Jiangsu Yanghe Distillery Co., Ltd.
2023 Annual Report
April 2024
1
Section I Important Statements, Contents and Definitions
The board of directors, board of supervisors, directors, supervisors and senior management of Jiangsu Yanghe
Distillery Co., Ltd. (hereinafter referred to as the Company) hereby guarantee that the information presented in
this report is free of any false records, misleading statements or material omissions, and shall individually and
together be legally liable for truthfulness, accuracy and completeness of its contents.
Mr. Zhang Liandong, the responsible person for the Company, Mr. Yin Qiuming, the responsible person for
accounting affairs and Mr. Zhao Qike, the responsible person for accounting department (the accounting
supervisor) have warranted that the financial statements in this report are true, accurate and complete. All
directors attended the board meeting to review this report.
The future plans and some other forward-looking statements mentioned in this report shall not be considered as
virtual promises of the Company to investors. Investors and people concerned should maintain adequate risk
awareness and understand the difference between plans, predictions and promises. Investors are kindly reminded
to pay attention to possible investment risks.
In the annual report, the possible risks in the operation of the Company are described in detail (see 11. Outlook
for the Future Development of the Company in Section III Management Discussion and Analysis). Investors are
kindly reminded to pay attention to relevant content.
The profit distribution plan approved by the board of directors: based on 1,506,445,074 shares, a cash dividend of
CNY 46.60 (tax inclusive) will be distributed for every 10 existing shares held, 0 shares of bonus shares (tax
inclusive), and reserves would not be converted into share capital.
The Company’s Chinese 2023 Annual Report was publicly disclosed on the Shenzhen Stock Exchange and
www.cninfo.com.cn on 27 April 2024. If there are any differences between the English version and the Chinese
one, please refer to the latter.
2
Contents
Section I Important Statements, Contents and Definitions……………………………….…2
Section II Company Profile and Key Financial Results……………………………………….…6
Section Ⅲ Management Discussion and Analysis………………………………………………11
Section Ⅲ Corporate Governance…………………………………………………………………..…34
Section Ⅲ Environment and Social Responsibility……………………………………………..69
Section Ⅲ Significant Events……………………………………………………………………………..76
Section Ⅲ Changes in Shares and Information about Shareholders…………………..93
Section Ⅲ Information about Preference Shares………………………………………………103
Section Ⅲ Information about Bonds………………………………………………………………..104
Section Ⅲ Financial Reports………………………………………………………………….…………105
3
Document Catalog
(I) Financial statements containing the signatures and seals of the person in charge of the Company, the
accounting head, and the person in charge of the accounting body (accounting manager).
(II) The original audit reports with the seal of the accounting firm and the signatures and seals of the certified
public accountants.
(III) The originals of all Company documents and announcements publicly disclosed during the reporting period.
4
Definitions
Term Reference Definition
The Company, This Company, Yanghe Refer to Jiangsu Yanghe Distillery Co., Ltd.
Yanghe Group, Controlling shareholder Refer to Jiangsu Yanghe Group Co.,Ltd.
The current year, In the reporting period Refer to 1 Jan. 2023 to 31 Dec. 2023
The report Refer to 2023 Annual Report
Yuan, Ten thousand yuan, A hundred million yuan Refer to CNY 0.00, CNY 10,000.00, CNY 100,000,000.00
The shareholders' meeting, the board of directors, The shareholders' meeting, the board of directors and
Refer to
the board of supervisors the board of supervisors of the Company
Articles of incorporation of Jiangsu Yanghe Distillery
Articles of incorporation Refer to
Co., Ltd.
SSE Refer to Shenzhen Stock Exchange
SRC, CSRC Refer to China Securities Regulatory Commission
State-owned Assets Supervision and Administration
SAC of Suqian, SASAC of Suqian Refer to
Commission of Suqian
Suya Jincheng, Accounting firm Refer to Suya Jincheng CPA LLP
Blue Alliance Refer to Jiangsu Blue Alliance Co., Ltd.
Yanghe Branch of the Company Refer to Jiangsu Yanghe Distillery Co., Ltd. Yanghe Branch
Siyang Branch of the Company Refer to Jiangsu Yanghe Distillery Co., Ltd. Siyang Branch
Shuanggou Distillery Refer to Jiangsu Shuanggou Distillery Stock Co.,Ltd.
Guijiu Comapny Refer to Guizhou Guijiu Co., Ltd.
Inside and outside the province Refer to Inside and outside Jiangsu Province
5
Section II Company Profile and Key Financial Results
I. Corporate information
Stock abbreviation Yanghe Stock code 002304
Stock exchange where the
shares of the Company Shenzhen Stock Exchange
are listed
Name of the Company in
江苏洋河酒厂股份有限公司
Chinese
Abbr. of the Company
洋河股份
name in Chinese
Name of the Company in
JIANGSU YANGHE DISTILLERY CO., LTD.
English (if any)
Abbr. of the Company
Yanghe
name in English (if any)
Legal representative Zhang Liandong
Registered address No.118 Middle Avenue, Yanghe Town, Suqian City, Jiangsu Province, China
Postal code of registered
223800
address
Historical changes of the
company's registered N/A
address
Business address No.118 Jiudu Avenue, Yanghe Town, Suqian City, Jiangsu Province, China
Postal code of business
223800
address
Company website http://www.chinayanghe.com
E-mail yanghe002304@chinayanghe.com
II. Contact us
Company secretary Representative for securities affairs
Name Lu Hongzhen Zhu Haihui
No.118 Jiudu Avenue, Yanghe Town, No.118 Jiudu Avenue, Yanghe Town,
Address
Suqian City, Jiangsu Province Suqian City, Jiangsu Province
Tels. 0527-84938128 0527-84938128
Fax 0527-84938128 0527-84938128
E-mail yanghe002304@chinayanghe.com yanghe002304@chinayanghe.com
III. Information disclosure and place where the annual report is kept
The website of the stock exchange where
Shenzhen Stock Exchange (www.szse.cn)
the company discloses the annual report
Media name and website of the annual Securities Times, Shanghai Securities Times, China Securities
report disclosed by the company Journal, Securities Daily and Cninfo (http://www. cninfo.com.cn)
Place where the Annual Report of the Shareholder reading room, the headquarters of the
Company is kept Company, Suqian City, Jiangsu Province
6
IV. Company registration and alteration
Organization code 9132000074557990XP
Changes in main business activities
since the Company was listed (if None
any)
Changes of controlling shareholders
None
of the Company (if any)
V. Other relevant information
Accounting firm engaged by the Company
Name of the accounting firm Suya Jincheng CPA LLP
Business address of the 14-16/F., Block A, Zhengtai Center, No.159 Taishan Road, Jianye District, Nanjing,
accounting firm Jiangsu Province
Name of accountants for
Li Laimin, Li Yan
writing signature
Sponsors engaged by the Company to continuously perform its supervisory function during the reporting period
□Applicable N/A
Financial adviser engaged by the Company to continuously perform its supervisory function during the reporting
period
□Applicable N/A
VI. Key accounting data and financial indicators
Whether the Company performed a retroactive adjustment or restatement of accounting data
Yes □No
The reason of retroactively adjust or restate
Changes in Accounting Policies
2022 YoY Change 2021
2023 Before After After Before After
adjustment adjustment adjustment adjustment adjustment
Operating 33,126,277,5 30,104,896,1 30,104,896,1 25,350,178,2 25,350,178,2
10.04%
revenues (CNY) 51.51 86.70 86.70 04.45 04.45
Net profits
attributable to
10,015,930,0 9,377,832,42 9,377,865,47 7,507,682,79 7,507,741,59
shareholders of 6.80%
40.27 9.08 9.41 7.40 9.03
the Company
(CNY)
Net profits
attributable to 9,842,844,98 9,276,644,83 9,276,677,88 7,372,758,25 7,372,817,05
6.10%
shareholders of 0.49 1.29 1.62 7.29 8.92
the Company
7
before non-
recurring gains
and losses
(CNY)
Net cash flows
6,130,220,86 3,647,623,95 3,647,623,95 15,318,165,4 15,318,165,4
from operating 68.06%
7.96 2.19 2.19 80.53 80.53
activities (CNY)
Basic earnings
per share 6.6487 6.2251 6.2252 6.80% 5.0141 5.0141
(CNY/share)
Diluted
earnings per
6.6487 6.2251 6.2252 6.80% 5.0141 5.0141
share
(CNY/share)
Weighted
20.34% 21.03% 21.03% -0.69% 18.55% 18.55%
average ROE
At the end of 2022 YoY Change At the end of 2021
At the end of
Before After After Before After
2023
adjustment adjustment adjustment adjustment adjustment
Total assets 69,792,287,4 67,964,247,1 67,972,824,6 67,798,704,1 67,803,122,3
2.68%
(CNY) 55.91 34.43 46.81 93.76 74.09
Net assets
attributable to
51,938,515,3 47,474,946,9 47,475,039,1 42,486,209,7 42,486,268,5
shareholders of 9.40%
45.20 74.68 84.70 89.59 91.22
the Company
(CNY)
Reasons for changes in accounting policies and correction of accounting errors
The Ministry of Finance issued No. 16 Interpretation of Enterprise Accounting Standards (Finance and Accounting
[2022] No. 31, hereinafter referred to as "Interpretation No. 16") on November 30, 2022, with the content of
"Accounting Treatment of Deferred Income Tax Not Exempted from Initial Recognition for Assets and Liabilities
Arising from Single Transactions" taking effect from January 1, 2023. For single transactions subject to
Interpretation No. 16, the company retrospectively adjusts the cumulative effect amounts on financial statements
to the earliest period's opening retained earnings and other related financial statement items, in accordance with
the provisions of Interpretation No. 16 and Enterprise Accounting Standard No. 18 - Income Taxes, for temporary
differences in taxable and deductible temporary differences arising from recognizing lease liabilities and right-of-
use assets.
The Company's net profit before or after deducting non-recurring profits and losses in the last three fiscal years is
negative, and the audit report of the last year shows that the Company's ability to continue operating is uncertain
□Yes No
The net profit before or after deducting non-recurring profits and losses is negative
□Yes No
VII. Differences in accounting data under domestic and overseas accounting standards
1. Differences in the net profits and net assets disclosed in the financial reports prepared under the international
and China accounting standards
8
□Applicable N/A
No such differences during this period.
2. Differences in the net profits and net assets disclosed in the financial reports prepared under the outbound
and China accounting standards
□Applicable N/A
No such differences during this period.
VIII. Key financial results by quarter
Unit: CNY
Q1 Q2 Q3 Q4
Operating revenues 15,046,180,974.50 6,826,748,877.59 8,410,164,952.92 2,843,182,746.50
Net profits attributable to
5,766,047,982.64 2,096,333,323.57 2,341,087,846.18 -187,539,112.12
shareholders of the Company
Net profits attributable to
shareholders of the Company
5,665,647,207.53 2,047,339,155.41 2,451,989,689.20 -322,131,071.65
before deducting non-
recurring profits and losses
Net cash flows from
1,402,723,384.09 -1,137,690,993.47 4,078,434,986.31 1,786,753,491.03
operating activities
Whether there are any material differences between the financial indicators above or their summations and those
which have been disclosed in quarterly or semi-annual reports.
□Yes No
IX. Non-recurring profits and losses
Unit: CNY
Item 2023 2023 2021 Note
Profit or loss from disposal of non-current
assets (including the write-off portion of the -10,375,821.67 -5,887,909.75 -10,687,905.76
impairment provision)
Government grants included in the profit or
loss for the current period (except those
closely related to the normal business of the
company, in line with the provisions of 51,085,965.67 60,162,525.57 87,366,302.47
national policies, and continuously enjoyed
according to a certain standard quota or
quantity)
Except for the effective hedging business
related to the normal business of the
company, profits and losses from changes in
fair value arising from holding trading
financial assets and trading financial 211,499,562.04 77,907,331.60 153,349,470.08
liabilities, as well as the investment income
obtained from the disposal of trading
financial assets, trading financial liabilities
and financial assets available for sale
Impairment provision reversal of the 12,009,031.70
9
accounts receivables on which the
impairment test is carried out individually
Other non-operating income and
-19,590,043.61 827,476.72 -31,556,128.88
expenditure except above-mentioned items
Other profit and loss items that conform to
the definition of non-recurring profits and 3,610,292.93 3,484,445.51
losses
Less: Corporate income tax 59,943,924.97 34,647,176.78 79,096,331.61
Minority interests (after tax) -409,322.32 784,942.50 -55,656.60
Total 173,085,059.78 101,187,597.79 134,924,540.11 --
Details of other profit and loss items that meet the definition of non-recurring profit and loss：
□Applicable N/A
The company has no specific circumstances of other profit and loss items that meet the definition of non-recurring
profit and loss.
Description of defining non-recurring profit and loss items listed in the Explanatory Announcement No. 1 on
Information Disclosure for Listed Companies -Non-recurring Profits and Losses as recurring profit and loss items.
□Applicable N/A
There is no such situation that the company classifies the non-recurring profit and loss items listed in the
Explanatory Announcement No. 1 on Information Disclosure for Listed Companies -Non-recurring Profits and Losses
as recurring profit and loss items.
10
Section Ⅲ Management Discussion and Analysis
I. Industry conditions faced by the company during the reporting period
In 2023, the structured growth and intensifying competition of Chinese Baijiu market have become increasingly
obvious. According to the data from the National Bureau of Statistics and the China Alcoholic Drinks Association,
the nationwide output of Chinese Baijiu by enterprises with an annual revenue of over a certain scale amounted
to 4,492,000.00 kiloliters, representing a decrease of 2.8% compared to the previous year. The operating revenue
was CNY756.3 billion, a year-on-year increase of 9.7%. Total profits before tax amounted to CNY232.8 billion, up
by 7.5% year-on-year. The Chinese Baijiu industry exhibited resilience amidst adjustments.
Yanghe is a large Chinese Baijiu production enterprise enjoying high brand awareness and reputation nationwide.
It is the only enterprise in the Chinese Baijiu industry that owns two famous Chinese Baijiu brands, Yanghe and
Shuanggou, two time-honored Chinese brands, six well-known Chinese trademarks, and two 4A level scenic spots.
The company's major products are Dream Blue, Sky Blue, Ocean Blue, Sujiu, Zhenbaofang, Yanghe Daqu,
Shuanggou Daqu and so on, which have high brand recognition and reputation nationwide. During the reporting
period, the company continuously enhanced its operational management level and maintained a healthy
development trend of "steady progress." In 2023, the company achieved an operating revenue of CNY33.126
billion, a year-on-year increase of 10.04%. The company realized a net profit attributable to shareholders of listed
companies of CNY10.016 billion, a year-on-year increase of 6.8%.
II. Main Businesses of the Company During the Reporting Period
The company shall comply with the disclosure requirements of food and wine manufacturing industries in Self-
regulatory Guidelines for Listed Companies in Shenzhen Stock Exchange No. 3 - Industry Information Disclosure
The main business engaged
The main business of the company is the production and sales of Chinese Baijiu, which is produced by solid-state
fermentation and sold mainly through two modes: wholesale distribution and online direct sales. The company's
main business and business model did not change during the reporting period. According to the Industry
Classification Guidelines for Listed Companies (revised in 2012) issued by the CSRC, the company belongs to the
"C15 wine, beverage and refined tea manufacturing industry".
Information about brand operation
The Company’s products include Dream Blue, Sujiu, Sky Blue, Zhenbaofang, Ocean Blue, Yanghe Daqu, Shuanggou
Daqu, Guijiu, Sidus Wine and so on. According to the price range standard of ex-factory price, the Company groups
the products into mid/high end and ordinary products. The mid/high end products refer to those with ex-factory
price ≥ CNY 100 / 500ml, mainly including Dream Blue craft class, Dream Blue M9, Dream Blue M6 +, Dream Blue
Crystal version, Su Jiu, Sky Blue, Zhenbaofang (Difang, Shengfang), Ocean Blue and so on. Ordinary products refer
to those with ex-factory price ＜ CNY 100 / 500ml, mainly including Yanghe Daqu and Shuanggou Daqu.
The revenue of various products is as follows:
Unit: CNY
Products Operating revenue
2023 YoY change
Mid/high end products 28,538,963,867.14 8.82%
Ordinary products 3,950,472,828.91 20.70%
11
Main sales model
The company sells its products mainly through distributors. Its sales models include wholesale distribution and
online direct selling, among which wholesale distribution is the main sales model.
Applicable □N/A
1. Disclosure of main business composition by different types
Unit: CNY
Gross
Types Operating revenue YoY change Operating cost YoY change YoY change
margin
By sales model
Wholesale
32,052,628,760.26 10.12% 7,637,998,918.20 7.11% 76.17% 0.67%
distribution
Online
436,807,935.79 11.25% 123,634,460.40 47.12% 71.70% -6.90%
direct selling
Subtotal 32,489,436,696.05 10.13% 7,761,633,378.60 7.58% 76.11% 0.57%
By geographical segment
Jiangsu 14,393,063,137.67 8.05% 3,612,062,812.84 -1.29% 74.90% 2.37%
Ex-Jiangsu 18,096,373,558.38 11.85% 4,149,570,565.76 16.70% 77.07% -0.95%
Subtotal 32,489,436,696.05 10.13% 7,761,633,378.60 7.58% 76.11% 0.57%
By product
Mid/high
end 28,538,963,867.14 8.82% 5,634,678,426.70 8.96% 80.26% -0.02%
products
Ordinary
3,950,472,828.91 20.70% 2,126,954,951.90 4.07% 46.16% 8.60%
products
Subtotal 32,489,436,696.05 10.13% 7,761,633,378.60 7.58% 76.11% 0.57%
The company's main products are classified according to the price range standard of ex-factory price, including
medium/high end products ≥ 100 CNY / 500ml and ordinary products < 100 CNY / 500ml.
2. Disclose the number of distributors according to regional classification
Geographical segment The number of distributors at the end of Increase (decrease) in the number
the reporting period during the reporting period
Jiangsu 2,960 -17
Ex-Jiangsu 5,829 568
Total 8,789 551
3. Settlement method and distribution method
The Company mainly adopts the bank transfer method for settlement, and adopts the method of payment before
goods for product sales.
4. Sales amount and sales proportion of the top five distributors
In 2023, the total sales amount of the top five distributors was CNY 1,852.3571 million, accounting for 5.59% of
the total sales of this year. Among the sales of the top five distributors, the sales from related parties were CNY 0,
accounting for 0% of the total sales of this year. The total amount of receivables of the top five distributors at the
12
end of the period was zero.
Retail sales accounted for more than 10%.
□Applicable N/A
Online direct selling
Applicable □N/A
Unit: CNY
Online direct
Product Sales amount in 2023 Sales amount in 2022 YoY change
selling
Tmall, JD and
Liquor 436,807,935.79 392,624,307.67 11.25%
other platforms
The sales price of the main products accounting for more than 10% of the total operating revenue of the current
period changed by more than 30% compared with the previous reporting period
□Applicable N/A
Procurement mode and content
Unit: CNY
Procurement mode Procurement content Amount
Raw materials and packaging
Market bidding 6,594,507,864.79
materials
Marketing purchase Energy 480,865,801.95
Procurement of raw materials from cooperatives or farmers accounted for more than 30% of the total purchase
amount
□Applicable N/A
The price of major outsourced raw materials changed by over 30% year on year
□Applicable N/A
Main production mode
The Company's production mode is self-produced mode, with major parts including raw material crushing,
fermentation, distillation, grade storage, liquor body design and combination, product packaging, etc.
Commissioned production
□Applicable N/A
The main components of operating costs
Unit:CNY
2023 2022
As a
Types Cost item percentage As a percentage YoY change
Amount Amount
of operating of operating cost
cost
Direct materials 5,740,988,852.45 70.01% 5,316,873,839.12 69.54% 7.98%
Chinese Direct labor 1,389,888,502.86 16.95% 1,238,729,841.81 16.20% 12.20%
Baijiu Fuels and
284,861,395.36 3.47% 288,045,390.08 3.77% -1.11%
energy
13
Manufacturing
283,217,880.58 3.45% 283,314,445.64 3.71% -0.03%
overhead
Output and inventory
1. Production volume, sales volume and inventory of major products
Types Item 2023 2022 YoY change
Sales (ton) 166,154.73 195,322.68 -14.93%
Chinese Baijiu Production (ton) 158,834.29 197,590.68 -19.61%
Inventory (ton) 39,176.04 46,496.48 -15.74%
2. Inventory of finished and semi-finished Baijiu at the end of the period
Inventory of finished products (including finished Inventory of semi-finished Baijiu (including raw liquor)
baijiu and wine) (ton) (ton)
39,875.47 650,766.36
3. Capacity of the Company
Name of production entity Design capacity (ton) Actual capacity in 2023 (ton)
Yanghe (including Yanghe branch and Siyang branch) 222,545 125,513
Shuanggou Distillery 97,040 29,851
III. Analysis of core competitiveness
The Company has significant advantages in natural environment, quality technology, brand building, marketing
network and so on. The Company has formed its unique core competitiveness, which has not changed during the
reporting period.
1. Natural environment advantage
The Company is located in Suqian, the capital of Chinese Baijiu with 'three rivers, two lakes and one wetland’. As
one of the three famous wetlands in the world, Suqian enjoys equal popularity with the Scotch whisky producing
area and the French Cognac producing area. The long history and unique ecological environment provide a good
source of water, soil and air for production for liquor production. Especially the microorganism condition is
significantly beneficial to production. The Yanghe distillery originated in the Sui and Tang Dynasties, flourished in
the Ming and Qing Dynasties. It had been sold in Jianghuai area during the period of Yong Zheng of Qing Dynasty.
It has a good reputation that 'dainty taste derived from fortune spring and liquor ocean, which made Yanghe rank
first in Jianghuai area'. Shuanggou alongside Yanghe was praised as the origin of Chinese natural liquor by domestic
and overseas experts due to the discovery of drunken ape fossils in Xiacaowan.
2. Quality advantage
Considering the diversification and individuation of consumption demand, the Company took the lead in breaking
the traditional classification of Baijiu flavor. The Company classifies Baijiu based on taste and emphasizes the value
of taste. The Company strengthens the mellowness of Baijiu, puts forward the new style of the mellow Baijiu quality,
and deeply meets core demand of target consumers. It has successfully established new craft of mellow Baijiu
production and system framework of mellowness mechanism, which caters to market consumption. In June 2008,
"Mellowness", a special type of Yanghe, was first written into the national standard in China Protected
Geographical Indication Product- Yanghe Daqu (Standard No. GB/T22046-2008). In 2019, the company formulated
the group standard named "Mellow Baijiu" (i.e., T/CBJ2104-2019), which further enriched and improved the
14
relevant standards of mellow Baijiu. In 2022, the company formulated the standards of "Baijiu Wetland Real Estate
Area" (T/CBJ2305-2022) and "Wetland Baijiu" (T/CBJ2110-2022), which promoted the specification of technical
quality standards for wetland liquor. In 2023, the company released the “China's Baijiu Mellow Quality
Development Report”, and comprehensively constructed the “mellow system”.
3. Talent advantage
The Company has 46 Masters of Chinese Baijiu, 78 provincial Baijiu tasting committee members and 1,952
technicians. The Company also has 10 national and provincial technical research and development platforms. The
obvious advantage of technical talents provides technical support for the continuous improvement of mellow
Baijiu quality. In 2023, the company's three scientific and technological achievements, "Research and Application
of Innovative Technology for Mellow Baijiu", "Integrated Research and Industrial Application of Digital Technology
for Mellow baijiu Brewing", and "Research on Autophagy and Antioxidant Effects of Mellow Baijiu" were identified
by the China Light Industry Federation and have reached the leading level in the international arena. In the 7th
National Sommelier Competition sponsored by the China Alcoholic Drinks Association, the company won the
championship for six consecutive times, fully demonstrating the company's talent advantages.
4. Brand advantage
The Company, as one of the eight traditional well-known Baijiu enterprises, is the only one in China's liquor industry
that has two Chinese famous wines, Yanghe and Shuanggou, two Chinese time-honored brands, six well-known
Chinese trademarks such as Yanghe, Shuanggou, Blue Classic, Zhenbaofang, Dream Blue, Su, two national 4A scenic
spots, two national industrial heritages, and a national key cultural relics protection unit. In 2023, in the "2023
World's Top 50 Most Valuable Spirits Brand Value" released by Brand Finance, a world-renowned brand value
research institution, the company ranked fifth in the world with a brand value of USD6.848 billion and ranked 102nd
in the "China's 500 Most Valuable Brands" released by World Brand Lab, with a brand value of CNY85.761 billion.
5. Marketing network advantage
The company has a marketing team with innovative ideas and strong execution. Its marketing network has
penetrated into all counties and regions in China. The high-speed channel for distribution has been basically built,
laying a solid foundation for future market expansion and category extension. Meanwhile, as a traditional
enterprise, Yanghe has consistently optimized new sales model and advanced digital transformation. The sales
digitalization of Yanghe has become a case study for Tsinghua University, showcasing the leading position of Yanghe
in internet application.
IV. Analysis of main business
1. Overview
During the reporting period, the company actively has responded to environmental changes, adheres to
empowering development through quality brands, strengthened marketing coordination and organizational
scheduling, enhanced operational capabilities and operational efficiency. Amidst increasingly fierce market
competition, it maintained an overall trend of "steady progress" in development. In 2023, the company achieved
an operating revenue of CNY33.126 billion, a year-on-year increase of 10.04%; The net profit attributable to
shareholders of the listed company was CNY10.016 billion, a year-on-year increase of 6.8%.
Brand building had become more comprehensive. Firstly, based on the different connotations and product
positioning of each brand, the company implemented differentiated brand communication strategies. It focused
15
on major events such as the Davos Forum and the Shanghai Cooperation Organization Summit, conducted activities
like the Gu Yu Forum and the opening ceremony of the "Head Row Wine Cellar," continuously elevating the brand
stature of "Dream Blue". Leveraging sports IPs such as "I Love Sky Blue," it bridged the gap between Sky Blue
products and consumers. Actively engaging with consumers, it further positioned Ocean Blue as a popular
consumer product. By sponsoring the Nanjing basketball team and hosting the "Head Row Sujiu Poetry Music
Festival," it amplified the influence of Shuanggou's wetland baijiu. Secondly, the company focused on market-
oriented services, conducting various targeted activities to reach key consumer groups and enhanced consumer
stickiness. Activities like "Spring Festival wins big prizes with Yang" and "I am the Yanghe Quality Ambassador" are
conducted, along with efficient placements of advertisements during the Mid-Autumn Festival TVCs, city light
shows, and Taihu Music Concerted to increase brand exposure and strengthen terminal marketing atmosphere.
Quality improvement was increasingly sustained. Firstly, leveraging ten major research and development
platforms, the company focused on key technological breakthroughs. Thirteen company-level research projects
have been completed, reinforcing the application of research and development outcomes in production practice,
thereby promoting further upgrades in the quality of leading products. Secondly, it implemented a working
mechanism of "planning, organizing, commanding, supervising, monitoring, warning, and evaluating,"
strengthening control over key brewing production process parameters to ensure consistent quality in raw liquor
production. Thirdly, the company's "Dream Team" swept the top three spots in the 7th National Sommelier
Competition. Three technological achievements, including "Research and Application of Innovative Technology for
Mellow Baijiu" have been appraised by the China Light Industry Federation. The company has also published the
“China's Baijiu Mellow Quality Development Report” providing strong theoretical and technical support for the
quality improvement of Yanghe's mellow baijiu. Fourthly, it continued to delve into product life cycle management,
focusing on "precision in product making and structural optimization," launching new products to achieve a
dynamic balance in product iteration.
Market marketing become more powerful. Firstly, promoting nationwide market expansion, reinforcing the
addition of new sales points, deepening penetration into towns and villages, optimizing consumer cultivation, and
further expanding markets beyond the province. Strengthening operations in the home market, refining the pricing
system for leading products like Dream Blue, Sky Blue and Ocean Blue, optimizing sales strategies, and promoting
steady development in the Jiangsu province market. Secondly, iteratively optimizing marketing organizational
structure, strengthening on-site coordination, and focusing on regional strategies to better drive business
development. Thirdly, leveraging digital tools to optimize and upgrade consumer activities, promoting the opening
of leading products; launching the Marketing Wisdom Center project, focusing on indicators traction and
collaborative empowerment to enhance business convenience. Fourthly, strengthening process indicators
assessment to promote marketing transformation, driving marketing management improvement through "project
management, responsibility system promotion, and list-based implementation".
ESG practices were deepening. Firstly, adhering to the concept of "people-oriented, scientific management," the
company continuously improved its risk management and internal control systems, streamlining procurement
processes to reduce human factors, emphasizing intellectual property protection, and continually enhancing
corporate governance standards. Secondly, there was a high emphasis on environmental management system
construction, with the formulation of a dual-carbon action plan, integrating the "dual-carbon" strategy into
corporate development, and striving to create an "ecological Yanghe." Thirdly, actively participating in rural
revitalization, hometown public welfare, and industrial assistance projects, continuing involvement in aerospace
16
public welfare activities, actively participating in the "Dunhuang Dream Guardianship Program," donating funds to
support disaster relief efforts in Zhuozhou and Jishi Mountain, organizing sealing and burial ceremonies, and
integrating major events into the construction of Suqian Liquor Capital, continuously practicing the social
responsibility and role of listed companies.
2. Revenues and cost of sales
(1) Breakdown of operating revenues
Unit：CNY
2023 2022
As a percentage As a percentage
YoY change
Amount of operating Amount of operating
revenues revenues
Total 33,126,277,551.51 100% 30,104,896,186.70 100% 10.04%
By business segment
Alcoholic Drinks 32,489,436,696.05 98.08% 29,499,863,067.64 97.99% 10.13%
Other 636,840,855.46 1.92% 605,033,119.06 2.01% 5.26%
By product
Baijiu 32,389,581,931.71 97.78% 29,338,843,747.26 97.46% 10.40%
Wine 99,854,764.34 0.30% 161,019,320.38 0.53% -37.99%
Other 636,840,855.46 1.92% 605,033,119.06 2.01% 5.26%
By geographical segment
Jiangsu 14,675,188,393.55 44.30% 13,594,267,792.89 45.16% 7.95%
Ex-Jiangsu 18,451,089,157.96 55.70% 16,510,628,393.81 54.84% 11.75%
By sales model
Wholesale
32,052,628,760.26 96.76% 29,107,238,759.97 96.69% 10.12%
distribution
Online direct
436,807,935.79 1.32% 392,624,307.67 1.30% 11.25%
selling
Other 636,840,855.46 1.92% 605,033,119.06 2.01% 5.26%
(2) Business segment, products, geographical segments or sales models contributing over 10% of the operating
revenues or profits
Applicable □N/A
Unit: CNY
Gross YoY change of YoY change of
Operating YoY change of
Cost of sales profit operating gross profit
revenues cost of sales
margin revenue margin
By business segment
Alcoholic
32,489,436,696.05 7,761,633,378.60 76.11% 10.13% 7.58% 0.57%
Drinks
By product
Baijiu 32,389,581,931.71 7,698,956,631.25 76.23% 10.40% 8.03% 0.52%
By geographical segment
Jiangsu 14,393,063,137.67 3,612,062,812.84 74.90% 8.05% -1.29% 2.37%
Ex-Jiangsu 18,096,373,558.38 4,149,570,565.76 77.07% 11.85% 16.70% -0.95%
By sales mode
Wholesale
32,052,628,760.26 7,637,998,918.20 76.17% 10.12% 7.11% 0.67%
distribution
17
Online
direct 436,807,935.79 123,634,460.40 71.70% 11.25% 47.12% -6.90%
selling
Under the circumstances that the statistical standards for the Company’s main business data adjusted in the
reporting period, the Company’s main business data in the current one year is calculated based on adjusted
statistical standards at the end of the reporting period.
□Applicable N/A
(3) Whether revenue from physical sales is higher than service revenue
Applicable □N/A
By business
Item Unit 2023 2022 YoY change
segment
Sales volume Ton 166,154.73 195,322.68 -14.93%
Production
Baijiu Ton 158,834.29 197,590.68 -19.61%
volume
Inventory volume Ton 39,176.04 46,496.48 -15.74%
Sales volume Ton 1,682.34 2,406.64 -30.10%
Production
Wine Ton 1,542.62 2,616.66 -41.05%
volume
Inventory volume Ton 699.43 839.15 -16.65%
Reasons for any over 30% YoY changes in the data above.
Applicable □N/A
The inventory of red wine increased by 30.10% year-on-year, mainly due to the decrease in demand in the red
wine market, resulting in a corresponding decline in red wine sales volume.
The Production of red wine increased by 41.05% year-on-year, mainly due to the decrease in red wine sales volume,
leading to a corresponding decline in production volume.
(4) Execution of significant sales contracts and significant purchase contracts in the reporting period
□Applicable N/A
(5) Breakdown of cost of sales
By business and product segment
Unit：CNY
2023 2022
By business As a
Item As a percentage YoY change
segment Amount Amount percentage of
of cost of sales
cost of sales
Alcoholic 7,214,917,301.
7,761,633,378.60 94.65% 94.37% 7.58%
Drinks 54
Unit：CNY
2023 2022
As a As a
By product
Item percentage percentage YoY change
segment Amount Amount
of cost of of cost of
sales sales
Alcoholic Direct
5,801,995,203.19 70.75% 5,402,139,505.20 70.66% 7.40%
Drinks materials
18
Alcoholic Direct
1,390,804,791.53 16.96% 1,240,006,256.85 16.22% 12.16%
Drinks labor
Alcoholic Fuels and
285,195,260.04 3.48% 288,774,712.57 3.78% -1.24%
Drinks energy
Manufact
Alcoholic
uring 283,638,123.84 3.46% 283,996,826.92 3.71% -0.13%
Drinks
overhead
Note: N/A
(6) Changes in the scope of the consolidated financial statements for the reporting period
Applicable □N/A
Establishment of subsidiaries
In April 2023, the company holding subsidiary, Jiangsu Yanghe Investment Management Co., Ltd., jointly invested
CNY150 million with Jiangsu Foris Agricultural Co., Ltd. to establish Jiangsu Yiguoxiang Biotechnology Co., Ltd, of
which Jiangsu Yanghe Investment Management Co., Ltd. contributed CNY112.5 million, accounting for 75% of its
registered capital; Jiangsu Foris Agricultural Co., Ltd. contributed CNY37.5 million, accounting for 25% of its
registered capital. Since April 2023, it has been included in the scope of consolidated financial statements.
(7) Major changes in the business, products or services in the reporting period
□Applicable N/A
(8) Main customers and suppliers
Sales to major customers of the Company
Total sales from top five customers（CNY） 1,852,357,097.73
Total sales from top five customers as a percentage of
5.59%
the total sales
Total sales from related parties among top five
0.00%
customers as a percentage of the total sales
Information on top five customers
As a percentage of the total sales
No. Customer Sales amount (CNY)
for the year
1 Customer A 915,681,458.18 2.76%
2 Customer B 358,988,195.66 1.08%
3 Customer C 197,172,511.25 0.60%
4 Customer D 194,165,406.52 0.59%
5 Customer E 186,349,526.12 0.56%
Total -- 1,852,357,097.73 5.59%
Other information on major customers
□Applicable N/A
Major suppliers of the Company
Total purchase from top five suppliers（CNY） 1,265,678,858.74
19
Total purchase from top five suppliers as a
16.40%
percentage of the total sales
Total purchase from related parties among top
five suppliers as a percentage of the total 0.00%
purchase
Information on top five suppliers
As a percentage of the total
No. Supplier Purchases (CNY)
purchase for the year
1 Supplier A 369,932,160.03 4.79%
2 Supplier B 279,932,095.26 3.63%
3 Supplier C 211,822,086.24 2.74%
4 Supplier D 202,101,338.44 2.62%
5 Supplier E 201,891,178.77 2.62%
Total -- 1,265,678,858.74 16.40%
Other information on major suppliers
□Applicable N/A
3. Expense
Unit：CNY
2023 2022 YoY change Reason for any significant change
Selling and
5,386,953,700.62 4,179,140,807.85 28.90%
distribution expenses
General and
administrative 1,764,423,149.06 1,935,673,295.75 -8.85%
expenses
Finance expenses -754,525,568.63 -636,470,105.91 -18.55%
R&D expenses 284,753,881.33 253,574,976.39 12.30%
The company shall comply with the disclosure requirements of food and wine manufacturing businesses in Self
Regulatory Guidelines for Listed Companies in Shenzhen Stock Exchange No. 3 - Industry Information Disclosure
The composition of selling and distribution expenses
Unit：CNY
As a percentage of As a percentage of
Current period selling and Previous period selling and
Item YoY change
amount distribution amount distribution
expenses expenses
Advertising and
promotion 3,460,573,010.51 64.24% 2,414,204,544.39 57.77% 43.34%
expense
Employee salary 1,278,306,975.33 23.73% 1,177,066,920.45 28.17% 8.60%
Travel expense 473,214,108.76 8.78% 433,273,104.21 10.37% 9.22%
Labor expense 29,938,594.80 0.56% 47,961,453.63 1.15% -37.58%
E-commerce
57,389,122.19 1.07% 33,851,096.47 0.81% 69.53%
expense
Other expense 87,531,889.03 1.62% 72,783,688.70 1.74% 20.26%
Subtotal 5,386,953,700.62 100% 4,179,140,807.85 100.00% 28.90%
20
Note:
In 2023, advertising and promotional expenses increased by 43.34% compared to the previous period. The main
reason for this is the intensified promotional efforts during the current period, leading to a corresponding increase
in promotional expenses.
In 2023, selling expenses for labor expenses decreased by 37.58% compared to the previous period. The main
reason for this is the reduction in labor employment during the current period, leading to a corresponding decrease
in labor expenses.
In 2023, e-commerce expenses increased by 69.53% compared to the previous year. This is mainly due to the
increased promotional efforts in e-commerce during the current period, resulting in a corresponding increase in
e-commerce expenses.
Composition of advertising costs:
Unit：CNY
As a percentage of advertising
Item Current period amount
expense
Nationwide advertising expense 408,298,715.85 36.73%
Regional advertising expense 703,235,967.49 63.27%
Total 1,111,534,683.34 100.00%
4. R&D input
Applicable □N/A
Name of main R & Objectives to be Expected impact on
Purpose Progress
D projects achieved future development
Analyze the natural
ecological
1. Establish the
conditions of the
natural ecological
Suqian production
and microbial
Research on the area of Chinese The milestone
profile of the
ecological baijiu, elucidate the target will be Provide support for
Suqian production
environment and environmental completed in the ecological
area for Chinese
brewing microbiota microbiota and December 2023 advantages and key
baijiu; 2. Clarify the
in the Suqian brewing microbiota and is expected to technological
structural
production area of structure, and be completed in applications of
characteristics of
Chinese baijiu expound on the June 2024. mellow baijiu.
environmental and
ecological brewing
brewing microbial
characteristics of
ecology.
mellow Chinese
baijiu.
Reveal the 1. Elucidate the The research
mechanism of post- molecular findings can
Research and consumption mechanisms provide a
application of the comfort in liquor, underlying post- theoretical
optimization of identify potential Successfully consumption foundation for the
flavor substance biomarkers for developed in reactions to baijiu design of liquor
architecture in wine quantifying December 2023. and establish bodies with high
based on improving comfort, utilize detection methods comfort and for the
post-consumption established for its biomarkers; improvement of
comfort orientation scientific analytical 2. Combine both production
methods to cellular and animal- processes.
21
determine key based methods for
factors influencing evaluating comfort
post-consumption to clarify the key
comfort in wine, influencing factors
and establish on post-
directions for wine consumption
body design. comfort of mellow
baijiu; 3. Based on
the research
findings, obtain the
optimal content
ranges of eight
major components
in mellow baijiu to
meet the dual
requirements of
taste and comfort.
1. Establish a
comprehensive
two-dimensional
gas
chromatography
combined with
time-of-flight mass
Provide key flavor
spectrometry
substance control
Clarify the method for
points to enhance
characteristics of qualitative and
Research on the Successfully product quality
complex trace quantitative
complex trace developed in from a production
flavor components analysis of multiple
components of December 2023. perspective.
in mellow raw flavor compounds
mellow raw wine.
wine. in raw liquor; 2.
Analyze the types
of flavor
compounds in
mellow raw liquor
and clarify the
flavor component
characteristics of
mellow raw liquor.
Information about R&D personnel
2023 2022 YoY change
Number of R&D personnel 632 587 7.67%
R&D personnel as a
percentage in total 3.08% 2.99% 0.09%
employees
Educational background of R & D personnel
Bachelor degree 173 155 11.61%
Master degree 60 59 1.69%
Age of R & D personnel
Under 30 58 51 13.73%
Between 30 and 40 350 343 2.04%
Information about R&D input
2023 2022 YoY change
22
R&D input (CNY) 291,491,760.35 260,555,532.15 11.87%
R&D input as a percentage
0.88% 0.87% 0.01%
in operating revenues
Capitalized R&D input
6,737,879.02 6,980,555.76 -3.48%
(CNY)
Capitalized R&D input
percentage in total R&D 2.31% 2.68% -0.37%
input
Reasons and effects of YoY change in the composition of R & D personnel.
□Applicable N/A
Reasons for any significant YoY change in the ratio of the R&D input to the operating revenues.
□Applicable N/A
Reasons for any significant YoY change in the ratio of the R&D input to the operating revenues.
□Applicable N/A
5. Cash flow
Unit：CNY
Item 2023 2022 YoY change
Subtotal of cash inflows
35,756,560,836.18 31,441,857,596.11 13.72%
from operating activities
Subtotal of cash outflows
29,626,339,968.22 27,794,233,643.92 6.59%
from operating activities
Net cash flows from
6,130,220,867.96 3,647,623,952.19 68.06%
operating activities
Subtotal of cash inflows
11,413,472,196.95 17,687,441,703.96 -35.47%
from investing activities
Subtotal of cash outflows
10,752,437,520.01 13,670,939,240.42 -21.35%
from investing activities
Net cash flows from
661,034,676.94 4,016,502,463.54 -83.54%
investing activities
Subtotal of cash inflows
57,000,000.00 42,800,000.00 33.18%
from financing activities
Subtotal of cash outflows
5,665,338,295.46 4,534,576,978.60 24.94%
from financing activities
Net cash flows from
-5,608,338,295.46 -4,491,776,978.60 -24.86%
financing activities
Net increase in cash and
1,182,007,012.68 3,172,012,990.35 -62.74%
cash equivalents
Explanation of why the data above varied significantly.
Applicable □N/A
(1)The net cash flow generated from operating activities increased by 68.06% compared to the same period last
year, mainly due to the growth in operating revenue and an increase in cash received from selling goods and
providing services.
(2)The net cash flow generated from investing activities decreased by 83.54% compared to the same period last
year, primarily because this period's changes in structured bank deposits resulted in a decrease in cash received
from investment returns greater than the decrease in cash paid for investments, leading to a reduction in the net
cash flow generated from investing activities.
23
(3)The net increase in cash and cash equivalents decreased by 62.74% compared to the same period last year,
mainly due to the decrease in net cash flow generated from investing activities and financing activities during this
period.
An explanation of the reasons for the significant difference between the net cash flow generated by the Company's
operating activities and the net profit for the year during the reporting period
Applicable □N/A
The significant difference between net cash flow and net profit from operating activities was mainly due to the
reduction in contractual liabilities, resulting in a significant reduction in operating payables.
V. Analysis of non-core business
Applicable □N/A
Unit：CNY
As a percentage
Amount Reasons Sustainability
of total profits
It is mainly the wealth
management income
Investment and the investment
255,520,777.61 1.93% No
income income of trading
financial assets during
the holding period
Mainly due to changes
Changes in fair
-37,082,477.77 -0.28% in fair value of financial No
value
assets held for trading
Asset Provision for stock
-2,828,018.24 -0.02% No
impairment obsolescence
compensation and
Non-operating
39,176,788.83 0.30% liquidated damages No
income
income
Mainly due to donation
Non-operating expenses and losses
63,913,298.25 0.48% No
expenses from retirement of fixed
assets
VI. Analysis of assets and liabilities
1. Significant changes of asset items
Unit：CNY
As at the end of 2023 As at the beginning of 2023
As a As a Change
percen percenta In Explanation about any
Amount tage of Amount ge of percenta significant changes
total total ge
assets assets
Cash and cash
25,812,787,646.86 36.99% 24,375,449,432.33 35.86% 1.13%
equivalents
24
Accounts
3,528,778.28 0.01% 45,142,892.78 0.07% -0.06%
receivable
Inventories 18,954,235,402.25 27.16% 17,729,258,966.54 26.08% 1.08%
Long-term
equity 1,229,838,793.04 1.76% 32,979,630.21 0.05% 1.71%
investments
Fixed assets 5,305,626,964.48 7.60% 5,794,773,069.53 8.53% -0.93%
Construction in
1,457,315,739.56 2.09% 757,145,492.90 1.11% 0.98%
progress
Right-of-use
82,464,551.16 0.12% 34,115,602.27 0.05% 0.07%
asset
Contract
11,104,763,487.18 15.91% 13,741,547,677.99 20.22% -4.31%
liabilities
Lease
48,709,685.88 0.07% 3,715,300.93 0.01% 0.06%
Liabilities
The proportion of overseas assets is relatively high.
□Applicable N/A
2. Assets and liabilities measured at fair value
Applicable □ N/A
Unit：CNY
Changes in
Changes in
the
fair value Amount
Opening cumulative Provision for Amount of Other Closing
Item recognized of
balance fair value impairment sale changes balance
in profit or purchase
recorded
loss
into equity
Financial
Assets
1. Financial
assets held
for trading
7,998,150,1 70,387,868. 8,300,000 10,817,363, 300,043,3 5,851,217,
(excluding
19.16 71 ,000.00 636.27 33.33 684.93
derivative
financial
assets)
5. Other
- -
non-current 6,148,634,1 142,788,0 351,644,91 5,532,792,
107,470,34 299,514,6
financial 60.78 34.84 0.98 281.26
6.48 56.90
assets
-
14,146,784, 8,442,788 11,169,008, 528,676.4 11,384,00
Total 37,082,477.
279.94 ,034.84 547.25 3 9,966.19
77
Financial
0.00 0.00 0.00 0.00 0.00 0.00
liabilities
Other changes
Other changes result from the reclassification of investments in debt instruments maturing within one year and
from changes in exchange rates at the beginning and end of the period.
Whether measurement attribution of main assets changed significantly during this period
25
□Applicable N/A
3. Restricted asset rights as of the end of this reporting period
No
VII. Investment
1. Total investment
Applicable □N/A
Investment made in the reporting Investment made in the prior year
YoY change
period (CNY) (CNY)
1,340,808,034.84 431,849,941.95 210.48%
2. Significant equity investment made in the reporting period
□Applicable N/A
3. Significant non-equity investment ongoing in the reporting period
□Applicable N/A
4. Investment in financial assets
(1) Securities investment
Applicable □ N/A
Unit：CNY
26
Changes
in the
Accoun Changes in Profit and
cumulati
Initial ting fair value loss during
Category of Stock Abbr. of Opening ve fair Amount of Amount of Closing Accounting Capital
investment measur recognized the
securities code securities balance value purchase sale balance subject source
cost ement in profit or reporting
recorded
model loss period
into
equity
Shanghai Yunfeng
Other Non-
Xincheng 1,148,364,120.1 Fair 1,148,364,120.1current Owned
Other Nil
Investment 0 value
1,176,435,004.02 28,070,883.92
0financial Fund
Center (L.P.)
assets
Other Non-
Domestic and BOCI Securities Fair current Owned
601696 300,000,000.00 834,473,679.76 -21,315,789.36 2,368,421.04 813,157,890.40
foreign stocks LLC value financial Fund
assets
Pan Mao
Other Non-
(Shanghai) Fair current Owned
Other Nil
Investment
239,079,277.82
value
394,673,570.21 66,745,413.84 37,106,098.40 12,585,627.60 424,312,885.65
financial Fund
Center (L.P.)
assets
Other Non-
Lianchu Reserve current Owned
Fair
Other Nil Securities Co., 330,000,000.00
value
330,000,000.00 330,000,000.00
Ltd. financial Fund
assets
Nanjing Xingnahai Other Non-
Equity Investment current Owned
Fair
Other Nil Partnership 224,757,000.00
value
195,000,000.00 37,889,298.52 30,000,000.00 243,000.00 262,646,298.52
(Limited financial Fund
Partnership) assets
Xiamen Yuanfeng
Ronghao Equity
Other Non-
Investment Fair current Owned
Other Nil
Partnership
193,050,000.00
value
195,000,000.00 31,437,985.30 1,950,000.00 224,487,985.30
financial Fund
(Limited
Partnership) assets
Domestic and Fair Other Non- Owned
VSPT Vina San Pedro 425,350,132.53 239,696,497.43 -18,637,218.05 16,136,323.97 221,059,279.38
foreign stocks value current Fund
27
financial
assets
Nanjing Xingnahe Other Non-
Venture Capital current Owned
Fair
Other Nil Partnership 196,627,500.00 205,027,500.00 8,400,000.00 196,627,500.00
(Limited value financial Fund
Partnership) assets
CICC Jiatai Phase
Other Non-
II (Tianjin) Equity Fair current Owned
Other Nil
Investment Fund
83,434,547.36 200,540,521.74 16,160,467.66 35,661,760.03 181,039,229.37
value financial Fund
Partnership (L.P.)
assets
Suzhou Danqing
Phase II Other Non-
Innovative current Owned
Fair
Other Nil Pharmaceutical 125,319,931.28 240,107,883.10 -22,330,777.80 48,390,886.89 169,386,218.41
Industry value financial Fund
Investment assets
Partnership (L.P.)
Other securities investments held at the end of this 1,903,644,962.9 2,034,999,807.46 -97,419,726.60 0.00 112,788,034.84 309,185,918.01 12,055,398.13 1,741,710,874.1
period 3
--
2
-- --
5,169,627,472.0 6,045,954,463.72 -7,470,346.49 0.00 142,788,034.84 469,008,547.25 43,145,770.74 5,712,792,281.2
Total
2
--
5
-- --
(2) Derivative investments
□Applicable N/A
28
No such cases in the reporting period.
5. Use of fund-raising
□Applicable N/A
No such cases in the reporting period.
VIII. Sale of major assets and equity Interests
1. Sale of major Assets
□Applicable N/A
No such cases in the reporting period
2. Sale of major equity Interests.
□Applicable N/A
IX. Analysis of major subsidiaries
Applicable □N/A
Main subsidiaries and joint companies with an over 10% influence on the Company’s net profit
Unit：CNY
Company Company Business Registered Operating Operating
Total assets Net assets Net profit
name type scope capital revenue profit
Su Wine Wholesalin
Trade g and
Group Subsidiary retailing of 334,400,000.00 25,483,714,205.27 6,601,644,703.87 28,560,606,603.28 7,313,364,021.46 5,632,238,706.79
Limited by prepackage
Share Ltd. d food
Jiangsu
Shuanggou Production
Distillery Subsidiary and sales 110,000,000.00 13,389,359,000.79 8,265,957,460.78 3,823,391,484.27 2,656,776,116.32 2,614,827,783.54
Stock Co., of Baijiu
Ltd.
Jiangsu Wholesalin
Shuanggou g and
Liquor Subsidiary retailing of 5,000,000.00 6,039,550,762.97 1,064,998,054.56 6,059,469,253.21 1,402,481,745.38 1,051,906,426.35
Operation prepackage
Co., Ltd. d food
Acquisition and disposal of subsidiaries during the reporting period
Applicable □ N/A
How subsidiary was acquired or
Impact on overall operation and
Subsidiary name disposed during the reporting
results
period
Jiangsu Yiguoxiang Biotechnology
Establishment minor
Co., Ltd
29
X. Structured entities controlled by the Company
□Applicable N/A
XI. Outlook for the future development of the Company
(1) Industry situation analysis
According to data from the National Bureau of Statistics and the China Alcoholic Drinks Association, in 2023, the
output of liquor by enterprises above designated size nationwide was 4.492 million kiloliters, a year-on-year
decrease of 2.8%; achieving operating revenue of CNY756.3 billion, a year-on-year increase of 9.7%; and achieving
a total profit before tax of CNY232.8 billion, a year-on-year increase of 7.5%. The liquor market presented a clear
trend of "strong differentiation, weak recovery". The pattern of structural growth and stock competition turned
more apparent, and leading brands and famous liquor companies accelerated market share gains. Liquor
companies with strong "brand power, product power" will enjoy more consumption upgrade benefits.
(2) The company's development strategy and business plan
a) Development strategy
During the "14th Five-Year Plan" period, the company adheres to the consumer-centered growth route, with
double-famous baijiu brands as the main body and multi-brand as the pillar, focuses on quality, brands, culture
and innovation, and builds the "12345" strategic system, making Yanghe brand as the leading force and Shuanggou
brand as the surging power. The company aims to promote the continuous growth of the quantity and the steady
improvement of the quality to a higher level, to achieve better, more balanced, higher quality and more efficient
development, leading Yanghe to become a Chinese taste that Chinese are proud of and a Chinese business card
that is remembered by the world.
b) Business plan for 2024
In 2024, The company will adhere to the development principle of "seeking progress while maintaining stability"
and firmly follow the development direction of "dual famous liquors, multiple brands, and multiple categories".
This will promote sustainable and high-quality development for the enterprise, striving for a year-on-year growth
in operating revenue of 5% to 10%. The main areas of focus include:
Focusing on strengthening brand momentum. Centered around the goals of "value enhancement" and "word of
mouth improvement", the company aims to enrich the differentiated brand connotations and build a
comprehensive brand construction system. The company will reinforce the shaping of high-end brands through
craftsmanship, emphasizing value, scarcity, and experiential aspects. Leveraging cultural marketing IPs and major
events, the company aims to establish benchmarks for high-end liquor brands. Exploring diverse brand
communication methods, the company will continue to excel in promoting the "Ocean Blue, Sky Blue, Dream Blue"
brand, ensuring precise outreach to key consumer groups. This will make the brand more vibrant and dynamic,
further enhancing its momentum and competitiveness.
Focusing on boosting sales volume. Centered around the goal of "deepening roots in home markets and expanding
nationwide", the company aims to concentrate on home markets high-potential markets outside of Jiangsu and
key regional markets. The company will drive channel penetration, fine-tune operations and squeeze out more
market share. Leveraging digital marketing tools, the company will focus on strategic flagship products such as
30
Ocean Blue, Sky Blue, Dream Blue, and Top Rank Su Liquor, adopt more tailored sales strategies, and further
upgrade the product mix. The company plans to actively advance the construction of terminal product promotion
systems, effectively enhance terminal operation efficiency, continuously strengthen manufacturer integration, and
adhere to a healthy and sustainable development approach, including a strong focus on improving market input
efficiency and management standards.
Focusing on enhancing product quality. Centered around the goal of "genuine soft, softer, and softest", the
company will emphasize the core positioning of basic research and applied basic research, and focus on key
technological research topics and applications. This will strengthen the optimization of crucial brewing processes
and further forge higher-quality base raw liquor. The company will deepen the new model of comprehensive
quality management, adhere to the principle of "balance between production and utilization", and increase
reserves of high-end resources. These will enable the company to create more personalized and distinctive quality
characteristics for Yanghe Mianrou, enriching the Mianrou system and enhancing the value expression of Mianrou
products.
Focusing on improving management efficiency. Centered around the overall requirements of "strengthening
management, improving efficiency, optimizing services, ensuring safety, and promoting development", we will
establish a work orientation of "striving for excellence in basic work, achieving results through value creation, and
striving for excellence in contribution". This involves solidifying the management foundation, accelerating
management innovation, adhering to the principle of efficient investment to promote cost reduction and efficiency
improvement, and consistently seeking benefits from management. Focusing on the top-level planning of "Smart
Yanghe", we will emphasize amplifying the effects of "intelligence transformation and digitalization". This includes
deeply constructing a smart supply chain system that is "autonomous, controllable, safe, efficient, agile, and
flexible", supported by digital operations. Yanghe targets to accelerate the construction and promotion of smart
energy management platforms to achieve precise energy data collection and continuous reduction of energy
consumption. Additionally, we aim to further optimize the construction of green supply chain management
systems, setting a new example for low-carbon development in the liquor industry. We plan to accelerate the
transformation of risk control towards proactive prevention and strive to achieve first-class safety standardization
for the enterprise.
(3) Possible risks
a) Macro-economic uncertainty risks. Although the overall economic recovery in China is positive, there still exists
pressure on demand. The consumption of Baijiu is easily influenced by economic fluctuations, bringing significant
uncertainty to the development of the Baijiu industry.
b) The risk of intensifying market competition. The Baijiu industry is entering a phase of accelerated competition,
with fierce competition among regions, enterprises, and brands. The Matthew effect in the Baijiu industry is
becoming more pronounced, placing higher demands on the market operation capabilities of liquor enterprises.
c) Risks of market demand changes. There have been significant changes in the size and structure of the main
consumer groups of Baijiu, as well as in their consumption preferences and philosophies. This poses new
requirements for enterprises in terms of product layout, brand marketing, and business concepts.
XII. Visits paid to the Company for research, communication, interview,
etc. during the reporting period.
31
Applicable □N/A
The main
contents of
the Index to
Reception Type of
Date of visit Way of visit Visitor discussion main inquiry
site visitor
and the information
information
provided
Investors Yanghe Share
who The Performance
participated company's Presentation
in the online production, Roadshow
Panorama.co
2023-05-18 Other Other briefing on marketing, Information
m
the management on 22 May
company's , finance, 2023 on
2022 annual strategy, etc www.cninfo.c
results om.cn
The
Shareholders
company's
and investors
business Yanghe Share
who
planning, Survery
participated
quality Activities
in the on-site
improvement Information
2023-05-31 Headquarter Field survey Other communicati
, sales on 02 Jun
on of the
situation, 2023 on
company's
product www.cninfo.c
2022 annual
strategy, om.cn
general
brand
meeting
planning, etc
The
company’s
200 investors market sales
Yanghe Share
from Guosen situation,
Survery
Securities, product
Activities
Telephone HSBC Qianhai planning,
Telephone Information
2023-08-30 communicati Institution Securities, financial
conference on 01 Sep
on Zheshang issues, layout
2023 on
Securities, of key work
www.cninfo.c
CITIC for the
om.cn
Securities,etc second half
of the year,
etc
XIII Implementation status of the 'Quality Improvement and Dual
Enhancement' action plan
Whether the company disclosed the 'Quality Improvement and Dual Enhancement' action plan
Yes □No
To embody the development concept of 'investors first' for listed companies, continuously enhance the company's
value creation capability and shareholder return capability, the company has formulated and disclosed the 'Quality
32
Improvement and Dual Enhancement' action plan. For specific details, please refer to the announcement titled
'Announcement on the 'Quality Improvement and Dual Enhancement' Action Plan' disclosed by the company on
March 7, 2024, on the Juchao Information Network (www.cninfo.com.cn) (Announcement No.: 2024-002).
The company will continue to strengthen its core business, always focus on consumer demand, grasp industry
trends, and promote the stable and far-reaching development path of high-quality enterprises. We will
continuously consolidate the foundation of standardized governance, including optimizing the board of directors'
structure, improving internal control management systems, and expanding channels for institutional investors to
participate in corporate governance, to continuously enhance governance capabilities. We will strengthen investor
relations management, highlight the importance and relevance of information disclosure, improve communication
efficiency with investors through multiple channels, and deepen investors' understanding of the company's value.
We will continuously strengthen investor returns and dynamically balance performance growth with shareholder
returns.
To further share the fruits of corporate development with investors, the company's proposed annual profit
distribution plan for 2023 is as follows: Based on the existing total share capital of 1,506,445,074 shares, the
company plans to distribute a cash dividend of CNY46.60 per 10 shares to all shareholders from undistributed
profits, totaling CNY7,020,034,044.84 (including tax), without bonus shares or bonus shares. The profit distribution
plan complies with the cash dividend policy stipulated in the Company's Articles of Association.
33
Section IV CORPORATE GOVERNANCE
I. Basic Situation of Corporate Governance
The company has strictly been following the "Company Law", "Securities Law", "Governance Guidelines for Listed
Companies", "Shenzhen Stock Exchange Listing Rules" and other laws, administrative regulations, departmental
rules and normative documents. Combining the actual development of the company, the company constantly has
improved its modern enterprise system and corporate governance structure. During the reporting period, the
overall operation of the company was standardized and complied line with the governance requirements of listed
companies.
1. Shareholders and shareholders’ meetings
The responsibilities of the company's general meeting of shareholders were clear, with accurate rules of procedure
and practical implementation. The calling, convening and deliberation procedures of the company's general
meeting of shareholders complied with the relevant provisions of the Company Law, the Articles of Association
and the Rules of Procedure for the General Meeting of Shareholders of the Company. All shareholders were treated
equally, especially to ensure that small and medium shareholders enjoy equal status and ensure that small and
medium shareholders can sufficiently exercise its own rights. The board of directors of the company earnestly has
implemented the resolutions of the general meeting of shareholders.
2. Directors and Board of directors
The responsibilities of the board of directors of the company were clear, and all directors could perform their duties
conscientiously. The board of directors of the company elected directors in strict accordance with the selection
and appointment procedures stipulated in the Company Law and the Articles of Association. The board of directors
of the company currently consisted of 11 directors, 4 of which were independent directors. The composition of
the board of directors conformed to the requirements of laws and regulations. The board of directors of the
company strictly complied with the "Company Law", "Articles of Association" and other relevant regulations to
regulate the deliberation and operation of the board of directors. All directors of the company could attend the
board of directors in accordance with the "Procedure Rules of the Board of Directors", "Working System for
Independent Directors" and other regulations, diligently and conscientiously reviewed each case, making scientific
and reasonable decisions on major issues of the company, and earnestly safeguarding the interests of the company
and the legitimate rights and interests of all shareholders. The company's board of directors consisted of four
professional committees, namely the strategy committee, the nomination committee, the audit committee and
the remuneration and appraisal committee. Each committee had a clear division of labor, powers and
responsibilities, and gived full play to its professional functions, providing scientific and professional opinion for
the decision-making of the board of directors.
3. Supervisors and Board of Supervisors
The company's board of supervisors has clear responsibilities, and all supervisors can conscientiously and
responsibly perform their duties. The board of Supervisors of the company election was in strict accordance with
the recruitment procedures stipulated in the Company Law and the Articles of Association and etc. The board of
supervisors of the company was composed of 5 supervisors, among which 2 are employees' representatives. The
composition of the members of the board of supervisors meeted the requirements of laws and regulations. The
34
board of supervisors operated in strict accordance with the company law, the company's articles and other
regulations, the supervisors could attend the board requested by the rules of procedure of the board of supervisors,
earnestly performed their duties, effectively supervising and expressing opinions on the major issues of the
company, financial status, and how the directors and President perform. Safeguarding the legitimate rights and
interests of the company and shareholders was also the duty of the board of supervisors.
4. Performance appraisal and incentive and restraint mechanism
The appointment of the company's directors, supervisors and senior management personnel was open and
transparent, in line with relevant laws and regulations, and a fair and transparent management performance
evaluation standard and incentive and restraint mechanism have been established. During the reporting period,
the company conducted a performance appraisal on the goals set by the executive suites in accordance with the
annual business plan, and all the executive suites have conscientiously performed their duties.
5. Performance appraisal and incentive and restraint mechanism
The controlling shareholder of the company exercised the rights of the investor and took the obligations in strict
accordance with the requirements of the Company Law. The company and the controlling shareholder separated
personnel, assets and finances, with independent organization and business, accounting independently and taking
responsibilities and risks independently. During the reporting period, the controlling shareholder did not directly
or indirectly interfere with the company's decision-making and business activities beyond the company's general
meeting of shareholders, and there was no situation where the controlling shareholder harmed the legitimate
rights and interests of other shareholders of the company. There was no major related transaction between the
company and its controlling shareholder, there was no phenomenon that the controlling shareholder occupies the
funds of the company, and the company did not provide guarantees for the controlling shareholder and its
subsidiaries.
6. Investor relations activities
The company payed great attention to the management of investor relations and actively safeguarded the
legitimate rights and interest of the company's shareholders. In addition to performing information disclosure
obligations diligently and honestly, the chairman, president and secretary of the board of directors maintained
positive interactions with investors by receiving investor surveys, participating in online performance briefings and
brokerage strategy meetings, etc. The securities department acting as a specialized relationship management
agency, strengthened communication with investors through telephone, email, interactive and other methods,
fully guaranteeing the investors' right to know, and safeguarding their legitimate rights and interests.
7. Stakeholders, environmental protection, social responsibility
The company fulfilled its social responsibility obligations in accordance with the requirements of social
responsibility, fully respected and safeguardd the legitimate rights and interests of relevant stakeholders, realized
the coordination and balance of the interests of the society, government, shareholders, the company, employees
and other parties, and jointly promoted the harmonious and stable development of the company. The company
advocated the governance concept of ‘green brewing, ecological enterprise’, integrates ecological and
environmental protection requirements into the company's development strategy and corporate governance
process. While maintaining the sustainable development, the company actively participated in social welfare
undertakings and practices social responsibility.
35
8. Information disclosure and transparency
In strict accordance with the requirements of the regulatory authorities, the company earnestly implemented
the "Information Disclosure Management System", "Investor Relations Management System" and others,
strengthened the management of information disclosure affairs, and earnestly fulfilled its information disclosure
obligations in accordance with the law, and discloses truthfully, accurately, completely, timely and fairly.
information, ensuring that all shareholders have equal access to information.
9 Continue to improve the internal management system
The company continued to improve the internal control system, further strengthen corporate governance, so
that the level of corporate governance has been further improved. The audit committee of the company
comprehensively reviewed and supervised the effectiveness of the company's financial reporting, internal control
and corporate governance. As an internal audit unit, the company's audit center conductd routine and continuous
supervision and inspection for the improvement and implementation of the internal control system, timely
discoverd and improved the deficiencies of internal control, ensured the effectiveness of internal control, and
improved the company's operation and management level and risk prevention ability.
Is the actual situation of corporate governance significantly different from laws, administrative regulations and
regulations on listed company governance issued by the CSRC？
□ Yes √ No
The actual situation of corporate governance is not significantly different from laws, administrative regulations
and regulations on listed company governance issued by the CSRC.
II Company’s Independence in Assets, Personnel, Finances, Organizations and Businesses from
Controlling Shareholders and Actual Controller
The company has a complete independent production and management system, and independent decision-
making management ability, covering business, personnel, assets, organizations and finance five aspects.
1. For business aspect
The company's business structure is independent and complete, with the ability to independently face the market
and operate independently. There is no horizontal competition with the controlling shareholder, and the
controlling shareholder does not directly or indirectly interfere with the company's operations.
2. For personnel aspect
The company has established an independent personnel and wage management system, and signed a "labor
contract" with employees. The chairman, president, vice president, chief financial officer and secretary of the
board of directors of the company receive remuneration from the company, but do not receive remuneration from
the controlling shareholder. The directors, supervisors and senior management of the company do not hold
positions prohibited by laws and regulations in other companies with the same or similar business as the company.
3. For assets aspect
The company has a clear property relationship with the controlling shareholder, has independent land use rights
and housing property rights, and independently registers, builds accounts, accounts and manages company assets.
36
The controlling shareholder has not occupied or dominated the company's assets or interfered with the company's
operation and management of the assets.
4. For organization aspect
The company has a mature organizational system. The general meeting of shareholders, the board of directors,
the board of supervisors, the management and each functional department operate independently, and a
corresponding internal management and control system has been formulated, so that the division of labor among
each department is clear, and each department performs its own duties. The cooperation with each other forms
an organic whole, which ensures the legal operation of the company, and there is no subordination relationship
with the controlling shareholder's functional department.
5. For finance aspect
The company has a complete and independent financial institution, equipped with sufficient full-time financial
accounting personnel, established an independent accounting system and financial management system, and
independently opened bank accounts, paid taxes, and made financial decisions independently. The controlling
shareholder does not intervene in the financial management of the company.
III. Competition in the same industry
□Applicable N/A
IV. Annual general meeting and extraordinary general meeting held during the reporting
period
1. Shareholders' general meeting during the reporting period
Investor
Which Session Type Open Date Disclose Date Meeting Outcome
Participation Ratio
For details, please
refer to the
"Announcement
on Resolutions of
the 2022 Annual
Annual
2022Annual General Meeting
General
General of Shareholders"
Meeting of 76.67% May 31, 2023 June 1, 2023
Meeting of disclosed by the
Shareholde
Shareholders company in the
rs
statutory
information
disclosure media
(Announcement
No.: 2023-013)
For details, please
2023 1st Extraordin
refer to the
Extraordinary ary general
September September "Announcement
General meeting of 66.23%
15,2023 16,2023 on Resolutions of
Meeting of Shareholde
the 2023 1st
Shareholders rs
Extraordinary
37
General Meeting
of Shareholders "
disclosed by the
company in the
statutory
information
disclosure media
(Announcement
No.: 2023-023)
2. Preference shareholders with restored voting rights request to convene an extraordinary general meeting
□Applicable N/A
38
V. Directors, Supervisors and Senior Managers
1. Basic situation
39
Number of Number
Number of Number of Other
shares of shares
Shares Shares Increase
held at the held at
Ag Service Term Start Term increased in decreased or
Name Gender Position beginning the end Reasons
e status Date End Date current in current decrease
of the of the
period period changes
period period
(Shares) (Shares) (shares)
(shares) (shares)
Zhang February April 02,
Male 56 Chairman Incumbent 0 0 0 0 0
Liandong 23, 2021 2027
Vice
February April 02,
Zhong Yu Male 60 Chairman, Incumbent 0 0 0 0 0
10, 2015 2027
President
Yang May 30, April 02,
Male 50 Director Incumbent 0 0 0 0 0
Weiguo 2022 2027
May 19, April 02,
Wang Kai Male 47 Director Incumbent 2,400 0 0 0 2,400
2017 2027
Director,
April 02, April 02,
Chen Jun Male 48 Vice Incumbent 0 0 0 0 0
2024 2027
President
40
Zheng February April
Male 57 Director Incumbent 45,000 0 0 0 45,000
Bujun 10,2015 02, 2027
Dai April 02, April
Male 53 Director Incumbent 0 0 0 0 0
Jianbing 2024 02, 2027
Independe February April
Nie Yao Male 47 Incumbent 0 0 0 0 0
nt Director 23, 2021 02, 2027
Independe February April
Lu Guoping Male 64 Incumbent 0 0 0 0 0
nt Director 23, 2021 02, 2027
Mao Independe February April
Male 60 Incumbent 0 0 0 0 0
Lingxiao nt Director 23, 2021 02, 2027
Hong Independe April 02, April
Male 43 Incumbent 0 0 0 0 0
Jinming nt Director 2024 02, 2027
Independe April 02, April
Lin Qing Female 49 Incumbent 0 0 0 0 0
nt Director 2024 02, 2027
Xu May 23, April
Male 47 Supervisor Incumbent 0 0 0 0 0
Youheng 2019 02, 2027
41
Ma April 02, April
Male 47 Supervisor Incumbent 0 0 0 0 0
Wenxiang 2024 02, 2027
April 02, April
Jin Yaguang Male 48 Supervisor Incumbent 0 0 0 0 0
2024 02, 2027
Huang April 02, April
Male 54 Supervisor Incumbent 0 0 0 0 0
Jinhua 2024 02, 2027
Vice
Yin July 13, April
Male 52 President, Incumbent 0 0 0 0 0
Qiuming 2020 02, 2027
CFO
Vice July 13, April
Li Yuling Male 54 Incumbent 0 0 0 0 0
President 2020 02, 2027
Vice November April
Fan Xiaolu Male 40 Incumbent 0 0 0 0 0
President 10,2023 02, 2027
Chen Vice November April
Male 56 Incumbent 0 0 0 0 0
Taisong President 10,2023 02, 2027
Zhang Vice November April
Male 55 Incumbent 0 0 0 0 0
Xueqian President 10,2023 02, 2027
42
Song Vice November April
Female 49 Incumbent 0 0 0 0 0
Zhimin President 10,2023 02, 2027
Lu Board February April
Female 45 Incumbent 0 0 0 0 0
Hongzhen Secretary 23, 2021 02, 2027
Director,
Liu Leaving January 29, February
Male 54 Executive 0 0 0 0 0
Huashuang office 2018 24, 2023
President
Zhao Independe Leaving February April
Male 72 0 0 0 0 0
Shuming nt Director office 23, 2021 02, 2024
Chairman
Chen of the Leaving July 13, April
Male 59 0 0 0 0 0
Taiqing Supervisor office 2020 02, 2024
y Board
Leaving February April
Xu Lili Female 45 Supervisor 0 0 0 0 0
office 23, 2021 02, 2024
Leaving July 6, April
Chen Fuya Male 59 Supervisor 0 0 0 0 0
office 2020 02, 2024
Total -- -- -- -- -- -- 47,400 0 0 0 47,400 --
43
During the reporting period, is there any resignation of directors and supervisors and dismissal of senior managers during their term of office？
44
Applicable □N/A
During the reporting period, Mr. Liu Huashuang resigned from the positions of director and Executive President
due to personal reasons; Mr. Chen Taisong resigned from the position of supervisor due to job adjustments; Ms.
Lin Qing and Mr. Zheng Bujun resigned from the positions of vice president due to job adjustments.
Changes in directors, supervisors and senior management of the company
Applicable □N/A
Name Position Type Date Reasons
Liu Huashuang Director, Executive Voluntary
Leaving office February 24, 2023
President resignation
Job adjustment,
Appointments and appointed as Vice
Chen Taisong Supervisor November 06, 2023
resignations President on
November 10, 2023
Job adjustment,
elected as
Appointments and Chairman of the
Lin Qing Vice President November 09, 2023
resignations Supervisory Board
in the election on
April 2, 2024
Job adjustment,
elected as a
Appointments and director in the
Zheng Bujun Vice President November 09, 2023
resignations election during the
handover on April
2, 2024
Fan Xiaolu Vice President Appointment November 10, 2023 Appointment
Chen Taisong Vice President Appointment November 10, 2023 Appointment
Zhang Xueqian Vice President Appointment November 10, 2023 Appointment
Song Zhimin Vice President Appointment November 10, 2023 Appointment
2. Situation of Employers
The professional background, main work experience and main responsibilities of the current directors, supervisors
and senior management of the company
(1) Directors
Mr. Zhang Liandong, born in September 1968, master degree from the Party School, deputy to the National
People's Congress. He successively served as director of the Management Committee of Sucheng District Economic
Development Zone, Deputy Director of the Sucheng District, member of the Standing Committee of the Sucheng
District Committee, secretary of the Party Working Committee of Sucheng Economic Development Zone, deputy
secretary-general of the Suqian Municipal Government, director of the Suqian City Administration Bureau, deputy
secretary-general of Suqian Municipal Government (section level), secretary of the Party and Working Committee
of Suqian City's Yanghe New District, chairman of Jiangsu Shuanggou Wine Co., Ltd., chairman of Sujiu Group
Trading Co., Ltd. He is currently the company’s the Party secretary and chairman of the board of directors.
Mr. Zhong Yu, born in May 1964, master degree, Chinese Brewmaster, a master of Chinese liquor, a senior engineer,
and a representative of the 13th and the 14th Jiangsu Provincial People's Congress. He successively served as the
director of the technical department, the director of the environmental protection department, director of the
45
Production Technology Division and minister of the Production Technology Department, and the director of the
technology center of Jiangsu Shuanggou Winery; the deputy chief engineer, assistant to the general manager,
brewing director, assistant to the president, vice president, general manager of Siyang Co., Ltd. ; general manager
of Yanghe Co., Ltd. He is currently the deputy secretary of the party committee, vice chairman and president of
the company.
Mr. Yang Weiguo, born in February 1974, bachelor degree and master degree. He has served as Standing
Committee member of Siyang County Party Committee, Minister of Publicity Department, member of Party
Leading Group of County government, deputy county head, deputy secretary-general of Suqian Municipal Party
Committee, deputy director of Suqian Reform Office, Party Secretary and President of Suqian Daily. He is currently
secretary of the party committee and chairman of Suqian Industrial Development Group Co., LTD., chairman of
Jiangsu Yanghe Group Co., LTD., and chairman of Jiangsu Shuanggou Group Co., LTD.
Mr. Wang Kai, born in August 1977, bachelor degree, intermediate economist. He has served as the manager of
the brand department of the Marketing Center of Shanghai Tobacco Group Co., Ltd., and the assistant to the
general manager of Shanghai Haiyan Logistics Development Co., Ltd. He is currently the director of the company
and the deputy general manager of Shanghai Haiyan Logistics Development Co., Ltd.
Mr. Chen Jun, born in January 1976, is a graduate of the Party School with a master's degree and holds the title
of Senior Economist. He has served in various positions, including Deputy Director of the Accounting and
Accounting Center of Suqian Finance Bureau, Vice President (Deputy Department-level) of the Chinese
Accounting Correspondence College Suqian Branch, Director and Deputy Director of the Financial Work Office of
Suqian Municipal People's Government, Member of the Party Working Committee and Deputy Director (on
secondment) of the Management Committee of Suqian Economic and Technological Development Zone, Deputy
Secretary of the Party Working Committee, Deputy Secretary of the Party Committee, and Deputy General
Manager of Suqian Industrial Development Group Co., Ltd. He is also a director of Jiangsu Yanghe Group Co., Ltd.
Currently, he serves as the Deputy Secretary of the Party Committee, Director, and Vice President of the
company, as well as the Chairman of Sujiu Group Trading Co., Ltd.
Mr. Zheng Bujun, born in January 1967, holds an MBA degree and the title of Senior Engineer. He has served as
the General Manager of Jiangsu Yanghe Group Co., Ltd., General Manager of Suqian State-owned Assets
Investment Management Co., Ltd., member of the Party Committee, director, and Deputy General Manager of
Jiangsu Shuanggou Liquor Co., Ltd., as well as the Director of the company. He has also held positions within the
company including Director of Procurement and Logistics, President's Assistant, member of the Party Committee,
and Vice President. Currently, he is a member of the Party Committee and Director of the company, as well as
the Party Secretary and General Manager of the company's Siyang Branch.
Mr. Dai Jianbing, born in September 1971, holds an associate degree. He has served in various positions,
including Deputy Director of the Office of Jiangsu Yanghe Group Co., Ltd., Manager of the Suqian, Zhenjiang, and
Suzhou Branches of Yanghe Sales Company, Deputy General Manager and General Manager of the East China
Marketing Center of Sujiu Group Trading Co., Ltd., Sales Director and General Manager of Jiangxi Region and
Southern Jiangsu Region, as well as Vice General Manager and General Manager of Shandong Region. Currently,
he serves as a director of the company and Vice General Manager and General Manager of the Huan Su Region
of Sujiu Group Trading Co., Ltd.
Mr. Nie Yao, born in June 1977. He has served as a visiting scholar at the Advanced Biotechnology and Medical
46
Center of Rutgers University (State University of New Jersey), an associate professor at the School of
Bioengineering, Jiangnan University, and an independent director of Jinhui Liquor Co., Ltd. He is currently an
independent director of the company, subdean and professor of the School of Bioengineering, Jiangnan University.
Mr. Lu Guoping, born in March 1960, bachelor degree, professor of accounting, CPA outstanding educator in
Jiangsu Province. He has successively served as lecturer, associate professor, director of teaching and research
section of the School of Engineering of Nanjing Agricultural University, and independent director of Langbo Sealing
Technology Co., Ltd., Huaxin New Materials Co., Ltd. Currently he is the independent director of Yanghe Brewery,
the deputy dean, professor and master tutor of the National Wealth Auditing College of Nanjing Audit University,
the person in charge of the national excellent online open course "Advanced Financial Accounting" and the
national first-class Head of the undergraduate course "Advanced Financial Accounting", director of Langbo Sealing
Technology Co., Ltd, independent director of Baosheng Technology Innovation Co. , Ltd. and Suzhou Lianxun
Instrument Co. , Ltd.
Mr. Mao Lingxiao, born in January 1964, bachelor’s degree, first-class lawyer (Senior professional title). He has
served as a staff member of the Jiangsu Provincial Department of Justice, a full-time lawyer of Jiangsu International
Economic and Trade Law Firm, a senior partner and director of Jiangsu Lingxiao Law Firm, a senior partner of
Jiangsu Jinding Law Firm, and a senior partner and director of Jiangsu Tianzhe Law Firm. Full-time lawyer, senior
partner and executive director of Beijing Zhongyin (Nanjing) Law Firm. He is currently an independent director of
the company, a full-time lawyer, senior partner and chairman of the partner meeting of Beijing Haotian (Nanjing)
Law Firm.
Mr. Hong Jinming, born in October 1981, holds a Ph.D. and is an associate researcher and doctoral supervisor. He
has served as Credit Manager at the Beijing Development Zone Branch of Agricultural Bank of China Limited,
Product Manager at the Planning and Accounting Department of the Beijing Branch, and Senior Specialist (Chief
Clerk) at the Head Office of Agricultural Bank of China. Currently, he serves as an independent director of the
company, Deputy Director of the Financial and Accounting Research Center at the Chinese Academy of Fiscal
Sciences, and an independent director of companies such as Aibru and Wuzhou Specialty Paper Co., Ltd.
(2) Supervisors
Ms. Lin Qing, born in May 1975, master's degree, senior accountant and certified public accountant. She
successively served as deputy director of the Enterprise Division of Suqian Finance Bureau of Jiangsu Province,
assistant to the director of the Municipal Price Bureau, member and deputy director of the Suqian Party Committee
of the Municipal Development and Reform Commission, member of the Standing Committee of the Party
Committee of the company, vice president of the company, and head of the internal audit of the company. She is
currently a member of the Standing Committee of the company's party committee, vice chairman of Sujiu Group
Trading Co., Ltd.
Mr. Xu Youheng, born in March 1977, master’s degree, senior political engineer and member of Communist Party
of China. He successively served as the director of the organization department, the director of the cadre
supervision department, the director of the cadre education department, and the director of the office of the
Organization Department of the Suqian Municipal Party Committee, the deputy director of the office of the party
construction leading group of the Suqian Municipal Party Committee, and the deputy secretary and deputy general
manager of the party committee of Suqian Industrial Development Group Co., Ltd. He is currently a supervisor of
the company, deputy secretary of the party committee and chairman of the supervisory committee of Suqian
47
Industry Development Group Co., Ltd.,director of Jiangsu Yanghe Group Co. , Ltd.
Mr. Ma Wenxiang, born in September 1977, holds a bachelor's degree and is a junior economist. He has served
as an investment manager at Shanghai Jiangju Investment Company, officer at the Asset Department and Deputy
Director of the General Office at Shanghai Ruitai Investment Development Company, Director of the Party
Committee Office and Director of the Party Work Department at Shanghai Sugar, Tobacco (Group) Co., Ltd.,
committee member and secretary of the committee at Shanghai Jieqiang Tobacco, Sugar, and Liquor (Group) Co.,
Ltd., as well as Deputy General Manager. Currently, he serves as a supervisor of the company, Secretary of the
Party Committee and General Manager of Shanghai Jieqiang Tobacco, Sugar, and Liquor (Group) Co., Ltd., and a
director of Shanghai Haiyan Logistics Development Co., Ltd.
Mr. Jin Yaguang, born in July 1976, holds a bachelor's degree. He has served as the Director of the Office and
member of the Party Committee at Jiangsu Shuanggou Liquor Co., Ltd., Director of the Office, Director of the
Party Committee Office, and Minister of the Organization Department at the company, Administrative Director
and Director of the Office at the Yanghe Branch of the company, General Manager of the Procurement and
Logistics Center, and General Manager of the Supply Chain Management Center. Currently, he serves as a
supervisor of the company and General Manager of the North China Region and Beijing Branch of Sujiu Group
Trading Co., Ltd.
Mr. Huang Jinhua, born in September 1970, holds a secondary school education. He has served as the head of
the General Dispatching Office, Director of the Equipment Department, and Deputy Director of the Thermal
Power Plant at Jiangsu Yanghe Group Co., Ltd., Manager of the Xuzhou Branch and Yancheng Branch at Yanghe
Sales Company, General Manager of the Yanlian Huaitong Region, Tianjin-Hebei Region, Hebei Region, Sutong
Region, and Sales Director at Sujiu Group Trading Co., Ltd., Deputy General Manager and General Manager of
Shuanggou Shandong Sales Co., Ltd., as well as General Manager of the Xuzhou Division at Jiangsu Shuanggou
Liquor Sales Co., Ltd. Currently, he serves as a supervisor of the company and Deputy General Manager and
General Manager of the Xuzhou Division at Jiangsu Shuanggou Liquor Sales Co., Ltd.
(3) Executives
Mr. Zhong Yu, President of the company, the same resume as above.
Mr. Chen Jun, President of the company, the same resume as above.
Mr. Yin Qiuming, born in July 1972, college's degree, auditor. He successively served as Assistant to the Director
of Audit, Director of Audit, Deputy Secretary of the Disciplinary Committee of Jiangsu Yanghe Group Co., Ltd.,
Director of the Company's Management Department, Deputy General Manager of Jiangsu Yanghe Sales Co., Ltd.,
Deputy General Manager, Party Committee Member, Financial Officer of Jiangsu Yanghe Wine Co., Ltd. Minister,
company supervisor, deputy secretary of the Disciplinary Committee, deputy general manager of the company's
Yanghe branch, finished product scheduling director, financial director, financial director, and general manager of
the financial center. He is currently the vice president and CFO of the company.
Mr. Li Yuling, born in December 1970, master's degree in MBA from Nanjing University, intermediate economist.
He successively served as the assistant to the director of the supply department, the assistant to the director of
the finance department, the deputy chief dispatcher of the general dispatching room, the director of the supply
department, the director of the company's supply department, the assistant to the general manager of Yanghe
48
Branch, the director of procurement and logistics, and the director of supply chain management in Jiangsu Yanghe
Group Co., Ltd. , Deputy Director and Office Director of the Procurement and Supply Logistics Center. He is currently
the vice president of the company, secretary of the party committee and general manager of Jiangsu Shuanggou
Wine Co., Ltd.
Mr. Fan Xiaolu, born in November 1984, holds a master's degree. He has served as a director, Deputy General
Manager, and member of the Party Committee at Suqian Industrial Development Group Co., Ltd., a director at
Jiangsu Yanghe Group Co., Ltd., Chairman and General Manager at Jiangsu Huaihai Finance Leasing Co., Ltd., a
director at Suqian Financial Asset Management Co., Ltd., an executive director and General Manager at Suqian
Science and Technology Venture Investment Co., Ltd., General Manager at Jiangsu Shuanggou Liquor Sales Co., Ltd.,
and Assistant to the President of the company. Currently, he serves as Vice President of the company, Vice General
Manager of Sujiu Group Trading Co., Ltd., General Manager of Jiangsu Shuanggou Liquor Co., Ltd., Executive
Director and Party Branch Secretary of Jiangsu Shuanggou Liquor Sales Co., Ltd.
Mr. Chen Taisong, born in January 1968, master’s degree. He has successively served as a member and secretary
of the Legislative Bureau of Siyang County Government, Secretary of the Office of the Siyang County Government
Office, Deputy Section Chief, Section Chief, Director Assistant, Deputy Director, Siyang County Chief of Chuancheng
Town, Secretary of the Party Committee, Jiangsu Sujiu Industrial Co., Ltd. Deputy Secretary, Secretary of the
Discipline Inspection Commission, Chairman of the Supervisory Board, Deputy Secretary of the Discipline
Inspection Commission, Standing Committee of the Party Committee and Organization Minister of the company,
Deputy Secretary of the Party Committee of Sujiu Group Trading Co., Ltd., Secretary of the Discipline Inspection
Commission, and Chairman of the Supervisory Board. He is currently a member of the Standing Committee of the
Party Committee, Supervisor, Chairman of Guijiu Co., Ltd.
Mr. Zhang Xueqian, born in November 1969, holds a bachelor's degree. He has served as the Deputy Director of
the Sales Department at Jiangsu Yanghe Group Co., Ltd., Deputy Director of the Product Department at Jiangsu
Yanghe Liquor Co., Ltd., Marketing Department Director, Product Department Manager, Manager of Strategic
Research Department, and Vice President of the company at Jiangsu Yanghe Sales Co., Ltd. He also held positions
such as Party Committee Member and Vice President at Sujiu Group Trading Co., Ltd., General Manager of
Jiangsu Shuanggou Liquor Sales Co., Ltd., and Assistant to the President. Currently, he serves as Vice President
and Chief Product Officer of the company, Vice President of Sujiu Group Trading Co., Ltd., and Chairman of Tibet
Earth Third Pole Liquor Co., Ltd.
Ms. Song Zhimin, born in October 1975, holds a master's degree. She has worked as a Regional Manager in the
Sales Department, Deputy Office Director, and Marketing Department Director at Jiangsu Yanghe Group Co., Ltd.
She also served as the Head of the Management Department, Assistant General Manager at Jiangsu Yanghe
Liquor Co., Ltd., Deputy General Manager of the Yanghe Branch of the company, Party Committee Member,
Assistant to the President, Director of Management, Director of Strategic Research, and General Manager of
Management Center and Strategic Research Center. Currently, she is Vice President and Director of Management
of the company and General Manager of the Yanghe Branch.
Ms. Lu Hongzhen, born in October 1978, holds a bachelor's degree, is a member of the China Democratic League,
and has obtained the Board Secretary Qualification Certificate issued by the Shenzhen Stock Exchange. She has
served as the Secretary of the Office, Deputy Minister of the Comprehensive Department, Deputy Director of the
Office, Director of the Securities Department, Securities Affairs Representative, and General Manager of the
49
Human Resources Center at Yanghe Co., Ltd. Currently, she is the Secretary of the Board of Directors and Deputy
Director of Human Resources of the company.
Positions in shareholder corporations
Applicable □N/A
Whether to
receive
Name of Position held in the Term start Term end remuneration
Shareholder name
employee shareholder company date date allowance in
the shareholder
company
Jiangsu Yanghe January 18,
Yang Weiguo Chairman NO
Group Co., Ltd 2022
Shanghai Haiyan
Logistics March 1,
Wang Kai Vice General Manager YES
Development Co., 2017
Ltd.
Jiangsu Yanghe
Xu Youheng Director April 11, 2024 NO
Group Co., Ltd
Shanghai Jieqiang
Party Committee
Tobacco, Sugar,
Ma Wenxiang Secretary and General July 03, 2020 YES
and Alcohol
Manager
(Group) Co., Ltd.
Shanghai Haiyan
Logistics March 09,
Ma Wenxiang Director NO
Development Co., 2022
Ltd.
Employments in other corporations
Applicable □N/A
Whether to
receive
Name of Other corporation Positions held in Term end remuneration
Term start date
employee name other companies date allowances in
other
companies
Suqian Industry Secretary of the
Yang Weiguo Development Party Committee, January 18,2022 YES
Group Co., Ltd. Chairman
Jiangsu
Yang Weiguo Shuanggou Group Chairman January 18,2022 NO
Co., Ltd.
Vice Dean and
Jiangnan Professor of
Nie Yao June 10, 2020 YES
University Bioengineering
Students
Professor of
Nanjing Audit
Lu Guoping Guofu Zhongxin March 02, 2020 YES
University
College
Changzhou
Langbo Sealing
Lu Guoping Director February 22, 2022 YES
Technology Co.,
Ltd.
Lu Guoping Baosheng Independent May 9, 2019 YES
50
Technology Director
Innovation Co.,
Ltd.
Changzhou
Academy of
Independent
Lu Guoping Architecture and July 6, 2020 YES
Director
Technology Co.,
Ltd.
Suzhou Lianxun
Independent December 17,
Lu Guoping Instrument Co., YES
Director 2022
Ltd.
Full-time lawyer,
Beijing Hylands senior partner,
Mao Lingxiao (Nanjing) Law chairman of the January 1, 2021 YES
Firm partnership
meeting
Nanjing Haichen
Independent
Mao Lingxiao Pharmaceutical May 15, 2023 YES
Director
Co., Ltd.
Deputy Director
of the Research
Chinese Academy
Hong Jinming Center for May 31, 2018 YES
of Fiscal Sciences
Finance and
Accounting
Quzhou Wuzhou
Independent
Hong Jinming Special Paper Co., July 01, 2021 YES
Director
Ltd.
Hunan Aibulu
Environmental
Independent September 30,
Hong Jinming Protection YES
Director 2023
Technology Co.,
Ltd.
Beijing Guoyao
New World
Independent
Hong Jinming Information October 10,2021 YES
Director
Technology Co.,
Ltd.
Deputy Secretary
of Party
Suqian Industry
Committee,
Xu Youheng Development October 16, 2021 YES
Chairman of the
Group Co., Ltd.
Supervisory
Board
Suqian Guosheng
Financing
Xu Youheng Chairman May 19, 2023 NO
Guarantee Group
Co., Ltd.
Suqian
Tongchuang Credit
Executive
Xu Youheng Financing May 19, 2023 NO
Director
Guarantee Co.,
Ltd.
Suqian Tongji
Rural
Xu Youheng Chairman April 01, 2024 NO
Microfinance Co.,
Ltd.
Xu Youheng Suqian High-tech Chairman March 30, 2024 NO
51
Zone Science and
Technology
Microfinance Co.,
Ltd.
Suqian Zaohe
Cultural and
September 27,
Xu Youheng Tourism Director NO
2019
Development Co.,
Ltd.
Jiangsu
Xu Youheng Shuanggou Group Director March 25, 2024 NO
Co., Ltd.
Suqian Sucheng
District Jinshui
Xu Youheng Rural Chairman March 31, 2024 NO
Microfinance Co.,
Ltd.
Suqian Hengxin
Enterprise Executive
Xu Youheng May 19, 2023 NO
Management Co., Director
Ltd.
Suqian Hengtong
Financing Executive
Xu Youheng May 19, 2023 NO
Guarantee Co., Director
Ltd.
Suqian Youjian
Executive
Xu Youheng Cultural Exhibition April 17, 2023 NO
Director
Co., Ltd.
Suqian City Citizen Executive
Xu Youheng April 19, 2021 NO
Card Co., Ltd. Director
Jiangsu Jingshi Big
Data
Xu Youheng Chairman June 22, 2022 NO
Management Co.,
Ltd.
Suqian Talent Executive November 17,
Xu Youheng NO
Group Co., Ltd. Director 2022
Suqian Human
Executive November 30,
Xu Youheng Resources Service NO
Director 2022
Co., Ltd.
Penalties imposed by securities regulators on current and outgoing directors, supervisors and senior managers of
the company in the past three years
□Applicable N/A
3. Remuneration of directors, supervisors and senior managers
Decision-making procedures, basis for determination and actual payment of remuneration for directors,
supervisors and senior managers
Decision procedure: The remuneration shall be implemented based on the cases “Adjusting the Allowance of
Independent Directors” approved by the Company's 2020 Annual General Meeting of Shareholders and
“Compensation and Assessment Management Measures for Members of Management Team” approved by the
Company's 2021 Annual General Meeting of Shareholders.
52
Determination basis: According to the company's current business situation, reference to the regional economic
level, industry and market level.
Actual payment: Paid on time according to the corporate's performance and compensation institutions.
Remuneration of directors, supervisors and senior managers during the reporting period
Unit: CNY10, 000
Whether to
Total pre-tax obtain
compensatio remuneratio
Name Gender Age Position Employed or not n received n from
from the related
company parties of the
company
Zhang
Male 56 Chairman Incumbent 197.94 NO
Liandong
Vice
Zhong Yu Male 60 Chairman, Incumbent 197.94 NO
President
Board
Yang Weiguo Male 50 Incumbent 0 YES
Director
Board
Wang Kai Male 47 Incumbent 0 YES
Director
Board
Director,
Chen Jun Male 48 Incumbent 0 YES
Vice
President
Board
Zheng Bujun Male 57 Incumbent 141.79 NO
Director
Board
Dai Jianbing Male 53 Incumbent 131.65 NO
Director
Independe
Nie Yao Male 47 Incumbent 10 NO
nt Director
Independe
Lu Guoping Male 64 Incumbent 10 NO
nt Director
Independe
Mao Lingxiao Male 60 Incumbent 10 NO
nt Director
Independe
Hong Jinming Male 43 Incumbent 0 NO
nt Director
Chairman
of the
Lin Qing Female 49 Incumbent 141.22 NO
Supervisory
Committee
Xu Youheng Male 47 Supervisor Incumbent 0 YES
Ma Wenxiang Male 47 Supervisor Incumbent 0 YES
Qin Yaguang Male 48 Supervisor Incumbent 73.7 NO
Huang Jinhua Male 54 Supervisor Incumbent 71.92 NO
Vice
Yin Qiuming Male 52 President, Incumbent 141.79 NO
CFO
Vice
Li Yuling Male 54 Incumbent 141.79 NO
President
Fan Xiaolu Male 40 Vice Incumbent 22.46 YES
53
President
Vice
Chen Taisong Male 56 Incumbent 140.1 NO
President
Vice
Zhang Xueqian Male 55 Incumbent 130.72 NO
President
Vice
Song Zhimin Female 49 Incumbent 131.24 NO
President
Secretary
Lu Hongzhen Female 46 of the Incumbent 85.37 NO
Board
Board
Liu Huashuang Male 54 Director, Former 32.99 NO
CEO
Independe
Zhao Shuming Male 72 Former 10 NO
nt Director
Chairman
of the
Chen Taiqing Male 59 Incumbent 141.79 NO
Supervisory
Committee
Xu Lili Female 45 Supervisor Incumbent 0 YES
Chen Fuya Male 59 Supervisor Incumbent 140.52 NO
Total -- -- -- -- 2,104.93 --
VI. Directors' performance of duties during the reporting period
1. The Board of Directors during the Reporting Period
Session Open Date Disclose Date Resolution
Reviewed and approved
The "2022 Annual CEO
Work Report," "2022
Annual Board of
Directors Work Report,"
"2022 Annual Report,"
including its full text and
summary, "2022 Annual
Financial Settlement
Report," "Proposal on
Profit Distribution for the
The Fourteenth Session
Year 2022," "2022 Annual
of the Seventh Board of April 24,2023 April 26,2023
Internal Control Self-
Directors
Assessment Report,"
"Proposal on the
Continuation of
Appointing Su Ya Jin
Cheng Accounting Firm
(Special General
Partnership) as the
Company's Audit
Institution for the Year
2023," "2022 Annual
Social Responsibility and
54
ESG Report," "Proposal
on Confirming the 2022
Routine Related Party
Transactions and
Anticipated 2023 Routine
Related Party
Transactions," "First
Quarter Report for 2023"
in its entirety, "Proposal
on Authorizing Company
Management to Use Own
Funds to Purchase
Financial Products
Opportunistically,"
"Proposal on Electing Mr.
Yang Weiguo as a
Member of the Seventh
Board of Directors
Strategic Committee,"
and "Proposal on
Convening the 2022
Annual Shareholders'
Meeting." For details,
please refer to the
"Announcement of the
Fourteenth Meeting
Resolution of the
Seventh Board of
Directors" disclosed by
the company in the
statutory information
disclosure media
(Announcement No.
2023-004).
Reviewed and approved
the "Proposal on External
Donations." For details,
please refer to the
"Announcement of the
Fifteenth Meeting
The Fifteenth Session of
Resolution of the
the Seventh Board of August 04,2023 August 05,2023
Seventh Board of
Directors
Directors" disclosed by
the company in the
statutory information
disclosure media
(Announcement No.
2023-015)
Reviewed and approved
the
"The Company's 2023
Interim Report" and
The Sixteenthth Session
summary, "Proposal on
of the Seventh Board of August 28,2023 August 29,2023
Joint Investment and
Directors
Related Transactions with
Professional Institutions,"
"Proposal on Cancelling
the Remaining
55
Repurchased Shares in
the Repurchase Special
Securities Account,"
"Proposal on Amending
the Company's Articles of
Association," "Proposal
on Convening the First
Extraordinary General
Meeting of Shareholders
in 2023." For details,
please refer to the
"Announcement of the
Sixteenth Meeting
Resolution of the
Seventh Board of
Directors" disclosed by
the company in the
statutory information
disclosure media
(Announcement No.
2023-016)
The Seventeenth Session Reviewed and approved
of the Seventh Board of October 27,2023 October 28,2023 the Yanghe Shares 2023
Directors Third Quarter Report
Reviewed and approved
the Proposal on
Appointing Senior
Management Personnel
of the Company." For
details, please refer to
the "Announcement of
The Eighteenth Session
the Eighteenth Meeting
of the Seventh Board of November 10, 2023 November 11, 2023
Resolution of the
Directors
Seventh Board of
Directors" disclosed by
the company in the
statutory information
disclosure media
(Announcement No.
2023-028)
Reviewed and approved
the "Proposal on External
Donations." For details,
please refer to the
"Announcement of the
Nineteenth Meeting
The Nineteenth Session
Resolution of the
of the 7th Board of December 20,2023 December 21,2023
Seventh Board of
Directors
Directors" disclosed by
the company in the
statutory information
disclosure media
(Announcement No.
2023-030)
56
2. Attendance of Directors at Board of Directors and General Meetings of Shareholders
Attendance of Directors at Board of Directors and General Meetings of Shareholders
The
number of Whether
Number of
times they Number of Amounts not Amounts
board
should Number of proxy of attended of
meetings
Name of attend the on-site attendance absences two attendance
by means
Directors board of board at the from the consecutiv at
of
directors attendance board of Board of e board shareholde
communic
during the directors Directors meetings r meetings
ation
reporting in person
period
Zhang
6 4 2 0 0 NO 2
Liandong
Zhong Yu 6 4 2 0 0 NO 2
Yang
6 1 4 1 0 NO 2
Weiguo
Wang Kai 6 1 5 0 0 NO 2
Zhao
6 1 4 0 1 NO 1
Shuming
Nie Yao 6 2 4 0 0 NO 1
Lu Guoping 6 2 4 0 0 NO 2
Mao
6 1 5 0 0 NO 1
Lingxiao
Explanation of two consecutive absences from attending the board of directors in person
N/A
3. Circumstances where directors raise objections to company-related matters
Were there any objections on related issues of the Company from directors?
□Yes No
During the reporting period, there is no objections on related issues of the Company from directors.
4. Other instructions for directors to perform their duties
Were there any suggestions from directors accepted by the Company?
Yes No
The statement on whether the director's recommendation to the company's proposal has been adopted or not
During the reporting period, the directors of the Company in accordance with the relevant requirements of “the
Company Law”, “the Securities Law”, “the Articles of Association” and other laws, regulations and rules, carried
out various work diligently and responsibly, provided reasonable opinions and suggestions for the company's
business decisions, and effectively safeguarded the interests of the company and all shareholders.
57
VII. The special committees under the board of directors during the reporting period
Specific
Number Important Other
circumstan
Committee of Opening Content of comments perform
Members ces of the
name meeting date meeting and ance of
objection
s held suggestions duties
(if any)
Reviewed and
approved the
Zhang
the “ 2022
Liandong,
Annual Board of
Zhong Yu,
Strategy April Directors Work
Yang 1
Committee 21,2023 Report,"
Weiguo,
Planned the
Zhao
future
Shuming
development of
the company
Reviewed and
approved the
Nie Yao, "The Proposal
Nominatio Zhang for Appointing
November
n Liandong, 1 Senior
09,2023
Committee Mao Management
Lingxiao Personnel"and
qualification
review
Reviewed the
performance of
the company's
Remunerat Zhao
management
ion and Shuming, April
1 team members
Appraisal Nie Yao 19,2023
and the
Committee
implementation
of the salary
system in 2022
Reviewed "The
2022 Annual
Financial
Statements
Audit Work
Plan,"
Lu
"Summary of
Audit Guoping,
4 the 2022 Annual
Committee Mao
February Internal Audit
Lingxiao
24,2023 Work and the
2023 Work
Plan," "Proposal
on Re-
appointing Su Ya
Jin Cheng
Certified Public
Accountants
(Special General
58
Partnership) as
the Company's
Audit Firm for
the Year 2023."
Reviewed the
"2022 Annual
Internal Control
Self-Evaluation
Report"
"Proposal on
Confirming
Routine Related
Party
Transactions for
2022 and
Anticipated
Routine Related
Party
Transactions for
2023"
"First Quarter
April
2023 Internal
21,2023
Audit Work
Report"
"Draft Audit
Report for the
Year 2022"
"2022 Annual
Financial
Settlement
Report"
"First Quarter
2023 Financial
Accounting
Statements"
"Status of 2022
Annual Financial
Statements
Audit Work"
Reviewed the
"First Half of
2023 Internal
August Audit Work
24,2023 Report"
"2023 Interim
Financial
Statements"
Reviewed the
"Third Quarter
2023 Internal
October
Audit Work
26,2023
Report"
"2023 Third
Quarter
59
Financial
Statements"
VIII. Performance of Duties by the Supervisory Committee
Were there any risks to the Company identified by Board of Supervisors when performing its duties during the
reporting period?
□Yes No
The Supervisory Committee has no objection to the supervision matters during the reporting period.
IX. Staff in the Company
1. Statistics of Employees, Professional Structure of the Staff, and Educational Background
Number of on-the-job employees of the parent 10,529
company at the end of the reporting period (person)
Number of on-the-job employees of major 9,990
subsidiaries at the end of the reporting period
(person)
Total number of on-the-job employees at the end of 20,519
the reporting period (person)
The total number of employees receiving salary in the 20,519
current period (person)
Number of retired employees (persons) that the 0
parent company and major subsidiaries need to pay
Professional Composition
Professional Composition Category Professional composition number (person)
Production staff 9,431
Sales staff 6,601
Technical staff 1,952
Financial staff 222
Administration staff 2,313
Total 20,519
Education Level
Educational level category Quantity (person)
Master 430
Bachelor 4,759
College 4,900
Senior High School and below 10,430
Total 20,519
2. Salary Policy
The salary of the company's employees is composed of basic salary, performance salary and profit increment
sharing award. All departments of the company implement a post-self-organization mechanism, and revised the
"Administrative Measures for Post-Self-organization" to further improve the quantity, quality, efficiency and
economic value of work. It has established quantifiable and assessable indicators to encourage employees to be
spontaneous, improve their work efficiency, and improve the company's management level in order to achieve a
60
win-win situation between the company and its employees.
3. Training Program
The company adheres to the incentive philosophy of "encouraging innovators, urging laggards, and promoting hard
workers." In 2023, the company continued its employee training efforts from two aspects: professional
competence enhancement and business capability improvement. It formulated annual training plans at the
company level, subsidiary level, and department level, organizing comprehensive training through the "Leadership
Academy, Marketing Academy, Customer Academy, and Craftsman Academy." Throughout the year, a total of
112,800 employees participated in training sessions, providing strong talent support and intellectual backing for
the company's sustainable development.
4. Outsourcing of labor service
□Applicable N/A
X. Profit Distribution and Capitalization of Capital Reserves
Profit distribution policy in the reporting period, especially the formulation, implementation and adjustment
of cash dividend policy
Applicable □N/A
On May 31, 2023, the company held the 2022 annual general meeting of shareholders, and reviewed and approved
the company's 2022 equity distribution plan. The specific plan is that based on the total equity on the equity
registration date when the profit distribution plan is implemented (excluding the repurchased shares held in the
company’s special securities account for repurchase), use undistributed profits to distribute cash dividends of
CNY37.40 (tax included) per 10 shares to all shareholders, no bonus shares, no conversion to paid-in capital.
The company implements the 2022 annual equity distribution, with June 20, 2023 as the equity registration date,
June 21, 2023 as the ex-rights and ex-dividend date, and the company's total share capital after excluding the
542,926 repurchased shares of 1,506,445,074 shares as the base, to all the shareholders. Shareholders will receive
a cash dividend of CNY 37.40 (tax included) for every 10 shares, with a total cash dividend of CNY 5,634,104,576.76
(tax included).
Special explanation of cash dividend policy
Whether it complies with the provisions of the
company's articles of association or the requirements YES
of the resolution of the shareholders' meeting
Whether the dividend standard and ratio are explicit
YES
and clear
Whether the relevant decision-making procedures
YES
and mechanisms are complete
Whether the independent directors performed their
YES
duties and played their roles
If the company has not conducted cash dividends, it
should disclose the specific reasons for this decision
N/A
and outline the next steps it plans to take to enhance
investor returns.
61
Whether minority shareholders have the opportunity
to fully express their opinions and demands, and
YES
whether their legitimate rights and interests are fully
protected
If the cash dividend policy is adjusted or changed,
The company's cash dividend policy does not adjust
whether the conditions and procedures are compliant
or change
and transparent
The company was profitable during the reporting period and the parent company's profit available for
distribution to shareholders was positive, but no cash dividend distribution plan was proposed
□Applicable N/A
Profit distribution and conversion of capital reserve into paid-in capital during the reporting period
Applicable □N/A
Number of bonus shares for every 10 shares (shares) 0
Dividends per 10 shares (CNY) (tax included) 46.60
Base of shares (shares) of the distribution plan 1,506,445,074
Amount of cash dividends (CNY) (tax included) 7,020,034,044.84
Amount of cash dividends in other ways (such as
0.00
share repurchase) (CNY)
Total cash dividends (including other methods) (CNY) 7,020,034,044.84
Distributable profit (CNY) 31,524,392,046.58
Proportion of total cash dividends (including other
100%
methods) to total profit distribution
Cash dividend situation
If the company's development stage is mature and there is no major capital expenditure arrangement when
making profit distribution, the proportion of cash dividends in this profit distribution should be at least 80%.
Detailed description of profit distribution or capital reserve conversion plan
As audited by Suya Jincheng Certified Public Accountants (Special General Partnership), the parent company
realized a net profit of CNY7,482,138,130.26 in 2023, and the statutory surplus reserve for the year was CNY
0.00, plus the undistributed profit at the beginning of the year of CNY 29,676,358,493.08, so after deducting
the 2022 profit distribution of CNY 5,634,104,576.76, the profit available for distribution to shareholders this
year was CNY 31,524,392,046.58
In line with the principle of not only taking into account the long-term development of the company, but also
giving appropriate returns to shareholders, the company plans to distribute cash dividends of CNY46.60 (tax
included) per 10 shares to all shareholders using the existing total share capital of 1,506,445,074 shares as the
base. The total cash distribution amounts to CNY7,020,034,044.84 (tax included), without bonus shares or
capitalization. This profit distribution scheme complies with the cash dividend policy stipulated in the
company's articles of association. In the event of changes in the total share capital before the equity
distribution registration date, the distribution ratio will be adjusted according to the principle of maintaining
the total distribution amount unchanged.
XI. Implementation of company equity incentive plans, employee stock ownership plans or
other employee incentives
Applicable □N/A
62
1. Equity incentive
N/A
Equity incentives obtained by the directors and senior management of the company
□Applicable N/A
Evaluation mechanism and incentives for senior managers
The company continues to establish and improve the assessment and traction mechanism based on business
performance and the compensation and incentive mechanism for management team members oriented by value
contribution that are compatible with the market economy system and modern enterprise system. The 2021
Annual General Meeting of shareholders of the Company reviewed and approved the “Management Measures for
Compensation and Assessment of Management Team Member”, which stipulates that the annual remuneration
of the members of the management team of the Company consists of basic annual salary, performance-based
annual salary, tenure incentive and other income, the basic annual salary is paid monthly, the performance-based
annual salary is implemented according to the annual performance appraisal results, and the tenure incentive is
linked to the operating performance appraisal during the term of office.
2. Implementation of employee stock ownership plans
Applicable □N/A
All valid employee stock ownership plans during the reporting period
Proportion to Funding sources
Range of Number of Total shares the total share for the
Changes
employees employees held capital of listed implementation
companies plan
Company’s
directors
(excluding
independent
directors),
supervisors,
senior Participants’
management legal
personnel, and remuneration,
middle-level self-financing
and above 4,738 9,118,384 N/A 0.61% and other
personnel and methods
core backbones permitted by
who are laws and
determined by regulations
the board of
directors of the
company and
wholly-owned
subsidiaries to
play an
63
important role
in the
company's
overall
performance
and medium
and long-term
development
Shareholdings of Directors, Supervisors and Senior Management in the Employee Stock Ownership Plan during
the Reporting Period
Number of shares Number of shares
Proportion to the
held at the held at the end of
Name Title total share capital
beginning of the the reporting
of listed companies
reporting period period
Zhang Liandong Chairman 96,404 96,404 0.01%
Deputy chairman,
Zhong Yu 96,404 96,404 0.01%
President
Director,
Liu Huashuang 96,404 96,404 0.01%
CEO (Leaving office)
Chairman of the
Board of
Chen Taiqing 48,202 48,202 0.00%
Supervisors(Leaving
office)
Supervisor(Leaving
Chen Fuya 48,202 48,202 0.00%
office)
Chairman of the
Board of
Chen Taiqing 48,202 48,202 0.00%
Supervisors(Leaving
office)
Vice
president(Chairman
Lin Qing 48,202 48,202 0.00%
of the Board of
Supervisors now)
Vice
Chen Bujun president(Director 48,202 48,202 0.00%
now)
Vice president,
Yin Qiuming 48,202 48,202 0.00%
CFO
Li Yuling Vice president 48,202 48,202 0.00%
Zhang Xueqian Vice president 28,921 28,921 0.00%
Song Zhimin Vice president 28,921 28,921 0.00%
Secretary of the
Lu Hongzhen 19,281 19,281 0.00%
Board
Changes in asset management institutions during the reporting period
□Applicable N/A
Changes in equity due to disposal of shares by holders during the reporting period
□Applicable N/A
The exercise of shareholders' rights during the reporting period
N/A
Other relevant situations and explanations of the employee stock ownership plan during the reporting period
64
□Applicable N/A
Members of Employee Stock Ownership Plan Management Committee Change
□Applicable N/A
The financial impact of the employee stock ownership plan on the listed company during the reporting period
and related accounting treatment
Applicable □N/A
In this period, the company confirmed that the cost increase of "capital reserves-other capital reserves" was
CNY81,609,539.19
Termination of employee stock ownership plans during the reporting period
□Applicable N/A
Other instructions: none
3. Other employee incentives
□Applicable N/A
XII. Construction and implementation of internal control system during the reporting period
1. Construction and implementation of internal control
(1)Internal control system construction
a) Establish a standard internal control system.
The company has mainly formulated 16 categories and 279 systems for human resources, quality and food safety,
financial and audit management.
b) Optimize the internal control environment of the enterprise.
i. Standardize the establishment of the organizational structure. According to the relevant laws and regulations of
China, clarify the responsibilities, authority, conditions, rules of procedure and work procedures of the board of
directors, board of supervisors and managers to ensure that decision-making, execution and supervision are
separated from each other and form checks and balances. Clarify the internal division of labor of the board of
directors, and set up special committees including audit committee, remuneration and appraisal committee,
strategy committee, nomination committee.
ii. Improve human resources policies.
① Improve the staff training mechanism. The company needs a strict assessment when hiring employees, select
outstanding talents to join the company, and form a system for employees on training, treatment, performance
assessment and promotion. For employees in different positions, the company provides channels to improve their
comprehensive quality to cultivate high-quality talents. ② Establish an effective incentive mechanism. On the
basis of following the fairness and relative stability of incentives and constraints, the company formulates equity
incentives and mechanisms for spontaneous compensation incentives which is conducive to stimulating
employees' subjective initiative, giving full play to their potential, safeguarding corporate interests and achieving
corporate goals.
65
c) Establish a risk assessment firewall. The company has formulated “Risk and Opportunity Management
Measures”, “Risk Management Responsibility Investigation System” and other systems to investigate risks from the
aspects of food safety and behavior safety, and make preparations for the occurrence and generation of risks.
Produce a map of audit risks for infrastructure projects, with 80 risk points, distilled into 9 quantifiable risk warning
indicators. At the same time, the company organizes the Guidance on Common Risks and Control of Contract
Management, Risk Management Training and other trainings, focusing on the risk management system, internal
control system and integrated risk management and control module, to discover and deal with risk points in time.
d) Implement effective internal control activities. With reference to the risk assessment level, the company
implements measures such as division of responsibilities control, authorization control, review and approval
control, budget control and performance evaluation control, to effectively safeguard the interests of the enterprise
and ensure the stable and orderly progress of various work.
e) Improve the information and communication mechanism. The company establishes the technical platform of
the information system, establishes a sensitive information collection and feedback system, realizes the upward,
parallel or downward flow and communication of various information within the enterprise, and implements the
whole process of the entire internal control information from production, release to feedback modern
management.
f) Strengthen internal audit and internal supervision of enterprise management. The company establishes a
scientific view of internal audit culture, pays great attention to the organization and team building of the audit
department, sets up the internal audit department in accordance with the relevant regulations of China, and
allocates internal auditors with professional competence, maintains the independence of internal audit, and makes
the internal audit department more independent. Besides, the internal audit has transformed from a single
supervision function to a comprehensive function of supervision, evaluation, control and consultation, and fully
exerted the value-added function. By sorting out the supervision content and matters, the company clarifies the
evaluation standards and audit methods of each department, and constantly improves the audit work plan. In
addition, the company needs to strengthen the construction of audit informatization, constantly strengthen the
thinking mode of big data audit, enhance the ability of big data audit, comprehensively use on-site audit and off-
site audit methods, and improve the efficiency of internal audit.
(2) Internal control system implementation
The company continues to establish and improve the internal control system and can effectively implement it. In
the focus of audit, highlight the key supervision of key funds, important projects, important assets and important
positions responsible for the economic responsibility of personnel. In the content of audit, benefit audit,
responsibility audit and internal control system audit should be the main. In terms of audit methods, audit and
research should be combined, post-supervision should be transformed into pre-control, and comprehensive audit
should be strengthened. Audit means need to gradually transition to modern audit means.
The audit Committee of the Board of Directors of the Company annually reviews and supervises the financial report,
the effectiveness of internal control, and the reasonableness and effectiveness of corporate governance; carry out
internal control self-evaluation every year; Optimize the system and management process every year according to
the internal and external environment and development requirements of the enterprise; closely focus on the key
work of the company, carry out full coverage audit of all molecular companies and functional departments, so as
to achieve full coverage audit of key departments once a year; conduct spot check and audit of important
66
departments, with a spot check rate of 50%, and audit with full coverage once every two years; Spot check and
audit of general departments, the spot check rate of 33%, to achieve full coverage of audit once every three years.
2. Details of major deficiencies in internal control discovered during the reporting period
□Yes No
XIII. The company's management and control of subsidiaries during the reporting period
Name of the Combination Combination Resolve Follow-up
Issues Solutions
subsidiaries plan progress progress resolution plan
N/A N/A N/A N/A N/A N/A N/A
XIV. Internal control self-assessment report or internal control audit report
1. Self-evaluation Report on Internal Control
Date of disclosure of the full text
of the internal control evaluation April 27, 2024
report
Disclosure Index of the Full Text of
The full text of the "Self-assessment Report on Internal Control" will be
the Internal Control Evaluation
disclosed on http://www.cninfo.com.cn on April 27, 2024
Report
The ratio of the total assets of the
company included in the
evaluation scope to the total 99.52%
assets of the company's
consolidated financial statements
The ratio of the operating income
of the company included in the
evaluation scope to the operating 99.98%
income of the company's
consolidated financial statements
Defect identification standard
Type Financial report Non-financial report
(1) Signs of major deficiencies in (1) Signs of major deficiencies in
financial reports include: i. non-financial reports include:
Fraudulent conduct by the i. lack of democratic decision-
company’s directors, supervisors making procedures, unscientific
or senior executives; decision-making procedures,
Qualitative Criteria
ii. Significant misstatements in the major mistakes which resulting in
current financial statements were major property losses to the
found, but the management failed company;
to detect them during the ii. Serious violation of national
operation of internal control; laws and regulations;
67
iii. As a result of internal control iii.Lack of important business
evaluation, major deficiencies have management system or systemic
not been rectified; failure of system operation;
iv. The audit committee and iv. The company's major or
internal audit institution's important internal control
supervision of internal control is deficiencies cannot be rectified in
invalid. a timely manner; v. The company
(2) Signs of significant deficiencies continues or has a large number of
in financial reporting include: important internal control
i. Failure to select and apply deficiencies .
accounting policies in accordance (2) Signs of significant deficiencies
with generally accepted in non- financial reporting include:
accounting principles; i. The business behavior violates
ii. Failure to establish anti-fraud relevant national laws;
procedures and control measures; ii. Inadequate decision-making
iii. Failure to establish process leads to important errors
corresponding accounting and large losses;
treatment for non-routine or iii. Serious loss of business
special transactions personnel in key positions; iv.
iv. There are one or more Deficiencies in important business
deficiencies in the control over the systems or systems.
period-end financial reporting (3) General deficiencies refer to
process and there is no reasonable control deficiencies other than the
assurance that the prepared above major deficiencies and
financial statements will achieve significant deficiencies.
the true and accurate objectives.
(3) General defects refer to other
control defects other than the
above-mentioned major defects
and important defects.
Major defects: Misstatement > 3%
of total operating income;
Misstatement > 5% of total profit;
Misstatement > 2% of total assets.
Important defects: 1% of total Major defect: loss accounts for ≥
operating income < misstatement 1% of total assets.
≤ 3% of total operating income; Important defects: 0.5%≤losses
3% of total profit < misstatement account for less than 1% of total
Quantitative standard
≤ 5% of total profit; 1% of total assets.
assets < misstatement ≤ 2% of General defects: The proportion of
total assets. loss to total assets is less than
General defects: misstatement ≤ 0.5%.
1% of total operating income;
misstatement ≤ 3% of total profit;
misstatement ≤ 1% of total
assets.
Number of major deficiencies in
0
financial reports (pieces)
Number of major deficiencies in
0
non-financial reports (pieces)
Number of material deficiencies in
0
financial reports (pieces)
Number of material deficiencies in
0
non-financial reports (pieces)
68
2. Internal Control Audit Report
Applicable □N/A
Deliberation Opinion Paragraph in Internal Control Audit Report
We believe that on December 31, 2023, Yanghe Co., Ltd. maintained effective internal control over financial
reporting in all material aspects in accordance with the “Basic Norms for Corporate Internal Control” and
relevant regulations.
Disclosure Situation of
Disclosed
Internal Control Audit Report
Disclosure date of the full text
of the internal control audit April 27, 2024
report
Full text disclosure index of
The full text will be disclosed on http://www.cninfo.com.cn on April 27, 2024
internal control audit report
Types of opinions on internal
Standard unqualified opinion
control audit reports
Whether there are material
deficiencies in non-financial No
reporting
Whether the accounting firm issued an internal control audit report with a non-standard opinion
□Yes No
Whether the internal control audit report issued by the accounting firm is consistent with the self-evaluation
report of the board of directors
Yes □No
XV. Special Rectification Actions for Self-inspected Problems of Listed Companies
During the self-inspection, some directors, supervisors and senior executives of the company were unable to
attend the general meeting of shareholders in person due to business trips and other reasons. The company had
promptly notified the relevant personnel of the convening of the meeting and the deliberation of proposals after
the meeting.
69
Section V Environmental and Social Responsibility
I. Significant environmental issues
Whether the listed company and its subsidiaries belong to the key pollutant discharge companies announced by
the environmental protection department
Yes □No
Environmental protection related policies and industry standards
The company strictly complies with environmental protection related laws and regulations and industry standards.
Relevant laws and regulations: “Environmental Protection Law of the People's Republic of China”, “Law of the
People's Republic of China on Water Pollution Prevention and Control”, “Law of the People's Republic of China on
the Prevention and Control of Environmental Pollution by Solid Waste”, “Law of the People's Republic of China on
Prevention and Control of Air Pollution”, “Law of the People's Republic of China on the Prevention of Noise
Pollution”,”Law of the People's Republic of China on Prevention and Control of Soil Pollution”, “Regulations on
discharge permit Administration”, “Regulations on the Prevention and Control of Environmental Pollution by
Industrial Solid Wastes in Suqian City”, etc; Relevant industry standards: “Discharge standard for water pollutants
of fermented alcohol and liquor industry” （GB27631-2011） and its amendment list, “Discharge standard of air
pollutants from boilers” （DB32/ 4385—2022), “Comprehensive Emission Standards for Air Pollutants”
(DB324041-2021), and “Industrial enterprise boundary environmental noise emission standard” (GB12348-2008)
and so on.
Environmental protection administrative permit
The company and its subsidiaries have complete materials such as environmental impact reports and pollutant
discharge permits for construction projects. Among them:
Jiangsu Yanghe Distillery Co., Ltd.：On July 18, 2022, the Company applied to Suqian Bureau of Ecological
Environment for the “Pollutant Discharge Permit of Yanghe Branch of Yanghe Stock Co., LTD.”, valid from July 18,
2022 to July 17, 2027.
Jiangsu Shuanggou Wine Co., Ltd.：The Company has obtained “Jiangsu Provincial Pollutant Discharge License”
issued by Suqian Municipal Bureau of Ecological Environment on August 12, 2021, valid from August 12, 2021 to
August 11, 2026.
Jiangsu Yanghe Distillery Co., Ltd. Siyang Branch：On November 11, 2022, the Company obtained the “Pollutant
Discharge License of Siyang Branch of Yanghe Corporation” issued by Suqian Municipal Bureau of Ecological
Environment. The license is valid from November 11, 2022 to November 10, 2027.
Guizhou Guijiu Group Co., Ltd.：The company applied for the renewal of the pollutant discharge permit in
November 30 2022, which has been approved by Guiyang Bureau of Ecological Environment and is valid from
October 18, 2022 to October 17, 2027.
Industrial discharge standards and details of the discharge of pollutants involved in production and business
activities
Compa Types Names Emission Num Distrib Emissio Implem Total Total Exces
ny of of method ber ution n ented emissio approved sive
70
name major major of of concen polluta ns emissions emis
or polluta polluta vent dischar tration nt sions
subsidi nts and nts and s ge dischar
ary charact charact outlets ge
name eristic eristic standar
polluta polluta ds
nts
nts
Oxygen
Deman Longitu
454.7
d, de： 64.26m 109.32t
6tons/ye
Ammo g/L ons
Jiangsu 650mg ar
nia 118°22′ 2.08mg 3.54to
Yanghe /L 36
Waste Nitroge Indirect 33.74″ /L ns
Distiller 1 40mg/L tons/year None
water n, Total emissions Latitud 1.2mg/ 2.04
y Co., 5mg/L 2.07
Phosph e： L tons
Ltd. 60mg/L tons/year
orus, 21.22m 36.10
37.35
Total 33°47′2 g/L tons
tons/year
Nitroge 6.74 ″
n
Oxygen
Deman
d, Longitu 56.7mg 49.02 400
Jiangsu Ammo de： /L tons tons/year
500mg
Shuang nia 118°12′ 2.23mg 1.76 32
/L
gou Waste Nitroge Indirect 07″ /L tons tons/year
1 40mg/L None
Wine water n, Total emissions Latitud 1.63mg 1.35 6.4
8mg/L
Co., Phosph e： /L tons tons/year
60mg/L
Ltd. orus, 33°13′4 16.26m 13.60 48
Total 5″ g/L tons tons/year
Nitroge
n
Oxygen
Deman
d, Longitu 123mg 600
Jiangsu 99 tons
Ammo de： /L tons/year
Yanghe 500mg 2.45
nia 118°45′ 3.01mg 41.8
Distiller /L tons
Waste Nitroge Indirect 33.08″ /L tons/year
y Co., 1 80mg/L 1.40 None
water n, Total emissions Latitud 1.8mg/ 4.98
Ltd. 12mg/L tons
Phosph e： L tons/year
Siyang 80mg/L 11.76
orus, 33°42′2 14.83m 58.55
Branch tons
Total 5.70″ g/L tons/year
Nitroge
n
Oxygen
Deman
Longitu 52.04m 3.482 8.958
d,
de： g/L tons tons/year
Guizho Ammo Straight 100mg
106°35′ 0.243m 0.016 0.898
u Guijiu nia emissions /L
Waste 43″ g/L tons tons/year
Group Nitroge after 1 10mg/L None
water Latitud 0.227m 0.004 0.0925
Co., n, Total processin 1mg/L
e： g/L tons tons/year
Ltd. Phosph g 20mg/L
25°50′5 6.616m 0.439 1.85
orus,
2″ g/L tons tons/year
Total
Nitroge
71
n
Longitu
de：
Guizho
106°35′
u Guijiu
exhaus Nitroge Straight 43″ 27.986 200mg 5.927 6.199
Group 1 None
t gas n oxide emissions Latitud mg/m /m tons tons/year
Co.,
e：
Ltd.
25°50′5
2″
Treatments of pollutants
Jiangsu Yanghe Distillery Co., Ltd.：The sewage treatment station in use was completed in 2012, with a total
investment of CNY 96 million, covering an area of 19,000 square meters, with a designed sewage treatment
capacity of 10,000 tons per day. The sewage treatment process adopts physical treatment method + chemical
treatment method + anaerobic biological treatment method + aerobic biological treatment method in order to
reach the treatment of high-concentration wastewater of 250 tons per hour. The emission implements the
"Fermentation Alcohol and Liquor Industry Pollutant Emission Standard (GB27631-2011)" to modify the list of
indirect emission protocol standards. In 2023, two new anaerobic towers were built to improve the efficiency of
anaerobic treatment. In 2023,1.701 million tons of wastewater were treated. COD reduction was 14,736.97 tons,
ammonia nitrogen reduction was 228.37 tons, total phosphorus reduction was 168.05 tons, total nitrogen
reduction was 387.27 tons. The emission concentration of all pollutants is lower than the national emission
standard. There is a biogas boiler room equipped with 9 biogas boilers, their production capacity reaches 32 tons
per hour, and the biogas produced by anaerobic fermentation of sewage treatment was all used for biogas boiler
combustion. The steam produced by the biogas boiler was used for brewing production, and the steam output was
150,000 tons in 2023. The economic benefit reaches CNY26.6 million. The sludge and vinasse are mainly recycled
by qualified third party units, and the utilization rate of distiller's grains reaches 100%.
Jiangsu Shuanggou Wine Co., Ltd.：The sewage treatment station in use was completed in 2013, with a total
investment of CNY 42.5 million, covering an area of 15,000 square meters, with a designed sewage treatment
capacity of 5,400 tons per day. Sewage treatment adopts anaerobic tower + UASB + AAO + secondary
sedimentation tank + phosphorus removal tank treatment process, in accordance with the revised list of
"Fermentation Alcohol and Liquor Industrial Pollutant Discharge Standard ( GB27631-2011)" and “Shuanggou
Township Wastewater Treatment Plant takeover standards”. In 2023, 805,500 tons of wastewater were treated.
COD reduction was 7,099.79 tons, ammonia nitrogen reduction was 101.96 tons, total phosphorus reduction was
56.528 tons, total nitrogen reduction was 158.76 tons. The emission concentration of all pollutants is lower than
the national emission standard. There is a biogas boiler room equipped with 3 biogas boilers, and the biogas
produced by anaerobic fermentation of sewage treatment was all used for biogas boiler combustion. The steam
produced by the biogas boiler was used for brewing production, and the steam output was 37,600 tons in 2023.
The sludge and vinasse are mainly recycled by qualified third party units.
Jiangsu Yanghe Distillery Co., Ltd. Siyang Branch：The sewage treatment station in use was completed in 2015,
with a total investment of CNY 50 million, covering an area of about 15,000 square meters, with a designed sewage
treatment capacity of 6,000 tons per day. The sewage treatment process adopts EGSB + AAO + advanced treatment
technology, and implements the indirect discharge agreement standard of the revised list of "Fermentation Alcohol
and Liquor Industry Pollutant Discharge Standard GB27631-2011". In 2023, 842,100 tons of wastewater were
72
treated. COD reduction was 15809 tons, ammonia nitrogen reduction was 156.5 tons, total phosphorus reduction
was 144 tons, total nitrogen reduction was 358.3 tons. The emission concentration of all pollutants is lower than
the national emission standard. There is a biogas boiler room equipped with 6 biogas boilers, and the biogas
produced by anaerobic fermentation of sewage treatment was all used for biogas boiler combustion. The steam
produced by the biogas boiler was used for brewing production, and the steam output was 91,600 tons in 2023.
The economic benefit reaches CNY17.98 million The sludge and vinasse are mainly recycled by qualified third party
units.
Guizhou Guijiu Group Co., Ltd.：The sewage treatment station in use was completed in 2021, with a total
investment of CNY18.5 million, covering an area of about 1,980 square meters, with a designed sewage treatment
capacity of 700 tons per day. The wastewater produced by pretreatment + AAO + MBR + ozone decolorization and
disinfection + chemical phosphorus removal treatment process shall comply with the direct discharge standard in
Table 2 of the Discharge Standard for Water Pollutants in Fermented Alcohol and Liquor Industry (GB27631-2011).
In February 2023, a new 2400 cubic meter regulating tank and secondary AO system were constructed and have
been put into operation. In 2023, 68,000 tons of wastewater were treated. COD reduction was 335.91 tons,
ammonia nitrogen reduction was 8.74 tons, total nitrogen reduction was 19.53 tons, total phosphorus reduction
was 2.25 tons. The emission concentration of all pollutants is lower than the national emission standard. The
combustion equipment is gas-fired boilers with natural gas as fuel. The sludge and vinasse are mainly recycled by
qualified third party units.
Emergency plan for environmental emergencies
The company and its subsidiaries have formulated contingency plans for environmental emergencies. The company
has filed with the Bureau of Ecological Environment of Suqian City；Shuanggou Wine has filed with the Sihong
Ecological Environment Bureau of Suqian City, the company's Siyang Branch has filed with Siyang County Ecological
Environment Bureau for the record, Guijiu Company has filed with Xiuwen County environmental supervision
brigade.
The company and its branches and subsidiaries actively organize employees to train and learn the plan, and
regularly carry out environmental emergency plan drills, to improve the environmental protection awareness and
emergency handling ability of all staff.
Environmental Self-Monitoring Program
The company and its subsidiaries have completed self-monitoring plans
Jiangsu Yanghe Distillery Co., Ltd. has installed COD, ammonia nitrogen, total nitrogen, total phosphorus, PH, flow
online monitoring instruments, whose data is connected to the automatic monitoring and basic database system
of key polluters and the Jiangsu Province pollution source "One enterprise, One station" management system. The
daily manual sampling and self-testing is conducted, and a periodical sampling inspection by qualified institutions
is entrusted by a third party. The environmental self-monitoring program has been filed with the Jiangsu Province
self-monitoring information release platform of key monitoring enterprises.
Jiangsu Shuanggou Wine Co., Ltd. has installed COD, ammonia nitrogen, total nitrogen, total phosphorus, PH, flow
73
online monitoring instruments and released the test results on the automatic monitoring and basic database
system of key pollutant discharge enterprises, the Jiangsu Province self-monitoring information release platform
of pollutant discharge enterprises, and the Suqian City Big Data Center of Ecological Environment. The daily manual
sampling and self-testing is conducted, and a sampling inspection by qualified institutions is entrusted by a third
party every month. The environmental self-monitoring program has been filed with the Jiangsu pollutant
discharging enterprises self-monitoring information release platform.
Jiangsu Yanghe Distillery Co., Ltd. Siyang Branch has installed COD, ammonia nitrogen, total nitrogen, total
phosphorus, PH, flow online monitoring instruments and released the test results on the automatic monitoring
and basic database system of key pollutant discharge enterprises, the Jiangsu Province self-monitoring information
release platform of pollutant discharge enterprises, and the Suqian City Big Data Center of Ecological Environment.
The daily manual sampling and self-testing is conducted, and a sampling inspection by qualified institutions is
entrusted by a third party every month. The environmental self-monitoring program has been filed with the Jiangsu
Province self-monitoring information release platform of key monitoring enterprises.
Guizhou Guijiu Group Co., Ltd. has installed COD, ammonia nitrogen, total nitrogen, total phosphorus, PH, ss, flow
online monitoring instruments released the test results on Guizhou Province Automatic monitoring and
management platform for key pollution sources. The daily manual sampling and self-testing is conducted, and a
sampling inspection by qualified institutions is entrusted by a third party every quarter. The environmental self-
monitoring program has been filed with the Xiuwen Branch of Guiyang Bureau of Ecology and Environment.
Input in environmental governance and protection and payment of environmental protection tax
The company, its branches and subsidiaries actively carry out environmental treatment and protection work. In
2022, the total investment of sewage operation and environmental management is about CNY 62.58 million, and
the environmental protection tax is about CNY0.6631 million.
Measures taken to reduce carbon emissions during the reporting period and their effects
Applicable □N/A
In 2023, the company integrated the concept of 'dual carbon' into its production and operations, actively
demonstrating the responsibility and commitment of the liquor industry in the context of the green era.
(1) Optimization of Energy Structure: In 2023, the company's proportion of green electricity reached 31%, an
increase of 3 percentage points compared to the previous year. This includes the construction of 8.5 MW
distributed photovoltaic power generation at Yanghe Base, 1.5 MW distributed photovoltaic power generation at
Siyang Base, and 6 MW distributed photovoltaic power generation at Shuanggou Base.
(2) Energy saving: At Yanghe Base, a multi-level self-control mode for steam usage was explored, with precise
control of steam pressure at the intake and usage ends in the workshops. This achieved stable steam pressure in
the workshops, with a comprehensive steam saving rate of 12.8%. At Siyang Base, by effectively controlling steam
pressure, the purchased steam usage was significantly reduced. Purchased steam decreased by 0.56 million tons
compared to the previous year. Simultaneously, a new solar energy collection technology was introduced to replace
steam heating methods, reducing steam usage. The daily steam usage in the workshops decreased by 1.54 tons
74
compared to the previous period. At Shuanggou Base, several balanced steam supply renovation projects were
implemented, resulting in an annual steam saving of over 6,000 tons.
(3) Green energy utilization: At Siyang Base, efficient upgrades were made to the lighting system, resulting in an
annual reduction of 140,000 kWh in lighting electricity consumption, achieving a carbon emission reduction of 97
tons. Additionally, by replacing 817 streetlights with solar-powered ones, the electricity consumption for street
lighting was reduced by 51,600 kWh annually, resulting in a carbon emission reduction of 36 tons.
The specific details regarding the reduction of carbon emissions during the reporting period can be found in the
company's disclosed "Annual Environmental, Social, and Corporate Governance Report for 2023."
Administrative penalties for environmental issues during the reporting period
The impact on
Company or the production
Reason for Violation Punishment Rectification
subsidiary and operation
punishment situation result measures
name of listed
companies
None None None None None None
Other environmental information that should be disclosed
None
Other environmental protection related information
None
II. Social responsibility
The company has disclosed the “2023 Annual Social Responsibility Report and ESG Report” ，see
www.cninfo.com.cn for details.
III. The Achievements of Poverty Alleviation and Rural Revitalization
In 2023, the company adhered to the national deployment of "consolidating and expanding the achievements of
poverty alleviation and effectively connecting rural revitalization", practicing the development concept of
"serving the country, benefiting the people, and benefiting the community", bravely assuming social
responsibility, and deeply cultivating public welfare undertakings.
1. Promoting Rural Revitalization: Actively responding to the requirements of Suqian Municipal Government
regarding "pairing assistance between urban and rural areas, and joint construction of civilization", the company
assisted Zhangdu Village in selling agricultural and sideline products, opened a "Village-Enterprise Joint
Construction Unique New Trend - Weekend Hair Salon", carried out the "Creating Demonstration of Original
Grain Planting, Sowing Seeds for Rich Villagers and Strong Villages" sorghum harvest festival activities, and
donated agricultural materials to Zhangdu Village. Cooperated with Qiuzhuang Village to carry out paired
assistance and traditional festival condolence activities, providing one-on-one assistance to extremely poor
people, low-income households, and families on the edge of subsistence.Implemented assistance for poverty
alleviation cooperation between the eastern and western regions, constructed the Langrejiu Village project in
Tibet, and created a new model for rural revitalization.
75
2. Engaging in Public Welfare Activities: Conducted theme activities such as "Searching for Lei Feng's Footprints,
Promoting the Spirit of Volunteerism" and "Heart-to-Heart with the Party, Walking with Dream Children",
focusing on caring for left-behind children.Carried out the "My University, My Dream" public welfare assistance
program, helping financially disadvantaged students in Suqian to realize their dream of attending university.
Established a public welfare blood donation project and organized the "Red Strength Transmission - Yanghe Co.,
Ltd.'s 2023 Volunteer Blood Donation Activity" to spread the "red" spirit.Supported the aerospace industry by
establishing the "Dream Blue China Aerospace Fund Scholarship" to help cultivate aerospace talents.Collaborated
with the China Dunhuang Grottoes Conservation and Research Foundation to launch the "Dunhuang
Guardianship Plan" to support the conservation of the Dunhuang Grottoes.Donated CNY10 million to Hebei's
Zhuozhou City for disaster relief and post-disaster reconstruction after flooding.Donated CNY10 million to assist
with earthquake relief and post-disaster support for youth in Jishishan County, Gansu Province, after an
earthquake.
For further details, please refer to the company's disclosed "Annual Environmental, Social, and Corporate
Governance Report for 2023".
76
Section VI Significant Events
I. Performance of commitments
1. Complete and incomplete commitments of the Company and its actual controller, shareholders, related
parties, acquirers, and other related parties for the commitments by the end of the reporting period
Applicable □N/A
Giver of
Commitment Commitment Details of Date of Term of
commitment Performance
s Type Commitment Commitment Commitment
s
1.
Commitment
to avoid
horizontal
competition:
(1) The
company is
not currently
engaged in
any business
that
competes
with the
joint-stock
company.
The company
promises to
Commitment
maintain the
s on
existing
Commitment Jiangsu horizontal
business
s made at Yanghe competition, August 26, In normal
structure, Long-term
IPO or Group Co. related 2009 execution
and not to
refinancing Ltd. transactions,
directly or
and capital
indirectly
occupation
operate with
the business
of the joint-
stock
company
that actually
constitutes
competition
or may
constitute
competition.
Any business,
or newly
established
subsidiaries
or affiliated
enterprises
77
engaged in
the above-
mentioned
business. (2)
If the
company
violates the
above
commitment
s, the joint-
stock
company has
the right to
request the
company to
immediately
terminate
the business
of horizontal
competition
and
compensate
the economic
loss caused
to the joint-
stock
company. At
the same
time, the
company
shall pay
liquidated
damages of
CNY 10
million to the
joint-stock
company. (3)
The company
promises not
to use its
status as the
controlling
shareholder
in the joint-
stock
company to
damage the
legitimate
rights and
interests of
the joint-
stock
company,
other
shareholders
of the joint-
stock
company and
78
creditors of
the joint-
stock
company. ⑷
This letter of
commitment
takes effect
from the
date of
signing and
cannot be
revoked
without the
consent of
the joint-
stock
company. 2.
Commitment
to reduce
related-party
transactions:
The company
will strictly
abide by the
requirements
of relevant
laws,
regulations
and
normative
documents
such as the
Company
Law, the
Securities
Law, and the
Code of
Corporate
Governance
for Listed
Companies,
and further
reduce and
strictly
regulate the
relationship
with joint-
stock
companies.
All kinds of
related-party
transactions
between the
two
companies,
to ensure
that the
status of the
79
controlling
shareholder
and actual
controller
will not be
used to harm
the interests
of the joint-
stock
company and
other
shareholders
of the joint-
stock
company,
and that no
new
occupation
of the joint-
stock
company will
occur.
Commitment
to avoid
horizontal
competition:
1. The
company is
mainly
engaged in
investment
management
, and does
not operate
the same or
Commitment related
s on business as
horizontal the issuer.
Jiangsu Blue
competition, November In normal
Alliance Co., The company Long-term
related 23, 2017 execution
Ltd. will not
transactions,
and capital engage in the
occupation same or
related
business as
the issuer's
business, and
will not harm
the issuer's
interests, nor
will it seek
illegitimate
benefits from
the issuer; 2.
If the
company
80
violates the
above
commitment
s, the issuer
has the right
to demand
compensatio
n from it
owing to
economic
losses caused
to the issuer,
and pay
liquidated
damages of
CNY 5
million, and
have the
right to
request the
acquisition of
the business
project at the
market price
of the
business
project or
the
establishmen
t cost price
(whichever is
lower); 3.
This
commitment
The book will
take effect
from the
date of
signing and
cannot be
revoked
without the
consent of
the issuer.
After the
issuer's
shares have
been listed
Jiangsu Blue Share
and traded November In normal
Alliance Co., Reduction Long-term
on the stock 23, 2017 execution
Ltd. Commitment
exchange for
one year, the
shares
transferred
81
each year
shall not
exceed 25%
of the total
number of
the issuer's
shares held
by the issuer,
and the
issuer's
shares held
and their
changes shall
be reported
to the issuer
in a timely
manner.
As one of the
directors,
supervisors
and senior
managers of
the of
Jiangsu Blue
Alliance Co.,
Ltd., I
promise: 1.
During the
term of
office of the
issuer, the
annual
transfer of
Blue Alliance
Other equity shall
Cong November March 30, In normal
commitment not exceed
Xuenian 23, 2017 2024 execution
s 25% of the
total equity
of Blue
Alliance held
by me 2. If I
resign from
the issuer, I
shall not
transfer the
shares of the
Blue Alliance
held by me
within six
months after
resignation;
3. If I resign
from the
issuer, the
82
number of
shares
transferred
shall not
exceed 50%
of the total
shares of the
Blue Alliance
held by me
within 12
months of six
months of
resignation
Whether the
promise is
YES
fulfilled on
time
If the
commitment
is overdue
and not
fulfilled, the
specific
reasons for
the failure to
N/A
fulfill and the
next work
plan shall be
explained in
detail
2.Where any profit forecast was made for any of the Company’s assets or projects and the current reporting
period is still within the forecast period, the Company shall explain whether the performance of the asset or
project reaches the profit forecast and why:
□Applicable N/A
II. Non-operating capital occupation of listed companies by controlling shareholders and other
related parties
□Applicable N/A
No such case during the current reporting period.
III. Illegal Provision of Guarantees for External Parties
□Applicable N/A
No such case during the current reporting period.
83
IV. Explanation of the board of directors on the latest ‘non-standard audit report’
□Applicable N/A
V. Explanation Given by the Board of Directors, Supervisory Committee and Independent
Directors (if applicable) regarding the “Non-standard Auditor’s Report” Issued by the CPA
Firm for the Current Reporting Period
□Applicable N/A
VI. For Changes in Accounting Policies, Accounting Estimates or Correction of Significant
Accounting Errors Compared with the Financial Report for the Prior Year
Applicable □N/A
The Ministry of Finance issued Interpretation No. 16 of the Enterprise Accounting Standards on November 30,
2022 (Finance [2022] No. 31, hereinafter referred to as "Interpretation No. 16"). The content of "the accounting
treatment of the initial recognition exemptions is not applicable to the deferred income tax on assets and liabilities
arising from individual transactions" shall be implemented from January 1, 2023. For individual transactions
subject to Interpretation No. 16, where temporary differences in taxable income and deductible temporary
differences arise from recognizing lease liabilities and right-of-use assets, the company retrospectively adjusts the
accumulated impact amount according to Interpretation No. 16 and Enterprise Accounting Standard No. 18 -
Income Taxes, and adjusts the earliest period's beginning retained earnings and other related financial statement
items in the financial statements.
VII. Explanation of changes in the scope of consolidated statements compared with the financial
report of the previous year
Applicable □N/A
Set up subsidiaries
In April 2023, the holding subsidiary Jiangsu Yanghe Investment Management Co., Ltd. and Jiangsu Furesi
Agricultural Co., Ltd. jointly invested CNY150 million to establish Jiangsu Yiguo Xiang Biotechnology Co., Ltd., with
Jiangsu Yanghe Investment Management Co., Ltd. subscribing for CNY112.5 million, accounting for 75% of its
registered capital; and Jiangsu Furesi Agricultural Co., Ltd. subscribing for CNY37.5 million, accounting for 25% of
its registered capital. Starting from April 2023, it will be included in the scope of consolidation for the
consolidated financial statements.
VIII. Engagement and Disengagement of the CPA firm
CPA firm engaged at present
Name of domestic accounting firm Suya Jincheng CPA LLP.
Remuneration of domestic accounting firm
190.8
(CNY10,000)
Consecutive years of audit services of domestic
17
accounting firms
The name of the certified public accountant of the Li Laimin, Li Yan
84
domestic accounting firm
Consecutive years of auditing services by certified
Li Laimin: 4 years; Li Yan: 5 years
public accountants of domestic accounting firms
Whether to change the CPA firm in the current period
□Yes No
Engagement of internal control audit CPA firm, financial advisor or sponsor
Applicable □N/A
During the reporting period, the Company hired Suya Jincheng CPA LLP. as the internal control audit accounting
firm, and paid a total of CNY 530,000 of financial consulting fees during the period.
IX. Facing delisting after annual report disclosure
□Applicable N/A
X. Bankruptcy and Restructuring
□Applicable N/A
No such case during the reporting period.
XI. Material Litigations and Arbitration
□Applicable N/A
The Company had no material litigation or arbitration during the current reporting period.
XII. Punishment and rectification
□Applicable N/A
No such case during the reporting period.
XIII. The integrity of the company and its controlling shareholders and actual controllers
□Applicable N/A
XIV. Significant Related-party Transactions
1. Related-party Transactions Arising from Routine Daily Operations
□Applicable N/A
No such case during the reporting period.
2. Related-party Transactions regarding Purchase and Disposal of Assets or Equity
□Applicable N/A
No such case during the reporting period.
85
3. Significant Related-party Transactions Arising from Joint Investments on External Parties
□Applicable N/A
No such case during the reporting period.
4. Related Credit and Debt Transactions
□Applicable N/A
No such case during the reporting period.
5. Transactions with related financial companies
□Applicable N/A
No such case during the reporting period.
6. Transactions between the financial company controlled by the company and related parties
□Applicable N/A
There is no deposit, loan, credit or other financial business between the financial company controlled by the
Company and its related parties.
7. Other significant related-party transactions
□Applicable N/A
The company has no other significant related transactions during the reporting period.
XV. Significant Contracts and Their Execution
1. Trusteeship, Contracting and Leasing
（1）Trusteeship
□Applicable N/A
No such case in the reporting period.
（2）Contracting
□Applicable N/A
No such case in the reporting period.
（3）Leasing
□Applicable N/A
No such case in the reporting period.
86
2. Significant Guarantees
□Applicable N/A
No such case in the reporting period.
3. Entrusting Others to Manage Cash Assets
(1) Entrusted financial management
Applicable □N/A
Overview of entrusted wealth management during the reporting period
Unit: CNY10, 000
Amount of
impairment
Amount not
Outstanding accrued owing
Product types Source of funds Amount collected after
balance to overdue
the due date
financial
management
Bank wealth
management Private funds 950,000 560,000 0 0
products
Trust wealth
management Private funds 27,500 0 27,947.78 6,512.85
products
Total 977,500 560,000 27,947.78 6,512.85
Specific circumstances of high-risk entrusted wealth management with a single large amount or low security and
low liquidity
Applicable □N/A
87
Unit: CNY10, 000
Ref
ere Is there
Typ Inv Actual The actual Whethe
Remun nce any
e of Sou est Expect profit and recovery of Amount of r it has An overview of
Trus Star eration ann entruste
Trus Am rce End me ed loss profit and provision gone the matter and
tee t determ uali d
tee Type oun s of dat nt earnin amount loss during for through an index of
nam dat ination zed financial
(or t fun e dire gs (if during the the impairme legal related queries
e e metho rate plan in
Trus ds ctio any) reporting reporting nt (if any) proced (if any)
d of the
tee) n period period ures
ret future
urn
The trust
financing
expires, and
CITIC
part of the
Trust
principal and
income are
Jiahe
deferred. For
No.
details, please
118
refer to the
Everg Nov
Ma "Announcement
CITI rande Priv em Deb
6,5 y on the Deferred
C Trus Guiya ate ber t 7.6 1,085.
12. 29, Cash 2,701.31 1341.14 6,512.85 Yes Yes Payment of the
Trus t ng fun 29, ass 0% 97
85 202 Expired
t New ds 202 ets
0 Principal and
World 1
Income of
Accu
Entrusted
mulat
Wealth
ive
Management"
Fund
disclosed by the
Trust
company on
Plan
December 4,
2021
(Announcement
88
No. 2021-044)
The trust
financing
extends, and
AVIC part of the
Trust principal and
income are
Tianxi deferred. For
n Bay details, please
Area refer to the
Feb Feb
Rene "Announcement
Priv rua rua Equ
AVIC wal on the Deferred
Trus 9,0 ate ry ry ity 8.5
Trus No. Cash 1,700 1,725.62 691.64 0 Yes Yes Payment of the
t 00 fun 26, 26, ass 0%
t 10 Expired
ds 202 202 ets
Collec Principal and
1 3
tive Income of
Fund Entrusted
Trust Wealth
Plan Management"
Phase disclosed by the
1 company on
March 18, 2023
(Announcement
No. 2023-003)
AVIC The trust
Trust financing
extends, and
Tianxi part of the
n Bay Ma Ma principal and
AVI Priv Equ
AVIC Area rch rch income are
C 9,0 ate ity 8.5
Trus Rene 1, 1, Cash 1,700 1,725.62 684.66 0 Yes Yes deferred. For
Trus 00 fun ass 0%
t wal 202 202 details, please
t ds ets
No. 1 3 refer to the
10 "Announcement
Collec on the Deferred
tive Payment of the
Fund Expired
89
Trust Principal and
Plan Income of
Phase Entrusted
2 Wealth
Management"
disclosed by the
company on
March 18, 2023
(Announcement
No. 2023-003)
24,
Total 4,485.
512 -- -- -- -- -- -- 6,152.37 -- 6,512.85 -- -- --
97
.85
Entrust finance expected to be failed to recover principle or other situation leading to impairment
Applicable □N/A
The “CITIC Trust Jiahe No. 118 Evergrande Guiyang New World Collective Fund Trust Plan” purchased by the company extended. Based on the principle of
prudence, the company handles changes in fair value. As of December 31, 2023, an impairment provision of CNY65,128,500 was recognized.
On March 18, 2023, the company disclosed a delay announcement of the “AVIC Trust Tianxin Bay Area Renewal No. 10 Collective Fund Trust Plan Phase 1”, “AVIC
Trust Tianxin Bay Area Renewal No. 10 Collective Fund Trust Plan Phase 2”. As of December 31, 2023, the aforementioned trust products had repaid principal
amounts of CNY10 million each. As of the disclosure date of this report, the aforementioned products had repaid principal amounts of CNY80 million each, leaving
a total of CNY40 million in principal yet to be recovered.
90
(2) Entrusted loan management
□Applicable N/A
No such case during the reporting period
4. Other major contracts
□Applicable N/A
No such case during the reporting period
XVI. Explanation of other significant matters
Applicable □N/A
1、The company indirectly holds the partnership shares of Jiangsu Jiequan Emerging Industry Development Fund
(Limited Partnership) by investing in Jiangsu Xinghe Investment Management Co., Ltd. and Nanjing Xingnahe
Venture Capital Partnership (Limited Partnership). Xingnahe Partnership and Jiequan Fund have completed the
Raised and completed the filing with the Asset Management Association of China, the filing codes are SCF515 and
SCL005 respectively. For details, please refer to the "Announcement on Cooperative Investment with Professional
Investment Institutions" (Announcement No.: 2017-021) and "Progress Announcement on Cooperative
Investment with Professional Investment Institutions" disclosed by the company on December 30, 2017 and April
12, 2018 (Announcement No.: 2018-011).
2、The wholly-owned subsidiary of the company, Sujiu Group Jiangsu Wealth Management Co., Ltd. subscribed
for the partnership shares of Suzhou Danqing Phase II Innovative Pharmaceutical Industry Investment Partnership
(Limited Partnership). Danqing Phase II has completed the fundraising and completed the filing with the China
Securities Investment Fund Industry Association, the filing code is SED720. For details, please refer to the
"Announcement on Cooperative Investment with Professional Investment Institutions" (Announcement No.:
2018-021), "About Announcement on the Progress of Cooperative Investment with Investment Institutions
(Announcement No.: 2018-030), "Announcement on the Progress of Cooperative Investment with Professional
Investment Institutions" (Announcement No.: 2019-004).
3、Jiangsu Yanghe Investment Management Co., Ltd. subscribed for the partnership share of Panmao (Shanghai)
Investment Center (Limited Partnership). Panmao Investment has completed the fundraising and completed the
filing with the Asset Management Association of China, the filing code is SED720. For details, please refer to the
"Announcement on Cooperative Investment with Professional Investment Institutions" disclosed by the company
on June 22, 2018 (announcement number: 2018-025).
4、Jiangsu Yanghe Investment Management Co., Ltd. subscribed for the partnership shares of Jiangsu Zijin
Hongyun Health Industry Investment Partnership (Limited Partnership), Suqian Yida Industrial Venture Capital
Fund (Limited Partnership), and Hunan Huaye Tiancheng Venture Capital Partnership (Limited Partnership). Zijin
Hongyun, Suqian Yida and Huaye Tiancheng have completed the fundraising and completed the filing with the
Asset Management Association of China. The filing codes are SGA436, SGV275 and SGW727 respectively. For
details, please refer to the "Announcement on Cooperative Investment with Professional Investment Institutions"
(Announcement No.: 2019-002) disclosed by the company on March 28, 2019, and "About Participating in
Investment in Suqian Yida Industrial Venture Capital" disclosed on April 30, 2019 Announcement on Funds and
91
Related Party Transactions” (Announcement No.: 2019-012), and “Announcement on Subscription of Hunan
Huaye Tiancheng Venture Capital Fund” disclosed on September 6, 2019 (Announcement No.: 2019-021).
5、Jiangsu Yanghe Investment Management Co., Ltd. indirectly holds the partnership share of Nanjing
Xingnaheyuan Venture Capital Partnership (Limited Partnership) by subscribing to Nanjing Xingnahai Equity
Investment Partnership (Limited Partnership), and Jiangsu Yanghe Investment Management Co., Ltd. subscribes
for Suzhou The partnership shares of Zhongxing Fushuzhi Venture Capital Partnership (Limited Partnership) and
Nanjing Hongyang Equity Investment Partnership (Limited Partnership), Xingna Heyuan, Suzhou Xingfu and
Nanjing Hongyang have completed the fundraising and invested in China Securities Investment Fund The industry
association has completed the filing, and the filing codes are SLR472, SNC111, and SNF086. For details, please refer
to the "Announcement on Cooperative Investment with Professional Investment Institutions" (Announcement No.:
2020-031) disclosed by the company on August 12, 2020, and the "About Subscription of Suzhou Zhongxin
Fushuzhi Entrepreneurship" disclosed on October 19, 2020 Investment Fund Announcement (Announcement No.:
2020-035), and the Announcement on Subscription of Nanjing Hongyang Equity Investment Fund (Announcement
No.: 2020-038) disclosed on November 4, 2020. Suzhou Xingfu and Nanjing Hongyang completed the fundraising
scale of CNY 1.5 billion and CNY 230 million respectively.
6、Jiangsu Yanghe Investment Management Co., Ltd. subscribed for the partnership share of Zhuhai Hengqin
Huaye Tiancheng Phase IV Venture Capital Partnership (Limited Partnership), Xiamen Yuanfeng Equity Investment
Fund Partnership (Limited Partnership), and Shanghai Yunfeng Xincheng Investment Center (Limited Partnership).
Huaye Phase IV, Xiamen Yuanfeng and Yunfeng Xincheng have completed the filing with the Asset Management
Association of China. The filing codes are SQB769, SLX842 and SH1000 respectively. For details, please refer to the
"Announcement on Subscribing Zhuhai Hengqin Huaye Tiancheng Phase IV Venture Capital Fund" disclosed by the
company on February 10, 2021 (Announcement No.: 2021-007), and the "About Subscription to Xiamen" disclosed
on April 13, 2021 Yuanfeng Equity Investment Fund Announcement (Announcement No.: 2021-012), and the
Announcement on Cooperative Investment with Professional Investment Institutions disclosed on August 6, 2021
(Announcement No.: 2021-033). Huaye Phase IV and Xiamen Yuanfeng completed the fundraising scale of CNY
1.899 billion and CNY 20 billion respectively.
7、Jiangsu Yanghe Blue Investment Management Co., Ltd. and Jiangsu Yanghe Dream Investment Management
Co., Ltd. subscribe for the partnership shares of Nanjing Huatai Yanghe Equity Investment Mother Fund (limited
partnership). Huatai Yanghe Mother Fund has completed the filing in Asset Management Association of China with
the filing code of SXY168. For details, please refer to the "Announcement on the establishment of wholly-owned
subsidiaries and Cooperative Investment with Professional Investment Institutions" disclosed by the company on
August 10, 2022 (Announcement No.: 2022-017), and the "Progress Announcement on the establishment of
wholly-owned subsidiaries and Cooperative Investment with Professional Investment Institutions" disclosed by
the company on September 28, 2022 (Announcement No.: 2022-020), and the "Progress Announcement on the
establishment of wholly-owned subsidiaries and Cooperative Investment with Professional Investment
Institutions" disclosed by the company on December 17, 2022 (Announcement No.: 2022-024), and the
“Announcement on the establishment of a wholly-owned subsidiary and joint investment with a professional
investment institution” disclosed by the company on January 5, 2023(Announcement No,:2023-001).
8、Jiangsu Yanghe Investment Management Co., Ltd. subscribed to the partnership shares of the Suqian Huatai
Production and Development Technology Equity Investment Fund (Limited Partnership). The Huatai Yanghe
Parent Fund has been filed with the Asset Management Association of China (AMAC), with the filing code
SACH73. For details, please refer to the “Announcement on the Progress of Joint Investment and Related
Transactions with Professional Institutions” disclosed by the company on December 23, 2023(Announcement
92
No.:2023-031), and the ” Announcement Regarding Joint Investment and Related Transactions with Professional
Institutions” disclosed by the company on August 29, 2023(Announcement No.:2023-019).
XVII. Significant Events of the Company's Subsidiaries
□Applicable N/A
93
Section VII Changes in Shares and Shareholders
I. Changes in shares
1. Table of Changes in Share Capital
Unit：share
Before the change Changes in the period (+, -) After the change
Share
transfe
New
Bonus rred
Shares Ratio Shares Others Sub-total Shares Ratio
issue from
Issued
capital
reserve
1. Shares subject to - 4,289,2
5,692,132 0.38% 0 0 0 -1,402,896 0.28%
conditional restriction(s) 1,402,896 36
1.1 State holdings 0 0.00% 0 0 0 0 0 0 0.00%
1.2 Shares held by
0 0.00% 0 0 0 0 0 0 0.00%
State-owned corporate
1.3. Other domestic - 4,289,2
5,692,132 0.38% 0 0 0 -1,402,896 0.28%
holdings 1,402,896 36
Including: held by
0 0.00% 0 0 0 0 0 0 0.00%
domestic corporates
held by domestic - 4,289,2
5,692,132 0.38% 0 0 0 -1,402,896 0.28%
natural persons 1,402,896 36
4. Foreign shares 0 0.00% 0 0 0 0 0 0 0.00%
Including: held by
0 0.00% 0 0 0 0 0 0 0.00%
overseas corporates
held by
0 0.00% 0 0 0 0 0 0 0.00%
overseas natural person
2. Shares without 1,501,295 1,502,1
99.62% 0 0 0 859,970 859,970 99.72%
restriction ,868 55,838
2.1 CNY ordinary 1,501,295 1,502,1
99.62% 0 0 0 859,970 859,970 99.72%
shares ,868 55,838
2.2 Domestically listed
0 0.00% 0 0 0 0 0 0 0.00%
foreign shares
2.3 Foreign shares
0 0.00% 0 0 0 0 0 0 0.00%
listed overseas
2.4 Others 0 0.00% 0 0 0 0 0 0 0.00%
1,506,988 100.00 1,506,4
3. Total shares 0 0 0 -542,926 -542,926 100.00%
,000 % 45,074
Reason for share changes
Applicable □N/A
Changes in shares were mainly due to changes in the shares locked by the current and outgoing directors,
supervisors and senior managers of the company, and the cancellation of shares.
Approval for changes in share capital
94
□Applicable N/A
Transfer for changes in share capital
□Applicable N/A
Effects of changes in share capital on the basic earnings per share ("EPS"), diluted EPS, net assets per share
attributable to common shareholders of the Company, and other financial indexes over the last year and last
period
□Applicable N/A
Other contents that the Company considers necessary or required by the securities regulatory authorities to
disclose
□Applicable N/A
2. Changes in Restricted Shares
Applicable □N/A
Unit：share
Opening Closing Note for
Name of Increased in Vested in Date of
restricted restricted restricted
shareholder current period current period unlocking
shares shares shares
On March 7,
2023, 25% of
the shares
held were
lifted from
restrictions on
sale, and the
Lock in upon remaining
Zhou Xinhu 2,878,291 0 719,573 2,158,718 director's shares that
departure have not been
lifted from
restrictions on
sale will be
lifted in
accordance
with relevant
regulations.
On March 30,
2023, 25% of
the shares
held were
lifted from
Lock in upon
restrictions on
Cong Xuenian 2,778,291 0 694,573 2,083,718 director's
sale, and the
departure
remaining
shares that
have not been
lifted from
restrictions on
95
sale will be
lifted in
accordance
with relevant
regulations.
Total 5,656,582 0 1,414,146 4,242,436 -- --
II. Issuance and Listing of Securities
1. Securities (exclude Preferred Share) Issued during the Reporting Period
□Applicable N/A
2. Explanation on Changes in Share Capital & the Structure of Shareholders, the Structure of Assets and
Liabilities
Applicable □N/A
The company convened the 16th meeting of the 7th Board of Directors and the 10th meeting of the 7th Supervisory
Board on August 28, 2023. They reviewed and approved the "Plan for Cancelling the Remaining Shares in the
Repurchase Special Securities Account". On September 15, 2023, the company convened the first extraordinary
general meeting of shareholders in 2023, and ”the proposal for Cancelling the Remaining Shares in the Repurchase
Special Securities Account” was approved. The company agreed to cancel 542,926 shares remaining in the
repurchase special securities account and correspondingly reduce the company's registered capital. For detailed
information, please refer to the announcements released by the company on August 29, 2023, and September 16,
2023, titled "Announcement on the Cancellation of Remaining Shares in the Repurchase Special Securities
Account" (Announcement No.: 2023-020) and "Announcement of Resolutions of the First Extraordinary General
Meeting of Shareholders in 2023" (Announcement No.: 2023-023), etc..
3. Existent Shares Held by Internal Staff of the Company
□Applicable N/A
III. Particulars about the Shareholders and Actual Controller
1. Total Number of Shareholders and Their Shareholdings
Unit：share
Total number The total The total
of common number of number of
Total number shareholders preferred preference
of common at the end of shareholders shareholders
shareholders the previous whose voting whose voting
180,196 183,521 0 0
at the end of month prior to rights have rights have
the reporting the annual been restored been restored
period report at the end of at the end of
disclosure the reporting the previous
date period (if any) month before
96
(see Note 8) the disclosure
date of the
annual report
(if any) (see
Note 8)
Shareholders who hold more than 5% of total shares or the top 10 shareholders (excluding lending of shares
through the transfer facility)
Total Pledge, marking or freezing
Increase
commo Number
/decrea Number
Share- n shares of
se of
Name of Nature of holding held at unrestric
during restricte
Shareholders shareholders percent the end ted Status Amount
the d shares
age (%) of the shares
reportin held
reportin held
g period
g period
Jiangsu Yanghe State-owned 514,858 514,858,
34.18% 0 0 N/A 0
Group Co., Ltd. legal person ,939 939
Domestic Non-
Jiangsu Blue 264,991 264,991,
state-owned 17.59% 0 0 N/A 0
Alliance Co., Ltd. ,926 926
legal person
Shanghai Haiyan
Logistics State-owned 145,708 145,708,
9.67% 0 0 N/A 0
Development legal person ,137 137
Co., Ltd.
Shanghai
Jieqiang
State-owned 59,744, 59,744,0
Tobacco Sugar & 3.97% 0 0 N/A 0
legal person 099 99
Wine (Group)
Co., Ltd.
Bank of China
Limited - China
Merchants CSI
Baijiu Index 47,406, 3,619,3 47,406,3
Others 3.15% 0 N/A 0
Classified 371 30 71
Securities
Investment
Fund
Hong Kong
Securities
Overseas legal 38,520, 1,153,1 38,520,8
Clearing 2.56% 0 N/A 0
persons 846 16 46
Company
Limited
Bank of China
Limited - E Fund
Blue Chip
36,000, 2,800,0 36,000,0
Selected Mixed Others 2.39% 0 N/A 0
006 06 06
Securities
Investment
Fund
China Securities
Domestic Non-
Finance 13,790, 13,790,0
state-owned 0.92% 0 0 N/A 0
Corporation 044 44
legal person
Limited
97
Bank of China
Limited - E Fund
Premium
12,500, 1,680,0 12,500,0
Selected Hybrid Others 0.83% 0 N/A 0
032 32 32
Securities
Investment
Fund
Yanghe Distillery
Co., LTD－The
first phase of
9,118,3 9,118,38
the core Others 0.61% 0 0 N/A 0
84 4
backbone
shareholding
plan
Strategic investors or general
legal persons becoming the top
10 shareholders due to NO
placement of new shares (if any)
(see Note 3)
Explanation of the related
relationship or concerted action NO
of the above shareholders
Explanation of the above-
mentioned shareholders
involving entrusted/entrusted NO
voting rights and abstention
from voting rights
Special instructions for the
existence of a special repurchase
account among the top 10 NO
shareholders (if any) (see Note
10)
Shareholdings of the top 10 shareholders without restrictions on sales
Number of unrestricted shares held at the Type of shares
Name of shareholders
end of the reporting period Type Amount
CNY common
Jiangsu Yanghe Group Co., Ltd. 514,858,939 514,858,939
shares
CNY common
Jiangsu Blue Alliance Co., Ltd 264,991,926 264,991,926
shares
Shanghai Haiyan Logistics CNY common
145,708,137 145,708,137
Development Co., Ltd. shares
Shanghai Jieqiang Tobacco Sugar CNY common
59,744,099 59,744,099
& Wine (Group) Co., Ltd. shares
Bank of China Limited－China CNY common
Merchants CSI Liquor Index shares
47,406,371 47,406,371
Graded Securities Investment
Fund
Hong Kong Securities Clearing CNY common
38,520,846 38,520,846
Co., Ltd shares
Bank of China Limited－E Fund CNY common
Blue Chip Selected Mixed 36,000,006 shares 36,000,006
Securities Investment Fund
China Securities Finance Co., LTD 13,790,044 CNY common 13,790,044
98
shares
Bank of China Limited－E Fund CNY common
Premium Selected Hybrid 12,500,032 shares 12,500,032
Securities Investment Fund
Yanghe Distillery Co., LTD－The CNY common
first phase of the core backbone 9,118,384 shares 9,118,384
shareholding plan
Description of the connected
relationship or concerted action
among the top 10 shareholders
of unrestricted tradable shares,
NO
and between the top 10
shareholders of unrestricted
tradable shares and the top 10
shareholders
Explanation on the participation
of the top 10 ordinary
shareholders in the securities NO
margin trading (if any) (see Note
4)
Participation of top 10 shareholders in the lending of shares in the transfer business
□Applicable N/A
Change in the top 10 shareholders from the previous period
□Applicable N/A
Any of the Company’s top 10 common shareholders or top 10 non-restricted common shareholders conducted
any agreed buy-back in the reporting period?
□Yes No
No such case during the current reporting period.
2. Particulars about Controlling Shareholder of the Company
Nature of controlling shareholder: local state-owned holding
Type of controlling shareholder: Corporation
Legal
Name of Controlling Date of
representative/ Organization Code Business scope
Shareholder establishment
People in charge
The business scope
includes grain
procurement; import
and export of various
commodities and
technologies on a self-
operated or agency
Jiangsu Yanghe Group 91321300142334989
Yang Weiguo May 8, 1997 basis (excluding
Co., LTD Y
commodities and
technologies restricted
or prohibited from
import and export by
the state); sales of
nickel, molybdenum
iron, refined nickel-
99
iron, nickel-chromium
pig iron, nickel-
chromium ore, furnace
charge, steel,
mechanical parts
castings, light stabilizer
944, light stabilizer 622,
antioxidant 3114,
organic fertilizers,
compound fertilizers,
chemical raw materials
(excluding dangerous
goods), viscose staple
fibers, cotton pulp
pellets, electric bicycles
and accessories,
lithium batteries,
hardware and electrical
sales; sales of raw
grains; property
leasing; industrial
investment; municipal
public works, building
construction projects,
tourism and cultural
industry investment
(business activities
shall be carried out
with the approval of
relevant departments
as required by law).
General projects: sales
of communication
equipment; sales of
optical communication
equipment; sales of
electronic products;
sales of mobile
communication
equipment; sales of
mobile terminal
equipment; wholesale
of computer hardware
and auxiliary
equipment; software
development;
information system
integration services
(business activities
shall be carried out
independently in
accordance with the
business license, except
for projects that
100
require approval by
law).
The controlling
shareholder reports on
the equity status of other
domestic and foreign N/A
listed companies held or
invested in during the
reporting period.
Change of controlling shareholder during the reporting period
□Applicable N/A
The Company's controlling shareholder has not changed during the reporting period.
3. Particulars about the Company’s Actual Controller & Concerted Parties
Nature of actual controller: local state-owned assets management organization
Actual controller type: Corporation
Legal
representative/ Date of
Name of Actual Controller Organization Code Business scope
People in establishment
charge
On behalf of Suqian
Municipal people's
Government to execute the
Suqian SASAC(State-owned responsibilities of state-
Assets Supervision October 22, owned enterprise investors,
Zhao Xiaoli N/A
and Administration 2005 implementing the
Commission) supervision and
management of state-
owned assets and state-
owned enterprises.
The equity of other
domestic and foreign listed
companies controlled by N/A
the actual controller during
the reporting period
Change of the actual controller during the reporting period
□Applicable N/A
No such change during the reporting period.
The ownership and controlling relationship between the actual controller of the Company and the Company is
detailed as follows:
101
The actual controller controls the company through trust or other asset management methods
□Applicable N/A
4. The Company's Controlling Shareholder or the Largest Shareholder and its Concerted Action Person's
Cumulative Pledged Shares Account for 80% of the Company's Shares Held by Them
□Applicable N/A
5. Particulars about Other Corporate Shareholders with Shareholding Proportion over 10%
Applicable □N/A
Legal
Date of
Name of Actual Controller representative/ Organization Code Business scope
establishment
People in charge
Sales of daily
necessities,
biotechnology research
and development,
Jiangsu Blue Alliance Co., LTD Cong Xuenian 28 July, 2016 CNY 105.6 million furniture production,
business management
consulting services,
fruit tree planting, pre-
packaged food sales.
102
6. Particulars on Shareholding Decrease Restrictions for the Controlling Shareholders, Actual Controller,
Restructurer or Other Committing Parties
□Applicable N/A
IV. The specific implementation of share repurchases during the reporting period
The implementation progress of share repurchases
□Applicable N/A
The implementation progress of reducing repurchased shares by centralized bidding
□Applicable N/A
103
Section VIII Preferred Shares
□Applicable N/A
There are no preferred shares in the company during the reporting period.
104
Section IX Bonds
□Applicable N/A
105
Section X Financial Report
I.Auditor’s report
Type of audit report Standard and unqualified opinion
Date of signature 25 April 2024
Name of Audit Suya Jincheng CPA LLP.
No. of auditor’s report Suya Audit [2024] No.755
Names of auditors Li Laimin, Li Yan
Body of Audit Report
To all the shareholders of Jiangsu Yanghe Distillery Co., Ltd.:
Opinion
We have audited the financial statements of Jiangsu Yanghe Distillery Co., Ltd. (hereinafter referred
to as the “Company”), which comprise the consolidated balance sheet and balance sheet as at 31
December 2023, consolidated income statement and income statement, consolidated cash flow
statement and cash flow statement, consolidated statement of changes in owners' equity and
statement of changes in owners' equity for the year then ended and notes to the financial
statements.
In our opinion, the attached financial statements are prepared, in all material respects, in accordance
with Accounting Standards for Business Enterprises and present fairly the financial position of the
company as at 31 December 2023 and its operating results and cash flow for the year then ended.
Basis for opinion
We conducted our audit in accordance with China Standards on Auditing (“CSAs”) for Certified
Public Accountants. Our responsibilities under those standards are further described in the Auditor's
Responsibilities for the Audit of the Financial Statements section of our report. We are independent
of the Company in accordance with the Code of professional ethics for Certified Public Accountants
in China (“the Code”), and we have fulfilled our other ethical responsibilities in accordance with
the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the consolidated financial statements of the current period. These matters were
addressed in the context of our audit of the consolidated financial statements as a whole and, in
forming our opinion thereon, and we do not provide a separate opinion on these matters.
1.Recognition of revenue
Please refer to note 27, “Significant Accounting Policies and Accounting Estimates” in Note Ⅲ, note 36 in Note
V "main Items of the Consolidated Financial Statements".
Key audit matters How our audit addressed the key audit matter
The Company’s specific condition of Our procedures in relation to revenue recognition included:
revenue recognition is that revenue
(1) Understood, tested and evaluated the effectiveness of internal
106
is recognized after customer control of sales and cash receipts cycle designed and executed by the
acceptance based on transfer of management.
control. In 2023, the Company’s (2) Through sampling inspection of the sales contract, identified the
annual operating revenue was contractual rights and obligations, evaluated the point of time of
CNY33.126 billion. The amount performance obligations and evaluated whether the judgment of the
substantial and operating revenue is transfer of control related to revenue recognition conforms to the
an important component of income Company's accounting policies and Accounting Standards for Business
statement. Therefore, we identified Enterprises.
operating revenue as a key audit (3) Judged whether there is an abnormal fluctuation of revenue in the
matter. reporting period with the analytic review of revenue and gross profit
margin in combination with product category.
(4) Sampling inspection of supporting documents related to revenue
recognition including sales contracts or orders, invoices, delivery lists or
receiving reports, shipping lists and bank slips.
(5) Implemented the external confirmation of selected major
franchisers and inspected the payback of account receivables after
the reporting period in combination with audit of accounts receivable
and contract liabilities.
(6) Sampling inspection of calculation and accounting treatment of
sales discount and sales allowance.
(7) Chose samples from sales revenue records before and after the
balance sheet date, inspected related supporting documents and
evaluated whether the revenue recorded in the appropriate accounting
period.
2. Existence, valuation and allocation of inventories
Please refer to note 13, “Significant Accounting Policies and Accounting Estimates” in Note Ⅲ, and note 8 in
Note V, "main Items of the Consolidated Financial Statements".
Key audit matters How our audit addressed the key audit matter
As at 31 December 2023, the book Our procedures in relation to existence, valuation, allocation of
value of inventory is CNY 18.954 inventories included:
billion, accounting for 27.16% of the
(1) Understood, tested and evaluated the effectiveness of
total assets and 36.08% of all
management's design and implementation of inventory-related internal
current assets. The book value of
control.
the inventories at year end is
(2) Carried out the inventory analysis review procedure.
relatively large and accounts for a
relatively large proportion of the (3) Supervised the inventory at the end of the period.
total assets at the year end. (4) Sample check of production cost calculation table and other cost
Therefore, the existence, valuation accounting data, and conducted valuation test on inventory, and
and allocation of inventories are evaluated the accuracy of closing balance of inventory.
identified as a key audit matter. (5) Obtained the calculation table of provision for stock obsolescence,
conduct the inventory impairment test, reviewed the inventory
impairment test process, and checked whether the provision for stock
obsolescence is made sufficiently.
Other information
The directors of the Company are responsible for the other information. The other information
comprises the information included in the annual report, but does not include the financial
statements and our auditors 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.
107
In connection with our audit of the financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with
the financial statements or our knowledge obtained in the audit or otherwise appears to be
materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information; we are required to report that fact. We have nothing to report in this regard.
Responsibilities of directors and those charged with governance for the financial statements
The directors of the Company are responsible for the preparation of the financial statements that
give a true and fair view in accordance with the disclosure requirements of Accounting Standards
for Business Enterprises, and designing, implementing and maintaining internal control that is
necessary to ensure the financial statements are free from material misstatement, whether due to
fraud or error.
In preparing the financial statements, the directors are 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 directors either intend to liquidate the
Company or to cease operations, or have no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company’s financial reporting
process.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a
whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s
report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a
guarantee that an audit conducted in accordance with CSAs will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with CSAs, we exercise professional judgment and maintain
professional skepticism throughout the audit. We also:
(1) Identify and assess the risks of material misstatement of the financial statements, whether due
to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override
of internal control.
(2) Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances.
(3) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
(4) Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to events
108
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.
(5) Evaluate the overall presentation, structure and content of the financial statements, including
the disclosures, and whether the financial statements represent the underlying transactions and
events in a manner that achieves fair presentation.
(6) Obtain sufficient 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
solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.
We also provide the 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 the governance, we determine those matters that were of
most significance in the audit of the consolidated 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.
Suya Jincheng CPA LLP
CPA of China: LI Laimin
CPA of China: LI Yan
Nanjing, China 25 April 2024
II. Financial statements
Consolidated balance sheet
Prepared by: Jiangsu Yanghe Distillery Co., Ltd.
109
As at 31 December 2023
Unit: CNY
Item On December 31st 2023 On January 1st 2023
Current assets:
Cash and bank balances 25,812,787,646.86 24,375,449,432.33
Settlement reserves
Lending funds
Financial assets held for trading 5,851,217,684.93 7,998,150,119.16
Derivative financial assets
Notes receivables 526,476,976.44 526,004,730.00
Accounts receivables 3,528,778.28 45,142,892.78
Account receivables financing 261,576,568.30 623,098,310.00
Prepayment 50,971,870.03 11,019,093.60
Premiums receivable
Reinsurance accounts receivable
Reinsurance contract reserve
Other receivables 57,782,263.17 74,362,342.41
Including: Interests receivable
Dividends receivable
Buying back the sale of financial
assets
Inventories 18,954,235,402.25 17,729,258,966.54
Contract assets
Assets held for sale
Non-current assets due within one
year
Other current assets 1,016,160,416.30 129,687,990.26
Total current assets 52,534,737,606.56 51,512,173,877.08
Non-current assets:
Disbursement of loans and
advances
Investment in debt instruments
Investment in other debt
instruments
Long-term receivables
Long-term equity investments 1,229,838,793.04 32,979,630.21
Investment in other equity
instruments
Other non-current financial assets 5,532,792,281.26 6,148,634,160.78
Investment property
Fixed assets 5,305,626,964.48 5,794,773,069.53
Construction in progress 1,457,315,739.56 757,145,492.90
Productive biological assets
Oil and gas assets
110
Right-of-use asset 82,464,551.16 34,115,602.27
Intangible assets 1,773,115,842.97 1,714,381,075.43
Development expenses
Goodwill 276,001,989.95 276,001,989.95
Long-term deferred expenses 8,052,339.84 12,078,509.76
Deferred tax assets 1,326,312,613.59 1,506,694,037.06
Other non-current assets 266,028,733.50 183,847,201.84
Total non-current assets 17,257,549,849.35 16,460,650,769.73
Total assets 69,792,287,455.91 67,972,824,646.81
Current liabilities:
Short-term loans
Borrowings from the central bank
Loans from other banks
Financial liabilities held for trading
Derivative financial liabilities
Notes payable
Accounts payables 1,425,873,552.42 1,376,209,527.01
Advance from customer
Contract liabilities 11,104,763,487.18 13,741,547,677.99
Financial assets sold for repurchase
Customer brokerage deposits
Securities underwriting brokerage
deposits
Receivings from vicariously sold
securities
Employee benefits payable 338,213,836.87 482,991,738.73
Taxes payable 1,009,471,862.46 1,136,695,805.18
Other payables 2,024,640,485.37 1,854,922,517.23
Including: Interests payable
Dividends payable
Handling charges and commissions
payable
Reinsurance accounts payables
Liabilities held for sale
Non-current liabilities due within
25,080,946.40 23,684,406.75
one year
Other current liabilities 1,247,749,929.26 1,312,248,150.31
Total current liabilities 17,175,794,099.96 19,928,299,823.20
Non-current liabilities:
Insurance contract reserves
Long-term loans
Bonds payable
Including: Preference shares
111
Perpetual bonds
Lease liabilities 48,709,685.88 3,715,300.93
Long-term payables 196,013,394.53 196,459,834.53
Long-term payroll payables
Accrued liabilities
Deferred income 87,520,166.67 92,277,166.67
Deferred tax liabilities 234,386,134.01 227,529,007.67
Other non-current liabilities
Total non-current liabilities 566,629,381.09 519,981,309.80
Total liabilities 17,742,423,481.05 20,448,281,133.00
Shareholders' equity
Share capital 1,506,445,074.00 1,506,988,000.00
Other equity instruments
Including: preference shares
Perpetual bonds
Capital reserves 930,524,463.31 904,650,678.91
Less: treasury stock 56,278,680.79
Other comprehensive income 2,023,194.81 1,982,037.01
Special reserves
Surplus reserves 753,494,000.00 753,494,000.00
General risk reserve
Undistributed profits 48,746,028,613.08 44,364,203,149.57
Total equity attributable to owners of
51,938,515,345.20 47,475,039,184.70
the parent company
Non-controlling interests 111,348,629.66 49,504,329.11
Total owners' equity 52,049,863,974.86 47,524,543,513.81
Total liabilities and owners' equity 69,792,287,455.91 67,972,824,646.81
Legal representative: Zhang Liandong
Person in charge of accounting affairs: Yin Qiuming
Person in charge of accounting department: Zhao Qike
Balance sheet of parent company
As at 31 December 2023
Unit: CNY
Item On December 31st 2023 On January 1st 2023
Current assets:
Cash and bank balances 23,078,403,040.50 23,231,793,606.79
112
Financial assets held for trading 4,353,570,013.70 5,084,342,428.09
Derivative financial assets
Notes receivables 355,328,831.49 505,704,730.00
Accounts receivables 95,491,609.32 1,204,161,788.24
Account receivables financing 394,478,350.00
Prepayment 55,401,319.74 51,616,255.75
Other receivables 2,510,993,906.82 1,068,086,225.72
Including: Interests receivable
Dividends receivable 519,220.27
Inventories 12,298,697,844.56 11,550,551,319.29
Contract assets
Assets held for sale
Non-current assets due within one
year
Other current assets 238,168,160.66 40,571,905.54
Total current assets 42,986,054,726.79 43,131,306,609.42
Non-current assets:
Investment in debt instruments
Investment in other debt
instruments
Long-term receivables
Long-term equity investments 9,530,201,578.43 8,180,436,290.49
Investment in other equity
instruments
Other non-current financial assets 1,782,878,797.80 2,427,355,825.21
Investment property
Fixed assets 3,327,872,021.12 3,693,258,788.76
Construction in progress 495,375,718.02 251,750,887.23
Productive biological assets
Oil and gas assets
Right-of-use asset 615,303.37 1,161,853.86
Intangible assets 1,133,200,138.15 1,141,322,601.26
Development expenses
Goodwill
Long-term deferred expenses 8,052,339.84 12,078,509.76
Deferred tax assets 33,504,216.38 24,515,740.48
Other non-current assets 194,423,677.41 163,216,415.72
Total Non-current Assets 16,506,123,790.52 15,895,096,912.77
Total Assets 59,492,178,517.31 59,026,403,522.19
Current liabilities:
Short-term loans
Financial liabilities held for trading
Derivative financial liabilities
113
Notes payable
Accounts payables 3,210,117,125.20 1,041,176,754.20
Advance from customer
Contract liabilities 16,052,768,704.31 17,485,085,741.24
Employee benefits payable
Taxes payable 157,200,430.68 377,457,671.93
Other payables 2,280,556,716.49 3,762,682,905.35
Including: Interests payable
Dividends payable
Liabilities held for sale
Non-current liabilities due within
369,739.52 704,940.02
one year
Other current liabilities 2,267,828,469.82 2,688,940,410.36
Total current liabilities 23,968,841,186.02 25,356,048,423.10
Non-current liabilities:
Long-term loans
Bonds payable
Including：preference shares
Perpetual bonds
Lease liabilities 286,396.18 656,135.70
Long-term payables 143,601,709.73 143,950,749.73
Long-term payroll payables
Provisions
Deferred income 8,791,666.67 4,791,666.67
Deferred tax liabilities 55,706,044.02 135,648,124.99
Other non-current liabilities
Total non-current liabilities 208,385,816.60 285,046,677.09
Total liabilities 24,177,227,002.62 25,641,095,100.19
Owners' equity (or shareholders'
equity)
Share capital 1,506,445,074.00 1,506,988,000.00
Other equity instruments
Including: preference shares
Perpetual bonds
Capital reserves 1,530,620,394.11 1,504,746,609.71
Less: treasury stock 56,278,680.79
Other comprehensive income
Special reserves
Surplus reserves 753,494,000.00 753,494,000.00
Undistributed profits 31,524,392,046.58 29,676,358,493.08
Total owners' equity 35,314,951,514.69 33,385,308,422.00
Total liabilities and owners' equity 59,492,178,517.31 59,026,403,522.19
114
Consolidated Income Statement
For the year ended 31 December 2023
Unit: CNY
Item Year 2023 Year 2022
1. Total operating revenue 33,126,277,551.51 30,104,896,186.70
Including: Operating revenue 33,126,277,551.51 30,104,896,186.70
Interest income
Earned premium
Fee and commission income
2. Total operating costs 20,151,096,010.15 17,765,764,643.68
Including: cost of sales 8,200,245,255.42 7,645,533,264.72
Interest expense
Handling charges and commission
expenses
Refunded premiums
Net payments for insurance claims
Net provision for insurance
contracts
Bond insurance expense
Reinsurance expenses
Taxes and surcharges 5,269,245,592.35 4,388,312,404.88
Selling and distribution expenses 5,386,953,700.62 4,179,140,807.85
General and administrative
1,764,423,149.06 1,935,673,295.75
expenses
Research and Development
284,753,881.33 253,574,976.39
expenses
Financial expenses -754,525,568.63 -636,470,105.91
Including: Interest expenses 1,707,107.98 694,325.50
Interest income 765,369,577.25 645,806,427.40
Plus: Other income 56,179,399.53 63,772,818.50
Investment income ("-" for losses) 255,520,777.61 425,865,631.53
Including: income from investment
-2,070,468.13 5,201,436.79
in associates and joint ventures
Disposal of financial instruments at
-27,758,655.92 -13,584,025.11
a mortised cost ("-" for losses)
Foreign exchange gains ("-" for
losses)
Net exposure to hedging gains("-
"for loss)
Gains from the changes in fair
-37,082,477.77 -318,331,123.43
values (“-“ for losses)
Losses from credit impairment ("-"
881,383.32 -746,085.96
for losses)
Losses from asset impairment ("-" -2,828,018.24 -2,333,823.54
115
for losses)
Gains from disposal of assets ("-" for
-5,282,977.32 1,846,300.27
losses)
3. Operating profits ("-" for losses) 13,242,569,628.49 12,509,205,260.39
Plus: non-operating income 39,176,788.83 25,586,332.71
Less: non-operating expenses 63,913,298.25 31,507,701.73
4. Total profits before tax ("-" for total
13,217,833,119.07 12,503,283,891.37
losses)
Less: income tax expenses 3,197,064,562.60 3,113,849,969.51
5. Net profit ("-" for net loss) 10,020,768,556.47 9,389,433,921.86
Classification by operating
continuity
Net profit from continuing
10,020,768,556.47 9,389,433,921.86
operation ("-" for losses)
Net profit from discontinued
operation ("-" for losses)
Classification by owners
Attributable to owners of the parent
10,015,930,040.27 9,377,865,479.41
company
Attributable to non-controlling
4,838,516.20 11,568,442.45
interests
6.Net of tax from other
46,942.15 7,861,445.76
comprehensive income
Net of tax from other
comprehensive income to the owner 41,157.80 7,826,027.30
of the parent company
Other comprehensive income
cannot reclassified into the profit and
loss:
Including: Changes in remeasured
defined benefit obligations
Share in other comprehensive
income that cannot be classified into
profit and loss under equity method
Changes in the fair value of other
equity instruments
Fair value changes in enterprise's
own credit risk
Others
Other comprehensive income that
will be reclassified into the profit and 41,157.80 7,826,027.30
loss
Including: Share in other
comprehensive income that will be
153,503.58
classified into profit and loss under
equity method
Net gain on debt instruments at fair
value through other comprehensive
income
116
The amount of financial assets
reclassified into other comprehensive
income
Other debt investment credit
impairment provision
Cash flow hedging reserve
Balance arising from the translation
of foreign currency financial 41,157.80 7,672,523.72
statements
Others
Net of tax from other
comprehensive income to non- 5,784.35 35,418.46
controlling interests
7. Total comprehensive income 10,020,815,498.62 9,397,295,367.62
Total comprehensive income
attributable to owners of the parent 10,015,971,198.07 9,385,691,506.71
company
Total comprehensive income
attributable to non-controlling 4,844,300.55 11,603,860.91
interests
8. Earnings per share
(1) Basic earnings per share 6.6487 6.2252
(2) Diluted earnings per share 6.6487 6.2252
Where an enterprise is merged under the same control in the current period, the net profit realized by
the merged party before the merger is: CNY 0.00, and the net profit realized by the merged party in the
previous period is: CNY 0.00.
Legal representative: Zhang Liandong
Person in charge of accounting affairs: Yin Qiuming
Person in charge of accounting department: Zhao Qike
Income statement of parent company
For the year ended 31 December 2023
Unit: CNY
Item Year 2023 Year 2022
1. Operating revenue 13,212,200,864.23 11,492,807,889.95
Less: Cost of sales 6,866,625,130.04 5,980,220,225.56
Taxes and surcharges 4,286,738,232.15 3,545,342,923.46
Selling and distribution expenses 21,375,400.72 8,061,097.87
General and administrative
967,000,222.04 1,066,652,613.72
expenses
Research and Development
273,595,370.01 251,317,786.01
expenses
Financial expenses -711,466,339.14 -599,586,816.00
Including: Interest expenses 43,225.12 68,917.37
117
Interest income 718,317,862.75 601,536,203.50
Plus: Other income 11,391,006.14 12,864,187.98
Investment income ("-" for losses) 6,555,756,927.65 5,820,859,899.66
Including: income from investment
300,199.49
in associates and joint ventures
Disposal of financial instruments at
-27,758,655.92 -11,790,752.31
a mortised cost ("-" for losses)
Net exposure to hedging gains ("-
"for loss)
Gains from the changes in fair
-319,221,773.34 -453,873,148.94
values (“-“ for losses)
Losses from credit impairment ("-"
-486,029.72 -343,834.00
for losses)
Losses from asset impairment ("-"
-2,985,642.31 -2,182,437.80
for losses)
Gains from disposal of assets ("-" for
220,085.06 204,782.75
losses)
2. Operating profits ("-" For Losses) 7,753,007,421.89 6,618,329,508.98
Plus: non-operating income 14,670,553.09 5,673,709.03
Less: non-operating expenses 31,017,552.84 17,026,160.31
3. Total profits before tax ("-" For Total
7,736,660,422.14 6,606,977,057.70
Losses)
Less: income tax expenses 254,522,291.88 212,628,263.96
4. Net profit ("-" For Net Loss) 7,482,138,130.26 6,394,348,793.74
Net profit from continuing
7,482,138,130.26 6,394,348,793.74
operation ("-" for losses)
Net profit from discontinued
operation ("-" for losses)
5.Net of tax from other
comprehensive income
Other comprehensive income
cannot reclassified into the profit and
loss:
Including: Changes in remeasured
defined benefit obligations
Other comprehensive income that
cannot be transferred under the
equity method
Net gain on equity instrument at
fair value through other
comprehensive income
Fair value changes in enterprise's
own credit risk
Others
Other comprehensive income that
will be reclassified into the profit and
loss
Including: Share in other
118
comprehensive income that will be
classified into profit and loss under
equity method
Net gain on debt instruments at fair
value through other comprehensive
income
The amount of financial assets
reclassified into other comprehensive
income
Other debt investment credit
impairment provision
Cash flow hedging reserve
Balance arising from the translation
of foreign currency financial
statements
others
6. Total comprehensive income 7,482,138,130.26 6,394,348,793.74
7. Earnings per share
(1)Basic earnings per share
(2)Diluted earnings per share
Consolidated Statement of Cash Flows
For the year ended 31 December 2023
Unit: CNY
Item Year 2023 Year 2022
1. Cash flows from operating activities
Cash received from sale of goods
34,853,832,478.90 30,888,040,308.39
and rendering of services
Net increase in customer bank
deposits and placement from banks
and other financial institutions
Net increase in loans from central
bank
Net increase in loans from other
financial institutions
Premiums received from original
insurance contracts
Net cash received from reinsurance
business
Net increase in deposits and
investments from policyholders
Cash received from interest,
handling charges and commissions
Net increase in placements from
other financial institutions
Net capital increase in repurchase
119
business
Net cash received for the sale of
securities
Refunds of taxes and surcharges 2,297,371.73 3,060,026.48
Cash received from other operating
900,430,985.55 550,757,261.24
activities
Sub-total of cash inflows from
35,756,560,836.18 31,441,857,596.11
operating activities
Cash paid for goods purchased and
9,046,851,531.74 7,975,641,881.57
services received
Net increase in loans and advances
to customers
Net increase in deposits in central
bank and other banks and financial
institutions
Cash paid for original insurance
contract claims
A net increase in divested funds
Cash paid for interests, handling
charges and commissions
Cash paid for policy dividends
Cash paid to and on behalf of
3,631,502,767.93 3,444,356,348.05
employees
Cash paid for taxes and surcharges 12,151,041,331.84 12,905,501,412.00
Cash paid for other operating
4,796,944,336.71 3,468,734,002.30
activities
Sub-total of cash outflows from
29,626,339,968.22 27,794,233,643.92
operating activities
Net cash flows from activities
6,130,220,867.96 3,647,623,952.19
operating
2. Cash flows from investing activities
Cash received from disposal of
11,154,008,547.25 17,261,152,475.37
investments
Cash received from returns on
257,591,245.74 420,664,194.74
investments
Net cash received from disposal of
fixed assets, intangible assets and 1,872,403.96 5,625,033.85
other long-term assets
Net cash received from disposal of
subsidiaries and other business units
Cash received from other investing
activities
Sub-total of cash inflows from
11,413,472,196.95 17,687,441,703.96
investing activities
Cash paid to acquire and construct
fixed assets, intangible assets and 1,111,629,485.17 539,153,153.61
other long-term assets
Cash paid for investments 9,640,808,034.84 13,131,786,086.81
120
Net increase in pledge loans
Net cash paid to acquire
subsidiaries and other business units
Cash paid for other investing
activities
Sub-total of cash outflows from
10,752,437,520.01 13,670,939,240.42
investing activities
Net cash flows from investing activities 661,034,676.94 4,016,502,463.54
3. Cash flows from financing activities
Cash received from investors 57,000,000.00 42,800,000.00
Including: cash received by
subsidiaries from investments by 57,000,000.00 42,800,000.00
minority shareholders
Cash received from borrowings
Cash received from other financing
activities
Sub-total of cash inflows from
57,000,000.00 42,800,000.00
financing activities
Cash paid for debt repayments 36,360.00
Cash paid for distribution of
dividends and profits or payment of 5,634,104,576.76 4,519,335,876.00
interest
Including: dividends and profits
paid to minority shareholders by
subsidiaries
Cash paid for other financing
31,233,718.70 15,204,742.60
activities
Sub-total of cash outflows from
5,665,338,295.46 4,534,576,978.60
financing activities
Net cash flows from financing
-5,608,338,295.46 -4,491,776,978.60
activities
4. Effect of fluctuation in exchange
-910,236.76 -336,446.78
rate on cash and cash equivalents
5. Net increase in cash and cash
1,182,007,012.68 3,172,012,990.35
equivalents
Plus: balance of cash and cash
equivalents at the beginning of the 24,019,016,540.72 20,847,003,550.37
period
6. Balance of cash and cash
25,201,023,553.40 24,019,016,540.72
equivalents at the end of the period
Cash flow statements of parent company
For the year ended 31 December 2023
Unit: CNY
Item Year 2023 Year 2022
1. Cash flows from operating activities
121
Cash received from sale of goods
14,975,434,852.75 7,611,553,357.29
and rendering of services
Refunds of taxes and surcharges 2,297,371.73 3,060,026.48
Cash received from other operating
526,760,153.32 2,314,707,779.42
activities
Sub-total of cash inflows from
15,504,492,377.80 9,929,321,163.19
operating activities
Cash paid for goods purchased and
5,294,280,877.13 6,064,059,385.00
services received
Cash paid to and on behalf of
1,470,245,728.10 1,368,615,850.49
employees
Cash paid for taxes and surcharges 6,085,955,339.44 4,939,845,815.65
Cash paid for other operating
3,272,079,710.56 967,712,898.60
activities
Sub-total of cash outflows from
16,122,561,655.23 13,340,233,949.74
operating activities
Net cash flows from activities
-618,069,277.43 -3,410,912,786.55
operating
2. Cash flows from investing activities
Cash received from disposal of
7,041,027,668.46 11,784,381,771.01
investments
Cash received from returns on
6,554,937,507.89 7,633,596,753.21
investments
Net cash received from disposal of
fixed assets, intangible assets and 332,189.17 4,762,886.20
other long-term assets
Net cash received from disposal of
subsidiaries and other business units
Cash received from other investing
activities
Sub-total of cash inflows from
13,596,297,365.52 19,422,741,410.42
investing activities
Cash paid to acquire and construct
fixed assets, intangible assets and 420,020,950.78 241,687,386.76
other long-term assets
Cash paid for investments 7,298,000,000.00 8,172,000,000.00
Net cash paid to acquire
subsidiaries and other business units
Cash paid for other investing
activities
Sub-total of cash outflows from
7,718,020,950.78 8,413,687,386.76
investing activities
Net cash flows from investing activities 5,878,276,414.74 11,009,054,023.66
3. Cash flows from financing activities
Cash received from investors
Cash received from loans
Cash received from other financing
activities
122
Sub-total of cash inflows from
financing activities
Cash paid for debt repayments 36,360.00
Cash paid for distribution of 5,634,104,576.76 4,519,404,139.37
dividends and profits or payment of
interest
Cash paid for other financing 546,330.28
activities
Sub-total of cash outflows from 5,634,650,907.04 4,519,440,499.37
financing activities
Net cash flows from financing -5,634,650,907.04 -4,519,440,499.37
activities
4. Effect of fluctuation in exchange 804,193.37 4,144,329.10
rate on cash and cash equivalents
5. Net increase in cash and cash -373,639,576.36 3,082,845,066.84
equivalents
Plus: balance of cash and cash 22,883,692,496.00 19,800,847,429.16
equivalents at the beginning of the
period
6. Balance of cash and cash 22,510,052,919.64 22,883,692,496.00
equivalents at the end of the period
123
Consolidated statement of changes in shareholders' equity
For the year ended 31 December 2023
Unit: CNY
Year 2023
Equity attributable to owners of the parent company Non- Total
Share Other equity Share Other equity Other General controllin sharehold
Special Surplus Undistrib Oth Subto
g interests ers'
Item capital instruments capital instruments Compre reserve reserve risk uted ers tal
Perpe hensive reserve profit equity
Preferr Othe
tual Income
ed rs
bond
stock
1. Balance as at 31 47,475
1,506,988 904,650, 1,982,037 753,494,0 44,364,203 49,504,329 47,524,543
December of last ,000.00 678.91
56,278,680.79
.01 00.00 ,149.57
,039,1
.11 ,513.81
year 84.70
Plus:
adjustments for
changes in
accounting
policies
Adjustments for
correction of
accounting errors
in prior year
Business
combinations
under common
control
Others
2. Balance as at 47,475
1,506,988 904,650, 1,982,037 753,494,0 44,364,203 49,504,329 47,524,543
January 1 of the ,000.00 678.91
56,278,680.79
.01 00.00 ,149.57
,039,1
.11 ,513.81
current year 84.70
3.Increases/decrea - 4,463,
25,873,7 - 4,381,825, 61,844,300 4,525,320,
ses in the current 542,926.0
84.40 56,278,680.79
41,157.80
463.51
476,16
.55 461.05
0 0.50
year (“ -” for
124
decreases)
(1) Total 10,015
10,015,930 4,844,300. 10,020,815
comprehensive 41,157.80
,040.27
,971,1
55 ,498.62
income 98.07
(2) Capital
- 81,609
contributed or 25,873,7 - 57,000,000 138,609,53
542,926.0 ,539.1
reduced by 0
84.40 56,278,680.79
9
.00 9.19
owners
Capital
57,000,000 57,000,000
contributions by .00 .00
owners
Capital
contributions by
other equity
instruments
holders
Amounts of
share-based 81,609
81,609,5 81,609,539
payments 39.19
,539.1
.19
recognized in 9
owners' equity
- -
Others -
542,926.0 55,735,7
56,278,680.79
0 54.79
-
(3) Profit - -
5,634,
distribution 5,634,104,
104,57
5,634,104,
576.76 576.76
6.76
Withdrawal of
surplus reserves
Withdrawal of
general risk
reserve
Profit -
- -
distributed to 5,634,
5,634,104, 5,634,104,
owners (or 576.76
104,57
576.76
6.76
shareholders)
125
Others
(4) Internal
carry-forward of
owners' equity
Conversion of
capital reserves
into paid-in capital
Conversion of
surplus reserves
into paid-in capital
Surplus reserves
offsetting losses
Amount of
Changes in setting
benefit plan
transfer to
retained earnings
Other
comprehensive
income transferred
to retained
earnings
Others
(5) Special
reserves
Withdrawal for
the period
Use for the
period
Others
4. Balance as at 31 51,938
1,506,445 930,524, 2,023,194 753,494,0 48,746,028 111,348,62 52,049,863
December of the ,074.00 463.31 .81 00.00 ,613.08
,515,3
9.66 ,974.86
current year 45.20
126
Year 2022
Equity attributable to owners of the parent company Non- Total
Share Other equity Capital Speci Surplus Genera Undistribu O Subtotal controlling shareh
Item
capital instruments reserve Less :Trea Other al reserve l risk ted th interest olders'
sury stock Comprehens reser profit er s equity
Perpet reserve
Preferred Others ive Income s
ual ve
stock
bond
1. Balance as at 31 - 42,481,3
1,506,98 782,236,37 56,278,680 - 753,494,00 39,505,614 42,486,20
December of last 8,000.00 0.14 .79 5,843,990.29 0.00 ,090.53 9,789.59
4,899,531. 10,257.7
year 80 9
Plus:
adjustments for
58,801.6
changes in 58,801.63 58,801.63
3
accounting
policies
Adjustments
for correction of
accounting errors
in prior year
Others
2. Balance as at - 42,481,3
1,506,98 782,236,37 56,278,680 - 753,494,00 39,505,672 42,486,26
January 1 of the 8,000.00 0.14 .79 5,843,990.29 0.00 ,892.16 8,591.22
4,899,531. 69,059.4
current year 80 2
3.Increases/decre
ases in the 122,414,30 4,858,530, 4,988,770 54,403,860 5,043,17
7,826,027.30
current year (“ -” 8.77 257.41 ,593.48 .91 4,454.39
for decreases)
(1) Total
9,377,865, 9,385,691 11,603,860 9,397,29
comprehensive 7,826,027.30
479.41 ,506.71 .91 5,367.62
income
(2) Capital
122,414,30 122,414,3 42,800,000 165,214,
contributed or 8.77 08.77 .00 308.77
reduced by
127
owners
Capital
42,800,000 42,800,0
contributions by .00 00.00
owners
Capital
contributions by
other equity
Instruments
holders
Amounts of
share-based
122,414,30 122,414,3 122,414,
payments 8.77 08.77 308.77
recognized in
owners' equity
Others
- - -
(3) Profit
4,519,335, 4,519,335 4,519,33
distribution 222.00 ,222.00 5,222.00
Withdrawal of
surplus reserves
Withdrawal of
general risk
reserve
Profit
- - -
distributed to
4,519,335, 4,519,335 4,519,33
owners (or 222.00 ,222.00 5,222.00
shareholders)
Others
(4) Internal
carry-forward of
owners' equity
Conversion of
capital reserves
into paid-in
capital
Conversion of
128
surplus reserves
into paid-in
capital
Surplus
reserves
offsetting losses
Carry-forward
of retained
earnings from
changes in
defined benefit
plans
Other
comprehensive
income
transferred to
retained earnings
Others
(5) Special
reserves
Withdrawal for
the period
Use for the
period
(6) Others
4. Balance as at 47,524,5
1,506,98 904,650,67 56,278,680 753,494,00 44,364,203 47,475,03 49,504,329
31 December of 8,000.00 8.91 .79
1,982,037.01
0.00 ,149.57 9,184.70 .11
43,513.8
the current year 1
Statement of changes in shareholders' equity of parent company
For the year ended 31 December 2023
Unit: CNY
Item Year 2023
129
Other equity instruments
Capital reserve Less：Treasury Other Special Total
Surplus Undistributed Other
Share stock Compre reserve shareholder
Preferred Perpetu reserve profit s
capital Othe
stock al hensive
rs s' equity
bond Income
1. Balance as at 31
1,506,988 29,676,358,493.0 33,385,308,422
December of last 1,504,746,609.71 56,278,680.79 753,494,000.00
,000.00 8 .00
year
Plus:
adjustments for
changes in
accounting
policies
adjustments for
correction of
accounting errors
in prior year
Others
2. Balance as at 1,506,988 1,504,746,609.71 56,278,680.79 753,494,000.00 29,676,358,493.0 33,385,308,422
January 1 of the ,000.00 8 .00
current year
3.Increases/decrea - 25,873,784.40 -56,278,680.79 1,848,033,553.50 1,929,643,092.
ses in the current 542,926.0 69
year (“ -” for 0
decreases)
(1) Total 7,482,138,130.26 7,482,138,130.
comprehensive 26
income
(2) Capital - 25,873,784.40 -56,278,680.79 81,609,539.19
contributed or 542,926.0
reduced by 0
owners
Capital
contributions by
owners (common
stock)
130
Capital
contributions by
other equity
instruments
holders
Amounts of 81,609,539.19
share-based
payments
recognized in
owners' equity
Others - -55,735,754.79 -56,278,680.79
542,926.0
0
(3)Profit - -
distribution 5,634,104,576.76 5,634,104,576.
76
Withdrawal of
surplus reserves
Profit distributed - -
to owners (or 5,634,104,576.76 5,634,104,576.
shareholders) 76
Others
(4) Internal
carry-forward of
owners' equity
Conversion of
capital reserves
into paid-in capital
Conversion of
surplus reserves
into paid-in capital
Surplus reserves
offsetting losses
Amount of
Changes in setting
benefit plan
131
transfer to
retained earnings
Other
comprehensive
income transferred
to retained
earnings
Others
(5) Special
reserves
Withdrawal for
the period
Use for the
period
(6) Others
4. Balance as at 31
1,506,445 31,524,392,046.5 35,314,951,514
December of the 1,530,620,394.11 753,494,000.00
,074.00 8 .69
current year
Year 2022
Other equity instruments Other
Less： Total
Item Share Capital Comprehe Special Surplus
Preferred Perpetual Treasury Undistributed profit Others shareholder
capital Others reserve nsive reserve reserve
stock bond stock s' equity
Income
1. Balance as at 31
1,506,988, 1,382,332, 56,278,680.7 753,494,000. 31,387,872,398.2
December of last 27,801,336,778.06
000.00 300.94 9 00 1
year
Plus:
adjustments for
changes in 8,143.28 8,143.28
accounting
policies
adjustments for
132
correction of
accounting errors
in prior year
Others
2. Balance as at
1,506,988, 1,382,332, 56,278,680.7 753,494,000. 31,387,880,541.4
January 1 of the 27,801,344,921.34
000.00 300.94 9 00 9
current year
3.Increases/decrea
ses in the current 122,414,30
1,875,013,571.74 1,997,427,880.51
year (“ -” for 8.77
decreases)
(1) Total
comprehensive 6,394,348,793.74 6,394,348,793.74
income
(2) Capital
contributed or 122,414,30
122,414,308.77
reduced by 8.77
owners
Capital
contributions by
owners (common
stock)
Capital
contributions by
other equity
instruments
holders
Amounts of
share-based
122,414,30
payments 122,414,308.77
8.77
recognized in
owners' equity
Others
(3)Profit -
-4,519,335,222.00
distribution 4,519,335,222.00
133
Withdrawal of
surplus reserves
Profit
distributed to -
-4,519,335,222.00
owners (or 4,519,335,222.00
shareholders)
Others
(4) Internal
carry-forward of
owners' equity
Conversion of
capital reserves
into paid-in capital
Conversion of
surplus reserves
into paid-in capital
Surplus reserves
offsetting losses
Amount of
Changes in setting
benefit plan
transfer to
retained earnings
Other
comprehensive
income transferred
to retained
earnings
Others
(5) Special
reserves
Withdrawal for
the period
Use for the
period
134
(6) Others
4. Balance as at 31
1,506,988, 1,504,746, 56,278,680.7 753,494,000. 33,385,308,422.0
December of the 29,676,358,493.08
000.00 609.71 9 00 0
current year
135
III. Company profile
Jiangsu Yanghe Distillery Co., Ltd.(hereinafter referred to as “the Company”)was established on 26 December 2002,
verified by the Government of Jiangsu Province, details referred to Reply on The approval of Establishment of
Jiangsu Yanghe Distillery Co., Ltd. by the provincial government (SuZhengFu [2002]No.155), and it was a company
founded by Jiangsu Yanghe Group Co., Ltd., Shanghai Haiyan Logistics Development Co., Ltd., Nantong Zongyi
Investment Co., Ltd., Shanghai Jieqiang Tobacco Sugar & Wine (Group) Co., Ltd., Jiangsu Venture Capital Co.,Ltd.,
China National Research Institute of Food and Fermentation Industries Co. Ltd., Nantong Shengfu Industrial Trade
Co., Ltd. and Yang Yandong and other totally 14 nature persons.
On 13 October 2009, the Company was verified by China Securities Regulatory Commission, according to the
document Reply on Approving Initial Public Offering of Jiangsu Yanghe Distillery Co., Ltd. (Zheng Jian Approval
[2009] No.1077). The Company announced the initial public offering of 45,000,000 common shares on 27 February
2009 and was listed for transactions in SZSE since 6 November 2009.
According to the Proposal of the cancellation of the remaining shares in the repurchase special securities account
approved by 2023 first extraordinary general meeting of shareholders on 15 September 2023, the company
cancelled 542,926 shares. The share cancellation procedures were completed on October 12, 2023. After this share
cancellation, the company's registered capital changed to 1,506,445,074 yuan, and the total number of shares
became 1,506,445,074 shares.
Registered address of the Company: 118 Middle Avenue, Yanghe Town, Suqian City, Jiangsu Province
Company type: Incorporated company (Listed)
Industry of the Company: Brewing food industry
Business scope of the Company: production and sale of liquor, wholesaling and retailing of prepackaged food, grain
purchase, self-operating and agency of import and export of various types of merchandise and technology
excluding merchandise and technology limited or prohibited by the state for import and export, domestic trade,
construction of e- commerce platform and online sales. ( Business activities of projects needed to be approved by
law must be approved according to related departments )
Parent company of the Company:Jiangsu Yanghe Group Co.,Ltd.
The scope of the Company's consolidated financial statements is based on control, and all subsidiaries are included
in the consolidation scope of the consolidated financial statements.
Changes of the scope of consolidation are as follows:
1. Subsidiaries that are newly incorporated into the scope of consolidation are shown in the following table:
Name Measure of acquisition
Jiangsu Yiguoxiang Biotechnology Co., Ltd Newly establishment
2. Details of the subsidiaries incorporated into the consolidated financial statements show on “Note 7. 1.Interests
in subsidiaries”, Changes in the scope of consolidation show on “Note 6. Change in consolidated scope”.
IV. Basis of preparation of financial statements
1. Basis of preparation
The Company has prepared its financial statements on a going concern basis, and recognized and measured its
accounting items in compliance with the Accounting Standards for Business Enterprises—Basic Standards and
various concrete accounting standards, and other relevant provisions on the basis of actual transactions and events.
2. Going concern
The Company has sustainable operation ability for at least 12 months from the end of the reporting period. In
136
addition, there is no significant event affecting going concern.
Ⅴ. Significant accounting policies and accounting estimates
The disclosure requirements of food and wine manufacturing-related industries in the Guidelines for Self-
regulation NO.3 of Listed Companies of Shenzhen Stock Exchange -Industry Information Disclosure shall be
observed
(1) Sales contract
The Company's sales products, promotional products and other goods belong to the performance obligations
performed at a certain point.
The Company recognizes the sales revenue when the goods are delivered to the customer and the control of the
goods is transferred. For export sales business, the Company recognizes the revenue after the goods are
delivered and the customs clearance procedures are completed.
According to the marketing policy, and the distributor sales of final product, the Company gives the distributor a
percentage discount, and regularly or irregularly settles with distributors. At the time of settlement, the
discounts are recorded in a sales invoice issued. The net amount of invoice value after the deduction of the
discount sales income is recognized as revenue according to the accrual principle. The discounts that have
occurred and have not yet been settled at the end of the current period shall be taken provision from the sales
revenue and recorded into the contract liabilities.
(2) Service Contract
The service contract provided by the Company contains the performance obligation of the lease service
provided. Since the customer obtains and consumes the economic benefits brought by the performance of the
contract at the same time, it is regarded as the performance obligation performed within a certain period of
time and is equally apportioned and confirmed during the service provision.
1. Statement of compliance with the ASBE
The financial statements of the Company have been prepared in accordance with ASBE, and present truly and
completely, the group’s financial position, the Company’s and results of operations, and changes in shareholders'
equity, cash flows and other related information for the reporting period.
2. Accounting period
The Company’s accounting period is calendar year as its accounting year, i.e. from 1 January to 31 December.
3. Operating cycle
The Company’s accounting period is 12 months.
4. Functional currency
The Company has adopted China Yuan (CNY) as functional currency.
5.Methods for Determining Importance Standards and Selection Criteria.
Applicable □N/A
Project importance criteria
Significant individual provision for bad debts on
Individual amount exceeds 1% of total assets
accounts receivable
Significant construction in progress Individual amount exceeds 1% of total assets
Net profit accounts for 10% of the consolidated
Significant non-wholly-owned subsidiaries
financial statements.
6. The accounting treatment of business combinations involving enterprises under common control and not
under common control
137
(1) Accounting treatment method for business combination under common control
Business combination under common control is accounted for under pooling of interest method.
Assets and liabilities obtained by the Company through business combination under common control shall be
measured at the book value as stated in the combine’s accounting record on the combination date. The share of
the book value of the merged party’s owner’s equity in the consolidated financial statements is taken as the initial
investment cost of long-term equity investments in individual financial statements. The capital reserve (stock
premium or capital premium) is adjusted according to the difference between the book value of net asset acquired
through combination and the book value of consideration paid for the combination (or total par value of shares
issued). If the capital reserve (stock premium or capital premium) is insufficient to offset, the retained earnings
shall be adjusted.
(2) Accounting treatment method of business combination not under common control
The Company accounts for business combination not under common control under purchase method.
a) All the net identifiable assets, liabilities or contingent liabilities obtained by the Company through business
combination not under common control shall be measured at fair value. Assets paid, liabilities incurred or assumed
and the equity securities issued as consideration for combination are generally measured at fair value on the
acquisition date, and differences between their fair values and book values shall be included in the current profit
and loss.
b) The cost of acquisition shall be respectively determined for the following conditions;
i. Business combination of a transaction implementation, the combination cost shall be the sum of the fair value
of the assets given, the liabilities incurred or assumed and the equity securities issued by the Company in exchange
for the control on the acquisition date, and contingent considerations meeting the recognition conditions. The
combination cost is the initial investment costs of long-term equity investments in individual financial statements.
ii. Business combination through multiple transactions step by step to realized, the combination cost shall be the
sum of the fair value measurement on the acquisition of the equity investment that holding before the acquisition
date and cost of all the new investment on the acquisition date. Long-term equity investment cost in individual
financial statements shall be the sum of the book value of the equity investment that holding before the acquisition
date and cost of all the new investment on the acquisition date. A package deal is excluded.
c) The Company, on the acquisition date, allocates the combination costs between the identifiable assets and
liabilities acquired
i. All assets of the acquiree obtained by the Company through business combination (not limited to those that have
been recognized by the acquiree), other than intangible assets, shall be separately recognized and measured at
fair value when the future economic benefits arising thereafter are expected to flow into the Company and the
fair value can be reliably measured.
ii. Intangible assets of the acquiree obtained by the Company through business combination shall be separately
recognized and measured at fair value when their fair values can be reliably measured.
iii. All liabilities of the acquiree obtained by the Company through business combination, other than contingent
liabilities, shall be separately recognized and measured at fair value when fulfillment of relevant obligations is
expected to bring future economic benefits to the Company and the fair value can be reliably measured.
iv. Contingent liabilities of the acquiree obtained by the Company through business combination shall be separately
recognized as liabilities and measured at fair value when their fair values can be reliably measured.
v. When the Company allocates the cost of business combination and recognizes the identifiable assets and
liabilities acquired through combination, it shall not include any goodwill and deferred income taxes that have
been recognized by the acquiree before the business combination.
d) Treatment of the difference between the business combination costs and the fair value of net identifiable asset
138
acquired from the acquiree through combination
i. The Company shall recognize the difference of the combination costs in excess of the fair value of the net
identifiable asset acquired from the acquiree through combination as goodwill.
ii. The Company shall recognize the difference of the combination costs in short of the fair value of the net
identifiable asset acquired from the acquiree through combination according to the following provisions:
Review the measurement of fair values of all the identifiable assets, liabilities and contingent liabilities acquired
from the acquiree and the combination costs;
After the review, if the combination costs are still in short of the fair value of the net identifiable asset acquired
from the acquiree through combination, include the difference in the current profit and loss.
(3) Treatment of relevant expenses arising from the Company’s business combination
a) Relevant expenses directly arising from the business combination of the Company (including the expenses for
audit, legal services, evaluation and consultation or other intermediary costs for business combination) shall be
included in the current profit and loss when they are incurred.
b) Commissions, fees and other expenses paid on issuance of bonds and undertaking of other debts for the
business combination shall be included in the initial measurement amount of debt securities.
i. Where the bonds are issued at discount or par value, that part of expenses will increase the amount of the
discount;
ii. Where the bonds are issued at premium, that part of expenses will decrease the amount of the premium.
c) Fees, commissions, and other transaction expenses paid on issuance of equity securities as combination
consideration in the business combination shall be included in the initial measurement amount of equity securities.
i. Where the equity securities are issued at premium, that part of expenses shall be deducted from capital reserves
(stock premium);
ii. Where the equity securities are issued at par value or discount, that part of expenses shall be deducted from
the retained earnings.
7. Criteria for determining control and Preparation of consolidated financial statements
(1) Criteria for determining control
The determination of the scope of consolidation of the consolidated financial statements is based on control.
Control refers to the investor having power over the investee, enjoying variable returns through involvement in
the investee's activities, and having the ability to influence the amount of returns through the exercise of power
over the investee. When changes in relevant facts and circumstances lead to changes in the elements involved in
the definition of control, the company will conduct a reassessment.
(2) Preparation of consolidated financial statements
(a) Consistency of accounting policies and accounting period
All the subsidiaries within the consolidation scope of consolidated financial statements shall adopt the same
accounting policies and accounting periods as those of the Company. If the accounting policies or accounting
periods of a subsidiary are different from those of the Company, the financial statements of the subsidiary, upon
preparation of consolidated financial statements, shall be adjusted according to the accounting policies and
accounting periods of the Company.
(b) Preparation method of consolidated financial statements
The consolidated financial statements are based on the financial statements of the Company and its subsidiaries,
and are prepared by the parent company according to other relevant information after the adjustment to long-
term equity investments in subsidiaries under the equity method and the elimination of effects of the internal
transactions between the Company and its subsidiaries and between the subsidiaries on the consolidated financial
statement.
139
(c) Reflection of excess losses incurred to a subsidiary in the consolidated financial statements
In the consolidated financial statements, where the current losses undertaken by the parent company are in excess
of its share of owners’ equity in the subsidiary at the beginning of the period, the balance shall reduce the owners’
equity (retained earnings) of the parent company; where the current losses undertaken by a subsidiary’s non-
controlling shareholders excess those non-controlling shareholders’ share of owners’ equity in the subsidiary at
the beginning of the period, the balance shall reduce the non- controlling interests.
(d) Changes in number of subsidiaries during the reporting period
a) Acquisition of subsidiaries during the reporting period
i. Treatment of acquiring subsidiaries from business combination under common control during the reporting
period
During the reporting period, if the Company acquires subsidiaries from the business combination under common
control, the opening balance in the consolidated balance sheet shall be adjusted. The income, expenses and profits
of the newly acquired subsidiaries from the beginning to the end of the reporting period shall be included in the
consolidated income statement. The cash flows of the newly acquired subsidiaries from the beginning to the end
of the reporting period shall be included in the consolidated statement of cash flows.
ii. Treatment of acquiring subsidiaries from business combination not under common control during the reporting
period
During the reporting period, if the Company acquires subsidiaries from the business combination not under
common control, the opening balance in the consolidated balance sheet shall not be adjusted. The income,
expenses and profits of the newly acquired subsidiaries from the acquisition date to the end of the reporting period
shall be included in the consolidated income statement. The cash flows of the newly acquired subsidiaries from
the acquisition date to the end of the reporting period shall be included in the consolidated statement of cash
flows.
b) Treatment of disposing subsidiaries during the reporting period
During the reporting period, if the Company disposes subsidiaries, the opening balance in the consolidated balance
sheet shall not be adjusted. The income, expenses and profits of the newly disposed sub diaries from the beginning
to the disposal date shall be included in the consolidated income statement. The cash flows from the beginning to
the disposal date shall be included in the consolidated statement of cash flows.
8. Classification of joint venture arrangements and the accounting treatment method of common operation
(1) Classification of joint venture arrangements
A joint arrangement is classified as either a joint operation or a joint venture. A joint operation is a joint
arrangement whereby the joint operators have rights to the assets, and obligations for the liabilities, relating to
the arrangement. A joint venture is a joint arrangement whereby the joint ventures only have the rights to the net
assets under this arrangement.
A joint arrangement that is not structured through a separate vehicle shall be classified as a joint operation. A
separate vehicle refers to a separately identifiable financial structure, including separate legal entities or entities
without a legal personality but recognized by statute.
A joint arrangement that is structured through a separate vehicle is usually classified as a joint venture. However,
when a joint arrangement provides clear evidence that it meets any of the following requirements and complies
with applicable laws and regulations as a joint operation:
a) The legal form of the joint arrangement indicates that the parties that have joint control have rights to the assets,
and obligations for the liabilities, relating to the arrangement.
b) The terms of the joint arrangement specify that the parties that have joint control have the rights to the assets,
and the obligations for the liabilities, relating to the arrangement.
140
c) Other facts and circumstances indicate that the parties that have joint control have rights to the assets, and the
obligations for the liabilities, relating to the arrangement---for example, the parties that have joint control have
rights to substantially all of the output of the arrangement, and the arrangement depends on the parties that have
joint control on a continuous basis for settling the liabilities of the arrangement.
(2) Accounting treatment of a joint operation
A joint operator shall recognize the following items in relation to its interest in a joint operation, and account for
them in accordance with relevant accounting standards:
a) Its solely-held assets, and its share of any assets held jointly;
b) Its solely-assumed liabilities, and its share of any liabilities incurred jointly;
c) Its revenue from the sale of its share of the output arising from the joint operation;
d) Its share of the revenue from sale of the output by the joint operation; and
e) Its solely-incurred expenses and its share of any expenses incurred jointly.
9. Cash and cash equivalents
Cash comprises cash on hand and deposits that can be readily withdrawn on demand.
Cash equivalents are the company’s short-term (due within 3 months from purchase date), highly liquid
investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk
of changes in value.
10. Foreign currency transactions and translation of foreign currency statements
(1) Accounting method of foreign currency transactions
a) Initial recognition of foreign currency transactions
For foreign currency transactions incurred, the Company converts the amount in foreign currency into the amount
in functional currency at the spot exchange rate (middle rate) announced by the People’s Bank of China on the
transaction date. Among them, for foreign currency exchange occurred or transaction involving foreign currency
exchange, the Company converts at the exchange rate actually adopted on the transaction date.
b) Adjustment or settlement on the balance sheet date or settlement date
On the balance sheet date or the settlement date, the Company handles foreign currency monetary items and
foreign currency non-monetary items separately in accordance with the following methods:
i. Accounting principles for handling foreign currency monetary items
For foreign currency monetary items, on the balance sheet date or the settlement date, the Company converts
them by using the spot exchange rate (middle rate) prevailing on the balance sheet date or settlement date, and
adjusts the amount in functional currency of foreign currency monetary items in respect of the difference arising
from exchange rate fluctuations, which shall be treated as exchange difference at the same time. Among them,
the exchange differences arising from foreign currency loans relating to the acquisition, construction or production
of assets eligible for capitalization shall be included in the costs of assets eligible for capitalization; other exchange
differences shall be included in the current financial expenses.
ii. Accounting principles for handling foreign currency non-monetary items
For foreign currency non-monetary items measured at historical cost, the Company shall convert them at the spot
exchange rate (middle rate) prevailing on the transaction date, with their amounts in functional currency remaining
unchanged and no exchange differences incurred.
For an inventory that is measured at the lower of its costs or its net realizable values, if the net realizable value is
determined in foreign currency, the Company, when determining the value of the inventory at the end of the period,
shall firstly convert the net realizable value into functional currency and then compare it with the inventory cost
reflected in functional currency.
Non-monetary items measured at fair value that is reflected in foreign currency at the end of the period, the
141
Company shall firstly translate the foreign currency into the amount in functional currency at the spot exchange
rate on the date when the fair value is determined, and then compare it with the original functional currency
amount. Difference between the translated functional currency amount and the original functional currency
amount is treated as profit or loss from changes in fair value (including changes in exchange rate) and is recognized
in current profit and loss.
(2) Accounting treatment method for translation of foreign currency statements
a) The Company shall translate the financial statements of foreign operations in accordance with the following
methods:
i. Assets and liabilities in the balance sheets shall be translated at the spot exchange rates on balance sheet date.
Shareholders’ equity items, except for the item of "undistributed profits", are translated at the spot exchange rates
on the dates when the transactions occur.
ii. Revenue and expense items in the income statement are translated at the spot exchange rates on the dates
when the transactions occur or at the exchange rate determined in a systematical and reasonable method and
similar to the spot exchange rate on the day when the transactions occur.
Differences arising from the above translations of foreign currency financial statements are separately listed under
‘other comprehensive income’ in the consolidated balance sheet.
The translation of comparative financial statements is handled by reference to the above approach.
b) The Company shall translate the financial statements of foreign operations that are in virulent inflation economy
in accordance with the following methods:
i. The Company restates the items in the balance sheet by using the general price index, and restates the items in
the income statement by using the changes in general price index, and then converts those items at the spot
exchange rate on the latest balance sheet date.
ii. Where the foreign operations are no longer in virulent inflation economy, the Company ceases to restate the
financial statements and converts the financial statements restated according to the price level on such cease.
c) Where the Company disposes of an overseas business, it shall transfer the foreign currency financial statements
exchange difference, which relates to the business disposed of and is presented under the items of the other
comprehensive income in the balance sheet, from the other comprehensive income item to the gain or loss on
disposal for the current period. If the overseas business is partly disposed of, the foreign currency financial
statements exchange difference shall be calculated in proportion to the percentage of disposal and transferred to
gain or loss on disposal for the current period.
11. Financial Instruments
Financial instruments are the financial asset, financial liability or (equity) instrument will be recognised when the
Company became one of the parties under a contract.
(1) Classification of financial instruments
a) Classification of financial assets
According to the company's business model of managing financial assets and the characteristics of contract cash
flow of financial assets, financial assets are classified into the following three categories: financial assets measured
at amortized cost; financial assets measured at fair value through other comprehensive income (including financial
assets directly designated to be measured at fair value through other comprehensive income); and financial assets
measured at fair value through the current profit or loss.
b) Classification of financial liabilities
The Company classifies the financial liabilities into the following two categories: financial liabilities measured at
fair value through current profit and loss (including financial liabilities held for trading and financial liabilities
directly designated to be at fair value through current profit and loss); and financial liabilities measured at
142
amortized cost.
(2) Recognition basis and measurement method of financial instruments
a) Recognition basis of financial instruments
When the Company becomes a party to a financial instrument, it shall recognize a financial asset or financial
liability.
b) Measurement method of financial instruments
i. Financial assets
Financial assets are measured at fair value upon initial recognition. For financial assets at fair value through profit
or loss, relevant transaction costs are directly recognized in profit or loss for the period. For other categories of
financial assets, relevant transaction costs are included in the amount initially recognized. Accounts receivable or
notes receivable arising from sales of goods or rendering services and without significant financing component or
the company decided not to consider financing elements for less than one year are initially recognized based on
the amount of consideration expected to be entitled to receive according to Accounting Standard for Business
Enterprises No. 14 - Revenue.
①Financial assets measured at amortized cost
These assets are subsequently measured at amortized cost using the effective interest method after initial
recognition. Gains/losses on financial assets that are measured at amortized cost and are not a part of any hedging
relationship shall be recognized in profit or loss when the financial asset is derecognised or reclassification or
amortized using the effective interest method or recognized the impairment allowance.
②Financial assets measured at fair value through other comprehensive income
These assets are subsequently measured at fair value after initial recognition. Except impairment, foreign exchange
gains and losses, interest income calculated using the effective interest method are recognized in profit or loss;
other gains and losses are recognized in other comprehensive income. On derecognition, gains and losses
accumulated in other comprehensive income are transferred to profit or loss.
In addition, the company designated some non-tradable equity instruments as financial assets measured at fair
value through other comprehensive income; the company shall recognize the relevant dividend income of such
financial assets into the current profit and loss, and recognize the change of fair value in other comprehensive
income. On derecognition, the accumulated gains/losses previously recognized in other comprehensive income
shall be transferred to retained earnings and not be recognized in current profit and loss.
③ Financial assets measured at fair value through profit or loss
The Company classifies the financial assets, except for financial assets measured at amortized cost or at fair value
through other comprehensive income as mentioned above, into the financial assets measured at fair value through
profit or loss for the current period. In addition, the company may designate some financial assets as financial
assets measured at fair value through profit or loss for the current period upon the initial recognition to eliminate
or significantly reduce accounting mismatch. For such financial assets, the company adopts the fair value for
subsequent measurement, and changes in fair value are recognized in the profit or loss for the current period.
ii. Financial liabilities
Financial liabilities shall be classified into financial liabilities measured at fair value through profit or loss for the
current period upon initial recognition and other financial liabilities. For financial liabilities measured at fair value
through profit or loss, relevant transaction costs are directly recognized in the current profit and loss, and the
relevant transaction costs of other financial liabilities are recognized in the initial recognition amount.
①Financial liabilities measured at fair value through profit or loss
Financial liabilities held for trading (including derivatives of financial liabilities) shall be subsequently measured at
the fair value. Except for those related to hedge accounting, changes in the fair value shall be recognized in the
143
profit or loss of the current period. For financial liabilities designated to be at fair value through profit or loss, fair
value changes caused by the Company's own credit risk changes which is recognized in other comprehensive
income, when the liability is derecognition, the accumulated change in its fair value caused by the change in its
own credit risk recognized in other comprehensive income is transferred to retained earnings, the remaining
changes of fair value is record in profit of loss. If the above treatment of the impact of the change in the credit risk
of such financial liabilities will cause or expand the accounting mismatch in the profit and loss, the company will
record all the gains/losses of such financial liabilities (including the amount affected by fair value changes in
enterprise's own credit risk) into the current profit and loss.
② Financial liabilities measured at amortized cost
Except financial liabilities that arise when a transfer of a financial assets does not qualify for derecognition or when
the continuing involvement approach applies security contract are classified as financial liabilities measured by
amortized cost, or financial subsequently measurement at amortized cost, and record the profits or losses
guarantee contracts recognition or amortization into the current profit and loss.
(3) Financial assets transfer
If the Company transfers substantially all the risks and rewards of ownership of the financial asset to the transferee,
the Company derecognizes the financial asset, the rights and obligations arising or retained in the transfer shall be
separately recognized as its assets or liabilities; if the Company retains substantially all the risks and rewards of
ownership of the financial asset, it continues to recognize the transferred financial assets. If the Company neither
transfers nor retains substantially all the risks and rewards of ownership of the financial asset, it is accounted for
as follows: if the Company has not retained control, it derecognizes the financial asset, the rights and obligations
arising or retained in the transfer shall be separately recognized as its assets or liabilities; and if the Company has
retained control, it continues to recognize the financial asset to the extent of its continuing involvement in the
transferred financial asset and recognizes the relevant liability.
Where transfer of financial assets qualify for derecognition entirety, the difference between the following two
amounts will be included into current profit or loss: The book value measured at the date of derecognition; and
The sum of the consideration for the derecognition part and the portion of derecognition corresponding to the
accumulated amount of the changes in fair value originally and directly included in OCI (involving the situation
where the financial asset transferred is a debt instrument investment measured at fair value and recognized in
other comprehensive income). The Company transferred the partial transfer of financial assets which qualify for
derecognition, the overall carrying amount of the transferred financial asset shall be apportioned according to
their respective relative fair value between the portion of derecognition and the remaining.
(4) Derecognition of financial liabilities
If the current obligation of the financial liability (or part thereof) has been discharged, the company shall remove
financial liability (or part thereof), and the company shall recognize the difference between its book value and the
consideration paid (including any non-cash assets transferred or liabilities assumed) in the current profit and loss.
(5) Offsetting of financial assets and liabilities
Financial assets and financial liabilities shall be shown separately in the balance sheet and shall not be offset
against each other. If the following conditions are met at the same time, the net value offset each other after
amount listed in the balance sheet:
The company has offset the confirmed number of legal rights of financial assets and financial liabilities, and this
kind of legal rights is the executable; and
The company plans to net or cash at the same time when the financial assets and liquidation of the financial liability.
If the transfer of financial assets does not meet the conditions for derecognition, the transferor shall not offset the
transferred financial assets and related liabilities.
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(6) Equity instruments
Equity instruments are contracts that prove ownership of the residual interest in the company’s assets after
deducting all liabilities. The issuance (including refinancing), repurchase, sale or cancellation of the equity
instruments of the company shall be treated as changes in the equity. The company does not recognize changes in
the fair value of equity instruments, and the transaction fees related to the equity transactions shall be deducted
from the equity. Where the equity instrument of the company distributes dividends during the term of its existence,
it shall be treated as profit distribution, and the total amount of shareholders' equity will not be affected by the
stock dividends issued.
(7) Method for determining the fair value of financial assets and financial liabilities
Where there is an active market for a financial instrument, the company shall determine its fair value by quoting
in the active market. Where there is no active market for the financial instrument, the company shall determine
its fair value by means of valuation technology. In valuation, the company uses valuation techniques applicable in
the current situation and supported by sufficient available data and other information to select input values
consistent with the characteristics of assets or liabilities considered by market participants in transactions of
related assets or liabilities, and gives priority to relevant observable input values as far as possible. Use
unobservable inputs only when relevant observable inputs cannot be obtained or are impracticable to obtain.
Upon initial recognition, the fair value of financial assets or financial liabilities is determined by the quoted price
of the same assets or liabilities in the active market or other valuation technology that only uses observable market
data, the Company defers the difference between the fair value and the transaction price. After initial recognition,
the Company recognizes the deferred difference as gain or loss in the corresponding accounting period according
to the changes of a certain factor in the corresponding accounting period.
(8) Impairment of Financial Assets
Based on the expected credit loss, the Company shall recognize the impairment loss on financial assets measured
at amortized cost, debt instrument investment at fair value through other comprehensive income.
a) The approach of recognition loss allowance for expected credit losses
Considering the reasonable and valid information such as past events, current conditions and forecast of future
economic conditions, and weighted by the risk of default, the Company calculates the probability weighted amount
of the present value of the difference between the cash flow receivable under the contract and the expected cash
flow to be received, and confirms the expected credit loss.
i. General approach
The Company assess whether the credit risk of financial instruments in different stages at each reporting date has
increased significantly. If the financial instruments' credit risk have not increased significantly after initial
recognition, it will be included in phase 1, and the Company measures the loss allowance for those instruments at
an amount equal to 12-month expected credit losses; if the financial instruments' credit risk have increased
significantly but without objective evidence for impairment after initial recognition, it will be included in phase 2,
and the Company measures the loss allowance of those instruments at an amount equal to lifetime expected credit
losses; if the financial asset that is evidently credit-impaired after initial recognition, it will be included in phase 3,
and the Company measures the loss allowance of those financial instruments at an amount equal to lifetime
expected credit losses. For financial instruments with low credit risk on the balance sheet data (e.g., fixed deposits
in commercial banks with higher credit rating, financial instruments with external credit rating above "investment
grade"), the Company assumes that the credit risk has not increased significantly since the initial recognition and
chooses to measure the loss provision according to the expected credit loss in the next 12 months.
ii. Simplified approach
For accounts receivable, contract assets, lease receivables and Income-related notes receivable that do not contain
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significant financing components or do not consider the financing components in the contracts for no more than
one year old, the company adopts simplified approach and shall always measure the loss allowance at an amount
equal to lifetime expected credit losses
For accounts receivable, contract assets and lease receivables are defined by the Accounting Standards for Business
Enterprises No. 21-Leasing that include significant financing components, the company recognizes a loss allowance
equal to the lifetime expected credit losses.
b) Criteria for determining whether credit risk has increased significantly subsequent to the initial recognition
If the probability of default of a financial asset in lifetime as determined on the balance sheet date is significantly
higher than the probability of default in lifetime as determined at the initial recognition, the credit risk of the
financial asset increases significantly.
No matter what method the Company is applied to evaluate whether credit risk has increased significantly, it
usually inferred that the credit risk of the financial instrument has increased significantly if the contract payment
delay exceeds 30 days, unless the Company can get the reasonable and valid information at reasonable cost to
evidence that the credit risk of the financial instrument has not increased significantly since the initial recognition.
Except in special cases, the Company shall use the change of default risk in the next 12 months as a reasonable
estimate of the change of default risk in lifetime to determine whether the credit risk has increased significantly
to the initial recognition
c) Approach of assessing expected credit risk on a portfolio basis and determine basis
The company evaluates credit risk individually for the credit risk of significantly different notes receivables,
accounts receivables, contract assets, lease receivables and other receivables with the following characteristics.
Such as: accounts receivables in dispute with the other party or involving litigation or arbitration; notes receivables,
accounts receivables that have shown clear signs that the debtor is likely to be unable to meet repayment
obligations.
When it is impossible to evaluate the expected credit loss information of an individual financial asset at a
reasonable cost, the Company divides the receivables into several portfolio according to the credit risk
characteristics, and calculates the expected credit loss on collective basis. The basis for determining the portfolio
is as following:
Name Approach of assessing expected credit risk
Bank acceptance bill For notes receivables divided into portfolio, the bank acceptance bill and
Portfolio; commercial acceptance bill refer to the historical credit loss experience, and
Commercial combines the current situation and the forecast of future economic situation
acceptance bill respectively. The Company calculates the expected credit loss based on the
Portfolio default risk exposure and the expected credit loss rate of the whole duration.
For accounts receivables divided into risk portfolio, the Company refers to the historical
credit loss experience, and combines the current situation and the forecast of future
Risk Portfolio economic situation, and prepares a comparison table between overdue ages of accounts
receivables and expected credit loss rate of the whole
duration to calculate the expected credit loss.
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The Company classifies items without significant recovery risk receivables as other
Other Portfolio portfolio such as items from subsidiaries in the consolidation scope, tax refunds
receivable, collection and withholding of funds. There is no provision for
bad debt for them.
For Lease receivables classified into combinations, the expected credit loss is
Lease receivables calculated through the default risk exposure and the expected credit loss rate of
the whole duration according to the historical credit loss experience, the current
situation and the forecast of the future economic situation
The Company shall take the provision or transfer the loss into the current profit and loss. For the debt instrument
investment measured at fair value through other comprehensive income, the Company shall adjust other
comprehensive income while recording the impairment loss or gain into the current profit and loss.
12. Contract assets
A contract asset is a company's right to receive consideration for goods transferred to a customer, and this right
depends on factors other than the passage of time. The company's contract assets mainly include completed and
unsettled assets and quality guarantee deposit. The contract assets and contract liabilities under the same contract
shall be shown on a net basis, and the contract assets and contract liabilities under different contracts shall not be
set off.
For the determination method and accounting treatment method of expected credit loss of contract assets, refer
to "Impairment of Financial Assets" in Note 10 (8).
13. Inventory
(1) Classification of inventory
Inventories are classified as: raw materials, semi-finished goods, stock commodities, consigned processing
materials, goods in progress and revolving materials (including low-cost consumables), etc.
Measurement method of dispatched inventories
Dispatched materials and stock commodities are accounted for by using the weighted average method.
(2) Basis to determine net realizable values of inventories and method of provision for
stock obsolescence
a) Determination basis of net realizable values of inventories
i. In normal operation process, for merchandise inventories held directly for sale, including stock commodities
(finished goods) and materials for sale, their net realizable values are determined at their estimated selling prices
minus their estimated selling expenses and relevant taxes and surcharges.
ii. In normal operation process, for material inventories that need further processing, their net realizable values
are determined at the estimated selling prices of finished goods minus estimated costs to completion, estimated
selling expenses and relevant taxes and surcharges.
iii. For inventories held to execute sales contract or service contract, their net realizable values are calculated on
the basis of contract price. If the quantities of inventories specified in the sales contracts are less than the
quantities held by the Company, the net realizable value of the excess portion of inventories shall be based on
general selling prices.
iv. The materials held for production shall be measured at cost if the net realizable value of the finished products
is higher than the cost. If a decline in the value of materials shows that the net realizable value of the finished
products is lower than the cost, the materials shall be measured at the net realizable value.
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b) Provision for stock obsolescence
i. Provisions for stock obsolescence are made at the lower of costs or net realizable values on a single basis.
ii. For inventories with large quantity and relatively low unit prices, the provision for stock obsolescence shall be
made on the ground of the categories of inventories.
(3) Inventory system
The Company adopts perpetual inventory system and takes physical inventory counts on a regular basis.
(4) Amortization method of revolving materials
a) Amortization method of low-cost consumables:
Low-cost consumables are amortized in full at once.
b) Amortization method of packaging materials
Packing materials are amortized in full at once when fetched for use by the Company.
14. Assets held for sale
Assets held for sale
a) Scope of a non-current asset held for sale and a disposal group
A non-current asset or disposal group is classified as held for sale when a company recovers its carrying value
primarily through the sale (including the exchange of non-monetary assets of a commercial nature) rather than
through the continuous use of such a group.
A disposal group is a group of assets that are disposed as a whole through sales or other ways in one transaction
and liabilities directly related to these assets delivered in the transaction.
b) Recognition criteria of a non-current asset held for sale and a disposal group
The Company recognizes its component (or non-current asset) that satisfies the following conditions as assets held
for sale:
i. The assets or disposal group must be available for immediate sale in its present condition subject only to terms
that are usual and customary for sales of such assets or disposal groups;
ii. Its sale must be highly probable. The Company has already made a decision to dispose the component and has
a commitment from the purchaser, the transfer will be completed within one year. If it requires shareholders’
approval or supervisors’ approval according to regulations, it has already received approval from the general
meeting of stockholders or relative authority institution.
c) Accounting treatment and presentation of a non-current asset held for sale and a disposal group
The non-current asset or disposal group is first classified as held for sale, the Company should measure the non-
current assets or assets and liabilities made up of disposal group in accordance with relevant accounting standards.
When the Company measure a non-current asset or disposal group held for sale initially or re-measure at balance
sheet date subsequently, the impairment loss should be recognized if the book value is higher than fair valueless
costs to sell at the amount of the difference of these two in profit and loss, the provision for assets held for sale
need to be recognized at the same time. For the impairment of disposal group, should write off goodwill if existing,
and then write down the related assets proportionally. Depreciation or amortization should cease for the non-
current asset held for sale.
No matter the asset is classified as individual asset held for sale or asset belonging to disposal group, the asset is
presented as current assets under “assets held for sale” item; liabilities related to the asset transferred in the
disposal group held for sale is presented as current liabilities under “liabilities held for sale” item in the balance
sheet.
The Company is committed to a sale plan involving loss of control of subsidiary shall classify all the assets and
liabilities of that subsidiary held for sale in consolidated balance sheets when the above criteria are met, regardless
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of whether the Company retain a non–controlling interests in its former subsidiary after the sale. In the balance
sheets of parent company, the investment should be classified as held for sale in full. In the consolidated financial
statements, all assets and liabilities of the subsidiaries are classified as held for sale.
Termination of business operations
Termination means any separate part which satisfies one of the following conditions and which has been disposed
of or classified as being held for sale:
a) The component represents a separate principal business or a separate principal area of operation;
b) The component is part of an associated plan to dispose of a separate principal business or a separate principal
operating area;
c) The component is a subsidiary acquired specifically for resale.
15. Long-term equity investment
(1) Recognition of the initial investment costs of long-term equity investments
a) For long-term equity investments from business combinations, the initial investment cost shall be recognized in
accordance with the provisions mentioned in Notes 3(5). Accounting Method for Long-term Equity Investment
from Business Combinations under Common Control and Business Combination not under Common Control.
b) Except for the long-term equity investments arising from business combinations, those obtained by other means
shall recognize their initial investment costs in accordance with the following provisions:
i. For the long-term equity investments obtained by cash paid, the Company recognizes the actual purchase price
as the initial investment costs. The initial investment costs include directly related expense, taxes and other
necessary expenses of obtaining long-term equity investments.
ii. For the long-term equity investments acquired by the issue of equity securities (equity instrument), the initial
investment cost shall be the fair value of the equity securities (equity instrument) issued. If the fair value of the
long-term equity investment obtained is more reliable than equity securities issued, the initial investment cost
shall be the fair value of the long-term equity investment made by the investors. The cost directly attributable to
the issue of equity securities (equity instrument), including fees, commissions, etc., write-downs premium price of
the issue, if premium price of the issue is insufficient, write- downs surplus reserve and undistributed profit in turn.
For the long-term equity investments acquired by the issue of debt securities (debt instrument) , reference through
the issuance of equity securities (equity instrument).
iii. For long-term equity investments obtained by debt restructuring, the Company recognizes the fair value of
shares of debt-for-equity swap as the initial investment costs.
iv. For long-term equity investments obtained by non-monetary assets exchange, under the condition that an
exchange of non-monetary assets is of commerce nature and the fair value of assets exchanged can be reliably
measured, non- monetary assets traded in is initially stated at the fair value of the assets traded out, unless there
is conclusive evidence indicating that the fair value of the assets traded in is more reliable; if the above conditions
are not satisfied, initial investment costs of long-term equity investments traded in shall be recognized at the book
value of the assets traded out and the relevant taxes and surcharges payable.
Expenses, taxes and other necessary expenses incurred to the Company and that are directly related to the
obtainment of long-term equity investments shall be recognized as the initial investment costs of long-term equity
investments.
For long-term equity investments obtained by the Company by any means, cash dividends or profits declared but
not yet distributed in the actual payments or the consideration actually paid for the investment shall be separately
accounted as dividends receivable and shall not constitute the costs of long- term equity investments.
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(2) Subsequent measurement and recognition of gains and losses of long-term equity investments
a) Long-term equity investment measured under cost method
i. If accompany can control an investee, namely investment in subsidiary, the long-term equity investment shall
be measured under the cost method.
ii. For long-term equity investments accounted at the cost method, except cash dividends or profits declared but
not yet distributed which are included in the actual payments or the consideration actually paid for the investment,
the cash dividends or profits declared by the investee shall be recognized as the investment income irrespective
of net profits realized by the investee before investment or after investment.
b) Long-term equity investments measured under the equity method
i. For the long-term equity investment which has joint control or significant influence over the investee, the equity
method is adopted for accounting.
ii. For long-term equity investments measured at the equity method, if the initial investment costs are higher than
the investor’s attributable share of the fair value of the investee’s identifiable net assets, no adjustment will be
made to the initial costs of the long-term equity investments; if the initial investment costs are lower than the
investor’s attributable share of the fair value of the investee’s identifiable net assets, the difference shall be
recognized in current profit and loss and at the same time the adjustment will be made to the initial costs of the
long-term equity investments.
iii. After obtaining the long-term equity investments, the Company shall, according to the shares of net profits and
other comprehensive income realized by the investee that shall be enjoyed or borne by the Company, recognize
the profit and loss on the investments and adjust the book value of the long-term equity investments. When
recognizing the net profits and losses and other comprehensive income of the investee that the Company shall
enjoy or bear, the Company shall make a recognition and calculation based on the net book profits and losses of
the investee after appropriate adjustments. However, where the Company is unable to obtain the relevant
information due to failure to reasonably determine the fair value of the investee’s identifiable assets, minor
difference between the investee’s identifiable assets and the book value thereof or other reasons, the profits or
losses on the investments shall be directly calculated and recognized based on the net book profits and losses of
the investee. The Company shall calculate the part distributed from cash dividends or profits declared by the
investee and correspondingly reduce the book value of the long-term equity investments.
When recognizing the income from investments in associates and joint ventures, the Company shall write off the
part of incomes from internal unrealized transactions between the Company and associates and joint ventures
which are attributable to the Company and recognize the profit and loss on investments on such basis. Where the
losses on internal transactions between the Company and the investee fall into the scope of losses on assets
impairment, full amounts of such losses shall be recognized. Profit and loss from internal unrealized transactions
between the Company’s subsidiaries included into the combination scope and associates and joint ventures shall
be written off according to the above principles and the profit and loss on investments thereafter shall be
recognized on such basis.
When the share of net loss of the investee attributable to the Company is recognized, it is treated in the following
sequence: Firstly, write off the book value of the long-term equity investments; where the book value of the long-
term equity investments is insufficient to cover the loss, investment losses are recognized to the extent that book
value of long-term equity which form net investment in the investee in other substances and the book value of
long-term receivables shall be written off; after all the above treatments, if the Company still assumes additional
obligation according to investment contracts or agreements, the obligation expected to be assumed should be
recognized as provision and included into the investment loss in the current period. If the investee is profitable in
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subsequent accounting periods, the Company shall treat the loss in reverse order against that described above
after deducting unrecognized share of loss: i.e. write down the book value of the recognized provision, then restore
the book value of long-term interests which substantially form net investments in the investee, then restore the
book value of long-term investments, and recognize investment income at the same time.
(3) Basis for judgment of common control or significant influence over the investee
a) Basis for judgment of common control over investee
Common 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. Relevant activities of
an arrangement usually include selling and purchasing of goods or services, managing financial assets, acquiring
or disposing of assets, researching and developing activities and financing activities. A joint venture is a joint
arrangement whereby the joint ventures have rights to the net assets of the arrangement. The parties have rights
to the assets, and obligations for the liabilities, relating to the arrangement, which is a joint operation, but not a
joint venture.
b) Basis for judgment of significant influence over investee
The term “significant influence” refers to the power to participate in decision-making on the financial and
operating policies of the investee, but with no control or joint control over the formulation of these policies. Where
the Company is able to exert significant influence over the investee, the investee is its associate.
16. Fixed assets
(1) Recognition of fixed assets
Fixed assets refer to tangible assets held for the purpose of producing commodities, providing services, renting or
business management with useful life exceeding one accounting year. Fixed assets are recognized when the
following criteria are satisfied simultaneously:
a) It is probable that the economic benefits relating to the fixed assets will flow into the Company;
b) The cost of the fixed assets can be measured reliably.
(2) Depreciation of fixed assets
Estimated Estimated
useful life residual value Annual depreciation
Category Depreciation method rate (%)
(Yr) rate (%)
Buildings Straight-line method 20 ~25 5 3.80 ~4.75
And constructions
Machinery equipments Straight-line method 10 5 9.50
Transportation Straight-line method 10 5 9.50
equipments
Other equipments Straight-line method 8 5 11.88
17. Construction in progress
(1) Categories of constructions in progress
Constructions in progress are accounted on individual project basis.
(2) Criteria and commencement of conversion of constructions in progress into fixed assets
The book entry values of the fixed assets are stated at total expenditures incurred before construction in progress
reaches the working condition for their intended use. For self- operating projects, total expenditures are measured
according to the expenditures of direct materials, direct labor, direct measurement mechanical construction costs
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and other expenditures; for contracting projects, total expenditures are measured according to project costs
payable and other expenditures. Borrowing costs incurred before the projects that are undertaking with borrowing
costs reach working condition for their intended use and meeting the condition for capitalization shall be
capitalized and included into the costs of construction in progress.
For construction in progress that has reached working condition for intended use but for which the completion of
settlement has not been handled, it shall be transferred into fixed assets at the estimated value according to the
project budget, construction price or actual cost, etc. from the date when it reaches the working condition for
intended use and the fixed assets shall be depreciated in accordance with the Company’s policy on fixed asset
depreciation; adjustment shall be made to the estimated value based on the actual cost after the completion of
settlement is handled, but depreciation already provided will not be adjusted.
18. Borrowing costs
(1) Scope of borrowing costs
The Company’s borrowing costs include interest thereon, amortization of discounts or premiums, ancillary
expenses and exchange differences incurred from foreign currency loan, etc.
(2) Recognition principles of capitalization of borrowing costs
The borrowing costs incurred to the Company and directly attributable to the acquisition and construction or
production of assets eligible for capitalization should be capitalized and recorded into relevant asset costs; other
borrowing costs should be recognized as costs according to the amount incurred and be included into the current
profit and loss.
Assets eligible for capitalization include fixed assets, investment properties, inventories and other assets which
may reach the working condition for their intended use or sale by acquisition and construction or production
activities for quite long time.
(3) Recognition of capitalization period of borrowing costs
a) Recognition of commencement of capitalization of borrowing costs
Borrowing costs may be capitalized when asset disbursements have already been incurred, borrowing costs have
already been incurred and the acquisition and construction or production activities which are necessary to prepare
the assets for their intended use or sale have already been started. Among which, asset disbursements include
those incurred by cash payment, the transfer of non-cash assets or the undertaking of interest-bearing debts for
acquiring and constructing or producing assets eligible for capitalization.
b) Recognition of period of capitalization suspension of borrowing costs
If the acquisition and construction or production activities of assets eligible for capitalization are interrupted
abnormally and this condition lasts for more than three months, the capitalization of borrowing costs should be
suspended. The borrowing costs incurred during interruption are charged to profit or loss for the current period,
and the capitalization of borrowing costs continues when the acquisition and construction or production activities
of the asset resume. If the interruption is necessary for the acquisition and construction or production to prepare
the assets for their intended use or sale, the capitalization of borrowing costs should continue.
c) Recognition of period of capitalization cessation of borrowing costs
Capitalization of borrowing costs should cease when the acquired and constructed or produced assets eligible for
capitalization have reached the working condition for their intended use or sale. Borrowing costs incurred after
the assets eligible for capitalization have reached the working condition for their intended use or sale should be
recognized as the current profit and loss when they incur.
If all parts of the acquired and constructed or produced assets are completed, each part may be used or sold
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externally in the process of continuous construction of other parts and the necessary acquisition or production
activities have been substantially completed to make the part of assets reach the working condition for their
intended use or sale, the capitalization of borrowing costs related to the part of assets should be ceased; if all parts
of the acquired and constructed or produced assets are completed but the assets cannot be used or sold externally
until overall completion, the capitalization of borrowing costs should cease at the time of overall completion of
the said assets.
(4) Recognition of capitalized amounts of borrowing costs
a) Recognition of capitalized amounts of interest on borrowing costs
During the period of capitalization, capitalized amount of the interest of each accounting period (including
amortization of discounts or premiums) shall be recognized according to the following provisions:
i. As for special loan borrowed for acquiring and constructing or producing assets eligible for capitalization,
borrowing costs of special loan actually incurred in the current period less the interest income of the loans unused
and deposited in bank or return on temporary investment should be recognized as the capitalization amount of
borrowing costs.
ii.As for general loans used for acquiring and constructing or producing assets eligible for capitalization, the interest
of general loans to be capitalized should be calculated by multiplying the weighted average of asset disbursements
of the part of accumulated asset disbursements in excess of special loans by the capitalization rate of used general
loans. The capitalization rate is calculated by weighted average interest rate of general loans.
iii. Where there are discounts or premiums on loans, the amounts of interest for each accounting period should
be adjusted taking account of amortizable discount or premium amounts for the period by effective interest
method.
iv. During the period of capitalization, the capitalized amount of interest of each accounting period shall not exceed
the current actual interest of the relevant loans.
b) Recognition of capitalized amounts of auxiliary expenses of loans
i.Auxiliary expenses incurred from special loans before the acquired or constructed assets eligible for capitalization
reach the working condition for their intended use or sale should be capitalized when they incur and charged to
the costs of assets eligible for capitalization; those incurred after the acquired or constructed assets eligible for
capitalization reach the working condition for their intended use or sale should be recognized as costs according
to the amounts incurred when they incur and charged to the current profit or loss.
ii. Auxiliary expenses incurred from general loans shall be recognized as costs according to the amounts incurred
when they occur and included in the current profit and loss.
c) Recognition of capitalized amount of exchange differences
During the period of capitalization, exchange differences incurred from the principal and interest of special foreign
currency loans should be capitalized and included in the costs of the assets eligible for capitalization.
19. Intangible assets
(1) Useful life and the basis for its determination, estimation, amortization methodology or review procedures
a) Initial measurement of intangible assets
i. Initial measurement of outsourcing intangible assets
Costs of outsourcing intangible assets shall be recognized according to the purchase price, related taxes and other
expenses directly attributed to reaching the working condition for their intended use. The cost of intangible assets
shall be recognized based on present value of purchase price when deferred payment over normal credit
conditions with financial nature. The difference between actual payment and purchase price, expect for capitalized
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amount, shall be included into the current profit and loss in the period of credit.
ii. Initial measurement of internally researched and developed intangible assets
Costs of internally researched and developed intangible assets shall be recognized according to the total expenses
during the period after the assets are eligible for capitalization and before they reach the intended purpose and
the expenses that have been included in the previous periods shall no longer be adjusted.
Expenses on the research phase of internally researched and developed intangible assets shall be included in the
current profit and loss when they incur; those on the development phase ineligible for capitalization shall be
included in the current profit and loss; those eligible for capitalization shall be recognized as intangible assets. If it
is unable to distinguish expenditure on the research phase and expenditure on development phase, the research
and development expenditures shall be all included in the current profit and loss.
b) Subsequent measurement of intangible assets
The useful lives of intangible assets are analyzed on acquisition. Intangible assets obtained by the Company are
divided into intangible assets with limited useful lives and intangible assets with indefinite useful lives.
i. Subsequent measurement of intangible assets with limited useful lives
The intangible assets with limited useful lives are amortized on a straight-line basis when they reach intended use
over their useful lives with no residual value reserved. Amortizations of intangible assets are usually recorded into
the current profit and loss; where the economic benefits of an intangible asset are realized by the products or
other assets produced thereafter, the amortizations are recorded into the costs of the relevant assets.
Category, estimated useful life, estimated net residual value rate and annual amortization rate of intangible assets
are shown below:
Category of Estimated useful life Estimated net residual Annual amortization
intangible assets (years) value rate (%) rate (%)
Land use right 50 0 2.00
Trademark 7-10 0 14.29-10.00
Computer software 10 0 10.00
The useful lives and amortization methods of intangible assets with limited useful lives on the balance sheet date
shall be reviewed.
ii. Subsequent measurement of intangible assets with indefinite useful lives
Intangible assets with indefinite useful lives are not amortized in the holding period, but impairment tests are
performed at the end of each year.
c) Estimates of useful lives of intangible assets
i. For intangible assets from any contractual right or other statutory rights, their useful lives shall be recognized
according to the period no more than that of the contractual or other statutory rights; when the contractual right
or other statutory rights contract is extended due to renewal of contracts and there is evidence that the renewal
of the Company does not need large costs, the renewal period shall be included into the useful lives.
ii. Where the contract or the law fails to specify the useful lives, the Company integrates situations in all aspects
and determine the period of intangible assets that can bring economic benefits for the Company by hiring the
relevant experts to demonstrate or comparing with the situation of the industry as well as referring to the
Company’s historical experience or otherwise.
iii. If it is still unable to reasonably determine that intangible assets may bring economic benefits for the Company
according to the above methods, the intangible assets are taken as intangible assets with indefinite useful lives.
(2) The scope of R&D expenditures and the related accounting treatment
a) Specific criteria for delineating the research and development phases of in-house R&D projects
i. The scope of R&D expenditures
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It usually includes research and development staff salary expense, direct input expense, depreciation and long-
term amortization expense, design expense, equipment commissioning expense, amortization expense for
intangible assets, commissioned external research and development expense, and other expense, including
expensed research expense and capitalized development expenditures.
ii. Specific criteria for delineating the research and development phases
According to the actual situation of the research and development, the Company classifies the research and
development project into that on the research phase and that on the development phase.
① Research stage
Research stage is the stage when creative and planned investigations and research activities are conducted to
acquire and understand new scientific or technological knowledge.
② Development stage
Development stage is the stage when the research achievements or other knowledge are applied to a plan or
design, prior to the commercial production or use, so as to produce any new or substantially improved material,
device or product.
Expenditure of an internal research and development project on the research phase shall be included in current
profit and loss when it occurs.
b) Specific criteria for qualifying expenditure on the development phase for capitalization
Expenditure on the development phase of an internal research and development project shall be recognized as
intangible assets only when the following conditions are simultaneously satisfied:
i. It is technically feasible to finish intangible assets for use or sale;
ii. It is intended to finish and use or sell the intangible assets;
iii. The usefulness of intangible assets to generate economic benefits shall be proved, including being able to prove
that there is a potential market for the products manufactured by applying the intangible assets or there is a
potential market for the intangible assets themselves or the intangible assets will be used internally;
iv. It is able to finish the development of the intangible assets, and able to use or sell the intangible assets, with
the support of sufficient technologies, financial resources and other resources;
v. The expenditure attributable to the intangible asset during its development phase can be measured reliably.
20. Non-current assets impairment
If there are impairment indicators of long-term equity investment, investment property measured at cost model,
fixed assets, construction in progress, right-of-use assets, intangible assets with indefinite useful lives and other
long-term assets at balance sheet date, impairment test should be performed. If the result of impairment test
shows that recoverable amount is less than its book value, the difference should be provided for impairment and
recorded into impairment loss. The recoverable amount is the higher of fair values less costs of disposal and the
present values of the future cash flows expected to be derived from the asset. Provision for impairment is
calculated and recognized on the basis of individual asset. If recoverable amount of individual asset is difficult to
be estimated, the Company should recognize the recoverable amount of the asset group which the individual asset
belongs to. Asset group is the minimum asset group which can generate cash inflow separately.
The Company should perform impairment test for goodwill and intangible assets with indefinite life at least at each
year end, no matter whether there is impairment indicator.
When the Company performs impairment test, book value of goodwill arising from business combination should
be amortized to relevant asset group using the reasonable method from the date of purchase. If it is difficult to
amortize it to relevant asset group, amortize it to relevant asset group portfolio. Apportion book value of goodwill
to relevant asset group or asset group portfolio according to the proportion of fair value of asset group or asset
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group portfolio accounting for total amount of relevant asset group or asset group portfolio. If fair value is difficult
to be measured reliably, amortize according to the proportion of book value of asset group or asset group portfolio
accounting for total amount of relevant asset group or asset group portfolio. When perform impairment test for
asset group or asset group portfolio including goodwill, if there is impairment indicator of asset group or asset
group portfolio relevant to goodwill, perform impairment test for asset group or asset group portfolio without
goodwill firstly, calculate its recoverable amount, compare with relevant book value and recognize impairment loss.
Then perform impairment test for asset group or asset group portfolio including goodwill, compare book value of
the asset group or asset group portfolio (including proportional book value of goodwill) and its recoverable amount,
if recoverable amount of relevant asset group or asset group portfolio is less than its book value, recognize
impairment loss of goodwill.
Once impairment loss stated above is recognized, reversal is not allowed in the subsequent accounting periods.
21. Long-term deferred expenses
(1) Scope of long-term deferred expenses
Long-term deferred expenses refer to various expenses which have been already incurred but will be born in this
period and in the future with an amortization period of over 1 year (exclusive).
(2) Initial measurement of long-term deferred expenses
Long-term deferred expenses shall be initially measured according to the actual costs incurred.
(3) Amortization of long-term deferred expenses
Long-term deferred expenses are amortized using the straight-line method over the beneficial period.
22. Contract liability
Contract liabilities refer to the obligation of a company to transfer commodities to customers for consideration
received or receivable from customers. If the customer has paid the contract consideration or the company has
obtained an unconditional right to receive the goods prior to the company's transfer of the goods to the customer,
the company will show the amount received or receivable as a contractual liability in which earlier the customer
actually pays the amount or the amount becomes due. The contract assets and contract liabilities under the same
contract shall be shown on a net basis, and the contract assets and contract liabilities under different contracts
shall not be set off.
23. Employee benefits
(1) Accounting treatment of short-term benefits
Short-term benefits are the benefits that the Company expect to pay in full within 12 months after the reporting
period in which the employee provided relevant services, excluding the compensation for employment
termination.
Short-term benefits include: wage, bonus, allowance and subsidy; employee welfare, social securities including
health insurance and work injury insurance; housing common reserve fund; union expenditure and employee
training expenditure; short-term paid leave; short-term profit-sharing; non-monetary welfare and other short-term
benefits.
Actual short-term benefits will be recognized as liability during the accounting period in which the employee is
providing the relevant service to the Company. The liability will be included in the current profits and losses or the
cost relevant assets.
(2) Accounting treatment of post-employment benefits
The defined contribution plan of the Company includes payments of basic pension, unemployment insurance,
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annuity, etc. that accord to relevant provisions. The amount which the Company deposit on balance sheet date in
exchange for the service of the employee during the accounting period will be recognized as employee benefits
liability and shall be included into the profit or loss for the current period.
(3) Accounting treatment of termination benefits
Termination benefits are the benefits the Company provide to the employee when the Company terminates the
employment before labor contract expires or encourages voluntary resignation. Employee benefits liabilities shall
be recognized and included into profit or loss for the current period on the earlier date of the two following
circumstances:
a) When the Company is not able to withdraw the benefits from termination of employment or resignation
persuasion unilaterally;
b) When the Company recognizes costs and fees relevant to reforming the termination benefits payment.
(4) Accounting treatment of other long-term employee benefits
Other long-term employee benefits are all employee benefits other than short-term benefits, post-employment
benefits and termination benefits. At the end of reporting period, the company will recognize the employee
benefits cost from other long-term employee benefits as the following components:
a) Service cost;
b) Net amount of interest from other long-term employee benefits net liabilities or assets;
c) Changes from recalculation of the net liabilities or assets from other long-term employee benefits.
In order to simplify related accounting procedure, the net amount of the above subjects shall be included into
current profit or loss or the cost of relevant assets.
24. Provisions
(1) Recognition principles of provision
When obligations related to external guarantees, pending actions or arbitration, product quality assurance,
onerous contracts, reorganization and contingencies satisfy the following three conditions, they shall be
recognized as provision:
a) This obligation is a present obligation of the Company;
b) The settlement of such obligation is likely to result in outflow of economic benefits from the Company; and
c) The amount of the obligation can be measured reliably.
(2) Measurement method of provision
The amount of provision is measured at the best estimate of expenses required for contingencies.
a) If there is continuous range for the necessary expenses, and probabilities of occurrence of all the outcomes
within this range are equal, the best estimate shall be determined at the median of the range.
b) The best estimate shall be accounted as follows in other cases:
i. If the contingency involves a single item, the best estimate shall be determined at the most likely outcome.
ii. If the contingency involves two or more items, the best estimate should be determined according to all the
possible outcomes with their relevant probabilities.
25. Share-based payment
Share-based payment is classified as equity-settled share-based payment and cash- settled share-based payment.
(1) Accounting treatment on the date of granting
The Company does not make any accounting treatment on the date of granting, neither for equity-settled share-
based payment nor for cash-settled share-based payment, except that the right of the share-based payment can
be exercised immediately.
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(2) Accounting treatment on each balance sheet date within vesting period
On each balance sheet date within vesting period, the Company records the service provided by employees or
other party as cost and expense, and recognizes equity or liability at the same time.
For the share-based payment attached with market conditions, once employees satisfy all conditions except
market conditions, the service acquired can be recognized. If the performance condition is not market condition,
the estimate for previous periods can be revised when the vesting period is determined and subsequent
information shows that the estimate for conditions of exercising rights requires adjustments.
For equity-settled share-based payment related with employees, charge the service into costs, expenses and
capital reserve (other capital reserve), using the fair value of the equity instrument on the date of granting. The
subsequent changes of fair value should not be recognized. For cash-settled share-based payment related with
employees, recalculate fair value of the equity instrument at each balance sheet date and recognize related costs,
expenses and employee benefit payable.
At each balance sheet date within vesting period, the Company makes the best estimate and revises the number
of equity instrument that can be exercised according to the latest subsequent information such as change of
number of employees who can exercise rights.
Use fair value and the number of equity instrument stated above to calculate cumulative amount of costs and
expenses that should be recognized by this period and then deduct the cumulative amount already recognized in
the previous period. The balance is the amount of cost and expense that should be recognized in the current period.
(3) Accounting treatment after the date when rights can be exercised
For equity-settled share-based payment, after the date when rights can be exercised, no adjustment shall be made
to the total amount of the cost expense and equity already recognized. The Company recognizes share capital and
capital premium, and carry forward the capital reserve (other capital reserve) recognized within vesting period at
the he dates when rights can be exercised.
For cash-settled share-based payment, the Company shall not recognize costs and expenses. The change of fair
value of liability (employee benefit payable) should be recorded into current profit or loss (profit or loss arising
from fair value changes) after the date when rights can be exercised.
(4) Accounting treatment for repurchasing shares regarding employee option incentive.
When the Company encourages employees in the form of repurchasing shares, total expenditure of repurchasing
shares is regarded as treasury stock and registered for check. At each balance sheet date within vesting period,
charge the employee service acquired into costs and expenses, and meanwhile increase capital reserve (other
capital reserve), using fair value of the equity instrument at the date of granting. When the employee exercises
the right to buy the Company’s shares and receives the amount, write off the cost of treasury stock delivered to
the employee and the cumulative amount of capital reserve (other capital reserve) recognized within the vesting
period, meanwhile the balance adjusting capital reserve (share capital premium).
26.Revenue
Accounting policies adopted in revenue recognition and measurement
(1) Principle and measurement method of revenue recognition
a) Revenue recognition
The Company has fulfilled its contractual performance obligation to recognize revenue when the customer
acquires control of the relevant goods. On the beginning date of the contract, the Company evaluates the contract,
identifies the individual performance obligations contained in the contract, and determines whether the individual
performance obligations are performed within a certain period of time or at a certain point. Then, the Company
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recognizes the revenue when the individual performance obligations are fulfilled.
b) Revenue measurement
If the contract contains two or more performance obligations, the Company shall, on the commencement date of
the contract, apportion the transaction price to each single performance obligation according to the relative
proportion of the separate selling price of the commodity or service committed by each single performance
obligation, and measure the revenue according to the transaction price apportioned to each single performance
obligation. In determining the transaction price, the Company will take into account the impact of variable
consideration, material financing elements existing in the contract, non-cash consideration and customer
consideration payable, and it is assumed that the goods will be transferred to the customer in accordance with the
provisions of the existing contract and that the contract will not be canceled, renewed or changed.
(2) Specific revenue recognition policies
a) Sales contract
The Company's sales products, promotional products and other goods belong to the performance obligations
performed at a certain point.
The Company recognizes the sales revenue when the goods are delivered to the customer and the control of the
goods is transferred. For export sales business, the Company recognizes the revenue after the goods are delivered
and the customs clearance procedures are completed.
According to the marketing policy, and the distributor sales of final product, the Company gives the distributor a
percentage discount, and regularly or irregularly settles with distributors. At the time of settlement, the discounts
are recorded in a sales invoice issued. The net amount of invoice value after the deduction of the discount sales
income is recognized as revenue according to the accrual principle. The discounts that have occurred and have not
yet been settled at the end of the current period shall be taken provision from the sales revenue and recorded into
the contract liabilities.
b) Service Contract
The service contract provided by the Company contains the performance obligation of the lease service provided.
Since the customer obtains and consumes the economic benefits brought by the performance of the contract at
the same time, it is regarded as the performance obligation performed within a certain period of time and is equally
apportioned and confirmed during the service provision.
27. Contract costs
Assets related to contract costs include contract acquisition costs and contract performance costs.
The cost of contract fulfillment incurred by the company to perform the contract shall be recognized as an asset if
the following conditions are met:
(1) The cost is directly related to a current or anticipated contract.
(2) The cost increases the company's resources for future performance obligations.
(3) The cost is expected to be recovered.
The incremental cost incurred by the company in obtaining the contract is expected to be recovered shall be
recognized as an asset as the cost of obtaining the contract.
The Company amortizes the asset related to the contract cost on the same basis as the recognition of the revenue
of the goods or services related to the asset, and includes it in the profit or cost for the current period.
If the book value of the assets related to the contract cost is higher than the difference between the following two
items, the Company will make an impairment provision for the excess part and confirm it as the impairment loss
of the assets:
(1) The transfer of the goods or services related to the asset less the estimated cost;
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(2) Estimated impending costs for the transfer of the related goods or services.
If the impairment provision of the above asset is subsequently reversed, the book value of the asset after reversal
shall not exceed the carrying amount the asset would have reached on the date of reversal had the provision for
impairment been not made.
28. Government grants
(1) Types of government grants
Government grants are monetary assets and non-monetary assets acquired free of charge by the Company from
the government, including government grants related to assets and government grants related to income.
Government grants related to assets are government grants that are acquired by the Company and used for
forming long-term assets through purchasing and constructing or other ways.
Government grants related to income are government grants other than government grants related to assets.
(2) Recognition principles of government grants
Government grants are recognized when both of the following conditions are met:
a) The Company can meet the attached conditions for the government grants;
b) The Company can receive the grants.
(3) Measurement of government grants
a) If a government grant is a monetary asset, it shall be measured in the light of the received or receivable amount.
b) If a government grant is a non-monetary asset, it shall be measured at its fair value; and if its fair value cannot
be obtained in a reliable way, it shall be measured at a nominal amount (a nominal amount is CNY 1).
(4) Accounting treatment method of government grants
a) The government grants related to assets shall be set off of the book value of the related assets or recognized as
deferred income at the actual entry amount on acquisition. Government grants recognized as deferred income
shall be allocated evenly over the useful lives of the relevant assets, and included in the current profit or loss.
Government grants measured at the nominal amount shall be directly included in current profit and loss.
b) Government grants related to income shall be separately handled according to the following circumstances:
i. If government grants related to income are used to compensate the Company’s relevant expenses or losses in
future periods, such government grants should be recognized as deferred income on acquisition and be included
into the current profit and loss or written off of the related costs when the relevant expenses, losses are recognized.
ii. If government grants related to income are used to compensate the
Company’s relevant expenses or losses incurred, such government grants are directly included into the current
profit and loss on acquisition or written off of the related costs.
c) Government grants related to assets and related to income are received together, shall be treated separately. If
it is hard to separate, government grants shall be treated as related to income as a whole.
d) Government grants related to daily operation shall be recoded in other income or written off relevant expenses,
costs. Government grants unrelated to daily operation shall be recorded in non-operating income. Financial
subsidy funds directly allocated to the company shall be offset the relevant borrowing costs.
e) Government grants already recognized required to be refunded shall be handled according to the following
circumstances:
i. If the grants have written down the book value of assets, the book value shall be adjusted.
ii. If there is related deferred income, the book value of relevant deferred income is written down and the
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exceeding part is recorded in the current profit and loss.
iii. If there is no related deferred income, the exceeding part is directly included in the current profit and loss.
29. Deferred tax assets and deferred tax liabilities
The Company adopts the balance sheet liability method to account for income tax.
(1) Recognition of deferred tax assets or deferred tax liabilities
a) The Company recognizes its tax base on acquisition of assets and liabilities. On the balance sheet date, the
Company analyzes and compares the book value of the assets and liabilities and the tax base. If there are
temporary differences in book value of the assets and liabilities and the tax base, under the circumstance that the
temporary differences incur in the current period and meet the recognition criteria, the Company shall respectively
recognize taxable temporary differences or deductible temporary differences as deferred tax liability or deferred
tax assets.
b) Recognition basis of deferred tax assets
i. Deferred tax assets incurred from deductible temporary differences are recognized to the extent that they shall
not exceed the taxable income probably obtained in future periods to be against the deductible temporary
difference. In determining the taxable income probably obtained in future periods, including the taxable income
from normal production and operation activities in future periods and the increase of taxable income due to the
reversal of taxable temporary differences during the period of reversal of deductible temporary differences.
ii. For deductible losses and tax credits that can be carried forward to the next years, the Company is likely to
recognize the corresponding deferred tax assets to the extent that the assets shall not exceed the taxable income
in the future for deducting deductible losses and tax credits and that are probably obtained by the Company.
iii. On the balance sheet date, the Company reviews the book value of deferred tax assets. If it is probably unable
to obtain sufficient taxable income in the future period to offset the benefits of the deferred tax assets, the
Company shall write down the book value of the deferred tax assets; when it is probable to obtain sufficient taxable
income, the write-downs shall be reversed.
c) Recognition basis of deferred tax liabilities
The Company recognizes the current and previous taxable temporary differences payable but unpaid as deferred
tax liabilities. But they exclude temporary differences arising from goodwill; transactions which are formed other
than from business combinations and neither affect the accounting profits nor affect taxable income at the time
of occurrence.
(2) Measurement of deferred tax assets or deferred tax liabilities
a) On the balance sheet date, the deferred tax assets and deferred tax liabilities are measured at the applicable
tax rate during the period of expected recovery of the assets or liquidation of the liabilities in accordance with the
provisions of the tax law.
b) Where the applicable tax rate changes, the Company remeasures deferred tax assets and deferred tax liabilities
recognized, except for those incurred in transactions or events directly recognized in the owner’s equity, of which
the effect shall be included in the income tax expenses in the current period when the rate changes.
c) When the Company measures the deferred tax assets and deferred tax liabilities, the tax rate and tax base in
consistent with the expected recovery of assets or liquidation of liabilities shall be adopted.
d) Deferred tax assets and deferred tax liabilities of the Company shall not be discounted.
30. Lease
(1) Accounting treatment for leases as lessee
On the commencement date of the lease term, the company recognizes right-of-use assets and lease liabilities for
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leases other than short-term leases and leases of low-value assets, and subsequently recognizes depreciation
expense and interest expense during the lease term.
a)Accounting treatment for right-of-use assets
A right-of-use asset is the right of the Company, as lessee, to use the leased asset during the lease term.
i. The initial measurement
On the lease commencement date, the company measures the right-of-use asset at its initial cost. This cost
comprises four components:① The initial measurement of the lease liability. ② Lease payments made at or before
the commencement date, net of any lease incentives received, if any. ③ Incurred initial direct costs, representing
the incremental costs of obtaining the lease. ④ Estimated costs expected to be incurred for dismantling and
removing the leased asset, restoring the leased asset's site, or reinstating the leased asset to the condition
specified in the lease agreement, excluding costs for inventory production purposes.
ii. Subsequent measurement.
After the lease commencement date, the company adopts the cost model for subsequent measurement of the
right-of-use asset, which means the asset is measured at cost less accumulated depreciation and accumulated
impairment losses. If the company re-measures the lease liability in accordance with the lease standards, the
carrying amount of the right-of-use asset is adjusted accordingly.
Depreciation is recognized on the right-of-use asset from the lease commencement date. Depreciation on the
right-of-use asset begins in the month of lease commencement. The amount of depreciation recognized is either
capitalized to the cost of related assets or expensed in the current period, depending on the use of the right-of-
use asset. The company applies the straight-line method to depreciate the right-of-use asset based on the expected
pattern of consumption of the economic benefits associated with the right-of-use asset. If the right-of-use asset is
impaired, subsequent depreciation is based on the carrying amount of the right-of-use asset after deducting
impairment losses. The categories of right-of-use assets, their useful lives, and annual depreciation rates are as
follows: [Categories, useful lives, and annual depreciation rates are not provided in the text you provided.
The categories of right-of-use The annual depreciation rate (as
The depreciation period (in years).
assets. a percentage)
buildings and structures. 2-5 50-20
(2) The accounting treatment method for lease liabilities.
(a) Initial measurement
At the commencement date, a lessee shall measure the lease liability at the present value of the lease payments
that are not paid at that
a) Lease payment
The lease payments included in the measurement of the lease liability comprise the following payments for the
right to use the underlying asset during the lease term that are not paid at the commencement date:
i. fixed payments (including in-substance fixed payments) less any lease incentives receivable;
ii. variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the
commence date;
iii. The exercise price of the purchase option, if the Company is reasonably certain to exercise that option;
iv. Payments of penalties for terminating the lease, if the lease term reflects the lessee exercising an option to
terminate the lease;
v. The amount expected to be paid based on the residual value of the guarantee provided by the company.
b) The discount rate
When calculating the present value of lease payments, the interest rate in the lease is determined as the discount
rate. If the rate cannot be readily determined, the Company shall use the lessee’s incremental borrowing rate,
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which is the rate of interest that a lessee would have to pay to borrow over a similar term, and with a similar
security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic
environment. The incremental borrowing rate is based on the bank lending rate and adjusted by the Company
considering relevant factors.
(b) Subsequent measurement
After the commencement date, the Company shall measure the lease liability by:
①increasing the carrying amount to reflect interest on the lease liability;
② reducing the carrying amount to reflect the lease payments made;
③ remeasuring the carrying amount to reflect any reassessment or lease modifications
After the lease commencement date, lease payment shall be remeasured if the following circumstances incurred,
and the lease liability shall be remeasured at the present value which is based on the revised lease payment and
revised discounting rate. The Company shall remeasure the lease liability to reflect changes to the lease payments.
A lessee shall recognize the amount of the remeasurement of the lease liability as an adjustment to the right-of-
use asset. However, if the carrying amount of the right-of-use asset is reduced to zero and there is a further
reduction in the measurement of the lease liability, a lessee shall recognize any remaining amount of the
remeasurement in profit or loss.
①change of in-substance fixed payments (subject to original discounting rate)
②change of amounts expected to be payable under residual value guarantees
③change of an index or a rate used for future lease payments
④change in assessment of a buy option
The interest expense during each period of the lease term shall be included in the current profit and loss , except
for those that should be capitalized.
(3) The criteria and accounting treatment methods for short-term leases and leases of low-value assets.
For short-term leases, they refer to leases where the lease term does not exceed 12 months from the lease
commencement date. Leases that include purchase options are not considered short-term leases. Low-value asset
leases are leases where the individual lease asset has a low value when it is new. Leases of assets for sublease or
expected sublease are excluded from low-value asset leases.
The company adopts a simplified approach for short-term leases and leases of low-value assets. Lease payments
for short-term leases and leases of low-value assets are recognized as an expense on a straight-line basis or using
another systematic and rational approach over the lease term in each reporting period. No right-of-use assets and
lease liabilities are recognized for these leases.
(4) The accounting treatment methods for leases as the lessor
(a) Accounting treatment for operating lease
According to the nature of the assets, the company will include the assets used as operating lease in the relevant
items of the balance sheet. The Company shall add initial direct costs incurred in obtaining an operating lease to
the carrying amount of the underlying asset and recognize those costs as an expense over the lease term on the
same basis as the lease income. Lease payment received shall be recognized as lease income on a straight-line
basis within the period. The depreciation policy for depreciable underlying fixed assets subject to operating leases
shall be consistent with the lessor’ s normal depreciation policy for similar assets. Amortization for other
underlying assets subject to operating lease shall be on reasonable systematic basis. The variable lease payments
obtained by the company related to operating leases, which are not included in the lease payment received, shall
be included in the current profit and loss when actually incurred.
A lessor shall account for a modification to an operating lease as a new lease from the effective date of the
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modification, considering any prepaid or accrued lease payments relating to the original lease as part of the lease
payments for the new lease.
(b) Accounting treatment for finance lease
At the commencement date of the lease term, the Company recognizes the finance lease receivable at the net
value of lease investment (the sum of the unguaranteed residual value and the present value of the lease receipts
not yet received at the commencement date of the lease term that are discounted at the interest rate in the lease)
and derecognizes the finance lease asset. Over the term of the relevant lease, the Company calculates and
recognizes interest income based on the interest rate in the lease.
The company shall account for a finance lease modification as a separate lease if both conditions are satisfied: ①
the modification increases the scope of the lease by adding the right to use one or more underlying assets or
extending the contractual lease term. ② the consideration for the lease increases by an amount commensurate
with the stand-alone price for the increase in scope or the contractual lease term extension and any appropriate
adjustments to that stand-alone price to reflect the circumstances of the particular contract. Stand-alone price to
reflect the circumstances of the particular contract.
31. Changes in significant accounting policies and accounting estimates
(1) Changes in significant accounting policies
Applicable □N/A
The Ministry of Finance issued No. 16 Interpretation of Enterprise Accounting Standards (Finance and Accounting
[2022] No. 31, hereinafter referred to as "Interpretation No. 16") on November 30, 2022, with the content of
"Accounting Treatment of Deferred Income Tax Not Exempted from Initial Recognition for Assets and Liabilities
Arising from Single Transactions" taking effect from January 1, 2023. For single transactions subject to
Interpretation No. 16, the company retrospectively adjusts the cumulative effect amounts on financial
statements to the earliest period's opening retained earnings and other related financial statement items, in
accordance with the provisions of Interpretation No. 16 and Enterprise Accounting Standard No. 18 - Income
Taxes, for temporary differences in taxable and deductible temporary differences arising from recognizing lease
liabilities and right-of-use assets.
The impact of the aforementioned accounting policy change on the financial statements is as follows:
Consolidated balance sheet items
December 31, 2022(Last year's year-end balance)
Project
Before adjustment After adjustment Adjustment amount
Deferred tax assets 1,498,116,524.68 1,506,694,037.06 8,577,512.38
Deferred tax liabilities 219,046,405.35 227,529,007.67 8,482,602.32
Other comprehensive
1,981,678.95 1,982,037.01 358.06
income
Retained earnings 44,364,111,297.61 44,364,203,149.57 91,851.96
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December 31, 2022(Last year's year-end balance)
Project
Before adjustment After adjustment Adjustment amount
Deferred tax assets 1,498,116,524.68 1,506,694,037.06 8,577,512.38
Minority interests 49,501,629.07 49,504,329.11 2,700.04
Parent company balance sheet items
December 31, 2022(Last year's year-end balance)
Project
Before adjustment After adjustment Adjustment amount
Deferred tax assets 24,212,971.55 24,515,740.48 302,768.93
Deferred tax liabilities 135,357,661.52 135,648,124.99 290,463.47
Retained earnings 29,676,346,187.62 29,676,358,493.08 12,305.46
Consolidated income statement items
December 31, 2022(Amount for the previous period)
Project
Before adjustment Before adjustment Before adjustment
Income tax expence 3,113,885,719.88 3,113,849,969.51 -35,750.37
Minority interests 11,565,742.41 11,568,442.45 2,700.04
Parent company income statement items
December 31, 2022(Amount for the previous period)
Project
Before adjustment Before adjustment Before adjustment
Income tax expence 212,632,426.14 212,628,263.96 -4,162.18
(2) Changes in significant accounting estimates
□Applicable N/A
(3) Adjustments to the financial statement items at the beginning of the fiscal year when implementing the new
accounting standards for the first time starting from 2023
Applicable N/A
Explanation of adjustment circumstances:
Please refer to Section X, Item V, 30(1) Significant Accounting Policy Changes in this report
32. Other
None.
165
V. Taxes
1. Major tax types and rates
Tax type Taxation basis Tax rate
Value-added tax (VAT) Output tax-deductible input tax 13%、9%、6%、19%
Sales revenue or composite assessable
Consumption tax please refer to the instructions
price
Urban maintenance and construction tax Applicable turnover tax amount 7%、5%
Applicable income tax rate Taxable
Corporate income tax 25%、16.5%、0%、27%
income
Disclosure statement if there are various taxpaying bodies with different corporate income tax rates
Company name Applicable tax rate
JSSJ Industry (HK) Holdings Co., Ltd. 16.50%
Hong Kong Zhaiugou International Trade Co., Ltd. 16.50%
ZYG E-Commerce HK Limited 16.50%
Yanghe Hong Kong Distillery Co., Ltd. 16.50%
YANGHE CHILE SPA 27%
YangHe International Investment Ltd 0%
ZYG LTD and ZYG TECHNOLOGY INVESTMENT LTD 0%
2.Other information
Note: Charging of Consumption Tax
(1) Ad valorem taxation: liquor consumption tax shall be calculated and paid according to 20% of the approved
sales amount. The taxable liquor commissioned for processing shall be taxed according to the sales price of similar
liquor of the entrusted party, and if there is no sales price of similar liquor, the taxable liquor shall be computed
according to the composition assessable price. Consumption tax on red wine (wine) is calculated at 10% of sales.
(2) Quantity-based taxation: liquor consumption tax is calculated and paid according to CNY 1 per kg.
VI. Notes to items in the consolidated financial Statements (all currency unit is CNY, except
other statements)
1. Cash and Bank Balances
Unit: CNY
Item Closing balance Opening balance
Cash 292.01
Bank deposit 25,766,215,567.22 24,331,397,524.64
Other cash and cash equivalents 46,571,787.63 44,051,907.69
Total 25,812,787,646.86 24,375,449,432.33
Including: total deposit outbound 55,707,753.67 49,598,745.91
Other notes
On December 31st 2023, the interest receivable for time deposit is CNY 611,764,093.46; The ending balance of
other currency funds is mainly the funds deposited in Tenpay, Alipay and other platforms.
Liquor manufacturing enterprises should disclose in detail whether there is any special interest arrangement
such as the establishment of capital co-management accounts with relevant parties
□Applicable N/A
2. Held-for-trading financial assets
Unit: CNY
166
Item Closing balance Opening balance
Financial asset at fair value through
5,851,217,684.93 7,998,150,119.16
profit and loss
Including:
Debt instruments 5,851,217,684.93 7,998,150,119.16
Including:
Total 5,851,217,684.93 7,998,150,119.16
Other notes
Debt instruments are bank financial products and trust financial products that mature within one year
3. Notes receivables
(1) Classification of notes receivables
Unit: CNY
Item Closing balance Opening balance
Bank acceptance bill 526,476,976.44 526,004,730.00
Total 526,476,976.44 526,004,730.00
(2) Disclosure by classification of provision for bad debts method
Unit: CNY
Closing balance Opening balance
Provision for bad Provision for
Item
Book balance debt Book
Book balance bad debt Book
amou propo proporti value proporti amou propo value
amount amount
nt rtion on on nt rtion
Including:
Provision for 526,4 100.0 526,476,9 526,004 100.00% 526,00
bad debt of 76,97 0% 76.44 ,730.00 4,730.
notes 6.44 00
receivables by
portfolio
Including:
526,4 100.0 526,476,9 526,004 100.00% 526,00
Bank acceptance
76,97 0% 76.44 ,730.00 4,730.
bill portfolio
6.44 00
526,4 100.0 526,476,9 526,004 100.00% 526,00
Total 76,97 0% 76.44 ,730.00 4,730.
6.44 00
Provision for bad debt by individual: 0.00
Unit: CNY
Closing balance
Item
Book balance Provision for bad debt Proportion
Bank acceptance bill portfolio 526,476,976.44 0.00 0.00%
Total 526,476,976.44 0.00
Notes to determine provision for bad debt by portfolio:
If provision for bad debt of notes receivable is calculated according to the general model of expected credit loss,
please refer to the disclosure method of other receivables to disclose the relevant information about provision for
bad debt:
□Applicable N/A
(3) Notes receivable that have been endorsed to other parties by the Company but have not expired at the
end of year
167
Unit: CNY
Item Derecognition at period end Not derecognition at period end
Bank acceptance bill 343,608,531.49
Total 343,608,531.49
4. Accounts receivables
(1) Disclosed by aging
Unit: CNY
Aging Closing book balance Opening book balance
Within1 year (including 1 year) 3,083,099.43 46,205,254.29
Within 1 year 3,083,099.43 46,205,254.29
1-2 years 394,794.95 230,463.47
2-3 years 145,836.47 123,334.80
Over 3 years 3,099,790.38 2,984,017.58
3-4 years 122,294.80 27,021.00
4-5 years 25,199.00 21,003.29
Over 5 years 2,952,296.58 2,935,993.29
合计 6,723,521.23 49,543,070.14
(2) Disclosed by categories
Unit: CNY
Closing balance Opening balance
Provision for bad Provision for
Book balance Book balance
debt bad debt
Category Book Book
Prop
Propor Propor value Propor value
Amount Amount Amount Amount ortio
tion tion tion
n
Including:
Provision for bad 6,723,521.2 100.0 3,194,7 47.52 3,528,7 49,543, 100.0 4,400,1 8.88 45,142,8
debt by portfolio 3 0% 42.95 % 78.28 070.14 0% 77.36 % 92.78
Including:：
6,723,521.2 100.0 3,194,7 47.52 3,528,7 49,543, 100.0 4,400,1 8.88 45,142,8
Risk portfolio
3 0% 42.95 % 78.28 070.14 0% 77.36 % 92.78
6,723,521.2 100.0 3,194,7 47.52 3,528,7 49,543, 100.0 4,400,1 8.88 45,142,8
Total
3 0% 42.95 % 78.28 070.14 0% 77.36 % 92.78
Provision for bad debts by portfolio: Risk portfolio
Unit: CNY
Closing balance
Aging
Accounts receivables Provision for bad debt Proportion of provision
Within1 year (including 1 3,083,099.43 92,492.99 3.00%
year)
1-2 years 394,794.95 39,479.49 10.00%
2-3 years 145,836.47 29,167.29 20.00%
Over 3 years 3,099,790.38 3,033,603.18 97.86%
Total 6,723,521.23 3,194,742.95
Notes to determine provision for bad debt by portfolio:
If provision for bad debt of accounts receivables is calculated according to the general model of expected credit
loss, please refer to the disclosure method of other receivables to disclose the relevant information about
provision for bad debt:
168
□Applicable N/A
(3) Provision for bad debt that is accrued, recovered or reversed during this period
Provision for bad debts during this period:
Unit: CNY
Changes in the current period
Opening
Category Recovered or Closing balance
balance Provision Write off Others
reversed
Provision 4,400,177.36 1,200,734.41 4,700.00 3,194,742.95
Total 4,400,177.36 1,200,734.41 4,700.00 3,194,742.95
Significant amount of reversal or recovery during this period
Unit: CNY
Amount recovered or Basis and
Company name Reason Method
reversed reasonableness
(4) The actual write-off of accounts receivable during the period
Unit: CNY
Project The amount written off
The actual write-off of accounts receivable 4,700.00
Important accounts receivable write-off situations
Whether the funds
Properties of The procedures
Reason for write- are generated
Company name accounts Write-off amount followed for write-
off from related-party
receivable off
transactions
N/A
Explanation of accounts receivable write-offs:
(5) Top five entities with the largest balances of the accounts receivables and contract assets
Unit: CNY
Closing balances of
Percentage of
accounts
Closing balance of combined
Closing balance of receivable,provision
Closing balance of accounts accounts
Company's name the accounts for bad debts and
the contract asset receivable and receivable and
receivables allowance for
contract assets contract assets
impairment of
closing balances
contract assets
First 728,016.81 728,016.81 10.83% 21,840.50
Second 716,000.00 716,000.00 10.65% 21,480.00
Third 600,000.00 600,000.00 8.92% 600,000.00
Fourth 454,356.93 454,356.93 6.76% 454,356.93
Fifth 386,013.00 386,013.00 5.74% 11,580.39
Total 2,884,386.74 2,884,386.74 42.90% 1,109,257.82
5. Receivables for Financing
(1) Classification of accounts receivable financing
Unit: CNY
Item Closing Balance Opening Balance
Bank acceptance bill 261,576,568.30 623,098,310.00
169
Total 261,576,568.30 623,098,310.00
(2) Disclosure by classification of provision for bad debts method
Unit: CNY
Closing balance Opening balance
Provision for bad Provision for
Item
Book balance debt Book
Book balance bad debt Book
amou propo proporti value proporti amou propo value
amount amount
nt rtion on on nt rtion
Including:
Provision for 261,5 100.0 261,576,5 623,098 100.00% 623,09
bad debt of 76,56 0% 68.30 ,310.00 8,310.
notes 8.30 00
receivables by
portfolio
Including:
261,5 100.0 261,576,5 623,098 100.00% 623,09
Bank acceptance
76,56 0% 68.30 ,310.00 8,310.
bill portfolio
8.30 00
261,5 100.0 261,576,5 623,098 100.00% 623,09
Total 76,56 0% 68.30 ,310.00 8,310.
8.30 00
Provision for bad debts provisioned by portfolio: Bank acceptance bill portfolio
Unit: CNY
Closing balance
Item
Book balance Provision for bad debt Proportion
Bank acceptance bill portfolio 261,576,568.30 0.00 0.00%
Total 261,576,568.30 0.00
Explanation of the basis for determining this portfolio:
Provision for bad debts is made based on the generally expected credit loss model.
Unit: CNY
Stage 1 Stage 2 Stage 3
Expected credit loss for Expected credit loss for
Bad debt Expected credit losses Total
lifetime (No credit loss lifetime (Credit loss
in the next 12 months
occurred) occurred)
Balance as at 1 January
2023
Explanation of the criteria for each stage division and the provision ratio for bad debt provision:
Description of significant changes in the carrying amount of accounts receivable financing for which there have
been significant changes in loss provisions during the current period:
(3) Notes receivable that have been endorsed to other parties by the Company but have not expired at the
end of year
Unit: CNY
Item Not derecognition at period end Not derecognition at period end
Bank acceptance bill 1,895,149,364.00
Total 1,895,149,364.00
(4) Other explanations
170
6. Other receivables
Unit: CNY
Item Closing balance Opening balance
Other receivables 57,782,263.17 74,362,342.41
Total 57,782,263.17 74,362,342.41
(1) Other receivables
a) Other receivables by nature
Unit: CNY
Nature of other receivables Closing balance Opening balance
Savings deposits (infringement dispute) 22,839,924.27 22,839,924.27
Deposit 57,772,158.18 75,233,431.94
Cooperation 3,910,000.00 3,910,000.00
Business loans, petty cash and others 27,530,727.48 26,329,410.21
Total 112,052,809.93 128,312,766.42
b) Disclosure by aging
Unit: CNY
Aging Closing balance Opening balance
Within 1 year(including 1 year) 30,242,714.39 72,545,501.15
Within 1 year 30,242,714.39 72,545,501.15
1-2 years 27,816,553.25 1,932,940.66
2-3 years 1,326,577.31 1,147,887.40
Over 3 years 52,666,964.98 52,686,437.21
3-4 years 153,428.50 140,570.01
4-5 years 136,528.41 3,029,986.98
Over 5 years 52,377,008.07 49,515,880.22
Total 112,052,809.93 128,312,766.42
c) Disclosed by categories
Unit: CNY
Closing balance Opening balance
Provision for bad Provision for
Book balance Book balance
debt bad debt
Category Book Book
Prop
Propor Propor value Propor value
Amount Amount Amount Amount ortio
tion tion tion
n
Including:
Risk portfolio
provision for bad debt of notes receivable is calculated according to the general model of expected credit loss.
Unit: CNY
Stage 1 Stage 2 Stage 3
Expected credit loss for Expected credit loss
Bad debt Expected credit losses Total
lifetime (No credit loss for lifetime (Credit
in the next 12 months
occurred) loss occurred)
Balance as at 1 January 2023 1,955,618.23 51,994,805.78 53,950,424.01
Change of opening balance
as at 1 January 2023 in
current period
Provision in 2023 715,213.59 715,213.59
171
Recovery in 2023 395,862.50 395,862.50
Other changes 771.66 771.66
Balance as at 31 1,559,755.73 52,710,791.03 54,270,546.76
December 2023
Basis for each stage division and provision ratio for bad debt provision
Provision ratio
Stage Book balance bad debts Book balance
for bad debts(%)
Stage 1 58,711,334.12 2.66 1,559,755.73 57,151,578.39
Stage 2
Stage 3 53,341,475.81 98.82 52,710,791.03 630,684.78
total 112,052,809.93 48.43 54,270,546.76 57,782,263.17
Changes in the carrying amount of the provision for losses that are material during the period
□Applicable N/A
d) Provision for bad debt that is accrued, recovered or reversed during this period
Provision for bad debts during this period:
Unit: CNY
Changes in current period
Opening Changes in
Category Recovered or Other
balance Provision Write off current period
reversed changes
Other receivables 53,950,424.01 319,351.09 771.66 54,270,546.76
bad debt provision
Total 53,950,424.01 319,351.09 771.66 54,270,546.76
Significant amount of reversal or recovery during this period:
Unit: CNY
Amount recovered or Basis and
Company name Reason Method
reversed reasonableness
e) Top five entities with the largest balances of other receivables
Unit: CNY
Provisioning
Proportion in total
Company’s name Category Closing balance Aging amount at period
receivable
end
Within 1 year:
Xiuwen County
18,000,000.00
Investment Deposit 38,000,000.00 33.91% 760,000.00
1-2 year:
Promotion Bureau 20,000,000.00
Industrial
Commercial Bank Savings deposit
of China Ltd. (Infringement 22,839,924.27 Over 5 years 20.38% 22,839,924.27
Kaifeng Haode dispute)
branch
Bankruptcy
administrator of
Jiangsu Juntai
Properties Co., Deposit 15,000,000.00 Over 5 years 13.39% 15,000,000.00
Ltd., Suqian Guotai
Department Store
Co., Ltd
Nanjing Peilong
Sports Culture Co., Cooperation 3,910,000.00 Over 5 years 3.49% 3,910,000.00
Ltd.
172
Nanjing Baiyang
Business
Deposit 1,248,918.00 Within 1 year 1.12% 24,978.36
Management Co.,
Ltd
Total 80,998,842.27 72.29%% 42,534,902.63
7. Prepayment
(1) Analysis by aging
Unit: CNY
Closing balance Opening balance
Aging
Amount Proportion Amount Proportion
Within 1 year 49,986,010.55 98.07% 10,442,862.34 94.77%
1-2 years 553,888.73 1.09% 430,756.91 3.91%
2-3 years 322,652.70 0.63% 4,996.76 0.05%
Over 3 years 109,318.05 0.21% 140,477.59 1.27%
Total 50,971,870.03 11,019,093.60
Significant prepayment aging over 1 year without settlement on time:
No significant prepayment aging over 1 year is recorded in the ending balance.
(2) Top five entities with the largest balances of prepayment
Company’s name Closing balance Proportion in the total prepayment (%)
First 29,700,000.00 58.27
Second 2,893,440.00 5.67
Third 2,435,505.00 4.78
Fourth 2,246,653.62 4.41
Fifth 2,093,403.02 4.11
39,369,001.64 77.24
Total
Other notes:
8. Inventories
(1) Categories of Inventories
Unit: CNY
Closing balance Opening balance
Provision Provision
Portfolio Name for stock for stock
Book balance Book value Book balance Book value
obsolesce obsolesce
nce nce
389,260,644.18 13,589,5 375,671,102.44 426,227,182.05 11,868,8 414,358,379.43
Raw material
41.74 02.62
Work in 828,665,166.57 828,665,166.57 761,814,393.67 761,814,393.67
progress
3,002,855,864.98 3,002,855,864.98 2,971,329,097.21 2,971,329,097.2
Stock goods
1
semi-finished 14,747,043,268.26 14,747,043,268.26 13,581,757,096.23 13,581,757,096.
goods 23
18,967,824,943.99 13,589,5 18,954,235,402.25 17,741,127,769.16 11,868,8 17,729,258,966.
Total
41.74 02.62 54
The disclosure requirements of food and wine manufacturing-related industries in the Guidelines for Self-
173
regulation NO.3 of Listed Companies of Shenzhen Stock Exchange -Industry Information Disclosure shall be
observed
(2) Provision for stock obsolescence and impairment provision of contract cost
Unit: CNY
Increases in current period Decreases in current period
Item Opening balance Closing balance
obsolete stocks Other obsolete stocks Other
Raw material 11,868,802.62 2,742,667.54 1,021,928.42 13,589,541.74
Total 11,868,802.62 2,742,667.54 1,021,928.42 13,589,541.74
Provision for obsolete stocks by portfolio
Closing Opening
Provision
Provision for Provision for
Item for stock Provision for stock Opening
Closing balance stock stock
obsolesce obsolescence balance
obsolescence obsolescence
nce
Criteria for making provision for obsolete stocks by portfolio
9. Other current assets
Unit: CNY
Item Closing balance Opening balance
VAT to be deducted 762,211,934.44 113,102,451.80
Consumption tax to be deducted 4,951,140.52 6,734,883.21
Advance payment of consumption tax 222,795,853.29
Advance payment of income tax 10,829,180.68 9,850,655.25
Advance payment of other taxes 15,372,307.37
Total 1,016,160,416.30 129,687,990.26
Other notes:
174
10. Long-term equity investments
Unit: CNY
Opening Changes in current period Closing
balance Cash balance
of Profit or loss Adjustments Other divided Provision of
Opening
Investee provision recognized of other chang or for Closing balance provision
balance Increase Decrease Other
for under equity comprehensi es in profit impairme for
impairme method ve income equity declare nt impairme
nt d nt
1.Joint venture
2.Associated enterprise
Jiangsu Su 3,298,194.70 31,421.50 909,630.9 4,239,247.16
Wine 6
Culture
Transmissi
on on Co,
Ltd.
Nanjing 3,770,295.75 39,522.07 3,809,817.82
Hesong
Culture
Technology
Co., Ltd.
Jiangsu 18,930,578.3 688,481.98 19,619,060.33
Xinghe 5
Investment
Manageme
nt nt Co.,
Ltd.
Nanjing 6,980,561.41 1,193,020,00 -3,130,093.17 1,196,870,468.2
Huatai 0.00 4
Yanghe
Equity
Investment
Master Fund
(limited
partnership)
Jiangsu 5,000,000.00 300,199.49 5,300,199.49
Zhibo
Brewing
175
Technology
Co., Ltd.
32,979,630.2 1,198,020,00 -2,070,468.13 909,630.9 1,229,838,793.0
Subtotal
1 0.00 6 4
32,979,630.2 1,198,020,00 -2,070,468.13 909,630.9 1,229,838,793.0
Total
1 0.00 6 4
The recoverable amount is determined as the net of fair value less costs of disposal.
□Applicable N/A
The recoverable amount is determined by the present value of estimated future cash flows
□Applicable N/A
Reasons for differences between the foregoing information and information used for impairment testing in previous years or external information that is clearly
inconsistent with the information.
Reasons for differences between the information used in the company's impairment tests in previous years and the actual situation in the current year that are
clearly inconsistent.
Other note:
176
11. Other non-current financial assets
Unit: CNY
Item Closing balance Opening balance
Classified as financial assets at fair
value through profit and loss
Including: equity instrument investment 5,532,792,281.26 5,848,590,827.45
Debt instrument investment 300,043,333.33
Total 5,532,792,281.26 6,148,634,160.78
Other note:
12. Fixed assets
Unit: CNY
Item Closing balance Opening balance
Fixed Assets 5,305,626,964.48 5,794,773,069.53
Fixed asset disposal
Total 5,305,626,964.48 5,794,773,069.53
(1)Details of fixed assets
Unit: CNY
Buildings and Machinery Transportatio Other Total
Item
constructions equipment n equipment equipment
Original cost of fixed assets
8,310,234,733.53 3,255,815,592.43 59,351,288.51 443,504,186.92 12,068,905,801.3
1.Opening balance 9
2.Increase in current period 66,179,923.64 73,490,175.85 1,827,104.58 17,681,276.06 159,178,480.13
(1) External purchase 15,336,863.19 1,378,496.11 1,827,104.58 17,681,276.06 36,223,739.94
(2) Transfer from construction in 50,843,060.45 72,111,679.74 122,954,740.19
progress
(3) Increase from business
combination
3.Decrease in current period 10,672,188.11 11,033,776.44 3,851,809.32 4,637,604.30 30,195,378.17
(1) Disposal or retirement 10,672,188.11 11,033,776.44 3,851,809.32 4,637,604.30 30,195,378.17
8,365,742,469.06 3,318,271,991.84 57,326,583.77 456,547,858.68 12,197,888,903.3
4.Closing balance 5
Accumulated depreciation
3,421,245,472.52 2,410,186,676.35 50,266,327.15 392,434,255.84 6,274,132,731.86
1.Opening balance
2.Increase in current period 389,881,378.67 228,693,665.11 2,641,728.07 18,118,796.43 639,335,568.28
(1) Provision 389,881,378.67 228,693,665.11 2,641,728.07 18,118,796.43 639,335,568.28
3.Decrease in current period 4,278,818.92 8,997,568.92 3,647,331.83 4,282,641.60 21,206,361.27
(1) Disposal or retirement 4,278,818.92 8,997,568.92 3,647,331.83 4,282,641.60 21,206,361.27
3,806,848,032.27 2,629,882,772.54 49,260,723.39 406,270,410.67 6,892,261,938.87
4.Closing balance
Provision for fixed asset
impairment
1.Opening balance
2.Increase in current period
(1) Provision
3.Decrease in current period
(1) Disposal or retirement
177
4.Closing balance
Book value
1.Closing book value 4,558,894,436.79 688,389,219.30 8,065,860.38 50,277,448.01 5,305,626,964.48
2.Opening book value 4,888,989,261.01 845,628,916.08 9,084,961.36 51,069,931.08 5,794,773,069.53
(2) Investment properties without certification of right
Unit: CNY
Reason for not having the certification of
Item Book value
right
Yanghe Blue-collar workers apartment 26,919,845.07 In process
Yanghe pottery jar warehouse 176,369,168.84 In process
Yanghe six-span workshop 28,492,734.36 In process
Workshop of Guizhou Guijiu Group Co., Ltd. 46,371,052.21 In process
Total 278,152,800.48
Other note:
13. Construction in progress
Unit: CNY
Item Closing balance Opening balance
Construction in progress 1,457,315,739.56 757,145,492.90
Total 1,457,315,739.56 757,145,492.90
178
(1) Details of the construction in progress
Unit: CNY
Closing balance Opening balance
Item Provision for Provision for Book value
Book Balance Book value Book Balance
impairment impairment
Shuanggou 120000 ton pottery jar storage project 140,295,657.74 140,295,657.74 3,670,946.95 3,670,946.95
Shuanggou packaging production line 17,191,907.04 17,191,907.04
Siyang base three-dimensional warehouse, packaging 1,100,810.08 1,100,810.08
production line projec
40,000 tons of pottery jar warehouse project 1,809,904.55 1,809,904.55
Nanjing operation center building project 529,591,557.52 529,591,557.52 355,622,206.07 355,622,206.07
Sesame Fragrant Intelligent brewing Project (Workshop 66,220,261.39 66,220,261.39 51,567,809.53 51,567,809.53
115, District 3)
20,000 tons of pottery jar warehouse project 21,303,084.96 21,303,084.96 6,814,642.25 6,814,642.25
sewage treatment capacity expansion and 4,191,150.45 4,191,150.45 15,827,143.46 15,827,143.46
reconstruction project
80,000 tons of pottery jar warehouse project 182,867,988.73 182,867,988.73 75,199,149.07 75,199,149.07
Six-span brewery workshop 5,014,659.77 5,014,659.77 2,753,290.37 2,753,290.37
Exhibition and Decoration Engineering of Wine History 78,301,551.45 78,301,551.45 61,055,364.82 61,055,364.82
Museum, Wine Rhyme Museum, and Wine Art Museum
Renovation of the seasoning distillery at Shuanggou 38,725,389.37 38,725,389.37
Base
Upgrade and renovation project of Shuanggou Liquor 43,661,565.61 43,661,565.61
Industry and Liquor Culture Tourism Area
Construction of new liquor fermentation workshop at 84,805,400.78 84,805,400.78
Siyang Base
Phase II of Gui wine project 23,303,088.08 23,303,088.08 62,362,038.53 62,362,038.53
Phase III of Gui wine project 37,506,285.70 37,506,285.70
Fruit wine and fruit vinegar production line project 55,489,805.70 55,489,805.70
Lhasa Langjie Liquor Village Project 36,779,851.17 36,779,851.17
Other projects 109,258,441.14 109,258,441.14 102,170,280.18 102,170,280.18
1,457,315,739.56 1,457,315,739.56 757,145,492.90 757,145,492.90
Total
(2) Significant changes in construction in progress
Unit: CNY
Opening Increase in Transfer Other Closing Proportion of Progre Interest Include:Ca Capital Sourc
Item Budget
balance current period into fixed decrea balance accumulative ss capitaliz pitalized ization e of
179
assets ses project input ation interest rate funds
in budget (%) rate for the for the
period period
Shuanggou
120000 ton
1,000,000,00 Early
pottery jar 3,670,946.95 136,624,710.79 140,295,657.74 14.03% Other
0.00 stage
storage
project
Shuanggou
packaging 120,000,000. 17,191,907.0 Late
17,191,907.04 95.01% Other
production 00 4 stage
line
Siyang base
three-
dimensional
41,000,000.0 Late
warehouse, 1,100,810.08 1,100,810.08 64.97% Other
0 stage
packaging
production
line projec
40,000 tons
of pottery jar 360,000,000. Late
1,809,904.55 1,809,904.55 57.35% Other
warehouse 00 stage
project
Nanjing
operation
800,000,000. Late
center 355,622,206.07 173,969,351.45 529,591,557.52 66.20% Other
00 stage
building
project
Sesame Late
Fragrant stage
Intelligent
brewing 68,842,800.0 10,406,522.1
51,567,809.53 25,058,973.97 66,220,261.39 120.50% Other
Project 0 1
(Workshop
115, District
3)
20,000 tons Late
of pottery jar 62,000,000.0 stage
6,814,642.25 19,585,750.08 5,097,307.37 21,303,084.96 118.94% Other
warehouse 0
project
180
sewage
treatment
capacity
23,000,000.0 19,161,599.5 Late
expansion 15,827,143.46 7,525,606.52 4,191,150.45 102.52% Other
0 3 stage
and
reconstructio
n project
80,000 tons
of pottery jar 240,000,000. Late
75,199,149.07 107,668,839.66 182,867,988.73 76.20% Other
warehouse 00 stage
project
Six-span
40,000,000.0 Late
brewery 2,753,290.37 2,261,369.40 5,014,659.77 87.32% Other
0 stage
workshop
Exhibition
and
Decoration
Engineering
of Wine
90,000,000.0 Late
History 61,055,364.82 17,246,186.63 78,301,551.45 87.00% Other
0 stage
Museum,
Wine Rhyme
Museum, and
Wine Art
Museum
Renovation of
the seasoning
50,600,000.0 Late
distillery at 38,725,389.37 38,725,389.37 76.53% Other
0 stage
Shuanggou
Base
Upgrade and
renovation
project of
Shuanggou
80,000,000.0 Late
Liquor 43,661,565.61 43,661,565.61 54.58% Other
0 stage
Industry and
Liquor
Culture
Tourism Area
181
Construction
of new liquor
600,000,000. Early
fermentation 84,805,400.78 84,805,400.78 14.13% Other
00 stage
workshop at
Siyang Base
Phase II of
139,540,200. 51,952,072.1 Late
Gui wine 62,362,038.53 12,893,121.70 23,303,088.08 55.83% Other
00 5 stage
project
Phase III of
2,000,000,00 Early
Gui wine 37,506,285.70 37,506,285.70 1.88% Other
0.00 stage
project
Fruit wine
and fruit
80,000,000.0 Late
vinegar 55,489,805.70 55,489,805.70 69.36% Other
0 stage
production
line project
Lhasa Langjie
248,280,000. Early
Liquor Village 36,779,851.17 36,779,851.17 14.81% Other
00 stage
Project
6,043,263,00 106,720,122. 1,348,057,298.
Total 654,975,212.72 799,802,208.53
0.00 83 42
(3)Impairment testing of the construction in progress
□Applicable N/A
14.Right-of-use Assets
182
(1)Details of right-to-use assets
Unit: CNY
Item Building and construction Total
Total original carrying amount
48,810,399.26 48,810,399.26
1.Opening balance
76,811,731.78 76,811,731.78
2. Increased
(1) New Lease 76,788,098.05 76,788,098.05
(2) Other 23,633.73 23,633.73
6,539,582.59 6,539,582.59
3. Decreased
(1) Disposal 6,539,582.59 6,539,582.59
(2) Other
119,082,548.45 119,082,548.45
4.Closing balance
Accumulated depreciation
14,694,796.99 14,694,796.99
1.Opening balance
27,613,647.34 27,613,647.34
2. Increased
(1) Provisions 27,594,763.53 27,594,763.53
(2) Other 18,883.81 18,883.81
3. Decreased
5,690,447.04 5,690,447.04
(1) Disposal
36,617,997.29 36,617,997.29
4.Closing balance
Provision for Right-of-use Assets
impairment
1.Opening balance
2.Increase in current period
(1) Provision
3.Decrease in current period
(1) Disposal or retirement
4.Closing balance
Total book value
1. Closing balance on book value 82,464,551.16 82,464,551.16
2. Opening balance on book value 34,115,602.27 34,115,602.27
15. Intangible assets
(1) Details of intangible assets
Unit: CNY
No-patent right Trademark Computer
Item Land use right Patent right Total
technology right software
Original cost of
intangible assets
2,041,819,607.76 399,936,371.09 165,586,240.84 2,607,342,219.6
1.Opening
9
balance
2.Increase in 83,176,461.72 228,495.90 37,623,718.08 121,028,675.70
current period
(1)Including: 83,176,461.72 228,495.90 37,623,718.08 121,028,675.70
Acquired
183
(2)Internally
developed
(3)Business
combination
3.Decrease in 20,048,574.11 20,048,574.11
current period
(1)Including: 20,048,574.11 20,048,574.11
Disposal
2,124,996,069.48 228,495.90 399,936,371.09 183,161,384.81 2,708,322,321.2
4.Closing balance
8
Accumulated
amortization of
intangible assets
408,071,375.04 393,488,204.38 91,401,564.84 892,961,144.26
1.Opening
balance
2.Increase in 42,998,632.31 9,520.65 1,655,797.25 14,390,647.34 59,054,597.55
current period
(1)Including: 42,998,632.31 9,520.65 1,655,797.25 14,390,647.34 59,054,597.55
Provision
3.Decrease in 16,809,263.50 16,809,263.50
current period
(1)Including: 16,809,263.50 16,809,263.50
Disposal
4.Closing balance 451,070,007.35 9,520.65 395,144,001.63 88,982,948.68 935,206,478.31
Provision for
impairment
1.Opening
balance
2.Increase in
current period
(1)Including:
Provision
3.Decrease in
current period
(1)Including:
Disposal
4.Closing balance
Book value of
intangible assets
Closing book 1,673,926,062.13 218,975.25 4,792,369.46 94,178,436.13 1,773,115,842.9
value 7
Opening book 1,633,748,232.72 6,448,166.71 74,184,676.00 1,714,381,075.4
value 3
The proportion of intangible assets formed through internal research and development of the Company in the
balance of intangible assets at the end of this period is 0.00%.
16. Goodwill
(1) Goodwill book value
Unit: CNY
Decrease in current
Investee’s name Opening Increase in current period Closing balance
period
184
or items resulting balance Business
in goodwill Disposal
combination
Jiangsu 276,001,989.95 276,001,989.95
Shuanggou
Distillery Stock
Co., Ltd.[Note]
Jiangsu Zhaiugou 6,940,018.79 6,940,018.79
E-commerce Co.,
Ltd
Jiangsu Zhaibianli 21,250,284.80 21,250,284.80
E-commerce Co.,
Ltd
Guizhou Guijiu 18,826,210.01 18,826,210.01
Co., Ltd.
ZYG 5,057,111.19 5,057,111.19
TECHNOLOGY
INVESTMENT LTD
Guizhou 11,333,195.25 11,333,195.25
Maotaizhen
Guijiu Liquor
Industry Co., Ltd
339,408,809.99 339,408,809.99
Total
(2) Goodwill impairment provision
Unit: CNY
Investee’s name or Increase in current period Decrease incurrent period
items resulting in Opening balance Closing balance
Provision Disposal
goodwill
Jiangsu Zhaiugou E- 6,940,018.79 6,940,018.79
commerce Co., Ltd
Jiangsu Zhaibianli E- 21,250,284.80 21,250,284.80
commerce Co., Ltd
Guizhou Guijiu Co., 18,826,210.01 18,826,210.01
Ltd.
ZYG TECHNOLOGY 5,057,111.19 5,057,111.19
INVESTMENT LTD
Guizhou Maotaizhen 11,333,195.25 11,333,195.25
Guijiu Liquor
Industry Co., Ltd
63,406,820.04 63,406,820.04
Total
Related information of asset groups or asset group portfolio containing goodwill
(3) Related information of asset groups or asset group portfolio containing goodwill
The composition and
basis of the asset group The affiliated operating Whether consistent with
Name
or combination to which branch and its basis previous years
it belongs
The asset group related to
The baijiu production and
the goodwill formed by the
sales business corresponding
acquisition of 40.60% equity
to the asset group related to N/A Yes
of Jiangsu Shuanggou Liquor
the goodwill of Shuanggou
Industry Co., Ltd. by Jiangsu
Liquor Industry
Yanghe Distillery Co., Ltd.
Changes in asset groups or combinations of asset groups
Composition before Composition after
Name Objective facts and basis
changes changes
185
N/A
Other note:
(4) Specific determination of recoverable amount
The recoverable amount is determined as the net of fair value less costs of disposal.
□Applicable N/A
The recoverable amount is determined by the present value of estimated future cash flows
、Applicable □N/A
Unit: CNY
The basis
for
Key Key
determinin
parameters parameters
Recoverabl Impairmen Forecast g key
Item Book value of the of the
e amount t amount period parameters
forecast stable
of the
period period
stable
period
Revenue Revenue
Jiangsu The same
growth rate: growth rate:
Shuanggou with last
7,751,556,4 7,895,000,0 5%, Average 0%, Gross
Liquor 0.00 5 years year of the
20.32 00.00 gross profit profit
Industry Co., forecast
margin: margin:
Ltd. period
43.93% 43.38%
7,751,556,4 7,895,000,0
Total 0.00
20.32 00.00
Reasons for differences between the foregoing information and information used for impairment testing in previous
years or external information that is clearly inconsistent with the information.
Reasons for differences between the information used in the company's impairment tests in previous years and
the actual situation in the current year that are clearly inconsistent.
17. Long-term prepaid expenses
Unit: CNY
Amortization for
Increase in the
Item Opening balance the current Other decreases Closing balance
current period
period
Wine city night 9,012,348.35 3,004,116.11 6,008,232.24
view Identification
project
Brighten old 1,308,290.55 436,096.85 872,193.70
factory and
packaging logistics
center project
Decoration 1,757,870.86 585,956.96 1,171,913.90
expenses of hotel
Total 12,078,509.76 4,026,169.92 8,052,339.84
Other note:
18. Deferred tax assets/ deferred tax liabilities
(1) Deferred tax assets before offset
186
Unit: CNY
Closing balance Opening balance
Item Deductible
Deductible temporary Deferred tax Deferred tax
temporary
differences assets assets
differences
Provision for asset
72,002,831.45 17,919,840.18 71,167,403.99 17,707,993.48
impairment
Unrealized profit from
274,116,122.67 68,529,030.67 49,441,159.83 12,360,289.96
internal transaction
The difference between
book value of debt and tax 3,829,516,453.37 957,379,113.35 4,738,345,825.27 1,184,537,946.74
base
ESOP 244,727,667.97 61,181,917.00 163,118,128.78 40,779,532.19
Deductible losses 885,210,849.53 221,302,712.39 1,005,233,098.74 251,308,274.69
Total 5,305,573,924.99 1,326,312,613.59 6,027,305,616.61 1,506,694,037.06
(2) deferred tax liabilities before offset
Unit: CNY
Closing balance Opening balance
Item Taxable temporary Deferred tax Taxable temporary Deferred tax
differences liabilities differences liabilities
Incremental valuation of
assets in the consolidation
36,406,637.56 9,101,659.39 39,067,014.32 9,766,753.58
of non-controlling
interests
Fair value changes in trading
818,673,347.32 204,668,336.83 837,118,607.04 209,279,651.77
financial assets
Right-of-use assets 82,464,551.16 20,616,137.79 34,115,602.27 8,482,602.32
Total 937,544,536.04 234,386,134.01 910,301,223.63 227,529,007.67
(3) Deferred tax assets or liabilities presented as net value after offset
Unit: CNY
Closing balance Of Opening offset amount Opening balance Of
Offset amount of
deferred tax assets or of deferred tax assets deferred tax assets or
Item deferred tax assets and
deferred tax liabilities and deferred tax deferred tax liabilities
deferred tax liabilities
after offset liabilities after offset
Deferred tax assets 1,326,312,613.59 1,506,694,037.06
Deferred tax liabilities 234,386,134.01 227,529,007.67
(4) Details of unrecognized deferred tax assets
Unit: CNY
Item Closing balance Opening balance
Deductible temporary differences 204,290,853.15 180,135,943.91
Deductible losses 115,511,259.53 265,285,228.80
Total 319,802,112.68 445,421,172.71
(5)Deductible losses from unrecognized deferred tax assets will due on the following years
Unit: CNY
Year Closing balance Opening balance Note
Year 2023 3,336,993.92
Year 2024 987,313.84 1,070,547.10
187
Year 2025 13,861,118.62 13,861,118.62
Year 2026 33,702,618.44 33,702,618.44
Year 2027 24,973,327.43 213,313,950.72
Year 2028 41,986,881.20
Total 115,511,259.53 265,285,228.80
19. Other non-current assets
Unit: CNY
Closing balance Opening balance
Item Provision for Provision for
Book Balance Book value Book Balance Book value
impairment impairment
Compensation
158,606,824.9
for land 203,669,611.94 203,669,611.94 158,606,824.94
4
demolition
Prepayment of
construction
62,359,121.56 62,359,121.56 25,240,376.90 25,240,376.90
equipment and
house purchase
183,847,201.8
Total 266,028,733.50 266,028,733.50 183,847,201.84
4
20. Accounts payables
(1) Presentation of accounts payables
Unit: CNY
Item Closing balance Opening balance
Payments for goods 1,403,834,890.43 1,305,100,314.00
Payables on equipment 22,038,661.99 71,109,213.01
Total 1,425,873,552.42 1,376,209,527.01
21. Other payables
Unit: CNY
Item Closing balance Opening balance
Other payables 2,024,640,485.37 1,854,922,517.23
Total 2,024,640,485.37 1,854,922,517.23
(1) Other payables
a) Categories by nature
Unit: CNY
Item Closing balance Opening balance
Dealer deposit 576,518,846.34 416,896,278.21
Dealer risk pledged deposit 659,025,149.71 672,664,279.37
Accrued expenses 408,783,098.49 508,608,287.32
Quality guarantee deposit and 222,944,106.65 166,220,885.21
performance deposit
Other payables 157,369,284.18 90,532,787.12
Total 2,024,640,485.37 1,854,922,517.23
b) Other important payables with the top five counterparties by year-end balance
Other note：
188
22. Contract liabilities
Unit: CNY
Item Closing balance Opening balance
Advance from customers 7,516,605,557.37 9,296,856,026.01
Discounts and allowances payable to
the distributors that have not yet been 3,588,157,929.81 4,444,691,651.98
settled
Total 11,104,763,487.18 13,741,547,677.99
Significant contract liabilities with an aging of over 1 year
Unit: CNY
Reasons for outstanding or carried-over
Item Closing balance
balances
N/A
Amounts and reasons for significant changes in book value during the reporting period
Unit: CNY
Item Amount of change Reason for change
The company is required to comply with the disclosure requirements of the food and alcohol manufacturing related industries in
the "Shenzhen Stock Exchange Listed Companies Self Regulatory Guidelines No. 3- Industry Information Disclosure"
23. Employee benefits payable
(1) Employee benefits payable shown as follows:
Unit: CNY
Increase in current Decrease in current
Item Opening balance Closing balance
period period
Short-term benefits 482,338,679.95 3,246,399,387.56 3,390,524,230.64 338,213,836.87
Post-employment
benefits-defined 653,058.78 240,210,938.77 240,863,997.55
contribution plans
Severance benefits 114,539.74 114,539.74
Total 482,991,738.73 3,486,724,866.07 3,631,502,767.93 338,213,836.87
(2) Short-term employee benefits payable shown as follows:
Unit: CNY
Increase in current Decrease in current
Item Opening balance Closing balance
period period
Wages, bonuses, 481,025,926.67 2,851,577,362.59 2,997,303,933.72 335,299,355.54
allowances and
grants
Employees’ welfare 108,187,070.70 108,187,070.70
Social insurance 348,382.20 112,339,335.92 112,687,718.12
premiums
Including: Medical 281,110.32 89,584,951.68 89,866,062.00
Insurance
Work-related injury 27,691.01 8,485,330.17 8,513,021.18
insurance
Maternity insurance 39,580.87 14,269,054.07 14,308,634.94
premium
Housing funds 949,820.00 162,459,169.20 162,528,518.76 880,470.44
Labor union 14,551.08 11,836,449.15 9,816,989.34 2,034,010.89
expenditures and
employee education
189
funds
Total 482,338,679.95 3,246,399,387.56 3,390,524,230.64 338,213,836.87
(3) Defined Contribution Plan shown as follows:
Unit: CNY
Increase in current Decrease in current
Item Opening balance Closing balance
period period
Basic endowment
633,253.23 232,894,538.54 233,527,791.77
insurance premium
Unemployment
19,805.55 7,316,400.23 7,336,205.78
insurance premium
Total 653,058.78 240,210,938.77 240,863,997.55
24. Taxes payable
Unit: CNY
Item Closing balance Opening balance
Value-added tax 393,967,989.64 234,202,860.34
Consumption tax 26,998,106.27 229,128,457.84
Enterprise income tax 508,559,557.17 563,184,112.71
Individual Income Tax 25,174,574.76 46,912,680.60
Urban maintenance and construction tax 12,539,893.78 19,917,118.57
Education Surcharge 12,315,190.92 19,421,778.51
Property tax 15,274,168.78 15,177,169.95
Land use tax 4,615,997.78 4,438,533.76
Stamp tax 7,541,322.67 1,827,899.05
Other tax 2,485,060.69 2,485,193.85
Total 1,009,471,862.46 1,136,695,805.18
25. Non-current Liabilities Due within One Year
Unit: CNY
Item Closing balance Opening balance
Lease liabilities due within one year 25,080,946.40 23,684,406.75
Total 25,080,946.40 23,684,406.75
26. Other current liabilities
Unit: CNY
Item Closing balance Opening balance
Output VAT to be transferred 904,141,397.77 889,853,420.31
Notes endorsed but not
343,608,531.49 422,394,730.00
derecognized
Total 1,247,749,929.26 1,312,248,150.31
27. Lease Liabilities
Unit: CNY
Item Closing balance Opening balance
Lease liabilities 48,709,685.88 3,715,300.93
Total 48,709,685.88 3,715,300.93
28. Long-term payables
Unit: CNY
190
Item Closing balance Opening balance
Special accounts payables 196,013,394.53 196,459,834.53
Total 196,013,394.53 196,459,834.53
(1) Categories by nature
Unit: CNY
Item Closing balance Opening balance
Special accounts payables 196,013,394.53 196,459,834.53
(2) Special accounts payables
Unit: CNY
Increase in current Decrease in
Item Opening balance Closing balance Reason
period current period
Compensation
Formation of
for replacement
196,459,834.53 446,440.00 196,013,394.53 corporate
of employee
restructuring
status
Total 196,459,834.53 446,440.00 196,013,394.53
29. Deferred incomes
Projects involving government grants:
Unit: CNY
Cost
Increase in
Opening reduction in The reasons for the
Liability item current Closing balance
balance current formation
period
period
Hubei Lihuacun liquor industry
liquor brewing, filling project
13,282,600.00 4,257,000.00 9,025,600.00 Project subsidies
supporting facilities
construction subsidies
Special fund for packaging
logistics project in Shuanggou 6,000,000.00 3,000,000.00 3,000,000.00 Project subsidies
new area
Special fund for Harbin Binzhou
41,202,900.00 41,202,900.00 Project subsidies
brewery construction project
Shuanggou sewage treatment
3,000,000.00 1,500,000.00 1,500,000.00 Project subsidies
project
The second batch of provincial-
level industrial and information
4,791,666.67 5,000,000.00 1,000,000.00 8,791,666.67 Project subsidies
industry transformation and
upgrading special funds in 2020
Supplementary funds for the
Shuanggou Pottery Tan 24,000,000.00 24,000,000.00 Project subsidies
Warehouse project
Total 92,277,166.67 5,000,000.00 9,757,000.00 87,520,166.67
191
30. Share capital
Unit: CNY
Increases/decreases in the current period (+, -)
Opening Conversion of
Issuance of Share reserves Closing balance
balance Others Subtotal
new shares donation funds into
shares
1,506,988,00 1,506,445,074.
Total shares -542,926.00 -542,926.00
0.00 00
Other notes:
According to the proposal passed at the first extraordinary general meeting of shareholders of the company in
2023 on September 15, regarding the cancellation of the remaining shares in the repurchase special securities
account, the company cancelled and repurchased 542,926 shares, and the share cancellation and reduction
procedures were completed on October 12, 2023.
31. Capital reserves
Unit: CNY
Increase in current Decrease in current
Item Opening balance Closing balance
period period
Share premium 741,502,550.13 244,727,667.97 55,735,754.79 930,494,463.31
Other capital reserves 163,148,128.78 81,609,539.19 244,727,667.97 30,000.00
Total 904,650,678.91 326,337,207.16 300,463,422.76 930,524,463.31
Other notes:
① The company confirms the ESOP plan fee to increase the capital reserves-other capital reserves
of CNY 81,609,539.19
② The company's cancellation of repurchased shares, totaling 542,926 shares, reduced the capital
reserves - share premium by CNY55,735,754.79.
③ Upon the expiration of the lock-up period for ESOP plan, an amount of CNY244,727,667.97 was
transferred from other capital reserves to share premium.
32. Treasury shares
Unit: CNY
Increase in current Decrease in current
Item Opening balance Closing balance
period period
Share repurchase 56,278,680.79 56,278,680.79
Total 56,278,680.79 56,278,680.79
Other explanations, including changes in the current period, reasons for the changes:
The company cancelled and repurchased 542,926 shares, resulting in a reduction of treasury stock by
CNY56,278,680.79.
192
33. Other comprehensive incomes
Unit: CNY
Current period
Less: Previously Less: previously Amount
Opening Amount in Amount
Item recognized in other recognized in other attribute to Closing balance
balance current period Less: attribute to
comprehensive comprehensive income non-controlling
before income income tax parent company
income transferred transferred to retained shareholders
tax after tax
to profit or loss earnings after tax
II. Other
comprehensive
income that will be 1,982,037.01 46,942.15 41,157.80 5,784.35 2,023,194.81
reclassified to profit
or loss
Effect on
conversion of
financial
1,982,037.01 46,942.15 41,157.80 5,784.35 2,023,194.81
statements
denominated in
foreign currencies
Total other
comprehensiv 1,982,037.01 46,942.15 41,157.80 5,784.35 2,023,194.81
e income
Other notes, including adjustments for valid portion of the gains and or losses from cash flow hedging transferring to initial recognition amount of projects hedged.
193
34. Surplus reserves
Unit: CNY
Increase in current Decrease in current
Item Opening balance Closing balance
period period
Statutory surplus
753,494,000.00 753,494,000.00
reserves
Total 753,494,000.00 753,494,000.00
35. Retained Earnings
Unit: CNY
Item Current period Previous period
Retained Earnings before adjustment at
44,364,203,149.57 39,505,614,090.53
the end of the last year
Retained Earnings after adjustment
58,801.63
at the beginning of year
The opening balance of retained
44,364,203,149.57 39,505,672,892.16
earnings after adjustment
Add: net profit attributable to
owners of the parent
10,015,930,040.27 9,377,865,479.41
company for the current
period
Less: Dividends payable on common
5,634,104,576.76 4,519,335,222.00
shares
Retained earnings at the end of the
48,746,028,613.08 44,364,203,149.57
current reporting period
Notes for adjusting undistributed profits at the beginning of the period:
(1) Retained Earnings at the beginning of the period were affected by CNY0.00 due to the retrospective
adjustment under the Accounting Standards for Business Enterprises and related new regulations.
(2) Retained Earnings at the beginning of the period were affected by CNY0.00 due to changes in accounting
policies.
(3) Undistributed profits at the beginning of the period were affected by CNY0.00 due to the correction of
significant accounting errors.
(4) Retained Earnings s at the beginning of the period were affected by CNY0.00 due to changes in the scope of
consolidation resulting from business combination involving enterprises under common control.
(5) Retained Earnings at the beginning of the period were affected by CNY0.00 in total due to other
adjustments
36. Operating revenue and cost of sales
Unit: CNY
Current period amount Previous period amount
Item
Operating revenue Cost of sales Operating revenue Cost of sales
Operating incomes 32,489,436,696.05 7,761,633,378.60 29,499,863,067.64 7,214,917,301.54
Other operating
636,840,855.46 438,611,876.82 605,033,119.06 430,615,963.18
income
Total 33,126,277,551.51 8,200,245,255.42 30,104,896,186.70 7,645,533,264.72
Whether the net profit is negative or not after deducting non-recurring profits and losses by audit,
□Yes No
Information on Operating revenue and cost of sales
Unit: CNY
Category
Segment 1 Segment 2 Current period amount Total
of Contra
. Operating Cost of .Operating Cost of .Operating Cost of . Operating Cost of sales
194
revenue sales revenue sales revenue sales revenue
Commodit
y type
Including:
32,489,43 7,761,633 32,489,436,696. 7,761,633,378
liquor
6,696.05 ,378.60 05 .60
636,840,8 438,611,8 636,840,855.46 438,611,876.8
Other
55.46 76.82 2
By
operating
regions
Including:
Type of
market or
customer
Including:
Type of
contract
Including:
By the
time of
commodit
y transfer
Including:
By the
contract
time
Including:
By the
selling
channel
Including:
33,126,27 8,200,245 33,126,277,551. 8,200,245,255
Total
7,551.51 ,255.42 51 .42
Other note:
N/A
The information related to the transaction price allocated to the remaining performance obligations:
The amount of revenue corresponding to performance obligations that have been contracted for but not yet
fulfilled or not yet completed at the end of the reporting period is CNY7,516,605,557.37. Among this amount, it is
expected that CNY7,516,605,557.37 will be recognized as revenue in the fiscal year 2024.
37. Taxes and surcharges
Unit: CNY
Item Current period amount Previous period amount
Consumption tax 4,349,218,770.04 3,611,101,428.65
Urban maintenance and construction tax 397,160,440.05 340,401,921.12
Educational surcharge 392,222,222.83 337,972,048.98
Property tax 64,961,335.23 65,064,008.57
195
Land use tax 18,966,528.89 18,379,939.08
Vehicle and vessel tax 8,811.30 8,875.20
Stamp tax 46,044,367.98 14,303,404.79
Environmental protection tax 663,116.03 1,080,778.49
Total 5,269,245,592.35 4,388,312,404.88
38. General and administrative expenses
Unit: CNY
Item Current period amount Previous period amount
Payroll 733,508,090.53 774,749,241.22
Travel expense 25,415,153.72 14,520,700.63
Office allowance 8,557,932.30 7,460,258.87
Water, electric and steam expense 72,246,397.65 66,592,027.85
Business entertainment expense 26,452,270.06 21,636,429.90
Depreciation cost 408,509,046.01 422,769,117.64
Repair charge 50,787,009.79 39,597,394.14
Amortization of intangible assets 59,054,597.55 58,879,062.62
Vehicle use expense 20,497,511.65 19,074,484.31
Shipping and handling cost 26,862,025.90 25,978,095.37
ESOP plan fee 79,728,598.28 119,528,186.15
Other expense 252,804,515.62 364,888,297.05
Total 1,764,423,149.06 1,935,673,295.75
39. Selling and distribution expenses
Unit: CNY
Item Current period amount Previous period amount
Advertising and promotion expense 3,460,573,010.51 2,414,204,544.39
Payroll 1,278,306,975.33 1,177,066,920.45
Travel expense 473,214,108.76 433,273,104.21
Labor expense 29,938,594.80 47,961,453.63
E-commerce expenses 57,389,122.19 33,851,096.47
Other expense 87,531,889.03 72,783,688.70
Total 5,386,953,700.62 4,179,140,807.85
40. Research & Development expenses
Unit: CNY
Item Current period amount Previous period amount
Material expenses 157,434,871.03 121,940,738.99
Payroll 79,372,512.44 84,197,126.24
Other expense 47,946,497.86 47,437,111.16
Total 284,753,881.33 253,574,976.39
41. Financial expenses
Unit: CNY
Item Current period amount Previous period amount
Interest expense 1,707,107.98 694,325.50
Bill discount expense 5,362,271.92 5,887,512.78
Interest income -765,369,577.25 -645,806,427.40
Losses from currency exchange (Less:
910,236.76 336,446.78
income)
196
Bank charges 2,864,391.96 2,418,036.43
Total -754,525,568.63 -636,470,105.91
42. Other income
Unit: CNY
Sources of other income Current period amount Previous period amount
Government grants received 51,085,965.67 60,162,525.57
Withholding personal tax commission 5,093,433.86 3,610,292.93
Total 56,179,399.53 63,772,818.50
43. Gains/losses of changes in fair value
Unit: CNY
Gains/losses of changes in fair value Current period amount Previous period amount
Held-for-trading financial assets -37,082,477.77 -318,331,123.43
Total -37,082,477.77 -318,331,123.43
44. Investment income
Unit: CNY
Item Current period amount Previous period amount
Investment income from long-term equity -2,070,468.13 5,201,436.79
investments under the equity method
Investment income from disposing long- term equity -1,052,106.17
investments
Investment income from financial assets held for 36,767,861.85 39,061,870.99
trading during the holding period
Investment income from disposal of financial 248,582,039.81 396,238,455.03
assets held for trading
Others -27,758,655.92 -13,584,025.11
Total 255,520,777.61 425,865,631.53
45. Credit Impairment Loss
Unit: CNY
Item Current period amount Previous period amount
Credit impairment losses of accounts receivables 1,200,734.41 -1,565,965.47
Credit impairment losses of other receivables -319,351.09 819,879.51
Total 881,383.32 -746,085.96
46. Losses from asset impairment
Unit: CNY
Item Current period amount Previous period amount
Losses on inventory devaluation and Contract assets
-2,742,667.54 -2,333,823.54
impairment loss
Others -85,350.70
Total -2,828,018.24 -2,333,823.54
47. Gains from disposal of assets
197
Unit: CNY
Gains from disposal of assets Current period amount Previous period amount
Gains from disposal of fixed assets -5,304,286.63 1,846,300.27
Gains from disposal of right-of-use
21,309.31
assets
Total -5,282,977.32 1,846,300.27
48. Non-operating income
Unit: CNY
Amount included in non-
Item Current period amount Previous period amount recurring profit and loss in
current period
Liquidated damages income 12,327,450.94 6,966,329.61 12,327,450.94
Compensation payment 17,220,582.75 10,662,216.44 17,220,582.75
Account payables that are
1,549,941.67 3,463,801.85 1,549,941.67
unable to pay
Others 8,078,813.47 4,493,984.81 8,078,813.47
Total 39,176,788.83 25,586,332.71 39,176,788.83
49. Non-operating expenses
Unit: CNY
Amount included in non-
Item Current period amount Previous period amount recurring profit and loss in
current period
Donation expenses 51,640,406.00 12,401,802.24 51,640,406.00
Losses from disposal of 5,092,844.35 6,682,103.85 5,092,844.35
fixed asset
Integrated fund 53,621.46 66,741.89
Compensation expenses 435,681.98 15,537.00 435,681.98
Others 6,690,744.46 12,341,516.75 6,690,744.46
Total 63,913,298.25 31,507,701.73 63,859,676.79
50. Income tax expense
(1) Details of income tax expense
Unit: CNY
Item Current period amount Previous period amount
Income tax for the current reporting
3,009,825,870.95 3,306,448,635.67
period
Deferred income tax expenses 187,238,691.65 -192,598,666.16
Total 3,197,064,562.60 3,113,849,969.51
(2) Adjustment for accounting profit and income tax expense
Unit: CNY
Item Current period amount
Total profit 13,217,833,119.07
Income tax expenses determined by statutory/applicable 3,304,458,279.77
198
tax rate
Impact from subsidiaries’ different tax rates -318,064.16
Adjust for impact from income tax expense in previous
-15,463,521.00
period
Tax effect of non-taxable income -5,030,876.79
Impact of non-deductible costs, expenses and losses 8,127,898.78
Deductible from deferred tax assets in previous period -855,056.80
Impact of deductible temporary differences or deductible
losses for which no deferred income tax assets is recognized 15,144,122.01
for the current period
Impact of use unrecognized deferred income tax assets in the
-41,942,167.44
prior period
Impact of additional deduction of R&D expenses -68,398,842.50
Other 1,342,790.73
Income tax expense 3,197,064,562.60
51. Net other comprehensive income
Refer to note 33 for details.
52. Consolidated cash flow items
(1) Cash related to operation activities
Cash received from other operation activities
Unit: CNY
Item Current period amount Previous period amount
Interest income 510,038,375.40 398,200,995.54
Liquidated damages income 12,327,450.94 6,966,329.61
Government grants 46,328,965.67 75,197,192.24
Charges of withholding individual 5,093,433.86 3,610,292.93
income tax
Others 326,642,759.68 66,782,450.92
Total 900,430,985.55 550,757,261.24
Cash paid for other operating activities
Unit: CNY
Item Current period amount Previous period amount
Transportation fee 25,051,690.74 28,032,045.07
Advertising promotion expense 3,540,003,293.93 2,243,614,041.05
Repair charge 45,704,796.31 39,389,355.92
Travel expense 503,056,183.81 435,008,309.39
Entertainment expense 43,206,639.87 23,994,929.18
Labor expense 73,562,470.06 91,759,676.26
Others 566,359,261.99 606,935,645.43
Total 4,796,944,336.71 3,468,734,002.30
199
(2) Cash related to investing activities
Other cash received related to investing activities
Unit: CNY
Item Current period amount Previous period amount
Significant cash received relating to investing activities
Unit: CNY
Item Current period amount Previous period amount
Cash received from recovery of 11,154,008,547.25 17,261,152,475.37
investments
Cash received from investment income 257,591,245.74 420,664,194.74
Total 11,411,599,792.99 17,681,816,670.11
Other cash paid related to investing activities
Unit: CNY
Item Current period amount Previous period amount
Significant cash paid related to investing activities
Unit: CNY
Item Current period amount Previous period amount
Cash paid for the acquisition and
construction of fixed assets, intangible 1,111,629,485.17 539,153,153.61
assets, and other long-term assets
Cash paid for investments 9,640,808,034.84 13,131,786,086.81
Total 10,752,437,520.01 13,670,939,240.42
(3) Cash paid for other financing activities
Other cash received relating to financing activities
Unit: CNY
Item Current period amount Previous period amount
Other cash paid relating to financing activities
Unit: CNY
Item Current period amount Previous period amount
Lease payment 31,233,718.70 15,204,742.60
Total 31,233,718.70 15,204,742.60
Changes in liabilities generated from financing activities
Applicable □N/A
Unit: CNY
Increase for the period Decrease for the period
Current period Previous
Item Cash Non-cash Non-cash
amount Cash change period amount
change change change
Lease
liabilities 27,399,707.68 78,495,088.16 31,233,718.70 870,444.86 73,790,632.28
(including
200
non-current
liabilities due
within one
year)
Dividends
5,634,104,576.76 5,634,104,576.76
payable
Total 27,399,707.68 5,712,599,664.92 5,665,338,295.46 870,444.86 73,790,632.28
53. Supplementary Information about Cash Flow Statement
(1) Supplementary information about of cash flow statement
Unit: CNY
Item Current period amount Previous period amount
Reconciliation of net profit to cash
flow from operating activities
Net profit 10,020,768,556.47 9,389,433,921.86
Add: Impairment of assets 1,946,634.92 3,079,909.50
Fixed assets depreciation 639,335,568.28 678,868,349.45
Right-of-use assets depreciation 27,594,763.53 11,177,822.64
Amortization of intangible assets 59,054,597.55 58,842,693.52
Amortization of long-term
4,026,169.92 4,026,169.92
deferred expenses
Gains on disposal of fixed
assets, intangible assets and 8,522,287.93 -1,846,300.27
other long-term assets
Fixed asset scrapping losses 1,853,533.74 6,682,103.85
Losses (gains) from changes in fair
37,082,477.77 318,331,123.43
value
Financial expense 2,617,344.74 1,030,772.28
Investments income -255,520,777.61 -425,865,631.53
Decrease in deferred tax asset 180,381,423.47 -116,318,960.55
Increase in deferred tax liabilities 6,857,126.34 -76,212,410.35
Decrease in inventory -1,226,697,174.83 -922,733,979.02
Decrease in operation receivables 380,090,873.53 -371,555,344.91
Increase in operation payables -3,582,948,946.71 -4,789,890,533.79
Others -174,743,591.08 -119,425,753.84
Net cash flow from operating activities 6,130,220,867.96 3,647,623,952.19
Significant investing and financing
activities not Involving cash flow:
Conversion of debt into capital
Convertible corporate bonds maturing
within one year
Assets under leases
Net change in cash &cash equivalents
Closing balance of cash 25,201,023,553.40 24,019,016,540.72
Less: Opening balance of cash 24,019,016,540.72 20,847,003,550.37
Add: Closing balance of cash equivalents
Less: Opening balance of cash
equivalents
Net Increase (decrease) in cash and
1,182,007,012.68 3,172,012,990.35
cash equivalents
201
(2) Composition of cash and cash equivalents
Unit: CNY
Item Closing balance Opening balance
Cash 25,201,023,553.40 24,019,016,540.72
Including: cash on hand 292.01
Unrestricted bank deposit 25,154,451,473.76 23,974,964,633.03
Cash equivalents 46,571,787.63 44,051,907.69
Closing balance of cash and cash
25,201,023,553.40 24,019,016,540.72
Equivalents
(3) Monetary funds not classified as cash and cash equivalents
Unit: CNY
Item Current period amount Previous period amount Reason
Interest receivable on time Interest receivable accrued on
611,764,093.46 356,432,891.61
deposits time deposits
Total 611,764,093.46 356,432,891.61
54. Foreign currency transactions
(1) Foreign currency balance
Unit: CNY
Balance in foreign currency at Balance of CNY converted at the
Item Exchange rate
the end of the reporting period end of the reporting period
Cash and cash equivalents
Including ：USD 1,571,981.46 7.0827 11,133,873.05
EUR 1,497,199.73 7.8592 11,766,792.12
HKD 3,085,498.47 0.9062 2,796,140.42
AUD 420,201.85 4.8484 2,037,306.65
CLP 937,238,985.00 0.008001 7,498,822.93
CAD 0.43 5.3673 2.31
Accounts receivables
Including ：USD
EUR
HKD
Long-term loans
Including ：USD
EUR
HKD
(2) Description of the overseas business entity, including the important foreign business entity, which shall
disclose its main foreign business place, bookkeeping standard currency and selection basis, and shall also
disclose the reason for the change of the bookkeeping standard currency.
Applicable □N/A
202
Functional
Foreign business entities Operation site Choosing reason
currency
Currency in the main
JSSJ Industry (HK) Holdings Co., Limited Hong Kong, China HKD economic environment of
business operations
Hong Kong Zhaiugo International Trade Co., Currency in the main
Hong Kong, China HKD economic environment of
Ltd. business operations
Currency in the main
ZYG E-Commerce HK Limited Hong Kong, China HKD economic environment of
business operations
Currency in the main
ZYG LTD Cayman Islands USD economic environment of
business operations
Currency in the main
YangHe International Investment Ltd British Virgin Islands USD economic environment of
business operations
Currency in the main
ZYG TECHNOLOGY INVESTMENT LTD British Virgin Islands USD economic environment of
business operations
Currency in the main
YANGHE CHILE SPA Santiago, Chile CLP economic environment of
business operations
Currency in the main
Yanghe Hong Kong Distillery Co., Ltd. Hong Kong, China HKD economic environment of
business operations
VII. Changes in consolidated scope
1. Changes of Consolidation Scope due to Other Causes
Explain the change of merger scope caused by other reasons (such as new subsidiary, liquidation subsidiary,
etc.) and the relevant situation
Establishing subsidiaries
In April 2023, the company holding subsidiary, Jiangsu Yanghe Investment Management Co., Ltd., jointly
invested CNY150 million with Jiangsu Foris Agricultural Co., Ltd. to establish Jiangsu Yiguoxiang Biotechnology Co.,
Ltd, of which Jiangsu Yanghe Investment Management Co., Ltd. contributed CNY112.5 million, accounting for 75%
of its registered capital; Jiangsu Foris Agricultural Co., Ltd. contributed CNY37.5 million, accounting for 25% of its
registered capital. Since April 2023, it has been included in the scope of consolidated financial statements.
VIII. Interests in other entities
1. Interests in subsidiaries
(1) Group composition:
Registere Major Place of Shareholding
Name of Nature of Acquisition method
d capital business registratio
subsidiaries business Direct Indirect
location n
1,000,00 Nanjing, Nanjing,
Nanjing Yanghe
0.00 Jiangsu Jiangsu Commerce 100.00% Establishment
Blue Classic Co., Ltd
province province
Beijing Yanghe 3,000,00 Fengtai, Fengtai,
Commerce 100.00% Establishment
Commerce and 0.00 Beijing Beijing
203
Trade Co., Ltd.
Jiangsu Huaqu 50,000,0 Nanjing, Nanjing,
Wine Group Co., 00.00 Jiangsu Jiangsu Commerce 97.00% Establishment
Ltd. province province
Suqian Tianhai 500,000. Suqian, Suqian,
Commerce and 00 Jiangsu Jiangsu Commerce 100.00% Establishment
Trade Co., Ltd. province province
Suqian Yanghe 700,000. Suqian, Suqian,
Guibinguan Co., 00 Jiangsu Jiangsu Hotel industry 100.00% Establishment
Ltd. province province
334,400, Suqian, Suqian,
Su Wine Group
000.00 Jiangsu Jiangsu Commerce 83.63% 16.37% Establishment
Trade Co., Ltd
province province
Jiangsu Yanghe 10,000,0
Suqian, Suqian,
Liquor Operation 00.00
Jiangsu Jiangsu Commerce 100.00% Establishment
Management Co.,
province province
Ltd.
Jiangsu Shuanggou 5,000,00 Sihong, Sihong,
Liquor Operation 0.00 Jiangsu Jiangsu Commerce 100.00% Establishment
Co., Ltd. province province
Jiangsu Dongdi 5,000,00 Suqian, Suqian,
Union International 0.00 Jiangsu Jiangsu Commerce 100.00% Establishment
Trade Co., Ltd. province province
Jiangsu 5,000,00
Suqian, Suqian,
Dongdixinghui 0.00
Jiangsu Jiangsu Commerce 100.00% Establishment
International Trade
province province
Co., Ltd.
500,000. Suqian, Suqian,
Suqian Blue Dream
00 Jiangsu Jiangsu Commerce 100.00% Establishment
Trade Co., Ltd.
province province
3,000,00 Siyang, Siyang,
Siyang Lantu Liquor
0.00 Jiangsu Jiangsu Commerce 100.00% Establishment
Operation Co., Ltd.
province province
JSSJ Industry (HK) Hong
Hong Kong,
Holdings Co., Kong， CORP 100.00% Establishment
China
Limited China
2,000,00 Shiyan, Yunxian,
Hubei Lihuacun
0.00 Hubei Hubei Commerce 100.00% Establishment
Trade Co., Ltd.
province province
110,000, Business
Jiangsu Shuanggou 000.00 Sihong, Sihong, Liquor combinations
Distillery Stock Co., Jiangsu Jiangsu manufacture 99.99% 0.01% involving enterprises
Ltd. province province and sales not under common
control
2,500,00 Business
Sihong Shuanggou 0.00 Sihong, Sihong, Waste combinations
Antai Waste Jiangsu Jiangsu material 100.00% involving enterprises
Recycling Co., Ltd. province province recycle not under common
control
5,000,00 Business
Hubei Lihuacun 0.00 Shiyan, Yunxian, Process liquor, combinations
Liquor Industry Co., Hubei Hubei wine and fruit 100.00% involving enterprises
Ltd. province province wine not under common
control
500,000. Manufacture Business
Ningxiang 00 Ningxiang, Ningxiang, and sale of combinations
Miluochun Liquor Hunan Hunan liquor and 100.00% involving enterprises
Industry Co., Ltd. province province compound not under common
wine control
2,200,00 Binxian, Binxian, Business
Harbin Binzhou
0.00 Heilongjiang Heilongjian Liquor-making 100.00% combinations
Brewery Co., Ltd.
province g province involving enterprises
204
not under common
control
3,000,00 Assets/invest
Su Wine Group
0,000.00 Nanjing, Nanjing, ment
Jiangsu Wealth
Jiangsu Jiangsu management, 100.00% Establishment
Management Co.,
province province information
Ltd.
consultation
Ningxiang 2,000,00 Ningxiang, Ningxiang,
Miluochun Trade 0.00 Hunan Hunan Commerce 100.00% Establishment
Co., Ltd. province province
2,000,00 Suqian, Suqian,
Suqian Blue Sky
0.00 Jiangsu Jiangsu Commerce 100.00% Establishment
Trade Co., Ltd.
province province
2,000,00 Liquor,
0.00 compound
Shiyan Yunyang Shiyan, Shiyan,
wine, health
Lihuacun Package Hubei Hubei 100.00% Establishment
wine
Service Co.,Ltd. province province
packaging
service
10,000,0 Network
00.00 technology
development,
Jiangsu Lion and Nanjing, Nanjing, technical
Sheep Network Jiangsu Jiangsu consultation, 100.00% Establishment
Technology Co.,Ltd. province province technical
services;
Software
development
198,670, Business
000.00 Nanjing, Nanjing, combinations
Jiangsu Zhaiugou E-
Jiangsu Jiangsu Commerce 100.00% involving enterprises
commerce Co., Ltd
province province not under common
control
20,000,0 Business
Freight
NanjingTongmeng 00.00 Nanjing, Nanjing, combinations
Transport,
City Logistics Co., Jiangsu Jiangsu 99.99% involving enterprises
Warehouse
Ltd. province province not under common
service
control
10,000,0 Business
Freight
Nanjing Jinling 00.00 Nanjing, Nanjing, combinations
Transport,
Tongmeng City Jiangsu Jiangsu 51.00% involving enterprises
Warehouse
Logistics Co., Ltd. province province not under common
service
control
10,000,0 Business
Freight
Huaian Tongmeng 00.00 Huaian, Huaian, combinations
Transport,
City Logistics Co., Jiangsu Jiangsu 51.00% involving enterprises
Warehouse
Ltd. province province not under common
service
control
10,000,0 Business
Changzhou Freight
00.00 Changzhou, Changzhou combinations
Jiezzhong Transport,
Jiangsu , Jiangsu 51.00% involving enterprises
Tongmeng City Warehouse
province province not under common
Logistics Co., Ltd. service
control
10,000,0 Business
Freight
Nantong Tongmeng 00.00 Nantong, Nantong, combinations
Transport,
City Logistics Co., Jiangsu Jiangsu 51.00% involving enterprises
Warehouse
Ltd. province province not under common
service
control
10,000,0 Business
Freight
Suzhou Tongmeng 00.00 Suzhou, Suzhou, combinations
Transport,
City Logistics Co., Jiangsu Jiangsu 51.00% involving enterprises
Warehouse
Ltd. province province not under common
service
control
205
10,000,0 Business
Freight
Taizhou Tongmeng 00.00 Taizhou, Taizhou, combinations
Transport,
City Logistics Co., Jiangsu Jiangsu 51.00% involving enterprises
Warehouse
Ltd. province province not under common
service
control
10,000,0 Business
Freight
Wuxi Tongmeng 00.00 Wuxi, Wuxi, combinations
Transport,
City Logistics Co., Jiangsu Jiangsu 51.00% involving enterprises
Warehouse
Ltd. province province not under common
service
control
10,000,0 Business
Freight
Yancheng 00.00 Yancheng, Yancheng, combinations
Transport,
Tongmeng City Jiangsu Jiangsu 51.00% involving enterprises
Warehouse
Logistics Co., Ltd. province province not under common
service
control
10,000,0 Business
Freight
Zhenjiang 00.00 Zhenjiang, Zhenjiang, combinations
Transport,
Tongmeng City Jiangsu Jiangsu 51.00% involving enterprises
Warehouse
Logistics Co., Ltd. province province not under common
service
control
10,000,0 Business
Freight
Yangzhou 00.00 Yangzhou, Yangzhou, combinations
Transport,
Tongmeng City Jiangsu Jiangsu 53.00% involving enterprises
Warehouse
Logistics Co., Ltd. province province not under common
service
control
10,000,0 Business
Freight
Suqian Tongmeng 00.00 Suqian, Suqian, combinations
Transport,
City Logistics Co., Jiangsu Jiangsu 51.00% involving enterprises
Warehouse
Ltd. province province not under common
service
control
10,000,0 Business
Freight
Pizhou Tongmeng 00.00 Xuzhou, Xuzhou, combinations
Transport,
City Logistics Co., Jiangsu Jiangsu 51.00% involving enterprises
Warehouse
Ltd. province province not under common
service
control
10,000,0 Business
Lianyungang Freight
00.00 Lianyungang Lianyungan combinations
Huaxing Tongmeng Transport,
, Jiangsu g, Jiangsu 51.00% involving enterprises
City Logistics Co., Warehouse
province province not under common
Ltd. service
control
10,000,0 Business
Jiangsu Zhaibianli 00.00 Nanjing, Nanjing, combinations
E-commerce Co., Jiangsu Jiangsu Commerce 100.00% involving enterprises
Ltd province province not under common
control
Business
Hongkong Zhaiugou Hong combinations
Hong Kong,
International Trade Kong, Commerce 100.00% involving enterprises
China
Co., Ltd China not under common
control
816,000, Business
Guizhou Guijiu
000.00 Guiyang, Guiyang, combinations
Liquor Operation
Guizhou Guizhou Commerce 100.00% involving enterprises
Management Co.,
province province not under common
Ltd.
control
2,000,00 Guiyang, Guiyang,
Guizhou Guijiu
0.00 Guizhou Guizhou Commerce 100.00% Establishment
Trade Co., Ltd.
province province
Business
Hong combinations
ZYG E-Commerce Hong Kong, Industrial
Kong, 100.00% involving enterprises
HK Limited China investment
China not under common
control
206
Business
combinations
Cayman Cayman Industrial
ZYG LTD 69.08% involving enterprises
Islands Islands investment
not under common
control
YangHe British
British Virgin Industrial
International Virgin 100.00% Establishment
Islands investment
Investment Ltd Islands
10,000,0 Healthy wine,
Jiangsu Shuanggou
00.00 Suqian, Suqian, nutrition and
Healthy Liquor
Jiangsu Jiangsu health food 100.00% Establishment
Research institute
province province research and
Co., Ltd.
development
Business
British combinations
ZYG TECHNOLOGY British Virgin Industrial
Virgin 71.03% involving enterprises
INVESTMENT LTD Islands investment
Islands not under common
control
Jiangsu Blue Dream 10,000,0 Suqian, Suqian,
E- commerce Co., 00.00 Jiangsu Jiangsu Commerce 100.00% Establishment
Ltd. province province
10,000,0 Network
00.00 technology
Jiangsu Yanghe
Nanjing, Nanjing, development,
Weiketang Network
Jiangsu Jiangsu technical 100.00% Establishment
Technology Co.,
province province consultation,
Ltd.
technical
service
260,000, Business
Kweichow Moutai 000.00 Renhuai, Renhuai, Liquor combinations
Town Guijiu Liquor Guizhou Guizhou manufacture 100.00% involving enterprises
Industry Co., Ltd province province and sales not under common
control
5,000,00 Road general
0.00 cargo
Suqian, transport,
Suqian Su Wine Suqian,Jiang
Jiangsu cargo 100.00% Establishment
Logistics Co., Ltd. su province
province distribution,
freight
forwarder
Movable and
real estate
investment
Santiago, Santiago,
YANGHE CHILE SPA services, 100.00% Establishment
Chile Chile
building
construction
services
3,000,00 Foreign
Jiangsu Yanghe 0,000.00 investment,
Suqian, Suqian,
Investment Asset
Jiangsu Jiangsu 50.00% 50.00% Establishment
Management Co., management,
province province
Ltd. Investment
consulting
500,000, Enterprise
000.00 management
consulting;
Su Wine Group Industrial
Nanjing, Nanjing,
Nanjing Operation investment;
Jiangsu Jiangsu 100.00% Establishment
Management Co., Food sales;
province province
Ltd. Gift sales;
House lease;
Hotel
management
207
Jiangsu Yangming 10,000,0 Nanjing, Nanjing,
Food sales,
Liwei liquor Co., 00.00 Jiangsu Jiangsu 100.00% Establishment
Gift sales
Ltd. province province
Yanghe Hong Kong HongKong, Hong Industrial
100.00% Establishment
Distillery Co., Ltd. China Kong,China investment
2,000,00 Painting and
0.00 calligraphy
creation,
exhibition;
Academic
research;
Jiangsu Yanghe Nanjing, Nanjing,
Public art
Calligraphy and Jiangsu Jiangsu 100.00% Establishment
education;
Painting Academy province province
Cultural and
creative
products
development
and
promotion
100,000, Sihong, Sihong,
Jiangsu Shuanggou
000.00 Jiangsu Jiangsu Commerce 100.00% Establishment
Wine Sales Co., Ltd
Province Province
20,000,0 Internet
Jiangsu Jiushang Suqian, Suqian,
00.00 information
Internet Jiangsu Jiangsu 51.00% Establishment
service,
Technology Co., LTD Province Province
alcohol sales
50,000,0 Tobacco retail,
Jiangsu Yanghe 00.00 Suqian, Suqian, catering,
Cultural Tourism Jiangsu Jiangsu accommodati 100.00% Establishment
Co., LTD Province Province on, tourism
business
20,000,0 Tobacco retail,
Jiangsu Yanghe 00.00 Suqian, Suqian, catering,
Cultural Tourism Jiangsu Jiangsu accommodati 80.00% Establishment
Operation Co., LTD. Province Province on, tourism
business
24,000,0 Wine
Siyang Blue Sky Sihong , Sihong,
00.00 production
Packaging Service Jiangsu Jiangsu 100.00% Establishment
and packaging
Co., Ltd Province Province
services
400,000, Liquor sales,
Lhasa City, Lhasa City,
Tibet Earth's Third 000.00 food
Tibet Tibet
Pole Liquor Co., production, 51.00% Establishment
Autonomou Autonomo
Ltd. and food
s Region us Region
retailing
Guizhou Guijiu 500,000. Zunyi City, Zunyi City,
Liquor Industry 00 Guizhou Guizhou Commerce 100.00% Establishment
Operation Co., Ltd Province Province
Jiangsu Ulan 10,000,0 Nanjing, Nanjing,
Shangyin Catering 00.00 Jiangsu Jiangsu Catering
100.00% Establishment
Management Co., province province Management
Ltd.
Jiangsu Yanghe 3,000,00 Nanjing, Nanjing, equity
Dream Investment 0,000.00 Jiangsu Jiangsu investment
100.00% Establishment
Management Co., province province
Ltd
Jiangsu Yanghe 10,000,0 Nanjing, Nanjing, equity
Blue Investment 00.00 Jiangsu Jiangsu investment
100.00% Establishment
Management Co., province province
Ltd.
Jiangsu Yiguoxiang 150,000, Suqian, Suqian, Food
Biotechnology Co., 000.00 Jiangsu Jiangsu production, 75.00% Establishment
Ltd Province Province beverage
208
production,
liquor
production,
liquor sales,
and food
retailing
Notes: 1.The company formerly known as Jiangsu Zhongshi Ji Liquor Industry Co., Ltd. has been renamed
to Jiangsu Yangming Liwei Liquor Industry Co., Ltd
The shareholding ratio in the subsidiary is different from the voting ratio:
The basis for holding half or less of the voting rights but still controlling the invested entity, and for
holding more than half of the voting rights but not controlling the invested entity :
For important structural subjects included in the scope of merging, the basis of control:
Basis for determining whether the company is an agent or a principal:
Other note:
2. Interests in joint ventures and associates
(1) Important joint ventures or associates
Accounting
Name of Equity ownership percentage treatment for
Main
Joint venture Registered Nature of investments
operating
or associate location business in joint
location Direct Indirect
company ventures or
associates
Nanjing
Huatai
Yanghe Equity
Nanjing, Nanjing,
Equity investment, Equity
Jiangsu Jiangsu 60.00%
Investment province province venture method
Fund capital
(Limited
Partnership)
Explanation of the difference between equity ownership percentage and voting rights in joint ventures or
associates:
Huatai Purple Gold Investment Co., Ltd. and Jiangsu Yanghe Blue Investment Management Co., Ltd. are
general partners, while Jiangsu Yanghe Dream Investment Management Co., Ltd. and Nanjing Jiangning
High-tech Zone Technology Entrepreneurship Investment Management Co., Ltd. are limited partners.
Huatai Purple Gold Investment Co., Ltd. subscribed for CNY1,000 million with a contribution ratio of 20%;
Jiangsu Yanghe Blue Investment Management Co., Ltd. subscribed for CNY10 million with a contribution
ratio of 0.20%; Jiangsu Yanghe Dream Investment Management Co., Ltd. subscribed for CNY2,990 million
with a contribution ratio of 59.80%; Nanjing Jiangning High-tech Zone Technology Entrepreneurship
Investment Management Co., Ltd. subscribed for CNY1,000 million with a contribution ratio of 20%. The
partnership has established an Investment Decision Committee consisting of five members, with Huatai
Purple Gold Investment Co., Ltd. appointing 2 members, Jiangsu Yanghe Blue Inve stment Management
Co., Ltd. appointing 2 members, and Nanjing Jiangning High-tech Zone Technology Entrepreneurship
Investment Management Co., Ltd. appointing 1 member. The executive managing partner is Huatai
Purple Gold Investment Co., Ltd.
209
(2) Summary of financial information of significant joint ventures and associates
Unit: CNY
Closing balance/Current period Opening balance/Previous period
amount amount
Current assets 1,992,133,681.31 10,980,935.69
Non-current assets 2,760,403.16
Total assets 1,994,894,084.47 10,980,935.69
Current liabilities 109,970.74
Non-current liabilities
Total liabilities 109,970.74
Minority interests
Equity attributable to owners of the
1,994,784,113.73 10,980,935.69
parent company
Net assets attributable to
shareholders based on ownership 1,196,870,468.24 6,980,561.41
proportion
Adjustments:
--Goodwill
--Unrealized profits from internal
transactions
--Others
Carrying value of investments in
1,196,870,468.24 6,980,561.41
associates' equity
Fair value of equity investments in
associates with publicly quoted
prices
Revenue 41,196,288.60 935.69
Net profit -5,216,821.96 935.69
Net profit from discontinued
operations
Other comprehensive income
Total comprehensive income -5,216,821.96 935.69
Dividends received from
associates during the current year
(3) Summary of financial information of insignificant joint ventures and associates
Unit: CNY
Closing balance/Current period Opening balance/Previous period
amount amount
Associates:
The aggregate amount of the
following items calculated based on
the Company’s equity share
percentage of the associates
--Net profit 909,717.87
--Other comprehensive income 153,503.58
-- Total comprehensive income 1,063,221.45
joint ventures:
210
Total carrying amount of investment 32,968,324.80 25,999,068.80
The sum of the following items
calculated according to the
shareholding ratio
--Net profit 1,059,625.04 4,291,157.51
-- Total comprehensive income 1,059,625.04 4,291,157.51
IX. Government grants
1. Government grants recognized as receivable at the end of the reporting period
□Applicable N/A
Reasons for not receiving the projected amount of government grants at the projected point in time
□Applicable N/A
2.Debt items related to government subsidies
Applicable N/A
Unit: CNY
Amount
Amount
included in
Subsidy transferred Other
non- Related to
Accounting Opening amount to other changes Closing
operating assets/inco
item balance added this income during this balance
income me
period during this period
during this
period
period
Deferred 92,277,166.6 87,520,166.6 Related to
5,000,000.00 9,757,000.00
income 7 7 assets
3. Government grants recognized in the current period's income statement
Applicable N/A
Unit: CNY
Accounting item Current period amount Previous period amount
Other income 51,085,965.67 60,162,525.57
X. Risks related to financial instruments
The Group is exposed to various financial risks in the ordinary course of business, mainly including: credit
risk, liquidity risk, market risk, etc. The Company's management is fully responsible for the formulation of
risk management objectives and policies, and takes responsibility for risk management objectives and
policies. The objective of the Company’s risk management is to identify and analysis risk, minimizing the
adverse impact of financial risks without excessive influence on the company's competitiveness and
resilience.
1. Credit risks
Credit risk refers to the risk that one party of the financial instruments fails to perform its obligations and
causes the financial losses of the other party. Credit risk mainly related to notes receivables and accounts
211
receivable, in order to control the risk, the Company takes the following measures:
(1) Bank deposit
The company's bank deposits are mainly deposited in state-owned holding banks, large and medium-sized
listed banks and other commercial banks with high credit. There is no significant credit risk and no
significant loss caused by default.
(2) Notes receivables and accounts receivables
The Company mainly trades with distributors, according to company credit policy, and adopts the way of
delivery after the payments finished. For some group purchase business, it only deals with the reputable
group clients, and continuously monitors the balance of notes receivables and accounts receivables, as a
result, there is no collateral required, and credit risk management concentrates on the clients. The balance
of notes receivables and accounts receivables are small till 31 December 2021. The Company does not hold
any collateral or other credit enhancement for the balance of accounts receivables.
(3) Other receivable
The other receivables are mainly saving deposits involving infringement dispute, deposits and petty cas h,
employee business loan and so on. The Company manages other receivables and continuously monitors its
balance, to ensure the Company not to face significant bad debt risks.
2. Liquidity risk
Liquidity risk refers to the risk of capital shortage when enterprise performs its obligations related to
financial liabilities. The Company uses various financing methods such as bill clearing and bank loan to
optimize the financing structure and maintain the balance between financing continuity and flexibility.
The maturity of the financial liabilities held by the Company according to the undiscounted remaining
contractual obligations is analyzed as follows:
Closing balance
Item Within 1 year 1-2 years 2-3 years Over 3 years Total
Account
payables 1,425,873,552.42 1,425,873,552.42
Other
payables 2,024,640,485.37 2,024,640,485.37
Long-term
payables 196,013,394.53 196,013,394.53
(Continued)
Opening balance
Item
Within 1 year 1-2 years 2-3 years Over 3 years Total
Account payables
1,376,209,527.01 1,376,209,527.01
Other payables 1,854,922,517.23 1,854,922,517.23
Long-term payables
196,459,834.53 196,459,834.53
3. Market risk
Market risk is the fair value of financial instrument or future cash flow fluctuates due to the fluctuation of
market price, and it mainly includes: interest rate risk, foreign exchange risk, etc.
(1) Interest rate risk
Interest rate risk refers to the fair value of financial instrument or future cash flow fluctuates due to the
fluctuation of interest rate. The Company faces the risk of market interest rate change mainly related to the
Company's borrowing limit.
(2) Foreign exchange risk
Foreign exchange risk arises from fluctuation in exchange rate, relevant to the assets and liabilities in foreign
212
currency. The less import and export business happened, the lower impact of exchange rate fluctuation on
company's operation.
The amount in CNY of the Company’s assets and liabilities shown in foreign currencies as follows:
Closing balance Opening balance
Balance in foreign Exchange Balance in foreign Exchange
Item Balance in CNY Balance in CNY
currency rate currency rate
Cash and
cash
equivalents
Include: USD 1,571,981.46 7.0827 11,133,873.05 2,325,513.37 6.9646 16,196,270.44
EUR 1,497,199.73 7.8592 11,766,792.12
AUD 420,201.85 4.8484 2,037,306.65 279,299.93 4.7992 1,340,416.22
HKD 3,085,498.47 0.9062 2,796,140.42
CLP 937,238,985.00 0.008001 7,498,822.93 471,084,627.00 0.008131 3,830,608.28
CAD 0.43 5.3673 2.31
Other
receivables
205,679.16 0.9062 186,390.57 155,679.16 0.8933 139,068.19
Include:HKD
Other payables
Include: USD 512.13 7.0827 3,627.26 512.13 6.9646 3,566.78
HKD 80,000.00 0.9062 72,497.60 217,800.00 0.8933 194,560.74
CLP 222,853.00 0.008001 1,783.04 328,119.00 0.008131 2,668.09
35,497,235.95 11,076,949.57
Net amount
The amount of foreign currency financial assets and financial liabilities of the company is small, and exchange
rate fluctuations have little impact on the company's business performance.
XI. Fair value disclosure
1. The Financial Assets and Financial Liabilities Measured at Fair Value at the end of the
Reporting Period
Unit: CNY
Closing fair value
Item
Level 1 Level 2 Level 3 Total
Continuous fair value
-- -- -- --
measurement
1.Financial assets held for
5,851,217,684.93 5,851,217,684.93
trading
(1) Debt instrument
5,851,217,684.93 5,851,217,684.93
investment
2.Other non-current financial
1,034,217,169.78 4,498,575,111.48 5,532,792,281.26
assets
Equity instrument
1,034,217,169.78 4,498,575,111.48 5,532,792,281.26
investment
3.Receivables Financing: 261,576,568.30 261,576,568.30
Bank acceptance bill 261,576,568.30 261,576,568.30
Total assets continuously
1,034,217,169.78 10,611,369,364.71 11,645,586,534.49
measured at fair value
Non-Continuous fair value
-- -- -- --
measurement
213
2. Basis for determining the market price of continuous and non-continuous level 1 fair value
measurement items
Active market price
Item Fair value
Trading price Information source
Continuous fair value measurement
Other non-current financial assets 1,034,217,169.78
Local open market closing
Equity instrument investment 1,034,217,169.78 Closing price
price
Total assets continuously measured at
1,034,217,169.78
fair value
3. Valuation techniques and qualitative and quantitative information of key parameters adopted
for continuous and non-continuous level 3 fair value measurement it
Item Fair value Valuation techniques
Continuous fair value measurement
1.Trading financial assets: 5,851,217,684.93
Using expected rate of return
Debt instrument investment 5,851,217,684.93 as a key reference for
evaluating fair value.
2.Other non-current financial assets: 4,498,575,111.48
Using cost or the investee's
net assets at the end of the
Equity instrument investment 4,498,575,111.48 period as a significant
reference for assessing fair
value.
3.Receivables Financing: 261,576,568.30
Bank acceptance bill Using face value as a key
261,576,568.30 reference for evaluating fair
value.
Total assets continuously measured at fair value 10,611,369,364.71
XII. Related parties and related party transactions
1. The parent company of the Company
Name of Shareholding Voting Ratio by
Registration Registered
parent Business nature ratio by the the parent
place capital
company parent company company
Grain purchase; self-
supporting and agent of
all kinds of goods and
technology import and
export business (except
Jiangsu
for goods and technology
Yanghe
Suqian, Jiangsu that the state limits CNY 1.5 billion 34.18% 34.18%
Group Co.,
enterprises to operate or
Ltd.
prohibits the import and
export); nickel,
ferromolybdenum,
refined ferronickel, nickel-
chromium pig iron, nickel-
214
chromium ores, furnace
materials, steel,
machinery parts castings,
light stabilizer 944, light
stabilizer 622, antioxidant
3114, organic fertilizers,
compound fertilizers,
chemical raw materials
(except for hazardous
materials), viscose Staple
fiber, cotton balances,
electric bicycles and their
accessories, lithium
batteries, hardware and
electricity sales; raw grain
sales; housing rental;
industrial investment;
municipal utility projects,
building construction
projects, tourism and
cultural industries
investment. (Items
subject to approval
according to law, can only
carry out business
activities after approval
by the relevant
departments)
General: sales of
communications
equipment; optical
communications
equipment sales;
electronic product sales;
mobile communications
equipment sales; mobile
terminal equipment
sales; computer software,
hardware and auxiliary
equipment wholesale;
software development;
information systems
integration services (in
addition to projects
subject to approval
according to law, with a
business license to carry
out business activities
independently according
to law)
Information about the Company’s parent company:
The final control party of the Company is State-owned Assets Supervision and Administration Commission of
Suqian.
Other statements:
2. Subsidiaries of the Company:
The information about the subsidiaries of the Company refers to NoteVI.1 Interests in Subsidiaries.
3. Joint venture and associate of the Company
The information about the joint venture and associate of the Company refers to the Note VI.2.
215
Other joint ventures and associates whose related party transactions with the Company in the current period or
balance formed from related party transactions with the Company in the prior period as follows:
Name of joint venture and associate Relationship with the Company
Jiangsu Su Wine Cultural Transmission Co., Ltd. Associate
Nanjing Hesong Culture Technology Co., Ltd. Associate
Jiangsu Xinghe Investment Management Co., Ltd. Associate
4. Other related party
Name of other related party Relationship with the Company
Shanghai Haiyan Logistics Development Co., Ltd. Holding 9.67% shares
VSPT, Via San Pedro Tarapacá S.A. Joint stock company, holding 12.50% shares
Suqian Chanfa Entrepreneurship Investment Co., Ltd. The same ultimate controlling party
Suqian Chanfa Technology Equity Investment Fund (Limited
The same ultimate controlling party
Partnership)
5. Related party transactions
(1) Related party transactions regarding sales and purchases of goods, provision of services and receiving
services
Statement of purchase of goods / Receipt of labor services
Unit: CNY
Whether
Approved exceeding the
Transaction Amount for the Amount for the
Related Party transaction approved
Content current period prior period
amount transaction
amount
VSPT, Via San
Pedro Tarapacá Red wine 10,847,369.03 16,462,530.10
S.A
Nanjing
Advertising and
Hesong Culture
general publicity 3,691,780.87 756,341.39
Technology
expense
Co., Ltd.
Statement of sales of goods/ rendering of labor services
Unit: CNY
Related Party Transaction Content Current period amount Previous period amount
Shanghai Haiyan Logistics
Sales of liquor 16,715,216.83 866,000.02
Development Co., Ltd.
Jiangsu Su Wine Cultural
Sales of liquor 470,992.66 40,369,222.60
Transmission Co., Ltd.
Nanjing Huatai Yanghe
Equity Investment Fund Consulting service 8,297,169.81
(Limited Partnership)
(2) Related party lease
The Company as a lessor
Unit: CNY
Amount in previous
Related party Types of Leased Assets Amount in current period
period
The Company as a lessee
Unit: CNY
Related Types Simplified rental Variable lease Rent paid Interest expense Increased use
216
party of fees for short-term payments not on lease liabilities rights assets
Leased leases and low included in the assumed
Assets value asset leases measurement of
（If Applicable） lease liabilities（If
Applicable）
Previou Previou Previou Previou Previou
Current Current Current Current Current
s s s s s
period period period period period
period period period period period
amount amount amount amount amount
amount amount amount amount amount
Jiangsu
Yanghe lease of 96,330. 298,16 4,236.3 68,263.
Group houses 28 5.14 3 37
Co., Ltd
(3) Compensation for key managers
Unit: CNY
Item Current period amount Previous period amount
(4) Other related-party transactions
Subsidiary Jiangsu Yanghe Investment Management Co., Ltd. (hereinafter referred to as "Yanghe Investment"),
jointly established Suqian Huatai Chanfa Technology Equity Investment Fund (Limited Partnership) (hereinafter
referred to as "Suqian Huatai Chanfa Fund") with Huatai Purple Gold Investment Co., Ltd. (hereinafter referred to
as "Huatai Purple Gold"), Suqian Chanfa Entrepreneurship Investment Co., Ltd. (hereinafter referred to as
"Suqian Chanfa Entrepreneurship"), Suqian Chanfa Technology Equity Investment Fund (Limited Partnership)
(hereinafter referred to as "Suqian Chanfa Fund"), and Nanjing Huatai Yanghe Equity Investment Fund (Limited
Partnership) (hereinafter referred to as "Huatai Yanghe Mother Fund").The target total subscribed capital of
Suqian Huatai Chanfa Fund is CNY500 million, with Huatai Purple Gold, Suqian Chanfa Entrepreneurship, Suqian
Chanfa Fund, Huatai Yanghe Mother Fund, and Yanghe Investment subscribing forCNY 1 million, CNY1 million,
CNY249 million, CNY124 million, and CNY125 million, respectively. Huatai Purple Gold is the general partner and
executive managing partner of the fund, Suqian Chanfa Entrepreneurship is a general partner, and the other
contributors are limited partners.
6. Receivables from and payables to related parties
(1) Payables
Unit: CNY
Item Related party Closing balance Opening balance
Shanghai Haiyan Logistics
Contract liabilities 2,369,114.16 72,307.08
Development Co., Ltd.
Jiangsu Su Wine Cultural Transmission
Contract liabilities 3,330,783.71 3,803,634.02
Co., Ltd.
VSPT,
Accounts payables 1,589.42 6,508,528.42
Via San Pedro Tarapacá S.A.
Shanghai Haiyan Logistics
Other Payables 133,000.00 133,000.00
Development Co., Ltd.
Jiangsu Su Wine Cultural Transmission
Other Payables 950,000.00 950,000.00
Co., Ltd.
XIII. Share-based payment
1. Other information:
217
According to Phase I Core Backbone Shareholding Plan (Draft) of Jiangsu Yanghe Distillery Co., Ltd., deliberated
and approved at the second Extraordinary Shareholders' Meeting of 2021 held on August 2, 2021, the shareholding
scale of the shareholding plan does not exceed 9,118,384 share. The stock in this stock plan is derived from the
company's A-share ordinary shares repurchased by the special account. The duration of the shareholding plan is
36 months, and the lock-up period of the acquired shares is 24 months, which shall be calculated from the date
when the draft shareholding plan is approved by the Shareholders' Meeting and the company announces the last
transfer of the underlying shares to the shareholding plan. Upon expiration of the shareholding plan, the
shareholding plan shall terminate automatically, and it may be extended upon the consent of more than half of
the members of the management Committee and the approval of the board of directors. Upon expiration of the
lock-up period, the stock rights and interests held in the stock holding plan will be disposed according to the
assessment results of the company's performance objectives. The performance assessment of the shareholding
plan requires that the operating revenue in 2021 should increase by no less than 15% compared with 2020 and
the operating revenue in 2022 should increase by no less than 15% compared with 2021. If the performance
assessment indicators are not reached, all the underlying stock rights and interests held in the shareholding plan
shall be recovered by the management Committee and sold at an appropriate time after the expiration of the lock-
up period, and shall be returned to the holder on the basis of the lower investment amount and the sold amount
(after deducting relevant expenses), and the remaining profits shall be enjoyed by the Company.The performance
assessment criteria for this shareholding plan have been met, and the lock-up period expired on September 10,
2023. All shares held by the plan have been unlocked, and the remaining repurchased shares have been canceled.
The total expenses recognized for this employee shareholding plan in the current period amount to
CNY81,609,539.19, credited to the capital reserve - other capital reserves for the same amount, with a cumulative
total of CNY244,727,667.97 credited to the capital reserve - other capital reserves.
XIV. Commitments and contingencies
1. Significant commitments
Significant commitments as of the balance sheet date
By the end of 31 December 2023, there were no significant commitments needed to be disclosed.
2. Contingencies
(1) There are no material contingencies that the Company is required to disclose, which should also be
explained
The Company has no significant contingencies to disclose.
XV. Post balance sheet event
1. Profit distribution
Unit: CNY
Proposed dividend per 10 shares (yuan) 46.60
Proposed bonus shares per 10 shares (shares) 0
Proposed bonus shares per 10 shares (shares) 0
Dividend per 10 shares declared and approved for distribution
46.60
(yuan)
Bonus shares per 10 shares declared and approved for
0
distribution (shares)
Bonus shares per 10 shares declared and approved for 0
218
distribution (shares)
The Company intends to distribute a cash dividend of CNY46.60
(including tax) per 10 shares to all shareholders based on the
existing total share capital of 1,506,445,074 shares, totaling a
cash distribution of CNY7,020,034,044.84 (including tax) with
no bonus shares and no capitalization. If there is any change in
Profit distribution plan
the total share capital of the Company before the share
registration date for the implementation of the equity
distribution, the distribution ratio will be adjusted in
accordance with the principle that the total amount of
distribution remains unchanged.
2. Explanation of post-balance sheet date events for other assets and liabilities
By the end of April 25, 2024, the company has no post-balance sheet date events that require disclosure.
219
XVI. Notes to major items of financial statements of parent company
1. Accounts receivable
(1)Analysis by aging
Unit: CNY
Aging Closing balance Opening balance
Within 1 year (including 1 year) 95,503,189.71 1,204,313,384.24
Total 95,503,189.71 1,204,313,384.24
(2) Disclosure of accounts receivable by categories
Unit: CNY
Closing balance Opening balance
Carrying balance Credit loss provision Carrying balance Credit loss provision
Type Proportion
Percentage Proportion Book value Percentage Book value
Amount Amount Amount Amount of
(%) of provision (%)
provision
Including:
Provision
for bad
95,503,189.71 100.00% 11,580.39 0.01% 95,491,609.32 1,204,313,384.24 100.00% 151,596.00 0.01% 1,204,161,788.24
debts by
portfolio
Including:
Risk portfolio 386,013.00 0.40% 11,580.39 3.00% 374,432.61 5,053,200.00 0.42% 151,596.00 3.00% 4,901,604.00
Other
95,117,176.71 99.60% 95,117,176.71 1,199,260,184.24 99.58% 1,199,260,184.24
portfolio
Total 95,503,189.71 100.00% 11,580.39 0.01% 95,491,609.32 1,204,313,384.24 100.00% 151,596.00 0.01% 1,204,161,788.24
Provision for bad debts by portfolio: risk portfolio
Unit: CNY
Closing balance
Name of portfolio
Accounts receivables Provision for bad debt Proportion
Within 1 year 386,013.00 11,580.39 3.00%
Total 386,013.00 11,580.39
220
Notes to determine provision for bad debt by portfolio:
Provision for bad debts by portfolio: other portfolio
Closing balance
Name of portfolio
Accounts receivables Provision for bad debt Proportion
Accounts receivable of companies within
95,117,176.71
the scope of consolidation
Total 95,117,176.71
Notes to determine provision for bad debt by portfolio:
If the Company uses the accounts receivable provision for bad debts according to the general model of expected credit loss, please disclose the relevant
information of provision for bad debt by referring to the disclosure method of other receivables
□Applicable N/A
221
Unit: CNY
(3) Provision for bad debt that is accrued, recovered or reversed during this period
Provision for bad debts during this period:
Unit: CNY
Changes in the current period
Opening
Category Recovered or Closing balance
balance Provision Write off Others
reversed
Provision for
bad debt of
151,596.00 140,015.61 11,580.39
accounts
receivables
Total 151,596.00 140,015.61 11,580.39
Significant amount of reversal or recovery during this period
Unit: CNY
Company name Amount recovered or reversed Method
None
(4) Top five entities with the largest balances of the accounts receivables and contractual
assets
Unit: CNY
Total closing Proportion in the
Closing balance of balance of the total accounts’
Closing balance of the
Company’s name the contractual accounts receivables and Provision amount
accounts receivables
assets receivables and contractual assets
contractual assets (%)
First 91,431,217.66 91,431,217.66 95.74%
Second 2,328,534.10 2,328,534.10 2.44%
Third 880,000.00 880,000.00 0.92%
Fourth 477,424.95 477,424.95 0.50%
Fifth 386,013.00 386,013.00 0.40% 11,580.39
Total 95,503,189.71 95,503,189.71 100.00% 11,580.39
2. Other receivables
Unit: CNY
Item Closing balance Opening balance
Dividend receivable 519,220.27
Other receivables 2,510,474,686.55 1,068,086,225.72
Total 2,510,993,906.82 1,068,086,225.72
(1) Dividend receivable
1）Category of dividend receivable
Unit: CNY
Item Closing balance Opening balance
Jiangsu Yanghe Micro Guest Hall Network
519,220.27
Technology Co., Ltd.
Total 519,220.27
(2) Other receivables
1) Disclosure of other receivable by nature
Unit: CNY
Nature of other receivables Closing balance Opening balance
Payments by related parties within the 2,509,089,391.72 1,062,874,527.41
222
Group
Guarantee deposit 15,994,592.00 18,498,496.00
Business loans and petty cash 126,160.91 1,128,524.66
Other receivables 2,908,216.70 2,602,307.10
Total 2,528,118,361.33 1,085,103,855.17
2) Other receivables by aging
Unit: CNY
Aging Closing balance Opening balance
Within 1 year (including 1 year) 2,493,474,240.21 739,643,544.05
Within 1 year 2,493,474,240.21 739,643,544.05
1-2 years 3,232,853.31 314,455,495.91
2-3 years 419,534.10 460,000.00
Over 3 years 30,991,733.71 30,544,815.21
3-4 years 460,000.00 8,830,032.00
4-5 years 8,830,032.00 848,000.00
Over 5 years 21,701,701.71 20,866,783.21
Total 2,528,118,361.33 1,085,103,855.17
3) According to the general model for expected credit losses
Provision for bad debts is made on the basis of a general model of expected credit losses:
Unit: CNY
Phase 1 Phase 2 Phase 3
Provisions for debts Future 12-month Lifetime ECL(without Lifetime ECL(with credit Total
ECL credit impairment) impairment)
Balance as at 1 January
2023 250,164.49 16,767,464.96 17,017,629.45
Change of opening
balance as at 1 January
2022 in current period
Provision in 2023 806,332.60 806,332.60
Reversal in 2023 180,287.27 180,287.27
Balance as at 31
69,877.22 17,573,797.56 17,643,674.78
December 2023
Basis of classification of stages and percentage of provision for bad debts
Significant change of the book balance of provision during the period
□Applicable N/A
4) Provision, recovery or reversal for bad debt during this period
Provision for bad debts in the current period:
Unit: CNY
Changes in the current period
Category Opening balance Recovered or Other Closing balance
Provision Write off
reversed changes
Provision for
other
17,017,629.45 626,045.33 17,643,674.78
receivables
bad debt
Total 17,017,629.45 626,045.33 17,643,674.78
Significant amount of reversal or recovery during this period:
223
5) Top five entities with the largest balances of the other receivables
Unit: CNY
Proportion in Provisioning
Company’s Name Category Closing balance Aging total amount at
receivables period end
Jiangsu Shuanggou
Liquor Sales Co., Loan 1,871,050,539.53 Within 1 year 74.01%
Ltd
Guizhou Guijiu Co., Within 1 year
Loan 484,780,044.34 19.18%
Ltd.
Guizhou Maotai
Town Guijiu Liquor Loan 125,712,890.12 Within 1 year 4.97%
Industry Co., Ltd
Jiangsu Juntai
Properties Co., Lt.,
Suqian Guotai deposit 15,000,000.00 Over 5 years 0.59% 15,000,000.00
Department Store
Co., Ltd.
Within 1 year
190,000.00, 1-2years
Harbin Binzhou 230,000.00,2-3years
Loan 14,997,100.00 0.59%
Brewery Co., Ltd. 400,000.00, over 3
years 14,177,100.00
合计 2,511,540,573.99 99.34% 15,000,000.00
3. Long-term equity investments
Unit: CNY
Closing balance Opening balance
Item Impairment Impairment
Book balance Book value Book balance Book value
provision provision
Investment in 8,180,436,290
9,524,901,378.94 9,524,901,378.94 8,180,436,290.49
subsidiaries .49
Investments in
joint ventures 5,300,199.49 5,300,199.49
and associates
8,180,436,290
Total 9,530,201,578.43 9,530,201,578.43 8,180,436,290.49
.49
(1) Investment in subsidiaries
Unit: CNY
Increase or decrease in the current period Closing
Opening Provision Closing balance of
Investee
balance Increase Decrease for Others balance provision for
impairment impairment
Suqian
Yanghe
700,000.00 700,000.00
Guibinguan
Co., Ltd.
Jiangsu
Shuanggou
1,729,668,793. 1,737,859,72
Distillery 8,190,936.81
05 9.86
Stock Co.,
Ltd.
Su Wine
43,274,151.6 411,027,669.
Trade Group 367,753,517.44
4 08
Co., Ltd.
Jiangsu 10,983,280.0
10,983,280.00
Yanghe 0
224
Liquor
Operation
Manageme
nt Co., Ltd
Jiangsu
Dongdi
Union
5,000,000.00 5,000,000.00
Internatio
nal Trade
Co., Ltd.
Jiangsu
Dongdixi
nghui
Internati 5,000,000.00 5,000,000.00
onal
Trade
Co., Ltd
Siyang Lantu
Liquor
3,161,700.00 3,161,700.00
Operation
Co., Ltd.
Hubei
Lihuacun
Liquor 3,000,000.00 3,000,000.00
Industry
Co., Ltd.
Ningxiang
Miluochu
n Liquor 2,129,000.00 2,129,000.00
Industry
Co., Ltd.
Harbin
Binzhou
2,000,000.00 2,000,000.00
Brewery
Co., Ltd.
Su Wine
Group
Jiangsu
3,000,000,000. 3,000,000,00
Wealth
00 0.00
Managem
ent Co.,
Ltd.
Jiangsu Lion
and Sheep
Network 5,460,000.00 5,460,000.00
Technology
Co., Ltd.
Guizhou
943,300,000.
Guijiu Co., 943,300,000.00
00
Ltd.
Jiangsu
Yanghe
Weiketang
300,000.00 300,000.00
Network
Technology
Co., Ltd.
YANGHE 456,880,000.
456,880,000.00
CHILE SPA 00
Jiangsu
Yanghe
1,500,000,000. 1,500,000,00
Investment
00 0.00
Management
Co., Ltd.
Yanghe Hong 18,000,000.0
18,000,000.00
Kong Liquor 0
225
Co., Ltd.
Jiangsu
Jiushang
Internet 5,100,000.00 5,100,000.00
Technology
Co., LTD
Tibet Earth
Third Pole
102,000,000.0 204,000,000.
Liquor 102,000,000.00
0 00
Industry Co.,
Ltd
Jiangsu
Yanghe
Dream 1,186,000,000. 1,206,000,00
20,000,000.00
Investment 00 0.00
Management
Co., Ltd
Suqian City
Sujiu
5,000,000.00 5,000,000.00
Logistics Co.,
Ltd.
Jiangsu
Yanghe
Cultural
Tourism Co.,
Ltd. 1
Siyang
County
Tianlan
Packaging
Service Co.,
Ltd. 2
Jiangsu Blue
Sky Drink
and Catering
Management
Co., Ltd. 3
8,180,436,290. 1,293,000,000. 51,465,088.4 9,524,901,37
Total
49 00 5 8.94
Notes:
1.Jiangsu Yanghe Cultural Tourism Co., Ltd. has not made any investments yet.
2.Siyang County Tianlan Packaging Service Co., Ltd. has not made any investments yet.
3.Jiangsu Blue Sky Drink and Catering Management Co., Ltd. has not made any investments yet.
(2) Investment in joint ventures and associates
Unit: CNY
226
Current period changes
Opening
balance Additi Reduc Invest Adjust
of onal tion of ment ment
Closing
impairm gains for Pro
invest invest balance
Opening ent or other Declar visi Closing
ment ment Other of
balance provision losses compr ation on balance
Investee provisio
(book recog ehensi equity of cash for Oth (book
n for
value) nized ve chang divide im ers value)
impair
under income es nds or pai
ment
the profits rm
equity ent
meth
od
1.Joint ventures
2.Associates
Suqian
5,00
Yanghe 300,1 5,300,1
0,00
Guibinguan 99.49 99.49
0.00
Co., Ltd.
5,00
300,1 5,300,1
Subtotal 0,00
99.49 99.49
0.00
5,00
300,1 5,300,1
Total 0,00
99.49 99.49
0.00
The recoverable amount is determined as the net of fair value less costs of disposal.
□Applicable N/A
The recoverable amount is determined by the present value of estimated future cash flows
□Applicable N/A
Reasons for differences between the foregoing information and information used for impairment
testing in previous years or external information that is clearly inconsistent with the information.
Reasons for differences between the information used in the company's impairment tests in
previous years and the actual situation in the current year that are clearly inconsistent.
Other note:
4. Operating revenue and cost of sales
Unit: CNY
Current period amount Previous period amount
Item
Operating revenue Cost of sales Operating revenue Cost of sales
Primary
12,784,912,675.46 6,545,812,647.88 11,033,861,278.77 5,597,622,749.56
business
Other business 427,288,188.77 320,812,482.16 458,946,611.18 382,597,476.00
Total 13,212,200,864.23 6,866,625,130.04 11,492,807,889.95 5,980,220,225.56
Information relating to revenue
Unit: CNY
Segment 1 Segment 2 Current period amount Total
Category Operatin .Operatin
of Contra Cost of Cost of .Operating Cost of Operating
g g Cost of sales
sales sales revenue sales revenue
revenue revenue
Commodi
ty type
Including
:
12,784,91 6,545,81 12,784,91 6,545,812,6
liquor
2,675.46 2,647.88 2,675.46 47.88
427,288,1 320,812, 427,288,1 320,812,48
Other
88.77 482.16 88.77 2.16
227
By
operating
regions
Including
:
Type of
market
or
customer
Including
:
Type of
contract
Including
:
By the
time of
commodi
ty
transfer
Including
:
By the
contract
time
Including
:
By the
selling
channel
Including
:
13,212,20 6,866,62 13,212,20 6,866,625,1
Total
0,864.23 5,130.04 0,864.23 30.04
Information relating to performance obligations
N/A
Information related to the transaction prices allocated to remaining performance obligations:
The amount of revenue corresponding to performance obligations under contracts that were signed
but not yet fulfilled or partially fulfilled as of the end of this reporting period is
CNY16,052,768,704.31. Out of this amount, CNY16,052,768,704.31 is expected to be recognized as
revenue in 2024, with the remaining amount to be recognized in subsequent years.
5. Investment income
Unit: CNY
Item Current period amount Previous period amount
Investment income from long-term
equity investments under the cost 6,398,636,365.50 5,529,140,387.31
method
Investment income from long-term
equity investments under the equity 300,199.49
method
Investment income from financial assets 6,057,651.32 3,865,643.47
228
held for trading during the holding
period
Investment income from disposal of
178,521,367.26 299,644,621.19
financial assets held for trading
Others -27,758,655.92 -11,790,752.31
Total 6,555,756,927.65 5,820,859,899.66
XVII. Supplementary information
1. Detailed statement of non-recurring profits and losses
Applicable □N/A
Unit: CNY
Item Amount Note
Profit or loss from disposal of
-10,375,821.67
non- current assets
Government grants accounted for, in
the profit or loss for the current period
(except for the government grants
closely related to the business of the 51,085,965.67
Company and given at a fixed amount or
quantity in accordance with the state's
uniform standards)
In addition to the effective hedging
business related to the company's
normal business operations, changes in
fair value from holding financial assets
held for trading, derivative financial
assets, financial liabilities held for
trading, fair value changes, and 211,499,562.04
investment income from disposal of
financial assets held for trading and
derivative financial assets, financial
liabilities held for trading, derivative
financial liabilities and other debt
investments
Other non-operating income and
expense except the items mentioned -19,590,043.61
above
Less: Effect of income tax 59,943,924.97
Effect of minority equity -409,322.32
Total 173,085,059.78 --
Specific details of other profit and loss items that conform to the definition of non-recurring profits
and losses
□Applicable N/A
The Company does not have any Specific details of other profit and loss items that conform to the
definition of non-recurring profits and losses
Statement for extraordinary gain and loss items that the Company defines according to the
definition in Explanatory Announcement of Information Disclosure of Company that Issues
Securities publicly No.1- Extraordinary Gain and Loss and definition of recurrent gain and loss
items that are listed as extraordinary gain and loss in the Explanatory Announcement of
Information Disclosure of Company that Issues Securities publicly NO. 1- Extraordinary Gain and
Loss:
□Applicable N/A
229
2. Return on equity and earnings per share
EPS (CNY/Share)
Profit during reporting period Weighted average ROE
Basic EPS Diluted EPS
Net profits attributable
to ordinary
20.34% 6.6487 6.6487
shareholders of the
Company
Net profits attributable
to ordinary
shareholders of the
Company after 19.99% 6.5338 6.5338
deduction of
extraordinary gain and
loss
3. Difference of the accounting data under accounting rules in and out of China
(1) Difference of the net profit and net assets disclosed in financial report, under both IAS
(International Accounting Standards) and Chinese GAAP (Generally Accepted Accounting Principles)
□Applicable N/A
(2) Difference of the net profit and net assets disclosed in financial report, under both foreign
accounting rules and Chinese GAAP (Generally Accepted Accounting Principles)
□Applicable N/A
(3) Explain the reasons for differences in accounting data under domestic and foreign accounting
standards, and, where the data audited by an overseas audit institution are subject to adjustment
for difference, indicate the name of the overseas institution.
4.Others
None.
230
