseas operating entities, their main operating places, functional currencies and adoption basis shall be disclosed. Reasons for any changes in functional currency shall also be disclosed. □ Applicable √ Not Applicable 83. Hedging √ Applicable □ Not Applicable Qualitative and quantitative information of hedging items disclosed by hedging categories, related hedging instruments and hedged risks (1) Overview of cash flow hedges The purchase price of aluminum, one of the significant packaging materials for beer production, has fluctuated considerably due to the influence of macroeconomy in recent years. In order to ensure the relative stability of product costs and achieve stable operation, the Company analyzed the expected aluminum purchase transactions, based on which the Company carried out hedges by futures, options, swaps and other derivative instruments. The Company formulated the “Management System for Hedges” to regulate approval authority, operation process, risk control and other aspects of hedges. (2) Qualitative analysis on cash flow hedges 206 / 246 ANNUAL REPORT 2022 The approval procedures of hedges carried out by the Company using self-owned funds comply with relevant national laws and regulations, and regulations of the “Management System for Hedges”. Hedges operated to avoid fluctuations in price of aluminum were conductive to controlling business risks and improving the Company’s capability to withstand the fluctuations in the market. (3) Quantitative analysis on cash flow hedges Hedge effectiveness Hedging Categories Hedged risks instruments Current period Accumulated amount at the end of cumulative the period (hedging reserve) Cash flow Commodity Fluctuation in price 1,213,019.84 1,213,019.84 hedges swaps of aluminum 84. Government grants (1) Basic information of government grants √ Applicable □ Not Applicable Monetary unit: RMB Yuan Amount included into profit Categories Amount Presented under or loss Government grants related to 256,611,695.14 Deferred income 28,112,910.68 assets Government grants related to 28,061,036.73 Other income 28,061,036.73 income (2) Return of government grants □ Applicable √ Not Applicable Other remarks: (a) Government grants related to assets Gross method Opening Closing balance Amortization Items balance of Increase Amortization of deferred presented Remarks deferred income income under Compensation for factory relocation and resettlement in Related 107,522,700.44 6,870,646.71 100,652,053.73 Other income Dali City – Carlsberg (China) to assets Breweries and Trading Co., Ltd. Subsidies for relocation and Related reconstruction – Chongqing 94,913,050.05 9,457,528.12 85,455,521.93 Other income to assets Beer Yibin Co., Ltd. Special subsidies for industrial development – Hunan Related 9,979,771.45 6,936,000.00 1,728,106.23 15,187,665.22 Other income Chongqing Beer Guoren Co., to assets Ltd. Subsidies for equipment Related investments – Carlsberg 8,103,038.91 665,493.16 7,437,545.75 Other income to assets Brewery (Anhui) Co., Ltd. Special subsidies for canning Related projects – Carlsberg Tianmuhu 7,779,924.73 707,103.28 7,072,821.45 Other income to assets Brewery (Jiangsu) Co., Ltd. Compensation for relocation and construction of production Related 5,676,666.43 1,820,000.04 3,856,666.39 Other income sites – Carlsberg Brewery to assets (Anhui) Co., Ltd. 207 / 246 ANNUAL REPORT 2022 Opening Closing balance Amortization Items balance of Increase Amortization of deferred presented Remarks deferred income income under Subsidies for relocation and Related reconstruction – Chongqing 4,212,000.00 1,512,000.00 2,700,000.00 Other income to assets Brewery Co., Ltd. Sixth Factory Special subsidies for sewage treatment – Carlsberg Related 2,220,000.00 518,000.00 1,702,000.00 Other income Chongqing Brewery Co., Ltd. to assets Shizhu Branch Subsidies for key energy conservation and pollution Related control projects in Tacheng 1,456,741.35 432,475.67 1,024,265.68 Other income to assets Prefecture – Xinjiang Wusu Brewery Co., Ltd. Government subsidies for canning line of Yibin Xuzhou Related Chuangyi Industrial Investment 12,840,000.00 757,874.09 12,082,125.91 Other income to assets Co., Ltd. – Chongqing Beer Yibin Co., Ltd. The first batch of subsidies for industrial technical transformation in Chongqing Related 3,720,000.00 69,232.87 3,650,767.13 Other income Liang Jiang New Area – to assets Carlsberg Chongqing Brewery Co., Ltd. Subsidies for retrofit of boiler Related burners – Carlsberg Brewery 2,780,000.00 133,597.80 2,646,402.20 Other income to assets (Jiangsu) Co., Ltd. Special funds for the development of advanced manufacturing industries at the Related 1,953,000.00 66,802.90 1,886,197.10 Other income municipal level in Yancheng to assets City – Carlsberg Brewery (Jiangsu) Co., Ltd. Related Other subsidies 12,820,012.46 1,811,700.00 3,374,049.81 11,257,662.65 Other income to assets Related Subtotal 254,683,905.82 30,040,700.00 28,112,910.68 256,611,695.14 Other income to assets (b) Government grants related to income and used to compensate incurred relevant costs, expenses or losses Items Amount Presented under Remarks The first batch of industrial supporting funds of 2021 from 6,300,000.00 Other income Related to income Finance Bureau of Huangpu District, Shanghai Awards for steady growth of industrial economy of 2021 from Management Committee of Dali 5,000,000.00 Other income Related to income Economic and Technological Development Zone Special funds for the development of small and medium-sized enterprises “digitization, cyberization and intellectualization” transformation 2,000,000.00 Other income Related to income pilot demonstration projects of 2021 from Department of Industry and Information Technology of Yunnan Province Awards for top 10 green food enterprises in Yunnan Province of 2,000,000.00 Other income Related to income 2022 from Department of Industry 208 / 246 ANNUAL REPORT 2022 Items Amount Presented under Remarks and Information Technology of Yunnan Province Awards for top 30 enterprises with comprehensive strength in 1,861,000.00 Other income Related to income Tianchang City Comprehensive contribution awards for commerce and trade enterprises 1,208,400.00 Other income Related to income in Chengdu City of 2022 Other subsidies 9,691,636.73 Other income Related to income Subtotal 28,061,036.73 (c) Amount of government grants included into profit or loss in the current period is 56,173,947.41 yuan. 85. Others □ Applicable √ Not Applicable VIII. Changes in the consolidation scope 1. Business combination not under common control □ Applicable √ Not Applicable 2. Business combination under common control □ Applicable √ Not Applicable 3. Reverse purchase □ Applicable √ Not Applicable 209 / 246 ANNUAL REPORT 2022 4. Disposal of subsidiaries One-time disposal leading to loss of control over a subsidiary □ Applicable √ Not Applicable Other remarks: □ Applicable √ Not Applicable 5. Changes in the consolidation scope due to other reasons Remarks on changes in the consolidation scope due to other reasons (e.g. establishment/liquidation of subsidiaries, etc.) and relevant conditions: √ Applicable □ Not Applicable Monetary unit: RMB Yuan Equity Capital Companies acquisition Equity acquisition date Capital contribution contribution method proportion Investment Carlsberg Brewery (Foshan) and 1/19/2022 10,000,000.00 100.00% Co., Ltd. establishment Investment Xinjiang Wusu Beer Trading and 1/11/2022 30,000,000.00 100.00% Co., Ltd. establishment 6. Others □ Applicable √ Not Applicable 210 / 246 ANNUAL REPORT 2022 IX. Interest in other entities 1. Interest in subsidiaries (1) Composition of the group √ Applicable □ Not Applicable Holding proportion Acquisition Main operating Place of Business (%) method Subsidiaries place registration nature Direct Indirect Carlsberg Business Chongqing Yubei District, Yubei District, Beer combination not 51.42 Brewery Co., Ltd. Chongqing City Chongqing City industry under common [Note 1] control Economic Economic Hunan Chongqing Development Development Beer Investment and Beer Guoren Co., Zone, Lixian, Zone, Lixian, industry establishment Ltd. [Note 2] Hunan Hunan Business Chongqing Beer Heshiba, Heshiba, Beer combination Panzhihua Co., Panzhihua City Panzhihua City industry under common Ltd. [Note 2] control Chongqing Beer Huashi Village, Huashi Village, Business Group Chengdu Deyuan Town, Deyuan Town, Beer combination not Boke Beer Co., Pidu District, Pidu District, industry under common Ltd. [Note 2] Chengdu City Chengdu City control Shao’e Street, Shao’e Street, Business Chongqing Beer Baixi Town, Baixi Town, Beer combination not Yibin Co., Ltd. Yibin County, Yibin County, industry under common [Note 2] Yibin City Yibin City control Chongqing Beer Anning Town, Anning Town, Beer Investment and Xichang Co., Ltd. Xichang City Xichang City industry establishment [Note 3] Carlsberg Beer Enterprise Business Management Beer combination Chongqing City Chongqing City (Chongqing) Co., industry under common Ltd. control [Note 2] Business Kunming Huashi Kunming City, Kunming City, Beer combination Brewery Co., Ltd. Yunnan Yunnan industry under common [Note 2] Province Province control Dali City, Dali Dali City, Dali Carlsberg (China) Business Bai Autonomous Bai Autonomous Breweries and Beer combination Prefecture, Prefecture, Trading Co., Ltd. industry under common Yunnan Yunnan [Note 2] control Province Province Business Xinjiang Wusu Urumqi, Urumqi, Beer combination Brewery Co., Ltd. Xinjiang Xinjiang industry under common [Note 2] control Carlsberg Brewery Business Huizhou City, Huizhou City, (Guangdong) Co., Beer combination Guangdong Guangdong Ltd. industry under common Province Province [Note 2] control Ningxia Xixia Business Beer Jianiang Brewery Yinchuan City Yinchuan City combination industry Co., Ltd. [Note 2] under common 211 / 246 ANNUAL REPORT 2022 Holding proportion Acquisition Main operating Place of Business (%) method Subsidiaries place registration nature Direct Indirect control Carlsberg Business Tianmuhu Brewery Beer combination Liyang City Liyang City (Jiangsu) Co., Ltd. industry under common [Note 4] control Economic Economic Business Carlsberg Brewery Development Development Beer combination (Anhui) Co., Ltd. Zone, Tianchang Zone, Tianchang industry under common [Note 4] City, Anhui City, Anhui control Province Province Korla, Korla, Xinjiang Wusu Bayingolin Bayingolin Business Brewery (Korla) Mongol Mongol Beer combination Co., Ltd. Autonomous Autonomous industry under common [Note 5] Prefecture, Prefecture, control Xinjiang Xinjiang Yining City, Ili Yining City, Ili Business Xinjiang Wusu Kazakh Kazakh Beer combination Brewery (Yining) Autonomous Autonomous industry under common Co., Ltd. [Note 5] Prefecture, Prefecture, control Xinjiang Xinjiang Xinjiang Wusu Business Brewery (Aksu) Aksu Prefecture, Aksu Prefecture, Beer combination Co., Ltd. Xinjiang Xinjiang industry under common [Note 5] control Xinjiang Wusu Wusu City, Wusu City, Business Brewery (Wusu) Tacheng Tacheng Beer combination Co., Ltd. Prefecture, Prefecture, industry under common [Note 5] Xinjiang Xinjiang control Xinjiang Wusu Beer Trading Co., Urumqi, Urumqi, Beer Investment and Ltd. Xinjiang Xinjiang industry establishment [Note 5] Carlsberg Brewery Yancheng City, Yancheng City, Beer Investment and (Jiangsu) Co., Ltd. Jiangsu Jiangsu industry establishment [Note 2] Province Province Carlsberg Enterprise Tianhe District, Tianhe District, Beer Investment and Management Guangzhou City Guangzhou City industry establishment Consulting Co., Ltd. [Note 2] Carlsberg Brewery Foshan City, Foshan City, Beer Investment and (Foshan) Co., Ltd. Guangdong Guangdong industry establishment [Note 2] Province Province Remarks on inconsistency between holding proportion and voting right proportion in subsidiaries Note 1: The Company and Guangzhou Carlsberg Consultancy and Management Services Co., Ltd. holds 51.42% and 48.58% of equity of Carlsberg Chongqing Brewery Co., Ltd. respectively. Note 2: The Company’s holding subsidiary Carlsberg Chongqing Brewery Co., Ltd. holds 98.75% of equity of Hunan Chongqing Beer Guoren Co., Ltd., 100.00% of equity of Chongqing Beer Panzhihua Co., Ltd., 100.00% of equity of Chongqing Beer Group Chengdu Boke Beer Co., Ltd., 100.00% of equity of Chongqing Beer Yibin Co., 212 / 246 ANNUAL REPORT 2022 Ltd., 100.00% of equity of Carlsberg Beer Enterprise Management (Chongqing) Co., Ltd., 100.00% of equity of Kunming Huashi Brewery Co., Ltd., 100.00% of equity of Carlsberg (China) Breweries and Trading Co., Ltd., 100.00% of equity of Xinjiang Wusu Brewery Co., Ltd., 99.00% of equity of Carlsberg Brewery (Guangdong) Co., Ltd., 70.00% of equity of Ningxia Xixia Jianiang Brewery Co., Ltd., 100.00% of equity of Carlsberg Brewery (Jiangsu) Co., Ltd., 100.00% of equity of Carlsberg Enterprise Management Consulting Co., Ltd. and 100.00% of equity of Carlsberg Brewery (Foshan) Co., Ltd. Note 3: Chongqing Beer Panzhihua Co., Ltd. holds 100.00% of equity of Chongqing Beer Xichang Co., Ltd. Note 4: Carlsberg Beer Enterprise Management (Chongqing) Co., Ltd. holds 100% of equity of Carlsberg Tianmuhu Brewery (Jiangsu) Co., Ltd. and 75% of equity of Carlsberg Brewery (Anhui) Co., Ltd. Note 5: Xinjiang Wusu Brewery Co., Ltd. holds 100% of equity of Xinjiang Wusu Brewery (Korla) Co., Ltd., Xinjiang Wusu Brewery (Yining) Co., Ltd., Xinjiang Wusu Brewery (Aksu) Co., Ltd., Xinjiang Wusu Brewery (Wusu) Co., Ltd. and Xinjiang Wusu Beer Trading Co., Ltd. Basis for the control of an investee while holding its half or less than half voting rights, and the non-control of an investee while holding its more than half voting rights: None. Basis for control of significant structured entities brought into the consolidation scope: None. Basis for determining an entity being acting as an agent or a principal: None. 213 / 246 ANNUAL REPORT 2022 Other remarks: None. (2) Significant not wholly-owned subsidiaries √ Applicable □ Not Applicable Monetary unit: RMB ten thousand Yuan Holding Non-controlling Dividend declared to Closing balance of proportion of Subsidiaries shareholders’ profit non-controlling non-controlling non-controlling or loss shareholders interest shareholders Carlsberg Chongqing 48.58% 1,323,294,711.34 1,131,817,628.96 1,566,866,996.50 Brewery Co., Ltd. Remarks on inconsistency between holding proportion and voting right proportion of non-controlling shareholders in subsidiaries: □ Applicable √ Not Applicable Other remarks: □ Applicable √ Not Applicable (3) Main financial information of significant not wholly-owned subsidiaries √ Applicable □ Not Applicable Monetary unit: RMB Yuan Closing balance Opening balance Subsidiaries Current Non-current Current Non-current Total Non-current Current Non-current Total Total assets Current assets Total assets assets assets liabilities liabilities liabilities assets liabilities liabilities liabilities Carlsberg Chongqing 509,469.16 672,102.18 1,181,571.34 826,259.35 50,111.77 876,371.12 438,979.66 656,677.51 1,095,657.17 783,299.69 46,302.47 829,602.15 Brewery Co., Ltd. Current period cumulative Preceding period comparative Subsidiaries Total Cash flows from Total Cash flows from Operating Operating Net profit comprehensive operating Net profit comprehensive operating revenue revenue income activities income activities Carlsberg Chongqing 1,403,904.05 267,536.02 267,867.71 380,964.24 1,311,931.07 248,267.05 248,639.24 363,374.17 Brewery Co., Ltd. Other remarks: None. (4) Significant restriction on use of the group assets and liquidation of the group liabilities □ Applicable √ Not Applicable (5) Financial or other support provided for structured entities brought into the consolidation scope □ Applicable √ Not Applicable Other remarks: 214 / 246 ANNUAL REPORT 2022 □ Applicable √ Not Applicable 2. Transactions resulting in changes in subsidiaries’ equity but without losing control □ Applicable √ Not Applicable 3. Interest in joint ventures or associates √ Applicable □ Not Applicable (1) Significant joint ventures or associates √ Applicable □ Not Applicable Monetary unit: RMB Yuan Holding Accounting Main proportion (%) treatment on Joint ventures or Place of Business operating investments in associates registration nature place Direct Indirect joint ventures or associates Chongqing Jiawei Chongqing Chongqing Production Beer Co., Ltd. Jianqiao Jianqiao and sales of 33.00 Equity method [Note] Industrial Park Industrial Park beers Remarks on inconsistency between holding proportion and voting right proportion in joint ventures or associates: Note: The Company’s holding subsidiary Carlsberg Chongqing Brewery Co., Ltd. holds 33.00% of equity of Chongqing Jiawei Beer Co., Ltd. Basis for significant influence over an entity on which the Company held less than 20% voting rights or insignificant influence over an entity on which the Company held more than 20% voting rights: None. (2) Main financial information of significant joint ventures □ Applicable √ Not Applicable 215 / 246 ANNUAL REPORT 2022 (3) Main financial information of significant associates √ Applicable □ Not Applicable Monetary unit: RMB Yuan Closing balance/ Opening balance/ Current period cumulative Preceding period comparative Chongqing Jiawei Beer Co., Chongqing Jiawei Beer Co., Ltd. Ltd. Current assets 1,082,719,631.91 899,166,258.08 Including: Cash and cash equivalents 273,748,191.82 94,040,591.53 Non-current assets 174,783,077.23 181,392,172.33 Total assets 1,257,502,709.14 1,080,558,430.41 Current liabilities 268,511,026.17 273,267,286.83 Non-current liabilities 90,204,164.62 79,046,293.02 Total liabilities 358,715,190.79 352,313,579.85 Non-controlling interest Equity attributable to shareholders of parent 898,787,518.35 728,244,850.56 company Proportionate share in net assets 296,599,881.05 240,320,800.68 Adjustments -- Goodwill -- Unrealized profit in internal transactions -- Others Carrying amount of investments in associates 296,599,881.05 240,320,800.68 Fair value of equity investments in associates in association with quoted price Operating revenue 508,334,306.85 451,322,972.02 Financial expenses 2,554,696.04 7,665,090.71 Income tax expenses 29,643,912.52 23,836,340.09 Net profit 170,542,667.79 131,211,920.34 Net profit of discontinued operations Other comprehensive income Total comprehensive income 170,542,667.79 131,211,920.34 Dividend received from associates in the 49,639,457.72 current period Other remarks None. (4) Aggregated financial information of insignificant joint ventures and associates □ Applicable √ Not Applicable (5) Significant restrictions on remittance of fund from joint ventures or associates to the Company □ Applicable √ Not Applicable 216 / 246 ANNUAL REPORT 2022 (6) Excess losses incurred by joint ventures or associates □ Applicable √ Not Applicable (7) Unrecognized commitments related to investments in joint ventures □ Applicable √ Not Applicable (8) Contingent liabilities related to investments in joint ventures or associates □ Applicable √ Not Applicable 4. Significant joint operations □ Applicable √ Not Applicable 5. Interest in unconsolidated structured entities Remarks on unconsolidated structured entities: □ Applicable √ Not Applicable 6. Others □ Applicable √ Not Applicable X. Risks related to financial instruments √ Applicable □ Not Applicable In risk management, the Company aims to seek the 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 Company’s financial performance, so as to maximize the profits of shareholders and other equity investors. Based on such risk management objectives, the Company’s risk management policies are established to identify and analyze the risks faced by the Company, to set appropriate risk limits and controls, and to monitor risks and adherence to limits on a timely and reliable basis. The Company has exposure to the following risks from its use of financial instruments, which mainly include: credit risk, liquidity risk, and market risk. The Management has deliberated and approved policies concerning such risks, and details are: (I) 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. 1. Credit risk management practice (1) Evaluation method of credit risk At each balance sheet date, the Company assesses whether the credit risk on a financial instrument has increased significantly since initial recognition. When assessing whether the credit risk has increased significantly since initial recognition, the Company takes into account reasonable and supportable information, which is available without undue cost or effort, including qualitative and quantitative analysis based on historical data, external credit risk 217 / 246 ANNUAL REPORT 2022 rating, and forward-looking information. The Company determines the changes in default risk of financial instruments during the estimated lifetime through comparison of the default risk at the balance sheet date and the initial recognition date, on an individual basis or a collective basis. The Company considers the credit risk on a financial instrument has increased significantly when one or more of the following qualitative and quantitative standards are met: 1) Quantitative standard mainly relates to the scenario in which, at the balance sheet date, the probability of default in the remaining lifetime has risen by more than a certain percentage compared with the initial recognition; 2) Qualitative standard mainly relates to significant adverse changes in the debtor’s operation or financial position, present or expected changes in technology, market, economy or legal environment that will have significant adverse impact on the debtor’s repayment ability; (2) Definition of default and credit-impaired assets A financial instrument is defined as defaulted when one or more following events have occurred, of which the standard is consistent with that for credit-impairment: 1) significant financial difficulty of the debtor; 2) a breach of binding clause of contract; 3) it is very likely that the debtor will enter bankruptcy or other financial reorganization; 4) the creditor of the debtor, for economic or contractual reasons relating to the debtor’s financial difficulty, having granted to the debtor a concession(s) that the creditor would not otherwise consider. 2. Measurement of expected credit losses The key factors in the measurement of expected credit loss include the probability of default, loss given default, and exposure to default risk. The Company develops a model of the probability of default, loss given default, and exposure to default risk on the basis of quantitative analysis of historical data (e.g. counterparty rating, guarantee measures and collateral type, payment method, etc.) and forward-looking information. 3. Please refer to item VII 5 and 8 of this section for details on the reconciliation table of opening balance and closing balance of provision for losses of financial instrument. 4. Exposure to credit risk and concentration of credit risk The Company’s credit risk is primarily attributable to cash and bank balances and receivables. In order to control such risks, the Company has taken the following measures: (1) Cash and bank balances The Company deposits its bank balances and other cash and bank balances in financial institutions with relatively high credit levels, hence, its credit risk is relatively low. (2) Receivables The Company performs credit assessment on customers using credit settlement on a continuous basis. The Company selects credible and well-reputed customers based on credit assessment result, and conducts ongoing monitoring on balance of receivables, to avoid significant risks in bad debts. As the Company only conducts business with credible and well-reputed third parties, collateral is not required from 218 / 246 ANNUAL REPORT 2022 customers. The Company manages credit risk aggregated by customers. As of December 31, 2022, the Company held no collateral or other credit enhancement on balance of receivables due to the short settlement period between the Company and distributors and the effective collection of payments. The maximum amount of exposure to credit risk of the Company is the carrying amount of each financial asset at the balance sheet. (II) Liquidity risk Liquidity risk is the risk that the Company may encounter deficiency of funds in meeting obligations associated with cash or other financial assets settlement, which is possibly attributable to failure in selling financial assets at fair value on a timely basis, or failure in collecting liabilities from counterparties of contracts, or early redemption of debts, or failure in achieving estimated cash flows. In order to control such risk, the Company utilizes financing tools such as credit terms with suppliers, etc. and adopts short-term financing methods to maintain a balance between financing sustainability and flexibility. Financial liabilities classified based on remaining time period till maturity Closing balance Items Contract amount not Carrying amount Within 1 year 1-3 years Over 3 years yet discounted Accounts 2,497,671,747.37 2,497,671,747.37 2,497,671,747.37 payable Other payables 3,490,319,176.38 3,490,319,176.38 3,490,319,176.38 Non-current liabilities due 24,005,592.21 24,005,592.21 24,005,592.21 within one year Lease liabilities 77,928,597.87 98,843,891.74 45,796,146.66 53,047,745.08 Subtotal 6,089,925,113.83 6,110,840,407.70 6,011,996,515.96 45,796,146.66 53,047,745.08 (Continued) December 31, 2021 Items Contract amount not yet Over 3 Carrying amount Within 1 year 1-3 years discounted years Accounts 2,212,689,178.11 2,212,689,178.11 2,212,689,178.11 payable Other payables 2,971,960,641.25 2,971,960,641.25 2,971,960,641.25 Non-current liabilities due 22,313,992.68 22,313,992.68 22,313,992.68 within one year Lease liabilities 16,951,000.00 18,324,143.06 18,324,143.06 Subtotal 5,223,914,812.04 5,225,287,955.10 5,206,963,812.04 18,324,143.06 (III) Market risk Market risk is the risk that the Company may encounter fluctuation in fair value or future cash flows of financial instruments due to changes in market price. Market risk mainly includes interest risk and foreign currency risk. 1. Interest risk Interest risk is the risk that an enterprise may encounter fluctuation in fair value or future cash flows of financial instruments due to changes in market interest. The Company’s fair value interest risks arise from fixed-rate financial 219 / 246 ANNUAL REPORT 2022 instruments, while the cash flow interest risks arise from floating-rate financial instruments. The Company determines the proportion of fixed-rate financial instruments and floating-rate financial instruments based on the market environment, and maintains a proper financial instruments portfolio through regular review and monitoring. 2. Foreign currency risk Foreign currency risk is the risk arising from changes in fair value or future cash flows of financial instrument resulted from changes in exchange rate. The Company is operated in mainland China, whose main activities are denominated in RMB, hence, the Company bears insignificant market risk arising from foreign exchange changes. XI. Fair value disclosure 1. Details of fair value of assets and liabilities at fair value at the balance sheet date √ Applicable □ Not Applicable Monetary unit: RMB Yuan Fair value as at the balance sheet date Items Level 1 fair value Level 2 fair value Level 3 fair value Total measurement measurement measurement I. Recurring fair value measurement (I) Held-for-trading 3,829,356.40 3,829,356.40 financial assets 1. Financial assets measured as at fair value through profit or loss (1) Debt instrument investments (2) Equity instrument investments (3) Derivative financial assets 2. Financial assets designated as at fair value through profit or loss (1) Debt instrument investments (2) Equity instrument investments 3. Derivative financial 3,829,356.40 3,829,356.40 assets (II) Other debt investments (III) Other equity 14,303,331.73 14,303,331.73 instrument investments (IV) Investment property 1. Land use right held for lease 2. Buildings for lease 3. Land use right held for transfer after appreciation (V) Biological assets 1. Consumptive biological assets 2. Productive biological assets 220 / 246 ANNUAL REPORT 2022 Fair value as at the balance sheet date Items Level 1 fair value Level 2 fair value Level 3 fair value Total measurement measurement measurement Total assets at recurring 3,829,356.40 14,303,331.73 18,132,688.13 fair value measurement (VI) Held-for-trading 2,616,336.56 2,616,336.56 liabilities 1. Financial liabilities measured as at fair value through profit or loss Including: Held-for-trading bonds issued Derivative financial liabilities Others 2. Financial liabilities designated as at fair value through profit or loss 3. Derivative financial 2,616,336.56 2,616,336.56 liabilities Total liabilities at recurring fair value 2,616,336.56 2,616,336.56 measurement II. Non-recurring fair value measurement (I) Assets held for sale Total assets at non- recurring fair value measurement Total liabilities at non- recurring fair value measurement 2. Basis for determining level 1 fair value at recurring and non-recurring fair measurement √ Applicable □ Not Applicable The amounts of derivative financial assets and derivative financial liabilities were determined based on the bank statements provided by the financial institutions. 3. Qualitative and quantitative information of valuation technique(s) and key input(s) for level 2 fair value at recurring and non-recurring fair measurement √ Applicable □ Not Applicable The Company took level 2 inputs as the fair value as the shares of Bank of Guizhou Co., Ltd. (“Guizhou Bank”) held by the Company cannot be publicly transferred in H-share market. The fair value per share of equity investment in Guizhou Bank as at December 31, 2022 was measured based on the net assets per share of Guizhou Bank as at June 30, 2022 disclosed in the latest interim report under certain discount method. 221 / 246 ANNUAL REPORT 2022 4. Qualitative and quantitative information of valuation technique(s) and key input(s) for level 3 fair value at recurring and non-recurring fair measurement √ Applicable □ Not Applicable The Company’s other non-current financial assets refer to equity investments in Xinjiang Guozhiming Packaging Co., Ltd., which has been closed in previous year and was a non-public interest entity. The Management has made full provisions for impairment on the entity in previous year due to its high going concern risk. 5. Items for level 3 recurring fair value measurement, a reconciliation from the opening balances to the closing balances, and sensitive analysis on unobservable inputs □ Applicable √ Not Applicable 6. Items at recurring fair value measurement with inter-level transfer, and reasons and policies for determining inter-level transfer time □ Applicable √ Not Applicable 7. Changes in valuation techniques in the current period and reasons for changes □ Applicable √ Not Applicable 8. Fair value of financial assets and liabilities not at fair value □ Applicable √ Not Applicable 9. Others □ Applicable √ Not Applicable XII. Related party relationships and transactions 1. Parent company of the Company √ Applicable □ Not Applicable Remarks on parent company of the Company Carlsberg Foundation is the Company’s actual controller and controls the Company’s controlling shareholder Carlsberg Breweries A/S, which holds 42.54% and 17.46% of the Company’s equity through Carlsberg Brewery Hong Kong Limited and Carlsberg Chongqing Limited respectively. The Company’s ultimate controlling party is Carlsberg Foundation. Other remarks: None. 2. Subsidiaries of the Company Please refer to relevant items for details on the Company’s subsidiaries. √ Applicable □ Not Applicable 222 / 246 ANNUAL REPORT 2022 Please refer to item IX of this section on the Company’s subsidiaries. 3. Joint ventures and associates of the Company Please refer to relevant items for details on the Company’s significant joint ventures and associates. √ Applicable □ Not Applicable Please refer to section IX of this section on the Company’s significant joint ventures and associates. Details of other joint ventures or associates carrying out related party transactions with the Company in the current period or in preceding period but with balance in the current period are as follows: √ Applicable □ Not Applicable Joint ventures or associates Relationships with the Company Chongqing Jiawei Beer Co., Ltd. Associate Other remarks □ Applicable √ Not Applicable 4. Other related parties of the Company √ Applicable □ Not Applicable Related parties Relationships with the Company Guangzhou Carlsberg Consultancy and Under common control of the Company’s ultimate controlling Management Services Co., Ltd. party Under common control of the Company’s ultimate controlling Carlsberg Trading (Shenzhen) Co., Ltd. party Beijing Shouniang Golden Wheat Trading Co., Associate of the Company’s controlling shareholder Ltd. Jinbei Asia Pacific (Beijing) Catering Co., Ltd. Associate of the Company’s controlling shareholder Under common control of the Company’s ultimate controlling Carlsberg Marketing Sdn Bhd party Under common control of the Company’s ultimate controlling Carlsberg Supply Company AG party Under common control of the Company’s ultimate controlling Cambrew Limited party Under common control of the Company’s ultimate controlling Carlsberg Italia S.p.A. party Under common control of the Company’s ultimate controlling Carlsberg Breweries A/S party Under common control of the Company’s ultimate controlling Carlsberg Brewery Hong Kong Limited party Under common control of the Company’s ultimate controlling Carlsberg Singapore Pte Ltd party Under common control of the Company’s ultimate controlling The Brooklyn Brewery Corp. party Other remarks None. 223 / 246 ANNUAL REPORT 2022 5. Related party transactions (1) Purchase and sale of goods, rendering and receiving of services Purchase of goods and receiving of services √ Applicable □ Not Applicable Monetary unit: RMB Yuan Current period Preceding period Related parties Content of transaction cumulative comparative Purchase of goods Chongqing Jiawei Beer Co., Ltd. 501,780,646.32 445,729,419.05 [Note] Beijing Shouniang Golden Wheat Purchase of goods 141,965.77 109,657.64 Trading Co., Ltd. Carlsberg Supply Company AG Purchase of goods 70,774.58 3,191,513.50 The Brooklyn Brewery Corp. Purchase of goods 417,691.74 Purchase of beers, Carlsberg Breweries A/S 113,506.35 materials, etc. Carlsberg Italia S.p.A. Purchase of goods 7,558.22 Purchase of materials, Chongqing Jiawei Beer Co., Ltd. 116,982.08 46,349.76 etc. Total 502,110,368.75 449,615,696.26 Note: Please refer to item XII 5 (8) of this section for details on exclusive sales of purchase of beers. Sale of goods and rendering of services √ Applicable □ Not Applicable Monetary unit: RMB Yuan Current period Preceding period Related parties Content of transaction cumulative comparative Carlsberg Brewery Hong Kong Sales of goods, etc. 70,168,212.54 41,673,663.03 Limited Carlsberg Singapore Pte Ltd Sales of goods 2,448,717.98 1,879,390.12 Cambrew Limited Sales of goods 1,309,978.37 588,578.91 Jinbei Asia Pacific (Beijing) Catering Sales of goods 699,577.16 177,463.65 Co., Ltd. Chongqing Jiawei Beer Co., Ltd. Sales of goods 264,948.96 380,485.24 Carlsberg Marketing Sdn Bhd Sales of goods 192,183.86 108,501.43 Guangzhou Carlsberg Consultancy Sales of goods 7,513.24 and Management Services Co., Ltd. Total 75,083,618.87 44,815,595.62 Remarks on purchase and sale of goods, rendering and receiving of services √ Applicable □ Not Applicable Note: The transaction amounts presented in item XII 5 of this section were tax-excluded amounts. (2) Related party trust/contracting and consignation/outsourcing The Company’s trust/contracting: □ Applicable √ Not Applicable Remarks on related party trust/contracting □ Applicable √ Not Applicable The Company’s consignation/outsourcing 224 / 246 ANNUAL REPORT 2022 □ Applicable √ Not Applicable Remarks on related party consignation/outsourcing □ Applicable √ Not Applicable (3) Related party leases The Company as the lessor: □ Applicable √ Not Applicable 225 / 246 ANNUAL REPORT 2022 The Company as the lessee: □ Applicable √ Not Applicable Remarks on related party leases □ Applicable √ Not Applicable 226 / 246 ANNUAL REPORT 2022 (4) Related party guarantees The Company as the guarantor □ Applicable √ Not Applicable The Company as the guaranteed party □ Applicable √ Not Applicable Remarks on related party guarantees □ Applicable √ Not Applicable (5) Call loans between related parties □ Applicable √ Not Applicable (6) Assets transfer and debt restructuring of the related parties □ Applicable √ Not Applicable (7) Key management’s emoluments √ Applicable □ Not Applicable Monetary unit: RMB Ten Thousand Yuan Items Current period cumulative Preceding period comparative Key management’s emoluments 2,308.27 3,294.32 (8) Other related party transactions √ Applicable □ Not Applicable 1.Related party licensing (1) The Company as the licensee Preceding period Related parties Current period cumulative comparative Carlsberg Breweries A/S [Note 1] 215,460,314.92 205,059,715.65 Beijing Shouniang Golden Wheat Trading Co., Ltd. 1,218,025.79 1,177,235.45 [Note 2] Total 216,678,340.71 206,236,951.10 Note 1: Carlsberg Breweries A/S granted the Company a license to use trademarks including Carlsberg, Tuborg, Carlsberg LIGHT, Carlsberg chill, Kronenbourg 1664, Jolly Shandy, OMERSBY, etc., with the licensing period as same as the registration validity period of licensed trademarks agreed in trademark licensing contract and its appendix. It was agreed by both parties that trademark licensing fees should be calculated based on the Company’s net sales revenue from the production and sales of products with licensed trademark in the calendar year. Details of rate of licensing fees are as follows: 4% for Tuborg, 5% for Carlsberg, Jolly Shandy and SOMERSBY, 6% for Kronenbourg 1664 (excluding Blanc series products), and 6% from January 1, 2022 to May 31, 2022 and 7% from June 1, 2022 for Blanc series products. Note 2: Beijing Shouniang Golden Wheat Trading Co., Ltd. granted the Company a license to use the trademark of 227 / 246 ANNUAL REPORT 2022 JingA, with the licensing period as same as the registration validity period of licensed trademarks agreed in trademark licensing contract and its appendix. It was agreed by both parties that trademark licensing fees should be calculated at 6% of Company’s net sales revenue from the production and sales of products with licensed trademark in the calendar year. (2) The Company as the licensor Related parties Current period cumulative Preceding period comparative Carlsberg Brewery Hong Kong Limited [Note ] 11,676.51 Total 11,676.51 Note: The Company granted Carlsberg Brewery Hong Kong Limited a license to use the trademark of Wusu Beer, with the licensing period as same as the registration validity period of licensed trademarks agreed in trademark licensing contract and its appendix. It was agreed by both parties that trademark licensing fees should be calculated based on the Company’s net sales revenue from the production and sales of products with licensed trademark in the calendar year. Details of rate of licensing fees are as follows: 1.25% from January 1, 2022 to December 31, 2022; 2.50% from January 1, 2023 to December 31, 2023; and 3.75% from January 1, 2024. 2. Related party exclusive sales agreements Pursuant to the Framework Agreement on Exclusive Sales of Products entered into between the Company and Chongqing Jiawei Beer Co., Ltd. (“Jiawei Beer”) in January 2009, Jiawei Beer would exclusively produce beers with trademark of Shancheng and sell all of the beers produced to the Company within the term of the agreement. Based on Jiawei Beer’s annual production capacity of 0.15 million kiloliters of beers in the current period and market demand, and the actual production and sales volume of 80,000 kiloliters in 2008, the Company agreed that the sales volume of beers from Jiawei Beer would increase by 14,000 kiloliters each year from 2009 to 2013, ensuring that the sales volume would reach 0.15 million kiloliters in 2013 and keep up with the increase in the total production and sales volume of the Company’s beer enterprises in Jiulongpo District and North New District of Chongqing from 2014. The selling prices of beers from Jiawei Beer should be determined in accordance with the ex-factory prices of beers in the Company’s beer enterprises in Jiulongpo District and North New District of Chongqing with the same variety, specification and market, and the average price of beers from Jiawei Beer per kiloliter should be the same as that produced by the Company’s beer enterprises in Jiulongpo District and North New District of Chongqing. In the meantime, Jiawei Beer should pay for the selling expenses in accordance with the quantity of beers sold by the Company. It was agreed that, from 2014, Jiawei Beer should pay the selling expenses at 100.00 yuan per kiloliter for the part of beers with sales volume less than 0.15 million kiloliters (inclusive), and pay the selling expenses in accordance with the average selling expenses per kiloliter of beers in the Company’s beer enterprises in Jiulongpo District and North New District of Chongqing for the part exceeding 0.15 million kiloliters. The validity period of the agreement is 20 years. The matters related to exclusive sales of beers mentioned above have been deliberated and approved in the Company’s First Extraordinary General Meeting of Shareholders in 2009. Due to the disputes from both parties on performance of terms related to price in the exclusive sales agreement and the accumulated difference in exclusive sales of beers and under approval of the seventh meeting of the eighth Board of Directors, the Company signed a supplementary agreement of “Framework Agreement on Exclusive Sales of 228 / 246 ANNUAL REPORT 2022 Products” with Jiawei Beer on December 28, 2016 to ensure the sound cooperation in future. The main contents of the supplementary agreement are as follows: (1) Adjustment on the calculation method of sales volume and net revenue from beers agreed in the exclusive sales agreement: both parties agreed to involve the sales volume of Hechan Branch in 2015 in the calculation of the growth rate of sales volume and the average net revenue from beers from January 2016 due to the overlap of sales areas. (2) Clarification on the solutions for difference in volume and price: both parties agreed that the Company should adjust the volume of beers purchased from Jiawei Beer or pay compensation in cash at the price of beers per kiloliter agreed by both parties when there is difference in volume or price during the performance of the exclusive sales agreement. (3) Clarification on settlement in the original way: both parties agreed that the settlement should be carried out in accordance with the exclusive sales agreement, and jointly engaged a third-party intermediary agency to conduct a special audit on the average price and volume of beers of both parties in the previous year, which should be taken as the basis for the final settlement of the year. (4) Compensation on difference in price: both parties agreed that within 3 years from January 1, 2016, the difference in price should be treated as follows: for difference in price between the higher average net revenue from beers of the Company and that of Jiawei Beer in the first year (2016), if the difference is less than or equivalent to 4% of the average net revenue from beers of Jiawei Beer in 2016, the Company would not compensate Jiawei Beer; otherwise, the Company would compensate Jiawei Beer for the portion exceeding 4%; if the difference in the second year (2017) is less than or equivalent to 2% of the average net revenue from beers of Jiawei Beer in 2017, the Company would not compensate Jiawei Beer; otherwise, the Company would compensate Jiawei Beer for the portion exceeding 2%; if the difference in the third year (2018) is less than or equivalent to 1% of the average net revenue from beers of Jiawei Beer in 2018, the Company would not compensate Jiawei Beer; otherwise, the Company would compensate Jiawei Beer for the portion exceeding 1%. (5) New products and usage of brands: in order to ensure that the average net revenue from beers per kiloliter of Jiawei Beer is as same as that of the Company, the Company agreed that Jiawei Beer could produce products with the trademarks of “Tuborg”, “Chongqing Pure Draft”, etc. under the premise of meeting the corresponding production standards of products, and the products should be exclusively sold by the Company. It is confirmed by both parties that the supplementary agreement would come into effect from the date of signing by both parties, and would be implemented retrospectively from January 1, 2016. In the meantime, it is agreed in the supplementary agreement that the Company should pay settlement fees of 30.00 million yuan to Jiawei Beer within one month after the effective date of the agreement. Except for the settlement fees, Jiawei Beer could not require the Company to bear any liabilities for breach of “Framework Agreement on Exclusive Sales of Products” before the effective date of the supplementary agreement. In 2021, the Company actually sold beers of 114,487.60 kiloliters with the trademarks of “Shancheng”, “Chongqing” and “Tuborg” totaling 445.73 million yuan (tax exclusive) and Jiawei Beer should pay selling expenses of 17.17 million yuan. In 2022, the Company actually sold beers of 129,325.12 kiloliters with the trademarks of “Shancheng”, 229 / 246 ANNUAL REPORT 2022 “Chongqing” and “Tuborg” totaling 501.78 million yuan (tax exclusive) and Jiawei Beer should pay selling expenses of 19.40 million yuan. 6. Balances due to or from related parties (1) Balances due from related parties √ Applicable □ Not Applicable Monetary unit: RMB Yuan Closing balance Opening balance Items Related parties Provision for bad Provision for bad Book balance Book balance debts debts Accounts receivable Carlsberg Brewery 19,081,927.98 954,096.40 11,855,371.25 592,768.56 Hong Kong Limited Carlsberg Singapore 254,903.41 12,745.17 327,566.65 16,378.33 Pte Ltd Cambrew Limited 241,204.80 12,060.24 Carlsberg Marketing 80,782.66 4,039.13 34,078.51 1,703.93 Sdn Bhd Jinbei Asia Pacific (Beijing) Catering Co., 72,877.63 3,643.88 35,908.94 1,795.45 Ltd. Subtotal 19,731,696.48 986,584.82 12,252,925.35 612,646.27 Other receivables Chongqing Jiawei Beer 73,455.50 3,672.78 Co., Ltd. Carlsberg Brewery 11,676.51 583.83 Hong Kong Limited Subtotal 85,132.01 4,256.61 (2) Balances due to related parties √ Applicable □ Not Applicable Monetary unit: RMB Yuan Items Related parties Closing book balance Opening book balance Accounts payable Carlsberg Supply Company 515,042.71 507,182.14 AG Chongqing Jiawei Beer Co., 7,034,063.35 Ltd. Beijing Shouniang Golden 12,083.58 Wheat Trading Co., Ltd. Subtotal 515,042.71 7,553,329.07 Other payables Carlsberg Breweries A/S 40,124,834.90 33,636,178.62 Beijing Shouniang Golden 194,480.53 1,182,327.83 Wheat Trading Co., Ltd. Carlsberg Trading 27,692.30 (Shenzhen) Co., Ltd. Subtotal 40,319,315.43 34,846,198.75 7. Related party commitments □ Applicable √ Not Applicable 230 / 246 ANNUAL REPORT 2022 8. Others □ Applicable √ Not Applicable XIII. Share-based payment 1. Overall information □ Applicable √ Not Applicable 2. Equity-settled share-based payment □ Applicable √ Not Applicable 3. Cash-settled share-based payment √ Applicable □ Not Applicable Monetary unit: RMB Yuan Determination method for the fair value of liabilities incurred by the Company and to be settled in shares or other equity instruments Accumulated amount of liabilities incurred due to cash- 15,049,013.31 settled share-based payment Total expenses incurred due to cash-settled share-based 1,048,565.00 payment Other remarks Note: Pursuant to the regulations of “Annual Plan of Long-term Incentive Plan from 2018 to 2020 of Carlsberg Group”, “Annual Plan of Long-term Incentive Plan from 2019 to 2021 of Carlsberg Group” and “Annual Plan of Long-term Incentive Plan from 2020 to 2022 of Carlsberg Group” (the “Annual Plans”), eligible executives at the level of vice president and above are entitled to join the Annual Plans. The vesting period of each Annual Plan is 3 years, and executives joined the Annual Plans could obtained a certain amount of Carlsberg B shares for free if they have reached the pre-set performance conditions and other relevant exercise conditions, and are still engaged by Carlsberg Group after the vesting period. The Company would settle in cash after the exercise conditions are met. 4. Modifications and cancellations of share-based payment □ Applicable √ Not Applicable 5. Others □ Applicable √ Not Applicable XIV. Commitments and contingencies 1. Significant commitments √ Applicable □ Not Applicable Significant commitments, their nature and amount at the balance sheet date 231 / 246 ANNUAL REPORT 2022 Please refer to item XII 5 (8) of this section for details on beer produced by Jiawei Beer and shall be exclusively sold by the Company. Except for the aforementioned events, the Company has no other significant commitments to be disclosed as of the balance sheet date. 2. Contingencies (1) Significant contingencies at the balance sheet date √ Applicable □ Not Applicable When the Company undertakes the exclusive sales of the beer produced by Jiawei Beer, the two parties shall settle the difference in sales volume and price. As of December 31 2022, the Company has estimated the cost of making up the net difference in sales volume and price based on the performance of the agreement, with final settlement not yet made. Please refer to item XII 5 (8) of this section for details. Except for the aforementioned events, the Company has no other significant contingencies to be disclosed as of the balance sheet date. (2) Remarks shall also be given if the Company has no significant contingencies to be disclosed. □ Applicable √ Not Applicable (3) Others □ Applicable √ Not Applicable XV. Events after the balance sheet date 1. Significant non-adjusting events □ Applicable √ Not Applicable 2. Profit distribution √ Applicable □ Not Applicable Monetary unit: RMB Yuan Profit or dividend planned to be distributed 1,258,325,114.80 Profit or dividend approved to be distributed Pursuant to the profit distribution plan of 2022 proposed at the eighth meeting of the tenth Board of Directors held on April 26, 2023, the Company intends to distribute cash dividend of 2.60 yuan (tax inclusive) per share out of profits available for distribution as of December 31, 2022. The proposal needs to be submitted to the Annual General Meeting of Shareholders for deliberation and approval. 3. Sales return □ Applicable √ Not Applicable 4. Other remarks □ Applicable √ Not Applicable 232 / 246 ANNUAL REPORT 2022 XVI. Other significant events 1. Corrections of prior period errors (1) Retroactive restatement method □ Applicable √ Not Applicable (2) Prospective application method □ Applicable √ Not Applicable 2. Debt restructuring □ Applicable √ Not Applicable 3. Assets exchange (1) Non-cash assets exchange □ Applicable √ Not Applicable (2) Other assets exchange □ Applicable √ Not Applicable 4. Annuity plan □ Applicable √ Not Applicable 233 / 246 ANNUAL REPORT 2022 5. Discontinued operations √ Applicable □ Not Applicable Monetary unit: RMB Yuan Profit of discontinued Income tax operations attributable to Items Revenue Expenses Total profit Net profit expenses shareholders of the parent company Shutting 554,141.24 1,357,571.19 -409.69 1,357,980.88 1,357,980.88 down plants Other remarks (1) Net profit from discontinued operations Items Current period cumulative Preceding period comparative Operating revenue Less: Operating cost Taxes and surcharges 345,765.84 948,095.15 Administrative expenses 550,975.31 372,521.37 Financial expenses 3,165.93 -184,133.06 Add: Other income 27,531.80 Gains on asset disposal 2,257,478.27 Operating profit 1,357,571.19 -1,108,951.66 Less: Non-operating expenses 7,009.93 Profit before tax of discontinued 1,357,571.19 -1,115,961.59 operations Less: Income tax of discontinued -409.69 1,860,521.34 operations Net profit of discontinued 1,357,980.88 -2,976,482.93 operations Add: Assets impairment loss recognized in the current period Add: Net gains or losses from disposal of discontinued operations (after tax) Including: Total gains or losses from disposal Less: Income tax expenses (or add: revenues) Total 1,357,980.88 -2,976,482.93 Including: Attributable to 1,357,980.88 -2,862,850.96 shareholders of parent company 234 / 246 ANNUAL REPORT 2022 (2) Cash flows of discontinued operations Current period cumulative Preceding period comparative Items Net cash flows Net cash flows Net cash flows Net cash flows Net cash flows Net cash flows from operating from investing from financing from operating from investing from financing activities activities activities activities activities activities Chongqing Brewery Co., Ltd. 33,382.55 -934.07 Qianjiang Branch Chongqing Brewery Co., Ltd. 5,472.33 8,747.66 Wanzhou Branch Chongqing Brewery Co., Ltd. -5.01 -1,089.71 Sixth Factory Hunan Chongqing Beer Guoren Co., -60,614.45 Ltd. Changde Branch Total 38,849.87 -53,890.57 6. Segment information (1) Identification basis and accounting policies for reportable segments √ Applicable □ Not Applicable Reportable segments are identified according to the structure of the Company’s internal organization, management requirements and internal reporting system, and based on regional segments. Assessments are respectively performed on the operating performance of southern region, northwest region and central region. Assets and liabilities shared by different segments are allocated among segments proportionate to their respective sizes. (2) Financial information of reportable segments √ Applicable □ Not Applicable Monetary unit: RMB Ten Thousand Yuan Northwest Inter-segment Items Southern region Central region Total region offsetting Operating revenue 478,189.87 412,678.78 717,718.17 204,682.76 1,403,904.05 Including: Revenue from contracts with 478,189.87 412,678.78 717,718.17 204,682.76 1,403,904.05 customers Operating cost 242,609.92 216,871.32 417,217.26 181,455.60 695,242.90 Total assets 524,319.94 364,725.98 1,056,791.47 696,083.18 1,249,754.22 Total liabilities 345,358.91 190,713.33 737,580.41 386,200.70 887,451.94 (3) Reasons shall be given if the Company has no reportable segment or cannot disclose the total assets and liabilities of each reportable segment. □ Applicable √ Not Applicable (4) Other remarks □ Applicable √ Not Applicable 7. Other significant transactions and events that may be influential for investors in decision-making √ Applicable □ Not Applicable 235 / 246 ANNUAL REPORT 2022 Pursuant to the “Proposal on Conducting Aluminum Hedging by the Subsidiary of the Company” deliberated and approved by the Company’s First Extraordinary General Meeting of Shareholders in 2022 and the “Proposal on the Adjustment of Implementation Plan for Aluminum Hedging” deliberated and approved by the Company’s 2021 Annual General Meeting of Shareholders, the Company and its subsidiaries intend to, in legal compliance without affecting normal operations, invest in aluminum hedges at an appropriate time using self-owned funds of not more than USD 70.00 million. As of December 31, 2022, the Company’s position amounted to USD 28,145,570.00, which has not yet expired. 8. Others √ Applicable □ Not Applicable (Ⅰ) Leases 1. The Company as lessee (1) Please refer to item VII 25 of this section for details on right-of-use assets. (2) Please refer to item V 42 of this section for details on the Company’s accounting policies on short-term leases and leases for which the underlying asset is of low value. The amounts of short-term leases and low-value asset leases included into profit or loss are as follows: Items Current period cumulative Preceding period comparative Expense relating to short-term 29,041,574.10 21,958,008.93 leases Total 29,041,574.10 21,958,008.93 (3) Profit or loss and cash flows related to leases Items Current period cumulative Preceding period comparative Interest expenses on lease 3,696,843.83 2,010,658.26 liabilities Total cash outflows related to 48,244,866.18 38,624,914.18 leases (4) Please refer to item X of this section for details on maturity analysis of lease liabilities and related liquidity risk management. (5) Nature of lease activities Whether hold the Type of leased assets Quantity Lease term extension option Buildings and structures 58.00 1-10 years No Machinery 12.00 1-5 years No Transport facilities 225.00 2 years No (Ⅱ) Commitments on the performance of major asset restructuring Pursuant to the relevant agreement on the Company’s major asset restructuring, Carlsberg Brewery Hong Kong Limited (“Carlsberg Hong Kong”) promises that the net profit of Carlsberg Chongqing Brewery Co., Ltd. which is attributable to the parent company after deducting non-recurring profit or loss in 2020, 2021 and 2022 would not be less than 48.98 million yuan, 58.91 million yuan and 62.11 million yuan respectively. If the actual performance is lower than the above commitment amount, Carlsberg Hong Kong will compensate the Company in cash. Carlsberg 236 / 246 ANNUAL REPORT 2022 Breweries A/S and Guangzhou Carlsberg Consultancy and Management Services Co., Ltd. promise that the total net profit of the target companies involved in Asset Package A and Asset Package B which is attributable to the parent company after deducting non-recurring profit or loss in 2020, 2021 and 2022 will not be less than 56.54 million yuan, 76.76 million yuan and 80.89 million yuan respectively. If the actual performance is lower than the above commitment amount, Carlsberg Breweries A/S and Guangzhou Carlsberg Consultancy and Management Services Co., Ltd. will compensate Carlsberg Chongqing Brewery Co., Ltd. in cash. In 2022, the actual performance of Carlsberg Chongqing Brewery Co., Ltd. and the total actual performance of Asset Package A and Asset Package B were all higher than the above commitment amount. At the same time, upon the expiration of the performance commitment period, the Company conducted an impairment test on the value of Carlsberg Chongqing Brewery Co., Ltd., Asset Package A and Asset Package B, and engaged an appraisal agency to evaluate their value. According to the evaluation results, Carlsberg Chongqing Brewery Co., Ltd., Asset Package A and Asset Package B were not impaired. (Ⅲ) Major investments Approved by the Fourth Extraordinary General Meeting of Shareholders in 2021, the subsidiary Carlsberg Chongqing Brewery Co., Ltd. and Xi’nan Subdistrict Office of Sanshui District, Foshan City entered into the “Letter of Intent for Investment in Beer Production Base Project”, agreeing that Carlsberg Chongqing Brewery Co., Ltd. plans to build a production base with an annual production capacity of 500,000 kiloliters of beer in Sanshui District, Foshan City, Guangdong Province, with a fixed assets investment of about 1.03 billion yuan. The two parties also agreed on the investment intensity, development progress and economic contributions. Under the approval of the fifth meeting of the tenth Board of Directors, in order to meet the needs of building intelligent and green wineries, reduce the long-term operating costs and improve the stability of product quality, the Company increased the total investment of the project to 1.492 billion yuan. As of the balance sheet date, the cumulative investment of the project totaled 0.38 billion yuan. 237 / 246 ANNUAL REPORT 2022 XVII. Notes to items of parent company financial statements 1. Accounts receivable (1) Age analysis □ Applicable √ Not Applicable (2) Details on categories of provision accrual methods □ Applicable √ Not Applicable Provision made on an individual basis □ Applicable √ Not Applicable Provision made on a collective basis □ Applicable √ Not Applicable For provision for bad debts made using three-stage model, please disclose relevant information referring to the disclosures in item VII 8 of this section □ Applicable √ Not Applicable (3) Provision for bad debts □ Applicable √ Not Applicable Significant provisions collected or reversed in the current period □ Applicable √ Not Applicable (4) Accounts receivable actually written off in the current period □ Applicable √ Not Applicable Significant accounts receivable written off in the current period □ Applicable √ Not Applicable (5) Details of the top 5 debtors with largest balances □ Applicable √ Not Applicable (6) Accounts receivable derecognized due to financial assets transfer □ Applicable √ Not Applicable (7) Assets and liabilities arising from transferred but still involved accounts receivable □ Applicable √ Not Applicable Other remarks □ Applicable √ Not Applicable 238 / 246 ANNUAL REPORT 2022 2. Other receivables Details √ Applicable □ Not Applicable Monetary unit: RMB Yuan Items Closing balance Opening balance Interest receivable Dividend receivable Other receivables 4,353,422.01 216,585.47 Total 4,353,422.01 216,585.47 Other remarks □ Applicable √ Not Applicable Interest receivable (1) Details on categories □ Applicable √ Not Applicable (2) Significant overdue interest □ Applicable √ Not Applicable (3) Provision for bad debts □ Applicable √ Not Applicable Other remarks □ Applicable √ Not Applicable Dividend receivable (4) Details □ Applicable √ Not Applicable (5) Significant balance with age over one year □ Applicable √ Not Applicable (6) Provision for bad debts □ Applicable √ Not Applicable Other remarks □ Applicable √ Not Applicable Other receivables (1) Age analysis √ Applicable □ Not Applicable Monetary unit: RMB Yuan Ages Closing book balance Within 1 year Including: Within 1 year 4,582,549.49 Subtotal 4,582,549.49 1-2 years 239 / 246 ANNUAL REPORT 2022 Ages Closing book balance 2-3 years Over 3 years 3-4 years 4-5 years Over 5 years Total 4,582,549.49 (2) Other receivables categorized by nature √ Applicable □ Not Applicable Monetary unit: RMB Yuan Nature of receivables Closing book balance Opening book balance Land disposal fees receivable 4,300,000.00 Security deposits 209,093.99 Petty cash 227,684.70 Others 73,455.50 300.00 Total 4,582,549.49 227,984.70 (3) Changes in provision for bad debts √ Applicable □ Not Applicable Monetary unit: RMB Yuan Stage 1 Stage 2 Stage 3 12month Lifetime expected Lifetime expected Provision for bad debts Total expected credit credit losses (credit credit losses (credit losses not impaired) impaired) Balances at January 1, 11,399.23 11,399.23 2022 Balances at January 1, 2022 in the current period --Transferred to stage 2 --Transferred to stage 3 --Reversed to stage 2 --Reversed to stage 1 Provision made in the 217,728.25 217,728.25 current period Provision recovered in the current period Provision reversed in the current period Provision written off in the current period Other changes Balances at December 229,127.48 229,127.48 31, 2022 240 / 246 ANNUAL REPORT 2022 Remarks on significant changes in book balance of other receivables with changes in provision for bad debts □ Applicable √ Not Applicable Determination basis for provision for credit impairment made in the current period and whether credit risk has increased significantly □ Applicable √ Not Applicable (4) Provision for bad debts □ Applicable √ Not Applicable (5) Other receivables actually written off in the current period □ Applicable √ Not Applicable (6) Details of the top 5 debtors with largest balances √ Applicable □ Not Applicable Monetary unit: RMB Yuan Proportion to the Nature of total balance of Provision for bad Debtors Closing balance Ages receivables other receivables debts (%) Chongqing Hongye Land disposal Asset Management fees 4,300,000.00 Within 1 year 93.83 215,000.00 Co., Ltd. receivable Kingold Group Co., Security 133,673.79 Within 1 year 2.92 6,683.69 Ltd. [Note] deposits Guangzhou Minghe Security 75,420.20 Within 1 year 1.65 3,771.01 Industrial Co., Ltd. deposits Chongqing Jiawei Others 73,455.50 Within 1 year 1.60 3,672.78 Beer Co., Ltd. Total / 4,582,549.49 / 100.00 229,127.48 Note: It includes its wholly-owned subsidiary Guangzhou Kingold Property Co., Ltd. (7) Other receivables related to government grants □ Applicable √ Not Applicable (8) Other receivables derecognized due to financial assets transfer □ Applicable √ Not Applicable (9) Assets and liabilities arising from transferred but still involved other receivables □ Applicable √ Not Applicable Other remarks □ Applicable √ Not Applicable 241 / 246 ANNUAL REPORT 2022 3. Long-term equity investments √ Applicable □ Not Applicable Monetary unit: RMB Yuan Closing balance Opening balance Items Provision for Provision for Book balance Carrying amount Book balance Carrying amount impairment impairment Investments in 1,714,103,968.78 19,037,610.07 1,695,066,358.71 1,714,103,968.78 19,037,610.07 1,695,066,358.71 subsidiaries Investments in associates and joint ventures Total 1,714,103,968.78 19,037,610.07 1,695,066,358.71 1,714,103,968.78 19,037,610.07 1,695,066,358.71 (1) Investments in subsidiaries √ Applicable □ Not Applicable Monetary unit: RMB Yuan Provision for Closing balance impairment made Investees Opening balance Increase Decrease Closing balance of provision for in the current impairment period Carlsberg Chongqing 1,714,103,968.78 1,714,103,968.78 19,037,610.07 Brewery Co., Ltd. Total 1,714,103,968.78 1,714,103,968.78 19,037,610.07 (2) Investments in associates and joint ventures □ Applicable √ Not Applicable Other remarks None. 4. Operating revenue/Operating cost (1) Details □ Applicable √ Not Applicable (2) Revenue from contracts □ Applicable √ Not Applicable (3) Remarks on performance obligations □ Applicable √ Not Applicable (4) Remarks on transaction price allocated to the remaining performance obligations □ Applicable √ Not Applicable Other remarks None. 242 / 246 ANNUAL REPORT 2022 5. Investment income √ Applicable □ Not Applicable Monetary unit: RMB Yuan Items Current period cumulative Preceding period comparative Investment income from long-term equity 1,155,407,400.00 858,714,000.00 investments under cost method Investment income from long-term equity investments under equity method Gains on disposal of long-term equity investments Investment income from held-for-trading financial assets Dividend income from other equity instrument investments Interest income from debt investments Interest income from other debt investments Investment income from disposal of held- for-trading financial assets Investment income from disposal of other equity instrument investments Investment income from disposal of debt investments Investment income from disposal of other debt investments Income from debt restructuring Total 1,155,407,400.00 858,714,000.00 Other remarks Note: Pursuant to the resolution and approval of the Company’s Third Extraordinary General Meeting of Shareholders in 2022, Carlsberg Chongqing Brewery Co., Ltd. distributed dividend of 2.25 billion yuan to the Company and Guangzhou Carlsberg Consultancy and Management Services Co., Ltd. based on its accumulated undistributed profits from January to October in 2022. 6. Others □ Applicable √ Not Applicable XVIII. Other supplementary information 1. Schedule of non-recurring profit or loss √ Applicable □ Not Applicable Monetary unit: RMB Yuan Items Amount Remarks Gains on disposal of non-current assets -2,686,096.87 Tax refund, credit or exemption approved beyond the power of authorities or without formal documents Government grants included in profit or loss (excluding those closely related to operating 56,173,947.41 activities of the Company and continuously enjoyed with certain quantity/quota based on 243 / 246 ANNUAL REPORT 2022 Items Amount Remarks certain national standards) Fund possession charge from non-financial entities and included in profit or loss Gains on acquisition of subsidiaries, joint ventures and associates due to the surplus of acquisition-date fair value of net identifiable assets in acquiree over the acquisition cost Gains on non-cash assets exchange Gains on assets consigned to the third party for investment or management Assets impairment loss incurred due to force majeure such as natural disasters Gains on debt restructuring Entity restructuring expenses, such as staffing and integrating expenses Gains on transactions with unfair value Net profit on subsidiaries acquired through business combination under common control from the beginning of the period to the combination date Contingent gains on non-operating activities Gains or losses on changes in fair value of held- for-trading financial assets, derivative financial assets, held-for-trading financial liabilities and derivative financial liabilities, and investment income from disposal of held-for-trading 11,322,859.61 financial assets, derivative financial assets, held- for-trading financial liabilities, derivative financial liabilities and other debt investments, excluding those arising from hedging business related to operating activities The reversed provision for impairment of receivables and contract assets based on 368,172.05 impairment testing on an individual basis Gains on designated loans Gains on changes in fair value of investment properties with subsequent measurement at the fair value mode Gains on reconciliation of current period profit or loss following legal and regulative requirements on taxation, accounting, etc. Management charges for consigned operations Other non-operating income or expenses 4,495,553.47 Other profit or loss satisfying the definition of 1,802,741.69 non-recurring profit or loss Less: Enterprise income tax affected 15,007,349.22 Non-controlling interest affected (after tax) 27,203,082.00 Total 29,266,746.14 Remarks on other profit or loss satisfying the definition of non-recurring profit or loss and remarks on defining non- recurring profit or loss listed in the “Interpretation Pronouncement on Information Disclosure Criteria for Public Companies No. 1 – Non-Recurring Profit or Loss” as recurring profit or loss □ Applicable √ Not Applicable 244 / 246 ANNUAL REPORT 2022 2. ROE and EPS √ Applicable □ Not Applicable Weighted EPS (yuan/share) Profit of the reporting period average ROE (%) Basic EPS Diluted EPS Net profit attributable to shareholders of 69.25 2.61 2.61 ordinary shares Net profit attributable to shareholders of ordinary shares after deducting non- 67.65 2.55 2.55 recurring profit or loss (1) Calculation process of weighted average ROE Current period Items Symbols cumulative Net profit attributable to shareholders of ordinary shares A 1,263,604,930.09 Non-recurring profit or loss B 29,266,746.14 Net profit attributable to shareholders of ordinary shares after C=A-B 1,234,338,183.95 deducting non-recurring profit or loss Opening balance of net assets attributable to shareholders of D 1,754,545,104.23 ordinary shares Net assets attributable to shareholders of ordinary shares increased due to offering of new shares or conversion of debts E into shares Number of months counting from the next month when the net F assets were increased to the end of the reporting period Net assets attributable to shareholders of ordinary shares decreased due to share repurchase or cash dividends G 967,942,396.00 appropriation Number of months counting from the next month when the net H 7.00 assets were decreased to the end of the reporting period Net increase in capital reserve arising from I1 5,652,955.00 share-based payment Number of months counting from the next month when the net assets were increased or J1 6.00 decreased to the end of the reporting period Others Net increase in other comprehensive income I2 295,189.31 Number of months counting from the next month when the net assets were increased or J2 6.00 decreased to the end of the reporting period Number of months in the reporting period K 12.00 L= D+A/2+ E×F/K- Weighted average net assets 1,824,688,577.10 G×H/K+I×J/K Weighted average ROE M=A/L 69.25% Weighted average ROE after deducting non-recurring profit or N=C/L 67.65% loss (2) Calculation process of basic EPS and diluted EPS a. Calculation process of basic EPS Items Symbols Current period cumulative Net profit attributable to shareholders of ordinary shares A 1,263,604,930.09 245 / 246 ANNUAL REPORT 2022 Items Symbols Current period cumulative Non-recurring profit or loss B 29,266,746.14 Net profit attributable to shareholders of ordinary shares C=A-B 1,234,338,183.95 after deducting non-recurring profit or loss Opening balance of total shares D 483,971,198.00 Number of shares increased due to conversion of reserve E to share capital or share dividend appropriation Number of shares increased due to offering of new shares F or conversion of debts into shares Number of months counting from the next month when the shares were increased to the end of the reporting G period Number of shares decreased due to share repurchase H Number of months counting from the next month when the shares were decreased to the end of the reporting I period Number of shares decreased in the reporting period J Number of months in the reporting period K L=D+E+F×G/K- Weighted average of outstanding ordinary shares 483,971,198.00 H×I/K-J Basic EPS M=A/L 2.61 Basic EPS after deducting non-recurring profit or loss N=C/L 2.55 b. Calculation process of diluted EPS Calculation process of diluted EPS is the same as that of basic EPS. 3. Financial data variance between financial reporting prepared under domestic and abroad accounting standards □ Applicable √ Not Applicable 4. Others □ Applicable √ Not Applicable Chairman of the Board of Directors: Joo Miguel Ventura Rego Abecasis Date of approval for issuance: April 26th, 2023 Revision □ Applicable √ Not Applicable 246 / 246