Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
Yantai Changyu Pioneer Wine Co., Ltd.
2023 Annual Report
Final 2024-01
April 12, 2024
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Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
Contents
I、Important Notice, Contents and Definition ............................................................................... 3
II、Brief Introduction for the Company and Main Financial Indicators ..................................6
III、Management Discussion and Analysis ................................................................................ 11
IV、Corporate Governance ..........................................................................................................35
V、Environmental and Social Responsibility .............................................................................63
VI、Major issues ........................................................................................................................... 66
VII、Changes in Shares and Shareholders’ Situation ...............................................................76
VIII、Related Situation of Preferred Shares ..............................................................................87
IX、Related Situation of Bonds ................................................................................................... 87
X、Financial Report ......................................................................................................................87
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Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
I. Important Notice, Contents and Definition
The board of directors，the board of supervisors，directors, supervisors and senior executives of the
Company guarantee the truthfulness, accuracy and completeness of the contents contained in the
report with no false records, misleading statements or significant omissions, and undertake
individual and joint legal liabilities.
Mr. Hongjiang Zhou (Person in charge of the Company), Mr. Jianxun Jiang (Person in charge of
accounting work) and Ms. Cuimei Guo (Person in charge of accounting organ & Accountant in
charge) assure the truthfulness, accuracy and completeness of the financial report in the annual
report.
Except for the following directors, other directors attended this board meeting for reviewing this
annual report in person.
Name of director not attending Position of director not attending Reason of not attending the Name of
the meeting personally the meeting personally meeting personally entrustee
Changqing Duan Independent director On a business trip Qinglin Liu
Huirong Liu Independent director On a business trip Zhuquan Wang
Forward-looking statements such as future plans and development strategies covered in this report
do not constitute a substantial commitment of the Company to investors. Investors are advised to
pay attention to investment risks.
About significant risks that may be faced in production and operation process, please refer to “(5)
Potential Risks” of “11. Expectation for the Company’s Future Development” in the “III.
Management Discussion and Analysis” of this report. Investors are advised to read carefully and
pay attention to investment risks.
The Company’s preliminary scheme of profit distribution deliberated and passed by the board of
directors this time is shown as following: Based on the Company’s total 692,249,559 shares, the
Company plans to pay CNY5 (including tax) in cash as dividends for every 10 shares to all
shareholders and send 0 bonus share (including tax); capital reserve will not be transferred to
equity.
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Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
Reference Documents
(1)The original of Annual Report autographed by the Chairman.
(2)The Financial Statements autographed and signed by the Chairman, Chief Accountant and
Accountant in charge.
(3)The Prospectus and Public Offering Announcement for Stock B issued in 1997; The Prospectus
of Intent and The Shares’ Change & A Share’s Public Offering Announcement for Stock A issued
by the capital increase in 2000.
(4) The originals of all documents and announcements that the Company made public during the
report period in the newspapers designated by China Securities Regulatory Commission.
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Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
Definition
Definition Item Refers to Definition Content
Company/The Company Refers to Yantai Changyu Pioneer Wine Co., Ltd.
Changyu Group/Controlling Shareholder Refers to Yantai Changyu Group Co., Ltd.
CSRC Refers to China Securities Regulatory Commission
SSE Refers to Shenzhen Stock Exchange
KPMG Huazhen Refers to KPMG Huazhen LLP (Limited Liability Partnership)
CNY Refers to Chinese Yuan
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Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
II. Brief Introduction for the Company and Main Financial Indicators
1. Company’s information
Stock Abbreviation Changyu A, Changyu B Stock Code 000869, 200869
Stock Abbreviation after Alteration -
Place of Stock Listing Shenzhen Stock Exchange
Legal Name in Chinese 烟台张裕葡萄酿酒股份有限公司
Abbreviation of Chinese Name 张裕
Legal Name in English YANTAI CHANGYU PIONEER WINE COMPANY LIMITED
Abbreviation of English Name CHANGYU
Legal Representative Hongjiang Zhou
Registered Address 56 Dama Road, Yantai, Shandong, China
Postal Code of Registered Address 264000
Historical Change in Registered Address No
Office Address 56 Dama Road, Yantai, Shandong, China
Postal Code of Office Address 264000
Website http://www.changyu.com.cn
E-mail webmaster@changyu.com.cn
2. Contact person and information
Secretary to the Board of Directors Authorized Representative of Securities Affairs
Name Mr. Jianxun Jiang Mr. Tingguo Li
Address 56 Dama Road, Yantai, Shandong, China 56 Dama Road, Yantai, Shandong, China
Tel. 0086-535-6602761 0086-535-6633656
Fax. 0086-535-6633639 0086-535-6633639
E-mail jiangjianxun@changyu.com.cn stock@changyu.com.cn
3. Information disclosure and filing location
Stock exchange website for
Shenzhen Stock Exchange (http://www.szse.cn)
disclosing annual report
Media name and website for China Securities Newspaper , Securities Times, Hong Kong
disclosing annual report Commercial Daily and CNINFO website (http://www.cninfo.com.cn)
Filing location of the Company’s Board of Directors’ Office of the Company, 56 Dama Road, Yantai,
annual report Shandong
4. Registration changes
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Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
Organization Code 913700002671000358
The business scope determined by the Company when it was established
on September 18th, 1997 is production, processing and sales of wine,
distilled liquor, healthy liquor, fruit liquor, non-alcohol beverage, fruit
jam, packing material and winemaking machine.On April 17th, 2008,
approved by the 2007 Annual Shareholders’ Meeting, the Company’s
business scope was changed to production, processing and sales of wine,
distilled liquor, medicinal liquor, fruit liqueur, non-alcohol beverage,
fruit jam, packing material and winemaking machines; licensed import
and export. On May 12th, 2010, approved by the 2009 Annual
Shareholders’ Meeting, the Company’s business scope was changed to
production, processing and sales of wine, distilled liquor, medicinal
Changes for the main businesses
liquor, fruit liqueur, non-alcohol beverage, fruit jam, packing material
of the Company since it was listed
and its products and winemaking machinery; licensed import and
(if have)
export; external investment subject to national policy. On September
23rd, 2016, approved by The 1st Interim Shareholders’ Meeting in 2016,
the Company’s business scope was changed to production of wine and
fruit wine (bulk wine, processing and filling); production of blending
liquor and other blending liquors (grape liqueur); production of other
liquors (other distilled liquors); production, processing and sales of
packing material and winemaking machines; grape plantation and
procurement; tourism resources development (excluding tourism);
packaging design; activity of building rental; licensed import and
export; warehouse business; external investment subject to national
policy.
Changes for all previous
No
controlling shareholders (if have)
5. Other relevant information
The accounting firm appointed by the Company
Name KPMG Huazhen LLP
Level 8, No.2 East Wing of Dongfang Square, No.1 East Chang’an
Address
Street, Beijing
Name of signatory accountants Ms. Ting Wang, Ms. Hui Jiang
The sponsor institution appointed by the Company to perform the duty of continuous supervision
during the report period
□Available Not available
The financial adviser appointed by the Company to perform the duty of continuous supervision
during the report period
□Available Not available
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Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
6. Key accounting data and financial indicators
Whether the Company needs to retrospectively adjust or restate the accounting data of previous
fiscal years.
□Yes No
Increase/decrease compared
2023 2022 2021
with last year (%)
Operating revenue (CNY) 4,384,764,335 3,918,941,160 11.89% 3,953,067,583
Net profit attributed to shareholders
532,438,907 428,681,411 24.20% 500,102,606
of the listed company (CNY)
Net profit attributed to shareholders
of the listed company after
464,073,693 413,831,359 12.14% 472,235,962
deducting non-recurring profits and
losses (CNY)
Net cash flows from operating
1,173,091,743 868,876,647 35.01% 1,125,382,658
activities (CNY)
Basic earnings per share (CNY) 0.78 0.63 23.81% 0.73
Diluted earnings per share (CNY) 0.78 0.63 23.81% 0.73
Weighted average for earning rate
4.98% 4.09% 0.89% 4.84%
of net assets
December 31, December 31, Increase/decrease compared December 31,
2023 2022 with last year-end (%) 2021
Total assets (CNY) 13,336,267,204 13,171,506,378 1.25% 13,472,009,754
Net assets attributed to shareholders
10,841,500,988 10,579,053,733 2.48% 10,447,884,183
of the listed company (CNY)
The lower of the net profits before non-recurring gains and losses and after non-recurring gains and
losses in recent three fiscal years is negative and the audit report in recent one year indicates there is
uncertainty in the Company’s sustainable operation ability
□Yes No
The lower of the net profits before non-recurring gains and losses and after non-recurring gains and
losses is negative
□Yes No
7. Differences in accounting data under PRC accounting standards and international
accounting standards
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Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
(1) Differences for net profit and net assets in the financial report disclosed according to both
international accounting standards and PRC accounting standards
□Available Not available
There are no differences for net profit and net assets in the financial report disclosed according to
both international accounting standards and PRC accounting standards during the report period.
(2) Differences for net profit and net assets in the financial report disclosed according to both
foreign accounting standards and PRC accounting standards
□Available Not available
There are no differences for net profit and net assets in the financial report disclosed according to
both foreign accounting standards and PRC accounting standards during the report period.
8. Key financial indicators by quarter
Unit：CNY
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
Operating revenue 1,131,459,036 835,279,449 834,486,573 1,583,539,277
Net profit attributed to shareholders of the
276,778,987 86,790,449 60,948,191 107,921,280
listed company
Net profit attributed to shareholders of the
listed company after deducting non-recurring 267,069,409 57,252,566 54,891,658 84,860,060
profits and losses
Net cash flows from operating activities 333,578,090 194,341,696 203,051,049 442,120,908
Whether there are significant differences between the above mentioned financial indicators or their
sum and the related financial indicators in the quarterly reports and semi-annual reports disclosed
by the Company.
□Yes No
9. Item and amount of non-recurring profit and loss
Available □Not available
Unit：CNY
Item 2023 2022 2021 Explanation
Profits and losses on disposal of non-current assets (including
23,852,237 -18,902,024 -15,364,993
the provision for asset impairment write-off part)
Government grants recorded into the current profits and
losses(except for those government grants that are closely
related to the enterprise’s normal operation, in line with national 51,523,799 33,145,440 48,240,741
policy provisions and in accordance with certain standard quota
or ration continued to enjoy)
Other non-operating revenues and expenditures in addition to
9,137,420 4,750,614 2,328,169
the aforementioned items
Less：Income tax effect 13,643,745 4,695,173 7,306,787
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Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
Minority shareholders’ equity effect (after taxes) 2,504,497 -551,195 30,486
Total 68,365,214 14,850,052 27,866,644 --
Specific situation of other profit and loss items conforming to the definition of non-recurring profit
and loss
□Available Not available
There does not exist specific situation of other profit and loss items conforming to the definition of
non-recurring profit and loss.
Explanation for regarding the non-recurring profit and loss specified in the Explanatory
Announcement on Public Company’s Information Disclosure No.1 –Non-recurring Profit and Loss
as recurrent profit and loss
□Available Not available
There is no situation regarding the non-recurring profit and loss specified in the Explanatory
Announcement on Public Company’s Information Disclosure No.1 –Non-recurring Profit and Loss
as recurrent profit and loss.
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Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
III. Management Discussion and Analysis
1. Situation of industry in which the Company operates during the report period
In 2023, the overall demand of China’s wine market is still sluggish, coupled with the squeeze of
strong wines such as Baijiu and beer, the market competition is very fierce, and some wine
enterprises are in trouble.
In the face of difficulties and challenges, the Company persisted in taking the market as the center,
adhered to the development strategy of “Focus on middle-and-high level, Focus on high quality,
Focus on large single product” and the marketing philosophy of “obtaining growth from the
terminal and nurturing consumers”, took market-oriented action to accelerate the pace of business
division reform, implement equity incentive, continue to promote circle marketing, banquet
promotion and digital transformation. In 2023, the Company realized the operating revenue of
CNY4384.76million with a year-on-year increase of 11.89% and the net profit attributable to the
parent company’s shareholders of CNY532.44million with a year-on-year increase of 24.20%,
maintaining the leading role in the industry.
2. Main businesses during the report period
The Company need to comply with the disclosure requirements of Food and Liquor Manufacturing
Related Businesses in Shenzhen Stock Exchange Industry Information Disclosure Guideline No. 3 -
Industry Information Disclosure.
(1) Situation of the industry in which the Company operates
During the report period, the Company’s main business was production and operation of wine and
brandy, thus providing domestic and foreign consumers with healthy and fashionable
alcoholic drinks. Compared with earlier stage, there were no significant changes happened to the
Company’s main business. The wine industry that the Company involved in was still in growth
stage. Being affected by many factors in recent years, the competition in domestic wine market was
fierce, the wine consumption continuously declined, and a large number of wine production
enterprises were on the brink of loss, even some wine enterprises were eliminated from the market.
There are no clear signs of a reversal for the industry. However, seen from the long term, the
Company believes that the existing consumption concept might change with the increase of
people’s income level and their pursuit of a relaxed, romantic and healthy lifestyle. More domestic
wine would be drunk by people, and wine would enter more and more household consumption. The
situation of current low average consumption of domestic wine would gradually improve. The
Company was at the forefront in the domestic wine market and was significantly ahead of major
domestic competitors.
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Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
The Company’s products were divided into two series: wine and brandy. For wine, main brands
included Changyu, Noble Dragon, AFIP, Longyu, Golden Icewine Valley, Zenithwirl, Vermouth,
Rena, Baron Balboa, Donelly, Atrio, Kilikanoon and IWCC and so on. For Brandy, main brands
included Koya, Liquan, Mminni, Pagese, Roullet Fransac and so on.
(2) The production licenses of main products obtained by the Company in China
Food Food production license
Producer name Obtaining time Obtaining method
category number
Yantai Changyu Pioneer Wine Co., Approval from SC11537060100050
Alcohol 2021.06.01
Ltd. government authority
Beijing Chateau Changyu AFIP Approval from SC11511280920745
Alcohol 2022.08.22
Global Co., Ltd. government authority
Liaoning Changyu Golden Icewine Approval from SC11521052200370
Alcohol 2021.03.25
Valley Co., Ltd. government authority
Ningxia Chateau Changyu Moser Approval from SC11564010500657
Alcohol 2018.01.25
XV Co., Ltd. government authority
Xinjiang Chateau Changyu Baron Approval from SC11565900100392
Alcohol 2017.08.25
Balboa Co., Ltd. government authority
Yantai Chateau Changyu-Castel Approval from SC11537063600172
Alcohol 2021.06.08
Co., Ltd. government authority
Shaanxi Chateau Changyu Rena Approval from SC11561040400532
Alcohol 2020.10.19
Co., Ltd. government authority
Yantai Chateau Koya Brandy Co., Approval from SC11537063601165
Alcohol 2021.01.11
Ltd. government authority
(3) Explanation for other major events
During the report period, there did not exist the trademark ownership dispute, food quality issue or
food safety incident etc. that had a significant impact on the Company.
Major sales mode
The Company’s main sales mode was the distribution mode, and main sales channel was offline
sales, that is, the Company’s products were distributed to sales terminals through approximately
5,000 distributors at home and abroad and ultimately provided to consumers.
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Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
Distribution mode
Available □Not available
(1) Situation of change in the number of distributors
Number at the Increased number during Number at the
Region
beginning of 2023 this report period end of 2023
1936 129 2065
Eastern China
605 -12 593
South China
447 -31 416
Central China
358 -6 352
North China
170 -9 161
Northwest China
483 -20 463
Southwest China
312 -10 302
Northeast China
HongKong, Macao,Taiwan 602 105 707
China and overseas
4913 146 5059
Total
(2) The Company and distributors took cash spot settlement, and mainly adopted buyout
distribution mode.
2023 2022
Sales model Operating income Operating cost Operating income Operating cost
Gross margin Gross margin
(CNY) (CNY) (CNY) (CNY)
Distribution 3,725,067,921 1,499,834,836 59.74% 3,272,506,752 1,396,195,485 57.34%
Direct sales 659,696,414 287,148,821 56.47% 646,434,408 284,599,247 55.97%
Total 4,384,764,335 1,786,983,657 59.25% 3,918,941,160 1,680,794,732 57.11%
The ratio of sales in self-owned exclusive shop exceeds 10%
□Available Not available
Sales of online direct selling
Available □Not available
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Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
2023 2022
Sales model Operating income Operating cost Operating income Operating cost
Gross margin Gross margin
(CNY) (CNY) (CNY) (CNY)
Distribution 3,725,067,921 1,499,834,836 59.74% 3,272,506,752 1,396,195,485 57.34%
Direct sales 659,696,414 287,148,821 56.47% 646,434,408 284,599,247 55.97%
Total 4,384,764,335 1,786,983,657 59.25% 3,918,941,160 1,680,794,732 57.11%
The change in sales prices of major products accounting for more than 10% of total operating
income in current report period exceeds 30% compared with those in last report period
□Available Not available
Procurement mode and procurement content
Unit：CNY
The amount of the main
Procurement mode Procurement content
procurement content
Price determined by quality comparison with standard price items Raw materials such as grapes/ bulk wine 72,953
Tender/Price determined by quality comparison with standard price items Packaging materials 53,449
Tender/Price determined by quality comparison with standard price items Brewing materials 2,230
Tender/Price determined by quality comparison with standard price items Vineyard supplies 955
Contract Fuel and power 4,387
Price determined by quality comparison with standard price items Other wines and derivatives 2,650
Amount of purchasing raw materials from cooperatives or farmers exceeds 30% of total procedure
amount
□Available Not available
The year-on-year change in the price of major outsourced raw materials exceeds 30%
□Available Not available
Major production mode
The production mode of the Company is self-produce.
Manufacturing consignment
□Available Not available
Major components of operating costs
Please refer to ‘4. Analysis in main business’ in this chapter.
Yield and inventory
Please refer to ‘4. Analysis in main business’ in this chapter.
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Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
3. Analysis of core competitiveness
Compared with the participants in the arena of the Chinese wine competition sector, the Company
owns following advantages:
Firstly, the Company has a large brand influence. Main brands used have a long history. “Changyu”,
“Noble Dragon” and “AFIP” are all “China famous brands” that have strong influence and good
reputation.
Secondly, the Company has set up a nationwide marketing network. The Company has formed a
“three-level” marketing network system mainly composed of the Company’s salesmen and
distributors and the online sales platform has had a certain scale and strong influence, owing strong
marketing ability and market exploitation ability.
Thirdly, the Company has strong scientific prowess and a product R&D system. Relying on the
country’s “State-level Wine R&D Center”, the Company has owned powerful winemaker team,
mastered advanced winemaking technology and production processes and had strong product
innovation capacity and perfect quality control system.
Fourthly, the Company is in possession of a lot of grape-growing bases that are compatible with its
development requirements. The Company has developed a great deal of vineyards in the most
suitable areas for wine grape growing such as Shandong, Ningxia and Xinjiang, and its subsidiary
overseas enterprises also own matching grape bases in local area, making the overall scale and
structure generally meet the Company’s needs for future development.
Fifthly, products in high, medium and low-grade as well as varieties and categories are all complete.
Over 100 varieties of series products such as wine, brandy and sparkling wine covers various grades,
including high, medium and low-grade, which can meet different consumer groups’ demands. The
Company has taken the dominant status in the domestic wine industry after many years’
development and has comparative advantages in the future competition.
Sixthly, the Company has a relatively perfect motivation system. Most of Company’s employees
indirectly hold the Company’s equity through controlling shareholders. There are high consistency
between employee benefits and shareholders benefits, in favor of motivating employees to create
value for shareholders.
Seventhly, the Company has set up flexible and efficient decision-making mechanism. The
Company’s core management team always maintains a working style of unity and pragmatic and
flexible and efficient decision-making mechanism, which makes the Company can deal with market
changes more calmly.
Eighthly, the global production capacity layout has been basically completed. The Company has
completed production capacity layout in China, France, Chile, Spain, Australia and other major
wine producing countries in the world, enabling making better use of global high-quality raw
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Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
material resources, capital, talents and advanced production processes and technologies to provide
consumers with diversified quality products and better serve consumers.
Based on the above reasons, the Company has formed relatively strong core competence and will
maintain a relatively dominant position in the future predictable market competition.
4. Analysis in main business
(1) Summarization
Increase or decrease
Description during this period over Cause of significant changes
last year
Operating revenue 11.89%Mainly due to the increase in sales volume
Operating cost 6.32%Mainly due to the increase in the procurement cost
Mainly due to the increased marketing expense resulting
Sales expense 20.49%
from increased market investment
Mainly due to the increase in performance salary resulting
Management expense 5.70%
from increased revenue
Mainly due to the Company’s increased R&D efforts, the
R&D expense 12.85%
cost of testing and consumable materials increased.
Mainly due to the increase in loan interest rate borrowing
Financial expense 52.74%
by overseas companies.
Net amount of cash flow generated Mainly due to the increase in operating income during the
35.05%
in operating activities year.
Net amount of cash flow generated
-124.48%Mainly due to the increase in time deposit during the year.
in investment activities
Net amount of cash flow generated
18.72%Mainly due to lower loan repayments during the year.
in financing activities
Review and summary of the process of the Company’s early-disclosed development strategy and
business plan during the report period
During the report period, demand of China’s wine industry did not improve much, and all the staff
of the Company made concerted efforts and forged ahead to complete the main work objectives
identified at the beginning of the year. The Company realized the operating revenue of
CNY4384.76million with a increase of 11.89% compared with last year, higher than the target
fixed at the beginning of the year of realizing operating revenue no less than CNY4.2billion, and
realized the net profit attributable to the parent company’s shareholders of CNY532.44million with
a increase of 24.20% compared with last year. The main works during the report period were
shown as followed:
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Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
Firstly, the Company kept innovating, and insisted on leading the development of the Company
with innovation. The Company implemented the restricted share incentive plan, which stimulated
the vitality of the enterprise and promoted the improvement of performance; integrated and
optimized Yantai local production system and the self-operated grape base in Yantai, which better
played the advantages of equipment production capacity and improved personnel allocation, and
strengthened profit orientation and quality orientation, achieving cost reduction and efficiency
increase; achieved stage results in the screening of minority variety, the utilization of local yeast,
the aging in Chinese oak and pottery, and light and simplified treatment; newly obtained one
national invention patent and one utility model patent; developed and launched new products such
as National-red Longyu, AFIP vast land series, Koya Loong-year zodiac brandy, Koya
Pinzhongliquan XO, Kilikanoon 7-star Crown and Donelly Kirin series; integrated and upgraded
the “Changyu Quality Life +” member applet and “Changyu Wine Official Flagship Store” applet,
which improved user experience and reduced the subscription cost and operation and maintenance
expense.
Secondly, the Company deepened the construction of the business division system, which played a
decisive role in improving the performance. In combination of its own products and market
characteristics, each business division of the Company carried out multiform marketing activities
such as banqueting promotion, product tasting, chateau experience and live sales based on different
timing and different local conditions; strengthened the construction of marketing team system, and
established the “marketing promotion” and “credit” evaluation system of distributors and affiliates;
focused on the circle marketing as well as the specified action; accelerated the construction of
product experience hall, achieving good results.
Thirdly, the Company adhered to the bottom-line consciousness and did not touch the red line. The
Company continued to consolidate the sense of safety production and strengthened internal
supervision and unannounced inspection; carried out special training on safety education at
different positions, stages and items, and also took special investigation and rectification activities
for major accident potentials; improved the construction of the safety management informatization
platform and comprehensively improved the level of safety management and work efficiency, and
no major accidents occurred throughout the year; strictly implemented the entity responsibility for
food safety, and further standardized and institutionalized the management of production sites and
key links through the establishment of the “quality day”, “daily control, weekly investigation,
monthly scheduling” systems. With ingenuity to keep the original heart, the Company adhered to
the concept of “product quality is the most fundamental” unwaveringly, and won more than 227
gold-and-above-level awards in the well-known local and abroad competitions last year; received
the good news that “Koya” brandy was selected into the second batch of “outstanding Shandong
products” brands; successfully completed the grape purchase and processing work, and
significantly improved both the quantity and the quality of premium bulk wine.
Fourthly, the Company strengthened financial management and intensified the function of audit
supervision. The Company completed a number of audit work such as key expense audit, profit
authenticity audit, asset integrity and effectiveness audit and economic responsibility investigation,
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Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
and conducted punishment to relevant responsible person; strengthened fund management and
increased interest income through structured deposits, agreed deposits and other ways; strengthened
the financial supervision in overseas enterprises and helped solve the financing problems, ensuring
the continuable operation of overseas enterprises.
(2) Revenue and cost
① Composition of operating revenue
Unit: CNY
2023 2022 Year-on-year
Proportion in Proportion in increase or
Amount Amount
operating revenue operating revenue decrease (%)
Total operating revenue 4,384,764,335 100% 3,918,941,160 100% 11.89%
Sector-classified
Sector of liquor and
4,384,764,335 100% 3,918,941,160 100% 11.89%
alcoholic beverage
Product-classified
Wine 3,139,234,808 71.59% 2,841,437,996 72.51% 10.48%
Brandy 1,152,841,194 26.30% 990,847,691 25.28% 16.35%
Tourism 82,987,641 1.89% 76,422,314 1.95% 8.59%
Others 9,700,692 0.22% 10,233,159 0.26% -5.20%
Area-classified
Domestic 3,761,534,794 85.79% 3,320,757,555 84.74% 13.27%
Overseas 623,229,541 14.21% 598,183,605 15.26% 4.19%
Sales model- classified
Distribution 3,725,067,921 84.95% 3,272,506,752 83.50% 13.83%
Direct sales 659,696,414 15.05% 646,434,408 16.50% 2.05%
② The industry, product, region and sales model that account for over 10% of the
Company’s operating revenue or operating profit
Available □Not available
Unit: CNY
Year-on-year Year-on-year Year-on-year
Operating Gross increase or increase or increase or
Operating cost
revenue margin decrease (%) of decrease (%) of decrease (%) of
operating revenue operating cost gross profit rate
Industry-classified
Industry of liquor
and alcoholic 4,384,764,335 1,786,983,657 59.25% 11.89% 6.32% 3.74%
beverage
Product-classified
Wine 3,139,234,808 1,285,794,140 59.04% 10.48% 4.18% 4.02%
18
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
Brandy 1,152,841,194 460,505,979 60.05% 16.35% 13.32% 1.80%
Tourism 82,987,641 35,413,161 57.33% 8.59% 1.64% 5.36%
Others 9,700,692 5,270,377 45.67% -5.20% -2.06% -3.69%
Area-classified
Domestic 3,761,534,794 1,413,634,659 62.42% 13.27% 9.79% 0.82%
Overseas 623,229,541 373,348,998 40.09% 4.19% -8.62% 7.88%
Sales model- classified
Distribution 3,725,067,921 1,499,834,836 59.74% 13.83% 7.42% 2.40%
Direct sales 659,696,414 287,148,821 56.47% 2.05% 0.90% 0.50%
Under the condition that the statistical caliber of the Company’s main business data is adjusted
during the report period, the Company’s main business data adjusted on the basis of caliber at the
end of report period in recent one year.
□Available Not available
③ Whether the Company’s sales revenue for material object is more than labor service
revenue
Yes □No
Sector Item Unit 2023 2022 Year-on-year increase or decrease (%)
Alcohol and Sales volume Ton 95,557 93,004 2.75%
alcoholic beverage Yield Ton 90,897 90,099 0.89%
industry Inventory Ton 25,996 27,427 -5.22%
Sales volume Ton 65,677 65,540 0.21%
Wine Yield Ton 62,772 66,269 -5.28%
Inventory Ton 17,037 16,441 3.63%
Sales volume Ton 29,880 27,464 8.80%
Brandy Yield Ton 28,125 23,830 18.02%
Inventory Ton 8,959 10,986 -18.45%
Explanation on the causes of over 30% year-on-year changes of the related comparison data
□Available Not available
④ The fulfillment of significant sales contract and purchase contract signed by the Company
up to the report period
□Available Not available
⑤ Composition of operating costs
Product categories
19
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
Unit: CNY
2023 2022 Year-on-year
Product
Item Proportion in the Proportion in the increase or
category Amount Amount
operating cost (%) operating cost (%) decrease (%)
Blending liquor 656,311,928 51.04% 607,707,572 49.24% 8.00%
Packing material 318,464,336 24.77% 306,725,909 24.85% 3.83%
Wages 43,873,400 3.41% 34,568,141 2.80% 26.92%
Wine
Manufacturing cost 174,460,788 13.57% 186,498,787 15.11% -6.45%
Contract performance
92,683,688 7.21% 98,684,162 8.00% -6.08%
costs
Blending liquor 216,764,039 47.07% 197,677,900 48.64% 9.66%
Packing material 143,038,953 31.06% 126,089,609 31.03% 13.44%
Wages 9,390,550 2.04% 8,076,651 1.99% 16.27%
Brandy
Manufacturing cost 58,406,958 12.68% 42,548,467 10.47% 37.27%
Contract performance
32,905,479 7.15% 31,994,291 7.87% 2.85%
costs
Explanation
No
⑥ Whether there are changes of consolidation scope during the report period
Yes No
⑦ Major changes or adjustments of the Company’s businesses, products or service during
the report period
□Available Not available
⑧ Information of major sales customers and major suppliers
The Company’s major sales customers
The total sales amount of the top five customers（CNY） 285,095,992
The proportion that total sales amount of the top five customers accounting for the annual total
6.50%
sales amount（%）
The proportion that sales amount of the related party in the total sales amount of the top five
0%
customers accounting for the annual total sales amount（%）
Information of the Company’s 5 biggest sales customers
No. Customer name Sales amount（CNY） Proportion in total sales for the year（%）
1 Rank 1st 170,870,674 3.90%
20
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
2 Rank 2nd 33,316,135 0.76%
3 Rank 3 rd 28,625,515 0.65%
4 Rank 4 th 28,373,917 0.65%
5 Rank 5 th 23,909,751 0.55%
Total -- 285,095,992 6.50%
Other situation explanations of major customers
□Available Not available
Information on the Company’s main suppliers
The total purchase amount of the top 5 suppliers 378,880,684
The proportion of the total purchase amount of the top 5 suppliers in the annual purchase
27.73%
amount
The proportion of the related party purchase amount in the top 5 supplier purchase amount
6.15%
in annual purchase amount
Information on the Company’s top 5 biggest suppliers
No. Supplier name Purchase amount(CNY) Proportion in total purchase for the year（%）
1 Rank 1 st 124,158,163 9.09%
2 Rank 2 nd 83,991,232 6.15%
3 Rank 3rd 75,882,684 5.55%
4 Rank 4 th 57,208,512 4.19%
5 Rank 5 th 37,640,093 2.75%
Total -- 378,880,684 27.73%
Other situation explanations of main suppliers
□Available Not available
(3) Expense
Unit: CNY
Year-on-year increase
2023 2022 Explanation of significant changes
or decrease (%)
Mainly because of increased marketing
Sales expense 1,239,782,776 1,028,966,138 20.49% expense resulting from increased market
investment
Mainly because of the increase in
Management
303,990,858 287,605,531 5.70% performance salary resulting from
expense
increased revenue
Financial Mainly because of increase in loan interest
11,083,459 7,256,207 52.74%
expense borrowing by overseas companies.
Research and 17,413,534 15,431,310 12.85% Mainly due to the Company’s increased
21
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
Development R&D efforts, the cost of testing and
expense consumable materials increased.
The Company needs to comply with the disclosure requirements of the food and wine
manufacturing industry as set out in the Guidance on Self-Regulation of Listed Companies of
Shenzhen Stock Exchange No.3- Industry Information Disclosure.
(4) Research and development investment
Available □Not available
Name of main
research and Project Project Predicted influence in the Company’s
Target
development purpose progress future development
project
— — — — —
The Company’s research and development personnel
2023 2022 Percentage of changes (%)
Number of R&D personnel (person) 139 139 0%
The proportion of the number of R&D personnel 6.35% 6.12% 0.23%
Educational structure of R&D personnel
Bachelor 48 48 0%
Postgraduate 25 25 0%
Doctor 1 1 0%
Below Bachelor 65 65 0%
Age structure of R&D personnel
Under 30-year-old 34 35 -2.86%
30-to 40-year-old 41 41 0%
Above 40-year-old 64 63 1.59%
The investment of the Company’s R&D
2023 2022 Percentage of changes (%)
R&D investment amount (CNY) 17,413,534 15,431,310 12.85%
R&D investment as a percentage of operating income 0.40% 0.39% 0.01%
Amount of R&D investment capitalized (CNY) 0 0 0%
Capitalized R&D investment as a percentage of R&D
0% 0% 0%
investment
Reasons and effects of major changes in the composition of the company’s R&D personnel
□Available Not available
Reasons for the significant change in the proportion of total R&D investment in operating income
compared with the previous year
□Available Not available
22
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
Reasons for the substantial changes in the capitalization rate of R&D investment and its rationality
explanation
□Available Not available
(5) Cash flow
Unit: CNY
Year-on-year increase
Item 2023 2022
or decrease (%)
Subtotal of cash inflow in operating activities 4,619,240,588 3,929,156,504 17.56%
Subtotal of cash outflow in operating activities 3,446,148,845 3,060,279,857 12.61%
Net amount of cash flow generated in operating activities 1,173,091,743 868,876,647 35.01%
Subtotal of cash inflow in investment activities 272,891,533 162,953,148 67.47%
Subtotal of cash outflow in investment activities 596,232,219 306,991,362 94.22%
Net amount of cash flow generated in investment activities -323,340,686 -144,038,214 -124.48%
Subtotal of cash inflow in financing activities 677,271,426 641,331,495 5.60%
Subtotal of cash outflow in financing activities 1,176,936,494 1,256,089,072 -6.30%
Net amount of cash flow generated in financing activities -499,665,068 -614,757,577 18.72%
Net increase of cash and cash equivalents 350,402,152 110,426,571 217.32%
Explanation of main influence factors contributing to great changes in related data on year-on-year
basis
□Available Not available
Explanation on the causes of major differences between the net cash flow generated by the
Company’s operating activities and net profit of this year during the report period.
□Available Not available
5. Analysis to non-main business
□Available Not available
23
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
6. Assets and liabilities
(1) Significant changes of assets composition
Unit: CNY
At the end of 2023 At the beginning of 2023
Proportion increase or Explanation on
Proportion in the total assets Proportion in the total assets
Amount Amount decrease (%) significant changes
(%) (%)
Monetary funds 2,217,693,647 16.63% 1,651,454,115 12.54% 4.09% No significant changes
Receivables 382,132,334 2.87% 343,982,985 2.61% 0.26% No significant changes
Contract assets 0% 0% 0% No significant changes
Inventory 2,765,390,587 20.74% 2,903,398,515 22.04% -1.30% No significant changes
Investment real estate 24,482,831 0.18% 22,115,318 0.17% 0.01% No significant changes
Long-term equity investments 38,285,620 0.29% 41,371,385 0.31% -0.02% No significant changes
Fixed assets 5,795,082,569 43.45% 6,028,137,972 45.77% -2.32% No significant changes
Construction in progress 3,323,241 0.02% 40,934,161 0.31% -0.29% No significant changes
Right-of-use asset 121,745,910 0.91% 139,887,159 1.06% -0.15% No significant changes
Short-term borrowings 364,981,445 2.74% 389,378,480 2.96% -0.22% No significant changes
Contract liability 175,278,849 1.31% 165,727,991 1.26% 0.05% No significant changes
Long-term borrowings 66,616,443 0.50% 128,112,115 0.97% -0.47% No significant changes
Lease liability 85,038,335 0.64% 109,505,093 0.83% -0.19% No significant changes
Foreign asset has a high proportion
Available □Not available
24
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
Control measures for Proportion of Whether there
Formation Operation Earning
Details of assets Assets scale Location safeguarding of overseas assets in the are significant
reasons mode condition
asset security Company’s net assets impairment risks
Hacienda Y The Company participates in
Vinedos Acquisition of Independent making important decisions through
576,893,966 Spain 21,492,701 4.33% No
Marques Del equity operation board of directors and appoints CFO
Atrio. SL on financial management.
Indomita Wine The Company participates in
Establishment Independent
Company Chile, 566,831,085 Chile making important decisions through 11,018,541 4.25% No
of joint venture operation
S.p.A. board of directors.
The Company participates in
Kilikanoon Acquisition of Independent
185,704,067 Australia making important decisions through (7,855,422) 1.39% No
Estate Pty., Ltd. equity operation
board of directors.
Francs Champs Sole The Company participates in
Independent
Participations proprietorship 219,388,533 France making important decisions through (2,057,375) 1.65% No
operation
SAS establishment board of directors.
Other
None
explanation
(2) Assets and liabilities measured at fair value
□Available Not available
(3) Limitations of assets rights up to the end of the report period
Please refer to the ‘52. Assets with restrictive ownership title or right of use’ of the ‘Notes to the financial statements’ in this report’s financial report.
7. Investment condition analysis
25
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
(1) Overall situation
Available □Not available
Investment amount during the report period (CNY) Investment amount of the same period of last year (CNY) Variation
46,150,000 126,590,000 -63.54%
(2) Cases of acquired significant equity investments during the report period
□Available Not available
(3) Cases of significant ongoing non-equity investments during the report period
Available □Not available
Unit: CNY
Accumulated Accumulated Reasons for
Whether Involved Investment
actual investment realized unreached Disclosure
Investment belongs to sectors of amount during Capital Project Estimated Disclosure index (if
Project name amount up to the earnings up to planning schedule date (if
mode fixed assets investment the report source progress earnings have)
end of the report the end of the and estimated have)
investment projects period
period report period earnings
Yantai Please refer to
Changyu Resolution
Liquor and
International Announcement of
Self-constr alcoholic Owned
Wine City Yes 5,780,000 1,705,784,100 100% 0 0 — 2017.04.22 Seventh Session
ucted beverage fund
Blending and Board of Directors
sector
Cooling 4th Meeting,
Center Resolution
26
Yantai Changyu Pioneer Wine Co. Ltd. 2023 Annual Report
Yantai Announcement of
Changyu Seventh Session
International Self-constr Owned Board of Directors
Yes 1,150,000 1,136,520,000 100% 0 0 — 2017.04.22
Wine City ucted fund 8th Meeting,
Bottling Resolution
Center Announcement of
Oak Barrel Seventh Session
Self-constr Owned
Procurement Yes 29,220,000 207,854,200 95% 0 0 — 2021.04.28 Board of Directors
ucted fund
Project 10th Meeting,
Intellectualize Resolution
d Upgrade Announcement of
and Eighth Session
Renovation Self-constr Owned Board of Directors
Yes 10,000,000 60,113,000 100% 0 0 — 2022.04.27
Project of ucted fund 4th Meeting,
Changyu Resolution
Wine Culture Announcement of
Museum Eighth Session
Board of Directors
11th Meeting and
Infrastructure Resolution
improvement Announcement of
project of Self-constr Owned Ninth Session Board
Yes 0 0 100% 0 0 — 2022.04.27
Changyu ucted fund of Directors 5th
Industrial Meeting disclosed
Park on China Securities
Journal,
Securities Times and
27
Yantai Changyu Pioneer Wine Co. Ltd. 2023 Annual Report
CNINFO
(http://www.cninfo.
com.cn/)
Total -- -- -- 46,150,000 3,110,271,300 -- -- 0 0 -- -- --
(4) Financial assets investment
① Security investment situation
□Available Not available
There are no security investments for the Company during the report period.
② Derivatives investment
□Available Not available
There are no derivatives investments for the Company during the report period.
(5) The usage situation of raised capital
□Available Not available
There are no usage situations of raised capital for the Company during the report period.
8. Sale of significant assets and equities
(1) Sale of significant assets
Available Not available
There is no sale of significant assets during the reporting period.
(2)Sale of significant equities
28
Yantai Changyu Pioneer Wine Co. Ltd. 2023 Annual Report
Available Not available
The equity contributed The proportion The Whether
Wheth Whether it is
to the net profit of the of the net profit Equity associated all the
Transacti er it is implemented as planned;
listed company from The impact of contributed by sale relationsh equity
Counter Sold Sale on price a If it is not implemented as Disclos Disclosure
the beginning of the the sale on the equity sale to pricing ip with involved
party equity date (CNY’00 related planned, explain the ure date index
current period to the company the total net principl the have been
00) transa reasons and the measures
date of sale profit of the es counterpa transferre
ction taken by the company
(CNY’0000) listed company rty d
The
Announcement
The Company
on Equity
will speed up
The Transfer of
the disposal of
equity Langfang
idle assets,
of Development
reduce asset
Langfa Zone
impairment
ng Castel-Changy
Langfang losses, better
Develo Negotia u Wine Co.,
Daxuan 2023. recover funds, 2023.11
pment 2,228.88 -120 0% ted No - Yes Yes Ltd. (2023
Trading 12.19 optimize asset .10
Zone pricing Interim-031)
Co., Ltd. structure and
Castel- disclosed on
improve
Changy China
operation
u Wine Securities
efficiency
Co., Journal,
though this
Ltd. Securities Time
equity
s and CNINFO
transaction
(http://www.cni
nfo.com.cn/)
9. Analysis of main holding and joint stock companies
Available Not available
Situation of main subsidiaries and joint stock companies affecting over 10% of the Company’s net profit
29
Yantai Changyu Pioneer Wine Co. Ltd. 2023 Annual Report
Unit: CNY
Company Main Registered Operating Operating
Company name Total assets Net assets Net profit
type business capital revenue profit
Yantai Changyu
Pioneer Wine Sales Subsidiary Sales CNY8million 581,183,436 81,160,443 2,894,335,691 386,570,018 326,400,726
Co., Ltd.
Yantai Changyu Wine
Subsidiary Sales CNY5million 317,295,336 283,301,622 1,140,824,471 205,789,026 154,394,694
Sales Co., Ltd.
Changyu Trading Co.,
Ltd. in Development Subsidiary Sales CNY5million 92,008,680 15,263,030 213,653,045 81,185,733 60,768,161
Zone of Yantai
Laizhou Changyu
Subsidiary Sales CNY1million 66,295,721 1,077,871 293,739,285 60,622,706 45,467,030
Wine Sales Co., Ltd.
Acquisition and disposal of subsidiaries during the report period
Available Not available
Acquisition and disposal of subsidiaries
Company name Impact on overall production, operation and performance
during the reporting period
The Company will speed up the disposal of idle assets, reduce asset
Langfang Development Zone
Sale of equity impairment losses, better recover funds, optimize asset structure and
Castel-Changyu Wine Co., Ltd.
improve operation efficiency though this equity transaction
Explanation on main holding and joint stock companies
Yantai Changyu Pioneer Wine Co., Ltd., Yantai Changyu Pioneer Wine Sales Co., Ltd. and French
VASF Company transferred 100% equity of Langfang Development Zone Castel-Changyu Wine Co.,
Ltd. they hold to Langfang Daxuan Trading Co., Ltd..
10. Situation of the structured subjects controlled by the Company
□Available Not available
11. Expectation for the Company’s future development
On the basis of our limited experience and professional skills, the Company makes the following
judgments on the wine industry and future development:
(1) The sector competition pattern and development trend
In 2024, affected by the increased uncertainty caused by various factors, people’s consumption
sentiment will be more cautious; coupled with the strong squeeze from other alcoholic products, the
growth in domestic wine consumption will be very difficult. Most wine enterprises are small, own
poor profitability, and are unable to cultivate the market, hence the whole industry is still difficult
to get out of the trough.
30
Yantai Changyu Pioneer Wine Co. Ltd. 2023 Annual Report
Although the development of the wine industry is currently encountering some difficulties, there
are also lots of positive factors. President XI Jinping pointed out that ‘China’s wine industry has
great prospects’ when he inspected Ningxia; The local governments of each wine-producing region
are actively responding to support the development of the wine industry; There are many
high-net-worth individuals in China, bringing a large base of high-end demand, and the atmosphere
of wine consumption and the perception of the fact that wine is healthy are gradually forming;
Young and trendy drinkers are on the rise, beginning to influence the future development trend of
wine consumption; With the rise of the national tide, the consumption of domestic goods has
gradually become a fashion; In the long run, the huge development potential of domestic wines has
not changed and the industry will continue to focus on core brands.
In such a case of long-term coexistence of opportunities and challenges, as always, the Company
believes that those enterprises that possess strong brand influence and marketing ability, catch the
opportunities, actively take adjustments, make full use of newly emerging and traditional sales
channels, make efforts to guide and cultivate wine consuming groups, timely satisfy the consumers’
demands and provide products with high cost performance, will have the opportunity to be the final
winner of competitions, forming a new pattern of the future Chinese wine market.
(2) The Company’s development strategy
The Company will adhere to the development strategy of “Focus on middle-and-high level, Focus
on high quality, Focus on large single product” and the marketing philosophy of “obtaining growth
from the terminal and nurturing consumers”, follow the work guideline of “invariable direction,
unweakened strength, partial improvement, continuous innovation”, give full play to own
advantages, and strive to achieve various operating targets.
(3) Management plan for the new year
In 2024, the Company will try its best to realize operating revenue of not less than CNY4.7billion
and control the main operating costs and three period expenses below CNY3.7billion.
(4) Measures to be adopted by the Company
In the new year, the development of the wine industry is still not optimistic. The Company will lead
and unite all employees, enhance confidence, face challenges, overcome difficulties, focus on target
indicators, and do all the best to seek development. The company will mainly do the following
work.
First, it is to continue to advocate and carry forward the spirit of service, the spirit of ingenuity and
the spirit of fairness in the whole company. The Company will play the role of “waiter” well and
firmly establish the “totally customer-centric” concept so as to better satisfy consumers; continue to
carry forward the spirit of “ingenuity”, and constantly improve product quality; stick to the bottom
line, do not touch the red line, and conduct the unselfish and strict management.
Second, it is to adhere to the “three guarantees, one promotion”. The Company will resolutely do
well in the investigation and management of major accidents, increase safety inspection and
31
Yantai Changyu Pioneer Wine Co. Ltd. 2023 Annual Report
assessment efforts to ensure safe production; adhere to “the most strict management system, the
most rigorous preventive measures, the most severe punishment” to ensure product quality and
safety; adhere to the order driven, balance the off-peak season orders, to ensure that the production
performance rate is steadily improved; adhere to compete with targeted products, actively listen to
market feedback, give full play to the role of the winemaker system, and further improve product
quality.
Third, it is to reduce the scale of assets and strengthen the assessment of profits. The Company will
continue to strictly control capital expenditure and promote the disposal of idle assets; continue to
strengthen the profit-oriented performance assessment and the assessment in the comprehensive
gross margin and main products’ gross margin, striving to achieve stable profit growth.
Fourth, it is to further improve the sales division system. The business divisions involving high-end
products will vigorously promote the breakthrough of certain circles, adhere to search for
multi-shareholder, cross-border and empowered, and adhere to focus on tasting meetings, chateau
tours and other direct and effective circle-marketing methods, in order to cultivate brand supporters
and expand product consumer groups; Noble Dragon Division will continue to carry out
banquet-based marketing and promotion, focus more on market share, and actively promote
products into community stores and concentrated areas of colleges and universities to expand the
wine “cake”; Brandy Division will increase the marketing of Koya and Liquan products so as to
make brandy truly become a booster for the development of the Company; Online Division will do
the best to increase the sales of sparkling wine, port wine, Vermouth and rhizoma polygonati
alcoholic product, cultivate new growth points, adhere to the principle of “different specifications
in same brand, different products in different brands”, in order to realize the supplement of online
and offline sales; Tourism Division will focus on business development and enhance the experience
of tourists (customers) at the same time, make tourists become customers, pay close attention to
new forms of tourism, and strengthen cooperation with influential tourism companies, so as to
achieve mutual drainage and promote the sales of proprietary products.
Fifth, it is to increase product innovation and management innovation, and strive to achieve new
breakthroughs in various work. The Company will establish and improve the operation system of
low-degree wine and new Liquan brandy products. To low-degree wine, the Company will adopt
“new products, new system, new team, new scene” and strive to make the wine market bigger; to
new Liquan brandy products, the Company will take deep cultivation in Shandong market, expand
Shandong and Guangdong market, to lay the foundation for brandy structure adjustment and scale
expansion. With “Chinese Terroir, Changyu Style, World Quality” as the quality orientation, the
Company will make in-depth research on Chinese terroir (producing area), Chinese technology,
Chinese expression and Chinese culture, strengthen product innovation as well as development and
production of “Chinese characteristics” products. It will also do well in the implementation of the
Company’s restricted share incentive plan to give better play to the long-term incentive mechanism
of equity and stimulate the vitality of enterprise development; optimize the shareholding structure
of overseas enterprises to promote the development of enterprises; establish a “mutual assistance”
relationship in technology, equipment and personnel between Yantai local enterprises and off-site
chateaux, make overall consideration and comprehensive policies, give full play to production
synergies, and improve per capital work efficiency; increase the recruitment and introduction of
32
Yantai Changyu Pioneer Wine Co. Ltd. 2023 Annual Report
middle-and-above-level personnel, especially city managers and provincial managers who are
helpful for market circle marketing breakthroughs, and expand the team of innovative marketing
talents; make innovation in media publicity, deal with the current and long-term relationship, fully
integrate the relationship between the “Changyu” parent brand and each sub-brand, and further
enhance the brand influence of century-old Changyu; solve the problem of “landing” of the brand
and “reaching” of core consumers.
(5) Potential risks
① Risk in price fluctuation of raw materials
Grapes are the Company’s main raw materials. The grape’s yield and quality are affected to a
certain extent by the natural factors such as drought, wind, rain, frost and snow. These force majeure
factors greatly influence the quantity and price of the grapes in this Company orders and add the
uncertainty to the Company’s production and operation. Therefore, the Company will lower the
risks that are likely to affect grape quality and result in price fluctuation by means of expanding the
self-run vineyards, strengthening the vineyard management and optimizing the layout of vineyards.
② Risk in uncertainty of market input and output
To cope with the cutthroat market competition and to meet the needs for market development, the
Company has input more and more capital in the market and the sales expense has taken up a higher
percentage point in the business revenue. The input-output ratio will affect the Company’s operating
results to a great extent and the risk that some investments may not reach the expectations is likely
to occur. Therefore, the Company will strengthen market research and analysis, enhance market
forecast accuracy and continue to perfect the input-output evaluation system to ensure the
investments in market to be satisfactory as expected.
③ Risk in product transport
The Company’s products are fragile and sent to different places all over the world, mostly by sea,
railway and expressway. The peak season of sales is usually in cold winter and close to the spring
festival when market has a great demand. At that time, the natural and human factors such as serious
shortage of transport capacity resulting from busy flow of people and goods, wind, snow, freezing as
well as traffic accidents make the transport departments difficult to send products to markets in time
and safely. As a result, it makes this Company have to face the risks of missing the peak season of
sales. Therefore, the Company will adopt all methods possible like making precise sales prediction
and well designed connection of production and sales, reasonably arranging production and
transport means and making use of more available warehouses in different places to lower these
kinds of risks.
④ Risk in investment faults
The Company invested many projects in the previous periods and the investment amounts were
relatively large. For individual project, owing to the influence of various factors, it led to have the
risks of facing with the investment amount out of budget or hardly taking back the expected
investment earnings. The Company will take an adequate argument and scientific decision-making
for investment projects, try hard to reduce and avoid investment risks.
⑤ Risk in exchange rate
The Company’s overseas subsidiaries export products to many different countries and the export
amount is relatively large. There may be exchange losses or gains due to exchange rate fluctuation.
33
Yantai Changyu Pioneer Wine Co. Ltd. 2023 Annual Report
⑥ Other risks
During the production and sales of the Company’s products, it may be affected by force majeure
such as wars, typhoons, earthquakes, etc..
12. Activity registration form for receptions of research, communication, visit and other
activities during the report period
Available □Not available
Type of Main discussed
Reception Reception Reception Basic situation
reception Reception object contents and
time place pattern index of reception
object provided data
Mr. Weiliang Tang from BOCI
Securities Limited, Mr. Lei Kan
from Northeast Securities, Ms.
Yuelang Zhou from China
The recent The Record of
The International Capital
production and Investor-relations
meeting Field Corporation Limited, Ms. Qing
2023.05.26 Institution operation Activity disclosed
room of the research Li from Rosefinch Fund
situation of the on Shenzhen Stock
Company Management Co. Ltd., Mr. Wei
Company Exchange
Yan from Fullgoal Fund
Management Company Limited
and Ms. Meng Wang from
Pingan Securities.
The recent The Record of
The
production and Investor-relations
meeting Field
2023.05.26 Institution Minority shareholders operation Activity disclosed
room of the research
situation of the on Shenzhen Stock
Company
Company Exchange
13. Implementation of the “The Improvement Both on Quality and Return” action plan
Whether the company disclosed the “The Improvement Both on Quality and Return” action plan
□Yes No
34
Yantai Changyu Pioneer Wine Co. Ltd. 2023 Annual Report
IV. Corporate Governance
1. Current Corporate Governance Situation of the Company
(1) About shareholders and shareholders’ meeting
The Company has set up the Deliberation Rules of Shareholders’ Meeting, and convened the
shareholders’ meetings in strict accordance with requirements of standard opinions of shareholders’
meeting, made the great effort to provide convenient conditions for more shareholders to
participate the shareholders’ meeting, and ensured all shareholders to enjoy same equity and well
exercised their rights. The Company drew great attention to the communication and exchange with
shareholders, actively responded the shareholders’ inquiry and questions, and widely listened to the
suggestions and comments from shareholders.
(2) About the Company and holding shareholder
The Company has independent business and self-management capacity, which is independent from
the controlling shareholders in business, staffs, assets, institutions and finance. The Board of
Directors, Board of Supervisors, management teams and also internal institutions are able to
operate independently in the Company. The controlling shareholders of the Company could
regulate their behaviors without directly or indirectly interfering in the Company’s decision-making
and business activities beyond the shareholder’s meeting; meanwhile, there is no case of
encroaching on the Company’s assets and damaging the interest of the Company and minority
shareholders.
(3) About the director and board of directors
The Company strictly appoints all directors in light of Corporation Act and Articles of Associations.
The qualifications of all directors are in line with the requirements of laws and regulations. In
accordance with the requirements of Corporate Governance Guidelines, the Company has carried
out the cumulative voting system in the director selection. At present, the Company has five
independent directors accounting for above one third of all directors, and the number and personnel
composition of board of directors was basically in accord with requirements of regulations as well
as Articles of Associations. All directors of the Company were able to carry out work in accordance
with the Rules of Board of Directors’ Procedure and Working Rules for Independent Directors,
punctually attended the board of directors’ and shareholders’ meetings, actively took part in
relevant knowledge training, were familiar with the laws and regulations concerned, had a deep
knowledge and long experience of practitioners, and performed their duties according to the law
and regulations. The Board of Directors convened the meetings complies with relevant laws and
regulations.
(4) About supervisor and board of supervisors
The Company strictly elected all supervisors in light of the procedures stipulated in the Corporation
Act and Articles of Associations. At present, board of supervisors has three people among which one
supervisor is representative for staff. The number and composition of board of supervisor meet the
requirements of regulations and laws. All supervisors of the Company could follow the requirement
35
Yantai Changyu Pioneer Wine Co. Ltd. 2023 Annual Report
of Rules of Board of Supervisors’ Procedure, insist the principle of responsibility to all shareholders,
seriously perform their duties, effectively supervise and present their independent opinions on
important issues, interrelated deals, financial status, appointment of an accounting firm and the duty
performance of directors and managers of the Company.
(5) About performance evaluation and incentive system
The appointment of managers was open and transparent, and accorded with laws and regulations.
The Company has established and gradually improved the performance evaluation standard and
formed efficient incentive system, so as to ensure the salary of staff to be linked with work
performance.
(6) About interested parties
The Company could fully respect and safeguard the legal rights of the party with relevant benefit,
cooperate actively with the interested parties, jointly drive the Company to develop continually and
stably, pay great attention to the issues such as local environmental protection and public utilities
etc., and fully assume the due social responsibility.
(7) About the information disclosure and transparency
The Company has appointed the board secretary to be responsible as the head of investor relation
management including information disclosure, investor relations management and reception of
shareholders’ visit and consultation. The Company has also assigned China Securities Newspaper,
Securities Times, Honkong Commercial Daily and web site http://www.cninfo.com.cn/ to disclose
information, punctually, accurately and truly disclosed any information in the light of requirement
of relevant laws and rules, and also ensured all shareholders to have same opportunity to acquire
any information.
In order to further perfect the Company’s governance system, during the report period, the
Company formulated Opinions on Strengthening the Management of Food Safety at Production
Sites and Provisions on Implementing the Supervision and Management of Food Safety Main Body
Responsibility, revised and improved several rules and regulations such as Measures for the
Administration of Labor Contracts.
Whether or not there is significant variance between the Company’s actual situation of corporate
governance and laws, administrative regulations and the regulations about listed company
governance issued by China Securities Regulatory Commission.
□Yes No
There is no significant variance between the Company’s actual situation of corporate governance
and laws, administrative regulations and the regulations about listed company governance issued by
China Securities Regulatory Commission.
2. Relative to the controlling shareholder and actual controller, independence of the Company
on ensuring the company’s assets, personnel,finance, organization, business, etc.
(1) Personnel Arrangement
The Company’s general manager, deputy general managers and other senior officers, all of whom
were paid by the Company and did not hold any concurrent administrative ranks in the controlling
36
Yantai Changyu Pioneer Wine Co. Ltd. 2023 Annual Report
units. The Company was entirely independent in personnel arrangement, conclusion and adjustment
of labor contracts thanks to its sound and independent system for labor, personal and salary
management.
(2) Assets
Tangible assets and Intangible assets including trademark, industrial property right and non-patent
technologies were all clearly divided between the Company and the controlling shareholders, and
all legal formalities were completed. As an independent legal entity, the Company operates
independently in accordance with the law, and does not provide any form of guarantee with its
assets for shareholders’ or individuals’ liabilities or other legal or natural persons. Due to the
historical issues, the ownership of trademarks such as “ 张 裕 ” (Changyu) that the Company is
permitted to use that are still remained with the controlling shareholder. Except for a very small
number of trademarks such as “张裕”(Changyu) , the Company has ownership rights of the vast
majority of trademarks being used by the Company, which ensures the independence and
completeness of the Company’s assets.
(3) Finance
The Company is equipped with independent finance department, financial administrator and
financial and accounting staff, as well as a complete, independent and standardized financial
accounting system. The Company also opened its own bank accounts, independent and legally
paying taxes and workers insurance fund. All financial individuals do not hold any concurrent posts
in associated companies and are able to make financial decisions independently. The Company has
its own audit department, which is especially responsible for the internal audit work of the
Company.
(4) Independent Institutions
The Company has set up a sound organizational framework, in which the Board of Directors and
Board of Supervisors operate independently, no superior and subordinate relationship exists
between the functional departments of the controlling shareholder. The Company has its own
independent production & business offices, and all functional departments are independent to
exercise their powers and carry out the production and business activities independently.
(5) Operations
The operations of the Company are independent of the controlling shareholders. The Company
owns itself completely independent systems covering research and development, financial
accounting, labor and human resource, quality control, raw materials purchase, production and sales,
has the independent management ability, and does not have the problem that entrusts the controlling
shareholders to buy and sell on commission, nor exist the horizontal competition with controlling
shareholders.
3. Situation for Horizontal Competition
□Available Not available
37
Yantai Changyu Pioneer Wine Co. Ltd. 2023 Annual Report
4. Information for the shareholders’ meeting and interim shareholders’ meeting held during the report period
(1) Information for the shareholders’ meeting during the report period
Participation ratio Convening Disclosure
Session Meeting type Meeting Resolution
of investors date date
According to the voting results, the meeting deliberated and approved the 2022 Annual
Board of Directors’ Work Report, 2022 Annual Board of Supervisors’ Work Report, 2022
Annual Report, Proposal on 2022 Annual Profit Distribution, Proposal on 2023 Annual
Financial Budget, Proposal on Appointing Certified Public Accountants Firm, Proposal
2022 Annual
Annual Shareholders’
Shareholders’ 60.77% 2023.05.26 2023.05.27 on the “Company’s Restricted Share Incentive Plan in 2023 (Draft)” and Abstract,
Meeting
Meeting
Proposal on Formulating the Company’s “Assessment Management Method of Restricted
Share Incentive Plan in 2023” and Proposal on Authorization of Shareholders’ Meeting to
Board of Directors to Promote Issues Relevant with the Company’s Restricted Share
Incentive Plan in 2023 by disclosed ballot.
(2) Request for convening interim shareholders’ meeting by preferred shareholders owing recovered voting right
□Available Not available
5. Situation for Directors, Supervisors, Senior Executives and Staff
(1) Changes in shareholdings of directors, supervisors and senior executives
Shares held at Increased Decreased Other Shares held at
Beginning date Ending date Reasons of the increase and
Name Gender Age Post Status the beginning shares during shares during changes of the end of the
of tenure of tenure decrease change of shares held
of the period the period the period shares held period
38
Yantai Changyu Pioneer Wine Co. Ltd. 2023 Annual Report
ZHOU Secondary market purchases and
M 59 Chairman Incumbent 2002.05.20 2025.05.28 37,800 241,800 279,600
Hongjiang was granted restricted shares
Secondary market purchases and
SUN Jian M 57 Director Incumbent 2019.05.17 2025.05.28 90,000 240,000 330,000
was granted restricted shares
LI Jiming M 57 Director Incumbent 2019.05.17 2025.05.28 160,000 160,000 Was granted restricted shares
CHEN
F 57 Director Incumbent 2019.05.17 2024.02.22
Dianxin
Aldino
M 71 Director Incumbent 2006.12.07 2025.05.28
Marzorati
JIANG
M 57 Director Incumbent 2022.05.27 2025.05.28 160,000 160,000 Was granted restricted shares
Jianxun
Stefano
M 65 Director Incumbent 2022.05.27 2025.05.28
Battioni
Enrico
M 55 Director Incumbent 2019.05.17 2025.05.28
Sivieri
CHIANG
F 56 Director Incumbent 2020.06.19 2025.05.28
Yun
DUAN Independent
M 59 Incumbent 2019.05.17 2025.05.28
Changqing director
LIU Independent
F 60 Incumbent 2019.05.17 2025.05.28
Huirong director
Independent
LIU Qinglin M 60 Incumbent 2019.07.02 2025.05.28
director
Independent
YU Renzhu M 45 Incumbent 2020.05.27 2025.05.28
director
WANG Independent
M 58 Incumbent 2022.05.27 2025.05.28
Zhuquan director
Chairman of
LENG Bin M 61 the Board of Incumbent 2022.05.27 2025.05.28
Supervisors
LIU Zhijun M 43 Supervisor Incumbent 2016.05.26 2025.05.28
ZHENG
F 55 Supervisor Incumbent 2022.05.27 2025.05.28
Wenping
General
SUN Jian M 57 Incumbent 2018.01.10 2025.06.10
manager
39
Yantai Changyu Pioneer Wine Co. Ltd. 2023 Annual Report
Deputy
LI Jiming M 57 general Incumbent 2019.05.28 2025.06.10
manager
Deputy
JIANG Hua M 60 general Incumbent 2001.09.14 2025.06.10 10,000 160,000 170,000 Was granted restricted shares
manager
Deputy
PENG Bin M 57 general Incumbent 2018.01.10 2025.06.10 160,000 160,000 Was granted restricted shares
manager
Deputy
general
JIANG
M 57 manager and Incumbent 2019.05.28 2025.06.10
Jianxun
Board
secretary
General
PAN Jianfu M 48 manager Incumbent 2018.04.19 2025.06.10 100,000 100,000 Was granted restricted shares
assistant
General
KONG
M 51 manager Incumbent 2022.06.09 2025.06.10 100,000 100,000 Was granted restricted shares
Qingkun
assistant
General
LIU Shilu M 49 manager Incumbent 2018.04.19 2025.06.10 100,000 100,000 Was granted restricted shares
assistant
General
XIAO
M 47 manager Incumbent 2018.04.19 2025.06.10 100,000 100,000 Was granted restricted shares
Zhenbo
assistant
Total -- -- -- -- -- -- 137,800 1,521,800 0 0 1,659,600 --
40
Yantai Changyu Pioneer Wine Co. Ltd. 2023 Annual Report
Is there any resignation of directors and supervisors and dismissal of senior management personnel
during their term of office during the reporting period
Yes No
Changes of directors, supervisors and senior managers of the company
Available Not available
(2) Situation for work experience
The professional background, main work experiences and present positions of the Company’s
directors, supervisors and senior executives
① Members of Board of Directors
Mr. Hongjiang Zhou, male, 59, Chinese, with doctoral degree, senior engineer, used to be the
General Manager of Yantai Changyu Pioneer Wine Sales Co., Ltd., the Deputy General Manager,
the General Manager and the Deputy Chairman of Yantai Changyu Pioneer Wine Co., Ltd.. He is
incumbent as the Chairman of Yantai Changyu Group Co., Ltd. and the board director and the
Chairman of the Company now.
Mr. Jian Sun, male, 57, Chinese, MBA, used to be the Deputy General Manager of the Company.
He is incumbent as the board director and the General Manager of the Company, and with an
additional post of the board director of the Group Company.
Mr. Jiming Li, male, 57,Chinese, with doctoral degree, application researcher, used to be the Chief
Engineer of the Company. He is incumbent as the board director and the Deputy General Manager
of the Company, and with an additional post of the board director of the Group Company.
Mr. Jianxun Jiang, male, 57, Chinese, MBA and accountant, served as the Financial Manager of
the Company from May 20, 2002 to January 10, 2018. He now serves as the board director, Deputy
General Manager and Board Secretary of the Company.
Ms. Dianxin Chen, female, 57, Chinese, with master degree of the Party School; from July 1985 to
February 2024, she used to serve as staff of Yantai Chemical Purchasing and Supply Station, staff
of Yantai Stated-owned Assets Assessment Center, the Deputy Director of Yantai Stated-owned
Assets Assessment Center, the Deputy Section Chief of Assets Assessment Management
Department in Yantai State-owned Assets Bureau, the Deputy Section Chief of Assets Assessment
Management Department in Yantai State-owned Assets Supervision and Administration
Commission, full-time Deputy Secretary of Party branch in Yantai State-owned Assets Supervision
and Administration Commission, the Section Chief of Property Management Department in Yantai
State-owned Assets Supervision and Administration Commission, the Director of retired carders
work office and the Section Chief of Property Management Department in Yantai State-owned
Assets Supervision and Administration Commission, and the Director of retired carders work office
in Yantai State-owned Assets Supervision and Administration Commission. Since October 2018,
she has been served as the Deputy Secretary of Party branch, the General Manager of Yantai
Guofeng Investment Holdings Group Co., Ltd. and the director of Yantai Changyu Group Co., Ltd.
and the Company. She resigned as a director of the Company on February 22, 2024.
Mr. Aldino Marzorati, male, 71, Italian, with bachelor degree, serves currently as the General
Manager of Illva Saronno Holding S.p.A, the member of the board of directors of some branches
under the Group Company, and the board director of Changyu Group Co., Ltd. and the Company.
41
Yantai Changyu Pioneer Wine Co. Ltd. 2023 Annual Report
Mr. Stefano Battioni, male, 65, Italian, graduated with a bachelor’s degree. He has served as a
Senior Product Manager of Colgate Palmolive in Italy, the Marketing Director of Barilla Holding,
the International Marketing Director and the Spirits Business Unit Director-General Manager of
Illva Saronno S.p.A. (a spirit company as a wholly-owned subsidiary of Illva Saronno Holding
S.p.A.). He is currently the CEO of Illva Saronno S.p.A. and the board director of Changyu Group
Co,. Ltd. and the Company.
Mr. Enrico Sivieri, male, 55, Italian, with bachelor degree, served successively as the financial
controller of ARNEG S.p.a., the commercial analyst of SPILLERS FOODS ITALIA S.p.a., the
trade controller of Nestle’ Purina Petcare Europe, European marketing & sales controller of Nestle’
Purina Petcare Europe, the European supply chain controller of Nestle’ Purina Petcare Europe, the
Southern Europe regional controller of Nestle’ Purina Petcare Europe and the Director of group
financial controlling of Illva Saronno Holding S.p.A., and currently serving as a member of the
board of directors for Royal Oak Distillery Ltd. and the General Manager of Illva Saronno Holding
S.p.A., and the board director of the Company.
Ms. Yun Chiang, female, 56, successively obtained Bachelor of Science degree Magna Cum Laude
from Virginia Tech, Virginia, EMBA of The Kellogg School of Management at North Western
University, USA and EMBA of The Graduate School of Management, Hong Kong University of
Science and Technology, Hong Kong, China. She used to acted as Director at American
International Group (AIG) direct investment team, the Managing Partner of Pacific Alliance Group
(PAG). She currently serves as the INED and member of Audit Committee and Nomination
Committee in Las Vegas Sands China, the INED and member of Audit Committee, Remunerations
Committee and Nomination Committee in Goodbaby International Holding Ltd., the INED,
member of Audit Committee and Nomination Committee and Chairlady of Remunerations
Committee in Pacific Century Premium Developments Ltd., the INED and member of Audit
Committee and Health, Safety and Security Committee in Merlin Entertainments plc., the CEO and
Founding Partner of Prospere Capital, and the board director of the Group Company and the
Company.
Mr. Qinglin Liu, male, 60, doctoral degree of Management, Chinese, no overseas permanent
residence. He is currently a professor and doctoral supervisor of Economics Faculty of Shandong
University, the Director of Institute for World Economy Studies of Shandong University, the
Executive Deputy President of Shandong Institute of Development of Shandong University, a
member of a council of China Society of World Economics, an executive member of a council of
The Association for Canadian Studies in China and Shandong Youth Scholars Association, a
member of a council of Shandong Association for Business Economics and Shandong Price
Association. He currently serves as an independent director of Shandong Xinneng Taishan Power
Generation Co., Ltd., an independent director of Weihai Huadong Automation Co., Ltd., and an
independent director of the Company.
Mr. Changqing Duan, male, 59, Chinese, with doctoral degree, professor, doctoral and master’s
supervisor, and the national senior winemaker and senior wine taster.He currently serves as the
chief scientist of national grape industry technology system and the Director of Wine Processing
Key Laboratory of Ministry of Agriculture and Rural Affairs. Meanwhile, he holds concurrent posts
of the Director of China Wine Technology Committee, the Director of China Wine and Fruit Wine
Expert Committee, the Executive President and the Secretary General of Grape and Wine Branch of
Chinese Horticultural Society and the Vice President of China Agricultural Society Grape Branch.
42
Yantai Changyu Pioneer Wine Co. Ltd. 2023 Annual Report
His major research fields are the basic theoretical research and related high and new technology
research and development as well as application promotion work in the direction of suitability
between ecology in producing area and grape variety and liquor variety, evolvement mechanism
and directional brewing of wine flavor formation, grape fruit flavor metabolism regulation and
product flavor quality evaluation and so on. He is a current independent director of the Company.
Ms. Huirong Liu, female, 60, Chinese, with doctoral degree, the former Deputy Dean and Dean of
the Institute of Political Science and Law of Ocean University of China. She used to serve as an
independent director of Sailun Group Co., Ltd., Longda Meat and Sacred Sun Co., Ltd. and
Shandong Sacred Sun Power Sources Co., Ltd.. Currently, she is a second-level professor and
doctoral supervisor of Ocean University of China and with additional post as a researcher of the
“Belt and Road Initiative” Judicial Research Center of the Supreme People’s Court, an expert at the
Supreme People’s Court for foreign-related commercial and maritime action expert database, the
Deputy Chairman of the sixth Shandong Law Society and the Deputy Director of the Academic
Committee, and the Chairman of the Qingdao Law-based Government Research Institute. Her
research fields are International Law and Legislative Science. She has won the title of Shandong
Top Ten Outstanding Young and Middle-aged Jurists, the third prize of Excellent Social Science
Achievement of the Ministry of Education, the third prize of Shandong Excellent Social Science
Achievement, the second prize of Shandong Excellent Philosophy and Social Science Achievement,
the first prize of Excellent Achievement of Shandong Education Department and the Top Talent in
Qingdao City. She is a current independent director of the Company.
Mr. Renzhu Yu, male, 45, Chinese, doctor of management, high-level talents of Jinan, used to act
as the Deputy Director of Huanglong National Scenic Area Administration in Aba prefecture of
Sichuan province as a member of the 18th doctoral team of the Central Organization Department
and the Communist Youth League of China and also ever acted as managing director of Shandong
Agricultural Economy Society. Currently, he serves as a professor and a master supervisor in
School of Business Administration in Shandong University of Finance and Economics, the
managing director of Chinese Marketing Association of Universities and an independent director of
the Company.
Mr. Zhuquan Wang, male, 58, Chinese, doctor of management (accountancy), first batch of
national accounting academic leading personals of Financial Department, the entrant of accountant
master cultivation project of Financial Department, outstanding teacher of Shandong province,
Government Special Allowance expert, acted as independent director from May 13, 2010 to May 12,
2013 and from May 23, 2014 to May 17, 2019. Now he is the professor and the doctoral supervisors
of the Ocean University of China and also holds a concurrent post of independent director of the
Company and Qingdao DoubleStar Co., Ltd..
② Members of board of supervisors
Mr. Bin Leng, male, 61, Chinese, with master degree, senior accountant, used to be the Deputy
Section Chief and the Section Chief of Yantai Audit Bureau, the board director and the Chief
Accountant of Yantai Changyu Group Co., Ltd. and the board director and the Deputy General
Manager of the Company. He is incumbent as the board director and the General Manager of Yantai
Changyu Group Co., Ltd. and the Chairman of Board of Supervisor of the Company, with an
additional post of the Chairman and General Manager of Yantai Zhongya Zhibao Medical Health
Wine Co., Ltd..
43
Yantai Changyu Pioneer Wine Co. Ltd. 2023 Annual Report
Mr. Zhijun Liu, male, 43, Chinese, bachelor degree; from July 2003 to February 2019, he used to
serve as the staff of worked in foreign fund department of Economy and Trade Bureau in Longkou
Economic Development Zone, a news section member of propaganda department in Longkou
Municipal Committee, a member of propaganda and mass work section, a member of planning
section, the Deputy Director Member of programming development and enterprise distribution
section, the Deputy Director Member and the Deputy Chief of programming development section,
the supervisor (section chief rank) of the Dongfang Electronics Corporation Co., Ltd., Shandong
Laidong Engine Co., Ltd. and Yantai Public Transportation Group Co., Ltd., and a section chief
rank of Yantai Municipal Audit Bureau; from March 2019 to June 2020, he served as the had of the
equity management department of Yantai Guofeng Investment Holdings Group Co., Ltd.; from June
2020 to present, he serves as a member of the Party Committee and the deputy general manager of
Yantai Guofeng Investment Holdings Group Co., Ltd. He now is a supervisor of the Company.
Ms. Wenping Zheng, female, Chinese, 55, bachelor degree. She now is a supervisor of the
Company.
③ Other senior executives
Mr. Hua Jiang, male, 60, Chinese, master degree, senior engineer, has been serving as the Deputy
General Manager of the Company since September 14, 2001.
Mr. Bin Peng, male, 57, MBA, senior engineer, ever successively served as the Department Chief
of Technical Transformation Department and the Minister of Investment and Development
Department of the Company, as well as the General Manager Assistant of Yantai Changyu Group
Co., Ltd.. He currently serves as the Deputy General Manager of the Company.
Mr. Jianfu Pan, male, 48, Chinese, MBA and senior economist, used to serve as the General
Manager of the Jiangxi Branch of the Company, the General Manager of the Shanghai marketing
management company and the General Manager of Beijing marketing management center.
Currently, he is a General Manager Assistant of the Company and the General Manager of Beijing
marketing management center and Beijing Chateau AFIP.
Mr. Qingkun Kong, male, 51, Chinese, MBA and economist, used to serve as a section member of
production department in the healthy liquor branch office, a clerk and the Deputy Director and the
Director of general manager office, and the chairman of the Company’s Board of Supervisor.
Currently, he serves as a General Manager Assistant of the Company.
Mr. Shilu Liu, male, 49, Chinese, master degree, used to be the Manager of Tianjin branch of the
Company, the Competence Manager of North China market, the General Manger of Beijing
marketing management company, the General Manager of Guangdong marketing management
center and the General Manager of e-commerce branch of the Company. Currently, he serves as the
General Manager Assistance of the Company and the General Manager of Yantai Changyu Pioneer
Wine Sales Co., Ltd..
Mr. Zhenbo Xiao, male, 47, Chinese, MBA, served as the Deputy Manager of the Company’s
market strategy development center, the General Manager of Shandong marketing management
company and Yantai Changyu liquor company. He currently serves as the General Manager
Assistant of the Company.
Post in the shareholder’s company
Available □Not available
44
Yantai Changyu Pioneer Wine Co. Ltd. 2023 Annual Report
Beginning date Ending date Paid by shareholder’s
Name Shareholder’s Company Post
of the post of the post company or not
ZHOU Hongjiang Yantai Changyu Group Co., Ltd. Chairman 2018.01.10 2026.01.11 No
LENG Bin Yantai Changyu Group Co., Ltd. Director & General manager 2018.01.10 2026.01.11 Yes
SUN Jian Yantai Changyu Group Co., Ltd. Director 2018.01.10 2026.01.11 No
LI Jiming Yantai Changyu Group Co., Ltd. Director 2018.01.10 2026.01.11 No
CHEN Dianxin Yantai Changyu Group Co., Ltd. Director 2018.11.15 2023.12.11 No
Aldino Marzorati Yantai Changyu Group Co., Ltd. Director 2018.01.10 2026.01.11 No
Enrico Sivieri Yantai Changyu Group Co., Ltd. Director 2018.01.10 2026.01.11 No
Stefano Battioni Yantai Changyu Group Co., Ltd. Director 2020.04.09 2026.01.11 No
CHIANG Yun Yantai Changyu Group Co., Ltd. Director 2020.05.12 2026.01.11 No
Explanation for the post in Mr. Bin Leng also holds concurrent post as the Chairman and General Manager of Yantai Zhongya Zhibao Medical
the shareholder’s company Health Wine Co., Ltd..
Post at other companies
□Available Not available
Disciplinary actions taken by securities regulators in recent 3 years to the Company’s directors,
supervisors and senior management both on the job and left during the report period
Available Not Available
(3) Salary of directors, supervisors and senior executives
The situation of decision-making process, the basis of determination and the actual payment of
remuneration for directors, supervisors and senior executives
The salary for the independent directors is paid according to the resolution of shareholders’ meeting.
The salary for the chairman, directors with administration duty, managers and other senior
management should be paid on basis of the evaluation result according to the Yantai Changyu
Pioneer Wine Co., Ltd. Executive Compensation and Performance Design, which was passed
during the Board of Directors’ meeting.
Salary of directors, supervisors and senior executives during the report period
Unit: CNY’0000
Total reward from the Whether get reward from
Name Gender Age Post Status
Company before tax related parties of the Company
ZHOU Hongjiang M 59 Chairman Incumbent 179.43 No
SUN Jian M 57 Director and General Manager Incumbent 166.3 No
LI Jiming M 57 Director and Deputy General Manager Incumbent 127.78 No
Director, Deputy General Manager and
JIANG Jianxun M 57 Incumbent 124.96 No
Board secretary
CHEN Dianxin F 57 Director Incumbent 0 Yes
Aldino Marzorati M 71 Director Incumbent 0 No
Stefano Battioni M 65 Director Incumbent 0 No
Enrico Sivieri M 55 Director Incumbent 0 No
45
Yantai Changyu Pioneer Wine Co. Ltd. 2023 Annual Report
CHIANG Yun F 56 Director Incumbent 0 No
DUAN Changqing M 59 Independent Director Incumbent 10 No
LIU Huirong F 60 Independent Director Incumbent 10 No
LIU Qinglin M 60 Independent Director Incumbent 10 No
YU Renzhu M 45 Independent Director Incumbent 10 No
WANG Zhuquan M 58 Independent Director Incumbent 10 No
LENG Bin M 61 Chairman of the Board of Supervisor Incumbent 0 Yes
ZHENG Wenping F 55 Supervisor Incumbent 30.33 No
Liu Zhijun M 43 Supervisor Incumbent 0 Yes
JIANG Hua M 60 Deputy General Manager Incumbent 134.07 No
PENG Bin M 58 Deputy General Manager Incumbent 130.11 No
PAN Jianfu M 48 General Manager Assistant Incumbent 79.87 No
KONG Qingkun M 51 General Manager Assistant Incumbent 86.56 No
LIU Shilu M 49 General Manager Assistant Incumbent 84.11 No
XIAO Zhenbo M 47 General Manager Assistant Incumbent 91.07 No
Total -- -- -- -- 1,284.59 --
Other information note
Available Not available
46
Yantai Changyu Pioneer Wine Co. Ltd. 2023 Annual Report
6. Performance of directors during the report period
(1) The situation of the board of directors’ meetings during this reporting period
Holding Disclosure
The session of meetings Meeting resolution
date date
The Ninth Session Board of The meeting deliberated and approved Proposal on Equity Transfer of Changyu Icewine Co., Ltd. Liaoning
2023.01.16 2023.01.17
Directors 4th Meeting as Transferee by disclosed ballot.
The meeting deliberated and approved 2022 Annual Board of Directors’ Work Report, 2022Annual General
Manager’s Work Report, 2022 Annual Report, Draft Proposal on 2022 Annual Profit Distribution, Proposal
on 2022 Annual Performance Assessment Result of the Company’s Senior Executives, 2022 Annual Self
The Ninth Session Board of
2023.04.11 2023.04.13 Assessment Report on Internal Control, 2022 Annual Social Responsibility Report, Proposal on Relevant
Directors 5th Meeting
Issues of Convening 2022 Annual Shareholders’ Meeting, Proposal on Appointment of Certified Public
Accounting Firm, Proposal on 2023 Annual Capital Expenditure Plan, Proposal on 2023 Annual Routine
Related Transaction and Proposal on 2023 Annual Financial Budget by disclosed ballot.
The meeting deliberated and approved Proposal on 2023 First Quarter Report, Proposal on the Company’s
“Restricted Share Incentive Plan in 2023 (Draft)” and Abstract, Proposal on Formulating the Company’s
The Ninth Session Board of
2023.04.26 2023.04.28 “Assessment Management Method of Restricted Share Incentive Plan in 2023” and Proposal on
Directors 6th Meeting
Authorization of Shareholders’ Meeting to Board of Directors to Promote Issues Relevant with the
Company’s Restricted Share Incentive Plan in 2023 by disclosed ballot.
The meeting deliberated and approved Proposal on Items of Adjustments to Restricted Share Incentive Plan
The First Interim Board of Directors
2023.06.26 2023.06.27 in 2023 and Proposal on Granting Restricted Shares to Incentive Objects Involved in Restricted Share
Meeting in 2023
Incentive Plan in 2023 by disclosed ballot.
47
Yantai Changyu Pioneer Wine Co. Ltd. 2023 Annual Report
The meeting deliberated and approved 2023 Semi-annual Report, Proposal on 2023 Semi-Annual Profit
The Ninth Session Board of
2023.08.29 2023.08.31 Distribution, Proposal on Disposal of Idle Office Property and Proposal on Providing Guarantee for
Directors 7th Meeting
Kilikanoon Estate Pty Ltd in Australia by disclosed ballot.
The Ninth Session Board of
2023.10.26 2023.10.27 The meeting deliberated and approved 2023 Third Quarter Report by disclosed ballot.
Directors 8th Meeting
The Second Interim Board of The meeting deliberated and approved Proposal on Equity Transfer of Langfang Development Zone
2023.11.09 2023.11.10
Directors Meeting in 2023 Castel-Changyu Wine Co., Ltd. by disclosed ballot.
The Third Interim Board of The meeting deliberated and approved Proposal on Partial Equity Acquisition of Kilikanoon Estate Pty Ltd in
2023.12.12 2023.12.13
Directors Meeting in 2023 Australia by disclosed ballot.
(2) Attendance of directors for the board of directors’ and the shareholders’ meetings
Attendance of directors for the board of directors
Required attendance On-site Communication Authorized Whether or not to attend the meetings Attendance time for the
Name Absence
time attendance attendance attendance personally for successive twice shareholders’ meeting
ZHOU Hongjiang 8 4 4 0 0 No 1
SUN Jian 8 4 4 0 0 No 1
LI Jiming 8 4 4 0 0 No 0
JIANG Jianxun 8 4 4 0 0 No 1
CHEN Dianxin 8 4 4 0 0 No 0
Aldino Marzorati 8 2 4 2 0 No 0
Stefano Battioni 8 3 4 1 0 No 0
Enrico Sivieri 8 3 4 1 0 No 0
CHIANG Yun 8 4 4 0 0 No 0
48
Yantai Changyu Pioneer Wine Co. Ltd. 2023 Annual Report
LUO Fei 8 4 4 0 0 No 0
DUAN Changqing 8 4 4 0 0 No 0
LIU Huirong 8 4 4 0 0 No 0
LIU Qinglin 8 4 4 0 0 No 1
YU Renzhu 8 4 4 0 0 No 0
WANG Zhuquan 8 4 4 0 0 No 0
Explanation for failed to personally attend the Board of Directors’ meetings for successive two times
No
(3) Any objections for the Company’s projects from the directors
Whether or not the directors raised any objection for the Company’s projects
□Yes No
During the report period, the directors did not raise any objections for the Company’s projects.
(4) Other explanations on directors’ performance
Whether or not the directors’ propositions are accepted by the Company
Yes □No
The explantion on the directors’ propositions are accepted or are not accepted by the Company
The proposition that the relevant directors of the Company put forward the implementation of equity incentive for the core business personnel of the
Company has been adopted.
7. Performance of the special committees under the Board of Directors during the report period
49
Yantai Changyu Pioneer Wine Co. Ltd. 2023 Annual Report
Other Specific
Committees Numbers of Held Important comments and
Members Meeting contents performance circumstances of the
name meeting held date suggestions made
of duties objection (if have)
During the reporting period, the
members of the Audit Committee
The meeting deliberated and approved provided advice and suggestions in
the 2022 Annual Report, Draft guiding the internal audit work,
DUAN Changqing, LIU
Proposal on 2022 Annual Profit Appointing an external audit firm,
Huirong, LIU Qinglin, YU
2023.04 Distribution, Proposal on Appointing supervising and evaluating
Renzhu,WANG Zhuquan, 1
.11 Certified Public Accountants Firm, external audit institutions,
CHEN Dianxin, JIANG
2022 Annual Self Assessment Report establishing an effective internal
Auditing Jianxun, Enrico Sivieri
on Internal Control and 2023 Annual control system and prompting No No
Committee
Internal Audit Plan. major business risks, and actively
safeguarded the interests of the
company and all shareholders.
DUAN Changqing, LIU
The meeting deliberated and approved The members of the audit
Huirong, LIU Qinglin, YU
2023.08 the 2023 Semi-Annual Report and committee made reasonable
Renzhu,WANG Zhuquan, 1
.29 Proposal on 2023 Semi-Annual Profit suggestions on the distribution of
CHEN Dianxin, JIANG
Distribution. profits.
Jianxun, Enrico Sivieri
During the reporting period, the
DUAN Changqing, LIU
The meeting deliberated and approved Emolument Committee put
Huirong, LIU Qinglin, YU
2023.04 the Proposal on 2022 Annual forward relevant suggestions on
Renzhu,WANG Zhuquan, 1
.11 Performance Assessment Results of further strengthening the
Emolument CHIANG Yun, JIANG
the Company’s Senior Executives. performance assessment of senior No No
Committee Jianxun, Aldino Marzorati
executives and profit assessment.
DUAN Changqing, LIU The meeting deliberated and approved The competition in the wine
2023.04
Huirong, LIU Qinglin, YU 1 the Proposal on the Company’s industry is becoming increasingly
.26
Renzhu,WANG Zhuquan, “Restricted Share Incentive Plan in fierce, and it is necessary to
50
Yantai Changyu Pioneer Wine Co. Ltd. 2023 Annual Report
CHIANG Yun, JIANG 2023 (Draft)” and Abstract, Proposal increase the incentive to mobilize
Jianxun, Aldino Marzorati on Formulating the Company’s the enthusiasm of the management
“Assessment Management Method of team and the core members. The
Restricted Share Incentive Plan in incentive plan should take into
2023” and Proposal on Verifying account both short-term and
“List of Incentive Objects Involved in long-term factors and set the
Restricted Share Incentive Plan in performance indicators
2023 of Yantai Changyu Pioneer Wine scientifically and reasonably.
Co., Ltd.”.
8. The work of the Board of Supervisors
Whether or not the Board of Supervisors found any existence risk to the Company in oversight activities during the report period
□Yes No
The Board of Supervisors has no objections to supervision matters during the report period.
51
Yantai Changyu Pioneer Wine Co. Ltd. 2023 Annual Report
9. Staff of the Company
(1) Staff number, specialty constitution and education degree
Incumbent staff number of parent company at the end of reporting period(people) 654
Incumbent staff number of major subsidiary companies at the end of reporting period
1,534
(people)
Total incumbent staff at the end of reporting period (people) 2,188
Total staff getting paid in current period (people) 2,188
Retired staff number whose expenses are undertaken by parent company or subsidiary
0
companies (people)
Specialty constitution
Category Number of people (people)
Production staff 654
Sales staff 1,053
Technical staff 127
Financial staff 103
Administrative staff 251
Total 2,188
Education degree
Category Number (People)
Postgraduate and above 98
Bachelor 855
Junior College 672
Technical secondary school or Senior high school 398
Junior high school and below 165
Total 2,188
(2) Remuneration policy
The Company has established and improved the remuneration and welfare system, including salary
system, incentive mechanism, social security and medical insurance and so on, to ensure the
participation of all employees. In accordance with the law, the Company purchases social
endowment insurance, medical insurance, occupational injury insurance, unemployment insurance
and maternity insurance, and pays housing fund for the employees. Based on the principle of
“distribution according to work and equal pay for equal work”, the Company pays the staff’s
remuneration timely. With the improvement of the Company’s profitability, the Company steadily
improves the staff’s remuneration and welfare, and provides its employees the competitive salary
and equal opportunity for development.
(3) Training plan
In 2024, the Company plans to enhance the core theme of “leadership and execution” of employees
and cultivate more key employees with “high quality and high skills” based on the enterprise spirit
52
Yantai Changyu Pioneer Wine Co. Ltd. 2023 Annual Report
of “patriotism, dedication, quality and striving for excellence”. The Company plans to customize
personalized and systematic courses for different positions and maintain quarterly training for
employees at all levels for 1-2 times, each time for 1 day, and ensure that the training rate of
employees of the Company could reach to 100% during the year.
Enhance strategic core leadership for corporate-level leaders. The plan is to improve the political
position of the leading group through the form of “holding meetings instead of training and holding
the central group study of the leadership team”. By analyzing the frontier trends of the wine
industry at domestic and abroad, timely implementation of enterprise reform to achieve high-quality
operation of the company, and empower the development of the national wine industry.
Improve team leadership and decision-making ability for middle-level management personnel. The
middle-level management personnel learn how to lead and make decisions scientifically through
video courses and outdoor activities combined with professional books. Encourage middle-level
management personnel to participate in university correspondence, self-examination or MBA and
other advanced degrees to ensure that the company’s cadre team to adapt to corporate strategic
planning, strengthen decision-making and coordination abilities and better lead team members to
work.
Improve their executive ability and innovation for employees whose level are or below section chief.
The plan is to combine on-site training, online teaching, theoretical self-study and other forms.
Enhance the scene simulation and practical ability of tourism, technology and skill personnel
through on-site training. Improve the knowledge base of business modules and case analysis ability
of administrative personnel through online teaching. Improve employees’ professional knowledge
reserve level by theoretical self-study.
The training for new employees is mainly based on on-site teaching and outreach training. It aims to
improve the basic knowledge of new employees in labor contract, production safety, technology,
finance and other professional aspects and quickly integrate into the enterprise. To enhance the
unity and cooperation ability and physical fitness of new employees through outreach training,
temper their strong will, and create excellent “successors” of Changyu.
(4) Labor outsourcing
Available Not available
10. The Company’s profit distribution and increasing equity with capital reserve
Profit distribution policies especially promulgation, implementation or adjustment of cash dividends
policies during the report period
Available □Not available
Deliberated and passed by the 2022 Annual Shareholders’ Meeting convened on May 26, 2023 by
the Company, the Company’s 2022 annual profit distribution scheme is shown as follows: based on
total 685,464,000 shares (including 453,460,800 A shares and 232,003,200 B shares), the Company
would pay cash dividend to all shareholders registered on the share registration day: CNY4.5
（including tax）in cash per ten shares. This time the Company would neither dispatch bonus shares
nor increase equity with capital reserve.
53
Yantai Changyu Pioneer Wine Co. Ltd. 2023 Annual Report
Total amount of shares has not changed since the disclosure of the distribution plan to the
implementation period.
On June 13, 2023, the Company published the Implementation Announcement of 2022 Annual
Equity Distribution on China Securities Journal, Securities Times and www.cninfo.com.cn,
determining that the share registration day and the ex-dividend day of A Share was respectively on
June 16, 2023 and on June 19, 2023; the last trading day, the ex-dividend day and the share
registration day of B Share was respectively on June 16, 2023, on June 19, 2023 and on June 21,
2023.
This time the dispatching objects contain all A Share shareholders registered at China Securities
Depository and Clearing Corporation Limited Shenzhen Company (hereinafter referred to as CSDC
Shenzhen Company) after closing of Shenzhen Stock Exchange in the afternoon of June 16, 2023
and all B Share shareholders registered at CSDC Shenzhen Company after closing of Shenzhen
Stock Exchange in the afternoon of June 21, 2023 (the last trading day is June 16, 2023).
This dispatching has already been completed in June 2023. The profit distribution scheme
implemented this time is consistent with the scheme deliberated and passed by the shareholders’
meeting. The implementation of the profit distribution scheme for this time is not more than two
months after the shareholders’ meeting passing it.
Special explanation for the cash dividends policy
Whether it is in accordance with the requirements of the regulation in the Articles of Yes
Association and the resolution of shareholders’ meeting
Whether the distribution standard and proportion is clear and definite Yes
Whether the relevant decision process and mechanism is complete Yes
Whether the independent directors perform their responsibilities and play the roles Yes
If the company does not pay cash dividend, it should disclose the specific reasons and The company had paid
the next steps to enhance the return level of investors: cash dividend
Whether the small and middle shareholders have the chance to express their opinions Yes
and appeals, as well as their lawful right and interest is in an enough protection
Whether it is legal and transparent for the condition and process while adjusting and Yes
amending the cash dividends policy
During the report period, the Company earned profit, the profit of the parent company that could be
distributed to shareholders was positive but without proposing cash dividend distribution
preliminary scheme.
□Available Not available
The Company’s preliminary scheme of profit distribution and preliminary scheme of increasing
equity with capital reserve for the report period
Available □Not available
Number of sending bonus shares per ten shares (share) 0
Number of dividend payout per ten shares (CNY) (including tax) 5
The cardinal number of the capital stocks for the preliminary distribution scheme (share) 692,249,559
Cash dividend distribution（CNY）(including tax) 346,124,780
54
Yantai Changyu Pioneer Wine Co. Ltd. 2023 Annual Report
Amount of cash dividends (eg. shares buy-back)（CNY）in other ways 0
Total cash dividend distribution（CNY）(including other ways) 346,124,780
Attributable profit（CNY） 532,438,907
The proportion of cash dividend distribution in the total profit distribution (including other ways) 100
Cash dividend distribution this time
If the Company’s development is in growth stage and major capital expenditure is arranged, while making profit distribution,
the proportion of cash dividends should takes up no less than 20% in this profit distribution.
Detailed explanation for the preliminary scheme of profit distribution or increasing equity with capital reserve
According to the audit result from KMPG Huazhen LLP, the net profit belonging to the parent company’s shareholders in the
consolidated statement in 2023 is CNY532,438,907 and the net profit of the parent company in financial statement in 2023 is
CNY412,140,101. According to PRC accounting standard, the situation for attributable profits of the consolidation and the
parent company at the end of 2023 as following:
Unit: CNY
Consolidation Parent company
Year-end undistributed profit 9,273,629,318 9,686,541,315
Among which: Total comprehensive income in 2023 532,438,907 412,140,101
Undistributed profit carried forward from beginning of the year 9,049,649,211 9,582,860,014
Dividends distribution of 2022 308,458,800 308,458,800
Legal earned surplus reserve to be drawn 0 0
According to regulation of 157th item in the Articles of Association, which is that “the Company can distribute dividends either
in cash or by stock, the profit to be distributed each year is not less than 25% of the distributable profit realized in the same
year and the accumulated sum of profit to be distributed in cash in the last three years is not less than 30% of the yearly
average distributable profit to be realized in the last three years”. Meanwhile, considering the amount on the capital
expenditure in 2024, under the condition of not influencing the normal production and operation, the Company put forward
preliminary scheme on profit distribution in 2023 as following:
Because the left amount of legal earned surplus reserve reaches 50% of registered capital, while making profit distribution, the
legal earned surplus reserve will not be drawn. Based on the Company’s 692,249,559 shares at total up to December 31, 2023,
the Company plans to pay CNY5 in cash as dividends for every ten share (including tax) to the Company’s all shareholders,
totaling up to CNY346,124,780. The retained and undistributed net profit will be reserved for distribution in the next year.
The cash dividend distributed to shareholders of domestic listed foreign shares (B share) is paid in HKD converted based on
the middle rate between CNY and HKD issued by the People’s Bank of China on the first working day after the resolution
date of 2023 Annual Shareholders’ Meeting.
11. Implementation of the Company’s equity inventive plan, employee stock ownership plan or
other employee incentive measures
Available Not available
55
Yantai Changyu Pioneer Wine Co. Ltd. 2023 Annual Report
(1) Equity Inventive
NO. Deliberative time Relevant meeting sessions Implementation overview Disclosure index
The meeting deliberated and approved Proposal on the Company’s
“Restricted Share Incentive Plan in 2023 (Draft)” and Abstract, Proposal Please refer to the resolution of board of directors
The Ninth Session Board of on Formulating the Company’s “Assessment Management Method of (announcement no. : 2023- Interim 9) disclosed on
1 2023.04.26
Directors 6th Meeting Restricted Share Incentive Plan in 2023” and Proposal on Authorization of April 28, 2023 on CNINFO
Shareholders’ Meeting to Board of Directors to Promote Issues Relevant (http://www.cninfo.com.cn/)
with the Company’s Restricted Share Incentive Plan in 2023.
The meeting deliberated and approved Proposal on the Company’s
“Restricted Share Incentive Plan in 2023 (Draft)” and Abstract, Proposal Please refer to the resolution of board of supervisors
The Eighth Session Board of on Formulating the Company’s “Assessment Management Method of (announcement no.: 2023- Interim 10) disclosed on
2 2023.04.26
Supervisors 5th Meeting Restricted Share Incentive Plan in 2023” and Proposal on Verifying “List April 28, 2023 on CNINFO
of Incentive Objects Involved in Restricted Share Incentive Plan in 2023 of (http://www.cninfo.com.cn/)
Yantai Changyu Pioneer Wine Co., Ltd.”.
2023.05.04 - The names and positions of incentive objects involved in this incentive plan
3
2023.05.14 were publicized within the Company
The Board of Supervisors issued the Explanation and Verification Opinions Please refer to the resolution of board of supervisors
on the Disclosure of the List of incentive Objects of the Restricted Share (announcement no. : 2023- Interim 16) disclosed on
4 2023.05.18
Incentive Plan in 2023 on the review and publicity of the list of incentive May 19, 2023 on CNINFO
objects. (http://www.cninfo.com.cn/)
The meeting deliberated and approved Proposal on the Company’s
“Restricted Share Incentive Plan in 2023 (Draft)” and Abstract, Proposal Please refer to the resolution of shareholders’
2022 Annual Shareholders’ on Formulating the Company’s “Assessment Management Method of meeting (announcement no.: 2023- Interim 18)
5 2023.05.26
Meeting Restricted Share Incentive Plan in 2023” and Proposal on Authorization of disclosed on May 27, 2023 on CNINFO
Shareholders’ Meeting to Board of Directors to Promote Issues Relevant (http://www.cninfo.com.cn/)
with the Company’s Restricted Share Incentive Plan in 2023.
The First Interim Board of The meeting deliberated and approved Proposal on Items of Adjustments to Please refer to the resolution of board of directors
6 2023.06.26
Directors Meeting in 2023 Restricted Share Incentive Plan in 2023 and Proposal on Granting (announcement no.: 2023- Interim 22) disclosed on
56
Yantai Changyu Pioneer Wine Co. Ltd. 2023 Annual Report
Restricted Shares to Incentive Objects Involved in Restricted Share June 27, 2023 on CNINFO
Incentive Plan in 2023 (http://www.cninfo.com.cn/)
The meeting deliberated and approved Proposal on Items of Adjustments to Please refer to the resolution of board of supervisors
The First Interim Board of Restricted Share Incentive Plan in 2023 and Proposal on Granting (announcement no.: 2023- Interim 23) disclosed on
7 2023.06.26
Supervisors Meeting in 2023 Restricted Shares to Incentive Objects Involved in Restricted Share June 27, 2023 on CNINFO
Incentive Plan in 2023 (http://www.cninfo.com.cn/)
Please refer to the announcement (announcement
Announced the Announcement on the Granting of Restricted Shares to
8 2023.07.10 no.: 2023- Interim 25) disclosed on July 10, 2023 on
Incentive Objects
CNINFO (http://www.cninfo.com.cn/)
After review and confirmation by Shenzhen Stock Exchange and Shenzhen
Branch of China Securities Depository and Clearing Corporation Limited, Please refer to the announcement (announcement
9 2023.07.19 the registration of the first grant of restricted shares was completed. The no.: 2023- Interim 26) disclosed on July 19, 2023 on
Announcement on the Grant Results of the 2023 Restricted Share Incentive CNINFO (http://www.cninfo.com.cn/)
Plan was published.
Equity incentives granted to directors and senior executives of the Company
Available Not available
Number of Number of Number of Number of The exercise Number of The marketing Number of Number Number of Grant Number of
share new share feasible exercised price of share price at the restricted of shares new restricted price of restricted
options options shares shares exercised shares options end o f the shares held unlocked share granted restricted share held
Name Position
held at the granted during during the during the during the held at the reporting at the during during the share at the end
beginning the reporting reporting reporting reporting period end of the period beginning of the reporting (CNY/sh of the
of the year period period period (CNY/share) period (CNY/share) the period period period are) period
ZHOU
Chairman 240,000 15.24 240,000
Hongjiang
Director
SUN Jian and General 210,000 15.24 210,000
Manager
Director
and Deputy
LI Jiming 160,000 15.24 160,000
General
Manager
57
Yantai Changyu Pioneer Wine Co. Ltd. 2023 Annual Report
Director,
Deputy
JIANG General
160,000 15.24 160,000
Jianxun Manager,
Board
secretary
Deputy
JIANG Hua General 160,000 15.24 160,000
Manager
Deputy
PENG Bin General 160,000 15.24 160,000
Manager
General
PAN Jianfu Manager 100,000 15.24 100,000
Assistant
General
KONG
Manager 100,000 15.24 100,000
Qingkun
Assistant
General
LIU Shilu Manager 100,000 15.24 100,000
Assistant
General
XIAO
Manager 100,000 15.24 100,000
Zhenbo
Assistant
Total -- 0 0 0 0 -- 0 -- 0 0 1,490,000 -- 1,490,000
Note（if have） None
Evaluation mechanisms and incentives for senior executives
According to the Compensation and Performance Appraisal Measures of the Company’s Senior Executives for the period from 2022 to 2024
approved by the Board of Directors, the compensation of senior executive includes basic compensation (fixed compensation+performance
compensation), excess profit commission and long-term incentive (deferred cash).
The Company has continuously improved the performance appraisal mechanism, and the evaluation and incentive of senior executives are linked
to the Company’s performance and personal work results. At the beginning of the year, according to the overall development strategy and annual
business objectives of the Company, the annual performance indicators and job responsibilities of senior executives are determined according to
the division of work. The annual performance and work results are presented by the Emolument Committee of the Board of Directors. After the
58
Yantai Changyu Pioneer Wine Co. Ltd. 2023 Annual Report
deliberation and approval of the assessment results, the performance assessment of senior executives is carried out, and the rewards and
punishments are honored.
(2) The implementation of employee shareholding plan
Available Not available
(3) Other employee incentives
Available Not available
On June 26, 2023, the restricted share incentive plan was first granted and registered. In addition to the above directors and senior executives, the
company also granted 5.2956 million restricted shares to 193 middle-level managers and core personals.
12. Construction and implementation of internal control system during the reporting period
(1) Construction and implementation of internal control
For the construction and implementation of the company’s internal control, please refer to the 2023 Annual Self-Assessment Report on Internal
Control disclosed in Securities Times, China Securities Journal and www.cninfo.com.cn on April 12, 2024.
(2) Specific situations for significant defects of the internal control found during the report period
□Yes No
13. The company’s management and control over subsidiaries during the reporting period
Company name Integration plan Integration progress Problems encountered in integration Actions taken Resolve progress Follow-up resolution plan
None None None None None None None
14. Internal control self-assessment report or internal control audit report
（1）Internal control self-assessment report
59
Yantai Changyu Pioneer Wine Co. Ltd. 2023 Annual Report
Disclosure date for full text of the internal control self-assessment report 2024.04.12
Disclosure index for full text of the internal control self-assessment report 2023 Annual Self-Assessment Report on Internal Control was disclosed on Securities Times,China Securities Journal and
www.cninfo.com.cn by the Company on April 12, 2024
Percentage of total unit assets included in scope of the assessment accounting for the
81.62%
Company’s total assets of consolidated financial statements
Percentage of unit operating income included in scope of the assessment accounting
85.68%
for the Company’s operating income of consolidated financial statements
Standards of Defect Identification
Category Financial report Non-financial report
Significant defects: one defect of internal control, individually or together with Significant defects: Any situations listed below appears, it can be
other defects, has the reasonable probability to cause the significant misstatements, regarded as significant defects. Operation: Unable to achieve all
which cannot be promptly prevented, or found and corrected timely in the financial operation target or key business index, widely out of budget in
report. For example: Company’s Directors, Supervisors and Senior Management various aspects. Safety accident effects: Cause one person and
have fraudulent practices; The Company makes corrections for the published above death, or more than 3 person serious injuries. Major
financial report; The audit of external intermediary agent finds significant negative effects: Negative information frequently appears in the
misstatement existing in the current financial report, but the Company does not medias with involving a wide scope in the international and national
realize it during the operation process; Negative information frequently appears mainstream media. Environment effects: Create irreparable
in the medias with involving a wide scope; The Company’s audit committee and damages to environment, and cause massive public complains.
internal audit department makes an inefficient supervision for internal control; Major defects: Any situations listed below appears, it can be
Qualitative criteria
Other situations maybe cause significant misdirection which guides the report users regarded as major defects. Operation: Unable to achieve partly
to make the right judgment. operation target, a big margin out of budget in various aspects.
Major defects ：The defect of internal control, individually or together with other Safety accident effects: Without reaching the number of person loss
defects, has the reasonable probability to cause the significant misstatements, which or serious injury of significant defects. Major negative effects:
cannot be promptly prevented, or found and corrected timely in the financial report, Negative news appears in the media with influencing a wide scope
although the misstatements neither achieves nor exceeds the importance level but in the provincial mainstream media. Environment effects: Cause
still arising the attention of Board of Directors and management team. Failure to heavy environment damages and massive public complains, ought to
select and apply accounting regulations in accordance with generally accepted carry out the significant remedial measures.
accounting principles; Failure to establish the anti-fraud procedures and control General defects: Any situations listed below appears, it can be
measures; Failure to set up corresponding control mechanism or to carry out and regarded as general defects. Operation: Other effects unable to
60
Yantai Changyu Pioneer Wine Co. Ltd. 2023 Annual Report
take corresponding compensating control for the accounting treatments with constitute the significant defects or major defects. Safety accident
irregular and special deal; Negative news appears in the media with influencing a effects: Personal injury less than the quantitative standards of major
wide scope; One or more defects exist in the control during the process of the defects. Major negative effects: Other defects unable to constitute
ending financial report, and the target of achieving truthfulness and integrality the significant defects or major defects. Environment effects:
cannot be reasonably guaranteed in the financial report; General defects refer to Other environment effects unable to constitute the significant defects
the other control defects, which do not constitute the significant and major defects. or major defects.
For total assets/Owner’s equity: For direct property loss:
Significant defects: misstatements ≧1%, or Significant defects: More than CNY10million
Major defects: 0.5%≦misstatements<1%, or Major defects: CNY1million-CNY10million (including
General defects: misstatements<0.5% CNY1million)
For operation revenue: General defects: Less than CNY1million
significant defects: misstatements ≧1%, or
Quantitative criterion
Major defects: 0.5%≦misstatements<1%, or
General defects: misstatements<0.5%
For pretax profit:
Significant defects: misstatements≧5%,or
Major defects: 2%≦misstatements<5%,or
General defects: misstatements<2%
Number of significant defect in financial report 0
Number of significant defect in non-financial report 0
Number of major defect in financial report 0
Number of major defect in non-financial report 0
(2) Internal control audit report
Available □Not available
Audit opinions of the internal control audit report
We believe that, the company maintained effective internal control over financial reporting in all material aspects in accordance with the Basic Norms for Corporate Internal Control and related regulations on
December 31, 2023.
61
Yantai Changyu Pioneer Wine Co. Ltd. 2023 Annual Report
Disclosure of the internal control audit report Disclosure
Disclosure date for the full text of the internal control audit report 2024.04.12
2023 Annual Self-Assessment Report on Internal Control was disclosed on Securities Times, China Securities Journal and www.cninfo.com.cn by
Disclosure index for the full text of the internal control audit report
the Company on April 12, 2024.
Opinion type of the internal control audit report Standard without reserved opinion
Whether or not exists significant defects in non-financial reports No
Whether or not the accounting firm issued non-standard opinions for the audit report of internal control
□Yes No
Whether the audit report of internal control issued by the accounting firm is in consistency with the self-assessment report of the board of
directors
Yes No
15. Self-inspection and rectification of problems in the special action on governance of listed company
No.
62
Yantai Changyu Pioneer Wine Co. Ltd. 2023 Annual Report
V. Environmental and Social Responsibility
1. Major Environmental issues
Whether the listed company and its subsidiaries belong to major polluters published by the environmental protection department
Yes No
Policies and industry standards related to environmental protection
The Environmental Protection Law of People’s Republic of China, The Water Pollution’s Prevention and Control Law of People’s Republic of China,
The Air Pollution’s Prevention and Control Law of People’s Republic of China, The Environmental Noise Pollution’s Prevention and Control Law of
People’s Republic of China, The Environmental Solid Waste Pollution’s Prevention and Control Law of People’s Republic of China and The
Environmental Protection Regulations of Liaoning Province; the national’s General Principles of Hazardous Waste Identification Standards, Surface
Water Environmental Quality Standards, Groundwater Environmental Quality Standards, Environmental Air Quality Standards, Acoustic
Environmental Quality Standards, Emission Standard for Environmental Noise at the Boundary of Industrial Enterprises, Comprehensive Discharge
Standard for Boiler Air Pollutants, The Limiting Value of Occupational Exposure to Hazardous Factors in the Workplace (Chemical Hazardous
Factors) and Comprehensive Wastewater Discharge Standard of Liaoning Province.
Administrative permit for environmental protection
It has been approved in the Huanhuanjianzi (2016) No.24 issued by the Environmental Protection Bureau of Huanren Manchu Autonomous County.
Industrial emission standards and specific information on the discharge of pollutants involved in production and business activities
Name of major Name of major Quantity Total Condition
Name of Total
pollutants and pollutants and Mode of of Distribution situation Discharge Implemented approved of
company or volume of
particular characteristic discharge discharge of discharge outlet concentration pollution discharge standard volume of excessive
subsidiary discharge
pollutants pollutants outlet discharge discharge
Liaoning Organized Discharge outlet Confirmed in line Emission Standard for Air Pollutants of Boiler
Changyu exhaust gas, exhaust gas, of boiler with national Meeting the (GB13271-2014), Emission Standard for Odor
Icewine inorganized waster water, chimney and 2 standard Graphical national Pollutants (GB14554-93), 4a in Class 2 of 35m3/d 120m3/d No
Chateau Co., exhaust gas, noise discharge outlet Signs for standards Emission Standard for Environmental Noise at
Ltd. waster water, of factory waste Environmental the Boundary of Industrial Enterprises
63
Yantai Changyu Pioneer Wine Co. Ltd. 2023 Annual Report
noise water Protection (GB12348-2008), Comprehensive Wastewater
(GB15562.1-1995) Discharge Standard of Liaoning Province
(GB15562.2-1995) (DB21/1627-2008)
Treatment of pollutants
The exhaust gas, SO2 and NOX produced by this company's boiler are discharged through ceramic tube dust removers and bag dust removers. A
wastewater treatment station has been constructed. The wastewater treatment process adopts the treatment process of hydrolys is aerobiont. Production
wastewater and domestic sewage are treated by the in-plant wastewater treatment station and then discharged into the waste water treatment plant in
Beidianzixiang Town.
Emergency plan for emergent environmental incident
The Company has formulated a comprehensive emergency plan for emergent environmental incident.
Environmental self-monitoring program
The Company has formulated a complete environmental self-monitoring program.
Investment in environmental governance and protection and payment of environmental protection tax
The Company has made sufficient investment in environmental protection, done a good job in environmental governance and protection and paid
environmental protection tax in full and timely according to law.
Measures taken to reduce carbon emissions and their effects during the reporting period
Available Not available
Administrative penalties for environmental issues during the reporting period
Company or subsidiary Reason for The impact on the production and The company’s
Violation Penalty result
name penalty operation of listed companies rectification measures
None None None None None None
Other environmental information that should be made public
No
64
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
Other related environmental information
No
2. Social responsibility performance
Please refer to the 2023 Environmental, Social and Regulatory Report (ESG) disclosed on CNINFO
(www.cninfo.com.cn) by the Company on April 12, 2024.
3. Consolidate and expand the achievements of poverty alleviation and rural revitalization
Please refer to the “Charity and Community Involvement” section of 2023 Environmental, Social
and Regulatory Report (ESG) disclosed on CNINFO (www.cninfo.com.cn) by the Company on
April 12, 2024.
65
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
VI. Major issues
1. Implementation of commitments
(1) Commitments that the Company’s actual controllers, shareholders, related parties, acquirers and the Company and other related
commitment parties have implemented during the report period and have not implemented up to the end of the report period
Available □Not available
Commitment Commitment Commitment Commitment
Commitments Commitment content Implementation
party type time period
Yantai Changyu Solve horizontal
Non-horizontal competition 1997.05.18 Forever Has been performing
Group Co., Ltd. competition
According to Trademark License Contract, the
According to Trademark License Contract, the trademark trademark use fee annually paid by the Company to
Commitments at the initial
Clear the use of royalty of Changyu and other trademarks paid by the 1997.05.18 Changyu Group shall be mainly used by Changyu Group
public offering or refinancing Yantai Changyu
trademark Company to Yantai Changyu Group Co., Ltd. every year is 1997.05.18 - to publicize trademarks including Changyu and contract
Group Co.,Ltd.
royalty mainly used for advertising Changyu and other trademarks and 2019.04.04 products. Except 2013 to 2017 during which the
this contract products by Yantai Changyu Group Co., Ltd. commitment was not strictly performed, Yantai Changyu
Group Co., Ltd. has been performing its commitment.
The CNY231,768,615 that was not used for publicity of
trademarks and contract products as promised would be offset The CNY231,768,615 that was not used for publicity of
Compensating 2019.04.04
Yantai Changyu by the four-year trademark use fee from 2019 to 2022. If trademarks and contract products as promised had offset
Other commitments unredeemed 2019.04.04 -
Group Co.,Ltd. insufficient, the shortfall would be filled in one time in 2023. by the four-year trademark use fee from 2019 to 2022.
commitment 2023.12.31
If there is any excess, the excess portion of the trademark use The shortfall was filled in one time in 2023.
fee would be collected from the year with excess occurrence.
Commitment under timely
Yes
implementation or not
Whether or not to have None
66
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
specific reasons of the
unimplemented commitment
and next steps
(2) The Company should make a statement on the achieved original profit forecast of assets or projects and its reason if there is profit forecast
of Company’s assets or projects and the report period is still in the profit forecast period
□Available Not available
2. Non-operating capital occupying of listed company by controlling shareholder and its related parties
□Available Not available
There are no non-operating capitals occupying of listed company by controlling shareholder and its related parties during the report period.
3. Illegal external guarantee
□Available Not available
There is no illegal guarantee situation during the report period.
4. Explanation of board of directors on the latest Non-standard Audit Report
□Available Not available
5. Explanation of Non-standard Audit Report given by accounting firm in the report period from board of directors, board of supervisors and
independent directors (if have)
□Available Not available
6. Compared with the last year’s financial report, explanation of the changes in accounting policy, accounting estimation or correction of
significant accounting errors
Available Not available
There is no changes of accounting policy, accounting estimation or correction of significant accounting errors during the report period.
67
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
7. Compared with the last year’s financial report, explanation for the changes of the
consolidated statements scope
Available Not available
For changes in the scope of the consolidated statements during the reporting period compared to the
previous year’s financial report, please refer to Note “VII Change of consolidation scope” to the financial
report of this report .
8. The appointment and dismissal of certified public accountants
Currently appointed accounting firm
Domestic accounting firm name KPMG Hua Zhen LLP
Remuneration for domestic accounting firm (CNY‘0000) 205
Consecutive period for the audit service of domestic accounting firm 5
Name of certified public accountant for the audit service of domestic accounting firm Ms. Ting Wang, Ms. Hui Jiang
Consecutive period for the certified public accountant’s audit service of domestic
5
accounting firm
Overseas accounting firm name (if have) —
Remuneration for overseas accounting firm (CNY‘0000) (if have) 0
Consecutive period for the audit service of overseas accounting firm (if have) —
Name of certified public accountant for the audit service of overseas accounting firm
—
(if have)
Consecutive period for the certified public accountant’s audit service of overseas
—
accounting firm (if have)
Whether or not to employ a new accounting firm during the report period
Yes No
To employ internal control audit accounting firms, financial adviser or sponsor.
Available Not available
This year, KPMG Huazhen LLP was hired as the internal control audit institution. The audit fee was not
determined separately, but was CNY2.05million together with the financial report audit fee.
9. Face of suspension and termination of listing after the disclosure of annual report
Available Not available
10. Bankruptcy reorganization
□Available Not available
There is no bankruptcy reorganization during the report period.
11. Material litigation and arbitration
□Available Not available
There are no material litigation and arbitration during the report period.
12. Penalty and rectification
Available Not available
There are no penalty and rectification during the report period
68
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
13. Credit of the Company, holding shareholders and actual controllers
□Available Not available
14. Significant related transactions
(1) Related transactions in relation to daily operations
Available □Not available
Proportion Whether
Approved Available
Amount accounting for exceed Cleari
Related Relationsh Pricing transaction market price Disclosur
Type Content Price (CNY‘000 amount of approved ng Disclosure index
party ip principle quota of similar e date
0) similar transaction form
(CNY‘0000) transactions
transactions quota
Anticipated
Announcement on
Purchase 2023 Annual
Yantai Controlled
Purchase and Routine Related
Shenma by the Determine
and commission Agreemen 2023.04. Transaction
Packagin same d by 8,399 15.71% 9,000 No Cash No
commission processing t pricing 13 disclosed in China
g Co., parent agreement
processing packaging Securities
Ltd. company
materials Journal,Securities
Timesand
CNINFO in 2023
Total -- -- 8,399 -- 9,000 -- -- -- -- --
Details of the return of large sales No
Actual performance of the estimated total amount for
daily operations related transactions by category that No
will occur during this period.
Reason for the deference between transaction price No
and market reference price(if available)
69
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
(2) Related transactions in relation to acquisition and sales of assets or equity
Available Not available
There is no related transactions in relation to acquisition or sales of assets or equity during the
report period.
(3) Related transactions in relation to common foreign investment
Available Not available
There is no related transactions in relation to common foreign investment during the report period.
(4) Related current credit and debt transactions
Available □Not available
Whether or not existing non-operating related credit and debt transactions
□Yes No
There is no non-operating related credit and debt transactions during the report period.
(5) Transactions with related financial companies
Available Not available
There is no deposit, loan, credit or other financial business between the Company and related
financial companies and related parties.
(6) Transactions between the related parties and financial companies controlled by the
Company
Available Not available
There is no deposit, loan, credit or other financial business between the related parties and the
financial companies controlled by the Company.
(7) Other major related transactions
Available Not available
The company has no other significant related party transactions during the reporting period.
15. Major and important contracts and execution results
(1) Trusteeship, contract and leasehold issues
Trusteeship situation
Available Not available
There is no trusteeship situation during the report period
Contract situation
Available Not available
There is no contract situation during the report period.
Leasehold situation
70
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
Available Not available
Explanation for lease situation
On January 1, 2022, the Company renewed the Space Lease Agreement with the controlling
shareholder Yantai Changyu Group Company Limited. The Company leased the space with
15,196.94 square meters locating at No. 174 Shihuiyao Road, Zhifu District, Yantai City. The
rent per year is CNY1.4645million with a rental period of 5 years from January 1, 2022 to
December 31, 2026. On January 1, 2022, the Company’s subordinate Sales & Marketing Co.
of Yantai Changyu Pioneer Wine Company Limited Brandy Sales Division renewed the
Space Lease Agreement with the controlling shareholder Yantai Changyu Group Company
Limited, leasing the space with 42,552.83 square meters locating at No. 1 Jichang Road, Zhifu
District, Yantai City and the space with 3,038 square meters locating at 56 Dama Road, Zhifu
District, Yantai City, which are all under the name of controlling shareholder. The rent of
above spaces per year is CNY4.3935million with a rental period of 5 years from January 1,
2022 to December 31, 2026.
In 2022, this Company signed a house-leasing contract with Yantai Shenma Packaging
Company Limited. According to this contract, since July 1, 2022, this Company leased
property to Yantai Shenma Packaging Company Limited for a business purpose with the
annual rent of CNY1,626,880. This contract expires on June 30, 2023.
Project whose profit and loss brought for the Company reach more than 10% of the total
profit during the report period
Available Not available
There are no lease projects whose profit and loss brought for the Company reach more than
10% of the total profit during the report period.
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Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
(2) Major guarantee
Available □Not available
Unit: CNY’0000
External guarantee of the Company and its subsidiaries（excluding guarantee to subsidiaries）
Disclosure date of
Actual date of Whether or not Whether or not belong
related Guarantee Actual guarantee Guarantee Collateral Counterguarantee Guarantee
Guarantee object name occurrence (date of complete to related-party
announcement about quota amount type (if have) situation (if have) Period
agreement) implementation guarantee
guarantee quota
Yantai Economic and Joint liability
Technological Development 2016.12.22 34,160 2016.12.21 34,160 assurance; - - 10 years No No
Zone Management Council. Mortgage
Total of the external guarantee quota approved Total of the actual external guarantee amount during the
0 0
during the report period (A1) report period (A2)
Total of the external guarantee quota approved by Balance of the actual external guarantee by the end of the
34,160 34,160
the end of the report period (A3) report period (A4)
Guarantee situations between the Company and subsidiaries
Disclosure date of
Whether or not Whether or not belong
related Guarantee Actual date of Actual guarantee Guarantee Counterguarantee Guarantee
Guarantee object name Collateral complete to related-party
announcement about quota occurrence amount type situation Period
implementation guarantee
guarantee quota
Yantai Changyu Wine Joint liability
Research and Development 2016.12.22 72,176 2016.12.21 72,176 assurance; - - 10 years No Yes
Company Limited Mortgage
Joint liability Effective as
Kilikanoon Estate Pty Ltd 2023.08.31 7,530 2023.09.01 7,530 - - No Yes
assurance of the date
72
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
this
Agreement is
signed and
will remain
in effect as
long as the
guarantor
remains in
business
with East
West Bank
Total of the guarantee quota approved to Total of the actual guarantee amount for subsidiaries during
7,530 7,530
subsidiaries during the report period (B1) the report period (B2)
Total of the guarantee quota approved to Balance of the actual guarantee for subsidiaries by the end
80,376 80,376
subsidiaries by the end of the report period (B3) of the report period (B4)
Guarantee situations between subsidiaries
Disclosure date of
Whether or not Whether or not belong
related Guarantee Actual date of Actual guarantee Guarantee Counterguarantee Guarantee
Guarantee object name Collateral complete to related-party
announcement about quota occurrence amount type situation Period
implementation guarantee
guarantee quota
Total guarantee amount of the Company（Total of above three major items）
Total of the approved guarantee quota during the Total of the actual guarantee amount during the report
7,530 7,530
report period（A1+B1+C1） period（A2+B2+C2）
Total of the approved guarantee quota by the end Balance of the actual guarantee by the end of the report
114,536 114,536
of the report period（A3+B3+C3） period（A4+B4+C4）
The proportion of actual total guarantee amount (A4+B4+C4) accounting for the Company’s net asset 10.56%
73
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
Among :
The amount of guarantee for shareholders, actual controllers and their related parties（D） 0
The amount of debt guarantee for the guaranteed objects whose asset-liability ratio is more than 70%
0
directly or indirectly（E）
Total amount of guarantee of the part that exceeds 50% of net assets（F） 0
Total amount of the above-mentioned three items（D+E+F） 0
Explanation for undue guarantees that have happened warranty liability or may take joint payback
No
liabilities during the report period (if have)
Explanation for violating due process to provide external guarantee (if have) No
74
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
Description of the specific situation of using compound guarantee
No.
(3) Entrusting others to manage cash assets
Financial management entrustment
□Available Not available
There is no financial management entrustment during the report period.
Loan entrustment
□Available Not available
There is no loan entrustment during the report period.
(4) Other important contracts
□Available Not available
There are no other important contracts during the report period.
16. Other Major issues
□Available Not available
There are no other major issues need to be explained during the report period.
17. Major issues of Company’s subsidiaries
□Available Not available
75
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
VII. Changes in Shares and the Shareholders’ Situation
1. Changes in shares
(1) Changes in shares
Unit: share
Amount before this change Change (+, -) Amount after this change
Transfer other capital to share
Amount Percentage % Allot new share Distribute bonus share Others Subtotal Amount Percentage %
capital
I. Shares with trading limited condition 6,785,559 6,785,559 6,785,559 0.98%
1. State-owned holdings
2. State-owned legal person holdings
3. Other domestic holdings 6,785,559 6,785,559 6,785,559 0.98%
Among which: domestic legal person
domestic natural person 6,785,559 6,785,559 6,785,559 0.98%
4. Foreign-owned holdings
Among which: foreign legal person
foreign natural person
II. Shares without trading limited condition 685,464,000 100% 685,464,000 99.02%
1. A shares 453,460,800 66.15% 453,460,800 65.51%
76
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
2. B shares 232,003,200 33.85% 232,003,200 33.51%
3. Oversea listed foreign shares
4. Others
III. Total shares 685,464,000 100% 6,785,559 6,785,559 692,249,559 100%
Cause of share change
Available Not available
During the reporting period, the Company implemented a restricted share incentive plan and granted 6.7856 million shares to 203 incentive subjects.
Approval of share change
Available Not available
It has been deliberated and approved by the Board of Directors and Shareholders’ Meeting.
Transfer ownership of changed shares
Available Not available
Shares have been granted to 203 incentive recipients and transfers have been completed.
The influence of share change on the financial indicators such as basic earnings per share, diluted earnings per share of the latest year and the latest
period, net asset per share belonging to the Company’s common shareholders, etc..
Available Not available
As a result of the increase in total share capital, financial indicators such as basic and diluted earnings per share for the most recent year and the most
recent period and assets per share attributable to the Company’s common shareholders will decrease accordingly.
77
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
Other contents the Company thinks necessary or securities regulatory departments ask to make public.
□Available Not available
(2) Changes in restricted shares
Available Not available
Unit: share
Number of
Number of restricted Increased number Number of restricted
Shareholder restricted shares at Reason for restricted
shares at the of restricted shares shares lifted during this Date of lifting restrictions
name the end of the sale
beginning period in this period period
period
203 incentive Implement equity Determined by equity
6,785,559 6,785,559
objects incentive incentive
Total 0 6,785,559 0 6,785,559 -- --
2. Securities issuance and listing situation
(1) Securities issuance (exclude preferred share) during report period
Available Not available
Names of shares and their Issued price (or Issued Number of Transaction Disclosure
Issued date Listing date Disclosure index
derivative securities interest rate) number approved listings termination date date
Share class
The Announcement on the Grant
Results of the 2023 Restricted Share
A share 2023.06.26 15.24 6,785,559 2023.07.20 6,785,559 2023.07.19
Incentive Plan (announcement no. :
2023- Interim 26)
Convertible corporate bonds, convertible corporate bonds that traded separately and corporate bonds
Other derivative securities
78
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
Description of the issuance of securities (excluding preferred shares) during the reporting period
During the reporting period, the Company issued 6,785,559 A shares at a price of CNY15.24 per share to 203 incentive objects.
(2) Explanation of change in Company’s total shares and shareholding structure and change in Company’s assets and liability
structure
Available Not available
During the reporting period, the Company implemented the restricted share incentive plan and granted 6.7856 million shares to 203 incentive subjects.
The changes in the Company’s share capital structure after the grant registration were as follows:
Before this change This change After this change
Nature of shareholder
Number of shares (share) Percentage Number of shares (share) Number of shares (share) Percentage
Tradable restricted shares 0 0% 6,785,559 6,785,559 0.98%
Tradable unrestricted shares 685,464,000 100% —— 685,464,000 99.02%
Total 685,464,000 100% 6,785,559 692,249,559 100%
After the completion of the restricted share granted, the company’s equity distribution still meets the listing conditions.
(3) Current internal employee shares
□Available Not available
3. Situation for shareholders and the actual controllers
(1) The number of shareholders of the Company and the shareholdings
Unit：share
Total number of shareholders by the Total number of preferred Total number of preferred
Total shareholders in the
46,713 end of last month before the disclosure 47,362 shareholder recovering voting 0 shareholder recovering voting 0
report period
day of the annual report power by the end of report period power by the end of last month
79
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
before the disclosure day of the
annual report
Shareholders holding more than 5% or the top 10 shareholders holding situation
Shares held until Number of Number of Pledged /marked or frozen
Character of Percentage Changes during the
Name of Shareholders the end of the restricted unrestricted
shareholders (%) report period Share status Amount
report period shares shares
Domestic non-state legal
YANTAI CHANGYU GROUP CO., LTD. 49.91% 345,473,856 2,300 0 345,473,856 — 0
person
GAOLING FUND, L.P. Foreign legal person 1.77% 12,238,951 -8,851,268 0 12,238,951 — 0
SHENWAN HONGYUAN SECURITIES (HONGKONG)
Foreign legal person 1.31% 9,061,352 1,767,400 0 9,061,352 — 0
LIMITED
GUOTAI JUNAN SECURITIES (HONGKONG) LIMITED Foreign legal person 1% 6,918,838 1,920,007 0 6,918,838 — 0
HONG KONG SECURITIES CLEARING COMPANY
Foreign legal person 0.77% 5,323,034 902,948 0 5,323,034 — 0
LIMITED
JIANG Fengdi Domestic natural person 0.77% 5,307,000 12,000 0 5,307,000 — 0
BBH BOS S/A FIDELITY FD - CHINA FOCUS FD Foreign legal person 0.69% 4,792,989 -2,890,027 0 4,792,989 — 0
VANGUARD EMERGING MARKETS STOCK INDEX
Foreign legal person 0.59% 4,094,263 67,400 0 4,094,263 — 0
FUND
Haitong International Securities Company Limited-Account
Foreign legal person 0.57% 3,921,904 -1,064,598 0 3,921,904 — 0
Client
VANGUARD TOTAL INTERNATIONAL STOCK INDEX
Foreign legal person 0.50% 3,483,537 0 0 3,483,537 — 0
FUND
Strategic investors or legal result of the placement of new shares to become a top 10
No
shareholders (If have) (Please refer to Note 3)
Among the top 10 shareholders, Yantai Changyu Group Company Limited has no associated relationship or accordant
The explanation for the associated relationship and accordant action
action relationship with the other 9 listed shareholders, while the relationship among the other shareholders is unknown.
Explanation of the above-mentioned shareholders’ entrustment/ fiduciary voting No
80
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
rights and waiver of the voting rights
Special explanation for the existence of a special repurchase account among the top
No
10 shareholders
The top 10 shareholders with shares without trading limited condition
Number of shares without trading limited condition held until Type of share
Name of Shareholders
the end of the year Type of share Amount
YANTAI CHANGYU GROUP CO., LTD. 345,473,856 A 345,473,856
GAOLING FUND, L.P. 12,238,951 B 12,238,951
SHENWAN HONGYUAN SECURITIES (HONGKONG) LIMITED 9,061,352 B 9,061,352
GUOTAI JUNAN SECURITIES (HONGKONG) LIMITED 6,918,838 B 6,918,838
HONG KONG SECURITIES CLEARING COMPANY LIMITED 5,323,034 A 5,323,034
JIANG Fengdi 5,307,000 A 5,307,000
BBH BOS S/A FIDELITY FD - CHINA FOCUS FD 4,792,989 B 4,792,989
VANGUARD EMERGING MARKETS STOCK INDEX FUND 4,094,263 B 4,094,263
Haitong International Securities Company Limited-Account Client 3,921,904 B 3,921,904
VANGUARD TOTAL INTERNATIONAL STOCK INDEX FUND 3,483,537 B 3,483,537
The explanation for the associated relationship and accordant action of the top 10
shareholders with unrestricted shares, the the associated relationship and accordant Among the top 10 shareholders, Yantai Changyu Group Company Limited has no associated relationship or accordant
action between the top 10 shareholders with unrestricted shares and the top 10 action relationship with the other 9 listed shareholders, and the relationship among the other shareholders is unknown.
shareholders
Explanation for the top 10 shareholders who involved in financing activities and
The top 10 shareholders do not involve in financing activities and stock trade business.
stock trading business
The lending of shares by the top ten shareholders in the securities financing business
Yes No
81
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
Unit：share
The lending of shares by the top ten shareholders in the securities financing business
Number of shares held in ordinary Number of lending shares of the Number of shares held in ordinary Number of lending shares of the
accounts and credit accounts at the securities financing and not be accounts and credit accounts at the securities financing and not be
Name of Shareholders (full name) beginning of the period returned yet at the beginning period end of the period returned yet at the end period
The proportion of the Total The proportion of the The proportion of the Total The proportion of the
Total quantity Total quantity
total share capital quantity total share capital total share capital quantity total share capital
YANTAI CHANGYU GROUP
345,471,556 50.40% 2,300 0% 345,473,856 49.91% 0 0%
CO., LTD.
The top ten shareholders changed from the previous period
Available Not available
Whether or not the Company’s top 10 common shareholders and shareholders with shares without trading limited condition take agreed repurchase
trading during the report period
□Yes No
There is no agreed repurchase trading taken by the Company’s top 10 common shareholders and shareholders with shares without trading limited
condition during the report period.
(2) Situation for the controlling shareholders of the Company
Property of holding shareholders: Property of holding main body undefined
Type of holding shareholders: Legal representative
Name of controlling shareholder Legal representative Establishment date Organization code Main business
Production of wine, healthy liquor, distilled liquor and beverages( only
Yantai Changyu Group Co., Ltd. ZHOU Hongjiang 1997.04.27 913706002656458244 produced by subsidiaries, shareholding companies and branches), sales
of the above-mentioned products, cultivation of agricultural products
82
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
and export business under the scope of permission.
Equity situation for the other domestic listed companies controlled or shared by the controlling shareholders during the report period No.
Changes in the controlling shareholder during the report period
Available Not available
There are no changes in the controlling shareholder during the report period.
(3) Situation for the actual controllers of the Company an its persons acting in concert
Property of actual controllers: domestic other institutions; foreign other institutions
Type of actual controllers: Legal representative
Name of actual controllers Legal representative Establishment date Organization code Main business
Under state permission, property investment, tenancy of machine and facility, wholesale and retail of
Yantai Yuhua Investment &
JIANG Hua 2004.10.28 767792947 construction material, chemical products (chemical hazard products excluded), hardware and electronical
Development Co., Ltd.
products, grape plantation.
Directly or indirectly conduct the production and distribution of food products (alcoholic products included) as
ILLVA Saronno Holding S.p.a. Aldino Marzorati 1984.07.25 － well as industrial, commercial, financial and service activities of any other kinds through joint-stock
companies and organizations.
International Finance Corporation is one of the members of World Bank, mainly dedicated to investment in
private sectors of developing countries while providing technical support and consultation service. The
International Finance Corporation Makhtar Diop 1956.07.25 － corporation is a multilateral financial institution that ranks first in the world in terms of providing capital stock
and loans to developing countries. Its purpose is to promote sustainable investments of private sectors of
developing countries in order to alleviate poverty and improve people’s life.
Operating management of state-owned property right (stock right) authorized by State-owned Assets
Yantai Guofeng Investment Supervision and Administration Commission of Yantai Municipal Government; Financing, investment and
RONG Feng 2009.02.12 684822338
Holdings Group Co., Ltd. operating management of government projects, such as strategic investment and industrial investment and so
on; Capital operation (including acquisition, reintegration and transfer, etc) of state-owned property right and
83
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
state-owned stock right within the scope of authorization; Venture capital investment business; Agency of
venture capital investment business of other venture investment enterprises or individuals; Participation in the
establishment of venture capital investment enterprises and venture capital investment management consultant
institutions; Investment and financing service and consulting business; Investment and financing consultant
business; Other business authorized by State-owned Assets Supervision and Administration Commission of
Yantai Municipal Government; wholesale and retail of non-ferrous metal mineral products, gold (spot good),
silver (spot good), chemical products (excluding dangerous goods), battery materials (excluding dangerous
chemicals); import and export of goods and technologies. (The business scope does not include national
pre-approval projects and projects restricted by national industrial policies; projects that are subject to approval
according to law can only carry out business activities after approval by relevant departments).
Yantai Yuhua Investment & Development Co., Ltd. did not control the equity of other domestic and foreign listed companies except the Company
Equity situation for the other domestic listed companies
during the reporting period; It is not clear that other actual controllers control the equity of other domestic and foreign listed companies other than the
controlled by the actual controller during the report period
Company during the reporting period.
Changes of the actual controllers during the report period
Available Not available
There are no changes in actual controllers during the report period.
84
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
Introduction for property right and control relations between the Company and its actual controllers
Actual controller controls the Company through a trust or other asset management ways
□Available Not available
85
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
(4) The company’s controlling shareholder or the largest shareholder and its concerted action
person’s cumulative pledged shares account for 80% of the company’s shares held by them
□Available Not available
(5) Other institutional shareholders holding more than 10% shares
□Available Not available
(6) Shares reduction situations of holding shareholders, actual controllers, restructuring side
and other commitment subjects
□Available Not available
4. The specific implementation of share repurchase during the reporting period
Implementation progress of share repurchase
□Available Not available
Implementation progress of reducing share repurchased by centralized bidding
□Available Not available
86
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
VIII. Related Situation of Preferred Shares
□Available Not available
There are no preferred shares during the report period.
IX. Related Situation of Bonds
□Available Not available
X. Financial Report
1. Audit Report
Type of audit opinion Standard unqualified audit opinion
Date signed on audit report April 10, 2024
KPMG Huazhen Certified Public Accountants
Audit agency name
Co., Ltd. (special general partnership)
Audit report No. KPMG Huazhen ShenZi No. 2405429
Certified public accountant’s name Ms. Ting Wang, Ms. Hui Jiang
87
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
YANTAI CHANGYU PIONEER WINE COMPANY LIMITED
ENGLISH TRANSLATION OF FINANCIAL STATEMENTS
FOR THE YEAR 1 JANUARY 2023 TO 31 DECEMBER 2023
IF THERE IS ANY CONFLICT BETWEEN THE CHINESE VERSION AND ITS ENGLISH
TRANSLATION, THE CHINESE VERSION WILL PREVAIL
88
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
AUDITOR’S REPORT
KPMG Huazhen Shen Zi No. 2405429
All Shareholders of Yantai Changyu Pioneer Wine Company Limited:
Opinion
We have audited the accompanying financial statements of Yantai Changyu Pioneer Wine
Company Limited (“Yantai Changyu”), which comprise the consolidated balance sheet and
company balance sheet as at 31 December 2023, the consolidated income statement and
company income statement, the consolidated cash flow statement and company cash flow
statement, the consolidated statement of changes in shareholders’ equity and company
statement of changes in shareholders’ equity for the year then ended, and notes to the
financial statements.
In our opinion, the accompanying financial statements present fairly, in all material respects,
the consolidated financial position and company financial position of Yantai Changyu as at 31
December 2023, and of its consolidated financial performance and company financial
performance and its consolidated cash flows and company cash flows for the year then ended
in accordance with Accounting Standards for Business Enterprises issued by the Ministry of
Finance of the People’s Republic of China.
Basis for Opinion
We conducted our audit in accordance with China Standards on Auditing for Certified Public
Accountants (“CSAs”). Our responsibilities under those standards are further described in
the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report.
We are independent of Yantai Changyu in accordance with the China Code of Ethics for
Certified Public Accountants (“the Code”), and we have fulfilled our other ethical
responsibilities in accordance with the Code. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our opinion.
89
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
AUDITOR’S REPORT (continued)
KPMG Huazhen Shen Zi No. 2405429
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most
significance in our audit of the financial statements for the year. These matters were
addressed in the context of our audit of the financial statements as a whole, and in forming
our opinion thereon, and we do not provide a separate opinion on these matters.
Recognition of Sales Revenue from Distributors
Refer to the accounting policies set out in the notes to the financial statements “III.
Significant accounting policies and accounting estimates” 25 and “V. Notes to the
consolidated financial statements” 38.
How the Matter was Addressed in Our
The Key Audit Matters
Audit
The principal activities of Yantai Changyu and Our audit procedures to evaluate revenue
its subsidiaries (hereinafter referred to as recognition of sales revenue from
“Yantai Changyu Group”) include manufacture distributors included the following:
and sales of wine, brandy and sparkling wine.
Understand and evaluate the
The revenue of Yantai Changyu Group is mainly Management’s design and operation
derived from sales of distributors. All effectiveness of key internal controls
distributor transaction terms adopt the unified related to distributor sales revenue
transaction terms formulated by Yantai recognition;
Changyu Group.
Selecting the sales contracts Yantai
Based on the contractual agreement and the Changyu signed with distributors in
business arrangement, Yantai Changyu sells order to examine whether Yantai
products to distributors and the transfer of Changyu has adopted the unified
product ownership is completed and the transaction terms, and evaluate
revenue is recognised when the goods are whether the accounting policy of
delivered to distributors and signed for revenue recognition meets the
acceptance. requirements of the Accounting
As revenue is one of the key performance Standards for Business Enterprises;
indicators of Yantai Changyu Group, there is a On a sampling basis, reconcile the
risk that management may recognise revenue revenue recorded for the year to
earlier or later in order to meet specific relevant supporting files such as
performance targets or expectations, therefore, relevant orders and signed delivery
the risk of cut-off misstatement arising from notes, etc. to evaluate whether
distributors’ sales revenue is identified as a key revenue is recognised in accordance
audit matter. with the accounting policy of Yantai
Changyu;
90
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
AUDITOR’S REPORT (continued)
KPMG Huazhen Shen Zi No. 2405429
Key Audit Matters (continued)
Recognition of Sales Revenue from Distributors (continued)
Refer to the accounting policies set out in the notes to the financial statements “III.
Significant accounting policies and accounting estimates” 25 and “V. Notes to the
consolidated financial statements” 38.
How the Matter was Addressed in Our
The Key Audit Matters
Audit
On a sampling basis, reconcile the sales
transaction before and after balance sheet
date to relevant supporting files such as
relevant orders, signed delivery notes,
etc. to evaluate whether revenue is
recognised in appropriate accounting
period;
Check the sales record after the balance
sheet date to identify significant sales
returns and check relevant supporting
files (If applicable) in order to evaluate
whether relevant revenue is recorded in
the appropriate accounting period;
Select revenue accounting entries that
meet specific risk criteria and check
related supporting documents.
91
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
AUDITOR’S REPORT (continued)
KPMG Huazhen Shen Zi No. 2405429
Other Information
Management of Yantai Changyu is responsible for the other information. The other
information comprises all the information included in the 2023 annual report, other than the
financial statements and our auditor’s report thereon.
Our opinion on the financial statements does not cover the other information and we do not
express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the audit or otherwise appears to
be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement
of this other information, we are required to report that fact. We have nothing to report in this
regard.
Responsibilities of Management and Those Charged with Governance for the Financial
Statements
Management is responsible for the preparation and fair presentation of the financial
statements in accordance with the Accounting Standards for Business Enterprises, and for
the design, implementation and maintenance of such internal control necessary to enable that
the financial statements are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing Yantai
Changyu’s ability to continue as a going concern, disclosing, as applicable, matters related to
going concern and using the going concern basis of accounting unless management either
intends to liquidate Yantai Changyu or to cease operations, or has no realistic alternative but
to do so.
Those charged with governance are responsible for overseeing Yantai Changyu’s financial
reporting process.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as
a whole are free from material misstatement, whether due to fraud or error, and to issue an
auditor’s report that includes our opinion. Reasonable assurance is a high level of
assurance, but is not a guarantee that an audit conducted in accordance with CSAs will
always detect a material misstatement when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these financial
statements.
92
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
AUDITOR’S REPORT (continued)
KPMG Huazhen Shen Zi No. 2405429
Auditor’s Responsibilities for the Audit of the Financial Statements (continued)
As part of an audit in accordance with CSAs, we exercise professional judgement and
maintain professional scepticism throughout the audit. We also:
(1) Identify and assess the risks of material misstatement of the financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those
risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for
our opinion. The risk of not detecting a material misstatement resulting from fraud is
higher than for one resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal control.
(2) Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances.
(3) Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by the management.
(4) Conclude on the appropriateness of management’s use of the going concern basis of
accounting and, basis of accounting and, based on the audit evidence obtained,
whether a material uncertainty exists related to events or conditions that may cast
significant doubt on Yantai Changyu’s ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to draw attention in our
auditor’s report to the related disclosures in the financial statements or, if such
disclosures are inadequate, to modify our opinion. Our conclusions are based on the
audit evidence obtained up to the date of our auditor’s report. However, future events
or conditions may cause Yantai Changyu to cease to continue as a going concern.
(5) Evaluate the overall presentation, structure and content of the financial statements,
including the disclosures, and whether the financial statements represent the underlying
transactions and events in a manner that achieves fair presentation.
(6) Obtain sufficient appropriate audit evidence regarding the financial information of the
entities or business activities within the Group to express our audit opinion on the
financial statements. We are responsible for the direction, supervision and
performance of the Group audit. We remain solely responsible for our audit opinion.
93
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
AUDITOR’S REPORT (continued)
KPMG Huazhen Shen Zi No. 2405429
Auditor’s Responsibilities for the Audit of the Financial Statements (continued)
We communicate with those charged with governance regarding, among other matters, the
planned scope and timing of the audit and significant audit findings, including any significant
deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with
relevant ethical requirements regarding independence, and communicate with them all
relationships and other matters that may reasonably be thought to bear on our independence
and, where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those
matters that were of most significance in the audit of the financial statements of the year and
are therefore the key audit matters. We describe these matters in our auditor’s report unless
law or regulation precludes public disclosure about the matter or when, in extremely rare
circumstances, we determine that a matter should not be communicated in our report
because the adverse consequences of doing so would reasonably be expected to outweigh
the public interest benefits of such communication.
KPMG Huazhen LLP Certified Public Accountants Registered
(Stamp) in the People’s Republic of China
Wang Ting (Engagement Partner)
(Signature and stamp)
Beijing, China Jiang Hui
(Signature and stamp)
Date: 10 April 2024
94
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
Yantai Changyu Pioneer Wine Company Limited
Consolidated balance sheet
as at 31 December 2023
(Expressed in Renminbi Yuan)
31 December 31 December
Note
2023 2022
Assets
Current assets
Cash at bank and on hand V.1 2,217,693,647 1,651,454,115
Bills receivable V.2 1,260,000 2,712,460
Accounts receivable V.3 382,132,334 343,982,985
Receivables under financing V.4 408,316,028 309,329,918
Prepayments V.5 61,497,933 60,415,508
Other receivables V.6 71,496,276 70,542,398
Inventories V.7 2,765,390,587 2,903,398,515
Other current assets V.8 88,368,542 185,337,393
Total current assets 5,996,155,347 5,527,173,292
Non-current assets
Long-term equity investments V.9 38,285,620 41,371,385
Investment properties V.10 24,482,831 22,115,318
Fixed assets V.11 5,795,082,569 6,028,137,972
Construction in progress V.12 3,323,241 40,934,161
Bearer biological assets V.13 177,461,983 184,420,741
Right-of-use assets V.14 121,745,910 139,887,159
Intangible assets V.15 542,625,776 578,240,846
Goodwill V.16 107,163,616 107,163,616
Long-term deferred expenses V.17 306,662,107 274,699,232
Deferred tax assets V.18 221,518,204 227,362,656
Other non-current assets V.19 1,760,000 -
Total non-current assets 7,340,111,857 7,644,333,086
Total assets 13,336,267,204 13,171,506,378
The notes on pages 114 to 210 form part of these financial statements.
95
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
Yantai Changyu Pioneer Wine Company Limited
Consolidated balance sheet
as at 31 December 2023 (continued)
(Expressed in Renminbi Yuan)
31 December 31 December
Note
2023 2022
Liabilities and shareholders’ equity
Current liabilities
Short-term loans V.20 364,981,445 389,378,480
Accounts payable V.21 473,352,525 503,323,746
Contract liabilities V.22 175,278,849 165,727,991
Employee benefits payable V.23 185,331,292 182,951,538
Taxes payable V.24 274,723,431 239,695,902
Other payables V.25 555,634,336 372,608,689
Other current liabilities V.26 44,958,297 18,945,706
Non-current liabilities due within
V.27 78,523,993 144,020,834
one year
Total current liabilities 2,152,784,168 2,016,652,886
Non-current liabilities
Long-term loans V.28 66,616,443 128,112,115
Lease liabilities V.29 85,038,335 109,505,093
Long-term payables V.30 - 42,000,000
Deferred income V.31 32,582,734 38,389,058
Deferred tax liabilities V.18 8,719,729 11,266,932
Total non-current liabilities 192,957,241 329,273,198
Total liabilities 2,345,741,409 2,345,926,084
The notes on pages 114 to 210 form part of these financial statements.
96
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
Yantai Changyu Pioneer Wine Company Limited
Consolidated balance sheet
as at 31 December 2023 (continued)
(Expressed in Renminbi Yuan)
31 December 31 December
Note
2023 2022
Liabilities and shareholders’ equity
(continued)
Shareholders’ equity
Share capital V.32 692,249,559 685,464,000
Capital reserve V.33 651,086,707 524,968,760
Less：Treasury stock V.34 103,411,919 -
Other comprehensive income V.35 (14,784,677) (23,760,238)
Surplus reserve V.36 342,732,000 342,732,000
Retained earnings V.37 9,273,629,318 9,049,649,211
Total equity attributable to shareholders of
10,841,500,988 10,579,053,733
the Company
Non-controlling interests 149,024,807 246,526,561
Total shareholders’ equity 10,990,525,795 10,825,580,294
Total liabilities and shareholders’ equity 13,336,267,204 13,171,506,378
These financial statements were approved by the Board of Directors of the Company on 10
April 2024. .
Zhou Hongjiang Jiang Jianxun Guo Cuimei (Company stamp)
Legal Representative The person in charge The head of the
of accounting affairs accounting department
(Signature and stamp) (Signature and stamp) (Signature and stamp)
The notes on pages 114 to 210 form part of these financial statements.
97
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
Yantai Changyu Pioneer Wine Company Limited
Company balance sheet
as at 31 December 2023
(Expressed in Renminbi Yuan)
31 December 31 December
Note
2023 2022
Assets
Current assets
Cash at bank and on hand 1,242,484,544 874,241,771
Accounts receivable 5,189,894 2,301,505
Receivables under financing XVII.1 36,322,019 41,061,417
Prepayments 52,587 3,518,783
Other receivables XVII.2 576,949,997 720,176,320
Inventories 323,465,919 335,031,522
Other current assets 147,187 20,080,844
Total current assets 2,184,612,147 1,996,412,162
Non-current assets
Long-term equity investments XVII.3 7,648,498,638 7,705,853,378
Investment properties 24,482,831 22,115,318
Fixed assets 194,601,612 216,651,596
Construction in progress 264,175 375,969
Bearer biological assets 100,785,279 108,370,882
Right-of-use assets 37,025,896 36,153,799
Intangible assets 72,552,201 75,298,044
Deferred tax assets 2,327,585 12,120,605
Other non-current assets 1,934,430,000 1,850,200,000
Total non-current assets 10,014,968,217 10,027,139,591
Total assets 12,199,580,364 12,023,551,753
The notes on pages 114 to 210 form part of these financial statements.
98
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
Yantai Changyu Pioneer Wine Company Limited
Company balance sheet
as at 31 December 2023 (continued)
(Expressed in Renminbi Yuan)
31 December 31 December
Note
2023 2022
Liabilities and shareholders’ equity
Current liabilities
Short-term loans 100,000,000 100,000,000
Accounts payable 63,686,113 100,583,550
Employee benefits payable 68,654,350 68,112,832
Taxes payable 6,439,899 39,101,259
Other payables 608,904,995 499,751,275
Non-current liabilities due within
3,803,910 5,129,607
one year
Total current liabilities 851,489,267 812,678,523
Non-current liabilities
Lease liabilities 42,380,074 38,757,167
Deferred income 55,718 877,814
Total non-current liabilities 42,435,792 39,634,981
Total liabilities 893,925,059 852,313,504
The notes on pages 114 to 210 form part of these financial statements.
99
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
Yantai Changyu Pioneer Wine Company Limited
Company balance sheet
as at 31 December 2023 (continued)
(Expressed in Renminbi Yuan)
31 December 31 December
Note
2023 2022
Liabilities and shareholders’ equity
(continued)
Shareholders’ equity
Share capital 692,249,559 685,464,000
Capital reserve 687,544,350 560,182,235
Less：Treasury stock 103,411,919 -
Surplus reserve 342,732,000 342,732,000
Retained earnings 9,686,541,315 9,582,860,014
Total shareholders’ equity 11,305,655,305 11,171,238,249
Total liabilities and shareholders’ equity 12,199,580,364 12,023,551,753
These financial statements were approved by the Board of Directors of the Company on 10
April 2024. .
Zhou Hongjiang Jiang Jianxun Guo Cuimei (Company stamp)
Legal Representative The person in charge The head of the
of accounting affairs accounting department
(Signature and stamp) (Signature and stamp) (Signature and stamp)
The notes on pages 114 to 210 form part of these financial statements.
100
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
Yantai Changyu Pioneer Wine Company Limited
Consolidated income statement
for the year ended 31 December 2023
(Expressed in Renminbi Yuan)
Note 2023 2022
I. Operating income V.38 4,384,764,335 3,918,941,160
Less: Operating costs V.38 1,786,983,657 1,680,794,732
Taxes and surcharges V.39 349,735,571 289,656,627
Selling and distribution
V.40 1,239,782,776 1,028,966,138
expenses
General and administrative
V.41 303,990,858 287,605,531
expenses
Research and development
17,413,534 15,431,310
expenses
Financial expenses V.42 11,083,459 7,256,207
Including: Interest expenses 35,800,097 26,856,890
Interest income 30,571,465 24,186,351
Add: Other income V.43 51,523,799 33,145,440
Investment income/(losses) V.44 23,847,450 (3,447,794)
Including: Losses from
investment
(712,480) (1,605,469)
associates and in
joint ventures
Credit reversal V.45 1,397,658 4,752,797
Impairment losses V.46 (13,506,958) (5,789,670)
Losses from disposal of assets V.47 (134,133) (16,191,903)
The notes on pages 114 to 210 form part of these financial statements.
101
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
Yantai Changyu Pioneer Wine Company Limited
Consolidated income statement
for the year ended 31 December 2023 (continued)
(Expressed in Renminbi Yuan)
Note 2023 2022
II. Operating profit 738,902,296 621,699,485
Add: Non-operating income V.48 11,992,270 6,832,809
Less: Non-operating expenses V.48 3,428,410 2,949,991
III. Profit before income tax 747,466,156 625,582,303
Less: Income tax expenses V.49 221,433,447 194,233,589
IV. Net profit 526,032,709 431,348,714
(1) Net profit classified by
continuity of operations:
1. Net profit from continuing
526,032,709 431,348,714
operations
2. Net profit from discontinued
- -
operations
(2) Net profit classified by
ownership:
1. Net profit attributable to
shareholders of the 532,438,907 428,681,411
Company
2. Non-controlling net
(6,406,198) 2,667,303
(losses)/interests
V. Other comprehensive income, net of
9,519,495 12,282,545
tax
(1) Other comprehensive income
(net of tax) attributable to 8,975,561 10,946,939
shareholders of the Company
Translation differences arising
from translation of foreign 8,975,561 10,946,939
currency financial statements
(2) Other comprehensive income
(net of tax) attributable to 543,934 1,335,606
non-controlling interests
The notes on pages 114 to 210 form part of these financial statements.
102
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
Yantai Changyu Pioneer Wine Company Limited
Consolidated income statement
for the year ended 31 December 2023 (continued)
(Expressed in Renminbi Yuan)
Note 2023 2022
VI. Total comprehensive income for the
535,552,204 443,631,259
year
(1) Attributable to shareholders of
541,414,468 439,628,350
the Company
(2) Attributable to non-controlling
(5,862,264) 4,002,909
interests
VII. Earnings per share:
(1) Basic earnings per share V.50 0.78 0.63
(2) Diluted earnings per share V.50 0.78 0.63
These financial statements were approved by the Board of Directors of the Company on 10
April 2024. .
Zhou Hongjiang Jiang Jianxun Guo Cuimei (Company stamp)
Legal Representative The person in charge The head of the
of accounting affairs accounting department
(Signature and stamp) (Signature and stamp) (Signature and stamp)
The notes on pages 114 to 210 form part of these financial statements.
103
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
Yantai Changyu Pioneer Wine Company Limited
Company income statement
for the year ended 31 December 2023
(Expressed in Renminbi Yuan)
Note 2023 2022
I. Operating income XVII.4 731,158,954 675,062,421
Less: Operating cost XVII.4 621,636,564 577,316,851
Taxes and surcharges 26,163,038 27,984,695
General and administrative
60,054,424 58,441,386
expenses
Research and development
1,127,242 2,674,191
expenses
Financial expenses (2,756,864) (4,912,837)
Including: Interest expenses 3,184,460 3,238,235
Interest income 10,213,608 10,840,336
Add: Other income 3,219,830 5,318,209
Investment income XVII.5 439,250,529 736,516,479
Impairment losses (42,274,055) -
Proceeds from the disposal of
- 33,453
assets
II. Operating profit 425,130,854 755,426,276
Add: Non-operating income 386,193 3,665,752
Less: Non-operating expenses 1,258,048 1,281,047
The notes on pages 114 to 210 form part of these financial statements.
104
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
Yantai Changyu Pioneer Wine Company Limited
Company income statement
for the year ended 31 December 2023 (continued)
(Expressed in Renminbi Yuan)
Note 2023 2022
III. Profit before income tax 424,258,999 757,810,981
Less: Income tax expenses 12,118,898 8,053,832
IV. Net profit 412,140,101 749,757,149
(i) Net profit from continuing
412,140,101 749,757,149
operations
(ii) Net profit from discontinued
- -
operations
V. Other comprehensive income, net of
- -
tax
VI. Total comprehensive income for the
412,140,101 749,757,149
year
These financial statements were approved by the Board of Directors of the Company on 10
April 2024. .
Zhou Hongjiang Jiang Jianxun Guo Cuimei (Company stamp)
Legal Representative The person in charge The head of the
of accounting affairs accounting department
(Signature and stamp) (Signature and stamp) (Signature and stamp)
The notes on pages 114 to 210 form part of these financial statements.
105
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
Yantai Changyu Pioneer Wine Company Limited
Consolidated cash flow statement
for the year ended 31 December 2023
(Expressed in Renminbi Yuan)
Note 2023 2022
I. Cash flows from operating activities:
Proceeds from sale of goods and
4,362,027,268 3,681,133,282
rendering of services
Refund of taxes 37,827,698 186,197,815
Proceeds from other operating
V.51(1) 219,385,622 61,825,407
activities
Sub-total of cash inflows 4,619,240,588 3,929,156,504
Payment for goods and services 1,368,282,215 1,266,006,299
Payment to and for employees 491,419,621 493,589,542
Payment of various taxes 910,748,260 718,434,215
Payment for other operating activities V.51(1) 675,698,749 582,249,801
Sub-total of cash outflows 3,446,148,845 3,060,279,857
Net cash flows from operating
V.52(1) 1,173,091,743 868,876,647
activities
II. Cash flows from investing activities:
Proceeds from disposal of
238,200,000 133,200,000
investments
Investment returns received 3,196,066 1,340,518
Net proceeds from disposal of fixed
assets, intangible assets and other 10,529,793 28,412,630
long-term assets
Net proceeds from disposal of
V.52(2) 20,308,625 -
subsidiaries and other business units
Net proceeds from acquisition of
V.52(2) 657,049 -
subsidiaries and other business units
Sub-total of cash inflows 272,891,533 162,953,148
Payment for acquisition of fixed
assets, intangible assets and other 132,032,219 198,791,362
long-term assets
Payment for acquisition of
464,200,000 108,200,000
investments
Sub-total of cash outflows 596,232,219 306,991,362
Net cash flows from investing
(323,340,686) (144,038,214)
activities
The notes on pages 114 to 210 form part of these financial statements.
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Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
Yantai Changyu Pioneer Wine Company Limited
Consolidated cash flow statement
for the year ended 31 December 2023 (continued)
(Expressed in Renminbi Yuan)
Note 2023 2022
III. Cash flows from financing activities:
Proceeds from investors 103,411,919 -
Proceeds from borrowings 573,859,507 641,331,495
Sub-total of cash inflows 677,271,426 641,331,495
Repayments of borrowings 768,253,239 903,179,998
Payment for dividends, profit
341,454,132 333,134,330
distributions or interest
Payment for other financing activities V.51(3) 67,229,123 19,774,744
Sub-total of cash outflows 1,176,936,494 1,256,089,072
Net cash flows from financing
(499,665,068) (614,757,577)
activities
IV. Effect of foreign exchange rate
changes on cash and cash 316,163 345,715
equivalents
V. Net increase in cash and cash
V.52(1) 350,402,152 110,426,571
equivalents
Add: Cash and cash equivalents at
1,612,753,600 1,502,327,029
the beginning of the year
VI. Cash and cash equivalents at the end
V.52(2) 1,963,155,752 1,612,753,600
of the year
These financial statements were approved by the Board of Directors of the Company on 10
April 2024. .
Zhou Hongjiang Jiang Jianxun Guo Cuimei (Company stamp)
Legal Representative The person in charge The head of the
of accounting affairs accounting department
(Signature and stamp) (Signature and stamp) (Signature and stamp)
The notes on pages 114 to 210 form part of these financial statements.
107
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
Yantai Changyu Pioneer Wine Company Limited
Company cash flow statement
for the year ended 31 December 2023
(Expressed in Renminbi Yuan)
Note 2023 2022
I. Cash flows from operating activities:
Proceeds from sale of goods and
673,455,798 610,597,839
rendering of services
Tax returns received - 1,597,879
Proceeds from other operating
12,473,241 84,262,490
activities
Sub-total of cash inflows 685,929,039 696,458,208
Payment for goods and services 611,290,566 401,136,965
Payment to and for employees 60,646,447 67,906,188
Payment of various taxes 62,523,754 50,709,754
Payment for other operating activities 28,861,990 23,452,120
Sub-total of cash outflows 763,322,757 543,205,027
Net cash flows from operating
(77,393,718) 153,253,181
activities
II. Cash flows from investing activities:
Proceeds from disposal of
262,833,449 118,200,000
investments
Investment returns received 729,828,424 489,479,719
Net proceeds from disposal of fixed
assets, intangible assets and other 576,150 175,978
long-term assets
Net proceeds from disposal of
subsidiaries and other business 17,965,519 1,677,331
units
Proceeds from borrowings to
10,000,000 312,000,000
subsidiaries
Sub-total of cash inflows 1,021,203,542 921,533,028
Payment for acquisition of fixed
assets, intangible assets and other 7,116,731 21,831,779
long-term assets
Payment for acquisition of
478,823,400 218,200,000
investments
Net payment for acquisition of
subsidiaries and other business 5,537,700 -
units
Cash paid to subsidiaries 94,230,000 138,700,000
Sub-total of cash outflows 585,707,831 378,731,779
Net cash flows from investing
435,495,711 542,801,249
activities
The notes on pages 114 to 210 form part of these financial statements.
108
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
Yantai Changyu Pioneer Wine Company Limited
Company cash flow statement
for the year ended 31 December 2023 (continued)
(Expressed in Renminbi Yuan)
Note 2023 2022
III. Cash flows from financing activities:
Proceeds from investors 103,411,919 -
Proceeds from borrowings 100,000,000 100,000,000
Sub-total of cash inflows 203,411,919 100,000,000
Repayments of borrowings 100,000,000 150,000,000
Payment for dividends or interest 311,643,260 311,697,035
Payment for other financing activities 4,956,105 4,796,838
Sub-total of cash outflows 416,599,365 466,493,873
Net cash flows from financing
(213,187,446) (366,493,873)
activities
IV. Effect of foreign exchange rate
changes on cash and cash - -
equivalents
V. Net increase in cash and cash
144,914,547 329,560,557
equivalents
Add: Cash and cash equivalents at
843,369,997 513,809,440
the beginning of the year
VI. Cash and cash equivalents at the end
988,284,544 843,369,997
of the year
These financial statements were approved by the Board of Directors of the Company on 10
April 2024. .
Zhou Hongjiang Jiang Jianxun Guo Cuimei (Company stamp)
Legal Representative The person in charge The head of the
of accounting affairs accounting department
(Signature and stamp) (Signature and stamp) (Signature and stamp)
The notes on pages 114 to 210 form part of these financial statements.
109
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
Yantai Changyu Pioneer Wine Company Limited
Consolidated statement of changes in shareholders’ equity
for the year ended 31 December 2023
(Expressed in Renminbi Yuan)
Attributable to shareholders of the Company
Total
Other Non-controlling
Note Less:Treasury-S Retained shareholders’
Share capital Capital reserve comprehensive Surplus reserve Sub-total interests
tock earnings equity
income
I. Balance at the beginning of the year 685,464,000 524,968,760 - (23,760,238) 342,732,000 9,049,649,211 10,579,053,733 246,526,561 10,825,580,294
II. Changes in equity during the year
1. Total comprehensive income - - - 8,975,561 - 532,438,907 541,414,468 (5,862,264) 535,552,204
2. Shareholders’ contributions and
decrease of capital
(1). Effects of Restricted Share
V.32 6,785,559 127,362,115 (103,411,919) - - - 30,735,755 - 30,735,755
Incentive Plan
(2). Acquisition of
VIII.2 - (1,244,168) - - - - (1,244,168) (31,502,609) (32,746,777)
non-controlling interests
3. Appropriation of profits
Distributions to shareholders V.37 - - - - - (308,458,800) (308,458,800) (1,538,316) (309,997,116)
4. Others
Disposal of equities in subsidiaries - - - - - - - (58,598,565) (58,598,565)
III. Balance at the end of the year 692,249,559 651,086,707 (103,411,919) (14,784,677) 342,732,000 9,273,629,318 10,841,500,988 149,024,807 10,990,525,795
These financial statements were approved by the Board of Directors of the Company on 10 April 2024. .
Zhou Hongjiang Jiang Jianxun Guo Cuimei (Company stamp)
Legal Representative The person in charge of The head of the accounting
accounting affairs department
(Signature and stamp) (Signature and stamp) (Signature and stamp)
The notes on pages 114 to 210 form part of these financial statements.
110
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
Yantai Changyu Pioneer Wine Company Limited
Consolidated statement of changes in shareholders’ equity (continued)
for the year ended 31 December 2022
(Expressed in Renminbi Yuan)
Attributable to shareholders of the Company
Total
Other Non-controlling
Note Retained shareholders’
Share capital Capital reserve comprehensive Surplus reserve Sub-total interests
earnings equity
income
I. Balance at the beginning of the year 685,464,000 524,968,760 (34,707,177) 342,732,000 8,929,426,600 10,447,884,183 244,792,421 10,692,676,604
II. Changes in equity during the year
(1) Total comprehensive income - - 10,946,939 - 428,681,411 439,628,350 4,002,909 443,631,259
(2) Appropriation of profits
Distributions to shareholders V.37 - - - - (308,458,800) (308,458,800) (2,268,769) (310,727,569)
III. Balance at the end of the year 685,464,000 524,968,760 (23,760,238) 342,732,000 9,049,649,211 10,579,053,733 246,526,561 10,825,580,294
These financial statements were approved by the Board of Directors of the Company on 10 April 2024. .
Zhou Hongjiang Jiang Jianxun Guo Cuimei (Company stamp)
Legal Representative The person in charge of The head of the accounting
accounting affairs department
(Signature and stamp) (Signature and stamp) (Signature and stamp)
The notes on pages 114 to 210 form part of these financial statements.
111
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
Yantai Changyu Pioneer Wine Company Limited
Company statement of changes in shareholders’ equity
for the year ended 31 December 2023
(Expressed in Renminbi Yuan)
Total
Less:Treasury- Retained
Note Share capital Capital reserve Surplus reserve shareholders’
Stock earnings
equity
I. Balance at the beginning
685,464,000 560,182,235 - 342,732,000 9,582,860,014 11,171,238,249
of the year
II. Changes in equity during
the year
(1) Total comprehensive
- - - - 412,140,101 412,140,101
income
(2) Contribution by
owners
Effects of Restricted
Share Incentive 6,785,559 127,362,115 (103,411,919) - - 30,735,755
Plan
(3) Appropriation of
profits
Distributions to
- - - - (308,458,800) (308,458,800)
shareholders
III. Balance at the end of the
692,249,559 687,544,350 (103,411,919) 342,732,000 9,686,541,315 11,305,655,305
year
These financial statements were approved by the Board of Directors of the Company on 10
April 2024. .
Zhou Hongjiang Jiang Jianxun Guo Cuimei (Company stamp)
Legal Representative The person in charge The head of the
of accounting affairs accounting department
(Signature and stamp) (Signature and stamp) (Signature and stamp)
The notes on pages 114 to 210 form part of these financial statements.
112
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
Yantai Changyu Pioneer Wine Company Limited
Company statement of changes in shareholders’ equity
for the year ended 31 December 2022 (continued)
(Expressed in Renminbi Yuan)
Total
Retained
Note Share capital Capital reserve Surplus reserve shareholders’
earnings
equity
I. Balance at the beginning of the year 685,464,000 560,182,235 342,732,000 9,141,561,665 10,729,939,900
II. Changes in equity during the year
(1) Total comprehensive income - - - 749,757,149 749,757,149
(2) Appropriation of profits
Distributions to shareholders - - - (308,458,800) (308,458,800)
III. Balance at the end of the year 685,464,000 560,182,235 342,732,000 9,582,860,014 11,171,238,249
These financial statements were approved by the Board of Directors of the Company on 10
April 2024. .
Zhou Hongjiang Jiang Jianxun Guo Cuimei (Company stamp)
Legal Representative The person in charge The head of the
of accounting affairs accounting department
(Signature and stamp) (Signature and stamp) (Signature and stamp)
The notes on pages 114 to 210 form part of these financial statements.
113
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
Yantai Changyu Pioneer Wine Company Limited
Notes to the financial statements
(Expressed in Renminbi Yuan unless otherwise indicated)
I. Company status
Yantai Changyu Pioneer Wine Co., Ltd. (the “Company” or the “Joint Stock Company”) was
incorporated as a joint stock limited company in accordance with the Company Law of the
People’s Republic of China (the “PRC”) in a reorganisation carried out by Yantai Changyu
Group Co., Ltd. (“Changyu Group”), in which Changyu Group Company injected certain
assets and liabilities in relation to the wine, brandy, and sparkling wine production and sales
businesses to the Company. The Company and its subsidiaries (the “Group”) are principally
engaged in the production and sales of wine, brandy, sparkling wine, grape growing and
acquisition, as well as travel resource development, etc.. Registration place of the Company
is Yantai, Shandong. Headquarter of the Company is located at No. 56 Da Ma Lu, Zhifu
District, Yantai, Shandong, PRC.
As at 31 December 2023 the total shares issued by the Company amounts to 692,249,559
shares. Please refer to Note V. 32 in detail.
The holding company of the Group is Changyu Group Company, which is jointly controlled by
Yantai GuoFeng Investment Holding Ltd., ILLVA SARONNO HOLDING SPA, International
Finance Corporation and Yantai Yuhua Investment and Development Company Limited.
The financial statements have been authorised by the board of directors on 10 April 2024.
According to the Company’s articles of association, the financial statements will be reviewed
by shareholders on the shareholder’s meeting.
For consolidation scope of the year, please refer to Note VIII “Equity in other entities” in detail.
II. Basis of preparation
The financial statements have been prepared on the going concern basis.
III. Significant accounting policies and accounting estimates
1 Statement of compliance
The financial statements have been prepared in accordance with the requirements of
Accounting Standards for Business Enterprises or referred to as China Accounting Standards
(“CAS”) issued by the MOF. These financial statements present truly and completely the
consolidated financial position and financial position of the Company as at 31 December
2023, and the consolidated financial performance and financial performance and the
consolidated cash flows and cash flows of the Company for the year then ended.
These financial statements also comply with the disclosure requirements of “Regulation on
the Preparation of Information Disclosures by Companies Issuing Securities, No. 15: General
Requirements for Financial Reports” as revised by the China Securities Regulatory
Commission (“CSRC”) in 2023.
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Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
2 Accounting period
The accounting period is from 1 January to 31 December.
3 Operating cycle
The Company takes the period from the acquisition of assets for processing to until the
ultimate realisation of cash or cash equivalents as a normal operating cycle. The operating
cycle of the Company is 12 months.
4 Functional currency
Renminbi (“RMB”) is the currency of the primary economic environment in which the
Company and its domestic subsidiaries operate. Therefore, the Company and its domestic
subsidiaries choose RMB as their functional currency. Overseas subsidiaries of the
Company adopt Euro, Chilean Peso and Australian Dollar as their functional currencies on the
basis of the primary economic environment in which they operate. The Company adopts
RMB to prepare its financial statements.
5 Method used to determine the materiality threshold and the basis for selection
Item Materiality threshold
Amount of the individual other
payables/accounts payable with
Significant other payables/accounts payable with ageing
ageing of more than 1 year
of more than one year
exceeds 0.5% of the Group’s
total liabilities
Carrying amount of the individual
construction in progress exceeds
Significant construction projects in progress
0.5% of the Group’s total
non-current assets
Carrying amount of net assets
attributable to non-controlling
shareholders of the
Significant non-wholly-owned subsidiaries
non-wholly-owned subsidiaries
exceeds 0.5% of the Group’s net
assets
Amount of the individual cash
Significant investing and financing activities not requiring
flow exceeds exceeds 0.5% of
the use of cash
the Group’s total assets
6 Accounting treatments for business combinations involving entities under common control
and not under common control
A transaction constitutes a business combination when the Group obtains control of one or
more entities (or a group of assets or net assets). Business combination is classified as
either business combinations involving enterprises under common control or business
combinations not involving enterprises under common control.
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Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
For a transaction not involving enterprises under common control, the acquirer determines
whether acquired set of assets constitute a business. The Group may elect to apply the
simplified assessment method, the concentration test, to determine whether an acquired set
of assets is not a business. If the concentration test is met and the set of assets is
determined not to be a business, no further assessment is needed. If the concentration test
is not met, the Group shall perform the assessment according to the guidance on the
determination of a business.
When the set of assets the group acquired does not constitute a business, acquisition costs
should be allocated to each identifiable assets and liabilities at their acquisitiondate fair
values. It is not required to apply the accounting of business combination described as
below.
(1) Business combinations involving entities under common control
A business combination involving entities under common control is a business combination in
which all of the combining entities are ultimately controlled by the same party or parties both
before and after the business combination, and that control is not transitory. The assets
acquired and liabilities assumed are measured based on their carrying amounts in the
consolidated financial statements of the ultimate controlling party at the combination date.
The difference between the carrying amount of the net assets acquired and the consideration
paid for the combination (or the total par value of shares issued) is adjusted against share
premium in the capital reserve, with any excess adjusted against retained earnings. Any
costs directly attributable to the combination are recognised in profit or loss when incurred.
The combination date is the date on which one combining entity obtains control of other
combining entities.
(2) Business combinations involving entities not under common control
A business combination involving entities not under common control is a business
combination in which all of the combining entities are not ultimately controlled by the same
party or parties both before and after the business combination. Where (1) the aggregate of
the acquisition-date fair value of assets transferred (including the acquirer’s previously held
equity interest in the acquiree), liabilities incurred or assumed, and equity securities issued by
the acquirer, in exchange for control of the acquiree, exceeds (2) the acquirer’s interest in the
acquisition-date fair value of the acquiree’s identifiable net assets, the difference is
recognised as goodwill (see Note III.19). If (1) is less than (2), the difference is recognised in
profit or loss for the current period. Other acquisition-related costs are expensed when
incurred. The acquiree’s identifiable asset, liabilities and contingent liabilities, if the
recognition criteria are met, are recognised by the Group at their acquisition-date fair value.
The acquisition date is the date on which the acquirer obtains control of the acquiree.
For a business combination involving entities not under common control and achieved in
stages, the Group remeasures its previously-held equity interest in the acquiree to its
acquisition-date fair value and recognises any resulting difference between the fair value and
the carrying amount as investment income or other comprehensive income for the current
period. In addition, any amount recognised in other comprehensive income that may be
reclassified to profit or loss, in prior reporting periods relating to the previously-held equity
interest, and any other changes in the owners’ equity under equity accounting, are transferred
to investment income in the period in which the acquisition occurs (see Note III.12(2)(b)). If
equity interests of the acquiree held before acquisition-date were equity instrument
116
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
investments measured at fair value through other comprehensive income, other
comprehensive income recognised shall be moved to retained earnings on acquisition-date.
7 Criteria of control and preparation of consolidated financial statements
(1) General principles
The scope of consolidated financial statements is based on control and the consolidated
financial statements comprise the Company and its subsidiaries. Control exists when the
investor has all of following: power over the investee; exposure, or rights, to variable returns
from its involvement with the investee and has the ability to affect those returns through its
power over the investee. When assessing whether the Group has power, only substantive
rights (held by the Group and other parties) are considered. The financial position, financial
performance and cash flows of subsidiaries are included in the consolidated financial
statements from the date that control commences until the date that control ceases.
Non-controlling interests are presented separately in the consolidated balance sheet within
shareholders’ equity. Net profit or loss attributable to non-controlling shareholders is
presented separately in the consolidated income statement below the net profit line item.
Total comprehensive income attributable to non-controlling shareholders is presented
separately in the consolidated income statement below the total comprehensive income line
item.
When the amount of loss for the current period attributable to the non-controlling shareholders
of a subsidiary exceeds the non-controlling shareholders’ share of the opening owners’ equity
of the subsidiary, the excess is still allocated against the non-controlling interests.
When the accounting period or accounting policies of a subsidiary are different from those of
the Company, the Company makes necessary adjustments to the financial statements of the
subsidiary based on the Company’s own accounting period or accounting policies.
Intra-group balances and transactions, and any unrealised profit or loss arising from
intra-group transactions, are eliminated when preparing the consolidated financial statements.
Unrealised losses resulting from intra-group transactions are eliminated in the same way as
unrealised gains, unless they represent impairment losses that are recognised in the financial
statements.
(2) Subsidiaries acquired through a business combination
Where a subsidiary was acquired during the reporting period, through a business combination
involving entities under common control, the financial statements of the subsidiary are
included in the consolidated financial statements based on the carrying amounts of the assets
and liabilities of the subsidiary in the financial statements of the ultimate controlling party as if
the combination had occurred at the date that the ultimate controlling party first obtained
control. The opening balances and the comparative figures of the consolidated financial
statements are also restated.
Where a subsidiary was acquired during the reporting period, through a business combination
involving entities not under common control, the identifiable assets and liabilities of the
acquired subsidiaries are included in the scope of consolidation from the date that control
commences, based on the fair value of those identifiable assets and liabilities at the
acquisition date.
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Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
(3) Disposal of subsidiaries
When the Group loses control over a subsidiary, any resulting disposal gains or losses are
recognised as investment income for the current period. The remaining equity investment is
re-measured at its fair value at the date when control is lost, any resulting gains or losses are
also recognised as investment income for the current period.
When the Group loses control of a subsidiary in multiple transactions in which it disposes of
its long-term equity investment in the subsidiary in stages, the following are considered to
determine whether the Group should account for the multiple transactions as a bundled
transaction:
- arrangements are entered into at the same time or in contemplation of each other;
- arrangements work together to achieve an overall commercial effect;
- the occurrence of one arrangement is dependent on the occurrence of at least one other
arrangement;
- one arrangement considered on its own is not economically justified, but it is economically
justified when considered together with other arrangements.
If each of the multiple transactions does not form part of a bundled transaction, the
transactions conducted before the loss of control of the subsidiary are accounted for in
accordance with the accounting policy for partial disposal of equity investment in subsidiaries
where control is retained (see Note III.7(4)).
If each of the multiple transactions forms part of a bundled transaction which eventually
results in the loss of control in the subsidiary, these multiple transactions are accounted for as
a single transaction. In the consolidated financial statements, the difference between the
consideration received and the corresponding proportion of the subsidiary’s net assets
(calculated continuously from the acquisition date) in each transaction prior to the loss of
control shall be recognised in other comprehensive income and transferred to profit or loss
when the parent eventually loses control of the subsidiary.
(4) Changes in non-controlling interests
Where the Company acquires a non-controlling interest from a subsidiary’s non-controlling
shareholders or disposes of a portion of an interest in a subsidiary without a change in control,
the difference between the proportion interests of the subsidiary’s net assets being acquired
or disposed and the amount of the consideration paid or received is adjusted to the capital
reserve (share premium) in the consolidated balance sheet, with any excess adjusted to
retained earnings.
8 Cash and cash equivalents
Cash and cash equivalents comprise cash on hand, deposits that can be readily withdraw on
demand, and short-term, highly liquid investments that are readily convertible into known
amounts of cash and are subject to an insignificant risk of change in value.
9 Foreign currency transactions and translation of foreign currency financial statements
When the Group receives capital in foreign currencies from investors, the capital is translated
to Renminbi at the spot exchange rate at the date of the receipt. Other foreign currency
transactions are, on initial recognition, translated to Renminbi at the spot exchange rates.
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Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
Monetary items denominated in foreign currencies are translated to Renminbi at the spot
exchange rate at the balance sheet date. The resulting exchange differences are generally
recognised in profit or loss, unless they arise from the re-translation of the principal and
interest of specific borrowings for the acquisition and construction of qualifying assets (see
Note III. 16). Non-monetary items that are measured at historical cost in foreign currencies
are translated to Renminbi using the exchange rate at the transaction date.
In translating the financial statements of a foreign operation, assets and liabilities of foreign
operation are translated to Renminbi at the spot exchange rate at the balance sheet date.
Equity items, excluding retained earnings and the translation differences in other
comprehensive income, are translated to Renminbi at the spot exchange rates at the
transaction dates. Income and expenses in the income statement are translated to
Renminbi at the spot exchange rates at the transaction dates. The resulting translation
differences are recognised in other comprehensive income. The translation differences
accumulated in other comprehensive income with respect to a foreign operation are
transferred to profit or loss in the period when the foreign operation is disposed.
10 Financial instruments
Financial instruments include cash at bank and on hand, investments in debt and equity
securities other than those classified as long-term equity investments (see Note III.12),
receivables, payables, loans and borrowings and share capital.
(1) Recognition and initial measurement of financial assets and financial liabilities
A financial asset or financial liability is recognised in the balance sheet when the Group
becomes a party to the contractual provisions of a financial instrument.
A financial assets (unless it is a trade receivable without a significant financing component)
and financial liabilities is measured initially at fair value. For financial assets and financial
liabilities at fair value through profit or loss, any related directly attributable transaction costs
are charged to profit or loss; for other categories of financial assets and financial liabilities,
any related directly attributable transaction costs are included in their initial costs. A trade
receivable, without significant financing component or practical expedient applied for one year
or less contracts, is initially measured at the transaction price in accordance with Note III.25.
(2) Classification and subsequent measurement of financial assets
(a) Classification of financial assets
The classification of financial assets is generally based on the business model in which
a financial asset is managed and its contractual cash flow characteristics. On initial
recognition, a financial asset is classified as measured at amortised cost, at fair value
through other comprehensive income (“FVOCI”), or at fair value through profit or loss
(“FVTPL”).
Financial assets are not reclassified subsequent to their initial recognition unless the
Group changes its business model for managing financial assets in which case all
affected financial assets are reclassified on the first day of the first reporting period
following the change in the business model.
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Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
A financial asset is measured at amortised cost if it meets both of the following
conditions and is not designated as at FVTPL:
- it is held within a business model whose objective is to hold assets to collect
contractual cash flows; and
- its contractual terms give rise on specified dates to cash flows that are solely
payments of principal and interest on the principal amount outstanding.
A debt investment is measured at FVOCI if it meets both of the following conditions and
is not designated as at FVTPL:
- it is held within a business model whose objective is achieved by both collecting
contractual cash flows and selling financial assets; and
- its contractual terms give rise on specified dates to cash flows that are solely
payments of principal and interest on the principal amount outstanding.
On initial recognition of an equity investment that is not held for trading, the Group may
irrevocably elect to present subsequent changes in the investment’s fair value in other
comprehensive income. This election is made on an investment-by-investment basis.
The instrument meets the definition of equity from the perspective of the issuer.
All financial assets not classified as measured at amortised cost or FVOCI as described
above are measured at FVTPL. On initial recognition, the Group may irrevocably
designate a financial asset that otherwise meets the requirements to be measured at
amortised cost or at FVOCI as at FVTPL if doing so eliminates or significantly reduces
an accounting mismatch that would otherwise arise.
The business model refers to how the Group manages its financial assets in order to
generate cash flows. That is, the Group’s business model determines whether cash
flows will result from collecting contractual cash flows, selling financial assets or both.
The Group determines the business model for managing the financial assets according
to the facts and based on the specific business objective for managing the financial
assets determined by the Group’s key management personnel.
In assessing whether the contractual cash flows are solely payments of principal and
interest, the Group considers the contractual terms of the instrument. For the
purposes of this assessment, ‘principal’ is defined as the fair value of the financial asset
on initial recognition. ‘Interest’ is defined as consideration for the time value of money
and for the credit risk associated with the principal amount outstanding during a
particular period of time and for other basic lending risks and costs, as well as a profit
margin. The Group also assesses whether the financial asset contains a contractual
term that could change the timing or amount of contractual cash flows such that it would
not meet this condition.
(b) Subsequent measurement of financial assets
- Financial assets at FVTPL
These financial assets are subsequently measured at fair value. Net gains and
losses, including any interest or dividend income, are recognised in profit or loss
unless the financial assets are part of a hedging relationship.
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- Financial assets at amortised cost
These assets are subsequently measured at amortised cost using the effective
interest method. A gain or loss on a financial asset that is measured at amortised
cost and is not part of a hedging relationship shall be recognised in profit or loss
when the financial asset is derecognised, reclassified, through the amortisation
process or in order to recognise impairment gains or losses.
- Debt investments at FVOCI
These assets are subsequently measured at fair value. Interest income calculated
using the effective interest method, impairment and foreign exchange gains and
losses are recognised in profit or loss. Other net gains and losses are recognised in
other comprehensive income. On derecognition, gains and losses accumulated in
other comprehensive income are reclassified to profit or loss.
- Equity investments at FVOCI
These assets are subsequently measured at fair value. Dividends are recognised
as income in profit or loss. Other net gains and losses are recognised in other
comprehensive income. On derecognition, gains and losses accumulated in other
comprehensive income are reclassified to retained earnings.
(3) Classification and subsequent measurement of financial liabilities
Financial liabilities are classified as measured at FVTPL or amortised cost by the Group.
- Financial liabilities at FVTPL
A financial liability is classified as at FVTPL if it is classified as held-for-trading (including
derivative financial liability) or it is designated as such on initial recognition.
Financial liabilities at FVTPL are subsequently measured at fair value and net gains and
losses, including any interest expense, are recognised in profit or loss, unless the financial
liabilities are part of a hedging relationship.
- Financial liabilities at amortised cost
These financial liabilities are subsequently measured at amortised cost using the effective
interest method.
(4) Offsetting
Financial assets and financial liabilities are generally presented separately in the balance
sheet, and are not offset. However, a financial asset and a financial liability are offset and
the net amount is presented in the balance sheet when both of the following conditions are
satisfied:
- The Group currently has a legally enforceable right to set off the recognised amounts;
- The Group intends either to settle on a net basis, or to realise the financial asset and settle
the financial liability simultaneously.
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(5) Derecognition of financial assets and financial liabilities
Financial asset is derecognised when one of the following conditions is met:
- the Group’s contractual rights to the cash flows from the financial asset expire;
- the financial asset has been transferred and the Group transfers substantially all of the
risks and rewards of ownership of the financial asset; or;
- the financial asset has been transferred, although the Group neither transfers nor retains
substantially all of the risks and rewards of ownership of the financial asset, it does not
retain control over the transferred asset.
Where a transfer of a financial asset in its entirety meets the criteria for derecognition, the
difference between the two amounts below is recognised in profit or loss:
- the carrying amount of the financial asset transferred measured at the date of
derecognition;
- the sum of the consideration received from the transfer and, when the transferred financial
asset is a debt investment at FVOCI, any cumulative gain or loss that has been recognised
directly in other comprehensive income for the part derecognised.
The Group derecognises a financial liability (or part of it) only when its contractual obligation
(or part of it) is extinguished.
(6) Impairment
The Group recognises loss allowances for expected credit loss (ECL) on:
- financial assets measured at amortised cost;
- financial investments at fair value through other comprehensive income
Financial assets measured at fair value, including debt investments or equity securities at
FVPL, equity securities designated at FVOCI and derivative financial assets, are not subject
to the ECL assessment.
Measurement of ECLs
ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as
the present value of all cash shortfalls (i.e. the difference between the cash flows due to the
entity in accordance with the contract and the cash flows that the Group expects to receive).
The maximum period considered when estimating ECLs is the maximum contractual period
(including extension options) over which the Group is exposed to credit risk.
Lifetime ECLs are the ECLs that result from all possible default events over the expected life
of a financial instrument.
12-month ECLs are the portion of ECLs that result from default events that are possible within
the 12 months after the balance sheet date (or a shorter period if the expected life of the
instrument is less than 12 months).
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Loss allowances for bills receivable, accounts receivable and receivables under financing
arising from oridinary business activities such as sale of goods and provision of services ,are
always measured at an amount equal to lifetime ECLs. ECLs on these financial assets are
estimated using a provision matrix based on the Group’s historical credit loss experience,
adjusted for factors that are specific to the debtors and an assessment of both the current and
forecast general economic conditions at the balance sheet date.
Except for bills receivable, accounts receivable, receivables under financing, the Group
measures loss allowances at an amount equal to 12-month ECLs for the following financial
instruments, and at an amount equal to lifetime ECLs for all other financial instruments:
- If the financial instrument is determined to have low credit risk at the balance sheet date;
- If the credit risk on a financial instrument has not increased significantly since initial
recognition.
Provisions for bad and doubtful debts arising from receivables
(a) Categories of groups for collective assessment based on credit risk characteristics and
basis for determination
Based on the different credit risk characteristics of acceptors,
Bills receivable the Group classifies bills receivable into two groups: bank
acceptance bills and commercial acceptance bills.
Historically, there is no significant difference in terms of
occurrence of losses among different customer types for the
Group. Therefore, the Group makes provisions for bad and
Accounts receivable
doubtful debts arising from accounts receivable on the basis
of all customers being one group without further
segmentation by different customer types.
The Group’s receivables under financing are bank
Receivables under acceptance bills held for dual purposes. As the accepting
financing banks have high credit ratings, the Group considers all
receivables under financing as a group.
The Group’s other receivables mainly include deposits and
guarantees receivable,ect. Based on the nature of
receivables and the credit risk characteristics of different
Other receivables
counterparties, the Group classifies other receivables into 2
groups, specifically: the group of deposits and guarantees
receivable and the group of other receivables.
(b) Criteria for individual assessment
Bills receivable, accounts receivable , receivables under financing, and other
receivables are usually assessed collectively as a group based on credit risk
characteristics to make provisions. When a counterparty is significantly different from
other counterparties in the group in terms of credit risk characteristics, or if there has
been a significant change in its credit risk characteristics, the individual approach is
adopted for receivables due from this counterparty. For example, when a counterparty is
in serious financial difficulties and the expected credit loss ratio of receivables due from
this counterparty is significantly higher than the average expected credit loss ratio of the
relevant ageing range, it should be individualy assessed for provisioning purposes.
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Financial instruments that have low credit risk
The credit risk on a financial instrument is considered low if the financial instrument has a low
risk of default, the borrower has a strong capacity to meet its contractual cash flow obligations
in the near term and adverse changes in economic and business conditions in the longer term
may, but will not necessarily, reduce the ability of the borrower to fulfil its contractual cash flow
obligations.
Significant increases in credit risk
In assessing whether the credit risk of a financial instrument has increased significantly since
initial recognition, the Group compares the risk of default occurring on the financial instrument
assessed at the balance sheet date with that assessed at the date of initial recognition.
When determining whether the credit risk of a financial asset has increased significantly since
initial recognition and when estimating ECL, the Group considers reasonable and supportable
information that is relevant and available without undue cost or effort, including
forward-looking information. In particular, the following information is taken into account:
- failure to make payments of principal and interest on their contractually due dates;
- an actual or expected significant deterioration in a financial instrument’s external or internal
credit rating (if available);
- an actual or expected significant deterioration in the operating results of the debtor; and
- existing or forecast changes in the technological, market, economic or legal environment
that have a significant adverse effect on the debtor’s ability to meet its obligation to the
Group.
Depending on the nature of the financial instruments, the assessment of a significant increase
in credit risk is performed on either an individual basis or a collective basis. When the
assessment is performed on a collective basis, the financial instruments are grouped based
on shared credit risk characteristics, such as past due status and credit risk ratings.
The Group assumes that the credit risk on a financial asset has increased significantly if it is
more than 30 days past due.
Credit-impaired financial assets
At each balance sheet date, the Group assesses whether financial assets carried at
amortised cost and debt investments at FVOCI are credit-impaired. A financial asset is
‘credit-impaired’ when one or more events that have a detrimental impact on the estimated
future cash flows of the financial asset have occurred. Evidence that a financial asset is
credit-impaired includes the following observable data:
- significant financial difficulty of the borrower or issuer;
- a breach of contract, such as a default or delinquency in interest or principal payments;
- for economic or contractual reasons relating to the borrower’s financial difficulty, the Group
having granted to the borrower a concession that would not otherwise consider;
- it is probable that the borrower will enter bankruptcy or other financial reorganisation; or
- the disappearance of an active market for that financial asset because of financial
difficulties.
Presentation of allowance for ECL
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ECLs are remeasured at each balance sheet date to reflect changes in the financial
instrument’s credit risk since initial recognition. Any change in the ECL amount is
recognised as an impairment gain or loss in profit or loss. The Group recognises an
impairment gain or loss for all financial instruments with a corresponding adjustment to their
carrying amount through a loss allowance account, except for debt investments that are
measured at FVOCI, for which the loss allowance is recognised in other comprehensive
income.
Write-off
The gross carrying amount of a financial asset is written off (either partially or in full) to the
extent that there is no realistic prospect of recovery. A write-off constitutes a derecognition
event. This is generally the case when the Group determines that the debtor does not have
assets or sources of income that could generate sufficient cash flows to repay the amounts
subject to the write-off. However, financial assets that are written off could still be subject to
enforcement activities in order to comply with the Group’s procedures for recovery of amounts
due.
Subsequent recoveries of an asset that was previously written off are recognised as a
reversal of impairment in profit or loss in the period in which the recovery occurs.
(7) Equity instrument
The consideration received from the issuance of equity instruments net of transaction costs is
recognised in shareholders’ equity. Consideration and transaction costs paid by the
Company for repurchasing self-issued equity instruments are deducted from shareholders’
equity.
When the Company repurchases its own shares, those shares are treated as treasury shares.
All expenditure relating to the repurchase is recorded in the cost of the treasury shares, with
the transaction recording in the share register. Treasury shares are excluded from profit
distributions and are presented as a deduction under shareholders’ equity in the balance
sheet.
11 Inventories
(1) Categories
Inventories include raw materials, work in progress and finished goods. Inventories are
initially measured at cost. Cost of inventories comprises all costs of purchase, costs of
conversion and other expenditure incurred in bringing the inventories to their present location
and condition. In addition to the purchase cost of raw materials, work in progress and
finished goods include direct labour costs and an appropriate allocation of production
overheads.
Agricultural products harvested are reported in accordance with the CAS No.1 - Inventories.
(2) Measurement method of cost of inventories
Cost of inventories is calculated using the weighted average method.
(3) Inventory count system
The Group maintains a perpetual inventory system.
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(4) Amortisation method for low-value consumables and packaging materials
Consumables including low-value consumables and packaging materials are charged to profit
or loss upon receipt. The amortisation charge is included in the cost of the related assets or
recognised in profit or loss for the current period.
(5) Criteria and method for provision for obsolete inventories
At the balance sheet date, inventories are carried at the lower of cost and net realisable value.
Net realisable value is the estimated selling price in the ordinary course of business less the
estimated costs of completion and the estimated costs necessary to make the sale and
relevant taxes. The net realisable value of materials held for use in production is measured
based on the net realisable value of the finished goods in which they will be incorporated. The
net realisable value of inventory held to satisfy sales or service contracts is measured based
on the contract price. If the quantities of inventories held by the Group exceed the quantities
specified in sales contracts, the net realisable value of the excess portion of inventories is
based on general selling prices.
Any excess of the cost over the net realisable value of each item of inventories is recognised
as a provision for obsolete inventories, and is recognised in profit or loss.
12 Long-term equity investments
(1) Investment cost of long-term equity investments
(a) Long-term equity investments acquired through a business combination
- The initial cost of a long-term equity investment acquired through a business
combination involving entities under common control is the Company’s share of the
carrying amount of the subsidiary’s equity in the consolidated financial statements of
the ultimate controlling party at the combination date. The difference between the
initial investment cost and the carrying amount of the consideration given is adjusted
to the share premium in the capital reserve, with any excess adjusted to retained
earnings. For a long-term equity investment in a subsidiary acquired through a
business combination achieved in stages which do not form a bundled transaction
and involving entities under common control, the Company determines the initial cost
of the investment in accordance with the above policies. The difference between
this initial cost and the sum of the carrying amount of previously-held investment and
the consideration paid for the shares newly acquired is adjusted to capital premium in
the capital reserve, with any excess adjusted to retained earnings.
- For a long-term equity investment obtained through a business combination not
involving enterprises under common control, the initial cost comprises the aggregate
of the fair value of assets transferred, liabilities incurred or assumed, and equity
securities issued by the Company, in exchange for control of the acquiree. For a
long-term equity investment obtained through a business combination not involving
entities under common control and achieved through multiple transactions in stages
which do not form a bundled transaction, the initial cost comprises the carrying
amount of the previously-held equity investment in the acquiree immediately before
the acquisition date, and the additional investment cost at the acquisition date.
(b) Long-term equity investments acquired other than through a business combination
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- A long-term equity investment acquired other than through a business combination is
initially recognised at the amount of cash paid if the Group acquires the investment
by cash, or at the fair value of the equity securities issued if an investment is acquired
by issuing equity securities.
(2) Subsequent measurement of long-term equity investment
(a) Investments in subsidiaries
In the Company’s separate financial statements, long-term equity investments in
subsidiaries are accounted for using the cost method unless the investment is classified
as held for sale (See Note III. 31). Except for cash dividends or profit distributions
declared but not yet distributed that have been included in the price or consideration
paid in obtaining the investments, the Company recognises its share of the cash
dividends or profit distributions declared by the investee as investment income for the
current period.
The investments in subsidiaries are stated in the balance sheet at cost less accumulated
impairment losses.
For the impairment of the investments in subsidiaries, refer to Note III.21.
In the Group’s consolidated financial statements, subsidiaries are accounted for in
accordance with the policies described in Note III.7.
(b) Investment in joint ventures and associates
A joint venture is an arrangement whereby the Group and other parties have joint control
(see Note III.12(3)) and rights to the net assets of the arrangement.
Associated enterprises refer to enterprises to which the Group can exercise significant
influence (see Note III.12(3)).
A long-term equity investment in a joint venture or an associate is accounted for using
the equity method for subsequent measurement, unless the investment is classified as
held for sale (see Note III.31).
The accounting treatments under the equity method adopted by the Group are as
follows:
- Where the initial cost of a long-term equity investment exceeds the Group’s interest
in the fair value of the investee’s identifiable net assets at the date of acquisition, the
investment is initially recognised at cost. Where the initial investment cost is less
than the Group’s interest in the fair value of the investee’s identifiable net assets at
the date of acquisition, the investment is initially recognised at the investor’s share of
the fair value of the investee’s identifiable net assets, and the difference is
recognised in profit or loss.
- After the acquisition of the investment, the Group recognises its share of the
investee’s profit or loss and other comprehensive income as investment income or
losses and other comprehensive income respectively, and adjusts the carrying
amount of the investment accordingly. Once the investee declares any cash
dividends or profit distributions, the carrying amount of the investment is reduced by
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the amount attributable to the Group. Changes in the Group’s share of the
investee’s owners’ equity, other than those arising from the investee’s net profit or
loss, other comprehensive income or profit distribution (referred to as “other changes
in owners’ equity”), is recognised directly in the Group’s equity, and the carrying
amount of the investment is adjusted accordingly.
- In calculating its share of the investee’s net profits or losses, other comprehensive
income and other changes in owners’equity, the Group recognises investment
income and other comprehensive income after making appropriate adjustments to
align the accounting policies or accounting periods with those of the Group based on
the fair value of the investee’s identifiable net assets at the date of acquisition.
Unrealised profits and losses resulting from transactions between the Group and its
associates or joint ventures are eliminated to the extent of the Group’s interest in the
associates or joint ventures. Unrealised losses resulting from transactions between
the Group and its associates or joint ventures are eliminated in the same way as
unrealised gains but only to the extent that there is no impairment.
- The Group discontinues recognising its share of further losses of the investee after
the carrying amount of the long-term equity investment and any long-term interest
that in substance forms part of the Group’s net investment in the associate is reduced
to zero, except to the extent that the Group has an obligation to assume additional
losses. If the joint venture or the associate subsequently reports net profits, the
Group resumes recognising its share of those profits only after its share of the profits
equals the share of losses not recognised.
For the impairment of the investments in joint ventures and associates, refer to Note
III.21.
(3) Criteria for determining the existence of joint control over an investee
Joint control is the contractually agreed sharing of control of an arrangement, which exists
only when decisions about the relevant activities (activities with significant impact on the
returns of the arrangement) require the unanimous consent of the parties sharing control.
The following factors are usually considered when assessing whether the Group can exercise
joint control over an investee:
- Whether no single participant party is in a position to control the investee’s related activities
unilaterally;
- Whether strategic decisions relating to the investee’s related activities require the
unanimous consent of all participant parties that sharing of control.
Significant influence is the power to participate in the financial and operating policy decisions
of an investee but does not have control or joint control over those policies.
13 Investment properties
Investment properties are properties held either to earn rental income or for capital
appreciation or for both. Investment properties are accounted for using the cost model and
stated in the balance sheet at cost less accumulated depreciation, amortisation and
impairment losses, and adopts a depreciation or amortisation policy for the investment
property which is consistent with that for buildings or land use rights, unless the investment
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property is classified as held for sale (see Note III.31). For the impairment of the investment
properties, refer to Note III.21.
Estimated useful Residual value rate Depreciation rate
Category
life (years) (%) (%)
Plant and buildings 20 - 40 years 0 - 5% 2.4% - 5.0%
14 Fixed assets
(1) Recognition of fixed assets
Fixed assets represent the tangible assets held by the Group for use in production of goods,
supply of services, for rental or for administrative purposes with useful lives over one
accounting year.
The cost of a purchased fixed asset comprises the purchase price, related taxes, and any
directly attributable expenditure for bringing the asset to working condition for its intended use.
The cost of self-constructed assets is measured in accordance with the policy set out in Note
III.15.
Where the parts of an item of fixed assets have different useful lives or provide benefits to the
Group in a different pattern, thus necessitating use of different depreciation rates or methods,
each part is recognised as a separate fixed asset.
Any subsequent costs including the cost of replacing part of an item of fixed assets are
recognised as assets when it is probable that the economic benefits associated with the costs
will flow to the Group, and the carrying amount of the replaced part is derecognised. The
costs of the day-to-day maintenance of fixed assets are recognised in profit or loss as
incurred.
Fixed assets are stated in the balance sheet at cost less accumulated depreciation and
impairment losses.
(2) Depreciation of fixed assets
The cost of a fixed asset, less its estimated residual value and accumulated impairment
losses, is depreciated using the straight-line method over its estimated useful life, unless the
fixed asset is classified as held for sale (see Note III.31).
The estimated useful lives, residual value rates and depreciation rates of each class of fixed
assets are as follows:
Estimated useful Residual value rate Depreciation rate
Class
life (years) (%) (%)
Plant and buildings 20 - 40 years 0 - 5% 2.4% - 5.0%
Machinery equipment 5 - 30 years 0 - 5% 3.2% - 20.0%
Motor vehicles 4 - 12 years 0 - 5% 7.9% - 25.0%
Useful lives, estimated residual values and depreciation methods are reviewed at least at
each year-end.
(3) For the impairment of the fixed assets, refer to Note III.21.
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(4) Disposal of fixed assets
The carrying amount of a fixed asset is derecognised:
- when the fixed asset is holding for disposal; or
- when no future economic benefit is expected to be generated from its use or disposal.
Gains or losses arising from the retirement or disposal of an item of fixed asset are
determined as the difference between the net disposal proceeds and the carrying amount of
the item, and are recognised in profit or loss on the date of retirement or disposal.
15 Construction in progress
The cost of self-constructed assets includes the cost of materials, direct labour, capitalised
borrowing costs (see Note III.16), and any other costs directly attributable to bringing the asset
to working condition for its intended use.
A self-constructed asset is classified as construction in progress and transferred to fixed asset
when it is ready for its intended use. No depreciation is provided against construction in
progress.
Criteria and timing for the transfer to fixed assets：
Category Criteria and timing for the transfer to fixed assets
(1) The main construction projects and ancillary projects have been
substantially completed;
(2) the construction projects have been checked and accepted by
the survey, design, construction and supervision units after
meeting the pre-determined design requirements;
(3) the construction projects have been checked and accepted by
Plant and buildings external departments such as the fire department, the land and
resources department and the planning department;
(4) if a construction project is available for its intended use but its
final account has not yet been finalised, the construction project
will be transferred to fixed assets at its estimated value from the
date it is available for its intended use, based on the its
estimated value of construction.
(1) The relevant equipment and other supporting facilities have
been installed;
(2) the equipment can operate normally and stably for a period after
Machinery and commissioning;
equipment (3) the production equipment is capable of producing qualified
products stably for a period;
(4) the equipment has been checked and accepted by asset
management personnel and users.
Construction in progress is stated in the balance sheet at cost less accumulated impairment
losses (see Note III.21).
When an enterprise sells products or by-products produced before a fixed asset is available
for its intended use, the proceeds and related cost are accounted for in accordance with CAS
14 – Revenue and CAS 1 – Inventories respectively, and recognised in profit or loss for the
current period.
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16 Borrowing costs
Borrowing costs incurred directly attributable to the acquisition, and construction or production
of a qualifying asset are capitalised as part of the cost of the asset. Other borrowing costs
are recognised as financial expenses when incurred.
During the capitalisation period, the amount of interest (including amortisation of any discount
or premium on borrowing) to be capitalised in each accounting period is determined as
follows:
- Where funds are borrowed specifically for the acquisition and construction or production of
a qualifying asset, the amount of interest to be capitalised is the interest expense
calculated using effective interest rates during the period less any interest income earned
from depositing the borrowed funds or any investment income on the temporary investment
of those funds before being used on the asset.
- To the extent that the Group borrows funds generally and uses them for the acquisition and
construction or production of a qualifying asset, the amount of borrowing costs eligible for
capitalisation is determined by applying a capitalisation rate to the weighted average of the
excess amounts of cumulative expenditure on the asset over the above amounts of specific
borrowings. The capitalisation rate is the weighted average of the interest rates
applicable to the general-purpose borrowings.
The effective interest rate is determined as the rate that exactly discounts estimated future
cash flow through the expected life of the borrowing or, when appropriate, a shorter period to
the initially recognised amount of the borrowings.
During the capitalisation period, exchange differences related to the principal and interest on
a specific-purpose borrowing denominated in foreign currency are capitalised as part of the
cost of the qualifying asset. The exchange differences related to the principal and interest on
foreign currency borrowings other than a specific-purpose borrowing are recognised as a
financial expense when incurred.
The capitalisation period is the period from the date of commencement of capitalisation of
borrowing costs to the date of cessation of capitalisation, excluding any period over which
capitalisation is suspended. Capitalisation of borrowing costs commences when expenditure
for the asset is being incurred, borrowing costs are being incurred and activities of acquisition,
construction or production that are necessary to prepare the asset for its intended use are in
progress, and ceases when the assets become ready for their intended use. Capitalisation
of borrowing costs should cease when the qualifying asset being constructed or produced has
reached its expected usable or saleable condition. Capitalisation of borrowing costs is
suspended when the acquisition, construction or production activities are interrupted
abnormally for a period of more than three months.
17 Biological assets
The Group’s biological assets are bearer biological assets.
Bearer biological assets are those that are held for the purposes of producing agricultural
produce, rendering of services or rental. Bearer biological assets in the Group are vines.
Bearer biological assets are initially measured at cost. The cost of self-grown or self-bred
bearer biological assets represents the necessary directly attributable expenditure incurred
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before satisfying the expected production and operating purpose, including capitalised
borrowing costs.
Bearer biological assets, after reaching the expected production and operating purpose, are
depreciated using the straight-line method over its estimated useful life. The estimated
useful lives, estimated net residual value rates and depreciation rates of bearer biological
assets are as follows:
Estimated useful Estimated net Depreciation rate
Category
life (years) residual value rate (%)
Vines 20 years 0% 5.0%
The Group evaluates the useful life and expected net salvage value by considering the normal
producing life of the bearer biological assets.
Useful lives, estimated residual values and depreciation methods of bearer biological assets
are reviewed at least at each year-end. Any changes should be treated as changes in
accounting estimates.
For a bearer biological asset that has been sold, damaged, dead or destroyed, any difference
between the disposal proceeds and the carrying amount of the asset should be recognised in
profit or loss for the period in which it arises.
18 Intangible assets
Useful life and amortisation methods
Intangible assets are stated in the balance sheet at cost less accumulated amortization
(where the estimated useful life is finite) and impairment losses (see Note III.21). For an
intangible asset with finite useful life, its cost estimated less residual value and accumulated
impairment losses is amortised on the straight-line method over its estimated useful life,
unless the intangible asset is classified as held for sale.
The estimated useful lives, basis for determination and amortisation methods of intangible
assets are as follows:
Amortisation Amortisation
Item Basis for determination
period (years) methods
Stright-line
Land use rights 40 - 50 years Terms of land use rights
Method
Shorter of the term of
Stright-line
Software licenses 5 - 10 years software or the estimated
Method
useful life of software
Shorter of the term of
trademark rights or the Stright-line
Trademarks 10 years
estimated useful life of Method
trademark rights
Useful lives and amortisation methods of intangible asset with finite useful life are reviewed at
least at each year-end.
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An intangible asset is regarded as having an indefinite useful life and is not amortised when
there is no foreseeable limit to the period over which the asset is expected to generate
economic benefits for the Group. At the balance sheet date, the Group had intangible assets
with infinite useful lives including the land use rights and trademarks. Land use rights with
infinite useful lives are permanent land use rights with permanent ownership held by the
Group under the relevant Chile and Australian laws arising from the Group’s acquisition of
Via Indómita, S.A., Via Dos Andes, S.A., and Bodegas Santa Alicia SPA. (collectively
referred to as the “Chile Indomita Wine Group”), and the acquisition of Kilikanoon Estate Pty
Ltd. (the “Australia Kilikanoon Estate”), therefore there was no amortisation. The right to use
trademark refers to the trademark held by the Group arising from the acquisition of the Chile
Indomita Wine Group and the Australia Kilikanoon Estate with infinite useful lives. The
valuation of trademark was based on the trends in the market and competitive environment,
product cycle, and managing long-term development strategy. Those basis indicated the
trademark will provide net cash flows to the Group within an uncertain period. The useful life
is indefinite as it was hard to predict the period that the trademark would bring economic
benefits to the Group.
19 Goodwill
The initial cost of goodwill represents the excess of cost of acquisition over the acquirer’s
interest in the fair value of the identifiable net assets of the acquiree under a business
combination not involving entities under common control.
Goodwill is not amortised and is stated in the balance sheet at cost less accumulated
impairment losses (see Note III.21). On disposal of an asset group or a set of asset groups,
any attributable goodwill is written off and included in the calculation of the profit or loss on
disposal.
20 Long-term deferred expenses
Long-term deferred expenses are amortised using a straight-line method within the benefit
period. The respective amortisation periods for such expenses are as follows:
Item Amortisation period
Land requisition fee 50 years
Greening fee 5 - 20 years
Renovation Fee 3 - 20 years
Others 3 years
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21 Impairment of assets other than inventories and financial assets
The carrying amounts of the following assets are reviewed at each balance sheet date based
on internal and external sources of information to determine whether there is any indication of
impairment:
- fixed assets
- construction in progress
- right-of-use assets
- intangible assets
- bearer biological assets
- investment properties measured using a cost model
- long-term equity investments
- goodwill
- long-term deferred expenses, etc.
If any indication exists, the recoverable amount of the asset is estimated. In addition, the
Group estimates the recoverable amounts of goodwill and intangible assets with infinite useful
lives at each year-end, irrespective of whether there is any indication of impairment.
Goodwill is allocated to each asset group, or set of asset groups, that is expected to benefit
from the synergies of the combination for the purpose of impairment testing.
The recoverable amount of an asset (or asset group, set of asset groups) is the higher of its
fair value (see Note III.22) less costs to sell and its present value of expected future cash
flows.
An asset group is composed of assets directly related to cash-generation and is the smallest
identifiable group of assets that generates cash inflows that are largely independent of the
cash inflows from other assets or asset groups.
The present value of expected future cash flows of an asset is determined by discounting the
future cash flows, estimated to be derived from continuing use of the asset and from its
ultimate disposal, to their present value using an appropriate pre-tax discount rate.
An impairment loss is recognised in profit or loss when the recoverable amount of an asset is
less than its carrying amount. A provision for impairment of the asset is recognised
accordingly. Impairment losses related to an asset group or a set of asset groups are
allocated first to reduce the carrying amount of any goodwill allocated to the asset group or set
of asset groups, and then to reduce the carrying amount of the other assets in the asset group
or set of asset groups on a pro rata basis. However, such allocation would not reduce the
carrying amount of an asset below the highest of its fair value less costs to sell (if
measurable), its present value of expected future cash flows (if determinable) and zero.
Once an impairment loss is recognised, it is not reversed in a subsequent period.
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22 Fair value measurement
Unless otherwise specified, the Group measures fair value as follows:
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement date.
When measuring fair value, the Group takes into account the characteristics of the particular
asset or liability (including the condition and location of the asset and restrictions, if any, on
the sale or use of the asset) that market participants would consider when pricing the asset or
liability at the measurement date, and uses valuation techniques that are appropriate in the
circumstances and for which sufficient data and other information are available to measure
fair value. Valuation techniques mainly include the market approach, the income approach
and the cost approach.
23 Provisions
A provision is recognised for an obligation related to a contingency if the Group has a present
obligation that can be estimated reliably, and it is probable that an outflow of economic
benefits will be required to settle the obligation.
A provision is initially measured at the best estimate of the expenditure required to settle the
related present obligation. Where the effect of the time value of money is material, provisions
are determined by discounting the expected future cash flows. Factors pertaining to a
contingency such as the risks, uncertainties and time value of money are taken into account
as a whole in reaching the best estimate. Where there is a continuous range of possible
outcomes for the expenditure required, and each possible outcome in that range is as likely as
any other, the best estimate is the mid-point of that range. In other cases, the best estimate is
determined as follows:
- Where the contingency involves a single item, the best estimate is the most likely outcome.
- Where the contingency involves a large population of items, the best estimate is
determined by weighting all possible outcomes by their associated probabilities.
The Group reviews the carrying amounts of provisions at the balance sheet date and adjusts
their carrying amounts to the current best estimates.
24 Share-based payments
(1) Classification of share-based payments
Share-based payment transactions in the Group are equity-settled share-based payments..
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(2) Accounting treatment of share-based payments
- Equity-settled share-based payments
Where the Group uses shares or other equity instruments as consideration for services
received from employees, the payment is measured at the fair value of the equity
instruments granted to employees at the grant date. If the equity instruments granted to
employees vest immediately, the fair value of the equity instruments granted is fully
recognised as costs or expenses on the grant date, with a corresponding increase in
capital reserve. If the equity instruments granted do not vest until the completion of
services for a period, or until the achievement of a specified performance condition, the
Group recognises an amount at each balance sheet date during the vesting period based
on the best estimate of the number of equity instruments expected to vest according to
newly obtained subsequent information regarding changes in the number of employees
expected to vest the equity instruments. The Group measures the services received at the
grant-date fair value of the equity instruments and recognises the costs or expenses as the
services are received, with a corresponding increase in capital reserve.
When the Group receives services but has no obligation to settle the transaction because
the relevant equity instruments are issued by the Company’s ultimate parent or its
subsidiaries outside the Group, the Group also classifies the transaction as equity-settled.
25 Revenue recognition
Revenue is the gross inflow of economic benefits arising in the course of the Group’s ordinary
activities when the inflows result in increase in shareholders’ equity, other than increase
relating to contributions from shareholders.
Revenue is recognised when the Group satisfies the performance obligation in the contract by
transferring the control over relevant goods or services to the customers.
Where a contract has two or more performance obligations, the Group determines the
stand-alone selling price at contract inception of the distinct good or service underlying each
performance obligation in the contract and allocates the transaction price in proportion to
those stand-alone selling prices. The Group recognises as revenue the amount of the
transaction price that is allocated to each performance obligation. The stand-alone selling
price is the price at which the Group would sell a promised good or service separately to a
customer. If a stand-alone selling price is not directly observable, the Group considers all
information that is reasonably available to the entity, maximises the use of observable inputs
to estimate the stand-alone selling price.
For the contract with a warranty, the Group analyses the nature of the warranty provided, if the
warranty provides the customer with a distinct service in addition to the assurance that the
product complies with agreed-upon specifications, the Group recognises for the promised
warranty as a performance obligation. Otherwise, the Group accounts for the warranty in
accordance with the requirements of CAS No.13 – Contingencies.
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The transaction price is the amount of consideration to which the Group expects to be entitled
in exchange for transferring promised goods or services to a customer, excluding amounts
collected on behalf of third parties. The Group recognises the transaction price only to the
extent that it is highly probable that a significant reversal in the amount of cumulative revenue
recognised will not occur when the uncertainty associated with the variable consideration is
subsequently resolved. Where the contract contains a significant financing component, the
Group recognises the transaction price at an amount that reflects the price that a customer
would have paid for the promised goods or services if the customer had paid cash for those
goods or services when (or as) they transfer to the customer. The difference between the
amount of promised consideration and the cash selling price is amortised using an effective
interest method over the contract term. The Group does not adjust the consideration for any
effects of a significant financing component if it expects, at contract inception, that the period
between when the Group transfers a promised good or service to a customer and when the
customer pays for that good or service will be one year or less.
The Group satisfies a performance obligation over time if one of the following criteria is met; or
otherwise, a performance obligation is satisfied at a point in time:
- the customer simultaneously receives and consumes the benefits provided by the Group’s
performance as the Group performs;
- the customer can control the asset created or enhanced during the Group’s performance;
or
- the Group’s performance does not create an asset with an alternative use to it and the
Group has an enforceable right to payment for performance completed to date.
For performance obligation satisfied over time, the Group recognises revenue over time by
measuring the progress towards complete satisfaction of that performance obligation. When
the outcome of that performance obligation cannot be measured reasonably, but the Group
expects to recover the costs incurred in satisfying the performance obligation, the Group
recognises revenue only to the extent of the costs incurred until such time that it can
reasonably measure the outcome of the performance obligation.
For performance obligation satisfied at a point in time, the Group recognises revenue at the
point in time at which the customer obtains control of relevant goods or services. To
determine whether a customer has obtained control of goods or services, the Group considers
the following indicators:
- the Group has a present right to payment for the goods or services;
- the Group has transferred physical possession of the goods to the customer;
- the Group has transferred the legal title of the goods or the significant risks and rewards of
ownership of the goods to the customer; and
- the customer has accepted the goods or services.
For the sale of a product with a right of return, the Group recognises revenue when the Group
obtains control of that product, in the amount of consideration to which the Group expects to
be entitled in exchange for the product transferred (i.e. excluding the amount of which
expected to be returned), and recognises a refund liability for the products expected to be
returned. Meanwhile, an asset is recognised in the amount of carrying amount of the product
expected to be returned less any expected costs to recover those products (including potential
decreases in the value of returned products), and carry forward to cost in the amount of
carrying amount of the transferred products less the above costs. At the end of each
reporting period, the Group updates its assessment of future sales return. If there is any
change, it is accounted for as a change in accounting estimate.
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A contract asset is the Group’s right to consideration in exchange for goods or services that it
has transferred to a customer when that right is conditional on something other than the
passage of time. The Group recognises loss allowances for expected credit loss on contract
assets (see Note III.10(6)). Accounts receivable is the Group’s right to consideration that is
unconditional (only the passage of time is required). A contract liability is the Group’s
obligation to transfer goods or services to a customer for which the Group has received
consideration (or an amount of consideration is due) from the customer.
The following is the description of accounting policies regarding revenue from the Group’s
principal activities:
The Group’s sales revenue is mainly derived from dealer sales. Revenue is recognised
when the Group transfers control of the related products to the customer. Based on the
business contract, the Group recognised the sales revenue of these transfers when the
product is confirmed and signed for acceptance by the customers.
26 Contract costs
Contract costs are either the incremental costs of obtaining a contract with a customer or the
costs to fulfil a contract with a customer.
Incremental costs of obtaining a contract are those costs that the Group incurs to obtain a
contract with a customer that it would not have incurred if the contract had not been obtained
e.g. an incremental sales commission. The Group recognises as an asset the incremental
costs of obtaining a contract with a customer if it expects to recover those costs. Other costs
of obtaining a contract are expensed when incurred.
If the costs to fulfil a contract with a customer are not within the scope of inventories or other
accounting standards, the Group recognises an asset from the costs incurred to fulfil a
contract only if those costs meet all of the following criteria:
- the costs relate directly to an existing contract or to a specifically identifiable anticipated
contract, including direct labour, direct materials, allocations of overheads (or similar
costs), costs that are explicitly chargeable to the customer and other costs that are incurred
only because the Group entered into the contract
- the costs generate or enhance resources of the Group that will be used in satisfying (or in
continuing to satisfy) performance obligations in the future; and
- the costs are expected to be recovered.
Assets recognised for the incremental costs of obtaining a contract and assets recognised for
the costs to fulfil a contract (the “assets related to contract costs”) are amortised on a
systematic basis that is consistent with the transfer to the customer of the goods or services to
which the assets relate and recognised in profit or loss for the current period. The Group
recognises the incremental costs of obtaining a contract as an expense when incurred if the
amortisation period of the asset that the entity otherwise would have recognised is one year or
less.
The Group recognises an impairment loss in profit or loss to the extent that the carrying
amount of an asset related to contract costs exceeds:
- remaining amount of consideration that the Group expects to receive in exchange for the
goods or services to which the asset relates; less
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- the costs that relate directly to providing those goods or services that have not yet been
recognised as expenses.
27 Employee benefits
(1) Short-term employee benefits
Employee wages or salaries, bonuses, social security contributions such as medical
insurance, work injury insurance, maternity insurance and housing fund, measured at the
amount incurred or accured at the applicable benchmarks and rates, are recognised as a
liability as the employee provides services, with a corresponding charge to profit or loss or
included in the cost of assets where appropriate.
(2) Post-employment benefits – defined contribution plans
Pursuant to the relevant laws and regulations of the People’s Republic of China, the Group
participated in a defined contribution basic pension insurance plan in the social insurance
system established and managed by government organisations. The Group makes
contributions to basic pension insurance plans based on the applicable benchmarks and rates
stipulated by the government. Basic pension insurance contributions payable are recognised
as a liability as the employee provides services, with a corresponding charge to profit or loss
or included in the cost of assets where appropriate.
(3) Termination benefits
When the Group terminates the employment with employees before the employment
contracts expire, or provides compensation under an offer to encourage employees to accept
voluntary redundancy, a provision is recognised with a corresponding expense in profit or loss
at the earlier of the following dates:
- When the Group cannot unilaterally withdraw the offer of termination benefits because of
an employee termination plan or a curtailment proposal;
- When the Group has a formal detailed restructuring plan involving the payment of
termination benefits and has raised a valid expectation in those affected that it will carry out
the restructuring by starting to implement that plan or announcing its main features to those
affected by it.
28 Government grants
Government grants are non-reciprocal transfers of monetary or non-monetary assets from the
government to the Group except for capital contributions from the government in the capacity
as an investor in the Group.
A government grant is recognised when there is reasonable assurance that the grant will be
received and that the Group will comply with the conditions attaching to the grant.
If a government grant is in the form of a transfer of a monetary asset, it is measured at the
amount received or receivable. If a government grant is in the form of a transfer of a
non-monetary asset, it is measured at fair value.
Government grants related to assets are grants whose primary condition is that the Group
qualifying for them should purchase, construct or otherwise acquire long-term assets.
Government grants related to income are grants other than those related to assets. A
government grant related to an asset is recognised as deferred income and amortised over
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the useful life of the related asset on a reasonable and systematic manner as other income or
non-operating income. A grant that compensates the Group for expenses or losses to be
incurred in the future is recognised as deferred income, and included in other income or
non-operating income in the periods in which the expenses or losses are recognised. Or
included in other income or non-operating income directly.
29 Income tax
Current tax and deferred tax are recognised in profit or loss except to the extent that they
relate to a business combination or items recognised directly in equity (including other
comprehensive income).
Current tax is the expected tax payable calculated at the applicable tax rate on taxable income
for the year, plus any adjustment to tax payable in respect of previous years.
At the balance sheet date, current tax assets and liabilities are offset only if the Group has a
legally enforceable right to set them off and also intends either to settle on a net basis or to
realise the asset and settle the liability simultaneously.
Deferred tax assets and deferred tax liabilities arise from deductible and taxable temporary
differences respectively, being the differences between the carrying amounts of assets and
liabilities for financial reporting purposes and their tax bases, which include deductible losses
and tax credits carried forward to subsequent periods. Deferred tax assets are recognised to
the extent that it is probable that future taxable profits will be available against which
deductible temporary differences can be utilised.
Deferred tax is not recognised for temporary differences arising from the initial recognition of
assets or liabilities in a single transaction that is not a business combination, affects neither
accounting profit nor taxable profit (or deductible loss) and does not give rise to equal taxable
and deductible temporary differences. Deferred tax is also not recognised for taxable
temporary differences arising from the initial recognition of goodwill.
At the balance sheet date, deferred tax is measured based on the tax consequences that
would follow from the expected manner of recovery or settlement of the carrying amounts of
the assets and liabilities, using tax rates enacted at the balance sheet date that are expected
to be applied in the period when the asset is recovered or the liability is settled.
The carrying amount of a deferred tax asset is reviewed at each balance sheet date, and is
reduced to the extent that it is no longer probable that the related tax benefits will be utilised.
Such reductions are reversed to the extent that it becomes probable that sufficient taxable
profits will be available.
At the balance sheet date, deferred tax assets and deferred tax liabilities are offset if all of the
following conditions are met:
- the taxable entity has a legally enforceable right to offset current tax liabilities and current
tax assets;
- they relate to income taxes levied by the same tax authority on either:
- the same taxable entity; or
- different taxable entities which intend either to settle the current tax liabilities and current
tax assets on a net basis, or to realise the assets and settle the liabilities simultaneously, in
each future period in which significant amounts of deferred tax liabilities or deferred tax
assets are expected to be settled or recovered.
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30 Leases
A contract is lease if the lessor conveys the right to control the use of an identified asset to
lessee for a period of time in exchange for consideration.
At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A
contract is, or contains, a lease if the contract conveys the right to control the use of an
identified asset for a period of time in exchange for consideration.
To assess whether a contract conveys the right to control the use of an identified asset, the
Group assesses whether:
- the contract involves the use of an identified asset. An identified asset may be specified
explicitly or implicitly speicied in a contrat and should be physically distinct, or capacity
portion or other portion of an asset that is not physically distinct but it represents
substantially all of the capacity of the asset and thereby provides the customer with the
right to obtain substantially all of the ecomonic benefits from the use of the asset. If the
supplier has a substantive substitution right throughout the period of use, then the asset is
not identified;
- the lessee has the right to obtain substantially all of the economic benefits from use of the
asset throughout the period of use;
- the lessee has the right to direct the use of the asset.
For a contract that contains more separate lease componets, the lessee and the lessor
separate lease components and account for each lease component as a lease separately. For
a contract that contains lease and non-lease components, the lessee and the lessor separate
lease components from non-lease components. For a contract that contains lease and
non-lease components, the lessee allocates the consideration in the contract to each lease
component on the basis of the relative stand-alone price of the lease component and the
aggregate stand-alone price of the non-lease components. The lessor allocates the
consideration in the contract in accordance with the accounting policy in Note III.25.
(1) As a lessee
The Group recognises a right-of-use asset and a lease liability at the lease commencement
date. The right-of-use asset is initially measured at cost, which comprises the initial amount of
the lease liability, any lease payments made at or before the commencement date (less any
lease incentives received), any initial direct costs incurred and an estimate of costs to
dismantle and remove the underlying asset or to restore the site on which it is located or
restore the underlying asset to the condition required by the terms and conditions of the lease.
The right-of-use asset is depreciated using the straight-line method. If the lessee is
reasonably certain to exercise a purchase option by the end of the lease term, the right-of-use
asset is depreciated over the remaining useful lives of the underlying asset. Otherwise, the
right-of-use asset is depreciated from the commencement date to the earlier of the end of the
useful life of the right-of-use asset or the end of the lease term. Impairment losses of
right-of-use assets are accounted for in accordance with the accounting policy described in
Note III.21.
The lease liability is initially measured at the present value of the lease payments that are not
paid at the commencement date, discounted using the interest rate implicit in the lease or, if
that rate cannot be readily determined, the Group’s incremental borrowing rate.
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A constant periodic rate is used to calculate the interest on the lease liability in each period
during the lease term with a corresponding charge to profit or loss or included in the cost of
assets where appropriate. Variable lease payments not included in the measurement of the
lease liability is charged to profit or loss or included in the cost of assets where appropriate as
incurred.
Under the following circumstances after the commencement date, the Group remeasures
lease liabilities based on the present value of revised lease payments:
- there is a change in the amounts expected to be payable under a residual value guarantee;
- there is a change in future lease payments resulting from a change in an index or a rate
used to determine those payments;
- there is a change in the assessment of whether the Group will exercise a purchase,
extension or termination option, or there is a change in the exercise of the extension or
termination option.
When the lease liability is remeasured, a corresponding adjustment is made to the carrying
amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the
right-of-use asset has been reduced to zero.
The Group has elected not to recognise right-of-use assets and lease liabilities for short-term
leases that have a lease term of 12 months or less and leases of low-value assets. The Group
recognises the lease payments associated with these leases in profit or loss or as the cost of
the assets where appropriate using the straight-line method over the lease term.
(2) As a lessor
The Group determines at lease inception whether each lease is a finance lease or an
operating lease. A lease is classified as a finance lease if it transfers substantially all the risks
and rewards incidental to ownership of an underlying asset irrespective of whether the legal
title to the asset is eventually transferred. An operating lease is a lease other than a finance
lease.
When the Group is a sub-lessor, it assesses the lease classification of a sub-lease with
reference to the right-of-use asset arising from the head lease, not with reference to the
underlying asset. If a head lease is a short-term lease to which the Group applies practical
expedient described above, then it classifies the sub-lease as an operating lease.
Under a finance lease, at the commencement date, the Group recognises the finance lease
receivable and derecognises the finance lease asset. The finance lease receivable is initially
measured at an amount equal to the net investment in the lease. The net investment in the
lease is measured at the aggregate of the unguaranteed residual value and the present value
of the lease receivable that are not received at the commencement date, discounted using the
interest rate implicit in the lease.
The Group recognises finance income over the lease term, based on a pattern reflecting a
constant periodic rate of return. The derecognition and impairment of the finance lease
receivable are recognised in accordance with the accounting policy in Note III.10. Variable
lease payments not included in the measurement of net investment in the lease are
recognised as income as they are earned.
Lease receipts from operating leases is recognised as income using the straight-line method
over the lease term. The initial direct costs incurred in respect of the operating lease are
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initially capitalised and subsequently amortised in profit or loss over the lease term on the
same basis as the lease income. Variable lease payments not included in lease receipts are
recognised as income as they are earned.
31 Assets held for sale
The Group classified a non-current asset or disposal group as held for sale when the carrying
amount of a non-current asset or disposal group will be recovered through a sale transaction
rather than through continuing use.
A disposal group refers to a group of assets to be disposed of, by sale or otherwise, together
as a whole in a single transaction and liabilities directly associated with those assets that will
be transferred in the transaction.
A non-current asset or disposal group is classified as held for sale when all the following
criteria are met:
- According to the customary practices of selling such asset or disposal group in
similar transactions, the non-current asset or disposal group must be available for
immediate sale in their present condition subject to terms that are usual and customary for
sales of such assets or disposal groups;
- Its sale is highly probable, that is, the Group has made a resolution on a sale plan
and has obtained a firm purchase commitment. The sale is to be completed within one
year.
Non-current assets or disposal groups held for sale are stated at the lower of carrying amount
and fair value (see Note III.22) less costs to sell (except financial assets (see Note III.10),
deferred tax assets (see Note III.29) and investment properties subsequent measured at fair
value (see Note III. 13) initially and subsequently. Any excess of the carrying amount over
the fair value (see Note III.22) less costs to sell is recognised as an impairment loss in profit or
loss.
32 Profit distributions
Dividends or profit distributions proposed in the profit appropriation plan, which will be
approved after the balance sheet date, are not recognised as a liability at the balance sheet
date but are disclosed in the notes separately.
33 Related parties
If a party has the power to control, jointly control or exercise significant influence over another
party, or vice versa, or where two or more parties are subject to common control or joint
control from another party, they are considered to be related parties. Related parties may be
individuals or enterprises. Enterprises with which the Company is under common control
only from the State and that have no other related party relationships are not regarded as
related parties.
In addition to the related parties stated above, the Company determines related parties based
on the disclosure requirements of Administrative Procedures on the Information Disclosures of
Listed Companies issued by the CSRC.
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34 Segment reporting
The Group is principally engaged in the production and sales of wine, brandy, and sparkling
wine in China, France, Spain, Chile and Australia. In accordance with the Group’s internal
organisation structure, management requirements and internal reporting system, the Group’s
operation is divided into five parts: China, Spain, France, Chile and Australia. The
management periodically evaluates segment results, in order to allocate resources and
evaluate performances. In 2023, over 86% of revenue, more than 96% of profit and over
91% of non-current assets derived from China/are located in China. Therefore the Group
does not need to disclose additional segment report information.
35 Significant accounting estimates and judgements
The preparation of the financial statements requires management to make estimates and
assumptions that affect the application of accounting policies and the reported amounts of
assets, liabilities, income and expenses. Actual results may differ from these estimates.
The management estimates as well as underlying assumptions and uncertainties involved are
reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the
period in which the estimate is revised and in any future periods affected.
Significant accounting estimates see Notes V.3 7 11 and 16.
36 Changes in significant accounting policies
In 2023, the Group has adopted the following newly revised accounting standards and
implementation guidance and illustrative examples issued by the MOF:
The accounting treatment of deferred tax related to assets and liabilities arising from a single
transaction excluded from the scope of the initial recognition exemption” in CAS Bulletin No.16
(Caikuai [2022] No.31) (“CAS Bulletin No.16”)
According to the provisions, for taxable and deductible temporary differences arising from the
initial recognition of assets or liabilities in a single transaction that is not a business
combination, affects neither accounting profits nor taxable profit (or deductible losses) and
gives rise to equal taxable and deductible temporary differences, the Group recognises the
corresponding deferred tax liabilities and deferred tax assets respectively in accordance with
relevant provisions in CAS 18 - Income Tax when such transactions occur, instead of
recognising deferred tax liabilities or deferred tax assets based on the net amount of taxable
and deductible temporary differences. The adoption of the above requirements and guidance
does not have a significant effect on the financial position and financial performance of the
Group.
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IV. Taxation
1 Main types of taxes and corresponding tax rates
Type of tax Taxation basis Tax rate
Output VAT is calculated on
product sales and taxable
13%, 9%, 6% (China), 20% (France),
Value-added tax services revenue. The
21% (Spain), 19% (Chile) and 10%
(VAT) basis for VAT payable is to
(Australia)
deduct input VAT from the
output VAT for the period
10% of the price, 20% of the price and
Consumption tax Based on taxable revenue
RMB1,000 each ton (China)
Urban maintenance
and construction Based on VAT paid 7% (China)
tax
Corporate income 25% (China), 25% (France), 28%
Based on taxable profits
tax (Spain), 27% (Chile), 30% (Australia)
Other than tax incentives stated in Note IV. 2, applicable tax rates of the Group in 2023 and
2022 are all stated as above.
2 Tax preferential treatments
Ningxia Changyu Grape Growing Co., Ltd. (“Ningxia Growing”), a subsidiary of the Group,
whose principal activity is grape growing is incorporated in Ningxia Huizu Autonomous
Region. According to clause 27 of the Corporate Income Tax Law of the People’s Republic
of China and clause 86 of the Implementation Rules of Enterprise Income Tax Law of the
People’s Republic of China, Ningxia Growing enjoys an exemption of corporate income tax.
Yantai Changyu Grape Growing Co., Ltd. (“Grape Growing”), a branch of the Company,
whose principal activity is grape growing is incorporated in Zhifu District, Yantai City,
Shandong Province. According to clause 27 of the Corporate Income Tax Law of the
People’s Republic of China and clause 86 of the Implementation Rules of Enterprise Income
Tax Law of the People’s Republic of China, Grape Growing enjoys an exemption of corporate
income tax.
Yantai Changyu Wine Research & Development Centre Co., Ltd. (“R&D Centre”), a branch of
the Company, is an enterprise engaged in grape growing in the Economic and Technological
Development Zone of Yantai City, Shandong Province. Pursuant to Article 27 of the
Enterprise Income Tax Law of the People’s Republic of China and Article 86 of the
Implementation Regulations of the Enterprise Income Tax Law of the People’s Republic of
China, R&D Centre enjoys the preferential policy of exemption of enterprise income tax on
income from grape growing.
Beijing Changyu AFIP Agriculture Development Co., Ltd. (“Agriculture Development”), a
subsidiary of the Group, whose principal activity is grape growing is incorporated in Miyun,
Beijing. According to clause 27 of the Corporate Income Tax Law of the People’s Republic
of China and clause 86 of the Implementation Rules of Enterprise Income Tax Law of the
People’s Republic of China, Agriculture Development enjoys an exemption of corporate
income tax.
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Xinjiang Tianzhu Wine Co., Ltd. (“Xinjiang Tianzhu” , disposal in June 2023), a subsidiary of
the Company, is an enterprise of wine production and sales incorporated in Shihezi city,
Xinjiang Weizu Autonomous. In accordance with relevant provisions of the Announcement
on Continuation of CIT Policies for Large-scale Development in the Western Region
(Announcement [2020] No.23 of the Ministry of Finance), Ningxia Chateau Changyu Moser is
entitled to preferential tax policies. Therefore, during the period from 2021 to 2030, its
corporate income tax shall be levied at a reduced tax rate of 15%.
Xinjiang Chateau Changyu Baron Balboa Co., Ltd. (“Chateau Shihezi”), a subsidiary of the
Company, is an enterprise of wine production and sales incorporated in Shihezi city, Xinjiang
Weizu Autonomous. In accordance with relevant provisions of the Announcement on
Continuation of CIT Policies for Large-scale Development in the Western Region
(Announcement [2020] No.23 of the Ministry of Finance), Ningxia Chateau Changyu Moser is
entitled to preferential tax policies. Therefore, during the period from 2021 to 2030, its
corporate income tax shall be levied at a reduced tax rate of 15%.
Ningxia Changyu Longyu Chateau Co., Ltd. (“Ningxia Chateau”), a subsidiary of the
Company, is an enterprise of wine production and sales incorporated in Yinchuan, Ningxia
Hui Autonomous Region. In accordance with the Notice on Continuing the Enterprise Income
Tax Policies for the Large-Scale Development of Western China (Notice of the Ministry of
Finance [2020] No. 23), Ningxia Chateau is qualified to enjoy preferential taxation policies,
which means it can pay corporate income tax at a preferential rate of 15% for the period from
2021 to 2030.
Changyu (Ningxia) Wine Co., Ltd. (“Ningxia Wine”), a subsidiary of the Company, is an
enterprise engaged in wine production and sales, incorporated in Shihezi City, Xinjiang Uygur
Autonomous Region. In accordance with relevant provisions of the Announcement on
Continuation of CIT Policies for Large-scale Development in the Western Region
(Announcement [2020] No.23 of the Ministry of Finance), Changyu (Ningxia) Wine is entitled
to preferential tax policies. Therefore, during the period from 2021 to 2030, its corporate
income tax shall be levied at a reduced tax rate of 15%.
In accordance with the PRC Enterprise Income Tax Law and its implementing regulations, the
Notice of the Ministry of Finance and the State Administration of Taxation on Implementing
the Inclusive Tax Deduction and Exemption Policies for Micro and Small Enterprises (No.13
[2019] of the Ministry of Finance), the Announcement on Implementation of Income Tax
Incentives for Micro and Small Enterprises and Individually-owned Businesses
(Announcement [2023] No.6 from the Ministry of Finance and the State Administration of
Taxation) and the Announcement on Further Implementation of Income Tax Incentives for
Small Enterprises with Meagre Profits (Announcement [2022] No. 13 of the Ministry of
Finance and the State Taxation Administration), for micro and small enterprises that meet the
application requirements that the taxable income that is not more than RMB 1 million, the
amount of taxable income shall be reduced by 25%, and the applicable rate of enterprise
income tax shall be 20%; for the annual taxable income exceeding RMB 1 million, but is not
more than RMB 3 million, the amount of taxable income shall be reduced by 25%, and the
applicable rate of enterprise income tax shall be 20%. Beijing Changyu Wine Marketing Co.,
Ltd. (“Beijing Marketing”), a subsidiary of the Company, was identified as a qualified small
enterprise with meagre profits.
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Pursuant to the Announcement on Clarifying VAT Relief and Other Policies for Small-scale
VAT Taxpayers (Announcement [2023] No.1 of the Ministry of Finance and the State Taxation
Administration), the taxable sales revenue of small-scale VAT taxpayers to which a levy rate
of 3% is applicable shall be subject to VAT at a reduced levy rate of 1%; and the prepaid VAT
items to which a pre-levy rate of 3% is applicable shall be subject to a reduced pre-levy rate of
1% from the period from 1 January 2023 to 31 December 2023. Xinjiang Changyu Sales Co.,
Ltd. Weimeisi Tasting Centre Branch is entitled to the above exemption.
In accordance with the Notice of the Ministry of Finance and the State Administration of
Taxation on Further Stepping up the Implementation of the Policy for the Refund of Term-End
Excess Input Value-Added Tax Credits (Notice of the Ministry of Finance and State Taxation
Administration [2022] No. 14), the government should further step up the implementation of
the policy for the refund of term-end excess input value-added tax credits and expand the
scope of industries applicable to this policy. The Company and its qualified subsidiaries have
enjoyed this policy.
In accordance with the Notice of the Ministry of Finance and the State Administration of
Taxation on the Further Implementation of Reduction and Exemption in Six Taxes and Two
Fees for Small-Scale and Micro Enterprises (Notice of the Ministry of Finance and State
Taxation Administration [2022] No. 10), from 1 January 2022 to 31 December 2024, People’s
Governments of all provinces, autonomous regions and municipalities can reduce the
resource tax, urban maintenance and construction tax, property tax, Urban and township land
use tax, stamp duty (excluding stamp duty on securities transaction), farmland occupation tax,
education surcharges, and local education surcharges within a 50% tax range for small-scale
VAT taxpayers, small-scale and low-profit enterprises, and individually-owned businesses
based on the actual situation in the region. Shandong, Xinjiang, Ningxia, Shaanxi, and other
provinces (regions, cities) are all subject to a 50% reduction in “six taxes and two fees”, and
some subsidiaries of the Company are qualified to enjoy the tax reduction.
V. Notes to the consolidated financial statements
1 Cash at bank and on hand
Item 2023 2022
Cash on hand 74,951 47,954
Bank deposits 2,217,280,801 1,643,577,420
Other monetary funds 337,895 7,828,741
Total 2,217,693,647 1,651,454,115
Including: Total overseas deposits 24,317,469 17,073,210
As at 31 December 2023, the Group’s term deposits with previous maturity of more than three
months is RMB 254,200,000, with interest rate 1.70% - 2.25% (31 December 2022:
RMB28,200,000).
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As at 31 December 2023, the Group’s other monetary assets is as follows:
Item 2023 2022
Deposits for letters of credit - 6,000,000
Alipay account balance 192,997 1,695,245
Deposit for ICBC platform 10,000 10,000
Deposits for the customs 134,898 123,496
Total 337,895 7,828,741
As at 31 December 2023, the Group did not have any special interest arrangements such as
the establishment of joint fund management accounts with related parties.
2 Bills receivable
Classification of bills receivable
Item 2023 2022
Bank acceptance bills 1,260,000 2,712,460
Total 1,260,000 2,712,460
All of the above bills are due within one year.
3 Accounts receivable
(1) Accounts receivable by customer type are as follows:
Type 31 December 2023 31 December 2022
Amounts due from related parties 4,401,307 2,827,473
Amounts due from other customers 390,889,475 355,711,618
Sub-total 395,290,782 358,539,091
Less: Provision for bad and doubtful debts (13,158,448) (14,556,106)
Total 382,132,334 343,982,985
As at 31 December 2023, ownership restricted accounts receivable is RMB 73,628,265 (31
December 2022: RMB59,982,807), referring to Note V. 53.
(2) The ageing analysis of accounts receivable is as follows:
Ageing 2023 2022
Within 1 year (inclusive) 387,161,172 349,764,300
Over 1 year but within 2 years (inclusive) 2,367,283 8,085,677
Over 2 years but within 3 years (inclusive) 5,396,673 452,254
Over 3 years 365,654 236,860
Sub-total 395,290,782 358,539,091
Less: Provision for bad and doubtful debts (13,158,448) (14,556,106)
Total 382,132,334 343,982,985
The ageing is counted starting from the date when accounts receivable are recognised.
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(3) Accounts receivable by provisioning method
At all times the Group measures the impairment loss for accounts receivable at an amount
equal to lifetime ECLs, and the ECLs are based on the number of overdue days and the loss
given default. According to the historical experience of the Group, there are no significant
differences in the losses of different customer groups. Therefore, different customer groups
are not further distinguished when calculating impairment loss based on the overdue
information.
2023
Carrying amount at Impairment loss at
Loss given default
the end of the year the end of the year
Current 0.2% 365,010,895 660,099
Overdue for 1 to 30 days 2.7% 14,276,606 384,812
Overdue for 31 to 60 days 10.8% 1,939,270 208,908
Overdue for 61 to 90 days 20.8% 443,199 92,141
Overdue for 91 to 120 days 37.2% 880,565 328,007
Overdue for 121 to 150 days 55.4% 874,822 485,022
Overdue for 151 to 180 days 55.4% 499,866 277,137
Overdue for 181 to 210 days 72.1% 497,356 358,689
Overdue for 211 to 240 days 77.1% 693,596 534,607
Overdue for 241 to 270 days 82.9% 980,610 812,545
Overdue for 271 to 300 days 88.9% 1,596,409 1,418,894
Overdue for 301 to 330 days 100.0% 9,150 9,150
Overdue for 331 to 360 days 100.0% 82,541 82,541
Overdue for 360 days 100.0% 7,505,897 7,505,896
Total 3.3% 395,290,782 13,158,448
2022
Carrying amount at Impairment loss at
Loss given default
the end of the year the end of the year
Current 0.3% 320,680,504 987,421
Overdue for 1 to 30 days 4.6% 14,539,415 670,713
Overdue for 31 to 60 days 12.1% 5,412,870 654,202
Overdue for 61 to 90 days 22.9% 1,755,591 401,918
Overdue for 91 to 120 days 25.5% 852,924 217,910
Overdue for 121 to 150 days 32.3% 3,243,366 1,047,097
Overdue for 151 to 180 days 40.0% 469,054 187,704
Overdue for 181 to 210 days 42.0% 217,218 91,181
Overdue for 211 to 240 days 44.4% 636,479 282,588
Overdue for 241 to 270 days 51.7% 654,567 338,403
Overdue for 271 to 300 days 71.0% 1,058,407 751,067
Overdue for 301 to 330 days 87.7% 753,174 660,380
Overdue for 331 to 360 days 100.0% 15,263 15,263
Overdue for 360 days 100.0% 8,250,259 8,250,259
Total 4.1% 358,539,091 14,556,106
The loss given default is measured based on the actual credit loss experience in the past 12
months, and is adjusted taking into consideration the differences among the economic
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Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
conditions during the historical data collection period, the current economic conditions and the
economic conditions during the expected lifetime.
(4) Movements of provisions for bad and doubtful debts:
2023 2022
Balance at the beginning of the year (14,556,106) (20,263,750)
Charge for the year (7,361,616) (15,084,381)
Recoveries or reversals during the year 8,759,274 19,837,178
Transfers out during the year - 954,847
Balance at the end of the year (13,158,448) (14,556,106)
(5) Five largest accounts receivable by debtor at the end of the year:
Ending balance
Percentage of
Relationship with Balance at the of provision for
Name Ageing ending balance
the Group end of the year bad and doubtful
of others (%)
debts
Debtor One Third party 147,458,311 Within 1 year 37.3% 265,765
Debtor Two Third party 14,267,454 Within 1 year 3.6% 504,073
Debtor Three Third party 14,054,076 Within 1 year 3.6% 496,535
Debtor Four Third party 9,396,987 Within 1 year 2.4% 331,999
Debtor Five Third party 8,241,582 Within 1 year 2.1% 291,178
Total 193,418,410 49.0% 1,889,550
4 Receivables under financing
Item Note 2023 2022
Bills receivable (1) 408,316,028 309,329,918
(1) Pledged bills receivable by the Group at the end of the year:
As at 31 December 2023, there was no pledged bills receivable (31 December 2022: Nil).
(2) Outstanding endorsed or discounted bills that have not matured at the end of the year
Amount
Item derecognised
at year end
Bank acceptance bills 394,923,505
Total 394,923,505
As at 31 December 2023, bills endorsed by the Group to other parties which are not yet due at
the end of the period is RMB 394,923,505 (31 December 2022: RMB 500,480,279). The notes
are used for payment to suppliers and constructions. The Group believes that due to good
reputation of bank, the risk of notes not accepting by bank on maturity is very low, therefore
derecognise the note receivables endorsed. If the bank is unable to pay the notes on maturity,
according to the relevant laws and regulations of China, the Group would undertake limited
liability for the notes.
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Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
5 Prepayments
(1) Prepayments by category:
Item 2023 2022
Prepayments 61,497,933 60,415,508
Total 61,497,933 60,415,508
(2) The ageing analysis of prepayments is as follows:
2023 2022
Ageing Percentage Percentage
Amount Amount
(%) (%)
Within 1 year (inclusive) 61,468,643 99.9% 59,426,080 98.4%
Over 1 year but within 2 years
29,290 0.1% 989,428 1.6%
(inclusive)
Total 61,497,933 100.0% 60,415,508 100.0%
The ageing is counted starting from the date when prepayments are recognised.
(3) Five largest prepayments by debtor at the end of the year:
Ending balance
Percentage of
Nature of the Balance at the of provision for
Name Ageing ending balance
receivable end of the year bad and doubtful
of others (%)
debts
Debtor One Prepayments 29,452,494 Within 1 year 47.9% -
Debtor Two Prepayments 8,104,605 Within 1 year 13.2% -
Debtor Three Prepayments 4,832,462 Within 1 year 7.9% -
Debtor Four Prepayments 1,715,378 Within 1 year 2.8% -
Debtor Five Prepayments 1,274,822 Within 1 year 2.1% -
Total 45,379,761 73.9% -
6 Other receivables
31 December 2023 31 December 2022
Others 71,496,276 70,542,398
Total 71,496,276 70,542,398
(1) Others by customer type:
Customer type 31 December 2023 31 December 2022
Amounts due from other companies 71,496,276 70,542,398
Sub-total 71,496,276 70,542,398
Less: Provision for bad and doubtful debts - -
Total 71,496,276 70,542,398
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Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
(2) The ageing analysis is as follows:
Ageing 2023 2022
Within 1 year (inclusive) 29,551,266 67,221,713
Over 1 year but within 2 years (inclusive) 39,753,227 1,208,361
Over 2 years but within 3 years (inclusive) 160,000 57,928
Over 3 years 2,031,783 2,054,396
Sub-total 71,496,276 70,542,398
Less: Provision for bad and doubtful debts - -
Total 71,496,276 70,542,398
The ageing is counted starting from the date when other receivables are recognised.
(3) Movements of provisions for bad and doubtful debts
As at 31 December 2023, no bad and doubtful debt provision was made for other
receivables (31 December 2022: Nil).
As at 31 December 2023, the Group has no other receivables written off (31 December
2022: Nil).
(4) Others categorised by nature
Nature of other receivables 2023 2022
Land purchases and reserves receivable 37,768,902 41,268,902
Refund of consumption tax and VAT 19,104,008 12,509,201
Deposit 5,429,202 5,578,001
Petty cash receivable 154,354 440,759
Others 9,039,810 10,745,535
Sub-total 71,496,276 70,542,398
Less: Provision for bad and doubtful debts - -
Total 71,496,276 70,542,398
(5) Five largest others-by debtor at the end of the year
Ending balance
Percentage of
Nature of the Balance at the of provision for
Name Ageing ending balance
receivable end of the year bad and doubtful
of others (%)
debts
Land purchases
Debtor One and reserves 37,768,902 1-2 years 52.8% -
receivable
Debtor Two Refund of VAT 17,894,493 Within 1 year 25.0% -
Housing
Debtor Three maintenance 2,670,094 Within 1 year 3.7% -
funds
Debtor Four Refund of VAT 736,946 Within 1 year 1.0% -
Debtor Five Deposits 572,880 Within 1 year 0.8% -
Total 59,643,315 83.3%
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Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
7 Inventories
(1) Inventories by category:
2023 2022
Provision for Provision for
Item Carrying Carrying
Book value impairment of Book value impairment of
amount amount
inventories inventories
Raw materials 241,961,713 - 241,961,713 258,200,178 - 258,200,178
Work in progress 1,915,860,327 - 1,915,860,327 1,986,391,270 - 1,986,391,270
Finished goods 625,076,081 (17,507,534) 607,568,547 673,171,026 (14,363,959) 658,807,067
Total 2,782,898,121 (17,507,534) 2,765,390,587 2,917,762,474 (14,363,959) 2,903,398,515
(2) Provision for impairment of inventories:
Increase during Decrease during
Item Opening balance the year the year Closing balance
Recognised Reversal
Finished goods 14,363,959 17,507,534 (14,363,959) 17,507,534
8 Other current assets
Item 2023 2022
Input tax to be credited 65,228,189 44,270,238
Right to recover returned goods 16,876,869 -
Prepaid income taxes 4,438,001 19,102,111
Deferred expenses 1,825,483 1,034,403
Trademarks (Note) - 120,930,641
Total 88,368,542 185,337,393
Notes:
Pursuant to a royalty agreement dated 18 May 1997, starting from 18 September 1997, the
Group may use certain trademarks of Changyu Group Company, which have been registered
with the PRC Trademark Office. An annual royalty fee at 2% of the Group’s annual sales is
payable to Changyu Group. The license is effective until the expiry of the registration of the
trademarks.
According to the above royalty agreement, Changyu Group collected a total of
RMB576,507,809 for royalty from 2013 to 2019, of which 51% was used to promote
trademarks such as Changyu and the product of this contract, totalling RMB294,018,093.
The amount is used for promotion of Changyu and other trademarks and the products of this
contract, totalling RMB62,250,368, the difference is RMB231,768,615 (including tax).
On 18 May 2019, the general meeting of shareholders approved the proposal of the
amendment to the royalty agreement. Article 6.1 of the royalty agreement with Changyu
Group was amended to: During the validity period of this contract, the Group pays Changyu
Group royalty on an annual basis. The royalty is calculated based on 0.98% of the sales
volume of the Group ‘s contract products using this trademark. Article 6.3 is amended to:
The royalty paid to the Changyu Group by the Group shall not be used to promote this
trademark and the contract products.
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Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
Changyu Group promised to offset the difference of RMB231,768,615 above with the royalty
for four years, i.e. from 2019 to 2022.If it is not sufficient for deduction, the rest will be repaid
in a one-off manner in 2023. If there is surplus, the surplus part of the royalty will be
charged from the year when the surplus occurs.
The Group recovered the balance of Changyu Group’s trademark royalties in December
2023.
9 Long-term equity investments
(1) Long-term equity investments by category:
Item 2023 2022
Investments in joint ventures 37,018,893 37,970,535
Investments in associates 1,266,727 3,400,850
Sub-total 38,285,620 41,371,385
Less: Provision for impairment - -
Total 38,285,620 41,371,385
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Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
(2) Movements of long-term equity investments during the year are as follows:
Movements during the year
2023
(Losses)/Profits
Balance at the 2023 Shareholding
Investee from investments
beginning of the Others Closing balance percentage
under
year
equity-method l
Joint ventures
SAS L&M Holdings (“L&M Holdings”) 37,970,535 (951,642) - 37,018,893 55%
Associates
WEMISS (Shanghai) Enterprise Development Co., Ltd
2,318,351 54,934 (2,373,285) - 100%
(“WEMISS Shanghai”) (Note1)
Shanghai Yufeng Brand Management Co., Ltd. (Note2) 420,369 (55,007) - 365,362
Yantai Guolong Wine Industry Co., Ltd. (Note2) 662,130 239,235 - 901,365 10%
Sub-total 3,400,850 239,162 (2,373,285) 1,266,727 10%
Total 41,371,385 (712,480) (2,373,285) 38,285,620
Note 1: According to the Equity Transfer Contract signed by the Company and Beijing Wanfeng Trading Co., Ltd. (“Beijing Wanfeng”) in 2023,
Beijing Wanfeng transferred its 70% equity in Weimeisi Shanghai to the Company at a price of RMB5,537,700, and Weimeisi Shanghai
becomes a wholly-owned subsidiary of the Company upon the completion of this transaction. The related transaction was completed in
January 2023, please see Note VII.1 for details.
Note 2: The Group has appointed one director to each of these investees.
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10 Investment properties
Plants and
buildings
Cost
31 December 2022 70,954,045
Transfer in 10,211,574
31 December 2023 81,165,619
Accumulated depreciation
31 December 2022 (48,838,727)
Transfer in (5,125,009)
Charge for the year (2,719,052)
31 December 2023 (56,682,788)
Carrying amount
31 December 2023 24,482,831
31 December 2022 22,115,318
11 Fixed assets
(1) Fixed assets
Machinery &
Item Plant & buildings Motor vehicles Total
equipment
Cost
31 December 2022 5,878,199,055 2,793,728,175 25,888,552 8,697,815,782
Additions during the year
- Purchases 30,659,690 73,274,720 174,932 104,109,342
- Transfers from construction
6,273,036 1,726,052 - 7,999,088
in progress
- Transfers to Investment
(10,211,574) - - (10,211,574)
properties
Disposals or written-offs during
(22,448) (35,868,072) (794,809) (36,685,329)
the year
Disposals of Subsidiaries (22,793,000) (21,338,824) (1,000,461) (45,132,285)
31 December 2023 5,882,104,759 2,811,522,051 24,268,214 8,717,895,024
Accumulated depreciation
31 December 2022 (1,167,095,365) (1,477,263,867) (22,633,029) (2,666,992,261)
Charge for the year (162,015,401) (150,533,496) (1,793,186) (314,342,083)
Transfers to Investment
5,125,009 - - 5,125,009
properties
Disposals or written-offs during
22,000 31,996,269 706,459 32,724,728
the year
Disposals of Subsidiaries 11,697,956 18,387,141 950,438 31,035,535
31 December 2023 (1,312,265,801) (1,577,413,953) (22,769,318) (2,912,449,072)
Provision for impairment
31 December 2022 - (2,685,549) - (2,685,549)
Accrued during the year - (10,363,383) - (10,363,383)
Disposals of Subsidiaries - 2,685,549 - 2,685,549
31 December 2023 - (10,363,383) - (10,363,383)
Carrying amount
31 December 2023 4,569,838,958 1,223,744,715 1,498,896 5,795,082,569
31 December 2022 4,711,103,690 1,313,778,759 3,255,523 6,028,137,972
As at 31 December 2023, ownership restricted net value of fixed assets is RMB 37,985,117
(31 December 2022: RMB303,897,124), referring to Note V. 53.
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Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
(2) Temporarily idle fixed assets
Accumulated Provision for
Item Cost Carrying amount
depreciation impairment
Machinery equipment 29,423,698 (19,060,315) (10,363,383) -
Total 29,423,698 (19,060,315) (10,363,383) -
(3) Fixed assets leased out under operating leases
Carrying amount at
Item
the end of the year
Plant & buildings 89,996,993
Machinery equipment 931
Fixed assets pending certificates of ownership
Reason why the
Item Carrying amount
certificates are pending
Dormitories, main building and reception
260,797,650 Processing
building of Changan Chateau
Buildings and boiler houses of KOYA Brand 167,954,341 Processing
European town, main building and service
158,783,634 Processing
building of AFIP
Fermentation shop of Zhangyu (Jingyang) 4,296,086 Processing
Office, experiment building and workshop of
4,163,331 Processing
Fermentation Centre
Finished goods warehouse and workshop of
1,943,460 Processing
Kylin Packaging
Others 874,037 Processing
The buildings without property certificate above have no significant impact on the Group’s
management.
12 Construction in progress
(1) Construction in progress
2023 2022
Project Provision for Carrying Provision for Carrying
Book value Book value
impairment amount impairment amount
Nnigxia Chateau museum
1,376,147 - 1,376,147 - - -
construction project
Museum construction
- - - 32,981,419 - 32,981,419
project
Shihezi Chateau
700,000 - 700,000 7,065,744 - 7,065,744
Construction Project
Other Companies’
1,247,094 - 1,247,094 886,998 - 886,998
Construction Project
Total 3,323,241 - 3,323,241 40,934,161 - 40,934,161
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Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
(2) Movements of major construction projects in progress during the year
Attributable to: Interest
Percentage of Accumulated
Budget Opening Additions Transfers to Other Closing Interest rate for Sources of
Item actual cost to capitalised
(RMB million) balance during the year fixed assets transfers out balance capitalised for capitalisation funding
budget (%) interest
the year in 2023 (%)
Museum construction project 51 32,981,419 - - (32,981,419) - 100% - - - Self-raised
Shihezi Chateau Construction Project 780 7,065,744 700,000 (7,065,744) - 700,000 98% - - - Self-raised
158
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
13 Bearer biological assets
Bearer biological assets are vines, which measured in cost method.
Immature Mature biological
Item Total
biological assets assets
Original book value
31 December 2022 23,405,557 252,471,374 275,876,931
Additions during the year
- Increase in cultivated 10,319,864 - 10,319,864
- Transferred to mature (83,870) 83,870 -
Decrease during the year (850,105) (3,716,924) (4,567,029)
31 December 2023 32,791,446 248,838,320 281,629,766
Accumulated amortisation
31 December 2022 - (91,456,190) (91,456,190)
Charge for the year - (13,800,290) (13,800,290)
Decrease during the year - 1,088,697 1,088,697
31 December 2023 - (104,167,783) (104,167,783)
Carrying amount
31 December 2023 32,791,446 144,670,537 177,461,983
31 December 2022 23,405,557 161,015,184 184,420,741
As at 31 December 2023, there is no biological asset with ownership restricted (31 December
2022: Nil).
As at 31 December 2023, no provision for impairment of biological asset of the Group was
recognised as there is no any indication exists (31 December 2022: Nil).
14 Right-of-use assets
As a lessee
Item Plant&buildings Lands Others Total
Cost
Balance at the beginning of
84,818,532 137,980,409 1,697,986 224,496,927
the year
Additions during the year 3,966,354 - - 3,966,354
Derecognition of right-of-use
(8,359,502) - - (8,359,502)
assets
Balance at the end of the year 80,425,384 137,980,409 1,697,986 220,103,779
Accumulated depreciation
Balance at the beginning of
(33,923,955) (49,667,021) (1,018,792) (84,609,768)
the year
Charge for the year (16,031,558) (5,736,448) (339,597) (22,107,603)
Derecognition of right-of-use
8,359,502 - - 8,359,502
assets
Balance at the end of the year (41,596,011) (55,403,469) (1,358,389) (98,357,869)
Carrying amounts
At the end of the year 38,829,373 82,576,940 339,597 121,745,910
At the beginning of the year 50,894,577 88,313,388 679,194 139,887,159
159
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
15 Intangible assets
Item Land use rights Software licenses Trademarks Total
Original book value
31 December 2022 475,770,881 101,979,429 189,575,068 767,325,378
Additions during the year
- Purchase 76,329 1,680,094 151,673 1,908,096
Decrease during the year
- Disposals (31,326,363) (771,307) (11,003) (32,108,673)
31 December 2023 444,520,847 102,888,216 189,715,738 737,124,801
Accumulated amortisation
31 December 2022 (110,698,068) (62,835,583) (15,550,881) (189,084,532)
Additions during the year
- Charge for the year (8,864,116) (7,611,775) (456,971) (16,932,862)
Decrease during the year
- Disposal 10,746,374 768,895 3,100 11,518,369
31 December 2023 (108,815,810) (69,678,463) (16,004,752) (194,499,025)
Carrying amount
31 December 2023 335,705,037 33,209,753 173,710,986 542,625,776
31 December 2022 365,072,813 39,143,846 174,024,187 578,240,846
As at 31 December 2023, the Group has land use right with infinite useful lives of RMB
32,863,731 (31 December 2022: RMB32,376,235), representing the freehold land held by
Chile Indomita Wine Group and Australia Kilikanoon Estate under relevant Chile and Australia
laws, on which the amortisation is not required.
As at 31 December 2023, the Group has trademark with infinite useful lives of RMB
155,447,037 (31 December 2022: RMB155,345,421), which is held by Chile Indomita Wine
Group and Australia Kilikanoon Estate. The recoverable amount of the trademark is
determined according to the present value of the expected future cash flows generated from
the asset group to which the single assets of trademark right belongs. The management
prepares the cash flow projection for future 5 years (the “projecting period”) based on the
latest financial budget assumption, and estimates the cash flows after the future 5 years (the
“subsequent period”). The pretax discount rates used in the cash flow projections are 13.3%
and 13.9%,（2022：13.0%-14.1%） The estimated long-term average growth rate of cash flows
after 5 years is 0.0% - 2.5% (2022: 0.0% - 2.5%), which represents the long-term average
growth rate for the industry or the region in which the company operates.
According to the result of impairment assessment, by the end of 31 December 2023, the
management believes there is no impairment loss on those trademarks with infinite useful
lives of the Group.
As at 31 December 2023, there is no ownership restricted net value of intangible assets. (31
December 2022: RMB 169,385,254).
160
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
16 Goodwill
(1) Changes in goodwill
Name of investee or events from 31 December Additions during Disposals during 31 December
Note
which goodwill arose 2022 the year the year 2023
Original book value
Etablissements Roullet Fransac
(a) 13,112,525 - - 13,112,525
(“Roullet Fransac”)
Dicot Partners, S.L (“Dicot”) (a) 92,391,901 - - 92,391,901
Chile Indomita Wine Group (a) 6,870,115 - - 6,870,115
Australia Kilikanoon Estate (a) 37,063,130 - - 37,063,130
Sub-total 149,437,671 - - 149,437,671
Impairment provision
Australia Kilikanoon Estate (37,063,130) - - (37,063,130)
Dicot Partners, S.L (“Dicot”) (5,210,925) - - (5,210,925)
Sub-total (42,274,055) - - (42,274,055)
Carrying amount 107,163,616 - - 107,163,616
(a) The Group acquired Fransac Sales, Dicot and Mirefleurs, Chile Indomita Wine Group
and Australia Kilikanoon Estate in December 2013, September 2015, July 2017 and
January 2018 respectively, resulting in respective goodwill amounting to
RMB13,112,525, RMB92,391,901, RMB 6,870,115 and RMB37,063,130. The
goodwill had been allocated to corresponding asset groups for impairment testing.
(2) Provision for impairment of goodwill
The Group has allocated the above goodwill to relevant asset groups for impairment testing.
As at 31 December 2023, Australia Kilikanoon Estate has made full provision for impairment
of goodwill and Atrio has made provision for impairment amounted to RMB 5,210,925 for the
current period.
The recoverable amount of the asset group is determined according to the present value of
the expected future cash flows. The management prepares the cash flow projection for
future 5 years (the “projecting period”) based on the latest financial budget assumption, and
estimates the cash flows after the future 5 years (the “subsequent period”). The pretax
discount rate used in calculating the recoverable amounts of Roullet Fransac, Dicot, and
Mirefleurs, Indomita Wine are 10.7%, 9.1%, and 13.3%, respectively (2022: 11.4%, 10.8%,
and 13.0%). The key assumption is the growth rate of annual revenue growth rate of
relevant subsidiaries, which is computed based on the expected growth rate of each
subsidiary and long-term average growth rates of relevant industries. Other relevant key
assumption is budget gross profit margin, which is determined based on the historical
performance of each subsidiary and its expectations for market development.
17 Long-term deferred expenses
Additions Amortisation
Item 31 December 2022 31 December 2023
during the year for the year
Land requisition fee 45,043,781 - (1,778,943) 43,264,838
Greening fee 118,996,004 - (8,680,919) 110,315,085
Leasehold improvement 103,895,364 50,256,817 (7,514,688) 146,637,493
Others 6,764,083 220,500 (539,892) 6,444,691
Total 274,699,232 50,477,317 (18,514,442) 306,662,107
161
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
18 Deferred tax assets and deferred tax liabilities
(1) Deferred tax assets and liabilities
31 December 2023 31 December 2022
Item Deductible or taxable Deferred tax assets/ Deductible or taxable Deferred tax assets/
temporary differences (liabilities) temporary differences (liabilities)
Deferred tax assets:
Provision for impairment of
41,029,365 10,563,366 31,605,614 8,024,903
assets
Unrealised profits of
403,653,124 100,913,281 431,328,252 107,832,063
intra-group transactions
Unpaid bonus 138,873,637 34,718,409 132,673,269 33,168,317
Termination benefits 8,475,845 2,118,961 9,422,154 2,355,538
Deductible tax losses 261,937,563 61,634,797 285,560,642 67,483,931
Deferred income 32,582,734 7,021,304 38,389,058 8,288,411
Effects of Restricted Share
17,614,180 4,370,992 - -
Incentive Plan
Effect of the lease standard 708,367 177,094 837,972 209,493
Sub-total 904,874,815 221,518,204 929,816,961 227,362,656
Deferred tax liabilities:
Revaluation due to business
combinations involving
26,659,530 7,718,480 43,651,105 10,577,065
entities not under common
control
Effect of the lease standard 3,995,628 1,001,249 2,759,468 689,867
Sub-total 30,655,158 8,719,729 46,410,573 11,266,932
(2) Details of unrecognised deferred tax assets
Item 2023 2022
Deductible tax losses 420,651,124 352,775,161
(3) Expiration of deductible tax losses for unrecognised deferred tax assets
Year 2023 2022
2023 - 22,801,737
2024 36,171,778 42,088,453
2025 70,528,510 75,724,538
2026 68,479,171 72,197,891
2027 128,025,572 139,962,542
2028 117,446,093 -
Total 420,651,124 352,775,161
19 Other non-current assets
Item 2023 2022
Prepaid for Construction fee 1,760,000 -
162
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
20 Short-term loans
Short-term loans by category:
Item 2023 2022
Unsecured loans 178,605,850 227,866,802
Mortgaged loans 163,103,275 127,908,137
Guaranteed loans 23,272,320 33,603,541
Total 364,981,445 389,378,480
As at 31 December 2023, details of short-term borrowings were as follows:
Interest rate at
Exchange Amount Nature of Interest rate the end of the
Amount
rate interest rate year
RMB % %
1 Year LPR -
Credit loans (RMB) 100,000,000 1.0000 100,000,000 Floating 2.70%
0.95%
Credit loans (USD) 1,000,000 7.0871 7,087,130 Fixed 7.30% 7.30%
Credit loans (EUR) 9,100,000 7.8592 71,518,720 Floating 3.90% ~ 6.95% 3.90% ~ 6.95%
Mortgaged loans
9,368,417 7.8592 73,628,264 Floating 4.35% ~ 5.40% 4.35% ~ 5.40%
(EUR)
Mortgaged loans
12,625,000 7.0871 89,475,011 Fixed 6.83% ~ 7.30% 6.83% ~ 7.30%
(USD)
Secured loan (AUD) 4,800,000 4.8484 23,272,320 Floating 1.81% ~ 2.54% 1.81% ~ 2.54%
Total 364,981,445
As at 31 December 2023, mortgaged loans (EUR) were Hacienda y Viedos Marques del
Atrio, S.L.U (“ Atrio “) factoring of accounts receivable from banks including Banco
ANTANDER、BBVA、CAIXABANK of EUR 9,368,417 (equivalent of RMB 73,628,264) (31
December 2022: EUR8,080,778 (equivalent of RMB59,982,807).
On 31 December 2023, Chile Indomita Wine Group pledged its fixed assets to Banco
Scotiabank and Banco de Chile to borrow USD 12,625,000 (equivalent to RMB
89,475,011 ) (31 December 2022: USD9,750,000 (equivalent to RMB67,925,330).
On 31 December 2023, the secured loan represented the secured loan of Australia
Kilikanoon Estate of AUD4,800,000 (equivalent to RMB23,272,320) (31 December 2022:
AUD7,128,758, equivalent to RMB33,603,541).
21 Accounts payable
(1) Details of advance payments received are as follows:
Ageing 2023 2022
Within 1 year (inclusive) 459,106,370 466,035,065
Over 1 year but within 2 years (inclusive) 10,654,983 34,588,275
Over 2 years but within 3 years (inclusive) 990,316 1,637,390
Over 3 years 2,600,856 1,063,016
Total 473,352,525 503,323,746
(2) There is no significant advance payments received with ageing of more than one year.
163
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
22 Contract liabilities
As at As at
Item
31 December 2023 1 January 2023
Receipt in advance 174,757,233 164,437,033
Withholding sales rebates 521,616 1,290,958
Total 175,278,849 165,727,991
Contract liabilities primarily relate to the Group’s advances from sales contracts of specific
customers and the withholding sales rebates. Relevant contract liabilities are recognised as
revenue when the control of the goods is transferred to the customer.
23 Employee benefits payable
(1) Employee benefits payable:
Additions during Decrease during
Note 31 December 2022 31 December 2023
the year the year
Short-term employee
(2) 173,197,491 453,422,444 (450,084,972) 176,534,963
benefits
Post-employment
benefits - defined (3) 331,893 36,838,982 (36,850,391) 320,484
contribution plans
Termination benefits 9,422,154 3,537,949 (4,484,258) 8,475,845
Total 182,951,538 493,799,375 (491,419,621) 185,331,292
(2) Short-term employee benefits
Additions during Decrease during
31 December 2022 31 December 2023
the year the year
Salaries, bonuses,
169,643,402 395,188,658 (391,481,809) 173,350,251
allowances
Staff welfare 1,460,170 23,794,432 (24,007,235) 1,247,367
Social insurance 307,244 17,496,294 (17,508,522) 295,016
Medical insurance 307,244 15,679,097 (15,691,325) 295,016
Work-related injury
- 1,347,906 (1,347,906) -
insurance
Maternity insurance - 469,291 (469,291) -
Housing fund 38,582 11,384,809 (11,384,809) 38,582
Labour union fee, staff and
1,748,093 5,558,251 (5,702,597) 1,603,747
workers’ education fee
Total 173,197,491 453,422,444 (450,084,972) 176,534,963
(3) Post-employment benefits - defined contribution plans
Additions during Decrease during
31 December 2022 31 December 2023
the year the year
Basic pension insurance 330,660 35,627,108 (35,638,517) 319,251
Unemployment insurance 1,233 1,211,874 (1,211,874) 1,233
Total 331,893 36,838,982 (36,850,391) 320,484
164
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
24 Taxes payable
Item 2023 2022
Value-added tax 65,545,854 42,260,465
Consumption tax 50,879,210 45,524,174
Corporate income tax 134,574,175 131,264,991
Individual income tax 1,414,309 1,199,990
Tax on the use of urban land 1,730,986 1,899,840
Education surcharges 5,072,436 2,731,857
Urban maintenance and construction tax 6,787,018 6,168,990
Others 8,719,443 8,645,595
Total 274,723,431 239,695,902
25 Other payables
Note 31 December 2023 31 December 2022
Interest payable - 88,889
Dividends payable - 70,317
Others (1) 555,634,336 372,449,483
Total 555,634,336 372,608,689
(1) Others
(a) Details of others by nature are as follows:
Item 2023 2022
Deposit payable to dealer 194,060,993 207,492,570
Advertising fee payable 104,815,517 40,244,601
Payables for repurchase of treasury shares 103,411,919 -
Trademarks 27,515,798 -
Freight charges payable 22,301,368 25,894,816
Deposits due to suppliers 18,284,971 13,549,010
Equipment and construction fee payable 14,832,439 15,976,573
Payables for equities 14,623,377 -
Contracting fee payable 3,360,355 7,407,093
Staff deposit 462,672 508,175
Others 51,964,927 61,376,645
Total 555,634,336 372,449,483
(b) There are no significant others aged over one year accured this year.
165
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
26 Other current liabilities
Item 2023 2022
Refund liabilities arising from rights of return 24,869,246 -
Tax to be transferred out as sales 20,089,051 18,945,706
Total 44,958,297 18,945,706
27 Non-current liabilities due within one year
Non-current liabilities due within one year by category are as follows:
Item 2023 2022
Long-term loans due within one year 58,510,868 103,011,894
Long-term payables due within one year - 22,000,000
Lease liabilities due within one year 20,013,125 19,008,940
Total 78,523,993 144,020,834
28 Long-term loans
Long-term loans by category
Item 2023 2022
Credit loans 125,127,311 186,342,909
Guaranteed loans - 44,781,100
Less: Long-term loans due within one year 58,510,868 103,011,894
Total 66,616,443 128,112,115
As at 31 December 2023, details of long-term borrowings were as follows:
Interest rate Long-term Long-term
Nature of
Exchange Amount Interest rate at the end loans due loans due
Amount interest
rate of the year within one after one
rate
RMB % % year year
1.50% - 1.50% -
Credit loans (EUR) 745,687 7.8592 5,860,499 Fixed 5,737,711 122,788
3.28% 3.28%
2.00% ~ 2.00% ~
Credit loans (EUR) 15,175,439 7.8592 119,266,812 Floating 52,773,157 66,493,655
7.59% 7.59%
Total 125,127,311 58,510,868 66,616,443
As at 31 December 2023, Credit loans (EUR) were EUR 15,921,126 borrowed by Banco
Sabadell, Bankia, Banco Santander, BBVA, Caja Rural de Navarr etc. (equivalent of RMB
125,127,311 (31 December 2022: EUR25,103,788, equivalent of RMB186,342,909).
29 Lease liabilities
Item Note 2023 2022
Long-term lease liabilities 105,051,460 128,514,033
Less: Lease liabilities due within one
V.27 20,013,125 19,008,940
year
Total 85,038,335 109,505,093
166
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
30 Long-term payables
Item 2023 2022
Agricultural Development Fund of China - 64,000,000
Less: Long-term payables due within one year - 22,000,000
Balance of long-term payables - 42,000,000
In 2016, RMB 305,000,000, from CADF was invested in R&D Centre, CADF accounted for
37.9% of the registered capital. According to the investment agreement, CADF will recovery
investment funds over 10 years, the investment income received equal to 1.2% of the
remaining unpaid principal per annum. In addition to the fixed income, CADF will no longer
enjoy other profits or bear the loss of R&D Centre. Therefore, although the investment in
R&D Centre, nominally equity investment, is actually a debt investment (financial discount
loan). The Group take this investment as long-term payables, which measured in amortized
cost. As at 31 December 2023, the Group has repaid the amount in full.
31 Deferred income
Additions during Decrease during
Item 31 December 2022 31 December 2023
the year the year
Government grants 38,389,058 4,000,000 (9,806,324) 32,582,734
167
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
Government grants:
Amounts
Additions of
recognised in other Related to
Liability 31 December 2022 government grants 31 December 2023
income during assets/income
during the year
the year
Government
Industrial development support
16,400,000 - (4,100,000) 12,300,000 grants related
project
to assets
Government
Retaining wall subsidies 5,973,333 3,500,000 (638,000) 8,835,333 grants related
to assets
Xinjiang industrial revitalisation Government
and technological 9,954,000 - (1,422,000) 8,532,000 grants related
transformation project to assets
Government
Wine fermentation capacity
1,600,000 - (400,000) 1,200,000 grants related
construction project
to assets
Government
Special fund for efficient
991,000 - (162,000) 829,000 grants related
water-saving irrigation project
to assets
Subsidy for economic and Government
energy-saving technological 513,200 - (128,300) 384,900 grants related
transformation projects to assets
Government
Subsidies for construction of
- 250,000 (4,216) 245,784 grants related
scenic spots
to assets
Subsidy for mechanic Government
development of Penglai 90,408 - (34,691) 55,717 grants related
Daliuhang Base to assets
Government
Special funds for cellar
2,079,711 - (2,079,711) - grants related
maintenance
to assets
Engineering technology Government
transformation of information 580,000 - (580,000) - grants related
system project to assets
Leisure agriculture subsidies
Related to
from Jugezhuang - 250,000 (50,000) 200,000
income
government
Special Funds for
Related to
Innovation-Driven 172,406 - (172,406) -
income
Development of Yantai City
Prize from Industrial Design
Related to
Competition of Yantai 35,000 - (35,000) -
income
Mayor’s Cup
Total 38,389,058 4,000,000 (9,806,324) 32,582,734
168
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
32 Share capital
Changes during
Balance at the
the year Balance at the
beginning of the
Issuance of new end of the year
year
shares
Unrestricted RMB ordinary shares 453,460,800 - 453,460,800
Restricted RMB ordinary shares (Note) - 6,785,559 6,785,559
Foreign shares listed domestically 232,003,200 - 232,003,200
Total shares 685,464,000 6,785,559 692,249,559
Note: The Proposal on the Company’s 2023 Restricted Share Incentive Plan (Draft) and
Relevant Summary and the Proposal on the Request for the Authorisation to the Board
of Directors by the General Meetings of Shareholders to Handle Matters related to the
Company’s 2023 Restricted Share Incentive Plan were passed by resolutions in the
Group’s 2022 General Meetings of Shareholders held on 26 May 2023. In addition, the
Proposal on the Adjustments to Matters related to 2023 Restricted Share Incentive
Plan and the Proposal on the Granting of Restricted Shares to Incentive Objects under
the 2023 Restricted Share Incentive Plan were reviewed and passed in the 2023 first
extraordinary Board meeting held on 26 June 2023 (hereinafter referred to as the
“Restricted Share Incentive Plan”, see Note XIII for details). The Group determined to
grant 6,850,000 restricted shares to 204 incentive objects at a grant price of
RMB15.24 per share on 26 June 2023 (the grant date). A total of 203 incentive objects
of the Group actually subscribed for 6,785,559 restricted shares at a grant price of
RMB15.24 per share. The transaction increased the Company’s registered capital by
RMB6,785,559, increased the capital reserve by RMB96,626,360 and recognised the
repurchase obligation on restricted shares of RMB103,411,919.
33 Capital reserve
Additions Decrease
31 December 31 December
Items Note during during the
2022 2023
the year year
Share premium (1) 519,052,172 96,626,360 - 615,678,532
Others (2) 5,916,588 30,735,755 (1,244,168) 35,408,175
Total 524,968,760 127,362,115 (1,244,168) 651,086,707
(1) During the reporting period, the Group’s issuance of restricted shares in connection with
the implementation of the Restricted Share Plan resulted in an increase in share
premium of RMB96,626,360, see Note V.32 for details.
(2) During the reporting period, the Group’s recognition of amortisation expenses in
connection with the implementation of the Restricted Share Plan resulted in an increase
in capital reserve of RMB30,735,755.
As a result of the Company’s acquisition of non-controlling interests in Liaoning
Changyu Ice Wine Chateau Co., Ltd., the difference between the long-term equity
investment acquired and the share of net assets continuously calculated since the
acquisition date by the subsidiary based on the proportion of newly increased
shareholding was recognised in capital reserve, resulting in a decrease in capital
reserve by RMB1,244,168, see Note VIII.2 for details.
169
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
34 Treasury shares
Balance at the
Additions during Decrease during Balance at the
Item beginning of the
the year the year end of the year
year
Treasury shares - 103,411,919 - 103,411,919
Total - 103,411,919 - 103,411,919
The increase in treasury shares during the reporting period was due to the repurchase
obligation of RMB103,411,919 arising from the granting of restricted shares to incentive
objects in connection with the implementation of the Restricted Share Plan, see Note V.32 for
details.
35 Other comprehensive income
Balance at the Accrued during the year Balance at the
beginning of Less: Net-of-tax end of the
Net-of-tax
the year Previously amount year
Less: amount
Item attributable to Before-tax recognised attributable to attributable to
Income tax attributable to
shareholders amount amount shareholders shareholders
expenses non-controllin
of the transferred to of the of the
g interests
Company profit or loss Company Company
Items that may be
reclassified to profit
or loss
Translation
differences
arising from
translation of (23,760,238) 9,519,495 - - 8,975,561 543,934 (14,784,677)
foreign currency
financial
statements
36 Surplus reserve
Item 31 December 2023 31 December 2022
Statutory surplus reserve 342,732,000 342,732,000
In accordance with the Company Law and the Articles of Association Company, the Company
appropriated 10% of its net profit to statutory surplus reserve. The appropriation to the
statutory surplus reserve may be ceased when the accumulated appropriation reaches over
50% of the registered capital of the Company. The Company does not appropriate net profit
to the surplus reserve in 2023 as surplus reserve of the Company is above 50% of the
registered capital.
The Company can appropriate discretionary surplus reserve after appropriation of the
statutory surplus reserve. Discretionary surplus reserve can be utilised to offset the deficit or
increase the share capital after approval.
170
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
37 Retained earnings
Item Note 2023 2022
Retained earnings at the beginning of the
9,049,649,211 8,929,426,600
year
Add: Net profits for the year attributable to
532,438,907 428,681,411
shareholders of the Company
Less: Dividends to ordinary shares (1) (308,458,800) (308,458,800)
Retained earnings at the end of the year (2) 9,273,629,318 9,049,649,211
(1) Dividends in respect of ordinary shares declared during the year
Pursuant to the shareholders’ approval at the shareholders’ general meeting on 26 May 2023,
the Company paid cash dividends to shareholders on June 16, 2023 and June 21, 2023 ,a
cash dividend of RMB 0.45 per share (2022: RMB0.45 per share), totalling RMB 308,458,800
(2022：RMB308,458,800).
(2) Retained earnings at the end of the year
As at 31 December 2023, the consolidated retained earnings attributable to the Company
included an appropriation of RMB 55,900,659 (2022: RMB58,180,889) to surplus reserve
made by the subsidiaries.
38 Operating income and operating costs
2023 2022
Item
Income Cost Income Cost
Principal activities 4,309,556,631 1,754,792,956 3,860,311,318 1,651,154,424
Other operating activities 75,207,704 32,190,701 58,629,842 29,640,308
Total 4,384,764,335 1,786,983,657 3,918,941,160 1,680,794,732
Including: Revenue from
contracts with 4,380,255,840 1,783,149,498 3,916,599,934 1,679,459,968
customers
Rent income 4,508,495 3,834,159 2,341,226 1,334,764
(1) Disaggregation of revenue from contracts with customers:
Type of contract 2023 2022
By type of goods or services
- Liquor 4,309,556,631 3,860,311,318
- Others 70,699,209 56,288,616
By timing of transferring goods or services
- Revenue recognised at a point in time 4,380,255,840 3,916,599,934
(2) Geographical regions of operating income and operating costs：
2023 2022
Type of contract
Income Cost Income Cost
By geographical regions
- China 3,761,534,793 1,378,286,484 3,320,757,555 1,283,478,621
- Other countries and regions 623,229,542 408,697,173 598,183,605 397,316,111
Total 4,384,764,335 1,786,983,657 3,918,941,160 1,680,794,732
171
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
39 Taxes and surcharges
Item 2023 2022
Consumption tax 239,887,676 198,284,289
Urban maintenance and construction tax 35,197,172 28,067,931
Education surcharges 23,177,137 19,554,864
Property tax 34,003,219 28,150,521
Tax on the use of urban land 10,331,175 11,403,394
Stamp duty 5,289,257 3,230,856
Others 1,849,935 964,772
Total 349,735,571 289,656,627
40 Selling and distribution expenses
Item 2023 2022
Marketing fee 490,535,793 322,593,973
Salaries and benefits 290,154,434 282,395,182
Labour service fee 93,243,814 108,784,934
Advertising fee 75,527,637 75,862,425
Depreciation expense 48,882,915 47,509,217
Design and production fee 32,182,656 30,594,519
Travelling expenses 29,318,913 23,759,493
Trademarks expenses 27,515,798 21,877,171
Storage rental 27,290,488 25,572,282
Restricted share incentive plan fee 22,929,489 -
Conference fee 19,309,557 8,735,659
Water, electricity and gas fee 16,830,073 16,438,410
Others 66,061,209 64,842,873
Total 1,239,782,776 1,028,966,138
41 General and administrative expenses
Item 2023 2022
Salaries and benefits 80,051,089 73,824,670
Depreciation expenses 89,486,538 85,366,361
Repair costs 11,978,855 11,853,538
Administrative expenses 19,929,523 23,586,680
Amortisation of greening fee 17,409,398 17,846,265
Amortisation expenses 16,202,523 18,057,909
Safety production costs 10,743,063 11,539,602
Security and cleaning fee 8,326,301 8,530,050
Restricted share incentive plan fee 7,806,266 -
Contracting fee 4,337,738 4,309,290
Others 37,719,564 32,691,166
Total 303,990,858 287,605,531
172
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
42 Financial expenses
Item 2023 2022
Interest expenses from loans and payables 31,297,810 22,174,501
Interest expenses from lease liabilities 4,502,287 4,682,389
Interest income from deposits (30,571,465) (24,186,351)
Exchange losses 5,002,117 3,301,716
Other financial expenses 852,710 1,283,952
Total 11,083,459 7,256,207
43 Other income
Related to
Item 2023 2022
assets/income
Government grants
Industrial development support project 4,100,000 4,100,000
related to assets
Special funds for the maintenance of Government grants
2,079,711 -
wine cellars related to assets
Xinjiang Industrial Revitalization and Government grants
1,422,000 1,422,000
Technological Transformation Project related to assets
Government grants
Subsidies for retaining wall 638,000 -
related to assets
Engineering technology transformation Government grants
580,000 -
of information system project related to assets
Wine production capacity construction Government grants
400,000 400,000
project related to assets
Special subsidies for infrastructure Government grants
- 1,060,000
support related to asse
Others - Government grants related to Government grants
329,207 2,152,842
assets related to assets
Tax rebates 19,533,196 7,592,342 Related to income
Special funds for the development of
9,237,716 8,380,737 Related to income
enterprises
Wine Industry Development Project 2,684,281 2,773,000 Related to income
Talent development funds from Shihezi
1,500,000 - Related to income
government
Funds for rural revitalisation,
technological innovation and 1,170,000 - Related to income
enhancement action plan
Funds for the integration development
1,000,000 - Related to income
project of agricultural industry
Others - Government grants related to
6,849,688 5,264,519 Related to income
income
Total 51,523,799 33,145,440
Other income during reporting period has been included in non-recurring gains and losses.
173
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
44 Investment income/(losses)
Investment losses by items
Item NOTE 2023 2022
Long-term equity investment losses under
(712,480) (1,605,469)
equity method
Investment profit/(loss) arising from disposal
of subsidiaries and long-term equity VII.2 24,559,930 (1,842,325)
investments
Total 23,847,450 (3,447,794)
45 Credit reversal
Item 2023 2022
Accounts receivable 1,397,658 4,752,797
Total 1,397,658 4,752,797
46 Impairment losses
Item 2023 2022
Fixed assets 10,363,383 -
Inventories 3,143,575 578,745
Goodwill - 5,210,925
Total 13,506,958 5,789,670
47 Loss from asset disposals
Item 2023 2022
Loss from disposal of fixed assets 134,133 16,191,903
Loss from disposal of assets during reporting period has been included in non-recurring gains
and losses.
48 Non-operating income and non-operating expenses
(1) Non-operating income by item is as follows:
Item 2023 2022
Net income from fine 9,325,229 566,334
Insurance compensation 452,242 3,038,560
Others 2,214,799 3,227,915
Total 11,992,270 6,832,809
Non-operating income during reporting period has been included in non-recurring gains and
losses.
174
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
(2) Non-operating expenses
Item 2023 2022
Donations provided 1,212,015 693,625
Losses from scrapping of packaging materials 1,137,256 -
Losses from disposal of non-current assets 573,560 867,796
Compensation, penalty and fine expenses 80,403 723,161
Others 425,176 665,409
Total 3,428,410 2,949,991
Non-operating expenses during reporting period has been included in non-recurring gains and
losses.
49 Income tax expenses
Item Note 2023 2022
Current tax expense for the year based on
216,588,992 176,922,552
tax law and regulations
Changes in deferred tax assets/liabilities (1) 4,844,455 17,311,037
Total 221,433,447 194,233,589
(1) The analysis of changes in deferred tax is set out below:
Item 2023 2022
Origination of temporary differences 4,844,455 17,311,037
Total 4,844,455 17,311,037
(2) Reconciliation between income tax expenses and accounting profit:
Item 2023 2022
Profit before taxation 747,466,156 625,582,303
Estimated income tax at 25% 186,866,539 156,395,576
Effect of different tax rates applied by subsidiaries 2,070,828 3,875,636
Effect of non-deductible costs, expense and losses 4,978,035 6,207,982
Effect of deductible losses of deferred tax assets not
25,756,996 26,681,652
recognised for the year
Deferred tax assets written-off 1,761,049 1,072,743
Income tax expenses 221,433,447 194,233,589
175
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
50 Basic earnings per share and diluted earnings per share
(1) Basic earnings per share
Basic earnings per share is calculated as dividing consolidated net profit attributable to
ordinary shareholders of the Company by the weighted average number of ordinary shares
outstanding:
2023 2022
Consolidated net profit attributable to ordinary
532,438,907 428,681,411
shareholders of the Company
Weighted average number of ordinary shares
685,464,000 685,464,000
outstanding
Basic earnings per share (RMB/share) 0.78 0.63
Weighted average number of ordinary shares is calculated as follows:
2023 2022
Issued ordinary shares at the beginning of the year 685,464,000 685,464,000
Weighted average number of ordinary shares at the
685,464,000 685,464,000
end of the year
(2) Diluted earnings per share
Diluted earnings per share is calculated by dividing consolidated net profit attributable to
ordinary shareholders of the Company by the weighted average number of ordinary shares
outstanding (diluted):
Note 2023 2022
Consolidated net profit attributable to
ordinary shareholders of the Company (a) 532,438,907 428,681,411
(Dilute)
Weighted average number of ordinary
(b) 685,670,893 685,464,000
shares outstanding (Dilute)
Diluted earnings per share (RMB/share) 0.78 0.63
(a) Consolidated net profit attributable to ordinary shareholders of the Company (diluted) is
calculated as follows:
2023 2022
Consolidated net profit attributable to
532,438,907 428,681,411
ordinary shareholders of the Company
Consolidated net profit attributable to
ordinary shareholders of the Company 532,438,907 428,681,411
(diluted)
176
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
(b) The weighted average number of the Company’s ordinary shares (diluted) is calculated
as follows:
2023 2022
Weighted average number of ordinary shares
685,464,000 685,464,000
at 31 December
Diluted adjustments:
Effects of restricted shares 206,893 -
Weighted average number of ordinary shares
685,670,893 685,464,000
(diluted) at the end of the year
51 Cash flow statement
(1) Cash relating to operating activities
a. Proceeds relating to other operating activities:
Item 2023 2022
Recovery of prior years’ trademarks right
120,930,641 -
receivables (Note V.8)
Government grants 45,677,242 30,239,160
Penalty income 9,325,229 566,334
Interest income from bank 27,375,399 22,845,833
Others 16,077,111 8,174,080
Total 219,385,622 61,825,407
b. Payments relating to other operating activities:
Item 2023 2022
Selling and distribution expenses 539,874,320 443,486,326
General and administrative expenses 99,254,521 92,510,326
Others 36,569,908 46,253,149
Total 675,698,749 582,249,801
(2) Cash relating to investing activities
a. Proceeds relating to significant investing activities:
Item 2023 2022
Recovery of fixed deposits 238,200,000 133,200,000
b. Payments relating to significant investing activities:
Item 2023 2022
Investments in fixed deposits 464,200,000 108,200,000
Acquisition of fixed assets and construction in
110,067,855 182,207,269
progress
177
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
(3) Cash relating to financing activities
a. Proceeds relating to other financing activities:
Item 2023 2022
Payment of capital reduction 20,674,509 -
Acquisition of non-controlling interests 14,623,400 -
Cash paid for lease 31,931,214 19,774,744
Total 67,229,123 19,774,744
b. Changes in liabilities arising from financing activities
Balance at the Additions during the year Decreases during the year Balance at the
beginning of end of
the year Cash Non-cash Cash Non-cash the year
Short-term loan 389,378,480 557,308,654 - (581,705,689) - 364,981,445
Long-term loan 128,112,115 16,550,853 - (75,199,936) (2,846,589) 66,616,443
Lease liabilities 109,505,093 - 3,966,353 (8,182,353) (20,250,758) 85,038,335
Long-term accounts payable 42,000,000 - - (42,000,000) - -
Non-current liabilities due
144,020,834 - 23,097,347 (88,594,188) - 78,523,993
within one year
Other accounts payable -
70,317 - 309,997,116 (310,067,433) - -
dividends payable
Other accounts payable -
88,889 - 35,800,097 (35,888,986) - -
interest payable
Other accounts payable -
- - 29,246,777 (14,623,400) - 14,623,377
payables for equities
Other accounts payable -
payables for repurchase of - 103,411,919 - - - 103,411,919
treasury shares
Other accounts payable -
Investments returned to - - 20,674,509 (20,674,509) - -
minority shareholders
Total 813,175,728 677,271,426 422,782,199 (1,176,936,494) (23,097,347) 713,195,512
178
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
52 Supplementary information on cash flow statement
(1) Supplement to cash flow statement
a. Reconciliation of net profit to cash flows from operating activities:
Item 2023 2022
Net profit 526,032,709 431,348,714
Add: Credit/asset impairment losses 12,109,300 1,036,873
Depreciation of fixed assets and
317,061,135 314,038,019
investment property
Amortisation of intangible assets 16,932,862 25,766,271
Amortisation of long-term deferred
18,514,442 19,340,746
expenses
Amortisation of biological assets 13,800,290 14,911,694
Depreciation of ROU assets 22,107,603 22,131,592
Losses from disposal of fixed assets,
intangible assets, and other long-term 707,693 17,059,699
assets
Financial expenses 32,287,868 25,170,658
Equity incentive expenses 30,735,755 -
Investment (profits)/losses (23,847,450) 3,447,794
Decrease in deferred tax assets 5,174,683 17,848,075
Decrease in deferred tax liabilities (330,228) (537,038)
Decrease/(increase) in gross
131,877,015 (101,354,740)
inventories
(Increase)/decrease in operating
(54,231,481) 187,564,569
receivables
Increase/(decrease) iecrease in
124,159,547 (108,896,279)
operating payables
Net cash flows from operating activities 1,173,091,743 868,876,647
b. Significant investing and financing activities not requiring the use of cash:
Item 2023 2022
Payment of construction in progress and other
13,226,592 40,584,152
long-term assets by bank acceptances
c. Change in cash and cash equivalents:
Item 2023 2022
Cash equivalents at the end of the year 1,963,155,752 1,612,753,600
Less: Cash equivalents at the beginning of the
1,612,753,600 1,502,327,029
year
Net increase in cash and cash equivalents 350,402,152 110,426,571
179
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
(2) Information on acquisition or disposal of subsidiaries and other business units during the
current year:
Information on acquisition of WEIMISS SHANGHAI:
2023
Consideration for acquisitions 5,537,700
Cash or cash equivalents paid during the year
for acquiring subsidiaries and other business 5,537,700
units during the year
Less: Cash and cash equivalents held by acquired subsidiaries and
6,194,749
other business units
Net cash received for the acquisition 657,049
For non-cash assets and liabilities held by the acquired subsidiaries and other business units,
refer to Note VII.1.
Information on disposal of subsidiaries and other business units:
Xinjing Tianzhu Langfang Castel
Consideration for disposals 12,090,000 10,921,494
Cash or cash equivalents received during the year
for disposing of subsidiaries and other business 12,090,000 10,921,494
units during the year
Less: Cash and cash equivalents held by
disposed subsidiaries and 2,451,415 251,454
other business units
Net cash received for disposing of subsidiaries and
9,638,585 10,670,040
other business units
Non-cash assets and liabilities held by disposed
subsidiaries and other business units
- Current assets 603,781 3,977,024
- Non-current assets 22,865,411 9,507,310
- Current liabilities 23,819 1,039,979
- Non-current liabilities 2,216,975 -
(3) Details of cash and cash equivalents
Item 2023 2022
Cash at bank and on hand
Including: Cash on hand 74,951 47,954
Bank deposits available on demand 1,963,080,801 1,612,705,646
Closing balance of cash and cash equivalents 1,963,155,752 1,612,753,600
180
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
53 Assets with restrictive ownership title or right of use
Balance at the
Item Opening balance Reason for restriction
end of the year
The Company deposits for
Cash at bank and on hand 10,500,515 337,895
letters of credit etc.
Short-term borrowings
Account receivable (i) 59,982,807 73,628,265
mortgage from Atrio
Short-term borrowings from
Fixed assets 303,897,124 37,985,117
Dicot
R&D Centre mortgage for
Intangible assets 169,385,254 -
long-term payables
Total 543,765,700 111,951,277
(i) As at 31 December 2023, the amount of accounts receivable with restricted ownership
is EUR 9,368,417 , equivalent of RMB 73,628,265 hich refers to accounts receivable
Atrio conducted for factoring from Banco de Sabadell, S.A. Etc. (31 December 2022:
EUR8,080,778, equivalent of RMB 59,982,807).
54 Leases
(1) As a lessee
Item 2023 2022
Short-term lease expenses for which the
527,463 122,097
practical expedient has been applied
Total cash outflow for leases 32,458,677 19,896,841
The Group leases buildings and motor vehicles with the lease terms of 1 year or less, and all
of these leases are short-term leases. The Group has elected not to recognise right-of-use
assets and lease liabilities for these leases.
(2) As a lessor
Item 2023 2022
Lease income 4,508,495 2,341,226
The Group leased out some machineries in 2022 and 2023 with a lease term within 1
year. The Group has classified these leases as operating leases, because they do not
transfer substantially all of the risks and rewards incidental to the ownership of the
assets.
181
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
VI. Research and development expenses
Presentation by nature
Item 2023 2022
Salaries 6,564,884 7,171,522
Diagnostic test fees 3,448,000 1,819,699
Consultancy fee 3,039,519 1,476,996
Material consumption 2,212,169 995,281
Others 2,148,962 3,967,812
Total 17,413,534 15,431,310
Including: research and development expenditures
17,413,534 15,431,310
that are expensed
182
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
VII. Change of consolidation scope
1 Business combinations involving entities not under common control
(1) Business combinations involving entities not under common control occurred during the year
Basis of Acquiree from acquisition
Acquisition Cost
Shareholding Acquisition Acquisition acquisition date to 31 December 2023
date of equity of equity
acquired (%) method date date Net cash
investment investment Income Net profit
determination outflow
Weimiss Transfer of
01/31/2023 5,537,700 70% Equity transfer 01/31/2023 1,673,699 225,842 90,627
Shanghai controls
Weimiss Shanghai is a company registered in Shanghai on 20 August 2020 and is engaged in Beijing Wanfeng. The Company held 30% of the
equity and Beijing Wanfeng Trading Co., Ltd. held 70% of the equity at the time of incorporation. This entity is mainly engaged in the wine and
food operations. According to the Equity Transfer Contract signed by the Company and Beijing Wanfeng in 2023, Beijing Wanfeng transferred its
70% equity in Weimiss Shanghai to the Company at a price of RMB5,537,700, and Weimiss Shanghai becomes a wholly-owned subsidiary of the
Company upon the completion of this transaction. The related transaction was completed in January 2023.
183
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
(2) Acquisition cost and goodwill
Weimiss Shanghai
Acquisition cost Carrying
Fair value
amount
Cash 5,537,700 5,537,700
Equity interests held before
2,373,285 2,373,285
acquisition date
Total acquisition cost 7,910,985 7,910,985
Less: Share of the fair value of the identifiable net
7,910,985 7,910,985
assets acquired
Goodwill - -
(3) Identifiable assets and liabilities of the acquiree at the acquisition date
Weimeisi Shnghai
Carrying
Fair value
amount
Assets
Cash at bank and on hand 6,194,749 6,194,749
Receivables 1,394 1,394
Prepayments 22,463 22,463
Other receivables 216,388 216,388
Inventories 1,356,577 1,356,577
Other current assets 124,024 124,024
Liabilities
Accounts Received in Advance 35 35
Payroll 3,000 3,000
Other payables 1,575 1,575
Net assets 7,910,985 7,910,985
Less: Non-controlling interests - -
Net assets acquired 7,910,985 7,910,985
184
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
2 Disposal of subsidiaries
(1) Transactions or events resulting in loss of control over subsidiaries
Investment
Difference income or
between loss/retained
consideration earnings
Shareholding Proportion of
Disposal Basis for received and transferred
Consideration being disposed remaining
Date of losing method on the determining the related from other
Entity name on the date of on the date of shareholding
control date of losing date of share of net comprehensive
losing control losing control on the date of
control losing control assets in income related
(%) losing control
consolidated to previous
financial equity
statements investments in
subsidiaries
Transfer of
Xinjiang Tianzhu Wine Co., Ltd. 30/06/2023 12,090,000 60% Equity transfer 17,003,530 - -
controls
Langfang Development Zone Transfer of
20/12/2023 10,921,494 49% Equity transfer 7,556,400 - -
Castel-Changyu Wine Co., Ltd. controls
(2) Other reasons for change of consolidation scope
The Group’s subsidiaries - Changyu (Jingyang) Wine Sales Co., Ltd. and Langfang Changyu Pioneer Wine Sales Co., Ltd. were cancelled in
2023.
185
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
VIII. Interests in other entities
1 Interests in subsidiaries
(1) Composition of the Group
Shareholding ratio
Principal place of Business (%)
Name of the Subsidiary Registered place Registered capital Acquisition method
business nature (or similar equity
interest)
Business combinations
Etablissements Roullet Fransac
Cognac, France Cognac, France Trading EUR2,900,000 - 100 involving entities not under
(“Roullet Fransac”)
common control
Business combinations
Marketing and
Dicot Partners, S.L (“Dicot”) Navarre, Spain Navarre, Spain EUR2,000,000 90 - involving entities not under
sales
common control
Via Indómita, S.A., Via Dos Andes, S.A.,
Marketing and Acquired through
and BodegasSantaAlicia SpA.. (“Chile Santiago, Chile Santiago, Chile CLP31,100,000,000 85 -
sales establishment or investment
Indomita Wine Group”)
Business combinations
Kilikanoon Estate Pty Ltd. Marketing and
Adelaide, Australia Adelaide, Australia AUD6,420,000 97.5 - involving entities not under
(“Australia Kilikanoon Estate”) sales
common control
Beijing Changyu Sales and Distribution Marketing and Acquired through
Beijing, China Beijing, China RMB1,000,000 100 -
Co., Ltd. (“Beijing Sales”) sales establishment or investment
Yantai Kylin Packaging Co., Ltd. Yantai, Shandong, Yantai, Shandong, Acquired through
Manufacturing RMB15,410,000 100 -
(“Kylin Packaging”) China China establishment or investment
Yantai Chateau Changyu-Castel Co., Yantai, Shandong, Yantai, Shandong, Acquired through
Manufacturing USD5,000,000 70 -
Ltd.(“Chateau Changyu”) (a) China China establishment or investment
Changyu (Jingyang) Wine Co., Ltd. Xianyang, Shaanxi, Xianyang, Shaanxi, Acquired through
Manufacturing RMB1,000,000 90 10
(“Jingyang Wine”) China China establishment or investment
Yantai Changyu Pioneer Wine Sales Yantai, Shandong, Yantai, Shandong,Marketing and Acquired through
RMB8,000,000 100 -
Co., Ltd. (“Sales Company”) China China sales establishment or investment
Shanghai Changyu Sales and Distribution Marketing and Acquired through
Shanghai, China Shanghai, China RMB1,000,000 100 -
Co., Ltd. (“Shanghai Sales”) sales establishment or investment
Beijing Changyu AFIP Agriculture
Miyun, Beijing, Marketing and Acquired through
development Co., Ltd. (“Agriculture Miyun, Beijing, China RMB1,000,000 - 100
China sales establishment or investment
Development”)
Beijing Chateau Changyu AFIP Global Acquired through
Beijing, China Beijing, China Manufacturing RMB642,750,000 91.53 -
Co., Ltd. (“AFIP”) (b) establishment or investment
186
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
Shareholding ratio
Principal place of Business (%)
Name of the Subsidiary Registered place Registered capital Acquisition method
business nature (or similar equity
interest)
Yantai Changyu Wine Sales Co., Ltd. (“Wines Yantai, Shandong, Yantai, Shandong, Marketing and Acquired through
RMB5,000,000 90 10
Sales”) China China sales establishment or investment
Yantai Changyu Pioneer International Yantai, Shandong, Yantai, Shandong, Marketing and Acquired through
RMB5,000,000 70 30
Co., Ltd. (“Pioneer International”) China China sales establishment or investment
Hangzhou Changyu Wine Sales Co., Ltd. Hangzhou, Zhejiang, Hangzhou, Zhejiang, Marketing and Acquired through
RMB500,000 - 100
(“Hangzhou Changyu”) China China sales establishment or investment
Ningxia Changyu Grape Growing Co., Ltd. Yinchuan, Ningxia, Acquired through
Ningxia, China Plating RMB1,000,000 100 -
(“Ningxia Growing”) China establishment or investment
Huanren Changyu National Wines Sales Co., Benxi, Liaoning, Marketing and Acquired through
Benxi, Liaoning, China RMB2,000,000 100 -
Ltd. (“National Wines”) China sales establishment or investment
Liaoning Changyu Golden Icewine Valley Co., Benxi, Liaoning, Acquired through
Benxi, Liaoning, China Manufacturing RMB59,687,300 100 -
Ltd. (“Golden Icewine Valley”) China establishment or investment
Yantai Development Zone Changyu Trading Yantai, Shandong, Yantai, Shandong, Marketing and Acquired through
RMB5,000,000 - 100
Co., Ltd. (“Development Zone Trading”) China China sales establishment or investment
Beijing AFIP Meeting Center Miyun, Beijing, Acquired through
Miyun, Beijing, China Services RMB500,000 - 100
(“Meeting Center”) China establishment or investment
Beijing AFIP Tourism and Culture Miyun, Beijing, Acquired through
Miyun, Beijing, China Tourism RMB500,000 - 100
(“AFIP Tourism”) China establishment or investment
Changyu (Ningxia) Wine Co., Ltd. Acquired through
Ningxia, China Ningxia, China Manufacturing RMB1,000,000 100 -
(“Ningxia Wine”) establishment or investment
Yantai Changyu Chateau Tinlot Co., Ltd. Yantai, Shandong, Yantai, Shandong, Wholesale and Acquired through
RMB400,000,000 65 35
(“Chateau Tinlot”) China China retail establishment or investment
Xinjiang Chateau Changyu Baron Balboa Co., Shihezi, Xinjiang, Shihezi, Xinjiang, Acquired through
Manufacturing RMB550,000,000 100 -
Ltd. (“Chateau Shihezi”) China China establishment or investment
Ningxia Chateau Changyu Moser XV Yinchuan, Ningxia, Yinchuan, Ningxia, Acquired through
Manufacturing RMB2,000,000 100 -
Co., Ltd. (“Chateau Ningxia”) China China establishment or investment
Shaanxi Chateau Changyu Rena Co., Ltd. Xianyang, Shaanxi, Xianyang, Shaanxi, Acquired through
Manufacturing RMB20,000,000 100 -
(“Chateau Changan”) China China establishment or investment
Yantai Changyu Wine Research &
Yantai, Shandong, Yantai, Shandong, Acquired through
Development Centre Co., Ltd. Manufacturing RMB500,000,000 100 -
China China establishment or investment
(“R&D Centre”) (c)
Wine
Changyu (HuanRen) Wine Co., Ltd. Benxi, Liaoning, Acquired through
Benxi, Liaoning, China production RMB5,000,000 100 -
(“Huan Ren Wine”) China establishment or investment
projecting
Xinjiang Changyu Sales Co., Ltd. Shihezi, Xinjiang, Shihezi, Xinjiang, Marketing and Acquired through
RMB10,000,000 - 100
(“Xinjiang Sales”) China China sales establishment or investment
Ningxia Changyu Trading Co., Ltd. Yinchuan, Ningxia, Yinchuan, Ningxia, Marketing and Acquired through
RMB1,000,000 - 100
(“Ningxia Trading”) China China sales establishment or investment
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Shareholding ratio
Principal place of Business (%)
Name of the Subsidiary Registered place Registered capital Acquisition method
business nature (or similar equity
interest)
Shaanxi Changyu Rena Wine Sales Xianyang, Shaanxi, Xianyang, Shaanxi, Marketing and Acquired through
RMB3,000,000 - 100
Co., Ltd. (“Shaanxi Sales”) China China sales establishment or investment
Penglai Changyu Wine Sales Co., Penglai, Shandong, Penglai, Shandong, Marketing and Acquired through
RMB5,000,000 - 100
Ltd.(“Penglai Sales”) China China sales establishment or investment
Laizhou Changyu Wine Sales Co., Ltd. Laizhou, Shandong, Laizhou, Shandong, Marketing and Acquired through
RMB1,000,000 - 100
(“Laizhou Sales”) China China sales establishment or investment
Francs Champs Participations SAS Investment Acquired through
Cognac, France Cognac, France EUR32,000,000 100 -
(“Francs Champs”) and trading establishment or investment
Yantai Roullet Fransac Wine Sales Co., Ltd. Yantai, Shandong, Yantai, Shandong, Marketing and Acquired through
RMB1,000,000 - 100
(“Yantai Roullet Fransac”) China China sales establishment or investment
Yantai Changyu Wine Sales Co., Ltd. (“Wine Yantai, Shandong, Yantai, Shandong, Marketing and Acquired through
RMB5,000,000 100 -
Sales Company”) China China sales establishment or investment
Shaanxi Chateau Changyu Rena Tourism Xianxin, Shaanxi, Xianxin, Shaanxi, Acquired through
Tourism RMB1,000,000 - 100
Co., Ltd. (“Chateau Tourism”) China China establishment or investment
Longkou Changyu Wine Sales Co., Ltd. Yantai, Shandong, Yantai, Shandong, Marketing and Acquired through
RMB1,000,000 - 100
(“Longkou Sales”) China China sales establishment or investment
Yantai Changyu Cultural Tourism
Yantai, Shandong, Yantai, Shandong, Acquired through
Development Co., Ltd. Tourism RMB10,000,000 100 -
China China establishment or investment
(“Culture Development “)
Yantai Changyu Wine Culture Museum Co., Yantai, Shandong, Yantai, Shandong, Acquired through
Tourism RMB500,000 - 100
Ltd. (“Museum”) China China establishment or investment
Yantai Changyu Culture Tourism Production Yantai, Shandong, Yantai, Shandong, Acquired through
Tourism RMB5,000,000 - 100
Sales Co., Ltd. (“Culture Sales”) China China establishment or investment
Yantai Changyu International Window of the
Yantai, Shandong, Yantai, Shandong, Acquired through
Wine City Co., Ltd. Tourism RMB60,000,000 - 100
China China establishment or investment
(“Window of the Wine City”)
Yantai KOYA Brandy Chateau Co., Ltd. Yantai, Shandong, Yantai, Shandong, Acquired through
Manufacturing RMB10,000,000 100 -
(“Chateau KOYA”) China China establishment or investment
Changyu (Shanghai) International Digital
Marketing and Acquired through
Marketing Center Limited Shanghai, China Shanghai, China RMB50,000,000 100 -
sales establishment or investment
(“Digital Marketing”)
Shanghai Changyu Guoqu Digital Technology
Marketing and Acquired through
Co., Ltd. Shanghai, China Shanghai, China RMB6,000,000 - 51
sales establishment or investment
(“Shanghai Guoqu”)
Tianjin Changyu Yixin Digital Technology Co., Marketing and Acquired through
Tianjin, China Tianjin, China RMB10,000,000 - 51
Ltd. (“Tianjin Yixin”) sales establishment or investment
Shanghai Changyu Yixin Digital Technology Marketing and Acquired through
Shanghai, China Shanghai, China RMB10,000,000 - 51
Co., Ltd. (“Shanghai Yixin”) sales establishment or investment
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Shareholding ratio
Principal place of Business (%)
Name of the Subsidiary Registered place Registered capital Acquisition method
business nature (or similar equity
interest)
Yantai Creighton Catering Company Limited Yantai, Shandong, Yantai, Shandong, Acquired through
Services RMB1,000,000 - 100
(“Creighton Catering”) China China establishment or investment
Marketing and Acquired through
Weimeisi Shanghai Shanghai, China Shanghai, China RMB10,000,000 100 -
sales establishment or investment
Reasons for the inconsistency between the proportion of shareholdings in a subsidiary and the proportion of voting rights:
(a) Chateau Changyu is a Sino-foreign joint venture established by the Company and a foreign investor, accounting for 70% of Changyu
Chateau’s equity interest. Through agreement arrangement, the Company has the full power to control Changyu Chateau’s strategic
operating, investing and financing policies. The agreement arrangement is terminated on 31 December 2027.
(b) AFIP is a limited liability company established by Yantai Dean and Beijing Qinglang. After the equity change, the Company holds 91.53%
of its equity. Through agreement arrangement, the Company has the full power to control AFIP’s strategic operating, investing and
financing policies. The agreement arrangement will be terminated on 2 September 2024.
(c) R&D Centre was a joint venture established by the Company and CADF, at December 31, 2023 the Company held 100% of its
equity.Through agreement arrangement in Note V. 30, the Company has the full power to control R&D Centre’s strategic operating,
investing and financing policies. The agreement arrangement will be terminated on 28 February 2025. The R&D Centre settled all CADF
borrowings early and completed the change of business license on 28 December 2023.
(2) Material non-wholly owned subsidiaries
Comprehensive income Dividend declared to
Proportion of ownership Balance of
attributable to non-controlling
Name of the Subsidiary interest held by non-controlling interests
non-controlling interests shareholders
non-controlling interests at the end of the year
for the year during the year
AFIP 8.47% - - 56,409,393
IWCC 15% 1,248,415 1,151,483 57,361,438
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(3) Key financial information about material non-wholly owned subsidiaries
The following table sets out the key financial information of the above subsidiaries without
offsetting internal transactions, but with adjustments made for the fair value adjustment at the
acquisition date and any differences in accounting policies:
AFIP Chile Indomita Wine Group
2023 2022 2023 2022
Current assets 268,602,777 251,902,602 252,718,459 221,192,234
Non-current assets 384,948,572 399,165,555 314,112,626 320,233,623
Total assets 653,551,349 651,068,157 566,831,085 541,425,857
Current liabilities 26,013,757 22,424,425 167,265,413 140,793,252
Non-current liabilities 3,603,886 3,020,582 9,598,445 11,311,586
Total liabilities 29,617,643 25,445,007 176,863,858 152,104,838
Operating income 198,426,991 175,992,960 232,778,304 238,351,323
Net profit/(loss) 2,636,577 (3,366,711) 11,018,541 23,561,992
Total comprehensive
2,636,577 (3,366,711) 8,322,765 29,720,066
income
Cash flows from operating activities 10,320,219 8,265,568 22,541,317 18,971,851
2 Transactions that cause changes in the Group’s interests in subsidiaries that do not result in
loss of control
(1) Changes in the Group’s interests in subsidiaries:
Percentage of
Name of minority
Fiscal year Purchase date
Subsidiary shareholdings
acquired
Golden Ice Wine
2023 49% 30/01/2023
Vally
(2) Impact of transactions on non-controlling interests and equity attributable to the shareholders
of the Company:
Golden Ice Wine
Vally
Acquisition cost consideration
- Cash 29,246,777
- Non-cash assets 3,500,000
Total 32,746,777
Less: Share of net assets in subsidiaries based on the
31,502,609
shares acquired
Difference 1,244,168
Including: Adjustment to capital reserve 1,244,168
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IX. Risk related to financial instruments
The Group has exposure to the following main risks from its use of financial instruments in the
normal course of the Group’s operations:
- Credit risk
- Liquidity risk
- Interest rate risk
- Foreign currency risk
The following mainly presents information about the Group’s exposure to each of the above
risks and their sources, their changes during the year, and the Group’s objectives, policies
and processes for measuring and managing risks, and their changes during the year.
The Group aims to seek appropriate balance between the risks and benefits from its use of
financial instruments and to mitigate the adverse effects that the risks of financial instruments
have on the Group’s financial performance. Based on such objectives, the Group’s risk
management policies are established to identify and analyse the risks faced by the Group, to
set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk
management policies and systems are reviewed regularly to reflect changes in market
conditions and the Group’s activities.
1 Credit risk
Credit risk is the risk that one party to a financial instrument will cause a financial loss for the
other party by failing to discharge an obligation. The Group’s credit risk is primarily
attributable to cash at bank, receivables, debt investments and derivative financial
instruments entered into for hedging purposes. Exposure to these credit risks are monitored
by management on an ongoing basis.
The cash at bank of the Group is mainly held with well-known financial institutions.
Management does not foresee any significant credit risks from these deposits and does not
expect that these financial institutions may default and cause losses to the Group.
As at 31 December 2023, the Group’s maximum exposure to credit risk which will cause a
financial loss to the Group due to failure to discharge an obligation by the counterparties.
In order to minimise the credit risk, the Group has adopted a policy to ensure that all sales
customers have good credit records. According to the policy of the Group, credit review is
required for clients who require credit transactions. In addition, the Group continuously
monitors the balance of account receivable to ensure there’s no exposure to significant bad
debt risks. For transactions that are not denominated in the functional currency of the
relevant operating unit, the Group does not offer credit terms without the specific approval of
the Department of Credit Control in the Group. In addition, the Group reviews the
recoverable amount of each individual trade debt at each balance sheet date to ensure that
adequate impairment losses are made for irrecoverable amounts. In this regard, the
management of the Group considers that the Group’s credit risk is significantly reduced.
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Since the Group trades only with recognised and creditworthy third parties, there is no
requirement for collateral. Concentrations of credit risk are managed by
customer/counterparty, by geographical region and by industry sector. As at 31 December
2023, 49.0% of the Group trade receivables are due from top five customers (31 December
2022: 48.8%). There is no collateral or other credit enhancement on the balance of the trade
receivables of the Group.
2 Liquidity risk
Liquidity risk is the risk that an enterprise will encounter difficulty in meeting obligations that
are settled by delivering cash or another financial asset. The Company and its individual
subsidiaries are responsible for their own cash management, including short-term investment
of cash surpluses and the raising of loans to cover expected cash demands (subject to
approval by the Company’s board when the borrowings exceed certain predetermined levels).
The Group’s policy is to regularly monitor its liquidity requirements and its compliance with
lending covenants, to ensure that it maintains sufficient reserves of cash, readily realisable
marketable securities and adequate committed lines of funding from major financial
institutions to meet its liquidity requirements in the short and longer term.
The following tables set out the remaining contractual maturities at the balance sheet date of
the Group’s financial liabilities, which are based on contractual undiscounted cash flows
(including interest payments computed using contractual rates or, if floating, based on rates
current at the balance sheet date) and the earliest date the Group can be required to pay:
2023 Contractual undiscounted cash flow Carrying
More than amount at
Item Within 1 year or More than
1 to 2 years 2 years but less Total balance sheet
on demand 5 years date
than 5 years
Short-term loans 378,707,190 - - - 378,707,190 364,981,445
Accounts payable 473,352,525 - - - 473,352,525 473,352,525
Other payables 555,634,336 - - - 555,634,336 555,634,336
Long-term payables (including
the portion due within one 62,702,857 9,455,183 61,890,894 - 134,048,934 125,127,311
year)
Lease liability (including the
24,050,888 23,215,484 21,007,143 62,047,723 130,321,238 105,051,460
portion due within one year)
Total 1,494,447,796 32,670,667 82,898,037 62,047,723 1,672,064,223 1,624,147,077
2022 Contractual undiscounted cash flow Carrying
More than amount at
Item Within 1 year or More than
1 to 2 years 2 years but less Total balance sheet
on demand 5 years date
than 5 years
Short-term loans 396,981,235 - - - 396,981,235 389,378,480
Accounts payable 503,323,746 - - - 503,323,746 503,323,746
Other payables 372,608,689 - - - 372,608,689 372,608,689
Long-term loans (including the
75,108,083 70,927,517 115,864,799 - 261,900,399 231,124,009
portion due within one year)
Long-term payables (including
the portion due within one 22,546,674 22,282,674 20,039,452 - 64,868,800 64,000,000
year)
Lease liability (including the
22,767,666 22,126,517 33,652,990 68,864,863 147,412,036 128,514,033
portion due within one year)
Total 1,393,336,093 115,336,708 169,557,241 68,864,863 1,747,094,905 1,688,948,957
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3 Interest rate risk
Interest-bearing financial instruments at variable rates and at fixed rates expose the Group to
cash flow interest rate risk and fair value interest risk, respectively. The Group determines
the appropriate weightings of the fixed and floating rate interest-bearing instruments based on
the current market conditions and performs regular reviews and monitoring to achieve an
appropriate mix of fixed and floating rate exposure.
(1) As at 31 December, the Group held the following interest-bearing financial instruments:
Fixed rate instruments:
2023 2022
Item Effective interest Effective interest
Amounts Amounts
rate rate
Financial assets
- Cash at bank 1.45% - 2.25% 579,200,000 2.00% - 2.25% 53,200,000
Financial liabilities
- Short-term loans 6.83% ~ 7.30% (96,562,141) 0.65% - 6.76% (155,774,939)
- Long-term loans (including the
1.50% - 3.28% (5,860,499) 1.50% - 3.65% (183,331,680)
portion due within one year)
- Long-term payables (including the
- 1.20% (64,000,000)
portion due within one year)
- Lease liability (including the
4.65% (105,051,460) 4.65% (128,514,033)
portion due within one year)
Total 371,725,900 (478,420,652)
Variable rate instruments:
2023 2022
Item Effective interest Effective interest
Amounts Amounts
rate rate
Financial assets
- Cash at bank 0.20% - 1.61% 1,638,418,696 0.25% - 1.61% 1,598,206,161
Financial liabilities
1Year LPR -
- Short-term loans (100,000,000) 1 year LPR 0.5% (200,000,000)
0.95%
- Short-term loans 1.81% ~ 2.54% (23,272,320) 1.81% - 2.54% (33,603,542)
- Short-term loans 3.90% ~ 6.95% (145,146,984) - -
- Long-term loans (including the
- - BBSY+1.10% (44,781,100)
portion due within one year)
- Long-term loans (including the
2.00% ~ 7.59% (119,266,812) 2.85% - 3.35% (3,011,228)
portion due within one year)
Total 1,250,732,580 1,316,810,291
(2) Sensitivity analysis
Management of the Group believes interest rate risk on bank deposit is not significant,
therefore does not disclose sensitivity analysis for interest rate risk.
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As at 31 December 2023, based on assumptions above, it is estimated that a general increase
of 50 basis points in interest rates, with all other variables held constant, would decrease the
Group’s equity by RMB 1,453,823 (2022: RMB1,055,235), and net profit by RMB 1,453,823
(2022: RMB1,055,235).
The sensitivity analysis above indicates the instantaneous change in the net profit and equity
that would arise assuming that the change in interest rates had occurred at the balance sheet
date and had been applied to re-measure those financial instruments held by the Group which
expose the Group to fair value interest rate risk at the balance sheet date. In respect of the
exposure to cash flow interest rate risk arising from floating rate non-derivative instruments
held by the Group at the balance sheet date, the impact on the net profit and equity is
estimated as an annualised impact on interest expense or income of such a change in interest
rates.
4 Foreign currency risk
In respect of cash at bank and on hand, accounts receivable and payable, short-term loans
denominated in foreign currencies other than the functional currency, the Group ensures that
its net exposure is kept to an acceptable level by buying or selling foreign currencies at spot
rates when necessary to address short-term imbalances.
(1) As at 31 December, the Group’s exposure to main currency risk arising from recognised
assets or liabilities denominated in foreign currencies is presented in the following tables.
For presentation purposes, the amounts of the exposure are shown in Renminbi, translated
using the spot rate at the balance sheet date. Differences resulting from the translation of
the financial statements denominated in foreign currency are excluded.
2023 2022
Balance at foreign Balance at RMB Balance at foreign Balance at RMB
currency equivalent currency equivalent
Cash at bank and on hand
- USD 308,229 2,184,232 10,922 76,068
- EUR 67 523 67 494
- HKD 217 196 208 186
Short-term loans
- USD 13,625,000 96,562,141 13,750,000 95,792,132
(2) The following are the exchange rates for Renminbi against foreign currencies applied by the
Group:
Balance sheet date
Average rate
mid-spot rate
2023 2022 2023 2022
USD 7.0558 6.7573 7.0871 6.9646
EUR 7.6689 7.0985 7.8592 7.4229
HKD 0.9011 0.8583 0.9062 0.8933
194
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(3) Sensitivity analysis
Assuming all other risk variables remained constant, a 5% strengthening of the Renminbi
against the US dollar and Euro dollar at 31 December would have impact on the Group’s
equity and net profit by the amount shown below. whose effect is in Renminbi and translated
using the spot rate at the year-end date:
Equity Net profit
31 December 2023
USD 3,539,172 3,539,172
EUR (20) (20)
HKD (7) (7)
Total 3,539,145 3,539,145
31 December 2022
USD 3,589,352 3,589,352
EUR (19) (19)
HKD (7) (7)
Total 3,589,326 3,589,326
A 5% weakening of the Renminbi against the US dollar and Euro dollar at 31 December would
have had the equal but opposite effect to the amounts shown above, on the basis that all
other variables remained constant.
X. Fair value disclosure
All financial assets and financial liabilities held by the Group are carried at amounts not
materially different from their fair value at 31 December 2023 and 31 December 2022.
195
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XI. Related parties and related party transactions
1 Information about the parent of the Company
Registered Shareholding Percentage of Ultimate controlling party of the
Company name Business nature Registered capital
place percentage (%) voting rights (%) Company
Jointly controlled by Yantai GuoFeng
Investment Holding Ltd, ILLVA
SARONNO HOLDING SPA,
Changyu Group Yantai Manufacturing 50,000,000 49.9% 49.9%
International Finance Corporation and
Yantai Yuhua Investment and
Development Company Limited.
The registered capital of the parent company did not change in 2023, while the parent company’s shareholding percentage and proportion of
voting rights changed from 50.4% to 49.9%.
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2 Information about the subsidiaries of the Company
For information about the subsidiaries of the Company, refer to Note VIII.1.
3 Information on other related parties
Name of other related parties Related party relationship
Yantai Shenma Packaging Co., Ltd. Controlled by the same parent
(“Shenma Packaging”) company
Information on the Group’s directors,
Yantai Zhongya Zhibao Pharmaceutical Co., Ltd.
supervisors and the senior
(“Zhongya Zhibao”)
management
Associate of the Group from
WEMISS (Shanghai) Enterprise Development Co., Ltd January 1 to January 30, 2023
(“WEMISS Shanghai”) Subsidiaries of the joint venture after
January 31, 2023
Shanghai Yufeng Brand Management Co.,
Associate of the Group
Ltd.("Shanghai Yufeng”)
Yantai Guolong Wine Industry Co., Ltd (“Yantai
Associate of the Group
Guolong”)
Societe Civile Argricole Du Chateau De Mirefleurs
Subsidiaries of the joint venture
(“Mirefleurs”)
CHATEAU DE LIVERSAN (“LIVERSAN”) Subsidiaries of the joint venture
4 Transactions with related parties
(1) Product procurement
Related parties Nature of transaction 2023 2022
Shenma Packaging Product procurement 83,991,232 82,187,388
Zhongya Zhibao Product procurement 152,932 253,410
Mirefleurs Product procurement 7,844,108 7,054,664
LIVERSAN Product procurement 2,602,967 2,870,515
Total 94,591,239 92,365,977
(2) Sales of goods
Related parties Nature of transaction 2023 2022
Zhongya Zhibao Sales of goods 4,306,827 5,384,362
Shanghai Yufeng Sales of goods 5,691,239 2,017,066
Wemiss Shanghai Sales of goods - 614,302
Shenma Packaging Sales of goods 121,548 110,048
Yantai Guolong Sales of goods 9,152,265 26,816,648
Total 19,271,879 34,942,426
197
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(3) Purchase of fixed assets
Related parties of the Company Nature of transaction 2023 2022
Purchase of fixed
Shenma Packaging 1,592,698 4,245,929
assets
Total 1,592,698 4,245,929
(4) Leases
(a) As the lessor
Type of assets Lease income Lease income
Name of lessee
leased recognised in 2023 recognised in 2022
Shenma Packaging Offices and plants 1,549,410 1,549,410
Zhongya Zhibao Offices and plants 963,810 590,476
Total 2,513,220 2,139,886
(b) As the lessee
Type of assets Lease expense Lease expense
Name of lessor
leased recognised in 2023 recognised in 2022
Changyu Group Office buildings 1,612,118 1,425,735
Changyu Group Offices and plants 1,394,762 1,275,144
Changyu Group Offices and plants 4,184,286 3,825,433
Offices and
Changyu Group 7,057,143 6,145,488
commercial building
Total 14,248,309 12,671,800
(5) Remuneration of key management personnel
Item 2023 2022
Remuneration of key management personnel 12,846,007 10,265,674
(6) Other related party transactions
Related parties Nature of transaction 2023 2022
Changyu Group Trademarks 27,515,798 21,877,171
Pursuant to a royalty agreement dated 18 May 1997, starting from 18 September 1997, the
Company may use certain trademarks of Changyu Group Company, which have been
registered with the PRC Trademark Office. An annual royalty fee at 2% of the Group’s
annual sales is payable to Changyu Group. The license is effective until the expiry of the
registration of the trademarks.
On 18 May 2019, the general meeting of shareholders approved the proposal of the
amendment to the royalty agreement. Article 6.1 of the royalty agreement with Changyu
Group was amended to: During the validity period of this contract, the Group pays Changyu
Group royalty on an annual basis. The royalty is calculated based on 0.98% of the sales
volume of the Group ‘s contract products using this trademark. The article 6.3 is amended
to: The royalty paid to the Changyu Group by the Group shall not be used to promote this
trademark and the contract products.
The Group incurred a trademark usage fee of RMB27,515,798 this year.
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5 Receivables from and payables to related parties
Receivables from related parties
2023 2022
Provision for Provision for
Item Related party
Book value bad and Book value bad and
doubtful debts doubtful debts
Accounts receivable Zhongya Zhibao 1,476,262 2,670 2,627,473 8,091
Shanghai
Accounts receivable 2,925,045 5,290 - -
Yufeng
Accounts receivable Yantai Guolong - - 200,000 616
Prepayments Mirefleurs 6,642,165 - - -
Other current assets Changyu Group - - 120,930,641 -
Payables to related parties
Item Related party 2023 2022
Accounts payable Shenma Packaging 27,358,723 36,600,233
Accounts payable Zhongya Zhibao 2,066 5,365,862
Accounts payable Shanghai Yufeng - 143,659
Accounts payable Changyu Group - 19,434,600
Contract liabilities Zhongya Zhibao - 240
Contract liabilities Yantai Guolong 14,840,000 -
Other payables Changyu Group 27,515,798 -
Other payables Shenma Packaging 400,000 471,869
XII. Capital management
The Group’s primary objectives when managing capital are to safeguard its ability to continue
as a going concern, so that it can continue to provide returns for shareholders, by pricing
products and services commensurately with the level of risk and by securing access to
finance at a reasonable cost.
The Group’s capital structure is regularly reviewed and managed to achieve an optimal
structure and return for shareholders. Factors for the Group’s consideration include: its
future funding requirements, capital efficiency, actual and expected profitability, expected
cash flows, and expected capital expenditure. Adjustments are made to the capital structure
in light of changes in economic conditions affecting the Group.
Neither the Company nor any of its subsidiaries are subject to externally imposed capital
requirements.
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XIII. Share-based payments
1 Equity instruments
(1) Share options or other equity instruments outstanding at the end of the year
Granted during the year Exercised during the year Unlocked during the year Forfeited during the year
Type of grantees
Quantity Amount Quantity Amount Quantity Amount Quantity Amount
Some directors, the
senior
management, the
middle 6,785,559 103,411,919 - - - - - -
management and
core technical
(operational) cadre
Total 6,785,559 103,411,919 - - - - - -
(2) Equity-settled share-based payments
Pursuant to the Proposal on the Company’s 2023 Restricted Share Incentive Plan (Draft) and
Relevant Summary and the Proposal on the Request for the Authorisation to the Board of
Directors by the General Meetings of Shareholders to Handle Matters related to the
Company’s 2023 Restricted Share Incentive Plan passed by resolutions in the Group’s 2022
General Meetings of Shareholders held on 26 May 2023 as well as the Proposal on the
Adjustments to Matters related to 2023 Restricted Share Incentive Plan and the Proposal on
the Granting of Restricted Shares to Incentive Objects under the 2023 Restricted Share
Incentive Plan reviewed and passed in the 2023 first extraordinary Board meeting held on 26
June 2023, the Group determined to grant 6,850,000 restricted shares to 204 incentive
objects at a grant price of RMB15.24 per share on 26 June 2023 (the grant date). A total of
203 incentive objects of the Group actually subscribed for 6,785,559 restricted shares at a
grant price of RMB15.24 per share. The transaction increased the Company’s registered
capital by RMB6,785,559, increased the capital reserve by RMB96,626,360.
All restricted shares granted to incentive objects are subject to different restricted sales
periods, which are respectively 12 months, 24 months and 36 months from the date of
completion of the grant registration of the restricted shares granted to the incentive objects.
The restricted shares granted to the incentive objects under the Restricted Share Incentive
Plan shall not be transferred, pledged as collateral or to repay debts during the restricted
sales periods. All restricted shares granted to incentive objects will be unlocked in three
phases after 12 months from the grant date, with the proportion of unlocking in each phase
being 30%, 30% and 40%, respectively, corresponding to unlocking dates of one year, two
years and three years from the grant date. The actual unlocked shares shall be linked to the
performance appraisal for each year.
When the Company’s performance meets the corresponding criteria, the unlocking proportion
of the above-mentioned restricted shares is determined based on the business performance
of the incentive object’s operation and the contribution value of the incentive object. The
Company will repurchase the locked restricted shares at the granted price of the incentive
objects if the unlocked criteria stipulated in this plan are not met, and the incentive object
shall not unlock the restricted shares for the current period.
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Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
As at 31 December 2023, the total costs of equity-settled share-based payments recognised
in the consolidate financial statements for the year were RMB30,735,755, and the
accumulated amount of equity-settled share-based payments recognised in the capital
reserve for the year amounted to RMB30,735,755.
XIV. Commitments and contingencies
1 Significant commitment
(1) Capital commitments
Item 2023 2022
Long-term assets acquisition commitment 50,057,140 45,698,000
Total 50,057,140 45,698,000
(2) Operating lease commitments
As at 31 December, the total future minimum lease payments under non-cancellable
operating leases of the Group’s properties were payable as follows:
Item 2023 2022
Within 1 year (inclusive) 50,000 -
Total 50,000 -
2 Contingencies
The Group do not have any significant contingencies as at balance sheet date.
XV. Subsequent events
1 Distribution of dividends on ordinary shares approved after the balance sheet date
According to the proposal of the Board of Directors on 10 April 2024, the Company intends
to distribute cash dividend totaling RMB346,124,780 to all shareholders of 692,249,559
capital shares for the year ended 31 December 2023 on the basis of RMB 5 (including tax) for
every 10 shares. The proposal is subject to the approval by the Shareholders’ meeting.
This distribution of profit in cash has not been recognised as a liability at the balance sheet
date.
XVI. Other significant items
1 Segment reporting
The Group is principally engaged in the production and sales of wine, brandy, and sparkling
wine in China, France, Spain, Chile and Australia. In accordance with the Group’s internal
organisation structure, management requirements and internal reporting system, the Group’s
operation is divided into five parts: China, Spain, France, Chile and Australia. The
management periodically evaluates segment results, in order to allocate resources and
evaluate performances. In 2023, over 86% of revenue, more than 96% of profit and over
91% of non-current assets derived from China/are located in China. Therefore, the Group
does not need to disclose additional segment report information.
201
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
XVII. Notes to the Company’s financial statements
1 Receivables under financing
Item Note 2023 2022
Bills receivable (1) 36,322,019 41,061,417
Total 36,322,019 41,061,417
(1) The pledged bills receivable of the Company at the end of the year
As at 31 December 2023, there was no pledged bills receivable (31 December 2022: Nil).
(2) Outstanding derecognised endorsed bills that have not matured at the end of the year
Amount
Item recognised at year
end
Bank acceptance bills 53,825,102
Total 53,825,102
As at 31 December 2023, derecognised bills endorsed by the Company to other parties which
are not yet due at the end of the period is RMB 53,825,102 (31 December 2022:
RMB105,149,583). The notes are used for payment to suppliers. The Company believes
that due to good reputation of bank, the risk of notes not accepting by bank on maturity is very
low, therefore derecognise the note receivables endorsed. If the bank is unable to pay the
notes on maturity, according to the relevant laws and regulations of China, the Company
would undertake limited liability for the notes.
2 Other receivables
Note 31 December 2023 31 December 2022
Dividends receivable (1) - 250,000,000
Others (2) 576,949,997 470,176,320
Total 576,949,997 720,176,320
(1) Dividends receivable
Item 31 December 2023 31 December 2022
Dividends to subsidiaries - 250,000,000
Total - 250,000,000
202
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
(2) Others
(a) Others by customer type:
Customer type 31 December 2023 31 December 2022
Amounts due from subsidiaries 574,127,885 470,128,362
Amounts due from related parties 2,822,112 47,958
Sub-total 576,949,997 470,176,320
Less: Provision for bad and doubtful debts - -
Total 576,949,997 470,176,320
(b) The ageing analysis is as follows:
Ageing 2023 2022
Within 1 year (inclusive) 576,845,525 470,071,848
Over 1 year but within 2 years (inclusive) - -
Over 2 years but within 3 years (inclusive) - 104,472
Over 3 years 104,472 -
Sub-total 576,949,997 470,176,320
Less: Provision for bad and doubtful debts - -
Total 576,949,997 470,176,320
The ageing is counted starting from the date.
(c) Movements of provisions for bad and doubtful debts
As at 31 December 2023, no bad and doubtful debt provision was made for other
receivables (31 December 2022: Nil).
As at 31 December 2023, the Company has no other receivables written off (31
December 2022: Nil).
(d) Others categorised by nature
Nature of other receivables 2023 2022
Amounts due from subsidiaries 574,127,885 470,128,362
Others 2,822,112 47,958
Sub-total 576,949,997 470,176,320
Less: Provision for bad and doubtful debts - -
Total 576,949,997 470,176,320
203
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
(e) Five largest others-by debtor at the end of the year
Ending balance
Percentage of
Nature of the Balance at the of provision for
Debtor Ageing ending balance
receivable end of the year bad and doubtful
of others (%)
debts
Amounts due
Sales Company 213,386,151 Within 1 year 37.0% -
from subsidiaries
Amounts due
Kilikanoon Australia 53,338,503 Within 1 year 9.2% -
from subsidiaries
Amounts due
R&D Centre 32,533,000 Within 1 year 5.6% -
from subsidiaries
Amounts due
Chateau Changyu 14,130,944 Within 1 year 2.4% -
from subsidiaries
Chile Indomita Wine Amounts due
13,100,592 Within 1 year 2.3% -
Group from subsidiaries
Total 326,489,190 56.5% -
3 Long-term equity investments
(1) Long-term equity investments by category:
2023 2022
Item Provision for Carrying Provision for Carrying
Book value Book value
impairment amount impairment amount
Investments in
7,690,772,693 (42,274,055) 7,648,498,638 7,703,535,027 - 7,703,535,027
subsidiaries
Investments in
- - - 2,318,351 - 2,318,351
associates
Total 7,690,772,693 (42,274,055) 7,648,498,638 7,705,853,378 - 7,705,853,378
204
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
(2) Investments in subsidiaries:
Balance of
Additions
Balance at the Additions Decrease Balance at the provision for
during the
Subsidiary beginning of during the during the end of the impairment at
year - Equity
the year year year year the end of the
Incentives
year
Xinjiang Tianzhu 60,000,000 - - (60,000,000) - -
Kylin Packaging 23,176,063 - 367,372 - 23,543,435 -
Chateau Changyu 28,968,100 - 304,959 - 29,273,059 -
Pioneer International 3,500,000 - 2,434,696 - 5,934,696 -
Ningxia Growing 36,573,247 - - - 36,573,247 -
National Wines 2,000,000 - - - 2,000,000 -
Golden Icewine Valley 30,440,500 32,746,777 244,217 - 63,431,494 -
Chateau Beijing 588,389,444 - 244,217 - 588,633,661 -
Sales Company 7,200,000 - 14,059,694 - 21,259,694 -
Langfang Sales 100,000 - - (100,000) - -
Langfang Castel 19,835,730 - - (19,835,730) - -
Wine Sales 4,500,000 - 833,190 - 5,333,190 -
Shanghai Marketing 1,000,000 - - - 1,000,000 -
Beijing Sales 850,000 - - - 850,000 -
Jingyang Sales 100,000 - - (100,000) - -
Jingyang Wine 900,000 - - - 900,000 -
Ningxia Wine 222,309,388 - - - 222,309,388 -
Chateau Ningxia 453,463,500 - 284,014 - 453,747,514 -
Chateau Tinlot 212,039,586 - - - 212,039,586 -
Chateau Shihezi 812,019,770 - 284,014 - 812,303,784 -
Chateau Changan 803,892,258 - 304,959 - 804,197,217 -
R&D Centre 3,288,906,445 - 1,324,269 - 3,290,230,714 -
Huanren Wine 22,200,000 - - - 22,200,000 -
Wine Sales Company 5,000,000 - 102,210 - 5,102,210 -
Francs Champs 236,025,404 - - - 236,025,404 -
Dicot 233,142,269 - - - 233,142,269 5,210,925
Chile Indomita Wine Group 274,248,114 - - - 274,248,114 -
Australia Kilikanoon Estate 129,275,639 - - - 129,275,639 37,063,130
Digital Marketing 1,000,000 - 186,121 - 1,186,121 -
Chateau Koya 110,000,000 - 328,128 - 110,328,128 -
Wemiss Shanghai - 7,910,985 - - 7,910,985 -
Culture Development 92,479,570 - 142,004 - 92,621,574 -
Development Zone Trading - - 861,192 - 861,192 -
Penglai sales - - 1,104,339 - 1,104,339 -
Longkou sales - - 1,611,286 - 1,611,286 -
Laizhou sales - - 84,916 - 84,916 -
Yantai Roullet Fransac - - 244,217 - 244,217 -
Museum - - 265,162 - 265,162 -
Window of the Wine City - - 470,134 - 470,134 -
AFIP Tourism - - 162,952 - 162,952 -
Meeting Center - - 102,210 - 102,210 -
Ningxia Trading - - 162,952 - 162,952 -
Creighton Catering - - 102,210 - 102,210 -
Total 7,703,535,027 40,657,762 26,615,634 (80,035,730) 7,690,772,693 42,274,055
For information about the subsidiaries of the Company, refer to Note VIII.
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Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
(3) Investments in associates:
Investment
Balance at the
losses Others Balance at the
Subsidiary beginning of the
recognized under (Notes.V.9) end of the year
year
the equity method
WEMISS Shanghai 2,318,351 54,934 (2,373,285) -
Total 2,318,351 54,934 (2,373,285) -
4 Operating income and operating costs
2023 2022
Item
Income Cost Income Cost
Principal activities 723,412,525 615,998,040 672,635,481 575,896,372
Other operating activities 7,746,429 5,638,524 2,426,940 1,420,479
Total 731,158,954 621,636,564 675,062,421 577,316,851
Including: Revenue from contracts
723,412,525 615,998,040 672,635,481 575,896,372
with customers
Rent income 7,746,429 5,638,524 2,426,940 1,420,479
Disaggregation of revenue from contracts with customers:
Type of contract 2023 2022
By type of goods or services
- Liquor 723,412,525 672,635,481
By timing of transferring goods or services
- Revenue recognised at a point in time 723,412,525 672,635,481
5 Investment income
Item 2023 2022
Income from long-term equity investments
476,632,356 738,407,264
accounted for using cost method
Income / (Loss) from long-term equity investments
accounted 54,935 (48,460)
for using equity method
Loss from long-term equity investments accounted
(37,436,762) (1,842,325)
for disposal of long-term equity investment
Total 439,250,529 736,516,479
6 Transactions with related parties
(1) Product procurement
Related parties Nature of transaction 2023 2022
Subsidiary of the parent
Product procurement 292,073,183 154,806,785
company
Other related parties of the
Product procurement 43,934,847 42,578,235
Company
Total 336,008,030 197,385,020
206
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
(2) Sales of goods
Related parties Nature of transaction 2023 2022
Subsidiary of the parent
Sales of goods 787,731,546 504,080,073
company
Other related parties of the
Sales of goods 3,184,145 2,952,493
Company
Total 790,915,691 507,032,566
(3) Guarantee
The Company as the guarantor
Amount of Inception date of Maturity date of Guarantee
Guarantee holder Currency
guarantee guarantee guarantee expired (Y/N)
Australia Kilikanoon Estate AUD 17,550,000 13 December 2018 13 December 2023 Y
Australia Kilikanoon Estate AUD 4,800,000 1 March 2025 29 Feburary 2028 N
(4) Leases
(a) As the lessor
Lease income Lease income
Name of lessee Type of assets leased
recognised in 2023 recognised in 2022
Other related parties of
Offices and plants 2,513,220 2,139,886
the Company
Subsidiary of the parent
Offices buildings 85,714 85,714
company
Total 2,598,934 2,225,600
(b) As the lessee
Lease expense Lease expense
Name of lessor Type of assets leased
recognised in 2023 recognised in 2022
Other related parties of
Office buildings 1,394,762 1,275,144
the Company
Total Office buildings 1,394,762 1,275,144
7 Receivables from and payables to related parties
Receivables from related parties
2023 2022
Provision for Provision for
Item Related party
Book value bad and Book value bad and
doubtful debts doubtful debts
Other related parties
Accounts receivables 727,123 1,298 2,309,309 7,805
of the Company
Other related parties
Prepayments 4,472,159 - - -
of the Company
Subsidiary of the
Other receivables 574,127,885 - 720,128,362 -
parent company
Subsidiary of the
Other non-current assets 1,934,430,000 - 1,850,200,000 -
parent company
207
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
Payables to related parties
Item Related party 2023 2022
Other related parties of
Accounts payable 13,895,970 35,944,149
the Company
Subsidiary of the
Other payables 441,681,129 421,781,524
parent company
Other related parties of
Other payables 400,000 471,869
the Company
XVIII. Extraordinary gains and losses in 2023
Item Amount
(1) Profit and loss from disposal of non-current assets 23,852,237
Government grants recognised through profit or loss (except for
those which are closely related to the company’s normal
operations, which the company is entitled to under established
(2) 51,523,799
standards in accordance with government policies and which
have a continuing impact on the profits and losses of the
company)
(3) Other non-operating income and expenses besides items above 9,137,420
Sub-total 84,513,456
(4) Tax effect (13,643,745)
(5) Effect on non-controlling interests after taxation (2,504,497)
Total 68,365,214
Note: Extraordinary gain and loss items (1) to (3) listed above are presented in the amount
before taxation.
XIX. Return on net assets and earnings per share
1 Calculation of earnings per share
(1) Basic earnings per share
For calculation of the basic earnings per share, please refer to Note V.50.
208
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
(2) Basic earnings per share excluding extraordinary gain and loss
Basic earnings per share excluding extraordinary gain and loss is calculated as dividing
consolidated net profit excluding extraordinary gain and loss attributable to ordinary
shareholders of the Company by the weighted average number of ordinary shares
outstanding:
2023 2022
Consolidated net profit attributable to ordinary
532,438,907 428,681,411
shareholders of the Company
Extraordinary gains and losses attributable to
68,365,214 14,850,052
ordinary shareholders of the Company
Consolidated net profit excluding extraordinary gain
and loss attributable to the Company’s ordinary 464,073,693 413,831,359
equity shareholders
Weighted average number of ordinary shares
685,464,000 685,464,000
outstanding
Basic earnings per share excluding extraordinary
0.68 0.60
gain and loss (RMB/share)
(3) Diluted earnings per share
For calculation of the diluted earnings per share, please refer to Note V.50.
(4) Diluted earnings per share excluding extraordinary gains and losses
Diluted earnings per share excluding extraordinary gains and losses is calculated by dividing
consolidated net profit excluding extraordinary gains and losses attributable to ordinary
shareholders of the Company (diluted) by the weighted average number of ordinary shares
outstanding (diluted):
2023 2022
Consolidated net profit attributable to ordinary
532,438,907 428,681,411
shareholders of the Company (diluted)
Extraordinary gains and losses attributable to
68,365,214 14,850,052
ordinary shareholders of the Company
Consolidated net profit excluding extraordinary
gains and losses attributable to the Company’s 464,073,693 413,831,359
ordinary equity shareholders (diluted)
Weighted average number of ordinary shares
685,670,893 685,464,000
outstanding (diluted)
Diluted earnings per share excluding extraordinary
0.68 0.60
gains and losses (RMB/share)
209
Yantai Changyu Pioneer Wine Co., Ltd. 2023 Annual Report
2 Calculation of weighted average return on net assets
(1) Weighted average return on net assets
Weighted average return on net assets is calculated as dividing consolidated net profit
attributable to ordinary shareholders of the Company by the weighted average amount of
consolidated net assets:
2023 2022
Consolidated net profit attributable to ordinary
532,438,907 428,681,411
shareholders of the Company
Weighted average amount of consolidated net
10,684,054,057 10,487,764,058
assets
Weighted average return on net assets 4.98% 4.09%
Calculation of weighted average amount of consolidated net assets is as follows:
2023 2022
Consolidated net assets at the beginning of the year 10,579,053,733 10,447,884,183
Effect of consolidated net profit attributable to
270,707,233 219,814,175
ordinary shareholders of the Company
Effects of Restricted Share Incentive Plan 15,367,878 -
Acquisition of non-controlling interests (1,140,487) -
Effect of shares repurchased (Note V.37) (179,934,300) (179,934,300)
Weighted average amount of consolidated net
10,684,054,057 10,487,764,058
assets
(2) Weighted average return on net assets excluding extraordinary gain and loss
Weighted average return on net assets excluding extraordinary gain and loss is calculated as
dividing consolidated net profit excluding extraordinary gain and loss attributable to ordinary
shareholders of the Company by the weighted average amount of consolidated net assets:
2023 2022
Consolidated net profit excluding extraordinary gain
and loss attributable to the Company’s ordinary 464,073,693 413,831,359
equity shareholders
Weighted average amount of consolidated net
10,684,054,057 10,487,764,058
assets
Weighted average return on net assets excluding
4.34% 3.95%
extraordinary gain and loss
Yantai Changyu Pioneer Wine Co., Ltd.
Board of Directors
April 12, 2024
210
