Jiangsu Yanghe Distillery Co., Ltd.
2023 Annual Report
April 2024
Section I Important Statements, Contents and Definitions
The board of directors, board of supervisors, directors, supervisors and senior management of Jiangsu YangheDistillery Co., Ltd. (hereinafter referred to as the Company) hereby guarantee that the information presented inthis report is free of any false records, misleading statements or material omissions, and shall individually andtogether be legally liable for truthfulness, accuracy and completeness of its contents.
Mr. Zhang Liandong, the responsible person for the Company, Mr. Yin Qiuming, the responsible person foraccounting affairs and Mr. Zhao Qike, the responsible person for accounting department (the accountingsupervisor) have warranted that the financial statements in this report are true, accurate and complete. Alldirectors attended the board meeting to review this report.
The future plans and some other forward-looking statements mentioned in this report shall not be considered asvirtual promises of the Company to investors. Investors and people concerned should maintain adequate riskawareness and understand the difference between plans, predictions and promises. Investors are kindly remindedto pay attention to possible investment risks.
In the annual report, the possible risks in the operation of the Company are described in detail (see 11. Outlookfor the Future Development of the Company in Section III Management Discussion and Analysis). Investors arekindly reminded to pay attention to relevant content.
The profit distribution plan approved by the board of directors: based on 1,506,445,074 shares, a cash dividend ofCNY 46.60 (tax inclusive) will be distributed for every 10 existing shares held, 0 shares of bonus shares (taxinclusive), and reserves would not be converted into share capital.
The Company’s Chinese 2023 Annual Report was publicly disclosed on the Shenzhen Stock Exchange andwww.cninfo.com.cn on 27 April 2024. If there are any differences between the English version and the Chineseone, please refer to the latter.
ContentsSection I Important Statements, Contents and Definitions……………………………….…2Section II Company Profile and Key Financial Results……………………………………….…6Section Ⅲ Management Discussion and Analysis………………………………………………11Section Ⅲ Corporate Governance…………………………………………………………………..…34Section Ⅲ Environment and Social Responsibility……………………………………………..69Section Ⅲ Significant Events……………………………………………………………………………..76Section Ⅲ Changes in Shares and Information about Shareholders…………………..93Section Ⅲ Information about Preference Shares………………………………………………103Section Ⅲ Information about Bonds………………………………………………………………..104Section Ⅲ Financial Reports………………………………………………………………….…………105
Document Catalog
(I) Financial statements containing the signatures and seals of the person in charge of the Company, the
accounting head, and the person in charge of the accounting body (accounting manager).(II) The original audit reports with the seal of the accounting firm and the signatures and seals of the certifiedpublic accountants.(III) The originals of all Company documents and announcements publicly disclosed during the reporting period.
Definitions
| Term | Reference | Definition |
| The Company, This Company, Yanghe | Refer to | Jiangsu Yanghe Distillery Co., Ltd. |
| Yanghe Group, Controlling shareholder | Refer to | Jiangsu Yanghe Group Co.,Ltd. |
| The current year, In the reporting period | Refer to | 1 Jan. 2023 to 31 Dec. 2023 |
| The report | Refer to | 2023 Annual Report |
| Yuan, Ten thousand yuan, A hundred million yuan | Refer to | CNY 0.00, CNY 10,000.00, CNY 100,000,000.00 |
| The shareholders' meeting, the board of directors, the board of supervisors | Refer to | The shareholders' meeting, the board of directors and the board of supervisors of the Company |
| Articles of incorporation | Refer to | Articles of incorporation of Jiangsu Yanghe Distillery Co., Ltd. |
| SSE | Refer to | Shenzhen Stock Exchange |
| SRC, CSRC | Refer to | China Securities Regulatory Commission |
| SAC of Suqian, SASAC of Suqian | Refer to | State-owned Assets Supervision and Administration Commission of Suqian |
| Suya Jincheng, Accounting firm | Refer to | Suya Jincheng CPA LLP |
| Blue Alliance | Refer to | Jiangsu Blue Alliance Co., Ltd. |
| Yanghe Branch of the Company | Refer to | Jiangsu Yanghe Distillery Co., Ltd. Yanghe Branch |
| Siyang Branch of the Company | Refer to | Jiangsu Yanghe Distillery Co., Ltd. Siyang Branch |
| Shuanggou Distillery | Refer to | Jiangsu Shuanggou Distillery Stock Co.,Ltd. |
| Guijiu Comapny | Refer to | Guizhou Guijiu Co., Ltd. |
| Inside and outside the province | Refer to | Inside and outside Jiangsu Province |
Section II Company Profile and Key Financial ResultsI. Corporate information
| Stock abbreviation | Yanghe | Stock code | 002304 |
| Stock exchange where the shares of the Company are listed | Shenzhen Stock Exchange | ||
| Name of the Company in Chinese | 江苏洋河酒厂股份有限公司 | ||
| Abbr. of the Company name in Chinese | 洋河股份 | ||
| Name of the Company in English (if any) | JIANGSU YANGHE DISTILLERY CO., LTD. | ||
| Abbr. of the Company name in English (if any) | Yanghe | ||
| Legal representative | Zhang Liandong | ||
| Registered address | No.118 Middle Avenue, Yanghe Town, Suqian City, Jiangsu Province, China | ||
| Postal code of registered address | 223800 | ||
| Historical changes of the company's registered address | N/A | ||
| Business address | No.118 Jiudu Avenue, Yanghe Town, Suqian City, Jiangsu Province, China | ||
| Postal code of business address | 223800 | ||
| Company website | http://www.chinayanghe.com | ||
| yanghe002304@chinayanghe.com | |||
II. Contact us
| Company secretary | Representative for securities affairs | |
| Name | Lu Hongzhen | Zhu Haihui |
| Address | No.118 Jiudu Avenue, Yanghe Town, Suqian City, Jiangsu Province | No.118 Jiudu Avenue, Yanghe Town, Suqian City, Jiangsu Province |
| Tels. | 0527-84938128 | 0527-84938128 |
| Fax | 0527-84938128 | 0527-84938128 |
| yanghe002304@chinayanghe.com | yanghe002304@chinayanghe.com |
III. Information disclosure and place where the annual report is kept
| The website of the stock exchange where the company discloses the annual report | Shenzhen Stock Exchange (www.szse.cn) |
| Media name and website of the annual report disclosed by the company | Securities Times, Shanghai Securities Times, China Securities Journal, Securities Daily and Cninfo (http://www. cninfo.com.cn) |
| Place where the Annual Report of the Company is kept | Shareholder reading room, the headquarters of the Company, Suqian City, Jiangsu Province |
IV. Company registration and alteration
| Organization code | 9132000074557990XP |
| Changes in main business activities since the Company was listed (if any) | None |
| Changes of controlling shareholders of the Company (if any) | None |
V. Other relevant informationAccounting firm engaged by the Company
| Name of the accounting firm | Suya Jincheng CPA LLP |
| Business address of the accounting firm | 14-16/F., Block A, Zhengtai Center, No.159 Taishan Road, Jianye District, Nanjing, Jiangsu Province |
| Name of accountants for writing signature | Li Laimin, Li Yan |
Sponsors engaged by the Company to continuously perform its supervisory function during the reporting period
□Applicable ?N/A
Financial adviser engaged by the Company to continuously perform its supervisory function during the reportingperiod
□Applicable ?N/A
VI. Key accounting data and financial indicators
Whether the Company performed a retroactive adjustment or restatement of accounting data?Yes □No
The reason of retroactively adjust or restateChanges in Accounting Policies
| 2023 | 2022 | YoY Change | 2021 | |||
| Before adjustment | After adjustment | After adjustment | Before adjustment | After adjustment | ||
| Operating revenues (CNY) | 33,126,277,551.51 | 30,104,896,186.70 | 30,104,896,186.70 | 10.04% | 25,350,178,204.45 | 25,350,178,204.45 |
| Net profits attributable to shareholders of the Company (CNY) | 10,015,930,040.27 | 9,377,832,429.08 | 9,377,865,479.41 | 6.80% | 7,507,682,797.40 | 7,507,741,599.03 |
| Net profits attributable to shareholders of the Company | 9,842,844,980.49 | 9,276,644,831.29 | 9,276,677,881.62 | 6.10% | 7,372,758,257.29 | 7,372,817,058.92 |
before non-recurring gainsand losses(CNY)
| before non-recurring gains and losses (CNY) | ||||||
| Net cash flows from operating activities (CNY) | 6,130,220,867.96 | 3,647,623,952.19 | 3,647,623,952.19 | 68.06% | 15,318,165,480.53 | 15,318,165,480.53 |
| Basic earnings per share (CNY/share) | 6.6487 | 6.2251 | 6.2252 | 6.80% | 5.0141 | 5.0141 |
| Diluted earnings per share (CNY/share) | 6.6487 | 6.2251 | 6.2252 | 6.80% | 5.0141 | 5.0141 |
| Weighted average ROE | 20.34% | 21.03% | 21.03% | -0.69% | 18.55% | 18.55% |
| At the end of 2023 | At the end of 2022 | YoY Change | At the end of 2021 | |||
| Before adjustment | After adjustment | After adjustment | Before adjustment | After adjustment | ||
| Total assets (CNY) | 69,792,287,455.91 | 67,964,247,134.43 | 67,972,824,646.81 | 2.68% | 67,798,704,193.76 | 67,803,122,374.09 |
| Net assets attributable to shareholders of the Company (CNY) | 51,938,515,345.20 | 47,474,946,974.68 | 47,475,039,184.70 | 9.40% | 42,486,209,789.59 | 42,486,268,591.22 |
Reasons for changes in accounting policies and correction of accounting errorsThe Ministry of Finance issued No. 16 Interpretation of Enterprise Accounting Standards (Finance and Accounting[2022] No. 31, hereinafter referred to as "Interpretation No. 16") on November 30, 2022, with the content of"Accounting Treatment of Deferred Income Tax Not Exempted from Initial Recognition for Assets and LiabilitiesArising from Single Transactions" taking effect from January 1, 2023. For single transactions subject toInterpretation No. 16, the company retrospectively adjusts the cumulative effect amounts on financial statementsto the earliest period's opening retained earnings and other related financial statement items, in accordance withthe provisions of Interpretation No. 16 and Enterprise Accounting Standard No. 18 - Income Taxes, for temporarydifferences in taxable and deductible temporary differences arising from recognizing lease liabilities and right-of-use assets.
The Company's net profit before or after deducting non-recurring profits and losses in the last three fiscal years isnegative, and the audit report of the last year shows that the Company's ability to continue operating is uncertain
□Yes ?No
The net profit before or after deducting non-recurring profits and losses is negative
□Yes ?No
VII. Differences in accounting data under domestic and overseas accounting standards
1. Differences in the net profits and net assets disclosed in the financial reports prepared under the internationaland China accounting standards
□Applicable ?N/A
No such differences during this period.
2. Differences in the net profits and net assets disclosed in the financial reports prepared under the outboundand China accounting standards
□Applicable ?N/A
No such differences during this period.VIII. Key financial results by quarter
Unit: CNY
| Q1 | Q2 | Q3 | Q4 | |
| Operating revenues | 15,046,180,974.50 | 6,826,748,877.59 | 8,410,164,952.92 | 2,843,182,746.50 |
| Net profits attributable to shareholders of the Company | 5,766,047,982.64 | 2,096,333,323.57 | 2,341,087,846.18 | -187,539,112.12 |
| Net profits attributable to shareholders of the Company before deducting non-recurring profits and losses | 5,665,647,207.53 | 2,047,339,155.41 | 2,451,989,689.20 | -322,131,071.65 |
| Net cash flows from operating activities | 1,402,723,384.09 | -1,137,690,993.47 | 4,078,434,986.31 | 1,786,753,491.03 |
Whether there are any material differences between the financial indicators above or their summations and thosewhich have been disclosed in quarterly or semi-annual reports.
□Yes ?No
IX. Non-recurring profits and losses
Unit: CNY
| Item | 2023 | 2023 | 2021 | Note |
| Profit or loss from disposal of non-current assets (including the write-off portion of the impairment provision) | -10,375,821.67 | -5,887,909.75 | -10,687,905.76 | |
| Government grants included in the profit or loss for the current period (except those closely related to the normal business of the company, in line with the provisions of national policies, and continuously enjoyed according to a certain standard quota or quantity) | 51,085,965.67 | 60,162,525.57 | 87,366,302.47 | |
| Except for the effective hedging business related to the normal business of the company, profits and losses from changes in fair value arising from holding trading financial assets and trading financial liabilities, as well as the investment income obtained from the disposal of trading financial assets, trading financial liabilities and financial assets available for sale | 211,499,562.04 | 77,907,331.60 | 153,349,470.08 | |
| Impairment provision reversal of the | 12,009,031.70 |
accounts receivables on which theimpairment test is carried out individually
| accounts receivables on which the impairment test is carried out individually | ||||
| Other non-operating income and expenditure except above-mentioned items | -19,590,043.61 | 827,476.72 | -31,556,128.88 | |
| Other profit and loss items that conform to the definition of non-recurring profits and losses | 3,610,292.93 | 3,484,445.51 | ||
| Less: Corporate income tax | 59,943,924.97 | 34,647,176.78 | 79,096,331.61 | |
| Minority interests (after tax) | -409,322.32 | 784,942.50 | -55,656.60 | |
| Total | 173,085,059.78 | 101,187,597.79 | 134,924,540.11 | -- |
Details of other profit and loss items that meet the definition of non-recurring profit and loss：
□Applicable ?N/A
The company has no specific circumstances of other profit and loss items that meet the definition of non-recurringprofit and loss.Description of defining non-recurring profit and loss items listed in the Explanatory Announcement No. 1 onInformation Disclosure for Listed Companies -Non-recurring Profits and Losses as recurring profit and loss items.
□Applicable ?N/A
There is no such situation that the company classifies the non-recurring profit and loss items listed in theExplanatory Announcement No. 1 on Information Disclosure for Listed Companies -Non-recurring Profits and Lossesas recurring profit and loss items.
Section Ⅲ Management Discussion and AnalysisI. Industry conditions faced by the company during the reporting periodIn 2023, the structured growth and intensifying competition of Chinese Baijiu market have become increasinglyobvious. According to the data from the National Bureau of Statistics and the China Alcoholic Drinks Association,the nationwide output of Chinese Baijiu by enterprises with an annual revenue of over a certain scale amountedto 4,492,000.00 kiloliters, representing a decrease of 2.8% compared to the previous year. The operating revenuewas CNY756.3 billion, a year-on-year increase of 9.7%. Total profits before tax amounted to CNY232.8 billion, upby 7.5% year-on-year. The Chinese Baijiu industry exhibited resilience amidst adjustments.
Yanghe is a large Chinese Baijiu production enterprise enjoying high brand awareness and reputation nationwide.It is the only enterprise in the Chinese Baijiu industry that owns two famous Chinese Baijiu brands, Yanghe andShuanggou, two time-honored Chinese brands, six well-known Chinese trademarks, and two 4A level scenic spots.The company's major products are Dream Blue, Sky Blue, Ocean Blue, Sujiu, Zhenbaofang, Yanghe Daqu,Shuanggou Daqu and so on, which have high brand recognition and reputation nationwide. During the reportingperiod, the company continuously enhanced its operational management level and maintained a healthydevelopment trend of "steady progress." In 2023, the company achieved an operating revenue of CNY33.126billion, a year-on-year increase of 10.04%. The company realized a net profit attributable to shareholders of listedcompanies of CNY10.016 billion, a year-on-year increase of 6.8%.
II. Main Businesses of the Company During the Reporting Period
The company shall comply with the disclosure requirements of food and wine manufacturing industries in Self-regulatory Guidelines for Listed Companies in Shenzhen Stock Exchange No. 3 - Industry Information Disclosure
The main business engagedThe main business of the company is the production and sales of Chinese Baijiu, which is produced by solid-statefermentation and sold mainly through two modes: wholesale distribution and online direct sales. The company'smain business and business model did not change during the reporting period. According to the IndustryClassification Guidelines for Listed Companies (revised in 2012) issued by the CSRC, the company belongs to the"C15 wine, beverage and refined tea manufacturing industry".
Information about brand operationThe Company’s products include Dream Blue, Sujiu, Sky Blue, Zhenbaofang, Ocean Blue, Yanghe Daqu, ShuanggouDaqu, Guijiu, Sidus Wine and so on. According to the price range standard of ex-factory price, the Company groupsthe products into mid/high end and ordinary products. The mid/high end products refer to those with ex-factoryprice ≥ CNY 100 / 500ml, mainly including Dream Blue craft class, Dream Blue M9, Dream Blue M6 +, Dream BlueCrystal version, Su Jiu, Sky Blue, Zhenbaofang (Difang, Shengfang), Ocean Blue and so on. Ordinary products referto those with ex-factory price ＜ CNY 100 / 500ml, mainly including Yanghe Daqu and Shuanggou Daqu.The revenue of various products is as follows:
Unit: CNY
| Products | Operating revenue | |
| 2023 | YoY change | |
| Mid/high end products | 28,538,963,867.14 | 8.82% |
Ordinary products
| Ordinary products | 3,950,472,828.91 | 20.70% |
Main sales modelThe company sells its products mainly through distributors. Its sales models include wholesale distribution andonline direct selling, among which wholesale distribution is the main sales model.
?Applicable □N/A
1. Disclosure of main business composition by different types
Unit: CNY
| Types | Operating revenue | YoY change | Operating cost | YoY change | Gross margin | YoY change |
| By sales model | ||||||
Wholesaledistribution
| Wholesale distribution | 32,052,628,760.26 | 10.12% | 7,637,998,918.20 | 7.11% | 76.17% | 0.67% |
Onlinedirect selling
| Online direct selling | 436,807,935.79 | 11.25% | 123,634,460.40 | 47.12% | 71.70% | -6.90% |
Subtotal
| Subtotal | 32,489,436,696.05 | 10.13% | 7,761,633,378.60 | 7.58% | 76.11% | 0.57% |
| By geographical segment | ||||||
Jiangsu
| Jiangsu | 14,393,063,137.67 | 8.05% | 3,612,062,812.84 | -1.29% | 74.90% | 2.37% |
Ex-Jiangsu
| Ex-Jiangsu | 18,096,373,558.38 | 11.85% | 4,149,570,565.76 | 16.70% | 77.07% | -0.95% |
Subtotal
| Subtotal | 32,489,436,696.05 | 10.13% | 7,761,633,378.60 | 7.58% | 76.11% | 0.57% |
By product
| By product | ||||||
| Mid/high end products | 28,538,963,867.14 | 8.82% | 5,634,678,426.70 | 8.96% | 80.26% | -0.02% |
Ordinaryproducts
| Ordinary products | 3,950,472,828.91 | 20.70% | 2,126,954,951.90 | 4.07% | 46.16% | 8.60% |
| Subtotal | 32,489,436,696.05 | 10.13% | 7,761,633,378.60 | 7.58% | 76.11% | 0.57% |
The company's main products are classified according to the price range standard of ex-factory price, includingmedium/high end products ≥ 100 CNY / 500ml and ordinary products < 100 CNY / 500ml.
2. Disclose the number of distributors according to regional classification
| Geographical segment | The number of distributors at the end of the reporting period | Increase (decrease) in the number during the reporting period |
Jiangsu
| Jiangsu | 2,960 | -17 |
| Ex-Jiangsu | 5,829 | 568 |
Total
| Total | 8,789 | 551 |
3. Settlement method and distribution method
The Company mainly adopts the bank transfer method for settlement, and adopts the method of payment beforegoods for product sales.
4. Sales amount and sales proportion of the top five distributors
In 2023, the total sales amount of the top five distributors was CNY 1,852.3571 million, accounting for 5.59% ofthe total sales of this year. Among the sales of the top five distributors, the sales from related parties were CNY 0,accounting for 0% of the total sales of this year. The total amount of receivables of the top five distributors at the
end of the period was zero.
Retail sales accounted for more than 10%.
□Applicable ?N/A
Online direct selling
?Applicable □N/A
Unit: CNY
| Product | Online direct selling | Sales amount in 2023 | Sales amount in 2022 | YoY change |
| Liquor | Tmall, JD and other platforms | 436,807,935.79 | 392,624,307.67 | 11.25% |
The sales price of the main products accounting for more than 10% of the total operating revenue of the currentperiod changed by more than 30% compared with the previous reporting period
□Applicable ?N/A
Procurement mode and content
Unit: CNY
| Procurement mode | Procurement content | Amount |
| Market bidding | Raw materials and packaging materials | 6,594,507,864.79 |
| Marketing purchase | Energy | 480,865,801.95 |
Procurement of raw materials from cooperatives or farmers accounted for more than 30% of the total purchaseamount
□Applicable ?N/A
The price of major outsourced raw materials changed by over 30% year on year
□Applicable ?N/A
Main production modeThe Company's production mode is self-produced mode, with major parts including raw material crushing,fermentation, distillation, grade storage, liquor body design and combination, product packaging, etc.Commissioned production
□Applicable ?N/A
The main components of operating costs
Unit:CNY
| Types | Cost item | 2023 | 2022 | YoY change | ||
| Amount | As a percentage of operating cost | Amount | As a percentage of operating cost | |||
| Chinese Baijiu | ||||||
| Direct materials | 5,740,988,852.45 | 70.01% | 5,316,873,839.12 | 69.54% | 7.98% | |
| Direct labor | 1,389,888,502.86 | 16.95% | 1,238,729,841.81 | 16.20% | 12.20% | |
| Fuels and energy | 284,861,395.36 | 3.47% | 288,045,390.08 | 3.77% | -1.11% | |
Manufacturingoverhead
| Manufacturing overhead | 283,217,880.58 | 3.45% | 283,314,445.64 | 3.71% | -0.03% |
Output and inventory
1. Production volume, sales volume and inventory of major products
| Types | Item | 2023 | 2022 | YoY change |
| Chinese Baijiu | ||||
| Sales (ton) | 166,154.73 | 195,322.68 | -14.93% | |
| Production (ton) | 158,834.29 | 197,590.68 | -19.61% | |
| Inventory (ton) | 39,176.04 | 46,496.48 | -15.74% |
2. Inventory of finished and semi-finished Baijiu at the end of the period
| Inventory of finished products (including finished baijiu and wine) (ton) | Inventory of semi-finished Baijiu (including raw liquor) (ton) |
39,875.47
| 39,875.47 | 650,766.36 |
3. Capacity of the Company
| Name of production entity | Design capacity (ton) | Actual capacity in 2023 (ton) |
| Yanghe (including Yanghe branch and Siyang branch) | 222,545 | 125,513 |
Shuanggou Distillery
| Shuanggou Distillery | 97,040 | 29,851 |
III. Analysis of core competitivenessThe Company has significant advantages in natural environment, quality technology, brand building, marketingnetwork and so on. The Company has formed its unique core competitiveness, which has not changed during thereporting period.
1. Natural environment advantage
The Company is located in Suqian, the capital of Chinese Baijiu with 'three rivers, two lakes and one wetland’. Asone of the three famous wetlands in the world, Suqian enjoys equal popularity with the Scotch whisky producingarea and the French Cognac producing area. The long history and unique ecological environment provide a goodsource of water, soil and air for production for liquor production. Especially the microorganism condition issignificantly beneficial to production. The Yanghe distillery originated in the Sui and Tang Dynasties, flourished inthe Ming and Qing Dynasties. It had been sold in Jianghuai area during the period of Yong Zheng of Qing Dynasty.It has a good reputation that 'dainty taste derived from fortune spring and liquor ocean, which made Yanghe rankfirst in Jianghuai area'. Shuanggou alongside Yanghe was praised as the origin of Chinese natural liquor by domesticand overseas experts due to the discovery of drunken ape fossils in Xiacaowan.
2. Quality advantage
Considering the diversification and individuation of consumption demand, the Company took the lead in breakingthe traditional classification of Baijiu flavor. The Company classifies Baijiu based on taste and emphasizes the valueof taste. The Company strengthens the mellowness of Baijiu, puts forward the new style of the mellow Baijiu quality,and deeply meets core demand of target consumers. It has successfully established new craft of mellow Baijiuproduction and system framework of mellowness mechanism, which caters to market consumption. In June 2008,"Mellowness", a special type of Yanghe, was first written into the national standard in China ProtectedGeographical Indication Product- Yanghe Daqu (Standard No. GB/T22046-2008). In 2019, the company formulatedthe group standard named "Mellow Baijiu" (i.e., T/CBJ2104-2019), which further enriched and improved the
relevant standards of mellow Baijiu. In 2022, the company formulated the standards of "Baijiu Wetland Real EstateArea" (T/CBJ2305-2022) and "Wetland Baijiu" (T/CBJ2110-2022), which promoted the specification of technicalquality standards for wetland liquor. In 2023, the company released the “China's Baijiu Mellow QualityDevelopment Report”, and comprehensively constructed the “mellow system”.
3. Talent advantage
The Company has 46 Masters of Chinese Baijiu, 78 provincial Baijiu tasting committee members and 1,952technicians. The Company also has 10 national and provincial technical research and development platforms. Theobvious advantage of technical talents provides technical support for the continuous improvement of mellowBaijiu quality. In 2023, the company's three scientific and technological achievements, "Research and Applicationof Innovative Technology for Mellow Baijiu", "Integrated Research and Industrial Application of Digital Technologyfor Mellow baijiu Brewing", and "Research on Autophagy and Antioxidant Effects of Mellow Baijiu" were identifiedby the China Light Industry Federation and have reached the leading level in the international arena. In the 7thNational Sommelier Competition sponsored by the China Alcoholic Drinks Association, the company won thechampionship for six consecutive times, fully demonstrating the company's talent advantages.
4. Brand advantage
The Company, as one of the eight traditional well-known Baijiu enterprises, is the only one in China's liquor industrythat has two Chinese famous wines, Yanghe and Shuanggou, two Chinese time-honored brands, six well-knownChinese trademarks such as Yanghe, Shuanggou, Blue Classic, Zhenbaofang, Dream Blue, Su, two national 4A scenicspots, two national industrial heritages, and a national key cultural relics protection unit. In 2023, in the "2023World's Top 50 Most Valuable Spirits Brand Value" released by Brand Finance, a world-renowned brand valueresearch institution, the company ranked fifth in the world with a brand value of USD6.848 billion and ranked 102
nd
in the "China's 500 Most Valuable Brands" released by World Brand Lab, with a brand value of CNY85.761 billion.
5. Marketing network advantage
The company has a marketing team with innovative ideas and strong execution. Its marketing network haspenetrated into all counties and regions in China. The high-speed channel for distribution has been basically built,laying a solid foundation for future market expansion and category extension. Meanwhile, as a traditionalenterprise, Yanghe has consistently optimized new sales model and advanced digital transformation. The salesdigitalization of Yanghe has become a case study for Tsinghua University, showcasing the leading position of Yanghein internet application.
IV. Analysis of main business
1. Overview
During the reporting period, the company actively has responded to environmental changes, adheres toempowering development through quality brands, strengthened marketing coordination and organizationalscheduling, enhanced operational capabilities and operational efficiency. Amidst increasingly fierce marketcompetition, it maintained an overall trend of "steady progress" in development. In 2023, the company achievedan operating revenue of CNY33.126 billion, a year-on-year increase of 10.04%; The net profit attributable toshareholders of the listed company was CNY10.016 billion, a year-on-year increase of 6.8%.
Brand building had become more comprehensive. Firstly, based on the different connotations and productpositioning of each brand, the company implemented differentiated brand communication strategies. It focused
on major events such as the Davos Forum and the Shanghai Cooperation Organization Summit, conducted activitieslike the Gu Yu Forum and the opening ceremony of the "Head Row Wine Cellar," continuously elevating the brandstature of "Dream Blue". Leveraging sports IPs such as "I Love Sky Blue," it bridged the gap between Sky Blueproducts and consumers. Actively engaging with consumers, it further positioned Ocean Blue as a popularconsumer product. By sponsoring the Nanjing basketball team and hosting the "Head Row Sujiu Poetry MusicFestival," it amplified the influence of Shuanggou's wetland baijiu. Secondly, the company focused on market-oriented services, conducting various targeted activities to reach key consumer groups and enhanced consumerstickiness. Activities like "Spring Festival wins big prizes with Yang" and "I am the Yanghe Quality Ambassador" areconducted, along with efficient placements of advertisements during the Mid-Autumn Festival TVCs, city lightshows, and Taihu Music Concerted to increase brand exposure and strengthen terminal marketing atmosphere.
Quality improvement was increasingly sustained. Firstly, leveraging ten major research and developmentplatforms, the company focused on key technological breakthroughs. Thirteen company-level research projectshave been completed, reinforcing the application of research and development outcomes in production practice,thereby promoting further upgrades in the quality of leading products. Secondly, it implemented a workingmechanism of "planning, organizing, commanding, supervising, monitoring, warning, and evaluating,"strengthening control over key brewing production process parameters to ensure consistent quality in raw liquorproduction. Thirdly, the company's "Dream Team" swept the top three spots in the 7th National SommelierCompetition. Three technological achievements, including "Research and Application of Innovative Technology forMellow Baijiu" have been appraised by the China Light Industry Federation. The company has also published the“China's Baijiu Mellow Quality Development Report” providing strong theoretical and technical support for thequality improvement of Yanghe's mellow baijiu. Fourthly, it continued to delve into product life cycle management,focusing on "precision in product making and structural optimization," launching new products to achieve adynamic balance in product iteration.
Market marketing become more powerful. Firstly, promoting nationwide market expansion, reinforcing theaddition of new sales points, deepening penetration into towns and villages, optimizing consumer cultivation, andfurther expanding markets beyond the province. Strengthening operations in the home market, refining the pricingsystem for leading products like Dream Blue, Sky Blue and Ocean Blue, optimizing sales strategies, and promotingsteady development in the Jiangsu province market. Secondly, iteratively optimizing marketing organizationalstructure, strengthening on-site coordination, and focusing on regional strategies to better drive businessdevelopment. Thirdly, leveraging digital tools to optimize and upgrade consumer activities, promoting the openingof leading products; launching the Marketing Wisdom Center project, focusing on indicators traction andcollaborative empowerment to enhance business convenience. Fourthly, strengthening process indicatorsassessment to promote marketing transformation, driving marketing management improvement through "projectmanagement, responsibility system promotion, and list-based implementation".
ESG practices were deepening. Firstly, adhering to the concept of "people-oriented, scientific management," thecompany continuously improved its risk management and internal control systems, streamlining procurementprocesses to reduce human factors, emphasizing intellectual property protection, and continually enhancingcorporate governance standards. Secondly, there was a high emphasis on environmental management systemconstruction, with the formulation of a dual-carbon action plan, integrating the "dual-carbon" strategy intocorporate development, and striving to create an "ecological Yanghe." Thirdly, actively participating in ruralrevitalization, hometown public welfare, and industrial assistance projects, continuing involvement in aerospace
public welfare activities, actively participating in the "Dunhuang Dream Guardianship Program," donating funds tosupport disaster relief efforts in Zhuozhou and Jishi Mountain, organizing sealing and burial ceremonies, andintegrating major events into the construction of Suqian Liquor Capital, continuously practicing the socialresponsibility and role of listed companies.
2. Revenues and cost of sales
(1) Breakdown of operating revenues
Unit：CNY
| 2023 | 2022 | YoY change | |||
| Amount | As a percentage of operating revenues | Amount | As a percentage of operating revenues | ||
| Total | 33,126,277,551.51 | 100% | 30,104,896,186.70 | 100% | 10.04% |
| By business segment | |||||
| Alcoholic Drinks | 32,489,436,696.05 | 98.08% | 29,499,863,067.64 | 97.99% | 10.13% |
| Other | 636,840,855.46 | 1.92% | 605,033,119.06 | 2.01% | 5.26% |
| By product | |||||
| Baijiu | 32,389,581,931.71 | 97.78% | 29,338,843,747.26 | 97.46% | 10.40% |
| Wine | 99,854,764.34 | 0.30% | 161,019,320.38 | 0.53% | -37.99% |
| Other | 636,840,855.46 | 1.92% | 605,033,119.06 | 2.01% | 5.26% |
| By geographical segment | |||||
| Jiangsu | 14,675,188,393.55 | 44.30% | 13,594,267,792.89 | 45.16% | 7.95% |
| Ex-Jiangsu | 18,451,089,157.96 | 55.70% | 16,510,628,393.81 | 54.84% | 11.75% |
| By sales model | |||||
| Wholesale distribution | 32,052,628,760.26 | 96.76% | 29,107,238,759.97 | 96.69% | 10.12% |
| Online direct selling | 436,807,935.79 | 1.32% | 392,624,307.67 | 1.30% | 11.25% |
| Other | 636,840,855.46 | 1.92% | 605,033,119.06 | 2.01% | 5.26% |
(2) Business segment, products, geographical segments or sales models contributing over 10% of the operatingrevenues or profits
?Applicable □N/A
Unit: CNY
| Operating revenues | Cost of sales | Gross profit margin | YoY change of operating revenue | YoY change of cost of sales | YoY change of gross profit margin | |
| By business segment | ||||||
| Alcoholic Drinks | 32,489,436,696.05 | 7,761,633,378.60 | 76.11% | 10.13% | 7.58% | 0.57% |
| By product | ||||||
| Baijiu | 32,389,581,931.71 | 7,698,956,631.25 | 76.23% | 10.40% | 8.03% | 0.52% |
| By geographical segment | ||||||
| Jiangsu | 14,393,063,137.67 | 3,612,062,812.84 | 74.90% | 8.05% | -1.29% | 2.37% |
| Ex-Jiangsu | 18,096,373,558.38 | 4,149,570,565.76 | 77.07% | 11.85% | 16.70% | -0.95% |
| By sales mode | ||||||
| Wholesale distribution | 32,052,628,760.26 | 7,637,998,918.20 | 76.17% | 10.12% | 7.11% | 0.67% |
Onlinedirectselling
| Online direct selling | 436,807,935.79 | 123,634,460.40 | 71.70% | 11.25% | 47.12% | -6.90% |
Under the circumstances that the statistical standards for the Company’s main business data adjusted in thereporting period, the Company’s main business data in the current one year is calculated based on adjustedstatistical standards at the end of the reporting period.
□Applicable ?N/A
(3) Whether revenue from physical sales is higher than service revenue
?Applicable □N/A
| By business segment | Item | Unit | 2023 | 2022 | YoY change |
| Baijiu | Sales volume | Ton | 166,154.73 | 195,322.68 | -14.93% |
| Production volume | Ton | 158,834.29 | 197,590.68 | -19.61% | |
| Inventory volume | Ton | 39,176.04 | 46,496.48 | -15.74% | |
| Wine | Sales volume | Ton | 1,682.34 | 2,406.64 | -30.10% |
| Production volume | Ton | 1,542.62 | 2,616.66 | -41.05% | |
| Inventory volume | Ton | 699.43 | 839.15 | -16.65% |
Reasons for any over 30% YoY changes in the data above.?Applicable □N/A
The inventory of red wine increased by 30.10% year-on-year, mainly due to the decrease in demand in the redwine market, resulting in a corresponding decline in red wine sales volume.The Production of red wine increased by 41.05% year-on-year, mainly due to the decrease in red wine sales volume,leading to a corresponding decline in production volume.
(4) Execution of significant sales contracts and significant purchase contracts in the reporting period
□Applicable ?N/A
(5) Breakdown of cost of sales
By business and product segment
Unit：CNY
| By business segment | Item | 2023 | 2022 | YoY change | ||
| Amount | As a percentage of cost of sales | Amount | As a percentage of cost of sales | |||
| Alcoholic Drinks | 7,761,633,378.60 | 94.65% | 7,214,917,301.54 | 94.37% | 7.58% | |
Unit：CNY
| By product segment | Item | 2023 | 2022 | YoY change | ||
| Amount | As a percentage of cost of sales | Amount | As a percentage of cost of sales | |||
| Alcoholic Drinks | Direct materials | 5,801,995,203.19 | 70.75% | 5,402,139,505.20 | 70.66% | 7.40% |
AlcoholicDrinks
| Alcoholic Drinks | Direct labor | 1,390,804,791.53 | 16.96% | 1,240,006,256.85 | 16.22% | 12.16% |
| Alcoholic Drinks | Fuels and energy | 285,195,260.04 | 3.48% | 288,774,712.57 | 3.78% | -1.24% |
| Alcoholic Drinks | Manufacturing overhead | 283,638,123.84 | 3.46% | 283,996,826.92 | 3.71% | -0.13% |
Note: N/A
(6) Changes in the scope of the consolidated financial statements for the reporting period
?Applicable □N/A
Establishment of subsidiariesIn April 2023, the company holding subsidiary, Jiangsu Yanghe Investment Management Co., Ltd., jointly investedCNY150 million with Jiangsu Foris Agricultural Co., Ltd. to establish Jiangsu Yiguoxiang Biotechnology Co., Ltd, ofwhich Jiangsu Yanghe Investment Management Co., Ltd. contributed CNY112.5 million, accounting for 75% of itsregistered capital; Jiangsu Foris Agricultural Co., Ltd. contributed CNY37.5 million, accounting for 25% of itsregistered capital. Since April 2023, it has been included in the scope of consolidated financial statements.
(7) Major changes in the business, products or services in the reporting period
□Applicable ?N/A
(8) Main customers and suppliers
Sales to major customers of the Company
| Total sales from top five customers（CNY） | 1,852,357,097.73 |
| Total sales from top five customers as a percentage of the total sales | 5.59% |
| Total sales from related parties among top five customers as a percentage of the total sales | 0.00% |
Information on top five customers
| No. | Customer | Sales amount (CNY) | As a percentage of the total sales for the year |
| 1 | Customer A | 915,681,458.18 | 2.76% |
| 2 | Customer B | 358,988,195.66 | 1.08% |
| 3 | Customer C | 197,172,511.25 | 0.60% |
| 4 | Customer D | 194,165,406.52 | 0.59% |
| 5 | Customer E | 186,349,526.12 | 0.56% |
| Total | -- | 1,852,357,097.73 | 5.59% |
Other information on major customers
□Applicable ?N/A
Major suppliers of the Company
| Total purchase from top five suppliers（CNY） | 1,265,678,858.74 |
Total purchase from top five suppliers as apercentage of the total sales
| Total purchase from top five suppliers as a percentage of the total sales | 16.40% |
| Total purchase from related parties among top five suppliers as a percentage of the total purchase | 0.00% |
Information on top five suppliers
| No. | Supplier | Purchases (CNY) | As a percentage of the total purchase for the year |
| 1 | Supplier A | 369,932,160.03 | 4.79% |
| 2 | Supplier B | 279,932,095.26 | 3.63% |
| 3 | Supplier C | 211,822,086.24 | 2.74% |
| 4 | Supplier D | 202,101,338.44 | 2.62% |
| 5 | Supplier E | 201,891,178.77 | 2.62% |
| Total | -- | 1,265,678,858.74 | 16.40% |
Other information on major suppliers
□Applicable ?N/A
3. Expense
Unit：CNY
| 2023 | 2022 | YoY change | Reason for any significant change | |
| Selling and distribution expenses | 5,386,953,700.62 | 4,179,140,807.85 | 28.90% | |
| General and administrative expenses | 1,764,423,149.06 | 1,935,673,295.75 | -8.85% | |
| Finance expenses | -754,525,568.63 | -636,470,105.91 | -18.55% | |
| R&D expenses | 284,753,881.33 | 253,574,976.39 | 12.30% |
The company shall comply with the disclosure requirements of food and wine manufacturing businesses in SelfRegulatory Guidelines for Listed Companies in Shenzhen Stock Exchange No. 3 - Industry Information Disclosure
The composition of selling and distribution expenses
Unit：CNY
| Item | Current period amount | As a percentage of selling and distribution expenses | Previous period amount | As a percentage of selling and distribution expenses | YoY change |
Advertising andpromotionexpense
| Advertising and promotion expense | 3,460,573,010.51 | 64.24% | 2,414,204,544.39 | 57.77% | 43.34% |
| Employee salary | 1,278,306,975.33 | 23.73% | 1,177,066,920.45 | 28.17% | 8.60% |
Travel expense
| Travel expense | 473,214,108.76 | 8.78% | 433,273,104.21 | 10.37% | 9.22% |
| Labor expense | 29,938,594.80 | 0.56% | 47,961,453.63 | 1.15% | -37.58% |
E-commerceexpense
| E-commerce expense | 57,389,122.19 | 1.07% | 33,851,096.47 | 0.81% | 69.53% |
| Other expense | 87,531,889.03 | 1.62% | 72,783,688.70 | 1.74% | 20.26% |
Subtotal
| Subtotal | 5,386,953,700.62 | 100% | 4,179,140,807.85 | 100.00% | 28.90% |
Note:
In 2023, advertising and promotional expenses increased by 43.34% compared to the previous period. The mainreason for this is the intensified promotional efforts during the current period, leading to a corresponding increasein promotional expenses.In 2023, selling expenses for labor expenses decreased by 37.58% compared to the previous period. The mainreason for this is the reduction in labor employment during the current period, leading to a corresponding decreasein labor expenses.In 2023, e-commerce expenses increased by 69.53% compared to the previous year. This is mainly due to theincreased promotional efforts in e-commerce during the current period, resulting in a corresponding increase ine-commerce expenses.
Composition of advertising costs:
Unit：CNY
| Item | Current period amount | As a percentage of advertising expense |
| Nationwide advertising expense | 408,298,715.85 | 36.73% |
| Regional advertising expense | 703,235,967.49 | 63.27% |
| Total | 1,111,534,683.34 | 100.00% |
4. R&D input
?Applicable □N/A
| Name of main R & D projects | Purpose | Progress | Objectives to be achieved | Expected impact on future development |
| Research on the ecological environment and brewing microbiota in the Suqian production area of Chinese baijiu | Analyze the natural ecological conditions of the Suqian production area of Chinese baijiu, elucidate the environmental microbiota and brewing microbiota structure, and expound on the ecological brewing characteristics of mellow Chinese baijiu. | The milestone target will be completed in December 2023 and is expected to be completed in June 2024. | 1. Establish the natural ecological and microbial profile of the Suqian production area for Chinese baijiu; 2. Clarify the structural characteristics of environmental and brewing microbial ecology. | Provide support for the ecological advantages and key technological applications of mellow baijiu. |
| Research and application of the optimization of flavor substance architecture in wine based on improving post-consumption comfort orientation | Reveal the mechanism of post-consumption comfort in liquor, identify potential biomarkers for quantifying comfort, utilize established scientific analytical methods to | Successfully developed in December 2023. | 1. Elucidate the molecular mechanisms underlying post-consumption reactions to baijiu and establish detection methods for its biomarkers; 2. Combine both cellular and animal- | The research findings can provide a theoretical foundation for the design of liquor bodies with high comfort and for the improvement of production processes. |
determine keyfactors influencingpost-consumptioncomfort in wine,and establishdirections for winebody design.
| determine key factors influencing post-consumption comfort in wine, and establish directions for wine body design. | based methods for evaluating comfort to clarify the key influencing factors on post-consumption comfort of mellow baijiu; 3. Based on the research findings, obtain the optimal content ranges of eight major components in mellow baijiu to meet the dual requirements of taste and comfort. | |||
| Research on the complex trace components of mellow raw wine. | Clarify the characteristics of complex trace flavor components in mellow raw wine. | Successfully developed in December 2023. | 1. Establish a comprehensive two-dimensional gas chromatography combined with time-of-flight mass spectrometry method for qualitative and quantitative analysis of multiple flavor compounds in raw liquor; 2. Analyze the types of flavor compounds in mellow raw liquor and clarify the flavor component characteristics of mellow raw liquor. | Provide key flavor substance control points to enhance product quality from a production perspective. |
Information about R&D personnel
| 2023 | 2022 | YoY change | |
| Number of R&D personnel | 632 | 587 | 7.67% |
| R&D personnel as a percentage in total employees | 3.08% | 2.99% | 0.09% |
| Educational background of R & D personnel | |||
| Bachelor degree | 173 | 155 | 11.61% |
| Master degree | 60 | 59 | 1.69% |
| Age of R & D personnel | |||
| Under 30 | 58 | 51 | 13.73% |
| Between 30 and 40 | 350 | 343 | 2.04% |
Information about R&D input
| 2023 | 2022 | YoY change |
R&D input (CNY)
| R&D input (CNY) | 291,491,760.35 | 260,555,532.15 | 11.87% |
| R&D input as a percentage in operating revenues | 0.88% | 0.87% | 0.01% |
| Capitalized R&D input (CNY) | 6,737,879.02 | 6,980,555.76 | -3.48% |
| Capitalized R&D input percentage in total R&D input | 2.31% | 2.68% | -0.37% |
Reasons and effects of YoY change in the composition of R & D personnel.
□Applicable ?N/A
Reasons for any significant YoY change in the ratio of the R&D input to the operating revenues.
□Applicable ?N/A
Reasons for any significant YoY change in the ratio of the R&D input to the operating revenues.
□Applicable ?N/A
5. Cash flow
Unit：CNY
| Item | 2023 | 2022 | YoY change |
| Subtotal of cash inflows from operating activities | 35,756,560,836.18 | 31,441,857,596.11 | 13.72% |
| Subtotal of cash outflows from operating activities | 29,626,339,968.22 | 27,794,233,643.92 | 6.59% |
| Net cash flows from operating activities | 6,130,220,867.96 | 3,647,623,952.19 | 68.06% |
| Subtotal of cash inflows from investing activities | 11,413,472,196.95 | 17,687,441,703.96 | -35.47% |
| Subtotal of cash outflows from investing activities | 10,752,437,520.01 | 13,670,939,240.42 | -21.35% |
| Net cash flows from investing activities | 661,034,676.94 | 4,016,502,463.54 | -83.54% |
| Subtotal of cash inflows from financing activities | 57,000,000.00 | 42,800,000.00 | 33.18% |
| Subtotal of cash outflows from financing activities | 5,665,338,295.46 | 4,534,576,978.60 | 24.94% |
| Net cash flows from financing activities | -5,608,338,295.46 | -4,491,776,978.60 | -24.86% |
| Net increase in cash and cash equivalents | 1,182,007,012.68 | 3,172,012,990.35 | -62.74% |
Explanation of why the data above varied significantly.?Applicable □N/A
(1)The net cash flow generated from operating activities increased by 68.06% compared to the same period lastyear, mainly due to the growth in operating revenue and an increase in cash received from selling goods andproviding services.
(2)The net cash flow generated from investing activities decreased by 83.54% compared to the same period lastyear, primarily because this period's changes in structured bank deposits resulted in a decrease in cash receivedfrom investment returns greater than the decrease in cash paid for investments, leading to a reduction in the netcash flow generated from investing activities.
(3)The net increase in cash and cash equivalents decreased by 62.74% compared to the same period last year,mainly due to the decrease in net cash flow generated from investing activities and financing activities during thisperiod.
An explanation of the reasons for the significant difference between the net cash flow generated by the Company'soperating activities and the net profit for the year during the reporting period?Applicable □N/A
The significant difference between net cash flow and net profit from operating activities was mainly due to thereduction in contractual liabilities, resulting in a significant reduction in operating payables.V. Analysis of non-core business?Applicable □N/A
Unit：CNY
| Amount | As a percentage of total profits | Reasons | Sustainability | |
| Investment income | 255,520,777.61 | 1.93% | It is mainly the wealth management income and the investment income of trading financial assets during the holding period | No |
| Changes in fair value | -37,082,477.77 | -0.28% | Mainly due to changes in fair value of financial assets held for trading | No |
| Asset impairment | -2,828,018.24 | -0.02% | Provision for stock obsolescence | No |
| Non-operating income | 39,176,788.83 | 0.30% | compensation and liquidated damages income | No |
| Non-operating expenses | 63,913,298.25 | 0.48% | Mainly due to donation expenses and losses from retirement of fixed assets | No |
VI. Analysis of assets and liabilities
1. Significant changes of asset items
Unit：CNY
| As at the end of 2023 | As at the beginning of 2023 | Change In percentage | Explanation about any significant changes | |||
| Amount | As a percentage of total assets | Amount | As a percentage of total assets | |||
| Cash and cash equivalents | 25,812,787,646.86 | 36.99% | 24,375,449,432.33 | 35.86% | 1.13% | |
Accountsreceivable
| Accounts receivable | 3,528,778.28 | 0.01% | 45,142,892.78 | 0.07% | -0.06% | |
| Inventories | 18,954,235,402.25 | 27.16% | 17,729,258,966.54 | 26.08% | 1.08% | |
| Long-term equity investments | 1,229,838,793.04 | 1.76% | 32,979,630.21 | 0.05% | 1.71% | |
| Fixed assets | 5,305,626,964.48 | 7.60% | 5,794,773,069.53 | 8.53% | -0.93% | |
| Construction in progress | 1,457,315,739.56 | 2.09% | 757,145,492.90 | 1.11% | 0.98% | |
| Right-of-use asset | 82,464,551.16 | 0.12% | 34,115,602.27 | 0.05% | 0.07% | |
| Contract liabilities | 11,104,763,487.18 | 15.91% | 13,741,547,677.99 | 20.22% | -4.31% | |
| Lease Liabilities | 48,709,685.88 | 0.07% | 3,715,300.93 | 0.01% | 0.06% |
The proportion of overseas assets is relatively high.
□Applicable ?N/A
2. Assets and liabilities measured at fair value
?Applicable □ N/A
Unit：CNY
| Item | Opening balance | Changes in fair value recognized in profit or loss | Changes in the cumulative fair value recorded into equity | Provision for impairment | Amount of purchase | Amount of sale | Other changes | Closing balance |
| Financial Assets | ||||||||
| 1. Financial assets held for trading (excluding derivative financial assets) | 7,998,150,119.16 | 70,387,868.71 | 8,300,000,000.00 | 10,817,363,636.27 | 300,043,333.33 | 5,851,217,684.93 | ||
| 5. Other non-current financial assets | 6,148,634,160.78 | -107,470,346.48 | 142,788,034.84 | 351,644,910.98 | -299,514,656.90 | 5,532,792,281.26 | ||
| Total | 14,146,784,279.94 | -37,082,477.77 | 8,442,788,034.84 | 11,169,008,547.25 | 528,676.43 | 11,384,009,966.19 | ||
| Financial liabilities | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | ||
Other changesOther changes result from the reclassification of investments in debt instruments maturing within one year andfrom changes in exchange rates at the beginning and end of the period.
Whether measurement attribution of main assets changed significantly during this period
□Applicable ?N/A
3. Restricted asset rights as of the end of this reporting period
No
VII. Investment
1. Total investment
?Applicable □N/A
| Investment made in the reporting period (CNY) | Investment made in the prior year (CNY) | YoY change |
| 1,340,808,034.84 | 431,849,941.95 | 210.48% |
2. Significant equity investment made in the reporting period
□Applicable ?N/A
3. Significant non-equity investment ongoing in the reporting period
□Applicable ?N/A
4. Investment in financial assets
(1) Securities investment
?Applicable □ N/A
Unit：CNY
| Category of securities | Stock code | Abbr. of securities | Initial investment cost | Accounting measurement model | Opening balance | Changes in fair value recognized in profit or loss | Changes in the cumulative fair value recorded into equity | Amount of purchase | Amount of sale | Profit and loss during the reporting period | Closing balance | Accounting subject | Capital source |
| Other | Nil | Shanghai Yunfeng Xincheng Investment Center (L.P.) | 1,148,364,120.10 | Fair value | 1,176,435,004.02 | 28,070,883.92 | 1,148,364,120.10 | Other Non-current financial assets | Owned Fund | ||||
| Domestic and foreign stocks | 601696 | BOCI Securities LLC | 300,000,000.00 | Fair value | 834,473,679.76 | -21,315,789.36 | 2,368,421.04 | 813,157,890.40 | Other Non-current financial assets | Owned Fund | |||
| Other | Nil | Pan Mao (Shanghai) Investment Center (L.P.) | 239,079,277.82 | Fair value | 394,673,570.21 | 66,745,413.84 | 37,106,098.40 | 12,585,627.60 | 424,312,885.65 | Other Non-current financial assets | Owned Fund | ||
| Other | Nil | Lianchu Reserve Securities Co., Ltd. | 330,000,000.00 | Fair value | 330,000,000.00 | 330,000,000.00 | Other Non-current financial assets | Owned Fund | |||||
| Other | Nil | Nanjing Xingnahai Equity Investment Partnership (Limited Partnership) | 224,757,000.00 | Fair value | 195,000,000.00 | 37,889,298.52 | 30,000,000.00 | 243,000.00 | 262,646,298.52 | Other Non-current financial assets | Owned Fund | ||
| Other | Nil | Xiamen Yuanfeng Ronghao Equity Investment Partnership (Limited Partnership) | 193,050,000.00 | Fair value | 195,000,000.00 | 31,437,985.30 | 1,950,000.00 | 224,487,985.30 | Other Non-current financial assets | Owned Fund | |||
| Domestic and foreign stocks | VSPT | Vina San Pedro | 425,350,132.53 | Fair value | 239,696,497.43 | -18,637,218.05 | 16,136,323.97 | 221,059,279.38 | Other Non-current | Owned Fund |
financialassets
| financial assets | |||||||||||||
| Other | Nil | Nanjing Xingnahe Venture Capital Partnership (Limited Partnership) | 196,627,500.00 | Fair value | 205,027,500.00 | 8,400,000.00 | 196,627,500.00 | Other Non-current financial assets | Owned Fund | ||||
| Other | Nil | CICC Jiatai Phase II (Tianjin) Equity Investment Fund Partnership (L.P.) | 83,434,547.36 | Fair value | 200,540,521.74 | 16,160,467.66 | 35,661,760.03 | 181,039,229.37 | Other Non-current financial assets | Owned Fund | |||
| Other | Nil | Suzhou Danqing Phase II Innovative Pharmaceutical Industry Investment Partnership (L.P.) | 125,319,931.28 | Fair value | 240,107,883.10 | -22,330,777.80 | 48,390,886.89 | 169,386,218.41 | Other Non-current financial assets | Owned Fund | |||
| Other securities investments held at the end of this period | 1,903,644,962.93 | -- | 2,034,999,807.46 | -97,419,726.60 | 0.00 | 112,788,034.84 | 309,185,918.01 | 12,055,398.13 | 1,741,710,874.12 | -- | -- | ||
| Total | 5,169,627,472.02 | -- | 6,045,954,463.72 | -7,470,346.49 | 0.00 | 142,788,034.84 | 469,008,547.25 | 43,145,770.74 | 5,712,792,281.25 | -- | -- | ||
(2) Derivative investments
□Applicable ?N/A
No such cases in the reporting period.
5. Use of fund-raising
□Applicable ?N/A
No such cases in the reporting period.
VIII. Sale of major assets and equity Interests
1. Sale of major Assets
□Applicable ?N/A
No such cases in the reporting period
2. Sale of major equity Interests.
□Applicable ?N/A
IX. Analysis of major subsidiaries
?Applicable □N/AMain subsidiaries and joint companies with an over 10% influence on the Company’s net profit
Unit：CNY
| Company name | Company type | Business scope | Registered capital | Total assets | Net assets | Operating revenue | Operating profit | Net profit |
| Su Wine Trade Group Limited by Share Ltd. | Subsidiary | Wholesaling and retailing of prepackaged food | 334,400,000.00 | 25,483,714,205.27 | 6,601,644,703.87 | 28,560,606,603.28 | 7,313,364,021.46 | 5,632,238,706.79 |
| Jiangsu Shuanggou Distillery Stock Co., Ltd. | Subsidiary | Production and sales of Baijiu | 110,000,000.00 | 13,389,359,000.79 | 8,265,957,460.78 | 3,823,391,484.27 | 2,656,776,116.32 | 2,614,827,783.54 |
| Jiangsu Shuanggou Liquor Operation Co., Ltd. | Subsidiary | Wholesaling and retailing of prepackaged food | 5,000,000.00 | 6,039,550,762.97 | 1,064,998,054.56 | 6,059,469,253.21 | 1,402,481,745.38 | 1,051,906,426.35 |
Acquisition and disposal of subsidiaries during the reporting period?Applicable □ N/A
| Subsidiary name | How subsidiary was acquired or disposed during the reporting period | Impact on overall operation and results |
| Jiangsu Yiguoxiang Biotechnology Co., Ltd | Establishment | minor |
X. Structured entities controlled by the Company
□Applicable ?N/A
XI. Outlook for the future development of the Company
(1) Industry situation analysis
According to data from the National Bureau of Statistics and the China Alcoholic Drinks Association, in 2023, theoutput of liquor by enterprises above designated size nationwide was 4.492 million kiloliters, a year-on-yeardecrease of 2.8%; achieving operating revenue of CNY756.3 billion, a year-on-year increase of 9.7%; and achievinga total profit before tax of CNY232.8 billion, a year-on-year increase of 7.5%. The liquor market presented a cleartrend of "strong differentiation, weak recovery". The pattern of structural growth and stock competition turnedmore apparent, and leading brands and famous liquor companies accelerated market share gains. Liquorcompanies with strong "brand power, product power" will enjoy more consumption upgrade benefits.
(2) The company's development strategy and business plan
a) Development strategyDuring the "14th Five-Year Plan" period, the company adheres to the consumer-centered growth route, withdouble-famous baijiu brands as the main body and multi-brand as the pillar, focuses on quality, brands, cultureand innovation, and builds the "12345" strategic system, making Yanghe brand as the leading force and Shuanggoubrand as the surging power. The company aims to promote the continuous growth of the quantity and the steadyimprovement of the quality to a higher level, to achieve better, more balanced, higher quality and more efficientdevelopment, leading Yanghe to become a Chinese taste that Chinese are proud of and a Chinese business cardthat is remembered by the world.b) Business plan for 2024In 2024, The company will adhere to the development principle of "seeking progress while maintaining stability"and firmly follow the development direction of "dual famous liquors, multiple brands, and multiple categories".This will promote sustainable and high-quality development for the enterprise, striving for a year-on-year growthin operating revenue of 5% to 10%. The main areas of focus include:
Focusing on strengthening brand momentum. Centered around the goals of "value enhancement" and "word ofmouth improvement", the company aims to enrich the differentiated brand connotations and build acomprehensive brand construction system. The company will reinforce the shaping of high-end brands throughcraftsmanship, emphasizing value, scarcity, and experiential aspects. Leveraging cultural marketing IPs and majorevents, the company aims to establish benchmarks for high-end liquor brands. Exploring diverse brandcommunication methods, the company will continue to excel in promoting the "Ocean Blue, Sky Blue, Dream Blue"brand, ensuring precise outreach to key consumer groups. This will make the brand more vibrant and dynamic,further enhancing its momentum and competitiveness.
Focusing on boosting sales volume. Centered around the goal of "deepening roots in home markets and expandingnationwide", the company aims to concentrate on home markets high-potential markets outside of Jiangsu andkey regional markets. The company will drive channel penetration, fine-tune operations and squeeze out moremarket share. Leveraging digital marketing tools, the company will focus on strategic flagship products such as
Ocean Blue, Sky Blue, Dream Blue, and Top Rank Su Liquor, adopt more tailored sales strategies, and furtherupgrade the product mix. The company plans to actively advance the construction of terminal product promotionsystems, effectively enhance terminal operation efficiency, continuously strengthen manufacturer integration, andadhere to a healthy and sustainable development approach, including a strong focus on improving market inputefficiency and management standards.
Focusing on enhancing product quality. Centered around the goal of "genuine soft, softer, and softest", thecompany will emphasize the core positioning of basic research and applied basic research, and focus on keytechnological research topics and applications. This will strengthen the optimization of crucial brewing processesand further forge higher-quality base raw liquor. The company will deepen the new model of comprehensivequality management, adhere to the principle of "balance between production and utilization", and increasereserves of high-end resources. These will enable the company to create more personalized and distinctive qualitycharacteristics for Yanghe Mianrou, enriching the Mianrou system and enhancing the value expression of Mianrouproducts.
Focusing on improving management efficiency. Centered around the overall requirements of "strengtheningmanagement, improving efficiency, optimizing services, ensuring safety, and promoting development", we willestablish a work orientation of "striving for excellence in basic work, achieving results through value creation, andstriving for excellence in contribution". This involves solidifying the management foundation, acceleratingmanagement innovation, adhering to the principle of efficient investment to promote cost reduction and efficiencyimprovement, and consistently seeking benefits from management. Focusing on the top-level planning of "SmartYanghe", we will emphasize amplifying the effects of "intelligence transformation and digitalization". This includesdeeply constructing a smart supply chain system that is "autonomous, controllable, safe, efficient, agile, andflexible", supported by digital operations. Yanghe targets to accelerate the construction and promotion of smartenergy management platforms to achieve precise energy data collection and continuous reduction of energyconsumption. Additionally, we aim to further optimize the construction of green supply chain managementsystems, setting a new example for low-carbon development in the liquor industry. We plan to accelerate thetransformation of risk control towards proactive prevention and strive to achieve first-class safety standardizationfor the enterprise.
(3) Possible risks
a) Macro-economic uncertainty risks. Although the overall economic recovery in China is positive, there still existspressure on demand. The consumption of Baijiu is easily influenced by economic fluctuations, bringing significantuncertainty to the development of the Baijiu industry.b) The risk of intensifying market competition. The Baijiu industry is entering a phase of accelerated competition,with fierce competition among regions, enterprises, and brands. The Matthew effect in the Baijiu industry isbecoming more pronounced, placing higher demands on the market operation capabilities of liquor enterprises.c) Risks of market demand changes. There have been significant changes in the size and structure of the mainconsumer groups of Baijiu, as well as in their consumption preferences and philosophies. This poses newrequirements for enterprises in terms of product layout, brand marketing, and business concepts.
XII. Visits paid to the Company for research, communication, interview,etc. during the reporting period.
?Applicable □N/A
| Date of visit | Reception site | Way of visit | Type of visitor | Visitor | The main contents of the discussion and the information provided | Index to main inquiry information |
| 2023-05-18 | Panorama.com | Other | Other | Investors who participated in the online briefing on the company's 2022 annual results | The company's production, marketing, management, finance, strategy, etc | Yanghe Share Performance Presentation Roadshow Information on 22 May 2023 on www.cninfo.com.cn |
| 2023-05-31 | Headquarter | Field survey | Other | Shareholders and investors who participated in the on-site communication of the company's 2022 annual general meeting | The company's business planning, quality improvement, sales situation, product strategy, brand planning, etc | Yanghe Share Survery Activities Information on 02 Jun 2023 on www.cninfo.com.cn |
| 2023-08-30 | Telephone conference | Telephone communication | Institution | 200 investors from Guosen Securities, HSBC Qianhai Securities, Zheshang Securities, CITIC Securities,etc | The company’s market sales situation, product planning, financial issues, layout of key work for the second half of the year, etc | Yanghe Share Survery Activities Information on 01 Sep 2023 on www.cninfo.com.cn |
XIII Implementation status of the 'Quality Improvement and DualEnhancement' action plan
Whether the company disclosed the 'Quality Improvement and Dual Enhancement' action plan?Yes □No
To embody the development concept of 'investors first' for listed companies, continuously enhance the company'svalue creation capability and shareholder return capability, the company has formulated and disclosed the 'Quality
Improvement and Dual Enhancement' action plan. For specific details, please refer to the announcement titled'Announcement on the 'Quality Improvement and Dual Enhancement' Action Plan' disclosed by the company onMarch 7, 2024, on the Juchao Information Network (www.cninfo.com.cn) (Announcement No.: 2024-002).
The company will continue to strengthen its core business, always focus on consumer demand, grasp industrytrends, and promote the stable and far-reaching development path of high-quality enterprises. We willcontinuously consolidate the foundation of standardized governance, including optimizing the board of directors'structure, improving internal control management systems, and expanding channels for institutional investors toparticipate in corporate governance, to continuously enhance governance capabilities. We will strengthen investorrelations management, highlight the importance and relevance of information disclosure, improve communicationefficiency with investors through multiple channels, and deepen investors' understanding of the company's value.We will continuously strengthen investor returns and dynamically balance performance growth with shareholderreturns.
To further share the fruits of corporate development with investors, the company's proposed annual profitdistribution plan for 2023 is as follows: Based on the existing total share capital of 1,506,445,074 shares, thecompany plans to distribute a cash dividend of CNY46.60 per 10 shares to all shareholders from undistributedprofits, totaling CNY7,020,034,044.84 (including tax), without bonus shares or bonus shares. The profit distributionplan complies with the cash dividend policy stipulated in the Company's Articles of Association.
Section IV CORPORATE GOVERNANCE
I. Basic Situation of Corporate Governance
The company has strictly been following the "Company Law", "Securities Law", "Governance Guidelines for ListedCompanies", "Shenzhen Stock Exchange Listing Rules" and other laws, administrative regulations, departmentalrules and normative documents. Combining the actual development of the company, the company constantly hasimproved its modern enterprise system and corporate governance structure. During the reporting period, theoverall operation of the company was standardized and complied line with the governance requirements of listedcompanies.
1. Shareholders and shareholders’ meetings
The responsibilities of the company's general meeting of shareholders were clear, with accurate rules of procedureand practical implementation. The calling, convening and deliberation procedures of the company's generalmeeting of shareholders complied with the relevant provisions of the Company Law, the Articles of Associationand the Rules of Procedure for the General Meeting of Shareholders of the Company. All shareholders were treatedequally, especially to ensure that small and medium shareholders enjoy equal status and ensure that small andmedium shareholders can sufficiently exercise its own rights. The board of directors of the company earnestly hasimplemented the resolutions of the general meeting of shareholders.
2. Directors and Board of directors
The responsibilities of the board of directors of the company were clear, and all directors could perform their dutiesconscientiously. The board of directors of the company elected directors in strict accordance with the selectionand appointment procedures stipulated in the Company Law and the Articles of Association. The board of directorsof the company currently consisted of 11 directors, 4 of which were independent directors. The composition ofthe board of directors conformed to the requirements of laws and regulations. The board of directors of thecompany strictly complied with the "Company Law", "Articles of Association" and other relevant regulations toregulate the deliberation and operation of the board of directors. All directors of the company could attend theboard of directors in accordance with the "Procedure Rules of the Board of Directors", "Working System forIndependent Directors" and other regulations, diligently and conscientiously reviewed each case, making scientificand reasonable decisions on major issues of the company, and earnestly safeguarding the interests of the companyand the legitimate rights and interests of all shareholders. The company's board of directors consisted of fourprofessional committees, namely the strategy committee, the nomination committee, the audit committee andthe remuneration and appraisal committee. Each committee had a clear division of labor, powers andresponsibilities, and gived full play to its professional functions, providing scientific and professional opinion forthe decision-making of the board of directors.
3. Supervisors and Board of Supervisors
The company's board of supervisors has clear responsibilities, and all supervisors can conscientiously andresponsibly perform their duties. The board of Supervisors of the company election was in strict accordance withthe recruitment procedures stipulated in the Company Law and the Articles of Association and etc. The board ofsupervisors of the company was composed of 5 supervisors, among which 2 are employees' representatives. Thecomposition of the members of the board of supervisors meeted the requirements of laws and regulations. The
board of supervisors operated in strict accordance with the company law, the company's articles and otherregulations, the supervisors could attend the board requested by the rules of procedure of the board of supervisors,earnestly performed their duties, effectively supervising and expressing opinions on the major issues of thecompany, financial status, and how the directors and President perform. Safeguarding the legitimate rights andinterests of the company and shareholders was also the duty of the board of supervisors.
4. Performance appraisal and incentive and restraint mechanism
The appointment of the company's directors, supervisors and senior management personnel was open andtransparent, in line with relevant laws and regulations, and a fair and transparent management performanceevaluation standard and incentive and restraint mechanism have been established. During the reporting period,the company conducted a performance appraisal on the goals set by the executive suites in accordance with theannual business plan, and all the executive suites have conscientiously performed their duties.
5. Performance appraisal and incentive and restraint mechanism
The controlling shareholder of the company exercised the rights of the investor and took the obligations in strictaccordance with the requirements of the Company Law. The company and the controlling shareholder separatedpersonnel, assets and finances, with independent organization and business, accounting independently and takingresponsibilities and risks independently. During the reporting period, the controlling shareholder did not directlyor indirectly interfere with the company's decision-making and business activities beyond the company's generalmeeting of shareholders, and there was no situation where the controlling shareholder harmed the legitimaterights and interests of other shareholders of the company. There was no major related transaction between thecompany and its controlling shareholder, there was no phenomenon that the controlling shareholder occupies thefunds of the company, and the company did not provide guarantees for the controlling shareholder and itssubsidiaries.
6. Investor relations activities
The company payed great attention to the management of investor relations and actively safeguarded thelegitimate rights and interest of the company's shareholders. In addition to performing information disclosureobligations diligently and honestly, the chairman, president and secretary of the board of directors maintainedpositive interactions with investors by receiving investor surveys, participating in online performance briefings andbrokerage strategy meetings, etc. The securities department acting as a specialized relationship managementagency, strengthened communication with investors through telephone, email, interactive and other methods,fully guaranteeing the investors' right to know, and safeguarding their legitimate rights and interests.
7. Stakeholders, environmental protection, social responsibility
The company fulfilled its social responsibility obligations in accordance with the requirements of socialresponsibility, fully respected and safeguardd the legitimate rights and interests of relevant stakeholders, realizedthe coordination and balance of the interests of the society, government, shareholders, the company, employeesand other parties, and jointly promoted the harmonious and stable development of the company. The companyadvocated the governance concept of ‘green brewing, ecological enterprise’, integrates ecological andenvironmental protection requirements into the company's development strategy and corporate governanceprocess. While maintaining the sustainable development, the company actively participated in social welfareundertakings and practices social responsibility.
8. Information disclosure and transparency
In strict accordance with the requirements of the regulatory authorities, the company earnestly implementedthe "Information Disclosure Management System", "Investor Relations Management System" and others,strengthened the management of information disclosure affairs, and earnestly fulfilled its information disclosureobligations in accordance with the law, and discloses truthfully, accurately, completely, timely and fairly.information, ensuring that all shareholders have equal access to information.
9 Continue to improve the internal management system
The company continued to improve the internal control system, further strengthen corporate governance, sothat the level of corporate governance has been further improved. The audit committee of the companycomprehensively reviewed and supervised the effectiveness of the company's financial reporting, internal controland corporate governance. As an internal audit unit, the company's audit center conductd routine and continuoussupervision and inspection for the improvement and implementation of the internal control system, timelydiscoverd and improved the deficiencies of internal control, ensured the effectiveness of internal control, andimproved the company's operation and management level and risk prevention ability.
Is the actual situation of corporate governance significantly different from laws, administrative regulations andregulations on listed company governance issued by the CSRC？
□ Yes √ No
The actual situation of corporate governance is not significantly different from laws, administrative regulationsand regulations on listed company governance issued by the CSRC.
II Company’s Independence in Assets, Personnel, Finances, Organizations and Businesses fromControlling Shareholders and Actual Controller
The company has a complete independent production and management system, and independent decision-making management ability, covering business, personnel, assets, organizations and finance five aspects.
1. For business aspect
The company's business structure is independent and complete, with the ability to independently face the marketand operate independently. There is no horizontal competition with the controlling shareholder, and thecontrolling shareholder does not directly or indirectly interfere with the company's operations.
2. For personnel aspect
The company has established an independent personnel and wage management system, and signed a "laborcontract" with employees. The chairman, president, vice president, chief financial officer and secretary of theboard of directors of the company receive remuneration from the company, but do not receive remuneration fromthe controlling shareholder. The directors, supervisors and senior management of the company do not holdpositions prohibited by laws and regulations in other companies with the same or similar business as the company.
3. For assets aspect
The company has a clear property relationship with the controlling shareholder, has independent land use rightsand housing property rights, and independently registers, builds accounts, accounts and manages company assets.
The controlling shareholder has not occupied or dominated the company's assets or interfered with the company'soperation and management of the assets.
4. For organization aspect
The company has a mature organizational system. The general meeting of shareholders, the board of directors,the board of supervisors, the management and each functional department operate independently, and acorresponding internal management and control system has been formulated, so that the division of labor amongeach department is clear, and each department performs its own duties. The cooperation with each other formsan organic whole, which ensures the legal operation of the company, and there is no subordination relationshipwith the controlling shareholder's functional department.
5. For finance aspect
The company has a complete and independent financial institution, equipped with sufficient full-time financialaccounting personnel, established an independent accounting system and financial management system, andindependently opened bank accounts, paid taxes, and made financial decisions independently. The controllingshareholder does not intervene in the financial management of the company.
III. Competition in the same industry
□Applicable ?N/A
IV. Annual general meeting and extraordinary general meeting held during the reportingperiod
1. Shareholders' general meeting during the reporting period
| Which Session | Type | Investor Participation Ratio | Open Date | Disclose Date | Meeting Outcome |
| 2022Annual General Meeting of Shareholders | Annual General Meeting of Shareholders | 76.67% | May 31, 2023 | June 1, 2023 | For details, please refer to the "Announcement on Resolutions of the 2022 Annual General Meeting of Shareholders" disclosed by the company in the statutory information disclosure media (Announcement No.: 2023-013) |
| 2023 1st Extraordinary General Meeting of Shareholders | Extraordinary general meeting of Shareholders | 66.23% | September 15,2023 | September 16,2023 | For details, please refer to the "Announcement on Resolutions of the 2023 1st Extraordinary |
General Meetingof Shareholders "disclosed by thecompany in thestatutoryinformationdisclosure media(AnnouncementNo.: 2023-023)
General Meetingof Shareholders "disclosed by thecompany in thestatutoryinformationdisclosure media(AnnouncementNo.: 2023-023)
2. Preference shareholders with restored voting rights request to convene an extraordinary general meeting
□Applicable ?N/A
V. Directors, Supervisors and Senior Managers
1. Basic situation
Name
| Name | Gender | Age | Position | Service status | Term Start Date | Term End Date | Number of shares held at the beginning of the period (shares) | Number of Shares increased in current period (Shares) | Number of Shares decreased in current period (Shares) | Other Increase or decrease changes (shares) | Number of shares held at the end of the period (shares) | Reasons |
| Zhang Liandong | Male | 56 | Chairman | Incumbent | February 23, 2021 | April 02, 2027 | 0 | 0 | 0 | 0 | 0 | |
| Zhong Yu | Male | 60 | Vice Chairman, President | Incumbent | February 10, 2015 | April 02, 2027 | 0 | 0 | 0 | 0 | 0 | |
| Yang Weiguo | Male | 50 | Director | Incumbent | May 30, 2022 | April 02, 2027 | 0 | 0 | 0 | 0 | 0 | |
| Wang Kai | Male | 47 | Director | Incumbent | May 19, 2017 | April 02, 2027 | 2,400 | 0 | 0 | 0 | 2,400 | |
| Chen Jun | Male | 48 | Director, Vice President | Incumbent | April 02, 2024 | April 02, 2027 | 0 | 0 | 0 | 0 | 0 |
ZhengBujun
| Zheng Bujun | Male | 57 | Director | Incumbent | February 10,2015 | April 02, 2027 | 45,000 | 0 | 0 | 0 | 45,000 | |
| Dai Jianbing | Male | 53 | Director | Incumbent | April 02, 2024 | April 02, 2027 | 0 | 0 | 0 | 0 | 0 | |
| Nie Yao | Male | 47 | Independent Director | Incumbent | February 23, 2021 | April 02, 2027 | 0 | 0 | 0 | 0 | 0 | |
| Lu Guoping | Male | 64 | Independent Director | Incumbent | February 23, 2021 | April 02, 2027 | 0 | 0 | 0 | 0 | 0 | |
| Mao Lingxiao | Male | 60 | Independent Director | Incumbent | February 23, 2021 | April 02, 2027 | 0 | 0 | 0 | 0 | 0 | |
| Hong Jinming | Male | 43 | Independent Director | Incumbent | April 02, 2024 | April 02, 2027 | 0 | 0 | 0 | 0 | 0 | |
| Lin Qing | Female | 49 | Independent Director | Incumbent | April 02, 2024 | April 02, 2027 | 0 | 0 | 0 | 0 | 0 | |
| Xu Youheng | Male | 47 | Supervisor | Incumbent | May 23, 2019 | April 02, 2027 | 0 | 0 | 0 | 0 | 0 |
MaWenxiang
| Ma Wenxiang | Male | 47 | Supervisor | Incumbent | April 02, 2024 | April 02, 2027 | 0 | 0 | 0 | 0 | 0 | |
| Jin Yaguang | Male | 48 | Supervisor | Incumbent | April 02, 2024 | April 02, 2027 | 0 | 0 | 0 | 0 | 0 | |
| Huang Jinhua | Male | 54 | Supervisor | Incumbent | April 02, 2024 | April 02, 2027 | 0 | 0 | 0 | 0 | 0 | |
| Yin Qiuming | Male | 52 | Vice President, CFO | Incumbent | July 13, 2020 | April 02, 2027 | 0 | 0 | 0 | 0 | 0 | |
| Li Yuling | Male | 54 | Vice President | Incumbent | July 13, 2020 | April 02, 2027 | 0 | 0 | 0 | 0 | 0 | |
| Fan Xiaolu | Male | 40 | Vice President | Incumbent | November 10,2023 | April 02, 2027 | 0 | 0 | 0 | 0 | 0 | |
| Chen Taisong | Male | 56 | Vice President | Incumbent | November 10,2023 | April 02, 2027 | 0 | 0 | 0 | 0 | 0 | |
| Zhang Xueqian | Male | 55 | Vice President | Incumbent | November 10,2023 | April 02, 2027 | 0 | 0 | 0 | 0 | 0 |
SongZhimin
| Song Zhimin | Female | 49 | Vice President | Incumbent | November 10,2023 | April 02, 2027 | 0 | 0 | 0 | 0 | 0 | |
| Lu Hongzhen | Female | 45 | Board Secretary | Incumbent | February 23, 2021 | April 02, 2027 | 0 | 0 | 0 | 0 | 0 | |
| Liu Huashuang | Male | 54 | Director, Executive President | Leaving office | January 29, 2018 | February 24, 2023 | 0 | 0 | 0 | 0 | 0 | |
| Zhao Shuming | Male | 72 | Independent Director | Leaving office | February 23, 2021 | April 02, 2024 | 0 | 0 | 0 | 0 | 0 | |
| Chen Taiqing | Male | 59 | Chairman of the Supervisory Board | Leaving office | July 13, 2020 | April 02, 2024 | 0 | 0 | 0 | 0 | 0 | |
| Xu Lili | Female | 45 | Supervisor | Leaving office | February 23, 2021 | April 02, 2024 | 0 | 0 | 0 | 0 | 0 | |
| Chen Fuya | Male | 59 | Supervisor | Leaving office | July 6, 2020 | April 02, 2024 | 0 | 0 | 0 | 0 | 0 | |
| Total | -- | -- | -- | -- | -- | -- | 47,400 | 0 | 0 | 0 | 47,400 | -- |
During the reporting period, is there any resignation of directors and supervisors and dismissal of senior managers during their term of office？
?Applicable □N/ADuring the reporting period, Mr. Liu Huashuang resigned from the positions of director and Executive Presidentdue to personal reasons; Mr. Chen Taisong resigned from the position of supervisor due to job adjustments; Ms.Lin Qing and Mr. Zheng Bujun resigned from the positions of vice president due to job adjustments.Changes in directors, supervisors and senior management of the company?Applicable □N/A
| Name | Position | Type | Date | Reasons |
| Liu Huashuang | Director, Executive President | Leaving office | February 24, 2023 | Voluntary resignation |
| Chen Taisong | Supervisor | Appointments and resignations | November 06, 2023 | Job adjustment, appointed as Vice President on November 10, 2023 |
| Lin Qing | Vice President | Appointments and resignations | November 09, 2023 | Job adjustment, elected as Chairman of the Supervisory Board in the election on April 2, 2024 |
| Zheng Bujun | Vice President | Appointments and resignations | November 09, 2023 | Job adjustment, elected as a director in the election during the handover on April 2, 2024 |
| Fan Xiaolu | Vice President | Appointment | November 10, 2023 | Appointment |
| Chen Taisong | Vice President | Appointment | November 10, 2023 | Appointment |
| Zhang Xueqian | Vice President | Appointment | November 10, 2023 | Appointment |
| Song Zhimin | Vice President | Appointment | November 10, 2023 | Appointment |
2. Situation of Employers
The professional background, main work experience and main responsibilities of the current directors, supervisorsand senior management of the company
(1) Directors
Mr. Zhang Liandong, born in September 1968, master degree from the Party School, deputy to the NationalPeople's Congress. He successively served as director of the Management Committee of Sucheng District EconomicDevelopment Zone, Deputy Director of the Sucheng District, member of the Standing Committee of the SuchengDistrict Committee, secretary of the Party Working Committee of Sucheng Economic Development Zone, deputysecretary-general of the Suqian Municipal Government, director of the Suqian City Administration Bureau, deputysecretary-general of Suqian Municipal Government (section level), secretary of the Party and Working Committeeof Suqian City's Yanghe New District, chairman of Jiangsu Shuanggou Wine Co., Ltd., chairman of Sujiu GroupTrading Co., Ltd. He is currently the company’s the Party secretary and chairman of the board of directors.
Mr. Zhong Yu, born in May 1964, master degree, Chinese Brewmaster, a master of Chinese liquor, a senior engineer,and a representative of the 13
th
and the 14
th
Jiangsu Provincial People's Congress. He successively served as thedirector of the technical department, the director of the environmental protection department, director of the
Production Technology Division and minister of the Production Technology Department, and the director of thetechnology center of Jiangsu Shuanggou Winery; the deputy chief engineer, assistant to the general manager,brewing director, assistant to the president, vice president, general manager of Siyang Co., Ltd. ; general managerof Yanghe Co., Ltd. He is currently the deputy secretary of the party committee, vice chairman and president ofthe company.
Mr. Yang Weiguo, born in February 1974, bachelor degree and master degree. He has served as StandingCommittee member of Siyang County Party Committee, Minister of Publicity Department, member of PartyLeading Group of County government, deputy county head, deputy secretary-general of Suqian Municipal PartyCommittee, deputy director of Suqian Reform Office, Party Secretary and President of Suqian Daily. He is currentlysecretary of the party committee and chairman of Suqian Industrial Development Group Co., LTD., chairman ofJiangsu Yanghe Group Co., LTD., and chairman of Jiangsu Shuanggou Group Co., LTD.
Mr. Wang Kai, born in August 1977, bachelor degree, intermediate economist. He has served as the manager ofthe brand department of the Marketing Center of Shanghai Tobacco Group Co., Ltd., and the assistant to thegeneral manager of Shanghai Haiyan Logistics Development Co., Ltd. He is currently the director of the companyand the deputy general manager of Shanghai Haiyan Logistics Development Co., Ltd.
Mr. Chen Jun, born in January 1976, is a graduate of the Party School with a master's degree and holds the titleof Senior Economist. He has served in various positions, including Deputy Director of the Accounting andAccounting Center of Suqian Finance Bureau, Vice President (Deputy Department-level) of the ChineseAccounting Correspondence College Suqian Branch, Director and Deputy Director of the Financial Work Office ofSuqian Municipal People's Government, Member of the Party Working Committee and Deputy Director (onsecondment) of the Management Committee of Suqian Economic and Technological Development Zone, DeputySecretary of the Party Working Committee, Deputy Secretary of the Party Committee, and Deputy GeneralManager of Suqian Industrial Development Group Co., Ltd. He is also a director of Jiangsu Yanghe Group Co., Ltd.Currently, he serves as the Deputy Secretary of the Party Committee, Director, and Vice President of thecompany, as well as the Chairman of Sujiu Group Trading Co., Ltd.
Mr. Zheng Bujun, born in January 1967, holds an MBA degree and the title of Senior Engineer. He has served asthe General Manager of Jiangsu Yanghe Group Co., Ltd., General Manager of Suqian State-owned AssetsInvestment Management Co., Ltd., member of the Party Committee, director, and Deputy General Manager ofJiangsu Shuanggou Liquor Co., Ltd., as well as the Director of the company. He has also held positions within thecompany including Director of Procurement and Logistics, President's Assistant, member of the Party Committee,and Vice President. Currently, he is a member of the Party Committee and Director of the company, as well asthe Party Secretary and General Manager of the company's Siyang Branch.
Mr. Dai Jianbing, born in September 1971, holds an associate degree. He has served in various positions,including Deputy Director of the Office of Jiangsu Yanghe Group Co., Ltd., Manager of the Suqian, Zhenjiang, andSuzhou Branches of Yanghe Sales Company, Deputy General Manager and General Manager of the East ChinaMarketing Center of Sujiu Group Trading Co., Ltd., Sales Director and General Manager of Jiangxi Region andSouthern Jiangsu Region, as well as Vice General Manager and General Manager of Shandong Region. Currently,he serves as a director of the company and Vice General Manager and General Manager of the Huan Su Regionof Sujiu Group Trading Co., Ltd.
Mr. Nie Yao, born in June 1977. He has served as a visiting scholar at the Advanced Biotechnology and Medical
Center of Rutgers University (State University of New Jersey), an associate professor at the School ofBioengineering, Jiangnan University, and an independent director of Jinhui Liquor Co., Ltd. He is currently anindependent director of the company, subdean and professor of the School of Bioengineering, Jiangnan University.
Mr. Lu Guoping, born in March 1960, bachelor degree, professor of accounting, CPA outstanding educator inJiangsu Province. He has successively served as lecturer, associate professor, director of teaching and researchsection of the School of Engineering of Nanjing Agricultural University, and independent director of Langbo SealingTechnology Co., Ltd., Huaxin New Materials Co., Ltd. Currently he is the independent director of Yanghe Brewery,the deputy dean, professor and master tutor of the National Wealth Auditing College of Nanjing Audit University,the person in charge of the national excellent online open course "Advanced Financial Accounting" and thenational first-class Head of the undergraduate course "Advanced Financial Accounting", director of Langbo SealingTechnology Co., Ltd, independent director of Baosheng Technology Innovation Co. , Ltd. and Suzhou LianxunInstrument Co. , Ltd.
Mr. Mao Lingxiao, born in January 1964, bachelor’s degree, first-class lawyer (Senior professional title). He hasserved as a staff member of the Jiangsu Provincial Department of Justice, a full-time lawyer of Jiangsu InternationalEconomic and Trade Law Firm, a senior partner and director of Jiangsu Lingxiao Law Firm, a senior partner ofJiangsu Jinding Law Firm, and a senior partner and director of Jiangsu Tianzhe Law Firm. Full-time lawyer, seniorpartner and executive director of Beijing Zhongyin (Nanjing) Law Firm. He is currently an independent director ofthe company, a full-time lawyer, senior partner and chairman of the partner meeting of Beijing Haotian (Nanjing)Law Firm.
Mr. Hong Jinming, born in October 1981, holds a Ph.D. and is an associate researcher and doctoral supervisor. Hehas served as Credit Manager at the Beijing Development Zone Branch of Agricultural Bank of China Limited,Product Manager at the Planning and Accounting Department of the Beijing Branch, and Senior Specialist (ChiefClerk) at the Head Office of Agricultural Bank of China. Currently, he serves as an independent director of thecompany, Deputy Director of the Financial and Accounting Research Center at the Chinese Academy of FiscalSciences, and an independent director of companies such as Aibru and Wuzhou Specialty Paper Co., Ltd.
(2) Supervisors
Ms. Lin Qing, born in May 1975, master's degree, senior accountant and certified public accountant. Shesuccessively served as deputy director of the Enterprise Division of Suqian Finance Bureau of Jiangsu Province,assistant to the director of the Municipal Price Bureau, member and deputy director of the Suqian Party Committeeof the Municipal Development and Reform Commission, member of the Standing Committee of the PartyCommittee of the company, vice president of the company, and head of the internal audit of the company. She iscurrently a member of the Standing Committee of the company's party committee, vice chairman of Sujiu GroupTrading Co., Ltd.
Mr. Xu Youheng, born in March 1977, master’s degree, senior political engineer and member of Communist Partyof China. He successively served as the director of the organization department, the director of the cadresupervision department, the director of the cadre education department, and the director of the office of theOrganization Department of the Suqian Municipal Party Committee, the deputy director of the office of the partyconstruction leading group of the Suqian Municipal Party Committee, and the deputy secretary and deputy generalmanager of the party committee of Suqian Industrial Development Group Co., Ltd. He is currently a supervisor ofthe company, deputy secretary of the party committee and chairman of the supervisory committee of Suqian
Industry Development Group Co., Ltd.,director of Jiangsu Yanghe Group Co. , Ltd.
Mr. Ma Wenxiang, born in September 1977, holds a bachelor's degree and is a junior economist. He has servedas an investment manager at Shanghai Jiangju Investment Company, officer at the Asset Department and DeputyDirector of the General Office at Shanghai Ruitai Investment Development Company, Director of the PartyCommittee Office and Director of the Party Work Department at Shanghai Sugar, Tobacco (Group) Co., Ltd.,committee member and secretary of the committee at Shanghai Jieqiang Tobacco, Sugar, and Liquor (Group) Co.,Ltd., as well as Deputy General Manager. Currently, he serves as a supervisor of the company, Secretary of theParty Committee and General Manager of Shanghai Jieqiang Tobacco, Sugar, and Liquor (Group) Co., Ltd., and adirector of Shanghai Haiyan Logistics Development Co., Ltd.
Mr. Jin Yaguang, born in July 1976, holds a bachelor's degree. He has served as the Director of the Office andmember of the Party Committee at Jiangsu Shuanggou Liquor Co., Ltd., Director of the Office, Director of theParty Committee Office, and Minister of the Organization Department at the company, Administrative Directorand Director of the Office at the Yanghe Branch of the company, General Manager of the Procurement andLogistics Center, and General Manager of the Supply Chain Management Center. Currently, he serves as asupervisor of the company and General Manager of the North China Region and Beijing Branch of Sujiu GroupTrading Co., Ltd.
Mr. Huang Jinhua, born in September 1970, holds a secondary school education. He has served as the head ofthe General Dispatching Office, Director of the Equipment Department, and Deputy Director of the ThermalPower Plant at Jiangsu Yanghe Group Co., Ltd., Manager of the Xuzhou Branch and Yancheng Branch at YangheSales Company, General Manager of the Yanlian Huaitong Region, Tianjin-Hebei Region, Hebei Region, SutongRegion, and Sales Director at Sujiu Group Trading Co., Ltd., Deputy General Manager and General Manager ofShuanggou Shandong Sales Co., Ltd., as well as General Manager of the Xuzhou Division at Jiangsu ShuanggouLiquor Sales Co., Ltd. Currently, he serves as a supervisor of the company and Deputy General Manager andGeneral Manager of the Xuzhou Division at Jiangsu Shuanggou Liquor Sales Co., Ltd.
(3) Executives
Mr. Zhong Yu, President of the company, the same resume as above.
Mr. Chen Jun, President of the company, the same resume as above.
Mr. Yin Qiuming, born in July 1972, college's degree, auditor. He successively served as Assistant to the Directorof Audit, Director of Audit, Deputy Secretary of the Disciplinary Committee of Jiangsu Yanghe Group Co., Ltd.,Director of the Company's Management Department, Deputy General Manager of Jiangsu Yanghe Sales Co., Ltd.,Deputy General Manager, Party Committee Member, Financial Officer of Jiangsu Yanghe Wine Co., Ltd. Minister,company supervisor, deputy secretary of the Disciplinary Committee, deputy general manager of the company'sYanghe branch, finished product scheduling director, financial director, financial director, and general manager ofthe financial center. He is currently the vice president and CFO of the company.
Mr. Li Yuling, born in December 1970, master's degree in MBA from Nanjing University, intermediate economist.He successively served as the assistant to the director of the supply department, the assistant to the director ofthe finance department, the deputy chief dispatcher of the general dispatching room, the director of the supplydepartment, the director of the company's supply department, the assistant to the general manager of Yanghe
Branch, the director of procurement and logistics, and the director of supply chain management in Jiangsu YangheGroup Co., Ltd. , Deputy Director and Office Director of the Procurement and Supply Logistics Center. He is currentlythe vice president of the company, secretary of the party committee and general manager of Jiangsu ShuanggouWine Co., Ltd.
Mr. Fan Xiaolu, born in November 1984, holds a master's degree. He has served as a director, Deputy GeneralManager, and member of the Party Committee at Suqian Industrial Development Group Co., Ltd., a director atJiangsu Yanghe Group Co., Ltd., Chairman and General Manager at Jiangsu Huaihai Finance Leasing Co., Ltd., adirector at Suqian Financial Asset Management Co., Ltd., an executive director and General Manager at SuqianScience and Technology Venture Investment Co., Ltd., General Manager at Jiangsu Shuanggou Liquor Sales Co., Ltd.,and Assistant to the President of the company. Currently, he serves as Vice President of the company, Vice GeneralManager of Sujiu Group Trading Co., Ltd., General Manager of Jiangsu Shuanggou Liquor Co., Ltd., ExecutiveDirector and Party Branch Secretary of Jiangsu Shuanggou Liquor Sales Co., Ltd.
Mr. Chen Taisong, born in January 1968, master’s degree. He has successively served as a member and secretaryof the Legislative Bureau of Siyang County Government, Secretary of the Office of the Siyang County GovernmentOffice, Deputy Section Chief, Section Chief, Director Assistant, Deputy Director, Siyang County Chief of ChuanchengTown, Secretary of the Party Committee, Jiangsu Sujiu Industrial Co., Ltd. Deputy Secretary, Secretary of theDiscipline Inspection Commission, Chairman of the Supervisory Board, Deputy Secretary of the DisciplineInspection Commission, Standing Committee of the Party Committee and Organization Minister of the company,Deputy Secretary of the Party Committee of Sujiu Group Trading Co., Ltd., Secretary of the Discipline InspectionCommission, and Chairman of the Supervisory Board. He is currently a member of the Standing Committee of theParty Committee, Supervisor, Chairman of Guijiu Co., Ltd.
Mr. Zhang Xueqian, born in November 1969, holds a bachelor's degree. He has served as the Deputy Director ofthe Sales Department at Jiangsu Yanghe Group Co., Ltd., Deputy Director of the Product Department at JiangsuYanghe Liquor Co., Ltd., Marketing Department Director, Product Department Manager, Manager of StrategicResearch Department, and Vice President of the company at Jiangsu Yanghe Sales Co., Ltd. He also held positionssuch as Party Committee Member and Vice President at Sujiu Group Trading Co., Ltd., General Manager ofJiangsu Shuanggou Liquor Sales Co., Ltd., and Assistant to the President. Currently, he serves as Vice Presidentand Chief Product Officer of the company, Vice President of Sujiu Group Trading Co., Ltd., and Chairman of TibetEarth Third Pole Liquor Co., Ltd.
Ms. Song Zhimin, born in October 1975, holds a master's degree. She has worked as a Regional Manager in theSales Department, Deputy Office Director, and Marketing Department Director at Jiangsu Yanghe Group Co., Ltd.She also served as the Head of the Management Department, Assistant General Manager at Jiangsu YangheLiquor Co., Ltd., Deputy General Manager of the Yanghe Branch of the company, Party Committee Member,Assistant to the President, Director of Management, Director of Strategic Research, and General Manager ofManagement Center and Strategic Research Center. Currently, she is Vice President and Director of Managementof the company and General Manager of the Yanghe Branch.
Ms. Lu Hongzhen, born in October 1978, holds a bachelor's degree, is a member of the China Democratic League,and has obtained the Board Secretary Qualification Certificate issued by the Shenzhen Stock Exchange. She hasserved as the Secretary of the Office, Deputy Minister of the Comprehensive Department, Deputy Director of theOffice, Director of the Securities Department, Securities Affairs Representative, and General Manager of the
Human Resources Center at Yanghe Co., Ltd. Currently, she is the Secretary of the Board of Directors and DeputyDirector of Human Resources of the company.
Positions in shareholder corporations
?Applicable □N/A
| Name of employee | Shareholder name | Position held in the shareholder company | Term start date | Term end date | Whether to receive remuneration allowance in the shareholder company |
| Yang Weiguo | Jiangsu Yanghe Group Co., Ltd | Chairman | January 18, 2022 | NO | |
| Wang Kai | Shanghai Haiyan Logistics Development Co., Ltd. | Vice General Manager | March 1, 2017 | YES | |
| Xu Youheng | Jiangsu Yanghe Group Co., Ltd | Director | April 11, 2024 | NO | |
| Ma Wenxiang | Shanghai Jieqiang Tobacco, Sugar, and Alcohol (Group) Co., Ltd. | Party Committee Secretary and General Manager | July 03, 2020 | YES | |
| Ma Wenxiang | Shanghai Haiyan Logistics Development Co., Ltd. | Director | March 09, 2022 | NO |
Employments in other corporations
?Applicable □N/A
| Name of employee | Other corporation name | Positions held in other companies | Term start date | Term end date | Whether to receive remuneration allowances in other companies |
| Yang Weiguo | Suqian Industry Development Group Co., Ltd. | Secretary of the Party Committee, Chairman | January 18,2022 | YES | |
| Yang Weiguo | Jiangsu Shuanggou Group Co., Ltd. | Chairman | January 18,2022 | NO | |
| Nie Yao | Jiangnan University | Vice Dean and Professor of Bioengineering Students | June 10, 2020 | YES | |
| Lu Guoping | Nanjing Audit University | Professor of Guofu Zhongxin College | March 02, 2020 | YES | |
| Lu Guoping | Changzhou Langbo Sealing Technology Co., Ltd. | Director | February 22, 2022 | YES | |
| Lu Guoping | Baosheng | Independent | May 9, 2019 | YES |
TechnologyInnovation Co.,Ltd.
| Technology Innovation Co., Ltd. | Director | ||||
| Lu Guoping | Changzhou Academy of Architecture and Technology Co., Ltd. | Independent Director | July 6, 2020 | YES | |
| Lu Guoping | Suzhou Lianxun Instrument Co., Ltd. | Independent Director | December 17, 2022 | YES | |
| Mao Lingxiao | Beijing Hylands (Nanjing) Law Firm | Full-time lawyer, senior partner, chairman of the partnership meeting | January 1, 2021 | YES | |
| Mao Lingxiao | Nanjing Haichen Pharmaceutical Co., Ltd. | Independent Director | May 15, 2023 | YES | |
| Hong Jinming | Chinese Academy of Fiscal Sciences | Deputy Director of the Research Center for Finance and Accounting | May 31, 2018 | YES | |
| Hong Jinming | Quzhou Wuzhou Special Paper Co., Ltd. | Independent Director | July 01, 2021 | YES | |
| Hong Jinming | Hunan Aibulu Environmental Protection Technology Co., Ltd. | Independent Director | September 30, 2023 | YES | |
| Hong Jinming | Beijing Guoyao New World Information Technology Co., Ltd. | Independent Director | October 10,2021 | YES | |
| Xu Youheng | Suqian Industry Development Group Co., Ltd. | Deputy Secretary of Party Committee, Chairman of the Supervisory Board | October 16, 2021 | YES | |
| Xu Youheng | Suqian Guosheng Financing Guarantee Group Co., Ltd. | Chairman | May 19, 2023 | NO | |
| Xu Youheng | Suqian Tongchuang Credit Financing Guarantee Co., Ltd. | Executive Director | May 19, 2023 | NO | |
| Xu Youheng | Suqian Tongji Rural Microfinance Co., Ltd. | Chairman | April 01, 2024 | NO | |
| Xu Youheng | Suqian High-tech | Chairman | March 30, 2024 | NO |
Zone Science andTechnologyMicrofinance Co.,Ltd.
| Zone Science and Technology Microfinance Co., Ltd. | |||||
| Xu Youheng | Suqian Zaohe Cultural and Tourism Development Co., Ltd. | Director | September 27, 2019 | NO | |
| Xu Youheng | Jiangsu Shuanggou Group Co., Ltd. | Director | March 25, 2024 | NO | |
| Xu Youheng | Suqian Sucheng District Jinshui Rural Microfinance Co., Ltd. | Chairman | March 31, 2024 | NO | |
| Xu Youheng | Suqian Hengxin Enterprise Management Co., Ltd. | Executive Director | May 19, 2023 | NO | |
| Xu Youheng | Suqian Hengtong Financing Guarantee Co., Ltd. | Executive Director | May 19, 2023 | NO | |
| Xu Youheng | Suqian Youjian Cultural Exhibition Co., Ltd. | Executive Director | April 17, 2023 | NO | |
| Xu Youheng | Suqian City Citizen Card Co., Ltd. | Executive Director | April 19, 2021 | NO | |
| Xu Youheng | Jiangsu Jingshi Big Data Management Co., Ltd. | Chairman | June 22, 2022 | NO | |
| Xu Youheng | Suqian Talent Group Co., Ltd. | Executive Director | November 17, 2022 | NO | |
| Xu Youheng | Suqian Human Resources Service Co., Ltd. | Executive Director | November 30, 2022 | NO |
Penalties imposed by securities regulators on current and outgoing directors, supervisors and senior managers ofthe company in the past three years
□Applicable ?N/A
3. Remuneration of directors, supervisors and senior managers
Decision-making procedures, basis for determination and actual payment of remuneration for directors,supervisors and senior managers
Decision procedure: The remuneration shall be implemented based on the cases “Adjusting the Allowance ofIndependent Directors” approved by the Company's 2020 Annual General Meeting of Shareholders and“Compensation and Assessment Management Measures for Members of Management Team” approved by theCompany's 2021 Annual General Meeting of Shareholders.
Determination basis: According to the company's current business situation, reference to the regional economiclevel, industry and market level.Actual payment: Paid on time according to the corporate's performance and compensation institutions.
Remuneration of directors, supervisors and senior managers during the reporting period
Unit: CNY10, 000
| Name | Gender | Age | Position | Employed or not | Total pre-tax compensation received from the company | Whether to obtain remuneration from related parties of the company |
| Zhang Liandong | Male | 56 | Chairman | Incumbent | 197.94 | NO |
| Zhong Yu | Male | 60 | Vice Chairman, President | Incumbent | 197.94 | NO |
| Yang Weiguo | Male | 50 | Board Director | Incumbent | 0 | YES |
| Wang Kai | Male | 47 | Board Director | Incumbent | 0 | YES |
| Chen Jun | Male | 48 | Board Director, Vice President | Incumbent | 0 | YES |
| Zheng Bujun | Male | 57 | Board Director | Incumbent | 141.79 | NO |
| Dai Jianbing | Male | 53 | Board Director | Incumbent | 131.65 | NO |
| Nie Yao | Male | 47 | Independent Director | Incumbent | 10 | NO |
| Lu Guoping | Male | 64 | Independent Director | Incumbent | 10 | NO |
| Mao Lingxiao | Male | 60 | Independent Director | Incumbent | 10 | NO |
| Hong Jinming | Male | 43 | Independent Director | Incumbent | 0 | NO |
| Lin Qing | Female | 49 | Chairman of the Supervisory Committee | Incumbent | 141.22 | NO |
| Xu Youheng | Male | 47 | Supervisor | Incumbent | 0 | YES |
| Ma Wenxiang | Male | 47 | Supervisor | Incumbent | 0 | YES |
| Qin Yaguang | Male | 48 | Supervisor | Incumbent | 73.7 | NO |
| Huang Jinhua | Male | 54 | Supervisor | Incumbent | 71.92 | NO |
| Yin Qiuming | Male | 52 | Vice President, CFO | Incumbent | 141.79 | NO |
| Li Yuling | Male | 54 | Vice President | Incumbent | 141.79 | NO |
| Fan Xiaolu | Male | 40 | Vice | Incumbent | 22.46 | YES |
President
| President | ||||||
| Chen Taisong | Male | 56 | Vice President | Incumbent | 140.1 | NO |
| Zhang Xueqian | Male | 55 | Vice President | Incumbent | 130.72 | NO |
| Song Zhimin | Female | 49 | Vice President | Incumbent | 131.24 | NO |
| Lu Hongzhen | Female | 46 | Secretary of the Board | Incumbent | 85.37 | NO |
| Liu Huashuang | Male | 54 | Board Director, CEO | Former | 32.99 | NO |
| Zhao Shuming | Male | 72 | Independent Director | Former | 10 | NO |
| Chen Taiqing | Male | 59 | Chairman of the Supervisory Committee | Incumbent | 141.79 | NO |
| Xu Lili | Female | 45 | Supervisor | Incumbent | 0 | YES |
| Chen Fuya | Male | 59 | Supervisor | Incumbent | 140.52 | NO |
| Total | -- | -- | -- | -- | 2,104.93 | -- |
VI. Directors' performance of duties during the reporting period
1. The Board of Directors during the Reporting Period
| Session | Open Date | Disclose Date | Resolution |
| The Fourteenth Session of the Seventh Board of Directors | April 24,2023 | April 26,2023 | Reviewed and approved The "2022 Annual CEO Work Report," "2022 Annual Board of Directors Work Report," "2022 Annual Report," including its full text and summary, "2022 Annual Financial Settlement Report," "Proposal on Profit Distribution for the Year 2022," "2022 Annual Internal Control Self-Assessment Report," "Proposal on the Continuation of Appointing Su Ya Jin Cheng Accounting Firm (Special General Partnership) as the Company's Audit Institution for the Year 2023," "2022 Annual Social Responsibility and |
ESG Report," "Proposalon Confirming the 2022Routine Related PartyTransactions andAnticipated 2023 RoutineRelated PartyTransactions," "FirstQuarter Report for 2023"in its entirety, "Proposalon Authorizing CompanyManagement to Use OwnFunds to PurchaseFinancial ProductsOpportunistically,""Proposal on Electing Mr.Yang Weiguo as aMember of the SeventhBoard of DirectorsStrategic Committee,"and "Proposal onConvening the 2022Annual Shareholders'Meeting." For details,please refer to the"Announcement of theFourteenth MeetingResolution of theSeventh Board ofDirectors" disclosed bythe company in thestatutory informationdisclosure media(Announcement No.2023-004).
| ESG Report," "Proposal on Confirming the 2022 Routine Related Party Transactions and Anticipated 2023 Routine Related Party Transactions," "First Quarter Report for 2023" in its entirety, "Proposal on Authorizing Company Management to Use Own Funds to Purchase Financial Products Opportunistically," "Proposal on Electing Mr. Yang Weiguo as a Member of the Seventh Board of Directors Strategic Committee," and "Proposal on Convening the 2022 Annual Shareholders' Meeting." For details, please refer to the "Announcement of the Fourteenth Meeting Resolution of the Seventh Board of Directors" disclosed by the company in the statutory information disclosure media (Announcement No. 2023-004). | |||
| The Fifteenth Session of the Seventh Board of Directors | August 04,2023 | August 05,2023 | Reviewed and approved the "Proposal on External Donations." For details, please refer to the "Announcement of the Fifteenth Meeting Resolution of the Seventh Board of Directors" disclosed by the company in the statutory information disclosure media (Announcement No. 2023-015) |
| The Sixteenthth Session of the Seventh Board of Directors | August 28,2023 | August 29,2023 | Reviewed and approved the "The Company's 2023 Interim Report" and summary, "Proposal on Joint Investment and Related Transactions with Professional Institutions," "Proposal on Cancelling the Remaining |
Repurchased Shares inthe Repurchase SpecialSecurities Account,""Proposal on Amendingthe Company's Articles ofAssociation," "Proposalon Convening the FirstExtraordinary GeneralMeeting of Shareholdersin 2023." For details,please refer to the"Announcement of theSixteenth MeetingResolution of theSeventh Board ofDirectors" disclosed bythe company in thestatutory informationdisclosure media(Announcement No.2023-016)
| Repurchased Shares in the Repurchase Special Securities Account," "Proposal on Amending the Company's Articles of Association," "Proposal on Convening the First Extraordinary General Meeting of Shareholders in 2023." For details, please refer to the "Announcement of the Sixteenth Meeting Resolution of the Seventh Board of Directors" disclosed by the company in the statutory information disclosure media (Announcement No. 2023-016) | |||
| The Seventeenth Session of the Seventh Board of Directors | October 27,2023 | October 28,2023 | Reviewed and approved the Yanghe Shares 2023 Third Quarter Report |
| The Eighteenth Session of the Seventh Board of Directors | November 10, 2023 | November 11, 2023 | Reviewed and approved the Proposal on Appointing Senior Management Personnel of the Company." For details, please refer to the "Announcement of the Eighteenth Meeting Resolution of the Seventh Board of Directors" disclosed by the company in the statutory information disclosure media (Announcement No. 2023-028) |
| The Nineteenth Session of the 7th Board of Directors | December 20,2023 | December 21,2023 | Reviewed and approved the "Proposal on External Donations." For details, please refer to the "Announcement of the Nineteenth Meeting Resolution of the Seventh Board of Directors" disclosed by the company in the statutory information disclosure media (Announcement No. 2023-030) |
2. Attendance of Directors at Board of Directors and General Meetings of Shareholders
| Attendance of Directors at Board of Directors and General Meetings of Shareholders | |||||||
| Name of Directors | The number of times they should attend the board of directors during the reporting period | Number of on-site board attendance | Number of board meetings by means of communication | Number of proxy attendance at the board of directors | Amounts of absences from the Board of Directors | Whether not attended two consecutive board meetings in person | Amounts of attendance at shareholder meetings |
| Zhang Liandong | 6 | 4 | 2 | 0 | 0 | NO | 2 |
| Zhong Yu | 6 | 4 | 2 | 0 | 0 | NO | 2 |
| Yang Weiguo | 6 | 1 | 4 | 1 | 0 | NO | 2 |
| Wang Kai | 6 | 1 | 5 | 0 | 0 | NO | 2 |
| Zhao Shuming | 6 | 1 | 4 | 0 | 1 | NO | 1 |
| Nie Yao | 6 | 2 | 4 | 0 | 0 | NO | 1 |
| Lu Guoping | 6 | 2 | 4 | 0 | 0 | NO | 2 |
| Mao Lingxiao | 6 | 1 | 5 | 0 | 0 | NO | 1 |
Explanation of two consecutive absences from attending the board of directors in personN/A
3. Circumstances where directors raise objections to company-related matters
Were there any objections on related issues of the Company from directors?
□Yes ?No
During the reporting period, there is no objections on related issues of the Company from directors.
4. Other instructions for directors to perform their duties
Were there any suggestions from directors accepted by the Company??Yes ?No
The statement on whether the director's recommendation to the company's proposal has been adopted or not
During the reporting period, the directors of the Company in accordance with the relevant requirements of “theCompany Law”, “the Securities Law”, “the Articles of Association” and other laws, regulations and rules, carriedout various work diligently and responsibly, provided reasonable opinions and suggestions for the company'sbusiness decisions, and effectively safeguarded the interests of the company and all shareholders.
VII. The special committees under the board of directors during the reporting period
| Committee name | Members | Number of meetings held | Opening date | Content of meeting | Important comments and suggestions | Other performance of duties | Specific circumstances of the objection (if any) |
| Strategy Committee | Zhang Liandong, Zhong Yu, Yang Weiguo, Zhao Shuming | 1 | April 21,2023 | Reviewed and approved the the “ 2022 Annual Board of Directors Work Report," Planned the future development of the company | |||
| Nomination Committee | Nie Yao, Zhang Liandong, Mao Lingxiao | 1 | November 09,2023 | Reviewed and approved the "The Proposal for Appointing Senior Management Personnel"and qualification review | |||
| Remuneration and Appraisal Committee | Zhao Shuming, Nie Yao | 1 | April 19,2023 | Reviewed the performance of the company's management team members and the implementation of the salary system in 2022 | |||
| Audit Committee | Lu Guoping, Mao Lingxiao | 4 | February 24,2023 | Reviewed "The 2022 Annual Financial Statements Audit Work Plan," "Summary of the 2022 Annual Internal Audit Work and the 2023 Work Plan," "Proposal on Re-appointing Su Ya Jin Cheng Certified Public Accountants (Special General |
Partnership) asthe Company'sAudit Firm forthe Year 2023."
| Partnership) as the Company's Audit Firm for the Year 2023." | ||||
| April 21,2023 | Reviewed the "2022 Annual Internal Control Self-Evaluation Report" "Proposal on Confirming Routine Related Party Transactions for 2022 and Anticipated Routine Related Party Transactions for 2023" "First Quarter 2023 Internal Audit Work Report" "Draft Audit Report for the Year 2022" "2022 Annual Financial Settlement Report" "First Quarter 2023 Financial Accounting Statements" "Status of 2022 Annual Financial Statements Audit Work" | |||
| August 24,2023 | Reviewed the "First Half of 2023 Internal Audit Work Report" "2023 Interim Financial Statements" | |||
| October 26,2023 | Reviewed the "Third Quarter 2023 Internal Audit Work Report" "2023 Third Quarter |
FinancialStatements"
FinancialStatements"
VIII. Performance of Duties by the Supervisory Committee
Were there any risks to the Company identified by Board of Supervisors when performing its duties during thereporting period?
□Yes ?No
The Supervisory Committee has no objection to the supervision matters during the reporting period.
IX. Staff in the Company
1. Statistics of Employees, Professional Structure of the Staff, and Educational Background
| Number of on-the-job employees of the parent company at the end of the reporting period (person) | 10,529 |
| Number of on-the-job employees of major subsidiaries at the end of the reporting period (person) | 9,990 |
| Total number of on-the-job employees at the end of the reporting period (person) | 20,519 |
| The total number of employees receiving salary in the current period (person) | 20,519 |
| Number of retired employees (persons) that the parent company and major subsidiaries need to pay | 0 |
| Professional Composition | |
| Professional Composition Category | Professional composition number (person) |
| Production staff | 9,431 |
| Sales staff | 6,601 |
| Technical staff | 1,952 |
| Financial staff | 222 |
| Administration staff | 2,313 |
| Total | 20,519 |
| Education Level | |
| Educational level category | Quantity (person) |
| Master | 430 |
| Bachelor | 4,759 |
| College | 4,900 |
| Senior High School and below | 10,430 |
| Total | 20,519 |
2. Salary Policy
The salary of the company's employees is composed of basic salary, performance salary and profit incrementsharing award. All departments of the company implement a post-self-organization mechanism, and revised the"Administrative Measures for Post-Self-organization" to further improve the quantity, quality, efficiency andeconomic value of work. It has established quantifiable and assessable indicators to encourage employees to bespontaneous, improve their work efficiency, and improve the company's management level in order to achieve a
win-win situation between the company and its employees.
3. Training Program
The company adheres to the incentive philosophy of "encouraging innovators, urging laggards, and promoting hardworkers." In 2023, the company continued its employee training efforts from two aspects: professionalcompetence enhancement and business capability improvement. It formulated annual training plans at thecompany level, subsidiary level, and department level, organizing comprehensive training through the "LeadershipAcademy, Marketing Academy, Customer Academy, and Craftsman Academy." Throughout the year, a total of112,800 employees participated in training sessions, providing strong talent support and intellectual backing forthe company's sustainable development.
4. Outsourcing of labor service
□Applicable ?N/A
X. Profit Distribution and Capitalization of Capital Reserves
Profit distribution policy in the reporting period, especially the formulation, implementation and adjustmentof cash dividend policy?Applicable □N/A
On May 31, 2023, the company held the 2022 annual general meeting of shareholders, and reviewed and approvedthe company's 2022 equity distribution plan. The specific plan is that based on the total equity on the equityregistration date when the profit distribution plan is implemented (excluding the repurchased shares held in thecompany’s special securities account for repurchase), use undistributed profits to distribute cash dividends ofCNY37.40 (tax included) per 10 shares to all shareholders, no bonus shares, no conversion to paid-in capital.
The company implements the 2022 annual equity distribution, with June 20, 2023 as the equity registration date,June 21, 2023 as the ex-rights and ex-dividend date, and the company's total share capital after excluding the542,926 repurchased shares of 1,506,445,074 shares as the base, to all the shareholders. Shareholders will receivea cash dividend of CNY 37.40 (tax included) for every 10 shares, with a total cash dividend of CNY 5,634,104,576.76(tax included).
| Special explanation of cash dividend policy | |
| Whether it complies with the provisions of the company's articles of association or the requirements of the resolution of the shareholders' meeting | YES |
| Whether the dividend standard and ratio are explicit and clear | YES |
| Whether the relevant decision-making procedures and mechanisms are complete | YES |
| Whether the independent directors performed their duties and played their roles | YES |
| If the company has not conducted cash dividends, it should disclose the specific reasons for this decision and outline the next steps it plans to take to enhance investor returns. | N/A |
Whether minority shareholders have the opportunityto fully express their opinions and demands, andwhether their legitimate rights and interests are fullyprotected
| Whether minority shareholders have the opportunity to fully express their opinions and demands, and whether their legitimate rights and interests are fully protected | YES |
| If the cash dividend policy is adjusted or changed, whether the conditions and procedures are compliant and transparent | The company's cash dividend policy does not adjust or change |
The company was profitable during the reporting period and the parent company's profit available fordistribution to shareholders was positive, but no cash dividend distribution plan was proposed
□Applicable ?N/A
Profit distribution and conversion of capital reserve into paid-in capital during the reporting period?Applicable □N/A
| Number of bonus shares for every 10 shares (shares) | 0 |
| Dividends per 10 shares (CNY) (tax included) | 46.60 |
| Base of shares (shares) of the distribution plan | 1,506,445,074 |
| Amount of cash dividends (CNY) (tax included) | 7,020,034,044.84 |
| Amount of cash dividends in other ways (such as share repurchase) (CNY) | 0.00 |
| Total cash dividends (including other methods) (CNY) | 7,020,034,044.84 |
| Distributable profit (CNY) | 31,524,392,046.58 |
| Proportion of total cash dividends (including other methods) to total profit distribution | 100% |
| Cash dividend situation | |
| If the company's development stage is mature and there is no major capital expenditure arrangement when making profit distribution, the proportion of cash dividends in this profit distribution should be at least 80%. | |
| Detailed description of profit distribution or capital reserve conversion plan | |
| As audited by Suya Jincheng Certified Public Accountants (Special General Partnership), the parent company realized a net profit of CNY7,482,138,130.26 in 2023, and the statutory surplus reserve for the year was CNY 0.00, plus the undistributed profit at the beginning of the year of CNY 29,676,358,493.08, so after deducting the 2022 profit distribution of CNY 5,634,104,576.76, the profit available for distribution to shareholders this year was CNY 31,524,392,046.58 In line with the principle of not only taking into account the long-term development of the company, but also giving appropriate returns to shareholders, the company plans to distribute cash dividends of CNY46.60 (tax included) per 10 shares to all shareholders using the existing total share capital of 1,506,445,074 shares as the base. The total cash distribution amounts to CNY7,020,034,044.84 (tax included), without bonus shares or capitalization. This profit distribution scheme complies with the cash dividend policy stipulated in the company's articles of association. In the event of changes in the total share capital before the equity distribution registration date, the distribution ratio will be adjusted according to the principle of maintaining the total distribution amount unchanged. | |
XI. Implementation of company equity incentive plans, employee stock ownership plans orother employee incentives?Applicable □N/A
1. Equity incentive
N/AEquity incentives obtained by the directors and senior management of the company
□Applicable ?N/A
Evaluation mechanism and incentives for senior managers
The company continues to establish and improve the assessment and traction mechanism based on businessperformance and the compensation and incentive mechanism for management team members oriented by valuecontribution that are compatible with the market economy system and modern enterprise system. The 2021Annual General Meeting of shareholders of the Company reviewed and approved the “Management Measures forCompensation and Assessment of Management Team Member”, which stipulates that the annual remunerationof the members of the management team of the Company consists of basic annual salary, performance-basedannual salary, tenure incentive and other income, the basic annual salary is paid monthly, the performance-basedannual salary is implemented according to the annual performance appraisal results, and the tenure incentive islinked to the operating performance appraisal during the term of office.
2. Implementation of employee stock ownership plans
?Applicable □N/A
All valid employee stock ownership plans during the reporting period
| Range of employees | Number of employees | Total shares held | Changes | Proportion to the total share capital of listed companies | Funding sources for the implementation plan |
| Company’s directors (excluding independent directors), supervisors, senior management personnel, and middle-level and above personnel and core backbones who are determined by the board of directors of the company and wholly-owned subsidiaries to play an | 4,738 | 9,118,384 | N/A | 0.61% | Participants’ legal remuneration, self-financing and other methods permitted by laws and regulations |
important rolein thecompany'soverallperformanceand mediumand long-termdevelopment
important rolein thecompany'soverallperformanceand mediumand long-termdevelopment
Shareholdings of Directors, Supervisors and Senior Management in the Employee Stock Ownership Plan duringthe Reporting Period
| Name | Title | Number of shares held at the beginning of the reporting period | Number of shares held at the end of the reporting period | Proportion to the total share capital of listed companies |
| Zhang Liandong | Chairman | 96,404 | 96,404 | 0.01% |
| Zhong Yu | Deputy chairman, President | 96,404 | 96,404 | 0.01% |
| Liu Huashuang | Director, CEO (Leaving office) | 96,404 | 96,404 | 0.01% |
| Chen Taiqing | Chairman of the Board of Supervisors(Leaving office) | 48,202 | 48,202 | 0.00% |
| Chen Fuya | Supervisor(Leaving office) | 48,202 | 48,202 | 0.00% |
| Chen Taiqing | Chairman of the Board of Supervisors(Leaving office) | 48,202 | 48,202 | 0.00% |
| Lin Qing | Vice president(Chairman of the Board of Supervisors now) | 48,202 | 48,202 | 0.00% |
| Chen Bujun | Vice president(Director now) | 48,202 | 48,202 | 0.00% |
| Yin Qiuming | Vice president, CFO | 48,202 | 48,202 | 0.00% |
| Li Yuling | Vice president | 48,202 | 48,202 | 0.00% |
| Zhang Xueqian | Vice president | 28,921 | 28,921 | 0.00% |
| Song Zhimin | Vice president | 28,921 | 28,921 | 0.00% |
| Lu Hongzhen | Secretary of the Board | 19,281 | 19,281 | 0.00% |
Changes in asset management institutions during the reporting period
□Applicable ?N/A
Changes in equity due to disposal of shares by holders during the reporting period
□Applicable ?N/A
The exercise of shareholders' rights during the reporting periodN/AOther relevant situations and explanations of the employee stock ownership plan during the reporting period
□Applicable ?N/A
Members of Employee Stock Ownership Plan Management Committee Change
□Applicable ?N/A
The financial impact of the employee stock ownership plan on the listed company during the reporting periodand related accounting treatment?Applicable □N/AIn this period, the company confirmed that the cost increase of "capital reserves-other capital reserves" wasCNY81,609,539.19Termination of employee stock ownership plans during the reporting period
□Applicable ?N/A
Other instructions: none
3. Other employee incentives
□Applicable ?N/A
XII. Construction and implementation of internal control system during the reporting period
1. Construction and implementation of internal control
(1)Internal control system construction
a) Establish a standard internal control system.The company has mainly formulated 16 categories and 279 systems for human resources, quality and food safety,financial and audit management.
b) Optimize the internal control environment of the enterprise.i. Standardize the establishment of the organizational structure. According to the relevant laws and regulations ofChina, clarify the responsibilities, authority, conditions, rules of procedure and work procedures of the board ofdirectors, board of supervisors and managers to ensure that decision-making, execution and supervision areseparated from each other and form checks and balances. Clarify the internal division of labor of the board ofdirectors, and set up special committees including audit committee, remuneration and appraisal committee,strategy committee, nomination committee.ii. Improve human resources policies.
① Improve the staff training mechanism. The company needs a strict assessment when hiring employees, selectoutstanding talents to join the company, and form a system for employees on training, treatment, performanceassessment and promotion. For employees in different positions, the company provides channels to improve theircomprehensive quality to cultivate high-quality talents. ② Establish an effective incentive mechanism. On thebasis of following the fairness and relative stability of incentives and constraints, the company formulates equityincentives and mechanisms for spontaneous compensation incentives which is conducive to stimulatingemployees' subjective initiative, giving full play to their potential, safeguarding corporate interests and achievingcorporate goals.
c) Establish a risk assessment firewall. The company has formulated “Risk and Opportunity ManagementMeasures”, “Risk Management Responsibility Investigation System” and other systems to investigate risks from theaspects of food safety and behavior safety, and make preparations for the occurrence and generation of risks.Produce a map of audit risks for infrastructure projects, with 80 risk points, distilled into 9 quantifiable risk warningindicators. At the same time, the company organizes the Guidance on Common Risks and Control of ContractManagement, Risk Management Training and other trainings, focusing on the risk management system, internalcontrol system and integrated risk management and control module, to discover and deal with risk points in time.
d) Implement effective internal control activities. With reference to the risk assessment level, the companyimplements measures such as division of responsibilities control, authorization control, review and approvalcontrol, budget control and performance evaluation control, to effectively safeguard the interests of the enterpriseand ensure the stable and orderly progress of various work.
e) Improve the information and communication mechanism. The company establishes the technical platform ofthe information system, establishes a sensitive information collection and feedback system, realizes the upward,parallel or downward flow and communication of various information within the enterprise, and implements thewhole process of the entire internal control information from production, release to feedback modernmanagement.
f) Strengthen internal audit and internal supervision of enterprise management. The company establishes ascientific view of internal audit culture, pays great attention to the organization and team building of the auditdepartment, sets up the internal audit department in accordance with the relevant regulations of China, andallocates internal auditors with professional competence, maintains the independence of internal audit, and makesthe internal audit department more independent. Besides, the internal audit has transformed from a singlesupervision function to a comprehensive function of supervision, evaluation, control and consultation, and fullyexerted the value-added function. By sorting out the supervision content and matters, the company clarifies theevaluation standards and audit methods of each department, and constantly improves the audit work plan. Inaddition, the company needs to strengthen the construction of audit informatization, constantly strengthen thethinking mode of big data audit, enhance the ability of big data audit, comprehensively use on-site audit and off-site audit methods, and improve the efficiency of internal audit.
(2) Internal control system implementation
The company continues to establish and improve the internal control system and can effectively implement it. Inthe focus of audit, highlight the key supervision of key funds, important projects, important assets and importantpositions responsible for the economic responsibility of personnel. In the content of audit, benefit audit,responsibility audit and internal control system audit should be the main. In terms of audit methods, audit andresearch should be combined, post-supervision should be transformed into pre-control, and comprehensive auditshould be strengthened. Audit means need to gradually transition to modern audit means.The audit Committee of the Board of Directors of the Company annually reviews and supervises the financial report,the effectiveness of internal control, and the reasonableness and effectiveness of corporate governance; carry outinternal control self-evaluation every year; Optimize the system and management process every year according tothe internal and external environment and development requirements of the enterprise; closely focus on the keywork of the company, carry out full coverage audit of all molecular companies and functional departments, so asto achieve full coverage audit of key departments once a year; conduct spot check and audit of important
departments, with a spot check rate of 50%, and audit with full coverage once every two years; Spot check andaudit of general departments, the spot check rate of 33%, to achieve full coverage of audit once every three years.
2. Details of major deficiencies in internal control discovered during the reporting period
□Yes ?No
XIII. The company's management and control of subsidiaries during the reporting period
| Name of the subsidiaries | Combination plan | Combination progress | Issues | Solutions | Resolve progress | Follow-up resolution plan |
| N/A | N/A | N/A | N/A | N/A | N/A | N/A |
XIV. Internal control self-assessment report or internal control audit report
1. Self-evaluation Report on Internal Control
| Date of disclosure of the full text of the internal control evaluation report | April 27, 2024 | ||
| Disclosure Index of the Full Text of the Internal Control Evaluation Report | The full text of the "Self-assessment Report on Internal Control" will be disclosed on http://www.cninfo.com.cn on April 27, 2024 | ||
| The ratio of the total assets of the company included in the evaluation scope to the total assets of the company's consolidated financial statements | 99.52% | ||
| The ratio of the operating income of the company included in the evaluation scope to the operating income of the company's consolidated financial statements | 99.98% | ||
| Defect identification standard | |||
| Type | Financial report | Non-financial report | |
| Qualitative Criteria | (1) Signs of major deficiencies in financial reports include: i. Fraudulent conduct by the company’s directors, supervisors or senior executives; ii. Significant misstatements in the current financial statements were found, but the management failed to detect them during the operation of internal control; | (1) Signs of major deficiencies in non-financial reports include: i. lack of democratic decision-making procedures, unscientific decision-making procedures, major mistakes which resulting in major property losses to the company; ii. Serious violation of national laws and regulations; | |
iii. As a result of internal controlevaluation, major deficiencies havenot been rectified;iv. The audit committee andinternal audit institution'ssupervision of internal control isinvalid.
(2) Signs of significant deficiencies
in financial reporting include:
i. Failure to select and applyaccounting policies in accordancewith generally acceptedaccounting principles;ii. Failure to establish anti-fraudprocedures and control measures;iii. Failure to establishcorresponding accountingtreatment for non-routine orspecial transactionsiv. There are one or moredeficiencies in the control over theperiod-end financial reportingprocess and there is no reasonableassurance that the preparedfinancial statements will achievethe true and accurate objectives.
(3) General defects refer to other
control defects other than theabove-mentioned major defectsand important defects.
| iii. As a result of internal control evaluation, major deficiencies have not been rectified; iv. The audit committee and internal audit institution's supervision of internal control is invalid. (2) Signs of significant deficiencies in financial reporting include: i. Failure to select and apply accounting policies in accordance with generally accepted accounting principles; ii. Failure to establish anti-fraud procedures and control measures; iii. Failure to establish corresponding accounting treatment for non-routine or special transactions iv. There are one or more deficiencies in the control over the period-end financial reporting process and there is no reasonable assurance that the prepared financial statements will achieve the true and accurate objectives. (3) General defects refer to other control defects other than the above-mentioned major defects and important defects. | iii.Lack of important business management system or systemic failure of system operation; iv. The company's major or important internal control deficiencies cannot be rectified in a timely manner; v. The company continues or has a large number of important internal control deficiencies . (2) Signs of significant deficiencies in non- financial reporting include: i. The business behavior violates relevant national laws; ii. Inadequate decision-making process leads to important errors and large losses; iii. Serious loss of business personnel in key positions; iv. Deficiencies in important business systems or systems. (3) General deficiencies refer to control deficiencies other than the above major deficiencies and significant deficiencies. | |
| Quantitative standard | Major defects: Misstatement > 3% of total operating income; Misstatement > 5% of total profit; Misstatement > 2% of total assets. Important defects: 1% of total operating income < misstatement ≤ 3% of total operating income; 3% of total profit < misstatement ≤ 5% of total profit; 1% of total assets < misstatement ≤ 2% of total assets. General defects: misstatement ≤ 1% of total operating income; misstatement ≤ 3% of total profit; misstatement ≤ 1% of total assets. | Major defect: loss accounts for ≥1% of total assets. Important defects: 0.5%≤losses account for less than 1% of total assets. General defects: The proportion of loss to total assets is less than 0.5%. |
| Number of major deficiencies in financial reports (pieces) | 0 | |
| Number of major deficiencies in non-financial reports (pieces) | 0 | |
| Number of material deficiencies in financial reports (pieces) | 0 | |
| Number of material deficiencies in non-financial reports (pieces) | 0 | |
2. Internal Control Audit Report
?Applicable □N/A
| Deliberation Opinion Paragraph in Internal Control Audit Report | |
| We believe that on December 31, 2023, Yanghe Co., Ltd. maintained effective internal control over financial reporting in all material aspects in accordance with the “Basic Norms for Corporate Internal Control” and relevant regulations. | |
| Disclosure Situation of Internal Control Audit Report | Disclosed |
| Disclosure date of the full text of the internal control audit report | April 27, 2024 |
| Full text disclosure index of internal control audit report | The full text will be disclosed on http://www.cninfo.com.cn on April 27, 2024 |
| Types of opinions on internal control audit reports | Standard unqualified opinion |
| Whether there are material deficiencies in non-financial reporting | No |
Whether the accounting firm issued an internal control audit report with a non-standard opinion
□Yes ?No
Whether the internal control audit report issued by the accounting firm is consistent with the self-evaluationreport of the board of directors?Yes □No
XV. Special Rectification Actions for Self-inspected Problems of Listed Companies
During the self-inspection, some directors, supervisors and senior executives of the company were unable toattend the general meeting of shareholders in person due to business trips and other reasons. The company hadpromptly notified the relevant personnel of the convening of the meeting and the deliberation of proposals afterthe meeting.
Section V Environmental and Social ResponsibilityI. Significant environmental issuesWhether the listed company and its subsidiaries belong to the key pollutant discharge companies announced bythe environmental protection department?Yes □No
Environmental protection related policies and industry standardsThe company strictly complies with environmental protection related laws and regulations and industry standards.
Relevant laws and regulations: “Environmental Protection Law of the People's Republic of China”, “Law of thePeople's Republic of China on Water Pollution Prevention and Control”, “Law of the People's Republic of China onthe Prevention and Control of Environmental Pollution by Solid Waste”, “Law of the People's Republic of China onPrevention and Control of Air Pollution”, “Law of the People's Republic of China on the Prevention of NoisePollution”,”Law of the People's Republic of China on Prevention and Control of Soil Pollution”, “Regulations ondischarge permit Administration”, “Regulations on the Prevention and Control of Environmental Pollution byIndustrial Solid Wastes in Suqian City”, etc; Relevant industry standards: “Discharge standard for water pollutantsof fermented alcohol and liquor industry” （GB27631-2011） and its amendment list, “Discharge standard of airpollutants from boilers” （DB32/ 4385—2022), “Comprehensive Emission Standards for Air Pollutants”(DB324041-2021), and “Industrial enterprise boundary environmental noise emission standard” (GB12348-2008)and so on.
Environmental protection administrative permit
The company and its subsidiaries have complete materials such as environmental impact reports and pollutantdischarge permits for construction projects. Among them:
Jiangsu Yanghe Distillery Co., Ltd.：On July 18, 2022, the Company applied to Suqian Bureau of EcologicalEnvironment for the “Pollutant Discharge Permit of Yanghe Branch of Yanghe Stock Co., LTD.”, valid from July 18,2022 to July 17, 2027.Jiangsu Shuanggou Wine Co., Ltd.：The Company has obtained “Jiangsu Provincial Pollutant Discharge License”issued by Suqian Municipal Bureau of Ecological Environment on August 12, 2021, valid from August 12, 2021 toAugust 11, 2026.Jiangsu Yanghe Distillery Co., Ltd. Siyang Branch：On November 11, 2022, the Company obtained the “PollutantDischarge License of Siyang Branch of Yanghe Corporation” issued by Suqian Municipal Bureau of EcologicalEnvironment. The license is valid from November 11, 2022 to November 10, 2027.Guizhou Guijiu Group Co., Ltd.：The company applied for the renewal of the pollutant discharge permit inNovember 30 2022, which has been approved by Guiyang Bureau of Ecological Environment and is valid fromOctober 18, 2022 to October 17, 2027.
Industrial discharge standards and details of the discharge of pollutants involved in production and businessactivities
| Company | Types of | Names of | Emission method | Number | Distribution | Emission | Implemented | Total emissio | Total approved | Excessive |
name
orsubsidi
aryname
| name or subsidiary name | major pollutants and characteristic pollutants | major pollutants and characteristic pollutants | of vents | of discharge outlets | concentration | pollutant discharge standards | ns | emissions | emissions | |
| Jiangsu Yanghe Distillery Co., Ltd. | Waste water | Oxygen Demand, Ammonia Nitrogen, Total Phosphorus, Total Nitrogen | Indirect emissions | 1 | Longitude： 118°22′33.74″ Latitude： 33°47′26.74 ″ | 64.26mg/L 2.08mg/L 1.2mg/L 21.22mg/L | 650mg/L 40mg/L 5mg/L 60mg/L | 109.32tons 3.54tons 2.04 tons 36.10 tons | 454.7 6tons/year 36 tons/year 2.07 tons/year 37.35 tons/year | None |
| Jiangsu Shuanggou Wine Co., Ltd. | Waste water | Oxygen Demand, Ammonia Nitrogen, Total Phosphorus, Total Nitrogen | Indirect emissions | 1 | Longitude： 118°12′07″ Latitude： 33°13′45″ | 56.7mg/L 2.23mg/L 1.63mg/L 16.26mg/L | 500mg/L 40mg/L 8mg/L 60mg/L | 49.02 tons 1.76 tons 1.35 tons 13.60 tons | 400 tons/year 32 tons/year 6.4 tons/year 48 tons/year | None |
| Jiangsu Yanghe Distillery Co., Ltd. Siyang Branch | Waste water | Oxygen Demand, Ammonia Nitrogen, Total Phosphorus, Total Nitrogen | Indirect emissions | 1 | Longitude： 118°45′33.08″ Latitude： 33°42′25.70″ | 123mg/L 3.01mg/L 1.8mg/L 14.83mg/L | 500mg/L 80mg/L 12mg/L 80mg/L | 99 tons 2.45 tons 1.40 tons 11.76 tons | 600 tons/year 41.8 tons/year 4.98 tons/year 58.55 tons/year | None |
| Guizhou Guijiu Group Co., Ltd. | Waste water | Oxygen Demand, Ammonia Nitrogen, Total Phosphorus, Total Nitroge | Straight emissions after processing | 1 | Longitude： 106°35′43″ Latitude： 25°50′52″ | 52.04mg/L 0.243mg/L 0.227mg/L 6.616mg/L | 100mg/L 10mg/L 1mg/L 20mg/L | 3.482 tons 0.016 tons 0.004 tons 0.439 tons | 8.958 tons/year 0.898 tons/year 0.0925 tons/year 1.85 tons/year | None |
n
| n | ||||||||||
| Guizhou Guijiu Group Co., Ltd. | exhaust gas | Nitrogen oxide | Straight emissions | 1 | Longitude： 106°35′43″ Latitude： 25°50′52″ | 27.986mg/m? | 200mg/m? | 5.927 tons | 6.199 tons/year | None |
Treatments of pollutants
Jiangsu Yanghe Distillery Co., Ltd.：The sewage treatment station in use was completed in 2012, with a totalinvestment of CNY 96 million, covering an area of 19,000 square meters, with a designed sewage treatmentcapacity of 10,000 tons per day. The sewage treatment process adopts physical treatment method + chemicaltreatment method + anaerobic biological treatment method + aerobic biological treatment method in order toreach the treatment of high-concentration wastewater of 250 tons per hour. The emission implements the"Fermentation Alcohol and Liquor Industry Pollutant Emission Standard (GB27631-2011)" to modify the list ofindirect emission protocol standards. In 2023, two new anaerobic towers were built to improve the efficiency ofanaerobic treatment. In 2023,1.701 million tons of wastewater were treated. COD reduction was 14,736.97 tons,ammonia nitrogen reduction was 228.37 tons, total phosphorus reduction was 168.05 tons, total nitrogenreduction was 387.27 tons. The emission concentration of all pollutants is lower than the national emissionstandard. There is a biogas boiler room equipped with 9 biogas boilers, their production capacity reaches 32 tonsper hour, and the biogas produced by anaerobic fermentation of sewage treatment was all used for biogas boilercombustion. The steam produced by the biogas boiler was used for brewing production, and the steam output was150,000 tons in 2023. The economic benefit reaches CNY26.6 million. The sludge and vinasse are mainly recycledby qualified third party units, and the utilization rate of distiller's grains reaches 100%.
Jiangsu Shuanggou Wine Co., Ltd.：The sewage treatment station in use was completed in 2013, with a totalinvestment of CNY 42.5 million, covering an area of 15,000 square meters, with a designed sewage treatmentcapacity of 5,400 tons per day. Sewage treatment adopts anaerobic tower + UASB + AAO + secondarysedimentation tank + phosphorus removal tank treatment process, in accordance with the revised list of"Fermentation Alcohol and Liquor Industrial Pollutant Discharge Standard ( GB27631-2011)" and “ShuanggouTownship Wastewater Treatment Plant takeover standards”. In 2023, 805,500 tons of wastewater were treated.COD reduction was 7,099.79 tons, ammonia nitrogen reduction was 101.96 tons, total phosphorus reduction was
56.528 tons, total nitrogen reduction was 158.76 tons. The emission concentration of all pollutants is lower thanthe national emission standard. There is a biogas boiler room equipped with 3 biogas boilers, and the biogasproduced by anaerobic fermentation of sewage treatment was all used for biogas boiler combustion. The steamproduced by the biogas boiler was used for brewing production, and the steam output was 37,600 tons in 2023.The sludge and vinasse are mainly recycled by qualified third party units.
Jiangsu Yanghe Distillery Co., Ltd. Siyang Branch：The sewage treatment station in use was completed in 2015,with a total investment of CNY 50 million, covering an area of about 15,000 square meters, with a designed sewagetreatment capacity of 6,000 tons per day. The sewage treatment process adopts EGSB + AAO + advanced treatmenttechnology, and implements the indirect discharge agreement standard of the revised list of "Fermentation Alcoholand Liquor Industry Pollutant Discharge Standard GB27631-2011". In 2023, 842,100 tons of wastewater were
treated. COD reduction was 15809 tons, ammonia nitrogen reduction was 156.5 tons, total phosphorus reductionwas 144 tons, total nitrogen reduction was 358.3 tons. The emission concentration of all pollutants is lower thanthe national emission standard. There is a biogas boiler room equipped with 6 biogas boilers, and the biogasproduced by anaerobic fermentation of sewage treatment was all used for biogas boiler combustion. The steamproduced by the biogas boiler was used for brewing production, and the steam output was 91,600 tons in 2023.The economic benefit reaches CNY17.98 million The sludge and vinasse are mainly recycled by qualified third partyunits.
Guizhou Guijiu Group Co., Ltd.：The sewage treatment station in use was completed in 2021, with a totalinvestment of CNY18.5 million, covering an area of about 1,980 square meters, with a designed sewage treatmentcapacity of 700 tons per day. The wastewater produced by pretreatment + AAO + MBR + ozone decolorization anddisinfection + chemical phosphorus removal treatment process shall comply with the direct discharge standard inTable 2 of the Discharge Standard for Water Pollutants in Fermented Alcohol and Liquor Industry (GB27631-2011).In February 2023, a new 2400 cubic meter regulating tank and secondary AO system were constructed and havebeen put into operation. In 2023, 68,000 tons of wastewater were treated. COD reduction was 335.91 tons,ammonia nitrogen reduction was 8.74 tons, total nitrogen reduction was 19.53 tons, total phosphorus reductionwas 2.25 tons. The emission concentration of all pollutants is lower than the national emission standard. Thecombustion equipment is gas-fired boilers with natural gas as fuel. The sludge and vinasse are mainly recycled byqualified third party units.
Emergency plan for environmental emergencies
The company and its subsidiaries have formulated contingency plans for environmental emergencies. The companyhas filed with the Bureau of Ecological Environment of Suqian City；Shuanggou Wine has filed with the SihongEcological Environment Bureau of Suqian City, the company's Siyang Branch has filed with Siyang County EcologicalEnvironment Bureau for the record, Guijiu Company has filed with Xiuwen County environmental supervisionbrigade.
The company and its branches and subsidiaries actively organize employees to train and learn the plan, andregularly carry out environmental emergency plan drills, to improve the environmental protection awareness andemergency handling ability of all staff.
Environmental Self-Monitoring Program
The company and its subsidiaries have completed self-monitoring plans
Jiangsu Yanghe Distillery Co., Ltd. has installed COD, ammonia nitrogen, total nitrogen, total phosphorus, PH, flowonline monitoring instruments, whose data is connected to the automatic monitoring and basic database systemof key polluters and the Jiangsu Province pollution source "One enterprise, One station" management system. Thedaily manual sampling and self-testing is conducted, and a periodical sampling inspection by qualified institutionsis entrusted by a third party. The environmental self-monitoring program has been filed with the Jiangsu Provinceself-monitoring information release platform of key monitoring enterprises.
Jiangsu Shuanggou Wine Co., Ltd. has installed COD, ammonia nitrogen, total nitrogen, total phosphorus, PH, flow
online monitoring instruments and released the test results on the automatic monitoring and basic databasesystem of key pollutant discharge enterprises, the Jiangsu Province self-monitoring information release platformof pollutant discharge enterprises, and the Suqian City Big Data Center of Ecological Environment. The daily manualsampling and self-testing is conducted, and a sampling inspection by qualified institutions is entrusted by a thirdparty every month. The environmental self-monitoring program has been filed with the Jiangsu pollutantdischarging enterprises self-monitoring information release platform.
Jiangsu Yanghe Distillery Co., Ltd. Siyang Branch has installed COD, ammonia nitrogen, total nitrogen, totalphosphorus, PH, flow online monitoring instruments and released the test results on the automatic monitoringand basic database system of key pollutant discharge enterprises, the Jiangsu Province self-monitoring informationrelease platform of pollutant discharge enterprises, and the Suqian City Big Data Center of Ecological Environment.The daily manual sampling and self-testing is conducted, and a sampling inspection by qualified institutions isentrusted by a third party every month. The environmental self-monitoring program has been filed with the JiangsuProvince self-monitoring information release platform of key monitoring enterprises.
Guizhou Guijiu Group Co., Ltd. has installed COD, ammonia nitrogen, total nitrogen, total phosphorus, PH, ss, flowonline monitoring instruments released the test results on Guizhou Province Automatic monitoring andmanagement platform for key pollution sources. The daily manual sampling and self-testing is conducted, and asampling inspection by qualified institutions is entrusted by a third party every quarter. The environmental self-monitoring program has been filed with the Xiuwen Branch of Guiyang Bureau of Ecology and Environment.
Input in environmental governance and protection and payment of environmental protection tax
The company, its branches and subsidiaries actively carry out environmental treatment and protection work. In2022, the total investment of sewage operation and environmental management is about CNY 62.58 million, andthe environmental protection tax is about CNY0.6631 million.
Measures taken to reduce carbon emissions during the reporting period and their effects?Applicable □N/A
In 2023, the company integrated the concept of 'dual carbon' into its production and operations, activelydemonstrating the responsibility and commitment of the liquor industry in the context of the green era.
(1) Optimization of Energy Structure: In 2023, the company's proportion of green electricity reached 31%, anincrease of 3 percentage points compared to the previous year. This includes the construction of 8.5 MWdistributed photovoltaic power generation at Yanghe Base, 1.5 MW distributed photovoltaic power generation atSiyang Base, and 6 MW distributed photovoltaic power generation at Shuanggou Base.
(2) Energy saving: At Yanghe Base, a multi-level self-control mode for steam usage was explored, with precisecontrol of steam pressure at the intake and usage ends in the workshops. This achieved stable steam pressure inthe workshops, with a comprehensive steam saving rate of 12.8%. At Siyang Base, by effectively controlling steampressure, the purchased steam usage was significantly reduced. Purchased steam decreased by 0.56 million tonscompared to the previous year. Simultaneously, a new solar energy collection technology was introduced to replacesteam heating methods, reducing steam usage. The daily steam usage in the workshops decreased by 1.54 tons
compared to the previous period. At Shuanggou Base, several balanced steam supply renovation projects wereimplemented, resulting in an annual steam saving of over 6,000 tons.
(3) Green energy utilization: At Siyang Base, efficient upgrades were made to the lighting system, resulting in anannual reduction of 140,000 kWh in lighting electricity consumption, achieving a carbon emission reduction of 97tons. Additionally, by replacing 817 streetlights with solar-powered ones, the electricity consumption for streetlighting was reduced by 51,600 kWh annually, resulting in a carbon emission reduction of 36 tons.
The specific details regarding the reduction of carbon emissions during the reporting period can be found in thecompany's disclosed "Annual Environmental, Social, and Corporate Governance Report for 2023."
Administrative penalties for environmental issues during the reporting period
| Company or subsidiary name | Reason for punishment | Violation situation | Punishment result | The impact on the production and operation of listed companies | Rectification measures |
| None | None | None | None | None | None |
Other environmental information that should be disclosedNoneOther environmental protection related informationNoneII. Social responsibilityThe company has disclosed the “2023 Annual Social Responsibility Report and ESG Report” ，seewww.cninfo.com.cn for details.
III. The Achievements of Poverty Alleviation and Rural RevitalizationIn 2023, the company adhered to the national deployment of "consolidating and expanding the achievements ofpoverty alleviation and effectively connecting rural revitalization", practicing the development concept of"serving the country, benefiting the people, and benefiting the community", bravely assuming socialresponsibility, and deeply cultivating public welfare undertakings.
1. Promoting Rural Revitalization: Actively responding to the requirements of Suqian Municipal Governmentregarding "pairing assistance between urban and rural areas, and joint construction of civilization", the companyassisted Zhangdu Village in selling agricultural and sideline products, opened a "Village-Enterprise JointConstruction? Unique New Trend - Weekend Hair Salon", carried out the "Creating Demonstration of OriginalGrain Planting, Sowing Seeds for Rich Villagers and Strong Villages" sorghum harvest festival activities, anddonated agricultural materials to Zhangdu Village. Cooperated with Qiuzhuang Village to carry out pairedassistance and traditional festival condolence activities, providing one-on-one assistance to extremely poorpeople, low-income households, and families on the edge of subsistence.Implemented assistance for povertyalleviation cooperation between the eastern and western regions, constructed the Langrejiu Village project inTibet, and created a new model for rural revitalization.
2. Engaging in Public Welfare Activities: Conducted theme activities such as "Searching for Lei Feng's Footprints,Promoting the Spirit of Volunteerism" and "Heart-to-Heart with the Party, Walking with Dream Children",focusing on caring for left-behind children.Carried out the "My University, My Dream" public welfare assistanceprogram, helping financially disadvantaged students in Suqian to realize their dream of attending university.Established a public welfare blood donation project and organized the "Red Strength Transmission - Yanghe Co.,Ltd.'s 2023 Volunteer Blood Donation Activity" to spread the "red" spirit.Supported the aerospace industry byestablishing the "Dream Blue China Aerospace Fund Scholarship" to help cultivate aerospace talents.Collaboratedwith the China Dunhuang Grottoes Conservation and Research Foundation to launch the "DunhuangGuardianship Plan" to support the conservation of the Dunhuang Grottoes.Donated CNY10 million to Hebei'sZhuozhou City for disaster relief and post-disaster reconstruction after flooding.Donated CNY10 million to assistwith earthquake relief and post-disaster support for youth in Jishishan County, Gansu Province, after anearthquake.
For further details, please refer to the company's disclosed "Annual Environmental, Social, and CorporateGovernance Report for 2023".
Section VI Significant Events
I. Performance of commitments
1. Complete and incomplete commitments of the Company and its actual controller, shareholders, relatedparties, acquirers, and other related parties for the commitments by the end of the reporting period
?Applicable □N/A
| Commitments | Giver of commitments | Commitment Type | Details of Commitment | Date of Commitment | Term of Commitment | Performance |
| Commitments made at IPO or refinancing | Jiangsu Yanghe Group Co. Ltd. | Commitments on horizontal competition, related transactions, and capital occupation | 1. Commitment to avoid horizontal competition: (1) The company is not currently engaged in any business that competes with the joint-stock company. The company promises to maintain the existing business structure, and not to directly or indirectly operate with the business of the joint-stock company that actually constitutes competition or may constitute competition. Any business, or newly established subsidiaries or affiliated enterprises | August 26, 2009 | Long-term | In normal execution |
engaged inthe above-mentionedbusiness. (2)If thecompanyviolates theabovecommitments, the joint-stockcompany hasthe right torequest thecompany toimmediatelyterminatethe businessof horizontalcompetitionandcompensatethe economicloss causedto the joint-stockcompany. Atthe sametime, thecompanyshall payliquidateddamages ofCNY 10million to thejoint-stockcompany. (3)The companypromises notto use itsstatus as thecontrollingshareholderin the joint-stockcompany todamage thelegitimaterights andinterests ofthe joint-stockcompany,othershareholdersof the joint-stockcompany and
creditors ofthe joint-stockcompany. ⑷This letter ofcommitmenttakes effectfrom thedate ofsigning andcannot berevokedwithout theconsent ofthe joint-stockcompany. 2.Commitmentto reducerelated-partytransactions:
The companywill strictlyabide by therequirementsof relevantlaws,regulationsandnormativedocumentssuch as theCompanyLaw, theSecuritiesLaw, and theCode ofCorporateGovernancefor ListedCompanies,and furtherreduce andstrictlyregulate therelationshipwith joint-stockcompanies.All kinds ofrelated-partytransactionsbetween thetwocompanies,to ensurethat thestatus of the
controllingshareholderand actualcontrollerwill not beused to harmthe interestsof the joint-stockcompany andothershareholdersof the joint-stockcompany,and that nonewoccupationof the joint-stockcompany willoccur.
| controlling shareholder and actual controller will not be used to harm the interests of the joint-stock company and other shareholders of the joint-stock company, and that no new occupation of the joint-stock company will occur. | ||||||
| Jiangsu Blue Alliance Co., Ltd. | Commitments on horizontal competition, related transactions, and capital occupation | Commitment to avoid horizontal competition: 1. The company is mainly engaged in investment management, and does not operate the same or related business as the issuer. The company will not engage in the same or related business as the issuer's business, and will not harm the issuer's interests, nor will it seek illegitimate benefits from the issuer; 2. If the company | November 23, 2017 | Long-term | In normal execution |
violates theabovecommitments, the issuerhas the rightto demandcompensation from itowing toeconomiclosses causedto the issuer,and payliquidateddamages ofCNY 5million, andhave theright torequest theacquisition ofthe businessproject at themarket priceof thebusinessproject ortheestablishment cost price(whichever islower); 3.ThiscommitmentThe book willtake effectfrom thedate ofsigning andcannot berevokedwithout theconsent ofthe issuer.
| violates the above commitments, the issuer has the right to demand compensation from it owing to economic losses caused to the issuer, and pay liquidated damages of CNY 5 million, and have the right to request the acquisition of the business project at the market price of the business project or the establishment cost price (whichever is lower); 3. This commitment The book will take effect from the date of signing and cannot be revoked without the consent of the issuer. | ||||||
| Jiangsu Blue Alliance Co., Ltd. | Share Reduction Commitment | After the issuer's shares have been listed and traded on the stock exchange for one year, the shares transferred | November 23, 2017 | Long-term | In normal execution |
each yearshall notexceed 25%of the totalnumber ofthe issuer'sshares heldby the issuer,and theissuer'sshares heldand theirchanges shallbe reportedto the issuerin a timelymanner.
| each year shall not exceed 25% of the total number of the issuer's shares held by the issuer, and the issuer's shares held and their changes shall be reported to the issuer in a timely manner. | ||||||
| Cong Xuenian | Other commitments | As one of the directors, supervisors and senior managers of the of Jiangsu Blue Alliance Co., Ltd., I promise: 1. During the term of office of the issuer, the annual transfer of Blue Alliance equity shall not exceed 25% of the total equity of Blue Alliance held by me 2. If I resign from the issuer, I shall not transfer the shares of the Blue Alliance held by me within six months after resignation; 3. If I resign from the issuer, the | November 23, 2017 | March 30, 2024 | In normal execution |
number ofsharestransferredshall notexceed 50%of the totalshares of theBlue Allianceheld by mewithin 12months of sixmonths ofresignation
| number of shares transferred shall not exceed 50% of the total shares of the Blue Alliance held by me within 12 months of six months of resignation | |||
| Whether the promise is fulfilled on time | YES | ||
| If the commitment is overdue and not fulfilled, the specific reasons for the failure to fulfill and the next work plan shall be explained in detail | N/A | ||
2.Where any profit forecast was made for any of the Company’s assets or projects and the current reportingperiod is still within the forecast period, the Company shall explain whether the performance of the asset orproject reaches the profit forecast and why:
□Applicable ?N/A
II. Non-operating capital occupation of listed companies by controlling shareholders and otherrelated parties
□Applicable ?N/A
No such case during the current reporting period.III. Illegal Provision of Guarantees for External Parties
□Applicable ?N/A
No such case during the current reporting period.
IV. Explanation of the board of directors on the latest ‘non-standard audit report’
□Applicable ?N/A
V. Explanation Given by the Board of Directors, Supervisory Committee and IndependentDirectors (if applicable) regarding the “Non-standard Auditor’s Report” Issued by the CPAFirm for the Current Reporting Period
□Applicable ?N/A
VI. For Changes in Accounting Policies, Accounting Estimates or Correction of SignificantAccounting Errors Compared with the Financial Report for the Prior Year?Applicable □N/AThe Ministry of Finance issued Interpretation No. 16 of the Enterprise Accounting Standards on November 30,2022 (Finance [2022] No. 31, hereinafter referred to as "Interpretation No. 16"). The content of "the accountingtreatment of the initial recognition exemptions is not applicable to the deferred income tax on assets and liabilitiesarising from individual transactions" shall be implemented from January 1, 2023. For individual transactionssubject to Interpretation No. 16, where temporary differences in taxable income and deductible temporarydifferences arise from recognizing lease liabilities and right-of-use assets, the company retrospectively adjusts theaccumulated impact amount according to Interpretation No. 16 and Enterprise Accounting Standard No. 18 -Income Taxes, and adjusts the earliest period's beginning retained earnings and other related financial statementitems in the financial statements.VII. Explanation of changes in the scope of consolidated statements compared with the financialreport of the previous year?Applicable □N/A
Set up subsidiariesIn April 2023, the holding subsidiary Jiangsu Yanghe Investment Management Co., Ltd. and Jiangsu FuresiAgricultural Co., Ltd. jointly invested CNY150 million to establish Jiangsu Yiguo Xiang Biotechnology Co., Ltd., withJiangsu Yanghe Investment Management Co., Ltd. subscribing for CNY112.5 million, accounting for 75% of itsregistered capital; and Jiangsu Furesi Agricultural Co., Ltd. subscribing for CNY37.5 million, accounting for 25% ofits registered capital. Starting from April 2023, it will be included in the scope of consolidation for theconsolidated financial statements.VIII. Engagement and Disengagement of the CPA firmCPA firm engaged at present
| Name of domestic accounting firm | Suya Jincheng CPA LLP. |
| Remuneration of domestic accounting firm (CNY10,000) | 190.8 |
| Consecutive years of audit services of domestic accounting firms | 17 |
| The name of the certified public accountant of the | Li Laimin, Li Yan |
domestic accounting firm
| domestic accounting firm | |
| Consecutive years of auditing services by certified public accountants of domestic accounting firms | Li Laimin: 4 years; Li Yan: 5 years |
Whether to change the CPA firm in the current period
□Yes ?No
Engagement of internal control audit CPA firm, financial advisor or sponsor
?Applicable □N/ADuring the reporting period, the Company hired Suya Jincheng CPA LLP. as the internal control audit accountingfirm, and paid a total of CNY 530,000 of financial consulting fees during the period.IX. Facing delisting after annual report disclosure
□Applicable ?N/A
X. Bankruptcy and Restructuring
□Applicable ?N/A
No such case during the reporting period.XI. Material Litigations and Arbitration
□Applicable ?N/A
The Company had no material litigation or arbitration during the current reporting period.XII. Punishment and rectification
□Applicable ?N/A
No such case during the reporting period.XIII. The integrity of the company and its controlling shareholders and actual controllers
□Applicable ?N/A
XIV. Significant Related-party Transactions
1. Related-party Transactions Arising from Routine Daily Operations
□Applicable ?N/A
No such case during the reporting period.
2. Related-party Transactions regarding Purchase and Disposal of Assets or Equity
□Applicable ?N/A
No such case during the reporting period.
3. Significant Related-party Transactions Arising from Joint Investments on External Parties
□Applicable ?N/A
No such case during the reporting period.
4. Related Credit and Debt Transactions
□Applicable ?N/A
No such case during the reporting period.
5. Transactions with related financial companies
□Applicable ?N/A
No such case during the reporting period.
6. Transactions between the financial company controlled by the company and related parties
□Applicable ?N/A
There is no deposit, loan, credit or other financial business between the financial company controlled by theCompany and its related parties.
7. Other significant related-party transactions
□Applicable ?N/A
The company has no other significant related transactions during the reporting period.XV. Significant Contracts and Their Execution
1. Trusteeship, Contracting and Leasing
（1）Trusteeship
□Applicable ?N/A
No such case in the reporting period.
（2）Contracting
□Applicable ?N/A
No such case in the reporting period.
（3）Leasing
□Applicable ?N/A
No such case in the reporting period.
2. Significant Guarantees
□Applicable ?N/A
No such case in the reporting period.
3. Entrusting Others to Manage Cash Assets
(1) Entrusted financial management
?Applicable □N/AOverview of entrusted wealth management during the reporting period
Unit: CNY10, 000
| Product types | Source of funds | Amount | Outstanding balance | Amount not collected after the due date | Amount of impairment accrued owing to overdue financial management |
| Bank wealth management products | Private funds | 950,000 | 560,000 | 0 | 0 |
| Trust wealth management products | Private funds | 27,500 | 0 | 27,947.78 | 6,512.85 |
| Total | 977,500 | 560,000 | 27,947.78 | 6,512.85 | |
Specific circumstances of high-risk entrusted wealth management with a single large amount or low security andlow liquidity
?Applicable □N/A
Unit: CNY10, 000
| Trustee name | Type of Trustee (or Trustee) | Type | Amount | Sources of funds | Start date | End date | Investment direction | Remuneration determination method | Reference annualized rate of return | Expected earnings (if any) | Actual profit and loss amount during the reporting period | The actual recovery of profit and loss during the reporting period | Amount of provision for impairment (if any) | Whether it has gone through legal procedures | Is there any entrusted financial plan in the future | An overview of the matter and an index of related queries (if any) |
| CITIC Trust | Trust | CITIC Trust ? Jiahe No. 118 Evergrande Guiyang New World Accumulative Fund Trust Plan | 6,512.85 | Private funds | May 29, 2020 | November 29, 2021 | Debt assets | Cash | 7.60% | 1,085.97 | 2,701.31 | 1341.14 | 6,512.85 | Yes | Yes | The trust financing expires, and part of the principal and income are deferred. For details, please refer to the "Announcement on the Deferred Payment of the Expired Principal and Income of Entrusted Wealth Management" disclosed by the company on December 4, 2021 (Announcement |
No. 2021-044)
| No. 2021-044) | ||||||||||||||||
| AVIC Trust | Trust | AVIC Trust ? Tianxin Bay Area Renewal No. 10 Collective Fund Trust Plan Phase 1 | 9,000 | Private funds | February 26, 2021 | February 26, 2023 | Equity assets | Cash | 8.50% | 1,700 | 1,725.62 | 691.64 | 0 | Yes | Yes | The trust financing extends, and part of the principal and income are deferred. For details, please refer to the "Announcement on the Deferred Payment of the Expired Principal and Income of Entrusted Wealth Management" disclosed by the company on March 18, 2023 (Announcement No. 2023-003) |
| AVIC Trust | AVIC Trust | AVIC Trust ? Tianxin Bay Area Renewal No. 10 Collective Fund | 9,000 | Private funds | March 1, 2021 | March 1, 2023 | Equity assets | Cash | 8.50% | 1,700 | 1,725.62 | 684.66 | 0 | Yes | Yes | The trust financing extends, and part of the principal and income are deferred. For details, please refer to the "Announcement on the Deferred Payment of the Expired |
TrustPlanPhase
| Trust Plan Phase 2 | Principal and Income of Entrusted Wealth Management" disclosed by the company on March 18, 2023 (Announcement No. 2023-003) | ||||||||||||||
| Total | 24,512.85 | -- | -- | -- | -- | -- | -- | 4,485.97 | 6,152.37 | -- | 6,512.85 | -- | -- | -- | |
Entrust finance expected to be failed to recover principle or other situation leading to impairment?Applicable □N/A
The “CITIC Trust Jiahe No. 118 Evergrande Guiyang New World Collective Fund Trust Plan” purchased by the company extended. Based on the principle ofprudence, the company handles changes in fair value. As of December 31, 2023, an impairment provision of CNY65,128,500 was recognized.
On March 18, 2023, the company disclosed a delay announcement of the “AVIC Trust ? Tianxin Bay Area Renewal No. 10 Collective Fund Trust Plan Phase 1”, “AVICTrust ? Tianxin Bay Area Renewal No. 10 Collective Fund Trust Plan Phase 2”. As of December 31, 2023, the aforementioned trust products had repaid principalamounts of CNY10 million each. As of the disclosure date of this report, the aforementioned products had repaid principal amounts of CNY80 million each, leavinga total of CNY40 million in principal yet to be recovered.
(2) Entrusted loan management
□Applicable ?N/A
No such case during the reporting period
4. Other major contracts
□Applicable ?N/A
No such case during the reporting periodXVI. Explanation of other significant matters
?Applicable □N/A
1、The company indirectly holds the partnership shares of Jiangsu Jiequan Emerging Industry Development Fund(Limited Partnership) by investing in Jiangsu Xinghe Investment Management Co., Ltd. and Nanjing XingnaheVenture Capital Partnership (Limited Partnership). Xingnahe Partnership and Jiequan Fund have completed theRaised and completed the filing with the Asset Management Association of China, the filing codes are SCF515 andSCL005 respectively. For details, please refer to the "Announcement on Cooperative Investment with ProfessionalInvestment Institutions" (Announcement No.: 2017-021) and "Progress Announcement on CooperativeInvestment with Professional Investment Institutions" disclosed by the company on December 30, 2017 and April12, 2018 (Announcement No.: 2018-011).
2、The wholly-owned subsidiary of the company, Sujiu Group Jiangsu Wealth Management Co., Ltd. subscribedfor the partnership shares of Suzhou Danqing Phase II Innovative Pharmaceutical Industry Investment Partnership(Limited Partnership). Danqing Phase II has completed the fundraising and completed the filing with the ChinaSecurities Investment Fund Industry Association, the filing code is SED720. For details, please refer to the"Announcement on Cooperative Investment with Professional Investment Institutions" (Announcement No.:
2018-021), "About Announcement on the Progress of Cooperative Investment with Investment Institutions(Announcement No.: 2018-030), "Announcement on the Progress of Cooperative Investment with ProfessionalInvestment Institutions" (Announcement No.: 2019-004).
3、Jiangsu Yanghe Investment Management Co., Ltd. subscribed for the partnership share of Panmao (Shanghai)Investment Center (Limited Partnership). Panmao Investment has completed the fundraising and completed thefiling with the Asset Management Association of China, the filing code is SED720. For details, please refer to the"Announcement on Cooperative Investment with Professional Investment Institutions" disclosed by the companyon June 22, 2018 (announcement number: 2018-025).
4、Jiangsu Yanghe Investment Management Co., Ltd. subscribed for the partnership shares of Jiangsu ZijinHongyun Health Industry Investment Partnership (Limited Partnership), Suqian Yida Industrial Venture CapitalFund (Limited Partnership), and Hunan Huaye Tiancheng Venture Capital Partnership (Limited Partnership). ZijinHongyun, Suqian Yida and Huaye Tiancheng have completed the fundraising and completed the filing with theAsset Management Association of China. The filing codes are SGA436, SGV275 and SGW727 respectively. Fordetails, please refer to the "Announcement on Cooperative Investment with Professional Investment Institutions"(Announcement No.: 2019-002) disclosed by the company on March 28, 2019, and "About Participating inInvestment in Suqian Yida Industrial Venture Capital" disclosed on April 30, 2019 Announcement on Funds and
Related Party Transactions” (Announcement No.: 2019-012), and “Announcement on Subscription of HunanHuaye Tiancheng Venture Capital Fund” disclosed on September 6, 2019 (Announcement No.: 2019-021).
5、Jiangsu Yanghe Investment Management Co., Ltd. indirectly holds the partnership share of NanjingXingnaheyuan Venture Capital Partnership (Limited Partnership) by subscribing to Nanjing Xingnahai EquityInvestment Partnership (Limited Partnership), and Jiangsu Yanghe Investment Management Co., Ltd. subscribesfor Suzhou The partnership shares of Zhongxing Fushuzhi Venture Capital Partnership (Limited Partnership) andNanjing Hongyang Equity Investment Partnership (Limited Partnership), Xingna Heyuan, Suzhou Xingfu andNanjing Hongyang have completed the fundraising and invested in China Securities Investment Fund The industryassociation has completed the filing, and the filing codes are SLR472, SNC111, and SNF086. For details, please referto the "Announcement on Cooperative Investment with Professional Investment Institutions" (Announcement No.:
2020-031) disclosed by the company on August 12, 2020, and the "About Subscription of Suzhou ZhongxinFushuzhi Entrepreneurship" disclosed on October 19, 2020 Investment Fund Announcement (Announcement No.:
2020-035), and the Announcement on Subscription of Nanjing Hongyang Equity Investment Fund (AnnouncementNo.: 2020-038) disclosed on November 4, 2020. Suzhou Xingfu and Nanjing Hongyang completed the fundraisingscale of CNY 1.5 billion and CNY 230 million respectively.
6、Jiangsu Yanghe Investment Management Co., Ltd. subscribed for the partnership share of Zhuhai HengqinHuaye Tiancheng Phase IV Venture Capital Partnership (Limited Partnership), Xiamen Yuanfeng Equity InvestmentFund Partnership (Limited Partnership), and Shanghai Yunfeng Xincheng Investment Center (Limited Partnership).Huaye Phase IV, Xiamen Yuanfeng and Yunfeng Xincheng have completed the filing with the Asset ManagementAssociation of China. The filing codes are SQB769, SLX842 and SH1000 respectively. For details, please refer to the"Announcement on Subscribing Zhuhai Hengqin Huaye Tiancheng Phase IV Venture Capital Fund" disclosed by thecompany on February 10, 2021 (Announcement No.: 2021-007), and the "About Subscription to Xiamen" disclosedon April 13, 2021 Yuanfeng Equity Investment Fund Announcement (Announcement No.: 2021-012), and theAnnouncement on Cooperative Investment with Professional Investment Institutions disclosed on August 6, 2021(Announcement No.: 2021-033). Huaye Phase IV and Xiamen Yuanfeng completed the fundraising scale of CNY
1.899 billion and CNY 20 billion respectively.
7、Jiangsu Yanghe Blue Investment Management Co., Ltd. and Jiangsu Yanghe Dream Investment ManagementCo., Ltd. subscribe for the partnership shares of Nanjing Huatai Yanghe Equity Investment Mother Fund (limitedpartnership). Huatai Yanghe Mother Fund has completed the filing in Asset Management Association of China withthe filing code of SXY168. For details, please refer to the "Announcement on the establishment of wholly-ownedsubsidiaries and Cooperative Investment with Professional Investment Institutions" disclosed by the company onAugust 10, 2022 (Announcement No.: 2022-017), and the "Progress Announcement on the establishment ofwholly-owned subsidiaries and Cooperative Investment with Professional Investment Institutions" disclosed bythe company on September 28, 2022 (Announcement No.: 2022-020), and the "Progress Announcement on theestablishment of wholly-owned subsidiaries and Cooperative Investment with Professional InvestmentInstitutions" disclosed by the company on December 17, 2022 (Announcement No.: 2022-024), and the“Announcement on the establishment of a wholly-owned subsidiary and joint investment with a professionalinvestment institution” disclosed by the company on January 5, 2023(Announcement No,:2023-001).
8、Jiangsu Yanghe Investment Management Co., Ltd. subscribed to the partnership shares of the Suqian HuataiProduction and Development Technology Equity Investment Fund (Limited Partnership). The Huatai YangheParent Fund has been filed with the Asset Management Association of China (AMAC), with the filing codeSACH73. For details, please refer to the “Announcement on the Progress of Joint Investment and RelatedTransactions with Professional Institutions” disclosed by the company on December 23, 2023(Announcement
No.:2023-031), and the ” Announcement Regarding Joint Investment and Related Transactions with ProfessionalInstitutions” disclosed by the company on August 29, 2023(Announcement No.:2023-019).XVII. Significant Events of the Company's Subsidiaries
□Applicable ?N/A
Section VII Changes in Shares and ShareholdersI. Changes in shares
1. Table of Changes in Share Capital
Unit：share
| Before the change | Changes in the period (+, -) | After the change | |||||||
| Shares | Ratio | New Shares Issued | Bonus issue | Share transferred from capital reserve | Others | Sub-total | Shares | Ratio | |
| 1. Shares subject to conditional restriction(s) | 5,692,132 | 0.38% | 0 | 0 | 0 | -1,402,896 | -1,402,896 | 4,289,236 | 0.28% |
| 1.1 State holdings | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| 1.2 Shares held by State-owned corporate | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| 1.3. Other domestic holdings | 5,692,132 | 0.38% | 0 | 0 | 0 | -1,402,896 | -1,402,896 | 4,289,236 | 0.28% |
| Including: held by domestic corporates | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| held by domestic natural persons | 5,692,132 | 0.38% | 0 | 0 | 0 | -1,402,896 | -1,402,896 | 4,289,236 | 0.28% |
| 4. Foreign shares | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| Including: held by overseas corporates | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| held by overseas natural person | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| 2. Shares without restriction | 1,501,295,868 | 99.62% | 0 | 0 | 0 | 859,970 | 859,970 | 1,502,155,838 | 99.72% |
| 2.1 CNY ordinary shares | 1,501,295,868 | 99.62% | 0 | 0 | 0 | 859,970 | 859,970 | 1,502,155,838 | 99.72% |
| 2.2 Domestically listed foreign shares | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| 2.3 Foreign shares listed overseas | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| 2.4 Others | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| 3. Total shares | 1,506,988,000 | 100.00% | 0 | 0 | 0 | -542,926 | -542,926 | 1,506,445,074 | 100.00% |
Reason for share changes?Applicable □N/AChanges in shares were mainly due to changes in the shares locked by the current and outgoing directors,supervisors and senior managers of the company, and the cancellation of shares.
Approval for changes in share capital
□Applicable ?N/A
Transfer for changes in share capital
□Applicable ?N/A
Effects of changes in share capital on the basic earnings per share ("EPS"), diluted EPS, net assets per shareattributable to common shareholders of the Company, and other financial indexes over the last year and lastperiod
□Applicable ?N/A
Other contents that the Company considers necessary or required by the securities regulatory authorities todisclose
□Applicable ?N/A
2. Changes in Restricted Shares
?Applicable □N/A
Unit：share
| Name of shareholder | Opening restricted shares | Increased in current period | Vested in current period | Closing restricted shares | Note for restricted shares | Date of unlocking |
| Zhou Xinhu | 2,878,291 | 0 | 719,573 | 2,158,718 | Lock in upon director's departure | On March 7, 2023, 25% of the shares held were lifted from restrictions on sale, and the remaining shares that have not been lifted from restrictions on sale will be lifted in accordance with relevant regulations. |
| Cong Xuenian | 2,778,291 | 0 | 694,573 | 2,083,718 | Lock in upon director's departure | On March 30, 2023, 25% of the shares held were lifted from restrictions on sale, and the remaining shares that have not been lifted from restrictions on |
sale will belifted inaccordancewith relevantregulations.
| sale will be lifted in accordance with relevant regulations. | ||||||
| Total | 5,656,582 | 0 | 1,414,146 | 4,242,436 | -- | -- |
II. Issuance and Listing of Securities
1. Securities (exclude Preferred Share) Issued during the Reporting Period
□Applicable ?N/A
2. Explanation on Changes in Share Capital & the Structure of Shareholders, the Structure of Assets andLiabilities?Applicable □N/A
The company convened the 16th meeting of the 7th Board of Directors and the 10th meeting of the 7th SupervisoryBoard on August 28, 2023. They reviewed and approved the "Plan for Cancelling the Remaining Shares in theRepurchase Special Securities Account". On September 15, 2023, the company convened the first extraordinarygeneral meeting of shareholders in 2023, and ”the proposal for Cancelling the Remaining Shares in the RepurchaseSpecial Securities Account” was approved. The company agreed to cancel 542,926 shares remaining in therepurchase special securities account and correspondingly reduce the company's registered capital. For detailedinformation, please refer to the announcements released by the company on August 29, 2023, and September 16,2023, titled "Announcement on the Cancellation of Remaining Shares in the Repurchase Special SecuritiesAccount" (Announcement No.: 2023-020) and "Announcement of Resolutions of the First Extraordinary GeneralMeeting of Shareholders in 2023" (Announcement No.: 2023-023), etc..
3. Existent Shares Held by Internal Staff of the Company
□Applicable ?N/A
III. Particulars about the Shareholders and Actual Controller
1. Total Number of Shareholders and Their Shareholdings
Unit：share
| Total number of common shareholders at the end of the reporting period | 180,196 | Total number of common shareholders at the end of the previous month prior to the annual report disclosure date | 183,521 | The total number of preferred shareholders whose voting rights have been restored at the end of the reporting period (if any) | 0 | The total number of preference shareholders whose voting rights have been restored at the end of the previous month before | 0 |
(see Note 8)
| (see Note 8) | the disclosure date of the annual report (if any) (see Note 8) | |||||||||||
| Shareholders who hold more than 5% of total shares or the top 10 shareholders (excluding lending of shares through the transfer facility) | ||||||||||||
| Name of Shareholders | Nature of shareholders | Share-holding percentage (%) | Total common shares held at the end of the reporting period | Increase/decrease during the reporting period | Number of restricted shares held | Number of unrestricted shares held | Pledge, marking or freezing | |||||
| Status | Amount | |||||||||||
| Jiangsu Yanghe Group Co., Ltd. | State-owned legal person | 34.18% | 514,858,939 | 0 | 0 | 514,858,939 | N/A | 0 | ||||
| Jiangsu Blue Alliance Co., Ltd. | Domestic Non-state-owned legal person | 17.59% | 264,991,926 | 0 | 0 | 264,991,926 | N/A | 0 | ||||
| Shanghai Haiyan Logistics Development Co., Ltd. | State-owned legal person | 9.67% | 145,708,137 | 0 | 0 | 145,708,137 | N/A | 0 | ||||
| Shanghai Jieqiang Tobacco Sugar & Wine (Group) Co., Ltd. | State-owned legal person | 3.97% | 59,744,099 | 0 | 0 | 59,744,099 | N/A | 0 | ||||
| Bank of China Limited - China Merchants CSI Baijiu Index Classified Securities Investment Fund | Others | 3.15% | 47,406,371 | 3,619,330 | 0 | 47,406,371 | N/A | 0 | ||||
| Hong Kong Securities Clearing Company Limited | Overseas legal persons | 2.56% | 38,520,846 | 1,153,116 | 0 | 38,520,846 | N/A | 0 | ||||
| Bank of China Limited - E Fund Blue Chip Selected Mixed Securities Investment Fund | Others | 2.39% | 36,000,006 | 2,800,006 | 0 | 36,000,006 | N/A | 0 | ||||
| China Securities Finance Corporation Limited | Domestic Non-state-owned legal person | 0.92% | 13,790,044 | 0 | 0 | 13,790,044 | N/A | 0 | ||||
Bank of ChinaLimited - E FundPremiumSelected HybridSecuritiesInvestmentFund
| Bank of China Limited - E Fund Premium Selected Hybrid Securities Investment Fund | Others | 0.83% | 12,500,032 | 1,680,032 | 0 | 12,500,032 | N/A | 0 |
| Yanghe Distillery Co., LTD－The first phase of the core backbone shareholding plan | Others | 0.61% | 9,118,384 | 0 | 0 | 9,118,384 | N/A | 0 |
| Strategic investors or general legal persons becoming the top 10 shareholders due to placement of new shares (if any) (see Note 3) | NO | |||||||
| Explanation of the related relationship or concerted action of the above shareholders | NO | |||||||
| Explanation of the above-mentioned shareholders involving entrusted/entrusted voting rights and abstention from voting rights | NO | |||||||
| Special instructions for the existence of a special repurchase account among the top 10 shareholders (if any) (see Note 10) | NO | |||||||
| Shareholdings of the top 10 shareholders without restrictions on sales | ||||||||
| Name of shareholders | Number of unrestricted shares held at the end of the reporting period | Type of shares | ||||||
| Type | Amount | |||||||
| Jiangsu Yanghe Group Co., Ltd. | 514,858,939 | CNY common shares | 514,858,939 | |||||
| Jiangsu Blue Alliance Co., Ltd | 264,991,926 | CNY common shares | 264,991,926 | |||||
| Shanghai Haiyan Logistics Development Co., Ltd. | 145,708,137 | CNY common shares | 145,708,137 | |||||
| Shanghai Jieqiang Tobacco Sugar & Wine (Group) Co., Ltd. | 59,744,099 | CNY common shares | 59,744,099 | |||||
| Bank of China Limited－China Merchants CSI Liquor Index Graded Securities Investment Fund | 47,406,371 | CNY common shares | 47,406,371 | |||||
| Hong Kong Securities Clearing Co., Ltd | 38,520,846 | CNY common shares | 38,520,846 | |||||
| Bank of China Limited－E Fund Blue Chip Selected Mixed Securities Investment Fund | 36,000,006 | CNY common shares | 36,000,006 | |||||
| China Securities Finance Co., LTD | 13,790,044 | CNY common | 13,790,044 | |||||
shares
| shares | |||
| Bank of China Limited－E Fund Premium Selected Hybrid Securities Investment Fund | 12,500,032 | CNY common shares | 12,500,032 |
| Yanghe Distillery Co., LTD－The first phase of the core backbone shareholding plan | 9,118,384 | CNY common shares | 9,118,384 |
| Description of the connected relationship or concerted action among the top 10 shareholders of unrestricted tradable shares, and between the top 10 shareholders of unrestricted tradable shares and the top 10 shareholders | NO | ||
| Explanation on the participation of the top 10 ordinary shareholders in the securities margin trading (if any) (see Note 4) | NO | ||
Participation of top 10 shareholders in the lending of shares in the transfer business
□Applicable ?N/A
Change in the top 10 shareholders from the previous period
□Applicable ?N/A
Any of the Company’s top 10 common shareholders or top 10 non-restricted common shareholders conductedany agreed buy-back in the reporting period?
□Yes ?No
No such case during the current reporting period.
2. Particulars about Controlling Shareholder of the Company
Nature of controlling shareholder: local state-owned holdingType of controlling shareholder: Corporation
| Name of Controlling Shareholder | Legal representative/ People in charge | Date of establishment | Organization Code | Business scope |
| Jiangsu Yanghe Group Co., LTD | Yang Weiguo | May 8, 1997 | 91321300142334989Y | The business scope includes grain procurement; import and export of various commodities and technologies on a self-operated or agency basis (excluding commodities and technologies restricted or prohibited from import and export by the state); sales of nickel, molybdenum iron, refined nickel- |
iron, nickel-chromiumpig iron, nickel-chromium ore, furnacecharge, steel,mechanical partscastings, light stabilizer944, light stabilizer 622,antioxidant 3114,organic fertilizers,compound fertilizers,chemical raw materials(excluding dangerousgoods), viscose staplefibers, cotton pulppellets, electric bicyclesand accessories,lithium batteries,hardware and electricalsales; sales of rawgrains; propertyleasing; industrialinvestment; municipalpublic works, buildingconstruction projects,tourism and culturalindustry investment(business activitiesshall be carried outwith the approval ofrelevant departmentsas required by law).General projects: salesof communicationequipment; sales ofoptical communicationequipment; sales ofelectronic products;sales of mobilecommunicationequipment; sales ofmobile terminalequipment; wholesaleof computer hardwareand auxiliaryequipment; softwaredevelopment;information systemintegration services(business activitiesshall be carried outindependently inaccordance with thebusiness license, exceptfor projects that
require approval bylaw).
| require approval by law). | ||
| The controlling shareholder reports on the equity status of other domestic and foreign listed companies held or invested in during the reporting period. | N/A | |
Change of controlling shareholder during the reporting period
□Applicable ?N/A
The Company's controlling shareholder has not changed during the reporting period.
3. Particulars about the Company’s Actual Controller & Concerted Parties
Nature of actual controller: local state-owned assets management organizationActual controller type: Corporation
| Name of Actual Controller | Legal representative/ People in charge | Date of establishment | Organization Code | Business scope |
| Suqian SASAC(State-owned Assets Supervision and Administration Commission) | Zhao Xiaoli | October 22, 2005 | N/A | On behalf of Suqian Municipal people's Government to execute the responsibilities of state-owned enterprise investors, implementing the supervision and management of state-owned assets and state-owned enterprises. |
| The equity of other domestic and foreign listed companies controlled by the actual controller during the reporting period | N/A | |||
Change of the actual controller during the reporting period
□Applicable ?N/A
No such change during the reporting period.The ownership and controlling relationship between the actual controller of the Company and the Company isdetailed as follows:
The actual controller controls the company through trust or other asset management methods
□Applicable ?N/A
4. The Company's Controlling Shareholder or the Largest Shareholder and its Concerted Action Person'sCumulative Pledged Shares Account for 80% of the Company's Shares Held by Them
□Applicable ?N/A
5. Particulars about Other Corporate Shareholders with Shareholding Proportion over 10%?Applicable □N/A
| Name of Actual Controller | Legal representative/ People in charge | Date of establishment | Organization Code | Business scope |
| Jiangsu Blue Alliance Co., LTD | Cong Xuenian | 28 July, 2016 | CNY 105.6 million | Sales of daily necessities, biotechnology research and development, furniture production, business management consulting services, fruit tree planting, pre-packaged food sales. |
6. Particulars on Shareholding Decrease Restrictions for the Controlling Shareholders, Actual Controller,Restructurer or Other Committing Parties
□Applicable ?N/A
IV. The specific implementation of share repurchases during the reporting period
The implementation progress of share repurchases
□Applicable ?N/A
The implementation progress of reducing repurchased shares by centralized bidding
□Applicable ?N/A
Section VIII Preferred Shares
□Applicable ?N/A
There are no preferred shares in the company during the reporting period.
Section IX Bonds
□Applicable ?N/A
Section X Financial ReportI.Auditor’s report
| Type of audit report | Standard and unqualified opinion |
| Date of signature | 25 April 2024 |
| Name of Audit | Suya Jincheng CPA LLP. |
| No. of auditor’s report | Suya Audit [2024] No.755 |
| Names of auditors | Li Laimin, Li Yan |
Body of Audit ReportTo all the shareholders of Jiangsu Yanghe Distillery Co., Ltd.:
OpinionWe have audited the financial statements of Jiangsu Yanghe Distillery Co., Ltd. (hereinafter referredto as the “Company”), which comprise the consolidated balance sheet and balance sheet as at 31December 2023, consolidated income statement and income statement, consolidated cash flowstatement and cash flow statement, consolidated statement of changes in owners' equity andstatement of changes in owners' equity for the year then ended and notes to the financialstatements.In our opinion, the attached financial statements are prepared, in all material respects, in accordancewith Accounting Standards for Business Enterprises and present fairly the financial position of thecompany as at 31 December 2023 and its operating results and cash flow for the year then ended.Basis for opinionWe conducted our audit in accordance with China Standards on Auditing (“CSAs”) for CertifiedPublic Accountants. Our responsibilities under those standards are further described in the Auditor'sResponsibilities for the Audit of the Financial Statements section of our report. We are independentof the Company in accordance with the Code of professional ethics for Certified Public Accountantsin China (“the Code”), and we have fulfilled our other ethical responsibilities in accordance withthe Code. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our opinion.Key audit mattersKey audit matters are those matters that, in our professional judgment, were of most significance inour audit of the consolidated financial statements of the current period. These matters wereaddressed in the context of our audit of the consolidated financial statements as a whole and, informing our opinion thereon, and we do not provide a separate opinion on these matters.
| 1.Recognition of revenue | |
| Please refer to note 27, “Significant Accounting Policies and Accounting Estimates” in Note Ⅲ, note 36 in Note V "main Items of the Consolidated Financial Statements". | |
| Key audit matters | How our audit addressed the key audit matter |
| The Company’s specific condition of revenue recognition is that revenue | Our procedures in relation to revenue recognition included: (1) Understood, tested and evaluated the effectiveness of internal |
is recognized after customeracceptance based on transfer ofcontrol. In 2023, the Company’sannual operating revenue wasCNY33.126 billion. The amountsubstantial and operating revenue isan important component of incomestatement. Therefore, we identifiedoperating revenue as a key auditmatter.
| is recognized after customer acceptance based on transfer of control. In 2023, the Company’s annual operating revenue was CNY33.126 billion. The amount substantial and operating revenue is an important component of income statement. Therefore, we identified operating revenue as a key audit matter. | control of sales and cash receipts cycle designed and executed by the management. (2) Through sampling inspection of the sales contract, identified the contractual rights and obligations, evaluated the point of time of performance obligations and evaluated whether the judgment of the transfer of control related to revenue recognition conforms to the Company's accounting policies and Accounting Standards for Business Enterprises. (3) Judged whether there is an abnormal fluctuation of revenue in the reporting period with the analytic review of revenue and gross profit margin in combination with product category. (4) Sampling inspection of supporting documents related to revenue recognition including sales contracts or orders, invoices, delivery lists or receiving reports, shipping lists and bank slips. (5) Implemented the external confirmation of selected major franchisers and inspected the payback of account receivables after the reporting period in combination with audit of accounts receivable and contract liabilities. (6) Sampling inspection of calculation and accounting treatment of sales discount and sales allowance. (7) Chose samples from sales revenue records before and after the balance sheet date, inspected related supporting documents and evaluated whether the revenue recorded in the appropriate accounting period. |
| 2. Existence, valuation and allocation of inventories | |
| Please refer to note 13, “Significant Accounting Policies and Accounting Estimates” in Note Ⅲ, and note 8 in Note V, "main Items of the Consolidated Financial Statements". | |
| Key audit matters | How our audit addressed the key audit matter |
| As at 31 December 2023, the book value of inventory is CNY 18.954 billion, accounting for 27.16% of the total assets and 36.08% of all current assets. The book value of the inventories at year end is relatively large and accounts for a relatively large proportion of the total assets at the year end. Therefore, the existence, valuation and allocation of inventories are identified as a key audit matter. | Our procedures in relation to existence, valuation, allocation of inventories included: (1) Understood, tested and evaluated the effectiveness of management's design and implementation of inventory-related internal control. (2) Carried out the inventory analysis review procedure. (3) Supervised the inventory at the end of the period. (4) Sample check of production cost calculation table and other cost accounting data, and conducted valuation test on inventory, and evaluated the accuracy of closing balance of inventory. (5) Obtained the calculation table of provision for stock obsolescence, conduct the inventory impairment test, reviewed the inventory impairment test process, and checked whether the provision for stock obsolescence is made sufficiently. |
Other informationThe directors of the Company are responsible for the other information. The other informationcomprises the information included in the annual report, but does not include the financialstatements and our auditors report thereon.Our opinion on the financial statements does not cover the other information and we do not expressany form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the otherinformation and, in doing so, consider whether the other information is materially inconsistent withthe financial statements or our knowledge obtained in the audit or otherwise appears to bematerially misstated.If, based on the work we have performed, we conclude that there is a material misstatement of thisother information; we are required to report that fact. We have nothing to report in this regard.
Responsibilities of directors and those charged with governance for the financial statementsThe directors of the Company are responsible for the preparation of the financial statements thatgive a true and fair view in accordance with the disclosure requirements of Accounting Standardsfor Business Enterprises, and designing, implementing and maintaining internal control that isnecessary to ensure the financial statements are free from material misstatement, whether due tofraud or error.In preparing the financial statements, the directors are responsible for assessing the Company’sability to continue as a going concern, disclosing, as applicable, matters related to going concern andusing the going concern basis of accounting unless the directors either intend to liquidate theCompany or to cease operations, or have no realistic alternative but to do so.Those charged with governance are responsible for overseeing the Company’s financial reportingprocess.
Auditor's responsibilities for the audit of the financial statementsOur objectives are to obtain reasonable assurance about whether the financial statements as awhole are free from material misstatement, whether due to fraud or error, and to issue an auditor’sreport that includes our opinion. Reasonable assurance is a high level of assurance, but is not aguarantee that an audit conducted in accordance with CSAs will always detect a materialmisstatement when it exists. Misstatements can arise from fraud or error and are consideredmaterial if, individually or in the aggregate, they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these financial statements.As part of an audit in accordance with CSAs, we exercise professional judgment and maintainprofessional skepticism throughout the audit. We also:
(1) Identify and assess the risks of material misstatement of the financial statements, whether dueto fraud or error, design and perform audit procedures responsive to those risks, and obtain auditevidence that is sufficient and appropriate to provide a basis for our opinion. The risk of notdetecting 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 overrideof internal control.
(2) Obtain an understanding of internal control relevant to the audit in order to design auditprocedures that are appropriate in the circumstances.
(3) Evaluate the appropriateness of accounting policies used and the reasonableness of accountingestimates and related disclosures made by the directors.
(4) Conclude on the appropriateness of the directors’ use of the going concern basis of accountingand, based on the audit evidence obtained, whether a material uncertainty exists related to events
or conditions that may cast significant doubt on the Company’s ability to continue as a going concern.If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’sreport 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 ofour auditor’s report. However, future events or conditions may cause the Company to cease tocontinue as a going concern.
(5) Evaluate the overall presentation, structure and content of the financial statements, includingthe disclosures, and whether the financial statements represent the underlying transactions andevents in a manner that achieves fair presentation.
(6) Obtain sufficient and appropriate audit evidence regarding the financial information of theentities or business activities within the Company to express an opinion on the financial statements.We are responsible for the direction, supervision and performance of the group audit. We remainsolely responsible for our audit opinion.We communicate with those charged with governance regarding, among other matters, the plannedscope and timing of the audit and significant audit findings, including any significant deficiencies ininternal control that we identify during our audit.We also provide the governance with a statement that we have complied with relevant ethicalrequirements regarding independence, and to communicate with them all relationships and othermatters that may reasonably be thought to bear on our independence, and where applicable,related safeguards.From the matters communicated with the governance, we determine those matters that were ofmost significance in the audit of the consolidated financial statements of the current period and aretherefore the key audit matters. We describe these matters in our auditor’s report unless law orregulation 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 adverseconsequences of doing so would reasonably be expected to outweigh the public interest benefits ofsuch communication.
Suya Jincheng CPA LLP
CPA of China: LI Laimin
CPA of China: LI Yan
Nanjing, China 25 April 2024
II. Financial statements
Consolidated balance sheet
Prepared by: Jiangsu Yanghe Distillery Co., Ltd.
As at 31 December 2023
Unit: CNY
| Item | On December 31st 2023 | On January 1st 2023 |
| Current assets: | ||
| Cash and bank balances | 25,812,787,646.86 | 24,375,449,432.33 |
| Settlement reserves | ||
| Lending funds | ||
| Financial assets held for trading | 5,851,217,684.93 | 7,998,150,119.16 |
| Derivative financial assets | ||
| Notes receivables | 526,476,976.44 | 526,004,730.00 |
| Accounts receivables | 3,528,778.28 | 45,142,892.78 |
| Account receivables financing | 261,576,568.30 | 623,098,310.00 |
| Prepayment | 50,971,870.03 | 11,019,093.60 |
| Premiums receivable | ||
| Reinsurance accounts receivable | ||
| Reinsurance contract reserve | ||
| Other receivables | 57,782,263.17 | 74,362,342.41 |
| Including: Interests receivable | ||
| Dividends receivable | ||
| Buying back the sale of financial assets | ||
| Inventories | 18,954,235,402.25 | 17,729,258,966.54 |
| Contract assets | ||
| Assets held for sale | ||
| Non-current assets due within one year | ||
| Other current assets | 1,016,160,416.30 | 129,687,990.26 |
| Total current assets | 52,534,737,606.56 | 51,512,173,877.08 |
| Non-current assets: | ||
| Disbursement of loans and advances | ||
| Investment in debt instruments | ||
| Investment in other debt instruments | ||
| Long-term receivables | ||
| Long-term equity investments | 1,229,838,793.04 | 32,979,630.21 |
| Investment in other equity instruments | ||
| Other non-current financial assets | 5,532,792,281.26 | 6,148,634,160.78 |
| Investment property | ||
| Fixed assets | 5,305,626,964.48 | 5,794,773,069.53 |
| Construction in progress | 1,457,315,739.56 | 757,145,492.90 |
| Productive biological assets | ||
| Oil and gas assets |
Right-of-use asset
| Right-of-use asset | 82,464,551.16 | 34,115,602.27 |
| Intangible assets | 1,773,115,842.97 | 1,714,381,075.43 |
| Development expenses | ||
| Goodwill | 276,001,989.95 | 276,001,989.95 |
| Long-term deferred expenses | 8,052,339.84 | 12,078,509.76 |
| Deferred tax assets | 1,326,312,613.59 | 1,506,694,037.06 |
| Other non-current assets | 266,028,733.50 | 183,847,201.84 |
| Total non-current assets | 17,257,549,849.35 | 16,460,650,769.73 |
| Total assets | 69,792,287,455.91 | 67,972,824,646.81 |
| Current liabilities: | ||
| Short-term loans | ||
| Borrowings from the central bank | ||
| Loans from other banks | ||
| Financial liabilities held for trading | ||
| Derivative financial liabilities | ||
| Notes payable | ||
| Accounts payables | 1,425,873,552.42 | 1,376,209,527.01 |
| Advance from customer | ||
| Contract liabilities | 11,104,763,487.18 | 13,741,547,677.99 |
| Financial assets sold for repurchase | ||
| Customer brokerage deposits | ||
| Securities underwriting brokerage deposits | ||
| Receivings from vicariously sold securities | ||
| Employee benefits payable | 338,213,836.87 | 482,991,738.73 |
| Taxes payable | 1,009,471,862.46 | 1,136,695,805.18 |
| Other payables | 2,024,640,485.37 | 1,854,922,517.23 |
| Including: Interests payable | ||
| Dividends payable | ||
| Handling charges and commissions payable | ||
| Reinsurance accounts payables | ||
| Liabilities held for sale | ||
| Non-current liabilities due within one year | 25,080,946.40 | 23,684,406.75 |
| Other current liabilities | 1,247,749,929.26 | 1,312,248,150.31 |
| Total current liabilities | 17,175,794,099.96 | 19,928,299,823.20 |
| Non-current liabilities: | ||
| Insurance contract reserves | ||
| Long-term loans | ||
| Bonds payable | ||
| Including: Preference shares |
Perpetual bonds
| Perpetual bonds | ||
| Lease liabilities | 48,709,685.88 | 3,715,300.93 |
| Long-term payables | 196,013,394.53 | 196,459,834.53 |
| Long-term payroll payables | ||
| Accrued liabilities | ||
| Deferred income | 87,520,166.67 | 92,277,166.67 |
| Deferred tax liabilities | 234,386,134.01 | 227,529,007.67 |
| Other non-current liabilities | ||
| Total non-current liabilities | 566,629,381.09 | 519,981,309.80 |
| Total liabilities | 17,742,423,481.05 | 20,448,281,133.00 |
| Shareholders' equity | ||
| Share capital | 1,506,445,074.00 | 1,506,988,000.00 |
| Other equity instruments | ||
| Including: preference shares | ||
| Perpetual bonds | ||
| Capital reserves | 930,524,463.31 | 904,650,678.91 |
| Less: treasury stock | 56,278,680.79 | |
| Other comprehensive income | 2,023,194.81 | 1,982,037.01 |
| Special reserves | ||
| Surplus reserves | 753,494,000.00 | 753,494,000.00 |
| General risk reserve | ||
| Undistributed profits | 48,746,028,613.08 | 44,364,203,149.57 |
| Total equity attributable to owners of the parent company | 51,938,515,345.20 | 47,475,039,184.70 |
| Non-controlling interests | 111,348,629.66 | 49,504,329.11 |
| Total owners' equity | 52,049,863,974.86 | 47,524,543,513.81 |
| Total liabilities and owners' equity | 69,792,287,455.91 | 67,972,824,646.81 |
Legal representative: Zhang LiandongPerson in charge of accounting affairs: Yin QiumingPerson in charge of accounting department: Zhao Qike
Balance sheet of parent company
As at 31 December 2023
Unit: CNY
| Item | On December 31st 2023 | On January 1st 2023 |
| Current assets: | ||
| Cash and bank balances | 23,078,403,040.50 | 23,231,793,606.79 |
Financial assets held for trading
| Financial assets held for trading | 4,353,570,013.70 | 5,084,342,428.09 |
| Derivative financial assets | ||
| Notes receivables | 355,328,831.49 | 505,704,730.00 |
| Accounts receivables | 95,491,609.32 | 1,204,161,788.24 |
| Account receivables financing | 394,478,350.00 | |
| Prepayment | 55,401,319.74 | 51,616,255.75 |
| Other receivables | 2,510,993,906.82 | 1,068,086,225.72 |
| Including: Interests receivable | ||
| Dividends receivable | 519,220.27 | |
| Inventories | 12,298,697,844.56 | 11,550,551,319.29 |
| Contract assets | ||
| Assets held for sale | ||
| Non-current assets due within one year | ||
| Other current assets | 238,168,160.66 | 40,571,905.54 |
| Total current assets | 42,986,054,726.79 | 43,131,306,609.42 |
| Non-current assets: | ||
| Investment in debt instruments | ||
| Investment in other debt instruments | ||
| Long-term receivables | ||
| Long-term equity investments | 9,530,201,578.43 | 8,180,436,290.49 |
| Investment in other equity instruments | ||
| Other non-current financial assets | 1,782,878,797.80 | 2,427,355,825.21 |
| Investment property | ||
| Fixed assets | 3,327,872,021.12 | 3,693,258,788.76 |
| Construction in progress | 495,375,718.02 | 251,750,887.23 |
| Productive biological assets | ||
| Oil and gas assets | ||
| Right-of-use asset | 615,303.37 | 1,161,853.86 |
| Intangible assets | 1,133,200,138.15 | 1,141,322,601.26 |
| Development expenses | ||
| Goodwill | ||
| Long-term deferred expenses | 8,052,339.84 | 12,078,509.76 |
| Deferred tax assets | 33,504,216.38 | 24,515,740.48 |
| Other non-current assets | 194,423,677.41 | 163,216,415.72 |
| Total Non-current Assets | 16,506,123,790.52 | 15,895,096,912.77 |
| Total Assets | 59,492,178,517.31 | 59,026,403,522.19 |
| Current liabilities: | ||
| Short-term loans | ||
| Financial liabilities held for trading | ||
| Derivative financial liabilities |
Notes payable
| Notes payable | ||
| Accounts payables | 3,210,117,125.20 | 1,041,176,754.20 |
| Advance from customer | ||
| Contract liabilities | 16,052,768,704.31 | 17,485,085,741.24 |
| Employee benefits payable | ||
| Taxes payable | 157,200,430.68 | 377,457,671.93 |
| Other payables | 2,280,556,716.49 | 3,762,682,905.35 |
| Including: Interests payable | ||
| Dividends payable | ||
| Liabilities held for sale | ||
| Non-current liabilities due within one year | 369,739.52 | 704,940.02 |
| Other current liabilities | 2,267,828,469.82 | 2,688,940,410.36 |
| Total current liabilities | 23,968,841,186.02 | 25,356,048,423.10 |
| Non-current liabilities: | ||
| Long-term loans | ||
| Bonds payable | ||
| Including：preference shares | ||
| Perpetual bonds | ||
| Lease liabilities | 286,396.18 | 656,135.70 |
| Long-term payables | 143,601,709.73 | 143,950,749.73 |
| Long-term payroll payables | ||
| Provisions | ||
| Deferred income | 8,791,666.67 | 4,791,666.67 |
| Deferred tax liabilities | 55,706,044.02 | 135,648,124.99 |
| Other non-current liabilities | ||
| Total non-current liabilities | 208,385,816.60 | 285,046,677.09 |
| Total liabilities | 24,177,227,002.62 | 25,641,095,100.19 |
| Owners' equity (or shareholders' equity) | ||
| Share capital | 1,506,445,074.00 | 1,506,988,000.00 |
| Other equity instruments | ||
| Including: preference shares | ||
| Perpetual bonds | ||
| Capital reserves | 1,530,620,394.11 | 1,504,746,609.71 |
| Less: treasury stock | 56,278,680.79 | |
| Other comprehensive income | ||
| Special reserves | ||
| Surplus reserves | 753,494,000.00 | 753,494,000.00 |
| Undistributed profits | 31,524,392,046.58 | 29,676,358,493.08 |
| Total owners' equity | 35,314,951,514.69 | 33,385,308,422.00 |
| Total liabilities and owners' equity | 59,492,178,517.31 | 59,026,403,522.19 |
Consolidated Income StatementFor the year ended 31 December 2023
Unit: CNY
| Item | Year 2023 | Year 2022 |
| 1. Total operating revenue | 33,126,277,551.51 | 30,104,896,186.70 |
| Including: Operating revenue | 33,126,277,551.51 | 30,104,896,186.70 |
| Interest income | ||
| Earned premium | ||
| Fee and commission income | ||
| 2. Total operating costs | 20,151,096,010.15 | 17,765,764,643.68 |
| Including: cost of sales | 8,200,245,255.42 | 7,645,533,264.72 |
| Interest expense | ||
| Handling charges and commission expenses | ||
| Refunded premiums | ||
| Net payments for insurance claims | ||
| Net provision for insurance contracts | ||
| Bond insurance expense | ||
| Reinsurance expenses | ||
| Taxes and surcharges | 5,269,245,592.35 | 4,388,312,404.88 |
| Selling and distribution expenses | 5,386,953,700.62 | 4,179,140,807.85 |
| General and administrative expenses | 1,764,423,149.06 | 1,935,673,295.75 |
| Research and Development expenses | 284,753,881.33 | 253,574,976.39 |
| Financial expenses | -754,525,568.63 | -636,470,105.91 |
| Including: Interest expenses | 1,707,107.98 | 694,325.50 |
| Interest income | 765,369,577.25 | 645,806,427.40 |
| Plus: Other income | 56,179,399.53 | 63,772,818.50 |
| Investment income ("-" for losses) | 255,520,777.61 | 425,865,631.53 |
| Including: income from investment in associates and joint ventures | -2,070,468.13 | 5,201,436.79 |
| Disposal of financial instruments at a mortised cost ("-" for losses) | -27,758,655.92 | -13,584,025.11 |
| Foreign exchange gains ("-" for losses) | ||
| Net exposure to hedging gains("-"for loss) | ||
| Gains from the changes in fair values (“-“ for losses) | -37,082,477.77 | -318,331,123.43 |
| Losses from credit impairment ("-" for losses) | 881,383.32 | -746,085.96 |
| Losses from asset impairment ("-" | -2,828,018.24 | -2,333,823.54 |
for losses)
| for losses) | ||
| Gains from disposal of assets ("-" for losses) | -5,282,977.32 | 1,846,300.27 |
| 3. Operating profits ("-" for losses) | 13,242,569,628.49 | 12,509,205,260.39 |
| Plus: non-operating income | 39,176,788.83 | 25,586,332.71 |
| Less: non-operating expenses | 63,913,298.25 | 31,507,701.73 |
| 4. Total profits before tax ("-" for total losses) | 13,217,833,119.07 | 12,503,283,891.37 |
| Less: income tax expenses | 3,197,064,562.60 | 3,113,849,969.51 |
| 5. Net profit ("-" for net loss) | 10,020,768,556.47 | 9,389,433,921.86 |
| Classification by operating continuity | ||
| Net profit from continuing operation ("-" for losses) | 10,020,768,556.47 | 9,389,433,921.86 |
| Net profit from discontinued operation ("-" for losses) | ||
| Classification by owners | ||
| Attributable to owners of the parent company | 10,015,930,040.27 | 9,377,865,479.41 |
| Attributable to non-controlling interests | 4,838,516.20 | 11,568,442.45 |
| 6.Net of tax from other comprehensive income | 46,942.15 | 7,861,445.76 |
| Net of tax from other comprehensive income to the owner of the parent company | 41,157.80 | 7,826,027.30 |
| Other comprehensive income cannot reclassified into the profit and loss: | ||
| Including: Changes in remeasured defined benefit obligations | ||
| Share in other comprehensive income that cannot be classified into profit and loss under equity method | ||
| Changes in the fair value of other equity instruments | ||
| Fair value changes in enterprise's own credit risk | ||
| Others | ||
| Other comprehensive income that will be reclassified into the profit and loss | 41,157.80 | 7,826,027.30 |
| Including: Share in other comprehensive income that will be classified into profit and loss under equity method | 153,503.58 | |
| Net gain on debt instruments at fair value through other comprehensive income |
The amount of financial assetsreclassified into other comprehensiveincome
| The amount of financial assets reclassified into other comprehensive income | ||
| Other debt investment credit impairment provision | ||
| Cash flow hedging reserve | ||
| Balance arising from the translation of foreign currency financial statements | 41,157.80 | 7,672,523.72 |
| Others | ||
| Net of tax from other comprehensive income to non-controlling interests | 5,784.35 | 35,418.46 |
| 7. Total comprehensive income | 10,020,815,498.62 | 9,397,295,367.62 |
| Total comprehensive income attributable to owners of the parent company | 10,015,971,198.07 | 9,385,691,506.71 |
| Total comprehensive income attributable to non-controlling interests | 4,844,300.55 | 11,603,860.91 |
| 8. Earnings per share | ||
| (1) Basic earnings per share | 6.6487 | 6.2252 |
| (2) Diluted earnings per share | 6.6487 | 6.2252 |
Where an enterprise is merged under the same control in the current period, the net profit realized bythe merged party before the merger is: CNY 0.00, and the net profit realized by the merged party in theprevious period is: CNY 0.00.
Legal representative: Zhang LiandongPerson in charge of accounting affairs: Yin Qiuming
Person in charge of accounting department: Zhao Qike
Income statement of parent companyFor the year ended 31 December 2023
Unit: CNY
| Item | Year 2023 | Year 2022 |
| 1. Operating revenue | 13,212,200,864.23 | 11,492,807,889.95 |
| Less: Cost of sales | 6,866,625,130.04 | 5,980,220,225.56 |
| Taxes and surcharges | 4,286,738,232.15 | 3,545,342,923.46 |
| Selling and distribution expenses | 21,375,400.72 | 8,061,097.87 |
| General and administrative expenses | 967,000,222.04 | 1,066,652,613.72 |
| Research and Development expenses | 273,595,370.01 | 251,317,786.01 |
| Financial expenses | -711,466,339.14 | -599,586,816.00 |
| Including: Interest expenses | 43,225.12 | 68,917.37 |
Interest income
| Interest income | 718,317,862.75 | 601,536,203.50 |
| Plus: Other income | 11,391,006.14 | 12,864,187.98 |
| Investment income ("-" for losses) | 6,555,756,927.65 | 5,820,859,899.66 |
| Including: income from investment in associates and joint ventures | 300,199.49 | |
| Disposal of financial instruments at a mortised cost ("-" for losses) | -27,758,655.92 | -11,790,752.31 |
| Net exposure to hedging gains ("- "for loss) | ||
| Gains from the changes in fair values (“-“ for losses) | -319,221,773.34 | -453,873,148.94 |
| Losses from credit impairment ("-" for losses) | -486,029.72 | -343,834.00 |
| Losses from asset impairment ("-" for losses) | -2,985,642.31 | -2,182,437.80 |
| Gains from disposal of assets ("-" for losses) | 220,085.06 | 204,782.75 |
| 2. Operating profits ("-" For Losses) | 7,753,007,421.89 | 6,618,329,508.98 |
| Plus: non-operating income | 14,670,553.09 | 5,673,709.03 |
| Less: non-operating expenses | 31,017,552.84 | 17,026,160.31 |
| 3. Total profits before tax ("-" For Total Losses) | 7,736,660,422.14 | 6,606,977,057.70 |
| Less: income tax expenses | 254,522,291.88 | 212,628,263.96 |
| 4. Net profit ("-" For Net Loss) | 7,482,138,130.26 | 6,394,348,793.74 |
| Net profit from continuing operation ("-" for losses) | 7,482,138,130.26 | 6,394,348,793.74 |
| Net profit from discontinued operation ("-" for losses) | ||
| 5.Net of tax from other comprehensive income | ||
| Other comprehensive income cannot reclassified into the profit and loss: | ||
| Including: Changes in remeasured defined benefit obligations | ||
| Other comprehensive income that cannot be transferred under the equity method | ||
| Net gain on equity instrument at fair value through other comprehensive income | ||
| Fair value changes in enterprise's own credit risk | ||
| Others | ||
| Other comprehensive income that will be reclassified into the profit and loss | ||
| Including: Share in other |
comprehensive income that will beclassified into profit and loss underequity method
| comprehensive income that will be classified into profit and loss under equity method | ||
| Net gain on debt instruments at fair value through other comprehensive income | ||
| The amount of financial assets reclassified into other comprehensive income | ||
| Other debt investment credit impairment provision | ||
| Cash flow hedging reserve | ||
| Balance arising from the translation of foreign currency financial statements | ||
| others | ||
| 6. Total comprehensive income | 7,482,138,130.26 | 6,394,348,793.74 |
| 7. Earnings per share | ||
| (1)Basic earnings per share | ||
| (2)Diluted earnings per share |
Consolidated Statement of Cash FlowsFor the year ended 31 December 2023
Unit: CNY
| Item | Year 2023 | Year 2022 |
| 1. Cash flows from operating activities | ||
| Cash received from sale of goods and rendering of services | 34,853,832,478.90 | 30,888,040,308.39 |
| Net increase in customer bank deposits and placement from banks and other financial institutions | ||
| Net increase in loans from central bank | ||
| Net increase in loans from other financial institutions | ||
| Premiums received from original insurance contracts | ||
| Net cash received from reinsurance business | ||
| Net increase in deposits and investments from policyholders | ||
| Cash received from interest, handling charges and commissions | ||
| Net increase in placements from other financial institutions | ||
| Net capital increase in repurchase |
business
| business | ||
| Net cash received for the sale of securities | ||
| Refunds of taxes and surcharges | 2,297,371.73 | 3,060,026.48 |
| Cash received from other operating activities | 900,430,985.55 | 550,757,261.24 |
| Sub-total of cash inflows from operating activities | 35,756,560,836.18 | 31,441,857,596.11 |
| Cash paid for goods purchased and services received | 9,046,851,531.74 | 7,975,641,881.57 |
| Net increase in loans and advances to customers | ||
| Net increase in deposits in central bank and other banks and financial institutions | ||
| Cash paid for original insurance contract claims | ||
| A net increase in divested funds | ||
| Cash paid for interests, handling charges and commissions | ||
| Cash paid for policy dividends | ||
| Cash paid to and on behalf of employees | 3,631,502,767.93 | 3,444,356,348.05 |
| Cash paid for taxes and surcharges | 12,151,041,331.84 | 12,905,501,412.00 |
| Cash paid for other operating activities | 4,796,944,336.71 | 3,468,734,002.30 |
| Sub-total of cash outflows from operating activities | 29,626,339,968.22 | 27,794,233,643.92 |
| Net cash flows from activities operating | 6,130,220,867.96 | 3,647,623,952.19 |
| 2. Cash flows from investing activities | ||
| Cash received from disposal of investments | 11,154,008,547.25 | 17,261,152,475.37 |
| Cash received from returns on investments | 257,591,245.74 | 420,664,194.74 |
| Net cash received from disposal of fixed assets, intangible assets and other long-term assets | 1,872,403.96 | 5,625,033.85 |
| Net cash received from disposal of subsidiaries and other business units | ||
| Cash received from other investing activities | ||
| Sub-total of cash inflows from investing activities | 11,413,472,196.95 | 17,687,441,703.96 |
| Cash paid to acquire and construct fixed assets, intangible assets and other long-term assets | 1,111,629,485.17 | 539,153,153.61 |
| Cash paid for investments | 9,640,808,034.84 | 13,131,786,086.81 |
Net increase in pledge loans
| Net increase in pledge loans | ||
| Net cash paid to acquire subsidiaries and other business units | ||
| Cash paid for other investing activities | ||
| Sub-total of cash outflows from investing activities | 10,752,437,520.01 | 13,670,939,240.42 |
| Net cash flows from investing activities | 661,034,676.94 | 4,016,502,463.54 |
| 3. Cash flows from financing activities | ||
| Cash received from investors | 57,000,000.00 | 42,800,000.00 |
| Including: cash received by subsidiaries from investments by minority shareholders | 57,000,000.00 | 42,800,000.00 |
| Cash received from borrowings | ||
| Cash received from other financing activities | ||
| Sub-total of cash inflows from financing activities | 57,000,000.00 | 42,800,000.00 |
| Cash paid for debt repayments | 36,360.00 | |
| Cash paid for distribution of dividends and profits or payment of interest | 5,634,104,576.76 | 4,519,335,876.00 |
| Including: dividends and profits paid to minority shareholders by subsidiaries | ||
| Cash paid for other financing activities | 31,233,718.70 | 15,204,742.60 |
| Sub-total of cash outflows from financing activities | 5,665,338,295.46 | 4,534,576,978.60 |
| Net cash flows from financing activities | -5,608,338,295.46 | -4,491,776,978.60 |
| 4. Effect of fluctuation in exchange rate on cash and cash equivalents | -910,236.76 | -336,446.78 |
| 5. Net increase in cash and cash equivalents | 1,182,007,012.68 | 3,172,012,990.35 |
| Plus: balance of cash and cash equivalents at the beginning of the period | 24,019,016,540.72 | 20,847,003,550.37 |
| 6. Balance of cash and cash equivalents at the end of the period | 25,201,023,553.40 | 24,019,016,540.72 |
Cash flow statements of parent companyFor the year ended 31 December 2023
Unit: CNY
| Item | Year 2023 | Year 2022 |
| 1. Cash flows from operating activities |
Cash received from sale of goodsand rendering of services
| Cash received from sale of goods and rendering of services | 14,975,434,852.75 | 7,611,553,357.29 |
| Refunds of taxes and surcharges | 2,297,371.73 | 3,060,026.48 |
| Cash received from other operating activities | 526,760,153.32 | 2,314,707,779.42 |
| Sub-total of cash inflows from operating activities | 15,504,492,377.80 | 9,929,321,163.19 |
| Cash paid for goods purchased and services received | 5,294,280,877.13 | 6,064,059,385.00 |
| Cash paid to and on behalf of employees | 1,470,245,728.10 | 1,368,615,850.49 |
| Cash paid for taxes and surcharges | 6,085,955,339.44 | 4,939,845,815.65 |
| Cash paid for other operating activities | 3,272,079,710.56 | 967,712,898.60 |
| Sub-total of cash outflows from operating activities | 16,122,561,655.23 | 13,340,233,949.74 |
| Net cash flows from activities operating | -618,069,277.43 | -3,410,912,786.55 |
| 2. Cash flows from investing activities | ||
| Cash received from disposal of investments | 7,041,027,668.46 | 11,784,381,771.01 |
| Cash received from returns on investments | 6,554,937,507.89 | 7,633,596,753.21 |
| Net cash received from disposal of fixed assets, intangible assets and other long-term assets | 332,189.17 | 4,762,886.20 |
| Net cash received from disposal of subsidiaries and other business units | ||
| Cash received from other investing activities | ||
| Sub-total of cash inflows from investing activities | 13,596,297,365.52 | 19,422,741,410.42 |
| Cash paid to acquire and construct fixed assets, intangible assets and other long-term assets | 420,020,950.78 | 241,687,386.76 |
| Cash paid for investments | 7,298,000,000.00 | 8,172,000,000.00 |
| Net cash paid to acquire subsidiaries and other business units | ||
| Cash paid for other investing activities | ||
| Sub-total of cash outflows from investing activities | 7,718,020,950.78 | 8,413,687,386.76 |
| Net cash flows from investing activities | 5,878,276,414.74 | 11,009,054,023.66 |
| 3. Cash flows from financing activities | ||
| Cash received from investors | ||
| Cash received from loans | ||
| Cash received from other financing activities |
Sub-total of cash inflows fromfinancing activities
| Sub-total of cash inflows from financing activities | ||
| Cash paid for debt repayments | 36,360.00 | |
| Cash paid for distribution of dividends and profits or payment of interest | 5,634,104,576.76 | 4,519,404,139.37 |
| Cash paid for other financing activities | 546,330.28 | |
| Sub-total of cash outflows from financing activities | 5,634,650,907.04 | 4,519,440,499.37 |
| Net cash flows from financing activities | -5,634,650,907.04 | -4,519,440,499.37 |
| 4. Effect of fluctuation in exchange rate on cash and cash equivalents | 804,193.37 | 4,144,329.10 |
| 5. Net increase in cash and cash equivalents | -373,639,576.36 | 3,082,845,066.84 |
| Plus: balance of cash and cash equivalents at the beginning of the period | 22,883,692,496.00 | 19,800,847,429.16 |
| 6. Balance of cash and cash equivalents at the end of the period | 22,510,052,919.64 | 22,883,692,496.00 |
Consolidated statement of changes in shareholders' equity
For the year ended 31 December 2023
Unit: CNY
| Item | Year 2023 | ||||||||||||||
| Equity attributable to owners of the parent company | Non-controlling interests | Total shareholders' equity | |||||||||||||
| Share capital | Other equity instruments | Share capital | Other equity instruments | Other Comprehensive Income | Special reserve | Surplus reserve | General risk reserve | Undistributed profit | Others | Subtotal | |||||
| Preferred stock | Perpetual bond | Others | |||||||||||||
| 1. Balance as at 31 December of last year | 1,506,988,000.00 | 904,650,678.91 | 56,278,680.79 | 1,982,037.01 | 753,494,000.00 | 44,364,203,149.57 | 47,475,039,184.70 | 49,504,329.11 | 47,524,543,513.81 | ||||||
| Plus: adjustments for changes in accounting policies | |||||||||||||||
| Adjustments for correction of accounting errors in prior year | |||||||||||||||
| Business combinations under common control | |||||||||||||||
| Others | |||||||||||||||
| 2. Balance as at January 1 of the current year | 1,506,988,000.00 | 904,650,678.91 | 56,278,680.79 | 1,982,037.01 | 753,494,000.00 | 44,364,203,149.57 | 47,475,039,184.70 | 49,504,329.11 | 47,524,543,513.81 | ||||||
| 3.Increases/decreases in the current year (“ -” for | -542,926.00 | 25,873,784.40 | -56,278,680.79 | 41,157.80 | 4,381,825,463.51 | 4,463,476,160.50 | 61,844,300.55 | 4,525,320,461.05 | |||||||
decreases)
| decreases) | |||||||||||||||
| (1) Total comprehensive income | 41,157.80 | 10,015,930,040.27 | 10,015,971,198.07 | 4,844,300.55 | 10,020,815,498.62 | ||||||||||
| (2) Capital contributed or reduced by owners | -542,926.00 | 25,873,784.40 | -56,278,680.79 | 81,609,539.19 | 57,000,000.00 | 138,609,539.19 | |||||||||
| Capital contributions by owners | 57,000,000.00 | 57,000,000.00 | |||||||||||||
| Capital contributions by other equity instruments holders | |||||||||||||||
| Amounts of share-based payments recognized in owners' equity | 81,609,539.19 | 81,609,539.19 | 81,609,539.19 | ||||||||||||
| Others | -542,926.00 | -55,735,754.79 | -56,278,680.79 | ||||||||||||
| (3) Profit distribution | -5,634,104,576.76 | -5,634,104,576.76 | -5,634,104,576.76 | ||||||||||||
| Withdrawal of surplus reserves | |||||||||||||||
| Withdrawal of general risk reserve | |||||||||||||||
| Profit distributed to owners (or shareholders) | -5,634,104,576.76 | -5,634,104,576.76 | -5,634,104,576.76 |
Others
| Others | |||||||||||||||
| (4) Internal carry-forward of owners' equity | |||||||||||||||
| Conversion of capital reserves into paid-in capital | |||||||||||||||
| Conversion of surplus reserves into paid-in capital | |||||||||||||||
| Surplus reserves offsetting losses | |||||||||||||||
| Amount of Changes in setting benefit plan transfer to retained earnings | |||||||||||||||
| Other comprehensive income transferred to retained earnings | |||||||||||||||
| Others | |||||||||||||||
| (5) Special reserves | |||||||||||||||
| Withdrawal for the period | |||||||||||||||
| Use for the period | |||||||||||||||
| Others | |||||||||||||||
| 4. Balance as at 31 December of the current year | 1,506,445,074.00 | 930,524,463.31 | 2,023,194.81 | 753,494,000.00 | 48,746,028,613.08 | 51,938,515,345.20 | 111,348,629.66 | 52,049,863,974.86 |
| Item | Year 2022 | ||||||||||||||
| Equity attributable to owners of the parent company | Non- controlling interest s | Total shareholders' equity | |||||||||||||
| Share capital | Other equity instruments | Capital reserve | Less :Treasury stock | Other Comprehensive Income | Special reserve | Surplus reserve | Genera l risk reserve | Undistributed profit | Others | Subtotal | |||||
| Preferred stock | Perpetual bond | Others | |||||||||||||
| 1. Balance as at 31 December of last year | 1,506,988,000.00 | 782,236,370.14 | 56,278,680.79 | -5,843,990.29 | 753,494,000.00 | 39,505,614,090.53 | 42,486,209,789.59 | -4,899,531.80 | 42,481,310,257.79 | ||||||
| Plus: adjustments for changes in accounting policies | 58,801.63 | 58,801.63 | 58,801.63 | ||||||||||||
| Adjustments for correction of accounting errors in prior year | |||||||||||||||
| Others | |||||||||||||||
| 2. Balance as at January 1 of the current year | 1,506,988,000.00 | 782,236,370.14 | 56,278,680.79 | -5,843,990.29 | 753,494,000.00 | 39,505,672,892.16 | 42,486,268,591.22 | -4,899,531.80 | 42,481,369,059.42 | ||||||
| 3.Increases/decreases in the current year (“ -” for decreases) | 122,414,308.77 | 7,826,027.30 | 4,858,530,257.41 | 4,988,770,593.48 | 54,403,860.91 | 5,043,174,454.39 | |||||||||
| (1) Total comprehensive income | 7,826,027.30 | 9,377,865,479.41 | 9,385,691,506.71 | 11,603,860.91 | 9,397,295,367.62 | ||||||||||
| (2) Capital contributed or reduced by | 122,414,308.77 | 122,414,308.77 | 42,800,000.00 | 165,214,308.77 | |||||||||||
owners
| owners | |||||||||||||||
| Capital contributions by owners | 42,800,000.00 | 42,800,000.00 | |||||||||||||
| Capital contributions by other equity Instruments holders | |||||||||||||||
| Amounts of share-based payments recognized in owners' equity | 122,414,308.77 | 122,414,308.77 | 122,414,308.77 | ||||||||||||
| Others | |||||||||||||||
| (3) Profit distribution | -4,519,335,222.00 | -4,519,335,222.00 | -4,519,335,222.00 | ||||||||||||
| Withdrawal of surplus reserves | |||||||||||||||
| Withdrawal of general risk reserve | |||||||||||||||
| Profit distributed to owners (or shareholders) | -4,519,335,222.00 | -4,519,335,222.00 | -4,519,335,222.00 | ||||||||||||
| Others | |||||||||||||||
| (4) Internal carry-forward of owners' equity | |||||||||||||||
| Conversion of capital reserves into paid-in capital | |||||||||||||||
| Conversion of |
surplus reservesinto paid-incapital
| surplus reserves into paid-in capital | |||||||||||||||
| Surplus reserves offsetting losses | |||||||||||||||
| Carry-forward of retained earnings from changes in defined benefit plans | |||||||||||||||
| Other comprehensive income transferred to retained earnings | |||||||||||||||
| Others | |||||||||||||||
| (5) Special reserves | |||||||||||||||
| Withdrawal for the period | |||||||||||||||
| Use for the period | |||||||||||||||
| (6) Others | |||||||||||||||
| 4. Balance as at 31 December of the current year | 1,506,988,000.00 | 904,650,678.91 | 56,278,680.79 | 1,982,037.01 | 753,494,000.00 | 44,364,203,149.57 | 47,475,039,184.70 | 49,504,329.11 | 47,524,543,513.81 |
Statement of changes in shareholders' equity of parent company
For the year ended 31 December 2023
Unit: CNY
| Item | Year 2023 |
Sharecapital
| Share capital | Other equity instruments | Capital reserve | Less：Treasury stock | Other Comprehensive Income | Special reserve | Surplus reserve | Undistributed profit | Other s | Total shareholder s' equity | |||
| Preferred stock | Perpetual bond | Others | ||||||||||
| 1. Balance as at 31 December of last year | 1,506,988,000.00 | 1,504,746,609.71 | 56,278,680.79 | 753,494,000.00 | 29,676,358,493.08 | 33,385,308,422.00 | ||||||
| Plus: adjustments for changes in accounting policies | ||||||||||||
| adjustments for correction of accounting errors in prior year | ||||||||||||
| Others | ||||||||||||
| 2. Balance as at January 1 of the current year | 1,506,988,000.00 | 1,504,746,609.71 | 56,278,680.79 | 753,494,000.00 | 29,676,358,493.08 | 33,385,308,422.00 | ||||||
| 3.Increases/decreases in the current year (“ -” for decreases) | -542,926.00 | 25,873,784.40 | -56,278,680.79 | 1,848,033,553.50 | 1,929,643,092.69 | |||||||
| (1) Total comprehensive income | 7,482,138,130.26 | 7,482,138,130.26 | ||||||||||
| (2) Capital contributed or reduced by owners | -542,926.00 | 25,873,784.40 | -56,278,680.79 | 81,609,539.19 | ||||||||
| Capital contributions by owners (common stock) | ||||||||||||
Capitalcontributions byother equityinstrumentsholders
| Capital contributions by other equity instruments holders | ||||||||||||
| Amounts of share-based payments recognized in owners' equity | 81,609,539.19 | |||||||||||
| Others | -542,926.00 | -55,735,754.79 | -56,278,680.79 | |||||||||
| (3)Profit distribution | -5,634,104,576.76 | -5,634,104,576.76 | ||||||||||
| Withdrawal of surplus reserves | ||||||||||||
| Profit distributed to owners (or shareholders) | -5,634,104,576.76 | -5,634,104,576.76 | ||||||||||
| Others | ||||||||||||
| (4) Internal carry-forward of owners' equity | ||||||||||||
| Conversion of capital reserves into paid-in capital | ||||||||||||
| Conversion of surplus reserves into paid-in capital | ||||||||||||
| Surplus reserves offsetting losses | ||||||||||||
| Amount of Changes in setting benefit plan |
transfer toretained earnings
| transfer to retained earnings | ||||||||||||
| Other comprehensive income transferred to retained earnings | ||||||||||||
| Others | ||||||||||||
| (5) Special reserves | ||||||||||||
| Withdrawal for the period | ||||||||||||
| Use for the period | ||||||||||||
| (6) Others | ||||||||||||
| 4. Balance as at 31 December of the current year | 1,506,445,074.00 | 1,530,620,394.11 | 753,494,000.00 | 31,524,392,046.58 | 35,314,951,514.69 |
| Item | Year 2022 | |||||||||||
| Share capital | Other equity instruments | Capital reserve | Less： Treasury stock | Other Comprehensive Income | Special reserve | Surplus reserve | Undistributed profit | Others | Total shareholder s' equity | |||
| Preferred stock | Perpetual bond | Others | ||||||||||
| 1. Balance as at 31 December of last year | 1,506,988,000.00 | 1,382,332,300.94 | 56,278,680.79 | 753,494,000.00 | 27,801,336,778.06 | 31,387,872,398.21 | ||||||
| Plus: adjustments for changes in accounting policies | 8,143.28 | 8,143.28 | ||||||||||
| adjustments for | ||||||||||||
correction ofaccounting errorsin prior year
| correction of accounting errors in prior year | ||||||||||||
| Others | ||||||||||||
| 2. Balance as at January 1 of the current year | 1,506,988,000.00 | 1,382,332,300.94 | 56,278,680.79 | 753,494,000.00 | 27,801,344,921.34 | 31,387,880,541.49 | ||||||
| 3.Increases/decreases in the current year (“ -” for decreases) | 122,414,308.77 | 1,875,013,571.74 | 1,997,427,880.51 | |||||||||
| (1) Total comprehensive income | 6,394,348,793.74 | 6,394,348,793.74 | ||||||||||
| (2) Capital contributed or reduced by owners | 122,414,308.77 | 122,414,308.77 | ||||||||||
| Capital contributions by owners (common stock) | ||||||||||||
| Capital contributions by other equity instruments holders | ||||||||||||
| Amounts of share-based payments recognized in owners' equity | 122,414,308.77 | 122,414,308.77 | ||||||||||
| Others | ||||||||||||
| (3)Profit distribution | -4,519,335,222.00 | -4,519,335,222.00 |
Withdrawal ofsurplus reserves
| Withdrawal of surplus reserves | ||||||||||||
| Profit distributed to owners (or shareholders) | -4,519,335,222.00 | -4,519,335,222.00 | ||||||||||
| Others | ||||||||||||
| (4) Internal carry-forward of owners' equity | ||||||||||||
| Conversion of capital reserves into paid-in capital | ||||||||||||
| Conversion of surplus reserves into paid-in capital | ||||||||||||
| Surplus reserves offsetting losses | ||||||||||||
| Amount of Changes in setting benefit plan transfer to retained earnings | ||||||||||||
| Other comprehensive income transferred to retained earnings | ||||||||||||
| Others | ||||||||||||
| (5) Special reserves | ||||||||||||
| Withdrawal for the period | ||||||||||||
| Use for the period |
(6) Others
| (6) Others | ||||||||||||
| 4. Balance as at 31 December of the current year | 1,506,988,000.00 | 1,504,746,609.71 | 56,278,680.79 | 753,494,000.00 | 29,676,358,493.08 | 33,385,308,422.00 |
III. Company profile
Jiangsu Yanghe Distillery Co., Ltd.(hereinafter referred to as “the Company”)was established on 26 December 2002,verified by the Government of Jiangsu Province, details referred to Reply on The approval of Establishment ofJiangsu Yanghe Distillery Co., Ltd. by the provincial government (SuZhengFu [2002]No.155), and it was a companyfounded by Jiangsu Yanghe Group Co., Ltd., Shanghai Haiyan Logistics Development Co., Ltd., Nantong ZongyiInvestment Co., Ltd., Shanghai Jieqiang Tobacco Sugar & Wine (Group) Co., Ltd., Jiangsu Venture Capital Co.,Ltd.,China National Research Institute of Food and Fermentation Industries Co. Ltd., Nantong Shengfu Industrial TradeCo., Ltd. and Yang Yandong and other totally 14 nature persons.On 13 October 2009, the Company was verified by China Securities Regulatory Commission, according to thedocument Reply on Approving Initial Public Offering of Jiangsu Yanghe Distillery Co., Ltd. (Zheng Jian Approval[2009] No.1077). The Company announced the initial public offering of 45,000,000 common shares on 27 February2009 and was listed for transactions in SZSE since 6 November 2009.According to the Proposal of the cancellation of the remaining shares in the repurchase special securities accountapproved by 2023 first extraordinary general meeting of shareholders on 15 September 2023, the companycancelled 542,926 shares. The share cancellation procedures were completed on October 12, 2023. After this sharecancellation, the company's registered capital changed to 1,506,445,074 yuan, and the total number of sharesbecame 1,506,445,074 shares.Registered address of the Company: 118 Middle Avenue, Yanghe Town, Suqian City, Jiangsu ProvinceCompany type: Incorporated company (Listed)Industry of the Company: Brewing food industryBusiness scope of the Company: production and sale of liquor, wholesaling and retailing of prepackaged food, grainpurchase, self-operating and agency of import and export of various types of merchandise and technologyexcluding merchandise and technology limited or prohibited by the state for import and export, domestic trade,construction of e- commerce platform and online sales. ( Business activities of projects needed to be approved bylaw must be approved according to related departments )Parent company of the Company:Jiangsu Yanghe Group Co.,Ltd.The scope of the Company's consolidated financial statements is based on control, and all subsidiaries are includedin the consolidation scope of the consolidated financial statements.
Changes of the scope of consolidation are as follows:
1. Subsidiaries that are newly incorporated into the scope of consolidation are shown in the following table:
| Name | Measure of acquisition |
| Jiangsu Yiguoxiang Biotechnology Co., Ltd | Newly establishment |
2. Details of the subsidiaries incorporated into the consolidated financial statements show on “Note 7. 1.Interestsin subsidiaries”, Changes in the scope of consolidation show on “Note 6. Change in consolidated scope”.IV. Basis of preparation of financial statements
1. Basis of preparation
The Company has prepared its financial statements on a going concern basis, and recognized and measured itsaccounting items in compliance with the Accounting Standards for Business Enterprises—Basic Standards andvarious concrete accounting standards, and other relevant provisions on the basis of actual transactions and events.
2. Going concern
The Company has sustainable operation ability for at least 12 months from the end of the reporting period. In
addition, there is no significant event affecting going concern.
Ⅴ. Significant accounting policies and accounting estimatesThe disclosure requirements of food and wine manufacturing-related industries in the Guidelines for Self-regulation NO.3 of Listed Companies of Shenzhen Stock Exchange -Industry Information Disclosure shall beobserved
(1) Sales contract
The Company's sales products, promotional products and other goods belong to the performance obligationsperformed at a certain point.The Company recognizes the sales revenue when the goods are delivered to the customer and the control of thegoods is transferred. For export sales business, the Company recognizes the revenue after the goods aredelivered and the customs clearance procedures are completed.According to the marketing policy, and the distributor sales of final product, the Company gives the distributor apercentage discount, and regularly or irregularly settles with distributors. At the time of settlement, thediscounts are recorded in a sales invoice issued. The net amount of invoice value after the deduction of thediscount sales income is recognized as revenue according to the accrual principle. The discounts that haveoccurred and have not yet been settled at the end of the current period shall be taken provision from the salesrevenue and recorded into the contract liabilities.
(2) Service Contract
The service contract provided by the Company contains the performance obligation of the lease serviceprovided. Since the customer obtains and consumes the economic benefits brought by the performance of thecontract at the same time, it is regarded as the performance obligation performed within a certain period oftime and is equally apportioned and confirmed during the service provision.
1. Statement of compliance with the ASBE
The financial statements of the Company have been prepared in accordance with ASBE, and present truly andcompletely, the group’s financial position, the Company’s and results of operations, and changes in shareholders'equity, cash flows and other related information for the reporting period.
2. Accounting period
The Company’s accounting period is calendar year as its accounting year, i.e. from 1 January to 31 December.
3. Operating cycle
The Company’s accounting period is 12 months.
4. Functional currency
The Company has adopted China Yuan (CNY) as functional currency.
5.Methods for Determining Importance Standards and Selection Criteria.
?Applicable □N/A
| Project | importance criteria |
| Significant individual provision for bad debts on accounts receivable | Individual amount exceeds 1% of total assets |
| Significant construction in progress | Individual amount exceeds 1% of total assets |
| Significant non-wholly-owned subsidiaries | Net profit accounts for 10% of the consolidated financial statements. |
6. The accounting treatment of business combinations involving enterprises under common control and notunder common control
(1) Accounting treatment method for business combination under common controlBusiness combination under common control is accounted for under pooling of interest method.Assets and liabilities obtained by the Company through business combination under common control shall bemeasured at the book value as stated in the combine’s accounting record on the combination date. The share ofthe book value of the merged party’s owner’s equity in the consolidated financial statements is taken as the initialinvestment cost of long-term equity investments in individual financial statements. The capital reserve (stockpremium or capital premium) is adjusted according to the difference between the book value of net asset acquiredthrough combination and the book value of consideration paid for the combination (or total par value of sharesissued). If the capital reserve (stock premium or capital premium) is insufficient to offset, the retained earningsshall be adjusted.
(2) Accounting treatment method of business combination not under common controlThe Company accounts for business combination not under common control under purchase method.a) All the net identifiable assets, liabilities or contingent liabilities obtained by the Company through businesscombination not under common control shall be measured at fair value. Assets paid, liabilities incurred or assumedand the equity securities issued as consideration for combination are generally measured at fair value on theacquisition date, and differences between their fair values and book values shall be included in the current profitand loss.b) The cost of acquisition shall be respectively determined for the following conditions;i. Business combination of a transaction implementation, the combination cost shall be the sum of the fair valueof the assets given, the liabilities incurred or assumed and the equity securities issued by the Company in exchangefor the control on the acquisition date, and contingent considerations meeting the recognition conditions. Thecombination cost is the initial investment costs of long-term equity investments in individual financial statements.ii. Business combination through multiple transactions step by step to realized, the combination cost shall be thesum of the fair value measurement on the acquisition of the equity investment that holding before the acquisitiondate and cost of all the new investment on the acquisition date. Long-term equity investment cost in individualfinancial statements shall be the sum of the book value of the equity investment that holding before the acquisitiondate and cost of all the new investment on the acquisition date. A package deal is excluded.c) The Company, on the acquisition date, allocates the combination costs between the identifiable assets andliabilities acquiredi. All assets of the acquiree obtained by the Company through business combination (not limited to those that havebeen recognized by the acquiree), other than intangible assets, shall be separately recognized and measured atfair value when the future economic benefits arising thereafter are expected to flow into the Company and thefair value can be reliably measured.ii. Intangible assets of the acquiree obtained by the Company through business combination shall be separatelyrecognized and measured at fair value when their fair values can be reliably measured.iii. All liabilities of the acquiree obtained by the Company through business combination, other than contingentliabilities, shall be separately recognized and measured at fair value when fulfillment of relevant obligations isexpected to bring future economic benefits to the Company and the fair value can be reliably measured.iv. Contingent liabilities of the acquiree obtained by the Company through business combination shall be separatelyrecognized as liabilities and measured at fair value when their fair values can be reliably measured.v. When the Company allocates the cost of business combination and recognizes the identifiable assets andliabilities acquired through combination, it shall not include any goodwill and deferred income taxes that havebeen recognized by the acquiree before the business combination.d) Treatment of the difference between the business combination costs and the fair value of net identifiable asset
acquired from the acquiree through combinationi. The Company shall recognize the difference of the combination costs in excess of the fair value of the netidentifiable asset acquired from the acquiree through combination as goodwill.ii. The Company shall recognize the difference of the combination costs in short of the fair value of the netidentifiable asset acquired from the acquiree through combination according to the following provisions:
Review the measurement of fair values of all the identifiable assets, liabilities and contingent liabilities acquiredfrom the acquiree and the combination costs;After the review, if the combination costs are still in short of the fair value of the net identifiable asset acquiredfrom the acquiree through combination, include the difference in the current profit and loss.
(3) Treatment of relevant expenses arising from the Company’s business combinationa) Relevant expenses directly arising from the business combination of the Company (including the expenses foraudit, legal services, evaluation and consultation or other intermediary costs for business combination) shall beincluded in the current profit and loss when they are incurred.b) Commissions, fees and other expenses paid on issuance of bonds and undertaking of other debts for thebusiness combination shall be included in the initial measurement amount of debt securities.i. Where the bonds are issued at discount or par value, that part of expenses will increase the amount of thediscount;ii. Where the bonds are issued at premium, that part of expenses will decrease the amount of the premium.c) Fees, commissions, and other transaction expenses paid on issuance of equity securities as combinationconsideration in the business combination shall be included in the initial measurement amount of equity securities.i. Where the equity securities are issued at premium, that part of expenses shall be deducted from capital reserves(stock premium);ii. Where the equity securities are issued at par value or discount, that part of expenses shall be deducted fromthe retained earnings.
7. Criteria for determining control and Preparation of consolidated financial statements
(1) Criteria for determining control
The determination of the scope of consolidation of the consolidated financial statements is based on control.Control refers to the investor having power over the investee, enjoying variable returns through involvement inthe investee's activities, and having the ability to influence the amount of returns through the exercise of powerover the investee. When changes in relevant facts and circumstances lead to changes in the elements involved inthe definition of control, the company will conduct a reassessment.
(2) Preparation of consolidated financial statements
(a) Consistency of accounting policies and accounting periodAll the subsidiaries within the consolidation scope of consolidated financial statements shall adopt the sameaccounting policies and accounting periods as those of the Company. If the accounting policies or accountingperiods of a subsidiary are different from those of the Company, the financial statements of the subsidiary, uponpreparation of consolidated financial statements, shall be adjusted according to the accounting policies andaccounting periods of the Company.(b) Preparation method of consolidated financial statementsThe consolidated financial statements are based on the financial statements of the Company and its subsidiaries,and are prepared by the parent company according to other relevant information after the adjustment to long-term equity investments in subsidiaries under the equity method and the elimination of effects of the internaltransactions between the Company and its subsidiaries and between the subsidiaries on the consolidated financialstatement.
(c) Reflection of excess losses incurred to a subsidiary in the consolidated financial statementsIn the consolidated financial statements, where the current losses undertaken by the parent company are in excessof its share of owners’ equity in the subsidiary at the beginning of the period, the balance shall reduce the owners’equity (retained earnings) of the parent company; where the current losses undertaken by a subsidiary’s non-controlling shareholders excess those non-controlling shareholders’ share of owners’ equity in the subsidiary atthe beginning of the period, the balance shall reduce the non- controlling interests.(d) Changes in number of subsidiaries during the reporting perioda) Acquisition of subsidiaries during the reporting periodi. Treatment of acquiring subsidiaries from business combination under common control during the reportingperiodDuring the reporting period, if the Company acquires subsidiaries from the business combination under commoncontrol, the opening balance in the consolidated balance sheet shall be adjusted. The income, expenses and profitsof the newly acquired subsidiaries from the beginning to the end of the reporting period shall be included in theconsolidated income statement. The cash flows of the newly acquired subsidiaries from the beginning to the endof the reporting period shall be included in the consolidated statement of cash flows.ii. Treatment of acquiring subsidiaries from business combination not under common control during the reportingperiodDuring the reporting period, if the Company acquires subsidiaries from the business combination not undercommon control, the opening balance in the consolidated balance sheet shall not be adjusted. The income,expenses and profits of the newly acquired subsidiaries from the acquisition date to the end of the reporting periodshall be included in the consolidated income statement. The cash flows of the newly acquired subsidiaries fromthe acquisition date to the end of the reporting period shall be included in the consolidated statement of cashflows.b) Treatment of disposing subsidiaries during the reporting periodDuring the reporting period, if the Company disposes subsidiaries, the opening balance in the consolidated balancesheet shall not be adjusted. The income, expenses and profits of the newly disposed sub diaries from the beginningto the disposal date shall be included in the consolidated income statement. The cash flows from the beginning tothe disposal date shall be included in the consolidated statement of cash flows.
8. Classification of joint venture arrangements and the accounting treatment method of common operation
(1) Classification of joint venture arrangements
A joint arrangement is classified as either a joint operation or a joint venture. A joint operation is a jointarrangement whereby the joint operators have rights to the assets, and obligations for the liabilities, relating tothe arrangement. A joint venture is a joint arrangement whereby the joint ventures only have the rights to the netassets under this arrangement.A joint arrangement that is not structured through a separate vehicle shall be classified as a joint operation. Aseparate vehicle refers to a separately identifiable financial structure, including separate legal entities or entitieswithout a legal personality but recognized by statute.A joint arrangement that is structured through a separate vehicle is usually classified as a joint venture. However,when a joint arrangement provides clear evidence that it meets any of the following requirements and complieswith applicable laws and regulations as a joint operation:
a) The legal form of the joint arrangement indicates that the parties that have joint control have rights to the assets,and obligations for the liabilities, relating to the arrangement.b) The terms of the joint arrangement specify that the parties that have joint control have the rights to the assets,and the obligations for the liabilities, relating to the arrangement.
c) Other facts and circumstances indicate that the parties that have joint control have rights to the assets, and theobligations for the liabilities, relating to the arrangement---for example, the parties that have joint control haverights to substantially all of the output of the arrangement, and the arrangement depends on the parties that havejoint control on a continuous basis for settling the liabilities of the arrangement.
(2) Accounting treatment of a joint operation
A joint operator shall recognize the following items in relation to its interest in a joint operation, and account forthem in accordance with relevant accounting standards:
a) Its solely-held assets, and its share of any assets held jointly;b) Its solely-assumed liabilities, and its share of any liabilities incurred jointly;c) Its revenue from the sale of its share of the output arising from the joint operation;d) Its share of the revenue from sale of the output by the joint operation; ande) Its solely-incurred expenses and its share of any expenses incurred jointly.
9. Cash and cash equivalents
Cash comprises cash on hand and deposits that can be readily withdrawn on demand.Cash equivalents are the company’s short-term (due within 3 months from purchase date), highly liquidinvestments that are readily convertible to known amounts of cash and which are subject to an insignificant riskof changes in value.
10. Foreign currency transactions and translation of foreign currency statements
(1) Accounting method of foreign currency transactions
a) Initial recognition of foreign currency transactionsFor foreign currency transactions incurred, the Company converts the amount in foreign currency into the amountin functional currency at the spot exchange rate (middle rate) announced by the People’s Bank of China on thetransaction date. Among them, for foreign currency exchange occurred or transaction involving foreign currencyexchange, the Company converts at the exchange rate actually adopted on the transaction date.b) Adjustment or settlement on the balance sheet date or settlement dateOn the balance sheet date or the settlement date, the Company handles foreign currency monetary items andforeign currency non-monetary items separately in accordance with the following methods:
i. Accounting principles for handling foreign currency monetary itemsFor foreign currency monetary items, on the balance sheet date or the settlement date, the Company convertsthem by using the spot exchange rate (middle rate) prevailing on the balance sheet date or settlement date, andadjusts the amount in functional currency of foreign currency monetary items in respect of the difference arisingfrom exchange rate fluctuations, which shall be treated as exchange difference at the same time. Among them,the exchange differences arising from foreign currency loans relating to the acquisition, construction or productionof assets eligible for capitalization shall be included in the costs of assets eligible for capitalization; other exchangedifferences shall be included in the current financial expenses.ii. Accounting principles for handling foreign currency non-monetary itemsFor foreign currency non-monetary items measured at historical cost, the Company shall convert them at the spotexchange rate (middle rate) prevailing on the transaction date, with their amounts in functional currency remainingunchanged and no exchange differences incurred.For an inventory that is measured at the lower of its costs or its net realizable values, if the net realizable value isdetermined in foreign currency, the Company, when determining the value of the inventory at the end of the period,shall firstly convert the net realizable value into functional currency and then compare it with the inventory costreflected in functional currency.Non-monetary items measured at fair value that is reflected in foreign currency at the end of the period, the
Company shall firstly translate the foreign currency into the amount in functional currency at the spot exchangerate on the date when the fair value is determined, and then compare it with the original functional currencyamount. Difference between the translated functional currency amount and the original functional currencyamount is treated as profit or loss from changes in fair value (including changes in exchange rate) and is recognizedin current profit and loss.
(2) Accounting treatment method for translation of foreign currency statements
a) The Company shall translate the financial statements of foreign operations in accordance with the followingmethods:
i. Assets and liabilities in the balance sheets shall be translated at the spot exchange rates on balance sheet date.Shareholders’ equity items, except for the item of "undistributed profits", are translated at the spot exchange rateson the dates when the transactions occur.ii. Revenue and expense items in the income statement are translated at the spot exchange rates on the dateswhen the transactions occur or at the exchange rate determined in a systematical and reasonable method andsimilar to the spot exchange rate on the day when the transactions occur.Differences arising from the above translations of foreign currency financial statements are separately listed under‘other comprehensive income’ in the consolidated balance sheet.The translation of comparative financial statements is handled by reference to the above approach.b) The Company shall translate the financial statements of foreign operations that are in virulent inflation economyin accordance with the following methods:
i. The Company restates the items in the balance sheet by using the general price index, and restates the items inthe income statement by using the changes in general price index, and then converts those items at the spotexchange rate on the latest balance sheet date.ii. Where the foreign operations are no longer in virulent inflation economy, the Company ceases to restate thefinancial statements and converts the financial statements restated according to the price level on such cease.c) Where the Company disposes of an overseas business, it shall transfer the foreign currency financial statementsexchange difference, which relates to the business disposed of and is presented under the items of the othercomprehensive income in the balance sheet, from the other comprehensive income item to the gain or loss ondisposal for the current period. If the overseas business is partly disposed of, the foreign currency financialstatements exchange difference shall be calculated in proportion to the percentage of disposal and transferred togain or loss on disposal for the current period.
11. Financial Instruments
Financial instruments are the financial asset, financial liability or (equity) instrument will be recognised when theCompany became one of the parties under a contract.
(1) Classification of financial instruments
a) Classification of financial assetsAccording to the company's business model of managing financial assets and the characteristics of contract cashflow of financial assets, financial assets are classified into the following three categories: financial assets measuredat amortized cost; financial assets measured at fair value through other comprehensive income (including financialassets directly designated to be measured at fair value through other comprehensive income); and financial assetsmeasured at fair value through the current profit or loss.b) Classification of financial liabilitiesThe Company classifies the financial liabilities into the following two categories: financial liabilities measured atfair value through current profit and loss (including financial liabilities held for trading and financial liabilitiesdirectly designated to be at fair value through current profit and loss); and financial liabilities measured at
amortized cost.
(2) Recognition basis and measurement method of financial instruments
a) Recognition basis of financial instrumentsWhen the Company becomes a party to a financial instrument, it shall recognize a financial asset or financialliability.b) Measurement method of financial instrumentsi. Financial assetsFinancial assets are measured at fair value upon initial recognition. For financial assets at fair value through profitor loss, relevant transaction costs are directly recognized in profit or loss for the period. For other categories offinancial assets, relevant transaction costs are included in the amount initially recognized. Accounts receivable ornotes receivable arising from sales of goods or rendering services and without significant financing component orthe company decided not to consider financing elements for less than one year are initially recognized based onthe amount of consideration expected to be entitled to receive according to Accounting Standard for BusinessEnterprises No. 14 - Revenue.
①Financial assets measured at amortized cost
These assets are subsequently measured at amortized cost using the effective interest method after initialrecognition. Gains/losses on financial assets that are measured at amortized cost and are not a part of any hedgingrelationship shall be recognized in profit or loss when the financial asset is derecognised or reclassification oramortized using the effective interest method or recognized the impairment allowance.
②Financial assets measured at fair value through other comprehensive income
These assets are subsequently measured at fair value after initial recognition. Except impairment, foreign exchangegains and losses, interest income calculated using the effective interest method are recognized in profit or loss;other gains and losses are recognized in other comprehensive income. On derecognition, gains and lossesaccumulated in other comprehensive income are transferred to profit or loss.In addition, the company designated some non-tradable equity instruments as financial assets measured at fairvalue through other comprehensive income; the company shall recognize the relevant dividend income of suchfinancial assets into the current profit and loss, and recognize the change of fair value in other comprehensiveincome. On derecognition, the accumulated gains/losses previously recognized in other comprehensive incomeshall be transferred to retained earnings and not be recognized in current profit and loss.
③ Financial assets measured at fair value through profit or loss
The Company classifies the financial assets, except for financial assets measured at amortized cost or at fair valuethrough other comprehensive income as mentioned above, into the financial assets measured at fair value throughprofit or loss for the current period. In addition, the company may designate some financial assets as financialassets measured at fair value through profit or loss for the current period upon the initial recognition to eliminateor significantly reduce accounting mismatch. For such financial assets, the company adopts the fair value forsubsequent measurement, and changes in fair value are recognized in the profit or loss for the current period.ii. Financial liabilitiesFinancial liabilities shall be classified into financial liabilities measured at fair value through profit or loss for thecurrent period upon initial recognition and other financial liabilities. For financial liabilities measured at fair valuethrough profit or loss, relevant transaction costs are directly recognized in the current profit and loss, and therelevant transaction costs of other financial liabilities are recognized in the initial recognition amount.
①Financial liabilities measured at fair value through profit or loss
Financial liabilities held for trading (including derivatives of financial liabilities) shall be subsequently measured atthe fair value. Except for those related to hedge accounting, changes in the fair value shall be recognized in the
profit or loss of the current period. For financial liabilities designated to be at fair value through profit or loss, fairvalue changes caused by the Company's own credit risk changes which is recognized in other comprehensiveincome, when the liability is derecognition, the accumulated change in its fair value caused by the change in itsown credit risk recognized in other comprehensive income is transferred to retained earnings, the remainingchanges of fair value is record in profit of loss. If the above treatment of the impact of the change in the credit riskof such financial liabilities will cause or expand the accounting mismatch in the profit and loss, the company willrecord all the gains/losses of such financial liabilities (including the amount affected by fair value changes inenterprise's own credit risk) into the current profit and loss.
② Financial liabilities measured at amortized cost
Except financial liabilities that arise when a transfer of a financial assets does not qualify for derecognition or whenthe continuing involvement approach applies security contract are classified as financial liabilities measured byamortized cost, or financial subsequently measurement at amortized cost, and record the profits or lossesguarantee contracts recognition or amortization into the current profit and loss.
(3) Financial assets transfer
If the Company transfers substantially all the risks and rewards of ownership of the financial asset to the transferee,the Company derecognizes the financial asset, the rights and obligations arising or retained in the transfer shall beseparately recognized as its assets or liabilities; if the Company retains substantially all the risks and rewards ofownership of the financial asset, it continues to recognize the transferred financial assets. If the Company neithertransfers nor retains substantially all the risks and rewards of ownership of the financial asset, it is accounted foras follows: if the Company has not retained control, it derecognizes the financial asset, the rights and obligationsarising or retained in the transfer shall be separately recognized as its assets or liabilities; and if the Company hasretained control, it continues to recognize the financial asset to the extent of its continuing involvement in thetransferred financial asset and recognizes the relevant liability.Where transfer of financial assets qualify for derecognition entirety, the difference between the following twoamounts will be included into current profit or loss: The book value measured at the date of derecognition; andThe sum of the consideration for the derecognition part and the portion of derecognition corresponding to theaccumulated amount of the changes in fair value originally and directly included in OCI (involving the situationwhere the financial asset transferred is a debt instrument investment measured at fair value and recognized inother comprehensive income). The Company transferred the partial transfer of financial assets which qualify forderecognition, the overall carrying amount of the transferred financial asset shall be apportioned according totheir respective relative fair value between the portion of derecognition and the remaining.
(4) Derecognition of financial liabilities
If the current obligation of the financial liability (or part thereof) has been discharged, the company shall removefinancial liability (or part thereof), and the company shall recognize the difference between its book value and theconsideration paid (including any non-cash assets transferred or liabilities assumed) in the current profit and loss.
(5) Offsetting of financial assets and liabilities
Financial assets and financial liabilities shall be shown separately in the balance sheet and shall not be offsetagainst each other. If the following conditions are met at the same time, the net value offset each other afteramount listed in the balance sheet:
The company has offset the confirmed number of legal rights of financial assets and financial liabilities, and thiskind of legal rights is the executable; andThe company plans to net or cash at the same time when the financial assets and liquidation of the financial liability.If the transfer of financial assets does not meet the conditions for derecognition, the transferor shall not offset thetransferred financial assets and related liabilities.
(6) Equity instruments
Equity instruments are contracts that prove ownership of the residual interest in the company’s assets afterdeducting all liabilities. The issuance (including refinancing), repurchase, sale or cancellation of the equityinstruments of the company shall be treated as changes in the equity. The company does not recognize changes inthe fair value of equity instruments, and the transaction fees related to the equity transactions shall be deductedfrom the equity. Where the equity instrument of the company distributes dividends during the term of its existence,it shall be treated as profit distribution, and the total amount of shareholders' equity will not be affected by thestock dividends issued.
(7) Method for determining the fair value of financial assets and financial liabilitiesWhere there is an active market for a financial instrument, the company shall determine its fair value by quotingin the active market. Where there is no active market for the financial instrument, the company shall determineits fair value by means of valuation technology. In valuation, the company uses valuation techniques applicable inthe current situation and supported by sufficient available data and other information to select input valuesconsistent with the characteristics of assets or liabilities considered by market participants in transactions ofrelated assets or liabilities, and gives priority to relevant observable input values as far as possible. Useunobservable inputs only when relevant observable inputs cannot be obtained or are impracticable to obtain.Upon initial recognition, the fair value of financial assets or financial liabilities is determined by the quoted priceof the same assets or liabilities in the active market or other valuation technology that only uses observable marketdata, the Company defers the difference between the fair value and the transaction price. After initial recognition,the Company recognizes the deferred difference as gain or loss in the corresponding accounting period accordingto the changes of a certain factor in the corresponding accounting period.
(8) Impairment of Financial Assets
Based on the expected credit loss, the Company shall recognize the impairment loss on financial assets measuredat amortized cost, debt instrument investment at fair value through other comprehensive income.a) The approach of recognition loss allowance for expected credit lossesConsidering the reasonable and valid information such as past events, current conditions and forecast of futureeconomic conditions, and weighted by the risk of default, the Company calculates the probability weighted amountof the present value of the difference between the cash flow receivable under the contract and the expected cashflow to be received, and confirms the expected credit loss.i. General approachThe Company assess whether the credit risk of financial instruments in different stages at each reporting date hasincreased significantly. If the financial instruments' credit risk have not increased significantly after initialrecognition, it will be included in phase 1, and the Company measures the loss allowance for those instruments atan amount equal to 12-month expected credit losses; if the financial instruments' credit risk have increasedsignificantly but without objective evidence for impairment after initial recognition, it will be included in phase 2,and the Company measures the loss allowance of those instruments at an amount equal to lifetime expected creditlosses; if the financial asset that is evidently credit-impaired after initial recognition, it will be included in phase 3,and the Company measures the loss allowance of those financial instruments at an amount equal to lifetimeexpected credit losses. For financial instruments with low credit risk on the balance sheet data (e.g., fixed depositsin commercial banks with higher credit rating, financial instruments with external credit rating above "investmentgrade"), the Company assumes that the credit risk has not increased significantly since the initial recognition andchooses to measure the loss provision according to the expected credit loss in the next 12 months.ii. Simplified approachFor accounts receivable, contract assets, lease receivables and Income-related notes receivable that do not contain
significant financing components or do not consider the financing components in the contracts for no more thanone year old, the company adopts simplified approach and shall always measure the loss allowance at an amountequal to lifetime expected credit lossesFor accounts receivable, contract assets and lease receivables are defined by the Accounting Standards for BusinessEnterprises No. 21-Leasing that include significant financing components, the company recognizes a loss allowanceequal to the lifetime expected credit losses.b) Criteria for determining whether credit risk has increased significantly subsequent to the initial recognitionIf the probability of default of a financial asset in lifetime as determined on the balance sheet date is significantlyhigher than the probability of default in lifetime as determined at the initial recognition, the credit risk of thefinancial asset increases significantly.No matter what method the Company is applied to evaluate whether credit risk has increased significantly, itusually inferred that the credit risk of the financial instrument has increased significantly if the contract paymentdelay exceeds 30 days, unless the Company can get the reasonable and valid information at reasonable cost toevidence that the credit risk of the financial instrument has not increased significantly since the initial recognition.Except in special cases, the Company shall use the change of default risk in the next 12 months as a reasonableestimate of the change of default risk in lifetime to determine whether the credit risk has increased significantlyto the initial recognitionc) Approach of assessing expected credit risk on a portfolio basis and determine basisThe company evaluates credit risk individually for the credit risk of significantly different notes receivables,accounts receivables, contract assets, lease receivables and other receivables with the following characteristics.Such as: accounts receivables in dispute with the other party or involving litigation or arbitration; notes receivables,accounts receivables that have shown clear signs that the debtor is likely to be unable to meet repaymentobligations.When it is impossible to evaluate the expected credit loss information of an individual financial asset at areasonable cost, the Company divides the receivables into several portfolio according to the credit riskcharacteristics, and calculates the expected credit loss on collective basis. The basis for determining the portfoliois as following:
| Name | Approach of assessing expected credit risk |
| Bank acceptance bill Portfolio; Commercial acceptance bill Portfolio | For notes receivables divided into portfolio, the bank acceptance bill and commercial acceptance bill refer to the historical credit loss experience, and combines the current situation and the forecast of future economic situation respectively. The Company calculates the expected credit loss based on the default risk exposure and the expected credit loss rate of the whole duration. |
| Risk Portfolio | For accounts receivables divided into risk portfolio, the Company refers to the historical credit loss experience, and combines the current situation and the forecast of future economic situation, and prepares a comparison table between overdue ages of accounts receivables and expected credit loss rate of the whole duration to calculate the expected credit loss. |
Other Portfolio
| Other Portfolio | The Company classifies items without significant recovery risk receivables as other portfolio such as items from subsidiaries in the consolidation scope, tax refunds receivable, collection and withholding of funds. There is no provision for bad debt for them. |
| Lease receivables | For Lease receivables classified into combinations, the expected credit loss is calculated through the default risk exposure and the expected credit loss rate of the whole duration according to the historical credit loss experience, the current situation and the forecast of the future economic situation |
The Company shall take the provision or transfer the loss into the current profit and loss. For the debt instrumentinvestment measured at fair value through other comprehensive income, the Company shall adjust othercomprehensive income while recording the impairment loss or gain into the current profit and loss.
12. Contract assets
A contract asset is a company's right to receive consideration for goods transferred to a customer, and this rightdepends on factors other than the passage of time. The company's contract assets mainly include completed andunsettled assets and quality guarantee deposit. The contract assets and contract liabilities under the same contractshall be shown on a net basis, and the contract assets and contract liabilities under different contracts shall not beset off.For the determination method and accounting treatment method of expected credit loss of contract assets, referto "Impairment of Financial Assets" in Note 10 (8).
13. Inventory
(1) Classification of inventory
Inventories are classified as: raw materials, semi-finished goods, stock commodities, consigned processingmaterials, goods in progress and revolving materials (including low-cost consumables), etc.Measurement method of dispatched inventoriesDispatched materials and stock commodities are accounted for by using the weighted average method.
(2) Basis to determine net realizable values of inventories and method of provision forstock obsolescencea) Determination basis of net realizable values of inventoriesi. In normal operation process, for merchandise inventories held directly for sale, including stock commodities(finished goods) and materials for sale, their net realizable values are determined at their estimated selling pricesminus their estimated selling expenses and relevant taxes and surcharges.ii. In normal operation process, for material inventories that need further processing, their net realizable valuesare determined at the estimated selling prices of finished goods minus estimated costs to completion, estimatedselling expenses and relevant taxes and surcharges.iii. For inventories held to execute sales contract or service contract, their net realizable values are calculated onthe basis of contract price. If the quantities of inventories specified in the sales contracts are less than thequantities held by the Company, the net realizable value of the excess portion of inventories shall be based ongeneral selling prices.iv. The materials held for production shall be measured at cost if the net realizable value of the finished productsis higher than the cost. If a decline in the value of materials shows that the net realizable value of the finishedproducts is lower than the cost, the materials shall be measured at the net realizable value.
b) Provision for stock obsolescencei. Provisions for stock obsolescence are made at the lower of costs or net realizable values on a single basis.ii. For inventories with large quantity and relatively low unit prices, the provision for stock obsolescence shall bemade on the ground of the categories of inventories.
(3) Inventory system
The Company adopts perpetual inventory system and takes physical inventory counts on a regular basis.
(4) Amortization method of revolving materials
a) Amortization method of low-cost consumables:
Low-cost consumables are amortized in full at once.b) Amortization method of packaging materialsPacking materials are amortized in full at once when fetched for use by the Company.
14. Assets held for sale
Assets held for salea) Scope of a non-current asset held for sale and a disposal groupA non-current asset or disposal group is classified as held for sale when a company recovers its carrying valueprimarily through the sale (including the exchange of non-monetary assets of a commercial nature) rather thanthrough the continuous use of such a group.A disposal group is a group of assets that are disposed as a whole through sales or other ways in one transactionand liabilities directly related to these assets delivered in the transaction.b) Recognition criteria of a non-current asset held for sale and a disposal groupThe Company recognizes its component (or non-current asset) that satisfies the following conditions as assets heldfor sale:
i. The assets or disposal group must be available for immediate sale in its present condition subject only to termsthat are usual and customary for sales of such assets or disposal groups;ii. Its sale must be highly probable. The Company has already made a decision to dispose the component and hasa commitment from the purchaser, the transfer will be completed within one year. If it requires shareholders’approval or supervisors’ approval according to regulations, it has already received approval from the generalmeeting of stockholders or relative authority institution.c) Accounting treatment and presentation of a non-current asset held for sale and a disposal groupThe non-current asset or disposal group is first classified as held for sale, the Company should measure the non-current assets or assets and liabilities made up of disposal group in accordance with relevant accounting standards.When the Company measure a non-current asset or disposal group held for sale initially or re-measure at balancesheet date subsequently, the impairment loss should be recognized if the book value is higher than fair valuelesscosts to sell at the amount of the difference of these two in profit and loss, the provision for assets held for saleneed to be recognized at the same time. For the impairment of disposal group, should write off goodwill if existing,and then write down the related assets proportionally. Depreciation or amortization should cease for the non-current asset held for sale.No matter the asset is classified as individual asset held for sale or asset belonging to disposal group, the asset ispresented as current assets under “assets held for sale” item; liabilities related to the asset transferred in thedisposal group held for sale is presented as current liabilities under “liabilities held for sale” item in the balancesheet.The Company is committed to a sale plan involving loss of control of subsidiary shall classify all the assets andliabilities of that subsidiary held for sale in consolidated balance sheets when the above criteria are met, regardless
of whether the Company retain a non–controlling interests in its former subsidiary after the sale. In the balancesheets of parent company, the investment should be classified as held for sale in full. In the consolidated financialstatements, all assets and liabilities of the subsidiaries are classified as held for sale.
Termination of business operationsTermination means any separate part which satisfies one of the following conditions and which has been disposedof or classified as being held for sale:
a) The component represents a separate principal business or a separate principal area of operation;b) The component is part of an associated plan to dispose of a separate principal business or a separate principaloperating area;c) The component is a subsidiary acquired specifically for resale.
15. Long-term equity investment
(1) Recognition of the initial investment costs of long-term equity investmentsa) For long-term equity investments from business combinations, the initial investment cost shall be recognized inaccordance with the provisions mentioned in Notes 3(5). Accounting Method for Long-term Equity Investmentfrom Business Combinations under Common Control and Business Combination not under Common Control.b) Except for the long-term equity investments arising from business combinations, those obtained by other meansshall recognize their initial investment costs in accordance with the following provisions:
i. For the long-term equity investments obtained by cash paid, the Company recognizes the actual purchase priceas the initial investment costs. The initial investment costs include directly related expense, taxes and othernecessary expenses of obtaining long-term equity investments.ii. For the long-term equity investments acquired by the issue of equity securities (equity instrument), the initialinvestment cost shall be the fair value of the equity securities (equity instrument) issued. If the fair value of thelong-term equity investment obtained is more reliable than equity securities issued, the initial investment costshall be the fair value of the long-term equity investment made by the investors. The cost directly attributable tothe issue of equity securities (equity instrument), including fees, commissions, etc., write-downs premium price ofthe issue, if premium price of the issue is insufficient, write- downs surplus reserve and undistributed profit in turn.For the long-term equity investments acquired by the issue of debt securities (debt instrument) , reference throughthe issuance of equity securities (equity instrument).iii. For long-term equity investments obtained by debt restructuring, the Company recognizes the fair value ofshares of debt-for-equity swap as the initial investment costs.iv. For long-term equity investments obtained by non-monetary assets exchange, under the condition that anexchange of non-monetary assets is of commerce nature and the fair value of assets exchanged can be reliablymeasured, non- monetary assets traded in is initially stated at the fair value of the assets traded out, unless thereis conclusive evidence indicating that the fair value of the assets traded in is more reliable; if the above conditionsare not satisfied, initial investment costs of long-term equity investments traded in shall be recognized at the bookvalue of the assets traded out and the relevant taxes and surcharges payable.Expenses, taxes and other necessary expenses incurred to the Company and that are directly related to theobtainment of long-term equity investments shall be recognized as the initial investment costs of long-term equityinvestments.For long-term equity investments obtained by the Company by any means, cash dividends or profits declared butnot yet distributed in the actual payments or the consideration actually paid for the investment shall be separatelyaccounted as dividends receivable and shall not constitute the costs of long- term equity investments.
(2) Subsequent measurement and recognition of gains and losses of long-term equity investmentsa) Long-term equity investment measured under cost methodi. If accompany can control an investee, namely investment in subsidiary, the long-term equity investment shallbe measured under the cost method.ii. For long-term equity investments accounted at the cost method, except cash dividends or profits declared butnot yet distributed which are included in the actual payments or the consideration actually paid for the investment,the cash dividends or profits declared by the investee shall be recognized as the investment income irrespectiveof net profits realized by the investee before investment or after investment.b) Long-term equity investments measured under the equity methodi. For the long-term equity investment which has joint control or significant influence over the investee, the equitymethod is adopted for accounting.ii. For long-term equity investments measured at the equity method, if the initial investment costs are higher thanthe investor’s attributable share of the fair value of the investee’s identifiable net assets, no adjustment will bemade to the initial costs of the long-term equity investments; if the initial investment costs are lower than theinvestor’s attributable share of the fair value of the investee’s identifiable net assets, the difference shall berecognized in current profit and loss and at the same time the adjustment will be made to the initial costs of thelong-term equity investments.iii. After obtaining the long-term equity investments, the Company shall, according to the shares of net profits andother comprehensive income realized by the investee that shall be enjoyed or borne by the Company, recognizethe profit and loss on the investments and adjust the book value of the long-term equity investments. Whenrecognizing the net profits and losses and other comprehensive income of the investee that the Company shallenjoy or bear, the Company shall make a recognition and calculation based on the net book profits and losses ofthe investee after appropriate adjustments. However, where the Company is unable to obtain the relevantinformation due to failure to reasonably determine the fair value of the investee’s identifiable assets, minordifference between the investee’s identifiable assets and the book value thereof or other reasons, the profits orlosses on the investments shall be directly calculated and recognized based on the net book profits and losses ofthe investee. The Company shall calculate the part distributed from cash dividends or profits declared by theinvestee and correspondingly reduce the book value of the long-term equity investments.When recognizing the income from investments in associates and joint ventures, the Company shall write off thepart of incomes from internal unrealized transactions between the Company and associates and joint ventureswhich are attributable to the Company and recognize the profit and loss on investments on such basis. Where thelosses on internal transactions between the Company and the investee fall into the scope of losses on assetsimpairment, full amounts of such losses shall be recognized. Profit and loss from internal unrealized transactionsbetween the Company’s subsidiaries included into the combination scope and associates and joint ventures shallbe written off according to the above principles and the profit and loss on investments thereafter shall berecognized on such basis.When the share of net loss of the investee attributable to the Company is recognized, it is treated in the followingsequence: Firstly, write off the book value of the long-term equity investments; where the book value of the long-term equity investments is insufficient to cover the loss, investment losses are recognized to the extent that bookvalue of long-term equity which form net investment in the investee in other substances and the book value oflong-term receivables shall be written off; after all the above treatments, if the Company still assumes additionalobligation according to investment contracts or agreements, the obligation expected to be assumed should berecognized as provision and included into the investment loss in the current period. If the investee is profitable in
subsequent accounting periods, the Company shall treat the loss in reverse order against that described aboveafter deducting unrecognized share of loss: i.e. write down the book value of the recognized provision, then restorethe book value of long-term interests which substantially form net investments in the investee, then restore thebook value of long-term investments, and recognize investment income at the same time.
(3) Basis for judgment of common control or significant influence over the investeea) Basis for judgment of common control over investeeCommon control is the contractually agreed sharing of control of an arrangement, which exists only when decisionsabout the relevant activities require the unanimous consent of the parties sharing control. Relevant activities ofan arrangement usually include selling and purchasing of goods or services, managing financial assets, acquiringor disposing of assets, researching and developing activities and financing activities. A joint venture is a jointarrangement whereby the joint ventures have rights to the net assets of the arrangement. The parties have rightsto the assets, and obligations for the liabilities, relating to the arrangement, which is a joint operation, but not ajoint venture.b) Basis for judgment of significant influence over investeeThe term “significant influence” refers to the power to participate in decision-making on the financial andoperating policies of the investee, but with no control or joint control over the formulation of these policies. Wherethe Company is able to exert significant influence over the investee, the investee is its associate.
16. Fixed assets
(1) Recognition of fixed assets
Fixed assets refer to tangible assets held for the purpose of producing commodities, providing services, renting orbusiness management with useful life exceeding one accounting year. Fixed assets are recognized when thefollowing criteria are satisfied simultaneously:
a) It is probable that the economic benefits relating to the fixed assets will flow into the Company;b) The cost of the fixed assets can be measured reliably.
(2) Depreciation of fixed assets
| Category | Depreciation method | Estimated useful life (Yr) | Estimated residual value rate (%) | Annual depreciation rate (%) |
| Buildings And constructions | Straight-line method | 20 ~25 | 5 | 3.80 ~4.75 |
| Machinery equipments | Straight-line method | 10 | 5 | 9.50 |
| Transportation equipments | Straight-line method | 10 | 5 | 9.50 |
| Other equipments | Straight-line method | 8 | 5 | 11.88 |
17. Construction in progress
(1) Categories of constructions in progress
Constructions in progress are accounted on individual project basis.
(2) Criteria and commencement of conversion of constructions in progress into fixed assetsThe book entry values of the fixed assets are stated at total expenditures incurred before construction in progressreaches the working condition for their intended use. For self- operating projects, total expenditures are measuredaccording to the expenditures of direct materials, direct labor, direct measurement mechanical construction costs
and other expenditures; for contracting projects, total expenditures are measured according to project costspayable and other expenditures. Borrowing costs incurred before the projects that are undertaking with borrowingcosts reach working condition for their intended use and meeting the condition for capitalization shall becapitalized and included into the costs of construction in progress.For construction in progress that has reached working condition for intended use but for which the completion ofsettlement has not been handled, it shall be transferred into fixed assets at the estimated value according to theproject budget, construction price or actual cost, etc. from the date when it reaches the working condition forintended use and the fixed assets shall be depreciated in accordance with the Company’s policy on fixed assetdepreciation; adjustment shall be made to the estimated value based on the actual cost after the completion ofsettlement is handled, but depreciation already provided will not be adjusted.
18. Borrowing costs
(1) Scope of borrowing costs
The Company’s borrowing costs include interest thereon, amortization of discounts or premiums, ancillaryexpenses and exchange differences incurred from foreign currency loan, etc.
(2) Recognition principles of capitalization of borrowing costs
The borrowing costs incurred to the Company and directly attributable to the acquisition and construction orproduction of assets eligible for capitalization should be capitalized and recorded into relevant asset costs; otherborrowing costs should be recognized as costs according to the amount incurred and be included into the currentprofit and loss.Assets eligible for capitalization include fixed assets, investment properties, inventories and other assets whichmay reach the working condition for their intended use or sale by acquisition and construction or productionactivities for quite long time.
(3) Recognition of capitalization period of borrowing costs
a) Recognition of commencement of capitalization of borrowing costsBorrowing costs may be capitalized when asset disbursements have already been incurred, borrowing costs havealready been incurred and the acquisition and construction or production activities which are necessary to preparethe assets for their intended use or sale have already been started. Among which, asset disbursements includethose incurred by cash payment, the transfer of non-cash assets or the undertaking of interest-bearing debts foracquiring and constructing or producing assets eligible for capitalization.b) Recognition of period of capitalization suspension of borrowing costsIf the acquisition and construction or production activities of assets eligible for capitalization are interruptedabnormally and this condition lasts for more than three months, the capitalization of borrowing costs should besuspended. The borrowing costs incurred during interruption are charged to profit or loss for the current period,and the capitalization of borrowing costs continues when the acquisition and construction or production activitiesof the asset resume. If the interruption is necessary for the acquisition and construction or production to preparethe assets for their intended use or sale, the capitalization of borrowing costs should continue.c) Recognition of period of capitalization cessation of borrowing costsCapitalization of borrowing costs should cease when the acquired and constructed or produced assets eligible forcapitalization have reached the working condition for their intended use or sale. Borrowing costs incurred afterthe assets eligible for capitalization have reached the working condition for their intended use or sale should berecognized as the current profit and loss when they incur.If all parts of the acquired and constructed or produced assets are completed, each part may be used or sold
externally in the process of continuous construction of other parts and the necessary acquisition or productionactivities have been substantially completed to make the part of assets reach the working condition for theirintended use or sale, the capitalization of borrowing costs related to the part of assets should be ceased; if all partsof the acquired and constructed or produced assets are completed but the assets cannot be used or sold externallyuntil overall completion, the capitalization of borrowing costs should cease at the time of overall completion ofthe said assets.
(4) Recognition of capitalized amounts of borrowing costs
a) Recognition of capitalized amounts of interest on borrowing costsDuring the period of capitalization, capitalized amount of the interest of each accounting period (includingamortization of discounts or premiums) shall be recognized according to the following provisions:
i. As for special loan borrowed for acquiring and constructing or producing assets eligible for capitalization,borrowing costs of special loan actually incurred in the current period less the interest income of the loans unusedand deposited in bank or return on temporary investment should be recognized as the capitalization amount ofborrowing costs.ii.As for general loans used for acquiring and constructing or producing assets eligible for capitalization, the interestof general loans to be capitalized should be calculated by multiplying the weighted average of asset disbursementsof the part of accumulated asset disbursements in excess of special loans by the capitalization rate of used generalloans. The capitalization rate is calculated by weighted average interest rate of general loans.iii. Where there are discounts or premiums on loans, the amounts of interest for each accounting period shouldbe adjusted taking account of amortizable discount or premium amounts for the period by effective interestmethod.iv. During the period of capitalization, the capitalized amount of interest of each accounting period shall not exceedthe current actual interest of the relevant loans.b) Recognition of capitalized amounts of auxiliary expenses of loansi.Auxiliary expenses incurred from special loans before the acquired or constructed assets eligible for capitalizationreach the working condition for their intended use or sale should be capitalized when they incur and charged tothe costs of assets eligible for capitalization; those incurred after the acquired or constructed assets eligible forcapitalization reach the working condition for their intended use or sale should be recognized as costs accordingto the amounts incurred when they incur and charged to the current profit or loss.ii. Auxiliary expenses incurred from general loans shall be recognized as costs according to the amounts incurredwhen they occur and included in the current profit and loss.c) Recognition of capitalized amount of exchange differencesDuring the period of capitalization, exchange differences incurred from the principal and interest of special foreigncurrency loans should be capitalized and included in the costs of the assets eligible for capitalization.
19. Intangible assets
(1) Useful life and the basis for its determination, estimation, amortization methodology or review proceduresa) Initial measurement of intangible assetsi. Initial measurement of outsourcing intangible assetsCosts of outsourcing intangible assets shall be recognized according to the purchase price, related taxes and otherexpenses directly attributed to reaching the working condition for their intended use. The cost of intangible assetsshall be recognized based on present value of purchase price when deferred payment over normal creditconditions with financial nature. The difference between actual payment and purchase price, expect for capitalized
amount, shall be included into the current profit and loss in the period of credit.ii. Initial measurement of internally researched and developed intangible assetsCosts of internally researched and developed intangible assets shall be recognized according to the total expensesduring the period after the assets are eligible for capitalization and before they reach the intended purpose andthe expenses that have been included in the previous periods shall no longer be adjusted.Expenses on the research phase of internally researched and developed intangible assets shall be included in thecurrent profit and loss when they incur; those on the development phase ineligible for capitalization shall beincluded in the current profit and loss; those eligible for capitalization shall be recognized as intangible assets. If itis unable to distinguish expenditure on the research phase and expenditure on development phase, the researchand development expenditures shall be all included in the current profit and loss.b) Subsequent measurement of intangible assetsThe useful lives of intangible assets are analyzed on acquisition. Intangible assets obtained by the Company aredivided into intangible assets with limited useful lives and intangible assets with indefinite useful lives.i. Subsequent measurement of intangible assets with limited useful livesThe intangible assets with limited useful lives are amortized on a straight-line basis when they reach intended useover their useful lives with no residual value reserved. Amortizations of intangible assets are usually recorded intothe current profit and loss; where the economic benefits of an intangible asset are realized by the products orother assets produced thereafter, the amortizations are recorded into the costs of the relevant assets.Category, estimated useful life, estimated net residual value rate and annual amortization rate of intangible assetsare shown below:
| Category of intangible assets | Estimated useful life (years) | Estimated net residual value rate (%) | Annual amortization rate (%) |
| Land use right | 50 | 0 | 2.00 |
| Trademark | 7-10 | 0 | 14.29-10.00 |
| Computer software | 10 | 0 | 10.00 |
The useful lives and amortization methods of intangible assets with limited useful lives on the balance sheet dateshall be reviewed.ii. Subsequent measurement of intangible assets with indefinite useful livesIntangible assets with indefinite useful lives are not amortized in the holding period, but impairment tests areperformed at the end of each year.c) Estimates of useful lives of intangible assetsi. For intangible assets from any contractual right or other statutory rights, their useful lives shall be recognizedaccording to the period no more than that of the contractual or other statutory rights; when the contractual rightor other statutory rights contract is extended due to renewal of contracts and there is evidence that the renewalof the Company does not need large costs, the renewal period shall be included into the useful lives.ii. Where the contract or the law fails to specify the useful lives, the Company integrates situations in all aspectsand determine the period of intangible assets that can bring economic benefits for the Company by hiring therelevant experts to demonstrate or comparing with the situation of the industry as well as referring to theCompany’s historical experience or otherwise.iii. If it is still unable to reasonably determine that intangible assets may bring economic benefits for the Companyaccording to the above methods, the intangible assets are taken as intangible assets with indefinite useful lives.
(2) The scope of R&D expenditures and the related accounting treatment
a) Specific criteria for delineating the research and development phases of in-house R&D projectsi. The scope of R&D expenditures
It usually includes research and development staff salary expense, direct input expense, depreciation and long-term amortization expense, design expense, equipment commissioning expense, amortization expense forintangible assets, commissioned external research and development expense, and other expense, includingexpensed research expense and capitalized development expenditures.ii. Specific criteria for delineating the research and development phasesAccording to the actual situation of the research and development, the Company classifies the research anddevelopment project into that on the research phase and that on the development phase.
① Research stage
Research stage is the stage when creative and planned investigations and research activities are conducted toacquire and understand new scientific or technological knowledge.
② Development stage
Development stage is the stage when the research achievements or other knowledge are applied to a plan ordesign, prior to the commercial production or use, so as to produce any new or substantially improved material,device or product.Expenditure of an internal research and development project on the research phase shall be included in currentprofit and loss when it occurs.b) Specific criteria for qualifying expenditure on the development phase for capitalizationExpenditure on the development phase of an internal research and development project shall be recognized asintangible assets only when the following conditions are simultaneously satisfied:
i. It is technically feasible to finish intangible assets for use or sale;ii. It is intended to finish and use or sell the intangible assets;iii. The usefulness of intangible assets to generate economic benefits shall be proved, including being able to provethat there is a potential market for the products manufactured by applying the intangible assets or there is apotential market for the intangible assets themselves or the intangible assets will be used internally;iv. It is able to finish the development of the intangible assets, and able to use or sell the intangible assets, withthe support of sufficient technologies, financial resources and other resources;v. The expenditure attributable to the intangible asset during its development phase can be measured reliably.
20. Non-current assets impairment
If there are impairment indicators of long-term equity investment, investment property measured at cost model,fixed assets, construction in progress, right-of-use assets, intangible assets with indefinite useful lives and otherlong-term assets at balance sheet date, impairment test should be performed. If the result of impairment testshows that recoverable amount is less than its book value, the difference should be provided for impairment andrecorded into impairment loss. The recoverable amount is the higher of fair values less costs of disposal and thepresent values of the future cash flows expected to be derived from the asset. Provision for impairment iscalculated and recognized on the basis of individual asset. If recoverable amount of individual asset is difficult tobe estimated, the Company should recognize the recoverable amount of the asset group which the individual assetbelongs to. Asset group is the minimum asset group which can generate cash inflow separately.The Company should perform impairment test for goodwill and intangible assets with indefinite life at least at eachyear end, no matter whether there is impairment indicator.When the Company performs impairment test, book value of goodwill arising from business combination shouldbe amortized to relevant asset group using the reasonable method from the date of purchase. If it is difficult toamortize it to relevant asset group, amortize it to relevant asset group portfolio. Apportion book value of goodwillto relevant asset group or asset group portfolio according to the proportion of fair value of asset group or asset
group portfolio accounting for total amount of relevant asset group or asset group portfolio. If fair value is difficultto be measured reliably, amortize according to the proportion of book value of asset group or asset group portfolioaccounting for total amount of relevant asset group or asset group portfolio. When perform impairment test forasset group or asset group portfolio including goodwill, if there is impairment indicator of asset group or assetgroup portfolio relevant to goodwill, perform impairment test for asset group or asset group portfolio withoutgoodwill firstly, calculate its recoverable amount, compare with relevant book value and recognize impairment loss.Then perform impairment test for asset group or asset group portfolio including goodwill, compare book value ofthe asset group or asset group portfolio (including proportional book value of goodwill) and its recoverable amount,if recoverable amount of relevant asset group or asset group portfolio is less than its book value, recognizeimpairment loss of goodwill.Once impairment loss stated above is recognized, reversal is not allowed in the subsequent accounting periods.
21. Long-term deferred expenses
(1) Scope of long-term deferred expenses
Long-term deferred expenses refer to various expenses which have been already incurred but will be born in thisperiod and in the future with an amortization period of over 1 year (exclusive).
(2) Initial measurement of long-term deferred expenses
Long-term deferred expenses shall be initially measured according to the actual costs incurred.
(3) Amortization of long-term deferred expenses
Long-term deferred expenses are amortized using the straight-line method over the beneficial period.
22. Contract liability
Contract liabilities refer to the obligation of a company to transfer commodities to customers for considerationreceived or receivable from customers. If the customer has paid the contract consideration or the company hasobtained an unconditional right to receive the goods prior to the company's transfer of the goods to the customer,the company will show the amount received or receivable as a contractual liability in which earlier the customeractually pays the amount or the amount becomes due. The contract assets and contract liabilities under the samecontract shall be shown on a net basis, and the contract assets and contract liabilities under different contractsshall not be set off.
23. Employee benefits
(1) Accounting treatment of short-term benefits
Short-term benefits are the benefits that the Company expect to pay in full within 12 months after the reportingperiod in which the employee provided relevant services, excluding the compensation for employmenttermination.Short-term benefits include: wage, bonus, allowance and subsidy; employee welfare, social securities includinghealth insurance and work injury insurance; housing common reserve fund; union expenditure and employeetraining expenditure; short-term paid leave; short-term profit-sharing; non-monetary welfare and other short-termbenefits.Actual short-term benefits will be recognized as liability during the accounting period in which the employee isproviding the relevant service to the Company. The liability will be included in the current profits and losses or thecost relevant assets.
(2) Accounting treatment of post-employment benefits
The defined contribution plan of the Company includes payments of basic pension, unemployment insurance,
annuity, etc. that accord to relevant provisions. The amount which the Company deposit on balance sheet date inexchange for the service of the employee during the accounting period will be recognized as employee benefitsliability and shall be included into the profit or loss for the current period.
(3) Accounting treatment of termination benefits
Termination benefits are the benefits the Company provide to the employee when the Company terminates theemployment before labor contract expires or encourages voluntary resignation. Employee benefits liabilities shallbe recognized and included into profit or loss for the current period on the earlier date of the two followingcircumstances:
a) When the Company is not able to withdraw the benefits from termination of employment or resignationpersuasion unilaterally;b) When the Company recognizes costs and fees relevant to reforming the termination benefits payment.
(4) Accounting treatment of other long-term employee benefits
Other long-term employee benefits are all employee benefits other than short-term benefits, post-employmentbenefits and termination benefits. At the end of reporting period, the company will recognize the employeebenefits cost from other long-term employee benefits as the following components:
a) Service cost;b) Net amount of interest from other long-term employee benefits net liabilities or assets;c) Changes from recalculation of the net liabilities or assets from other long-term employee benefits.In order to simplify related accounting procedure, the net amount of the above subjects shall be included intocurrent profit or loss or the cost of relevant assets.
24. Provisions
(1) Recognition principles of provision
When obligations related to external guarantees, pending actions or arbitration, product quality assurance,onerous contracts, reorganization and contingencies satisfy the following three conditions, they shall berecognized as provision:
a) This obligation is a present obligation of the Company;b) The settlement of such obligation is likely to result in outflow of economic benefits from the Company; andc) The amount of the obligation can be measured reliably.
(2) Measurement method of provision
The amount of provision is measured at the best estimate of expenses required for contingencies.a) If there is continuous range for the necessary expenses, and probabilities of occurrence of all the outcomeswithin this range are equal, the best estimate shall be determined at the median of the range.b) The best estimate shall be accounted as follows in other cases:
i. If the contingency involves a single item, the best estimate shall be determined at the most likely outcome.ii. If the contingency involves two or more items, the best estimate should be determined according to all thepossible outcomes with their relevant probabilities.
25. Share-based payment
Share-based payment is classified as equity-settled share-based payment and cash- settled share-based payment.
(1) Accounting treatment on the date of granting
The Company does not make any accounting treatment on the date of granting, neither for equity-settled share-based payment nor for cash-settled share-based payment, except that the right of the share-based payment canbe exercised immediately.
(2) Accounting treatment on each balance sheet date within vesting period
On each balance sheet date within vesting period, the Company records the service provided by employees orother party as cost and expense, and recognizes equity or liability at the same time.For the share-based payment attached with market conditions, once employees satisfy all conditions exceptmarket conditions, the service acquired can be recognized. If the performance condition is not market condition,the estimate for previous periods can be revised when the vesting period is determined and subsequentinformation shows that the estimate for conditions of exercising rights requires adjustments.For equity-settled share-based payment related with employees, charge the service into costs, expenses andcapital reserve (other capital reserve), using the fair value of the equity instrument on the date of granting. Thesubsequent changes of fair value should not be recognized. For cash-settled share-based payment related withemployees, recalculate fair value of the equity instrument at each balance sheet date and recognize related costs,expenses and employee benefit payable.At each balance sheet date within vesting period, the Company makes the best estimate and revises the numberof equity instrument that can be exercised according to the latest subsequent information such as change ofnumber of employees who can exercise rights.Use fair value and the number of equity instrument stated above to calculate cumulative amount of costs andexpenses that should be recognized by this period and then deduct the cumulative amount already recognized inthe previous period. The balance is the amount of cost and expense that should be recognized in the current period.
(3) Accounting treatment after the date when rights can be exercised
For equity-settled share-based payment, after the date when rights can be exercised, no adjustment shall be madeto the total amount of the cost expense and equity already recognized. The Company recognizes share capital andcapital premium, and carry forward the capital reserve (other capital reserve) recognized within vesting period atthe he dates when rights can be exercised.For cash-settled share-based payment, the Company shall not recognize costs and expenses. The change of fairvalue of liability (employee benefit payable) should be recorded into current profit or loss (profit or loss arisingfrom fair value changes) after the date when rights can be exercised.
(4) Accounting treatment for repurchasing shares regarding employee option incentive.When the Company encourages employees in the form of repurchasing shares, total expenditure of repurchasingshares is regarded as treasury stock and registered for check. At each balance sheet date within vesting period,charge the employee service acquired into costs and expenses, and meanwhile increase capital reserve (othercapital reserve), using fair value of the equity instrument at the date of granting. When the employee exercisesthe right to buy the Company’s shares and receives the amount, write off the cost of treasury stock delivered tothe employee and the cumulative amount of capital reserve (other capital reserve) recognized within the vestingperiod, meanwhile the balance adjusting capital reserve (share capital premium).
26.Revenue
Accounting policies adopted in revenue recognition and measurement
(1) Principle and measurement method of revenue recognition
a) Revenue recognitionThe Company has fulfilled its contractual performance obligation to recognize revenue when the customeracquires control of the relevant goods. On the beginning date of the contract, the Company evaluates the contract,identifies the individual performance obligations contained in the contract, and determines whether the individualperformance obligations are performed within a certain period of time or at a certain point. Then, the Company
recognizes the revenue when the individual performance obligations are fulfilled.b) Revenue measurementIf the contract contains two or more performance obligations, the Company shall, on the commencement date ofthe contract, apportion the transaction price to each single performance obligation according to the relativeproportion of the separate selling price of the commodity or service committed by each single performanceobligation, and measure the revenue according to the transaction price apportioned to each single performanceobligation. In determining the transaction price, the Company will take into account the impact of variableconsideration, material financing elements existing in the contract, non-cash consideration and customerconsideration payable, and it is assumed that the goods will be transferred to the customer in accordance with theprovisions of the existing contract and that the contract will not be canceled, renewed or changed.
(2) Specific revenue recognition policies
a) Sales contractThe Company's sales products, promotional products and other goods belong to the performance obligationsperformed at a certain point.The Company recognizes the sales revenue when the goods are delivered to the customer and the control of thegoods is transferred. For export sales business, the Company recognizes the revenue after the goods are deliveredand the customs clearance procedures are completed.According to the marketing policy, and the distributor sales of final product, the Company gives the distributor apercentage discount, and regularly or irregularly settles with distributors. At the time of settlement, the discountsare recorded in a sales invoice issued. The net amount of invoice value after the deduction of the discount salesincome is recognized as revenue according to the accrual principle. The discounts that have occurred and have notyet been settled at the end of the current period shall be taken provision from the sales revenue and recorded intothe contract liabilities.b) Service ContractThe service contract provided by the Company contains the performance obligation of the lease service provided.Since the customer obtains and consumes the economic benefits brought by the performance of the contract atthe same time, it is regarded as the performance obligation performed within a certain period of time and is equallyapportioned and confirmed during the service provision.
27. Contract costs
Assets related to contract costs include contract acquisition costs and contract performance costs.The cost of contract fulfillment incurred by the company to perform the contract shall be recognized as an asset ifthe following conditions are met:
(1) The cost is directly related to a current or anticipated contract.
(2) The cost increases the company's resources for future performance obligations.
(3) The cost is expected to be recovered.
The incremental cost incurred by the company in obtaining the contract is expected to be recovered shall berecognized as an asset as the cost of obtaining the contract.The Company amortizes the asset related to the contract cost on the same basis as the recognition of the revenueof the goods or services related to the asset, and includes it in the profit or cost for the current period.If the book value of the assets related to the contract cost is higher than the difference between the following twoitems, the Company will make an impairment provision for the excess part and confirm it as the impairment lossof the assets:
(1) The transfer of the goods or services related to the asset less the estimated cost;
(2) Estimated impending costs for the transfer of the related goods or services.
If the impairment provision of the above asset is subsequently reversed, the book value of the asset after reversalshall not exceed the carrying amount the asset would have reached on the date of reversal had the provision forimpairment been not made.
28. Government grants
(1) Types of government grants
Government grants are monetary assets and non-monetary assets acquired free of charge by the Company fromthe government, including government grants related to assets and government grants related to income.Government grants related to assets are government grants that are acquired by the Company and used forforming long-term assets through purchasing and constructing or other ways.Government grants related to income are government grants other than government grants related to assets.
(2) Recognition principles of government grants
Government grants are recognized when both of the following conditions are met:
a) The Company can meet the attached conditions for the government grants;b) The Company can receive the grants.
(3) Measurement of government grants
a) If a government grant is a monetary asset, it shall be measured in the light of the received or receivable amount.b) If a government grant is a non-monetary asset, it shall be measured at its fair value; and if its fair value cannotbe obtained in a reliable way, it shall be measured at a nominal amount (a nominal amount is CNY 1).
(4) Accounting treatment method of government grants
a) The government grants related to assets shall be set off of the book value of the related assets or recognized asdeferred income at the actual entry amount on acquisition. Government grants recognized as deferred incomeshall be allocated evenly over the useful lives of the relevant assets, and included in the current profit or loss.Government grants measured at the nominal amount shall be directly included in current profit and loss.b) Government grants related to income shall be separately handled according to the following circumstances:
i. If government grants related to income are used to compensate the Company’s relevant expenses or losses infuture periods, such government grants should be recognized as deferred income on acquisition and be includedinto the current profit and loss or written off of the related costs when the relevant expenses, losses are recognized.ii. If government grants related to income are used to compensate theCompany’s relevant expenses or losses incurred, such government grants are directly included into the currentprofit and loss on acquisition or written off of the related costs.c) Government grants related to assets and related to income are received together, shall be treated separately. Ifit is hard to separate, government grants shall be treated as related to income as a whole.d) Government grants related to daily operation shall be recoded in other income or written off relevant expenses,costs. Government grants unrelated to daily operation shall be recorded in non-operating income. Financialsubsidy funds directly allocated to the company shall be offset the relevant borrowing costs.e) Government grants already recognized required to be refunded shall be handled according to the followingcircumstances:
i. If the grants have written down the book value of assets, the book value shall be adjusted.ii. If there is related deferred income, the book value of relevant deferred income is written down and the
exceeding part is recorded in the current profit and loss.iii. If there is no related deferred income, the exceeding part is directly included in the current profit and loss.
29. Deferred tax assets and deferred tax liabilities
The Company adopts the balance sheet liability method to account for income tax.
(1) Recognition of deferred tax assets or deferred tax liabilities
a) The Company recognizes its tax base on acquisition of assets and liabilities. On the balance sheet date, theCompany analyzes and compares the book value of the assets and liabilities and the tax base. If there aretemporary differences in book value of the assets and liabilities and the tax base, under the circumstance that thetemporary differences incur in the current period and meet the recognition criteria, the Company shall respectivelyrecognize taxable temporary differences or deductible temporary differences as deferred tax liability or deferredtax assets.b) Recognition basis of deferred tax assetsi. Deferred tax assets incurred from deductible temporary differences are recognized to the extent that they shallnot exceed the taxable income probably obtained in future periods to be against the deductible temporarydifference. In determining the taxable income probably obtained in future periods, including the taxable incomefrom normal production and operation activities in future periods and the increase of taxable income due to thereversal of taxable temporary differences during the period of reversal of deductible temporary differences.ii. For deductible losses and tax credits that can be carried forward to the next years, the Company is likely torecognize the corresponding deferred tax assets to the extent that the assets shall not exceed the taxable incomein the future for deducting deductible losses and tax credits and that are probably obtained by the Company.iii. On the balance sheet date, the Company reviews the book value of deferred tax assets. If it is probably unableto obtain sufficient taxable income in the future period to offset the benefits of the deferred tax assets, theCompany shall write down the book value of the deferred tax assets; when it is probable to obtain sufficient taxableincome, the write-downs shall be reversed.c) Recognition basis of deferred tax liabilitiesThe Company recognizes the current and previous taxable temporary differences payable but unpaid as deferredtax liabilities. But they exclude temporary differences arising from goodwill; transactions which are formed otherthan from business combinations and neither affect the accounting profits nor affect taxable income at the timeof occurrence.
(2) Measurement of deferred tax assets or deferred tax liabilities
a) On the balance sheet date, the deferred tax assets and deferred tax liabilities are measured at the applicabletax rate during the period of expected recovery of the assets or liquidation of the liabilities in accordance with theprovisions of the tax law.b) Where the applicable tax rate changes, the Company remeasures deferred tax assets and deferred tax liabilitiesrecognized, except for those incurred in transactions or events directly recognized in the owner’s equity, of whichthe effect shall be included in the income tax expenses in the current period when the rate changes.c) When the Company measures the deferred tax assets and deferred tax liabilities, the tax rate and tax base inconsistent with the expected recovery of assets or liquidation of liabilities shall be adopted.d) Deferred tax assets and deferred tax liabilities of the Company shall not be discounted.
30. Lease
(1) Accounting treatment for leases as lessee
On the commencement date of the lease term, the company recognizes right-of-use assets and lease liabilities for
leases other than short-term leases and leases of low-value assets, and subsequently recognizes depreciationexpense and interest expense during the lease term.a)Accounting treatment for right-of-use assetsA right-of-use asset is the right of the Company, as lessee, to use the leased asset during the lease term.i. The initial measurementOn the lease commencement date, the company measures the right-of-use asset at its initial cost. This costcomprises four components:① The initial measurement of the lease liability. ② Lease payments made at or beforethe commencement date, net of any lease incentives received, if any. ③ Incurred initial direct costs, representingthe incremental costs of obtaining the lease. ④ Estimated costs expected to be incurred for dismantling andremoving the leased asset, restoring the leased asset's site, or reinstating the leased asset to the conditionspecified in the lease agreement, excluding costs for inventory production purposes.ii. Subsequent measurement.After the lease commencement date, the company adopts the cost model for subsequent measurement of theright-of-use asset, which means the asset is measured at cost less accumulated depreciation and accumulatedimpairment losses. If the company re-measures the lease liability in accordance with the lease standards, thecarrying amount of the right-of-use asset is adjusted accordingly.Depreciation is recognized on the right-of-use asset from the lease commencement date. Depreciation on theright-of-use asset begins in the month of lease commencement. The amount of depreciation recognized is eithercapitalized to the cost of related assets or expensed in the current period, depending on the use of the right-of-use asset. The company applies the straight-line method to depreciate the right-of-use asset based on the expectedpattern of consumption of the economic benefits associated with the right-of-use asset. If the right-of-use asset isimpaired, subsequent depreciation is based on the carrying amount of the right-of-use asset after deductingimpairment losses. The categories of right-of-use assets, their useful lives, and annual depreciation rates are asfollows: [Categories, useful lives, and annual depreciation rates are not provided in the text you provided.
| The categories of right-of-use assets. | The depreciation period (in years). | The annual depreciation rate (as a percentage) |
| buildings and structures. | 2-5 | 50-20 |
(2) The accounting treatment method for lease liabilities.
(a) Initial measurementAt the commencement date, a lessee shall measure the lease liability at the present value of the lease paymentsthat are not paid at thata) Lease paymentThe lease payments included in the measurement of the lease liability comprise the following payments for theright to use the underlying asset during the lease term that are not paid at the commencement date:
i. fixed payments (including in-substance fixed payments) less any lease incentives receivable;ii. variable lease payments that depend on an index or a rate, initially measured using the index or rate as at thecommence date;iii. The exercise price of the purchase option, if the Company is reasonably certain to exercise that option;iv. Payments of penalties for terminating the lease, if the lease term reflects the lessee exercising an option toterminate the lease;v. The amount expected to be paid based on the residual value of the guarantee provided by the company.b) The discount rateWhen calculating the present value of lease payments, the interest rate in the lease is determined as the discountrate. If the rate cannot be readily determined, the Company shall use the lessee’s incremental borrowing rate,
which is the rate of interest that a lessee would have to pay to borrow over a similar term, and with a similarsecurity, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economicenvironment. The incremental borrowing rate is based on the bank lending rate and adjusted by the Companyconsidering relevant factors.(b) Subsequent measurementAfter the commencement date, the Company shall measure the lease liability by:
①increasing the carrying amount to reflect interest on the lease liability;
② reducing the carrying amount to reflect the lease payments made;
③ remeasuring the carrying amount to reflect any reassessment or lease modificationsAfter the lease commencement date, lease payment shall be remeasured if the following circumstances incurred,and the lease liability shall be remeasured at the present value which is based on the revised lease payment andrevised discounting rate. The Company shall remeasure the lease liability to reflect changes to the lease payments.A lessee shall recognize the amount of the remeasurement of the lease liability as an adjustment to the right-of-use asset. However, if the carrying amount of the right-of-use asset is reduced to zero and there is a furtherreduction in the measurement of the lease liability, a lessee shall recognize any remaining amount of theremeasurement in profit or loss.
①change of in-substance fixed payments (subject to original discounting rate)
②change of amounts expected to be payable under residual value guarantees
③change of an index or a rate used for future lease payments
④change in assessment of a buy option
The interest expense during each period of the lease term shall be included in the current profit and loss , exceptfor those that should be capitalized.
(3) The criteria and accounting treatment methods for short-term leases and leases of low-value assets.For short-term leases, they refer to leases where the lease term does not exceed 12 months from the leasecommencement date. Leases that include purchase options are not considered short-term leases. Low-value assetleases are leases where the individual lease asset has a low value when it is new. Leases of assets for sublease orexpected sublease are excluded from low-value asset leases.The company adopts a simplified approach for short-term leases and leases of low-value assets. Lease paymentsfor short-term leases and leases of low-value assets are recognized as an expense on a straight-line basis or usinganother systematic and rational approach over the lease term in each reporting period. No right-of-use assets andlease liabilities are recognized for these leases.
(4) The accounting treatment methods for leases as the lessor
(a) Accounting treatment for operating leaseAccording to the nature of the assets, the company will include the assets used as operating lease in the relevantitems of the balance sheet. The Company shall add initial direct costs incurred in obtaining an operating lease tothe carrying amount of the underlying asset and recognize those costs as an expense over the lease term on thesame basis as the lease income. Lease payment received shall be recognized as lease income on a straight-linebasis within the period. The depreciation policy for depreciable underlying fixed assets subject to operating leasesshall be consistent with the lessor’ s normal depreciation policy for similar assets. Amortization for otherunderlying assets subject to operating lease shall be on reasonable systematic basis. The variable lease paymentsobtained by the company related to operating leases, which are not included in the lease payment received, shallbe included in the current profit and loss when actually incurred.A lessor shall account for a modification to an operating lease as a new lease from the effective date of the
modification, considering any prepaid or accrued lease payments relating to the original lease as part of the leasepayments for the new lease.
(b) Accounting treatment for finance leaseAt the commencement date of the lease term, the Company recognizes the finance lease receivable at the netvalue of lease investment (the sum of the unguaranteed residual value and the present value of the lease receiptsnot yet received at the commencement date of the lease term that are discounted at the interest rate in the lease)and derecognizes the finance lease asset. Over the term of the relevant lease, the Company calculates andrecognizes interest income based on the interest rate in the lease.The company shall account for a finance lease modification as a separate lease if both conditions are satisfied: ①the modification increases the scope of the lease by adding the right to use one or more underlying assets orextending the contractual lease term. ② the consideration for the lease increases by an amount commensuratewith the stand-alone price for the increase in scope or the contractual lease term extension and any appropriateadjustments to that stand-alone price to reflect the circumstances of the particular contract. Stand-alone price toreflect the circumstances of the particular contract.
31. Changes in significant accounting policies and accounting estimates
(1) Changes in significant accounting policies
?Applicable □N/A
The Ministry of Finance issued No. 16 Interpretation of Enterprise Accounting Standards (Finance and Accounting[2022] No. 31, hereinafter referred to as "Interpretation No. 16") on November 30, 2022, with the content of"Accounting Treatment of Deferred Income Tax Not Exempted from Initial Recognition for Assets and LiabilitiesArising from Single Transactions" taking effect from January 1, 2023. For single transactions subject toInterpretation No. 16, the company retrospectively adjusts the cumulative effect amounts on financialstatements to the earliest period's opening retained earnings and other related financial statement items, inaccordance with the provisions of Interpretation No. 16 and Enterprise Accounting Standard No. 18 - IncomeTaxes, for temporary differences in taxable and deductible temporary differences arising from recognizing leaseliabilities and right-of-use assets.
The impact of the aforementioned accounting policy change on the financial statements is as follows:
Consolidated balance sheet items
| Project | December 31, 2022(Last year's year-end balance) | ||
| Before adjustment | After adjustment | Adjustment amount | |
| Deferred tax assets | 1,498,116,524.68 | 1,506,694,037.06 | 8,577,512.38 |
| Deferred tax liabilities | 219,046,405.35 | 227,529,007.67 | 8,482,602.32 |
| Other comprehensive income | 1,981,678.95 | 1,982,037.01 | 358.06 |
| Retained earnings | 44,364,111,297.61 | 44,364,203,149.57 | 91,851.96 |
Project
| Project | December 31, 2022(Last year's year-end balance) | ||
| Before adjustment | After adjustment | Adjustment amount | |
| Deferred tax assets | 1,498,116,524.68 | 1,506,694,037.06 | 8,577,512.38 |
| Minority interests | 49,501,629.07 | 49,504,329.11 | 2,700.04 |
Parent company balance sheet items
| Project | December 31, 2022(Last year's year-end balance) | ||
| Before adjustment | After adjustment | Adjustment amount | |
| Deferred tax assets | 24,212,971.55 | 24,515,740.48 | 302,768.93 |
| Deferred tax liabilities | 135,357,661.52 | 135,648,124.99 | 290,463.47 |
| Retained earnings | 29,676,346,187.62 | 29,676,358,493.08 | 12,305.46 |
Consolidated income statement items
| Project | December 31, 2022(Amount for the previous period) | ||
| Before adjustment | Before adjustment | Before adjustment | |
| Income tax expence | 3,113,885,719.88 | 3,113,849,969.51 | -35,750.37 |
| Minority interests | 11,565,742.41 | 11,568,442.45 | 2,700.04 |
Parent company income statement items
| Project | December 31, 2022(Amount for the previous period) | ||
| Before adjustment | Before adjustment | Before adjustment | |
| Income tax expence | 212,632,426.14 | 212,628,263.96 | -4,162.18 |
(2) Changes in significant accounting estimates
□Applicable ?N/A
(3) Adjustments to the financial statement items at the beginning of the fiscal year when implementing the newaccounting standards for the first time starting from 2023?Applicable ?N/AExplanation of adjustment circumstances:
Please refer to Section X, Item V, 30(1) Significant Accounting Policy Changes in this report
32. Other
None.
V. Taxes
1. Major tax types and rates
| Tax type | Taxation basis | Tax rate |
| Value-added tax (VAT) | Output tax-deductible input tax | 13%、9%、6%、19% |
| Consumption tax | Sales revenue or composite assessable price | please refer to the instructions |
| Urban maintenance and construction tax | Applicable turnover tax amount | 7%、5% |
| Corporate income tax | Applicable income tax rate Taxable income | 25%、16.5%、0%、27% |
Disclosure statement if there are various taxpaying bodies with different corporate income tax rates
| Company name | Applicable tax rate |
| JSSJ Industry (HK) Holdings Co., Ltd. | 16.50% |
| Hong Kong Zhaiugou International Trade Co., Ltd. | 16.50% |
| ZYG E-Commerce HK Limited | 16.50% |
| Yanghe Hong Kong Distillery Co., Ltd. | 16.50% |
| YANGHE CHILE SPA | 27% |
| YangHe International Investment Ltd | 0% |
| ZYG LTD and ZYG TECHNOLOGY INVESTMENT LTD | 0% |
2.Other information
Note: Charging of Consumption Tax
(1) Ad valorem taxation: liquor consumption tax shall be calculated and paid according to 20% of the approvedsales amount. The taxable liquor commissioned for processing shall be taxed according to the sales price of similarliquor of the entrusted party, and if there is no sales price of similar liquor, the taxable liquor shall be computedaccording to the composition assessable price. Consumption tax on red wine (wine) is calculated at 10% of sales.
(2) Quantity-based taxation: liquor consumption tax is calculated and paid according to CNY 1 per kg.VI. Notes to items in the consolidated financial Statements (all currency unit is CNY, except
other statements)
1. Cash and Bank Balances
Unit: CNY
| Item | Closing balance | Opening balance |
| Cash | 292.01 | |
| Bank deposit | 25,766,215,567.22 | 24,331,397,524.64 |
| Other cash and cash equivalents | 46,571,787.63 | 44,051,907.69 |
| Total | 25,812,787,646.86 | 24,375,449,432.33 |
| Including: total deposit outbound | 55,707,753.67 | 49,598,745.91 |
Other notesOn December 31st 2023, the interest receivable for time deposit is CNY 611,764,093.46; The ending balance ofother currency funds is mainly the funds deposited in Tenpay, Alipay and other platforms.Liquor manufacturing enterprises should disclose in detail whether there is any special interest arrangementsuch as the establishment of capital co-management accounts with relevant parties
□Applicable ?N/A
2. Held-for-trading financial assets
Unit: CNY
Item
| Item | Closing balance | Opening balance |
| Financial asset at fair value through profit and loss | 5,851,217,684.93 | 7,998,150,119.16 |
| Including: | ||
| Debt instruments | 5,851,217,684.93 | 7,998,150,119.16 |
| Including: | ||
| Total | 5,851,217,684.93 | 7,998,150,119.16 |
Other notesDebt instruments are bank financial products and trust financial products that mature within one year
3. Notes receivables
(1) Classification of notes receivables
Unit: CNY
| Item | Closing balance | Opening balance |
| Bank acceptance bill | 526,476,976.44 | 526,004,730.00 |
| Total | 526,476,976.44 | 526,004,730.00 |
(2) Disclosure by classification of provision for bad debts method
Unit: CNY
| Item | Closing balance | Opening balance | ||||||||
| Book balance | Provision for bad debt | Book value | Book balance | Provision for bad debt | Book value | |||||
| amount | proportion | amount | proportion | amount | proportion | amount | proportion | |||
| Including: | ||||||||||
| Provision for bad debt of notes receivables by portfolio | 526,476,976.44 | 100.00% | 526,476,976.44 | 526,004,730.00 | 100.00% | 526,004,730.00 | ||||
| Including: | ||||||||||
| Bank acceptance bill portfolio | 526,476,976.44 | 100.00% | 526,476,976.44 | 526,004,730.00 | 100.00% | 526,004,730.00 | ||||
| Total | 526,476,976.44 | 100.00% | 526,476,976.44 | 526,004,730.00 | 100.00% | 526,004,730.00 | ||||
Provision for bad debt by individual: 0.00
Unit: CNY
| Item | Closing balance | ||
| Book balance | Provision for bad debt | Proportion | |
| Bank acceptance bill portfolio | 526,476,976.44 | 0.00 | 0.00% |
| Total | 526,476,976.44 | 0.00 | |
Notes to determine provision for bad debt by portfolio:
If provision for bad debt of notes receivable is calculated according to the general model of expected credit loss,please refer to the disclosure method of other receivables to disclose the relevant information about provision forbad debt:
□Applicable ?N/A
(3) Notes receivable that have been endorsed to other parties by the Company but have not expired at theend of year
Unit: CNY
| Item | Derecognition at period end | Not derecognition at period end |
| Bank acceptance bill | 343,608,531.49 | |
| Total | 343,608,531.49 |
4. Accounts receivables
(1) Disclosed by aging
Unit: CNY
| Aging | Closing book balance | Opening book balance |
| Within1 year (including 1 year) | 3,083,099.43 | 46,205,254.29 |
| Within 1 year | 3,083,099.43 | 46,205,254.29 |
| 1-2 years | 394,794.95 | 230,463.47 |
| 2-3 years | 145,836.47 | 123,334.80 |
| Over 3 years | 3,099,790.38 | 2,984,017.58 |
| 3-4 years | 122,294.80 | 27,021.00 |
| 4-5 years | 25,199.00 | 21,003.29 |
| Over 5 years | 2,952,296.58 | 2,935,993.29 |
| 合计 | 6,723,521.23 | 49,543,070.14 |
(2) Disclosed by categories
Unit: CNY
| Category | Closing balance | Opening balance | ||||||||
| Book balance | Provision for bad debt | Book value | Book balance | Provision for bad debt | Book value | |||||
| Amount | Proportion | Amount | Proportion | Amount | Proportion | Amount | Proportion | |||
| Including: | ||||||||||
| Provision for bad debt by portfolio | 6,723,521.23 | 100.00% | 3,194,742.95 | 47.52% | 3,528,778.28 | 49,543,070.14 | 100.00% | 4,400,177.36 | 8.88% | 45,142,892.78 |
| Including:： | ||||||||||
| Risk portfolio | 6,723,521.23 | 100.00% | 3,194,742.95 | 47.52% | 3,528,778.28 | 49,543,070.14 | 100.00% | 4,400,177.36 | 8.88% | 45,142,892.78 |
| Total | 6,723,521.23 | 100.00% | 3,194,742.95 | 47.52% | 3,528,778.28 | 49,543,070.14 | 100.00% | 4,400,177.36 | 8.88% | 45,142,892.78 |
Provision for bad debts by portfolio: Risk portfolio
Unit: CNY
| Aging | Closing balance | ||
| Accounts receivables | Provision for bad debt | Proportion of provision | |
| Within1 year (including 1 year) | 3,083,099.43 | 92,492.99 | 3.00% |
| 1-2 years | 394,794.95 | 39,479.49 | 10.00% |
| 2-3 years | 145,836.47 | 29,167.29 | 20.00% |
| Over 3 years | 3,099,790.38 | 3,033,603.18 | 97.86% |
| Total | 6,723,521.23 | 3,194,742.95 | |
Notes to determine provision for bad debt by portfolio:
If provision for bad debt of accounts receivables is calculated according to the general model of expected creditloss, please refer to the disclosure method of other receivables to disclose the relevant information aboutprovision for bad debt:
□Applicable ?N/A
(3) Provision for bad debt that is accrued, recovered or reversed during this periodProvision for bad debts during this period:
Unit: CNY
| Category | Opening balance | Changes in the current period | Closing balance | |||
| Provision | Recovered or reversed | Write off | Others | |||
| Provision | 4,400,177.36 | 1,200,734.41 | 4,700.00 | 3,194,742.95 | ||
| Total | 4,400,177.36 | 1,200,734.41 | 4,700.00 | 3,194,742.95 | ||
Significant amount of reversal or recovery during this period
Unit: CNY
| Company name | Amount recovered or reversed | Reason | Method | Basis and reasonableness |
(4) The actual write-off of accounts receivable during the period
Unit: CNY
| Project | The amount written off |
| The actual write-off of accounts receivable | 4,700.00 |
Important accounts receivable write-off situations
| Company name | Properties of accounts receivable | Write-off amount | Reason for write-off | The procedures followed for write-off | Whether the funds are generated from related-party transactions |
| N/A |
Explanation of accounts receivable write-offs:
(5) Top five entities with the largest balances of the accounts receivables and contract assets
Unit: CNY
| Company's name | Closing balance of the accounts receivables | Closing balance of the contract asset | Closing balance of accounts receivable and contract assets | Percentage of combined accounts receivable and contract assets closing balances | Closing balances of accounts receivable,provision for bad debts and allowance for impairment of contract assets |
| First | 728,016.81 | 728,016.81 | 10.83% | 21,840.50 | |
| Second | 716,000.00 | 716,000.00 | 10.65% | 21,480.00 | |
| Third | 600,000.00 | 600,000.00 | 8.92% | 600,000.00 | |
| Fourth | 454,356.93 | 454,356.93 | 6.76% | 454,356.93 | |
| Fifth | 386,013.00 | 386,013.00 | 5.74% | 11,580.39 | |
| Total | 2,884,386.74 | 2,884,386.74 | 42.90% | 1,109,257.82 |
5. Receivables for Financing
(1) Classification of accounts receivable financing
Unit: CNY
| Item | Closing Balance | Opening Balance |
| Bank acceptance bill | 261,576,568.30 | 623,098,310.00 |
Total
| Total | 261,576,568.30 | 623,098,310.00 |
(2) Disclosure by classification of provision for bad debts method
Unit: CNY
| Item | Closing balance | Opening balance | ||||||||
| Book balance | Provision for bad debt | Book value | Book balance | Provision for bad debt | Book value | |||||
| amount | proportion | amount | proportion | amount | proportion | amount | proportion | |||
| Including: | ||||||||||
| Provision for bad debt of notes receivables by portfolio | 261,576,568.30 | 100.00% | 261,576,568.30 | 623,098,310.00 | 100.00% | 623,098,310.00 | ||||
| Including: | ||||||||||
| Bank acceptance bill portfolio | 261,576,568.30 | 100.00% | 261,576,568.30 | 623,098,310.00 | 100.00% | 623,098,310.00 | ||||
| Total | 261,576,568.30 | 100.00% | 261,576,568.30 | 623,098,310.00 | 100.00% | 623,098,310.00 | ||||
Provision for bad debts provisioned by portfolio: Bank acceptance bill portfolio
Unit: CNY
| Item | Closing balance | ||
| Book balance | Provision for bad debt | Proportion | |
| Bank acceptance bill portfolio | 261,576,568.30 | 0.00 | 0.00% |
| Total | 261,576,568.30 | 0.00 | |
Explanation of the basis for determining this portfolio:
Provision for bad debts is made based on the generally expected credit loss model.
Unit: CNY
| Bad debt | Stage 1 | Stage 2 | Stage 3 | Total |
| Expected credit losses in the next 12 months | Expected credit loss for lifetime (No credit loss occurred) | Expected credit loss for lifetime (Credit loss occurred) | ||
| Balance as at 1 January 2023 |
Explanation of the criteria for each stage division and the provision ratio for bad debt provision:
Description of significant changes in the carrying amount of accounts receivable financing for which there havebeen significant changes in loss provisions during the current period:
(3) Notes receivable that have been endorsed to other parties by the Company but have not expired at theend of year
Unit: CNY
| Item | Not derecognition at period end | Not derecognition at period end |
| Bank acceptance bill | 1,895,149,364.00 | |
| Total | 1,895,149,364.00 |
(4) Other explanations
6. Other receivables
Unit: CNY
| Item | Closing balance | Opening balance |
| Other receivables | 57,782,263.17 | 74,362,342.41 |
| Total | 57,782,263.17 | 74,362,342.41 |
(1) Other receivables
a) Other receivables by nature
Unit: CNY
| Nature of other receivables | Closing balance | Opening balance |
| Savings deposits (infringement dispute) | 22,839,924.27 | 22,839,924.27 |
| Deposit | 57,772,158.18 | 75,233,431.94 |
| Cooperation | 3,910,000.00 | 3,910,000.00 |
| Business loans, petty cash and others | 27,530,727.48 | 26,329,410.21 |
| Total | 112,052,809.93 | 128,312,766.42 |
b) Disclosure by aging
Unit: CNY
| Aging | Closing balance | Opening balance |
| Within 1 year(including 1 year) | 30,242,714.39 | 72,545,501.15 |
| Within 1 year | 30,242,714.39 | 72,545,501.15 |
| 1-2 years | 27,816,553.25 | 1,932,940.66 |
| 2-3 years | 1,326,577.31 | 1,147,887.40 |
| Over 3 years | 52,666,964.98 | 52,686,437.21 |
| 3-4 years | 153,428.50 | 140,570.01 |
| 4-5 years | 136,528.41 | 3,029,986.98 |
| Over 5 years | 52,377,008.07 | 49,515,880.22 |
| Total | 112,052,809.93 | 128,312,766.42 |
c) Disclosed by categories
Unit: CNY
| Category | Closing balance | Opening balance | ||||||||
| Book balance | Provision for bad debt | Book value | Book balance | Provision for bad debt | Book value | |||||
| Amount | Proportion | Amount | Proportion | Amount | Proportion | Amount | Proportion | |||
| Including: | ||||||||||
| Risk portfolio | ||||||||||
provision for bad debt of notes receivable is calculated according to the general model of expected credit loss.
Unit: CNY
| Bad debt | Stage 1 | Stage 2 | Stage 3 | Total |
| Expected credit losses in the next 12 months | Expected credit loss for lifetime (No credit loss occurred) | Expected credit loss for lifetime (Credit loss occurred) | ||
| Balance as at 1 January 2023 | 1,955,618.23 | 51,994,805.78 | 53,950,424.01 | |
| Change of opening balance as at 1 January 2023 in current period | ||||
| Provision in 2023 | 715,213.59 | 715,213.59 |
Recovery in 2023
| Recovery in 2023 | 395,862.50 | 395,862.50 | ||
| Other changes | 771.66 | 771.66 | ||
| Balance as at 31 December 2023 | 1,559,755.73 | 52,710,791.03 | 54,270,546.76 |
Basis for each stage division and provision ratio for bad debt provision
| Stage | Book balance | Provision ratio for bad debts(%) | bad debts | Book balance |
| Stage 1 | 58,711,334.12 | 2.66 | 1,559,755.73 | 57,151,578.39 |
| Stage 2 | ||||
| Stage 3 | 53,341,475.81 | 98.82 | 52,710,791.03 | 630,684.78 |
| total | 112,052,809.93 | 48.43 | 54,270,546.76 | 57,782,263.17 |
Changes in the carrying amount of the provision for losses that are material during the period
□Applicable ?N/A
d) Provision for bad debt that is accrued, recovered or reversed during this period
Provision for bad debts during this period:
Unit: CNY
| Category | Opening balance | Changes in current period | Changes in current period | |||
| Provision | Recovered or reversed | Write off | Other changes | |||
| Other receivables bad debt provision | 53,950,424.01 | 319,351.09 | 771.66 | 54,270,546.76 | ||
| Total | 53,950,424.01 | 319,351.09 | 771.66 | 54,270,546.76 | ||
Significant amount of reversal or recovery during this period:
Unit: CNY
| Company name | Amount recovered or reversed | Reason | Method | Basis and reasonableness |
e) Top five entities with the largest balances of other receivables
Unit: CNY
| Company’s name | Category | Closing balance | Aging | Proportion in total receivable | Provisioning amount at period end |
| Xiuwen County Investment Promotion Bureau | Deposit | 38,000,000.00 | Within 1 year: 18,000,000.00 1-2 year: 20,000,000.00 | 33.91% | 760,000.00 |
| Industrial Commercial Bank of China Ltd. Kaifeng Haode branch | Savings deposit (Infringement dispute) | 22,839,924.27 | Over 5 years | 20.38% | 22,839,924.27 |
| Bankruptcy administrator of Jiangsu Juntai Properties Co., Ltd., Suqian Guotai Department Store Co., Ltd | Deposit | 15,000,000.00 | Over 5 years | 13.39% | 15,000,000.00 |
| Nanjing Peilong Sports Culture Co., Ltd. | Cooperation | 3,910,000.00 | Over 5 years | 3.49% | 3,910,000.00 |
Nanjing BaiyangBusinessManagement Co.,Ltd
| Nanjing Baiyang Business Management Co., Ltd | Deposit | 1,248,918.00 | Within 1 year | 1.12% | 24,978.36 |
| Total | 80,998,842.27 | 72.29%% | 42,534,902.63 |
7. Prepayment
(1) Analysis by aging
Unit: CNY
| Aging | Closing balance | Opening balance | ||
| Amount | Proportion | Amount | Proportion | |
| Within 1 year | 49,986,010.55 | 98.07% | 10,442,862.34 | 94.77% |
| 1-2 years | 553,888.73 | 1.09% | 430,756.91 | 3.91% |
| 2-3 years | 322,652.70 | 0.63% | 4,996.76 | 0.05% |
| Over 3 years | 109,318.05 | 0.21% | 140,477.59 | 1.27% |
| Total | 50,971,870.03 | 11,019,093.60 | ||
Significant prepayment aging over 1 year without settlement on time:
No significant prepayment aging over 1 year is recorded in the ending balance.
(2) Top five entities with the largest balances of prepayment
| Company’s name | Closing balance | Proportion in the total prepayment (%) |
| First | 29,700,000.00 | 58.27 |
| Second | 2,893,440.00 | 5.67 |
| Third | 2,435,505.00 | 4.78 |
| Fourth | 2,246,653.62 | 4.41 |
| Fifth | 2,093,403.02 | 4.11 |
| Total | 39,369,001.64 | 77.24 |
Other notes:
8. Inventories
(1) Categories of Inventories
Unit: CNY
| Portfolio Name | Closing balance | Opening balance | ||||
| Book balance | Provision for stock obsolescence | Book value | Book balance | Provision for stock obsolescence | Book value | |
| Raw material | 389,260,644.18 | 13,589,541.74 | 375,671,102.44 | 426,227,182.05 | 11,868,802.62 | 414,358,379.43 |
| Work in progress | 828,665,166.57 | 828,665,166.57 | 761,814,393.67 | 761,814,393.67 | ||
| Stock goods | 3,002,855,864.98 | 3,002,855,864.98 | 2,971,329,097.21 | 2,971,329,097.21 | ||
| semi-finished goods | 14,747,043,268.26 | 14,747,043,268.26 | 13,581,757,096.23 | 13,581,757,096.23 | ||
| Total | 18,967,824,943.99 | 13,589,541.74 | 18,954,235,402.25 | 17,741,127,769.16 | 11,868,802.62 | 17,729,258,966.54 |
The disclosure requirements of food and wine manufacturing-related industries in the Guidelines for Self-
regulation NO.3 of Listed Companies of Shenzhen Stock Exchange -Industry Information Disclosure shall beobserved
(2) Provision for stock obsolescence and impairment provision of contract cost
Unit: CNY
| Item | Opening balance | Increases in current period | Decreases in current period | Closing balance | ||
| obsolete stocks | Other | obsolete stocks | Other | |||
| Raw material | 11,868,802.62 | 2,742,667.54 | 1,021,928.42 | 13,589,541.74 | ||
| Total | 11,868,802.62 | 2,742,667.54 | 1,021,928.42 | 13,589,541.74 | ||
Provision for obsolete stocks by portfolio
| Item | Closing | Opening | ||||
| Closing balance | Provision for stock obsolescence | Provision for stock obsolescence | Opening balance | Provision for stock obsolescence | Provision for stock obsolescence | |
Criteria for making provision for obsolete stocks by portfolio
9. Other current assets
Unit: CNY
| Item | Closing balance | Opening balance |
| VAT to be deducted | 762,211,934.44 | 113,102,451.80 |
| Consumption tax to be deducted | 4,951,140.52 | 6,734,883.21 |
| Advance payment of consumption tax | 222,795,853.29 | |
| Advance payment of income tax | 10,829,180.68 | 9,850,655.25 |
| Advance payment of other taxes | 15,372,307.37 | |
| Total | 1,016,160,416.30 | 129,687,990.26 |
Other notes:
10. Long-term equity investments
Unit: CNY
| Investee | Opening balance | Opening balance of provision for impairment | Changes in current period | Closing balance | Closing balance of provision for impairment | |||||||
| Increase | Decrease | Profit or loss recognized under equity method | Adjustments of other comprehensive income | Other changes in equity | Cash divided or profit declared | Provision for impairment | Other | |||||
| 1.Joint venture | ||||||||||||
| 2.Associated enterprise | ||||||||||||
| Jiangsu Su Wine Culture Transmission on Co, Ltd. | 3,298,194.70 | 31,421.50 | 909,630.96 | 4,239,247.16 | ||||||||
| Nanjing Hesong Culture Technology Co., Ltd. | 3,770,295.75 | 39,522.07 | 3,809,817.82 | |||||||||
| Jiangsu Xinghe Investment Management nt Co., Ltd. | 18,930,578.35 | 688,481.98 | 19,619,060.33 | |||||||||
| Nanjing Huatai Yanghe Equity Investment Master Fund (limited partnership) | 6,980,561.41 | 1,193,020,000.00 | -3,130,093.17 | 1,196,870,468.24 | ||||||||
| Jiangsu Zhibo Brewing | 5,000,000.00 | 300,199.49 | 5,300,199.49 | |||||||||
TechnologyCo., Ltd.
| Technology Co., Ltd. | ||||||||||||
| Subtotal | 32,979,630.21 | 1,198,020,000.00 | -2,070,468.13 | 909,630.96 | 1,229,838,793.04 | |||||||
| Total | 32,979,630.21 | 1,198,020,000.00 | -2,070,468.13 | 909,630.96 | 1,229,838,793.04 |
The recoverable amount is determined as the net of fair value less costs of disposal.
□Applicable ?N/A
The recoverable amount is determined by the present value of estimated future cash flows
□Applicable ?N/A
Reasons for differences between the foregoing information and information used for impairment testing in previous years or external information that is clearlyinconsistent with the information.Reasons for differences between the information used in the company's impairment tests in previous years and the actual situation in the current year that areclearly inconsistent.Other note:
11. Other non-current financial assets
Unit: CNY
| Item | Closing balance | Opening balance |
| Classified as financial assets at fair value through profit and loss | ||
| Including: equity instrument investment | 5,532,792,281.26 | 5,848,590,827.45 |
| Debt instrument investment | 300,043,333.33 | |
| Total | 5,532,792,281.26 | 6,148,634,160.78 |
Other note:
12. Fixed assets
Unit: CNY
| Item | Closing balance | Opening balance |
| Fixed Assets | 5,305,626,964.48 | 5,794,773,069.53 |
| Fixed asset disposal | ||
| Total | 5,305,626,964.48 | 5,794,773,069.53 |
(1)Details of fixed assets
Unit: CNY
| Item | Buildings and constructions | Machinery equipment | Transportation equipment | Other equipment | Total |
| Original cost of fixed assets | |||||
| 1.Opening balance | 8,310,234,733.53 | 3,255,815,592.43 | 59,351,288.51 | 443,504,186.92 | 12,068,905,801.39 |
| 2.Increase in current period | 66,179,923.64 | 73,490,175.85 | 1,827,104.58 | 17,681,276.06 | 159,178,480.13 |
| (1) External purchase | 15,336,863.19 | 1,378,496.11 | 1,827,104.58 | 17,681,276.06 | 36,223,739.94 |
| (2) Transfer from construction in progress | 50,843,060.45 | 72,111,679.74 | 122,954,740.19 | ||
| (3) Increase from business combination | |||||
| 3.Decrease in current period | 10,672,188.11 | 11,033,776.44 | 3,851,809.32 | 4,637,604.30 | 30,195,378.17 |
| (1) Disposal or retirement | 10,672,188.11 | 11,033,776.44 | 3,851,809.32 | 4,637,604.30 | 30,195,378.17 |
| 4.Closing balance | 8,365,742,469.06 | 3,318,271,991.84 | 57,326,583.77 | 456,547,858.68 | 12,197,888,903.35 |
| Accumulated depreciation | |||||
| 1.Opening balance | 3,421,245,472.52 | 2,410,186,676.35 | 50,266,327.15 | 392,434,255.84 | 6,274,132,731.86 |
| 2.Increase in current period | 389,881,378.67 | 228,693,665.11 | 2,641,728.07 | 18,118,796.43 | 639,335,568.28 |
| (1) Provision | 389,881,378.67 | 228,693,665.11 | 2,641,728.07 | 18,118,796.43 | 639,335,568.28 |
| 3.Decrease in current period | 4,278,818.92 | 8,997,568.92 | 3,647,331.83 | 4,282,641.60 | 21,206,361.27 |
| (1) Disposal or retirement | 4,278,818.92 | 8,997,568.92 | 3,647,331.83 | 4,282,641.60 | 21,206,361.27 |
| 4.Closing balance | 3,806,848,032.27 | 2,629,882,772.54 | 49,260,723.39 | 406,270,410.67 | 6,892,261,938.87 |
| Provision for fixed asset impairment | |||||
| 1.Opening balance | |||||
| 2.Increase in current period | |||||
| (1) Provision | |||||
| 3.Decrease in current period | |||||
| (1) Disposal or retirement |
| 4.Closing balance | |||||
| Book value | |||||
| 1.Closing book value | 4,558,894,436.79 | 688,389,219.30 | 8,065,860.38 | 50,277,448.01 | 5,305,626,964.48 |
| 2.Opening book value | 4,888,989,261.01 | 845,628,916.08 | 9,084,961.36 | 51,069,931.08 | 5,794,773,069.53 |
(2) Investment properties without certification of right
Unit: CNY
| Item | Book value | Reason for not having the certification of right |
| Yanghe Blue-collar workers apartment | 26,919,845.07 | In process |
| Yanghe pottery jar warehouse | 176,369,168.84 | In process |
| Yanghe six-span workshop | 28,492,734.36 | In process |
| Workshop of Guizhou Guijiu Group Co., Ltd. | 46,371,052.21 | In process |
| Total | 278,152,800.48 |
Other note:
13. Construction in progress
Unit: CNY
| Item | Closing balance | Opening balance |
| Construction in progress | 1,457,315,739.56 | 757,145,492.90 |
| Total | 1,457,315,739.56 | 757,145,492.90 |
(1) Details of the construction in progress
Unit: CNY
| Item | Closing balance | Opening balance | ||||
| Book Balance | Provision for impairment | Book value | Book Balance | Provision for impairment | Book value | |
| Shuanggou 120000 ton pottery jar storage project | 140,295,657.74 | 140,295,657.74 | 3,670,946.95 | 3,670,946.95 | ||
| Shuanggou packaging production line | 17,191,907.04 | 17,191,907.04 | ||||
| Siyang base three-dimensional warehouse, packaging production line projec | 1,100,810.08 | 1,100,810.08 | ||||
| 40,000 tons of pottery jar warehouse project | 1,809,904.55 | 1,809,904.55 | ||||
| Nanjing operation center building project | 529,591,557.52 | 529,591,557.52 | 355,622,206.07 | 355,622,206.07 | ||
| Sesame Fragrant Intelligent brewing Project (Workshop 115, District 3) | 66,220,261.39 | 66,220,261.39 | 51,567,809.53 | 51,567,809.53 | ||
| 20,000 tons of pottery jar warehouse project | 21,303,084.96 | 21,303,084.96 | 6,814,642.25 | 6,814,642.25 | ||
| sewage treatment capacity expansion and reconstruction project | 4,191,150.45 | 4,191,150.45 | 15,827,143.46 | 15,827,143.46 | ||
| 80,000 tons of pottery jar warehouse project | 182,867,988.73 | 182,867,988.73 | 75,199,149.07 | 75,199,149.07 | ||
| Six-span brewery workshop | 5,014,659.77 | 5,014,659.77 | 2,753,290.37 | 2,753,290.37 | ||
| Exhibition and Decoration Engineering of Wine History Museum, Wine Rhyme Museum, and Wine Art Museum | 78,301,551.45 | 78,301,551.45 | 61,055,364.82 | 61,055,364.82 | ||
| Renovation of the seasoning distillery at Shuanggou Base | 38,725,389.37 | 38,725,389.37 | ||||
| Upgrade and renovation project of Shuanggou Liquor Industry and Liquor Culture Tourism Area | 43,661,565.61 | 43,661,565.61 | ||||
| Construction of new liquor fermentation workshop at Siyang Base | 84,805,400.78 | 84,805,400.78 | ||||
| Phase II of Gui wine project | 23,303,088.08 | 23,303,088.08 | 62,362,038.53 | 62,362,038.53 | ||
| Phase III of Gui wine project | 37,506,285.70 | 37,506,285.70 | ||||
| Fruit wine and fruit vinegar production line project | 55,489,805.70 | 55,489,805.70 | ||||
| Lhasa Langjie Liquor Village Project | 36,779,851.17 | 36,779,851.17 | ||||
| Other projects | 109,258,441.14 | 109,258,441.14 | 102,170,280.18 | 102,170,280.18 | ||
| Total | 1,457,315,739.56 | 1,457,315,739.56 | 757,145,492.90 | 757,145,492.90 | ||
(2) Significant changes in construction in progress
Unit: CNY
| Item | Budget | Opening balance | Increase in current period | Transfer into fixed | Other decrea | Closing balance | Proportion of accumulative | Progress | Interest capitaliz | Include:Capitalized | Capitalization | Source of |
assets
| assets | ses | project input in budget (%) | ation rate | interest for the period | rate for the period | funds | ||||||
| Shuanggou 120000 ton pottery jar storage project | 1,000,000,000.00 | 3,670,946.95 | 136,624,710.79 | 140,295,657.74 | 14.03% | Early stage | Other | |||||
| Shuanggou packaging production line | 120,000,000.00 | 17,191,907.04 | 17,191,907.04 | 95.01% | Late stage | Other | ||||||
| Siyang base three-dimensional warehouse, packaging production line projec | 41,000,000.00 | 1,100,810.08 | 1,100,810.08 | 64.97% | Late stage | Other | ||||||
| 40,000 tons of pottery jar warehouse project | 360,000,000.00 | 1,809,904.55 | 1,809,904.55 | 57.35% | Late stage | Other | ||||||
| Nanjing operation center building project | 800,000,000.00 | 355,622,206.07 | 173,969,351.45 | 529,591,557.52 | 66.20% | Late stage | Other | |||||
| Sesame Fragrant Intelligent brewing Project (Workshop 115, District 3) | 68,842,800.00 | 51,567,809.53 | 25,058,973.97 | 10,406,522.11 | 66,220,261.39 | 120.50% | Late stage | Other | ||||
| 20,000 tons of pottery jar warehouse project | 62,000,000.00 | 6,814,642.25 | 19,585,750.08 | 5,097,307.37 | 21,303,084.96 | 118.94% | Late stage | Other |
sewagetreatmentcapacityexpansionandreconstruction project
| sewage treatment capacity expansion and reconstruction project | 23,000,000.00 | 15,827,143.46 | 7,525,606.52 | 19,161,599.53 | 4,191,150.45 | 102.52% | Late stage | Other | ||||
| 80,000 tons of pottery jar warehouse project | 240,000,000.00 | 75,199,149.07 | 107,668,839.66 | 182,867,988.73 | 76.20% | Late stage | Other | |||||
| Six-span brewery workshop | 40,000,000.00 | 2,753,290.37 | 2,261,369.40 | 5,014,659.77 | 87.32% | Late stage | Other | |||||
| Exhibition and Decoration Engineering of Wine History Museum, Wine Rhyme Museum, and Wine Art Museum | 90,000,000.00 | 61,055,364.82 | 17,246,186.63 | 78,301,551.45 | 87.00% | Late stage | Other | |||||
| Renovation of the seasoning distillery at Shuanggou Base | 50,600,000.00 | 38,725,389.37 | 38,725,389.37 | 76.53% | Late stage | Other | ||||||
| Upgrade and renovation project of Shuanggou Liquor Industry and Liquor Culture Tourism Area | 80,000,000.00 | 43,661,565.61 | 43,661,565.61 | 54.58% | Late stage | Other |
Constructionof new liquorfermentationworkshop atSiyang Base
| Construction of new liquor fermentation workshop at Siyang Base | 600,000,000.00 | 84,805,400.78 | 84,805,400.78 | 14.13% | Early stage | Other | ||||||
| Phase II of Gui wine project | 139,540,200.00 | 62,362,038.53 | 12,893,121.70 | 51,952,072.15 | 23,303,088.08 | 55.83% | Late stage | Other | ||||
| Phase III of Gui wine project | 2,000,000,000.00 | 37,506,285.70 | 37,506,285.70 | 1.88% | Early stage | Other | ||||||
| Fruit wine and fruit vinegar production line project | 80,000,000.00 | 55,489,805.70 | 55,489,805.70 | 69.36% | Late stage | Other | ||||||
| Lhasa Langjie Liquor Village Project | 248,280,000.00 | 36,779,851.17 | 36,779,851.17 | 14.81% | Early stage | Other | ||||||
| Total | 6,043,263,000.00 | 654,975,212.72 | 799,802,208.53 | 106,720,122.83 | 1,348,057,298.42 |
(3)Impairment testing of the construction in progress
□Applicable ?N/A
14.Right-of-use Assets
(1)Details of right-to-use assets
Unit: CNY
| Item | Building and construction | Total |
| Total original carrying amount | ||
| 1.Opening balance | 48,810,399.26 | 48,810,399.26 |
| 2. Increased | 76,811,731.78 | 76,811,731.78 |
| (1) New Lease | 76,788,098.05 | 76,788,098.05 |
| (2) Other | 23,633.73 | 23,633.73 |
| 3. Decreased | 6,539,582.59 | 6,539,582.59 |
| (1) Disposal | 6,539,582.59 | 6,539,582.59 |
| (2) Other | ||
| 4.Closing balance | 119,082,548.45 | 119,082,548.45 |
| Accumulated depreciation | ||
| 1.Opening balance | 14,694,796.99 | 14,694,796.99 |
| 2. Increased | 27,613,647.34 | 27,613,647.34 |
| (1) Provisions | 27,594,763.53 | 27,594,763.53 |
| (2) Other | 18,883.81 | 18,883.81 |
| 3. Decreased | ||
| (1) Disposal | 5,690,447.04 | 5,690,447.04 |
| 4.Closing balance | 36,617,997.29 | 36,617,997.29 |
| Provision for Right-of-use Assets impairment | ||
| 1.Opening balance | ||
| 2.Increase in current period | ||
| (1) Provision | ||
| 3.Decrease in current period | ||
| (1) Disposal or retirement | ||
| 4.Closing balance | ||
| Total book value | ||
| 1. Closing balance on book value | 82,464,551.16 | 82,464,551.16 |
| 2. Opening balance on book value | 34,115,602.27 | 34,115,602.27 |
15. Intangible assets
(1) Details of intangible assets
Unit: CNY
| Item | Land use right | Patent right | No-patent right technology | Trademark right | Computer software | Total |
| Original cost of intangible assets | ||||||
| 1.Opening balance | 2,041,819,607.76 | 399,936,371.09 | 165,586,240.84 | 2,607,342,219.69 | ||
| 2.Increase in current period | 83,176,461.72 | 228,495.90 | 37,623,718.08 | 121,028,675.70 | ||
| (1)Including: Acquired | 83,176,461.72 | 228,495.90 | 37,623,718.08 | 121,028,675.70 |
(2)Internally
developed
| (2)Internally developed | ||||||
| (3)Business combination | ||||||
| 3.Decrease in current period | 20,048,574.11 | 20,048,574.11 | ||||
| (1)Including: Disposal | 20,048,574.11 | 20,048,574.11 | ||||
| 4.Closing balance | 2,124,996,069.48 | 228,495.90 | 399,936,371.09 | 183,161,384.81 | 2,708,322,321.28 | |
| Accumulated amortization of intangible assets | ||||||
| 1.Opening balance | 408,071,375.04 | 393,488,204.38 | 91,401,564.84 | 892,961,144.26 | ||
| 2.Increase in current period | 42,998,632.31 | 9,520.65 | 1,655,797.25 | 14,390,647.34 | 59,054,597.55 | |
| (1)Including: Provision | 42,998,632.31 | 9,520.65 | 1,655,797.25 | 14,390,647.34 | 59,054,597.55 | |
| 3.Decrease in current period | 16,809,263.50 | 16,809,263.50 | ||||
| (1)Including: Disposal | 16,809,263.50 | 16,809,263.50 | ||||
| 4.Closing balance | 451,070,007.35 | 9,520.65 | 395,144,001.63 | 88,982,948.68 | 935,206,478.31 | |
| Provision for impairment | ||||||
| 1.Opening balance | ||||||
| 2.Increase in current period | ||||||
| (1)Including: Provision | ||||||
| 3.Decrease in current period | ||||||
| (1)Including: Disposal | ||||||
| 4.Closing balance | ||||||
| Book value of intangible assets | ||||||
| Closing book value | 1,673,926,062.13 | 218,975.25 | 4,792,369.46 | 94,178,436.13 | 1,773,115,842.97 | |
| Opening book value | 1,633,748,232.72 | 6,448,166.71 | 74,184,676.00 | 1,714,381,075.43 |
The proportion of intangible assets formed through internal research and development of the Company in thebalance of intangible assets at the end of this period is 0.00%.
16. Goodwill
(1) Goodwill book value
Unit: CNY
| Investee’s name | Opening | Increase in current period | Decrease in current period | Closing balance |
or items resultingin goodwill
| or items resulting in goodwill | balance | Business combination | Disposal | |||
| Jiangsu Shuanggou Distillery Stock Co., Ltd.[Note] | 276,001,989.95 | 276,001,989.95 | ||||
| Jiangsu Zhaiugou E-commerce Co., Ltd | 6,940,018.79 | 6,940,018.79 | ||||
| Jiangsu Zhaibianli E-commerce Co., Ltd | 21,250,284.80 | 21,250,284.80 | ||||
| Guizhou Guijiu Co., Ltd. | 18,826,210.01 | 18,826,210.01 | ||||
| ZYG TECHNOLOGY INVESTMENT LTD | 5,057,111.19 | 5,057,111.19 | ||||
| Guizhou Maotaizhen Guijiu Liquor Industry Co., Ltd | 11,333,195.25 | 11,333,195.25 | ||||
| Total | 339,408,809.99 | 339,408,809.99 |
(2) Goodwill impairment provision
Unit: CNY
| Investee’s name or items resulting in goodwill | Opening balance | Increase in current period | Decrease incurrent period | Closing balance | ||
| Provision | Disposal | |||||
| Jiangsu Zhaiugou E-commerce Co., Ltd | 6,940,018.79 | 6,940,018.79 | ||||
| Jiangsu Zhaibianli E-commerce Co., Ltd | 21,250,284.80 | 21,250,284.80 | ||||
| Guizhou Guijiu Co., Ltd. | 18,826,210.01 | 18,826,210.01 | ||||
| ZYG TECHNOLOGY INVESTMENT LTD | 5,057,111.19 | 5,057,111.19 | ||||
| Guizhou Maotaizhen Guijiu Liquor Industry Co., Ltd | 11,333,195.25 | 11,333,195.25 | ||||
| Total | 63,406,820.04 | 63,406,820.04 | ||||
Related information of asset groups or asset group portfolio containing goodwill
(3) Related information of asset groups or asset group portfolio containing goodwill
| Name | The composition and basis of the asset group or combination to which it belongs | The affiliated operating branch and its basis | Whether consistent with previous years |
| The asset group related to the goodwill formed by the acquisition of 40.60% equity of Jiangsu Shuanggou Liquor Industry Co., Ltd. by Jiangsu Yanghe Distillery Co., Ltd. | The baijiu production and sales business corresponding to the asset group related to the goodwill of Shuanggou Liquor Industry | N/A | Yes |
Changes in asset groups or combinations of asset groups
| Name | Composition before changes | Composition after changes | Objective facts and basis |
N/A
| N/A |
Other note:
(4) Specific determination of recoverable amount
The recoverable amount is determined as the net of fair value less costs of disposal.
□Applicable ?N/A
The recoverable amount is determined by the present value of estimated future cash flows、Applicable □N/A
Unit: CNY
| Item | Book value | Recoverable amount | Impairment amount | Forecast period | Key parameters of the forecast period | Key parameters of the stable period | The basis for determining key parameters of the stable period |
| Jiangsu Shuanggou Liquor Industry Co., Ltd. | 7,751,556,420.32 | 7,895,000,000.00 | 0.00 | 5 years | Revenue growth rate: 5%, Average gross profit margin: 43.93% | Revenue growth rate: 0%, Gross profit margin: 43.38% | The same with last year of the forecast period |
| Total | 7,751,556,420.32 | 7,895,000,000.00 | 0.00 |
Reasons for differences between the foregoing information and information used for impairment testing in previous
years or external information that is clearly inconsistent with the information.Reasons for differences between the information used in the company's impairment tests in previous years andthe actual situation in the current year that are clearly inconsistent.
17. Long-term prepaid expenses
Unit: CNY
| Item | Opening balance | Increase in the current period | Amortization for the current period | Other decreases | Closing balance |
| Wine city night view Identification project | 9,012,348.35 | 3,004,116.11 | 6,008,232.24 | ||
| Brighten old factory and packaging logistics center project | 1,308,290.55 | 436,096.85 | 872,193.70 | ||
| Decoration expenses of hotel | 1,757,870.86 | 585,956.96 | 1,171,913.90 | ||
| Total | 12,078,509.76 | 4,026,169.92 | 8,052,339.84 |
Other note:
18. Deferred tax assets/ deferred tax liabilities
(1) Deferred tax assets before offset
Unit: CNY
| Item | Closing balance | Opening balance | ||
| Deductible temporary differences | Deferred tax assets | Deductible temporary differences | Deferred tax assets | |
| Provision for asset impairment | 72,002,831.45 | 17,919,840.18 | 71,167,403.99 | 17,707,993.48 |
| Unrealized profit from internal transaction | 274,116,122.67 | 68,529,030.67 | 49,441,159.83 | 12,360,289.96 |
| The difference between book value of debt and tax base | 3,829,516,453.37 | 957,379,113.35 | 4,738,345,825.27 | 1,184,537,946.74 |
| ESOP | 244,727,667.97 | 61,181,917.00 | 163,118,128.78 | 40,779,532.19 |
| Deductible losses | 885,210,849.53 | 221,302,712.39 | 1,005,233,098.74 | 251,308,274.69 |
| Total | 5,305,573,924.99 | 1,326,312,613.59 | 6,027,305,616.61 | 1,506,694,037.06 |
(2) deferred tax liabilities before offset
Unit: CNY
| Item | Closing balance | Opening balance | ||
| Taxable temporary differences | Deferred tax liabilities | Taxable temporary differences | Deferred tax liabilities | |
| Incremental valuation of assets in the consolidation of non-controlling interests | 36,406,637.56 | 9,101,659.39 | 39,067,014.32 | 9,766,753.58 |
| Fair value changes in trading financial assets | 818,673,347.32 | 204,668,336.83 | 837,118,607.04 | 209,279,651.77 |
| Right-of-use assets | 82,464,551.16 | 20,616,137.79 | 34,115,602.27 | 8,482,602.32 |
| Total | 937,544,536.04 | 234,386,134.01 | 910,301,223.63 | 227,529,007.67 |
(3) Deferred tax assets or liabilities presented as net value after offset
Unit: CNY
| Item | Offset amount of deferred tax assets and deferred tax liabilities | Closing balance Of deferred tax assets or deferred tax liabilities after offset | Opening offset amount of deferred tax assets and deferred tax liabilities | Opening balance Of deferred tax assets or deferred tax liabilities after offset |
| Deferred tax assets | 1,326,312,613.59 | 1,506,694,037.06 | ||
| Deferred tax liabilities | 234,386,134.01 | 227,529,007.67 |
(4) Details of unrecognized deferred tax assets
Unit: CNY
| Item | Closing balance | Opening balance |
| Deductible temporary differences | 204,290,853.15 | 180,135,943.91 |
| Deductible losses | 115,511,259.53 | 265,285,228.80 |
| Total | 319,802,112.68 | 445,421,172.71 |
(5)Deductible losses from unrecognized deferred tax assets will due on the following years
Unit: CNY
| Year | Closing balance | Opening balance | Note |
| Year 2023 | 3,336,993.92 | ||
| Year 2024 | 987,313.84 | 1,070,547.10 |
Year 2025
| Year 2025 | 13,861,118.62 | 13,861,118.62 | |
| Year 2026 | 33,702,618.44 | 33,702,618.44 | |
| Year 2027 | 24,973,327.43 | 213,313,950.72 | |
| Year 2028 | 41,986,881.20 | ||
| Total | 115,511,259.53 | 265,285,228.80 |
19. Other non-current assets
Unit: CNY
| Item | Closing balance | Opening balance | ||||
| Book Balance | Provision for impairment | Book value | Book Balance | Provision for impairment | Book value | |
| Compensation for land demolition | 203,669,611.94 | 203,669,611.94 | 158,606,824.94 | 158,606,824.94 | ||
| Prepayment of construction equipment and house purchase | 62,359,121.56 | 62,359,121.56 | 25,240,376.90 | 25,240,376.90 | ||
| Total | 266,028,733.50 | 266,028,733.50 | 183,847,201.84 | 183,847,201.84 | ||
20. Accounts payables
(1) Presentation of accounts payables
Unit: CNY
| Item | Closing balance | Opening balance |
| Payments for goods | 1,403,834,890.43 | 1,305,100,314.00 |
| Payables on equipment | 22,038,661.99 | 71,109,213.01 |
| Total | 1,425,873,552.42 | 1,376,209,527.01 |
21. Other payables
Unit: CNY
| Item | Closing balance | Opening balance |
| Other payables | 2,024,640,485.37 | 1,854,922,517.23 |
| Total | 2,024,640,485.37 | 1,854,922,517.23 |
(1) Other payables
a) Categories by nature
Unit: CNY
| Item | Closing balance | Opening balance |
| Dealer deposit | 576,518,846.34 | 416,896,278.21 |
| Dealer risk pledged deposit | 659,025,149.71 | 672,664,279.37 |
| Accrued expenses | 408,783,098.49 | 508,608,287.32 |
| Quality guarantee deposit and performance deposit | 222,944,106.65 | 166,220,885.21 |
| Other payables | 157,369,284.18 | 90,532,787.12 |
| Total | 2,024,640,485.37 | 1,854,922,517.23 |
b) Other important payables with the top five counterparties by year-end balance
Other note：
22. Contract liabilities
Unit: CNY
| Item | Closing balance | Opening balance |
| Advance from customers | 7,516,605,557.37 | 9,296,856,026.01 |
| Discounts and allowances payable to the distributors that have not yet been settled | 3,588,157,929.81 | 4,444,691,651.98 |
| Total | 11,104,763,487.18 | 13,741,547,677.99 |
Significant contract liabilities with an aging of over 1 year
Unit: CNY
| Item | Closing balance | Reasons for outstanding or carried-over balances |
| N/A |
Amounts and reasons for significant changes in book value during the reporting period
Unit: CNY
| Item | Amount of change | Reason for change |
The company is required to comply with the disclosure requirements of the food and alcohol manufacturing related industries inthe "Shenzhen Stock Exchange Listed Companies Self Regulatory Guidelines No. 3- Industry Information Disclosure"
23. Employee benefits payable
(1) Employee benefits payable shown as follows:
Unit: CNY
| Item | Opening balance | Increase in current period | Decrease in current period | Closing balance |
| Short-term benefits | 482,338,679.95 | 3,246,399,387.56 | 3,390,524,230.64 | 338,213,836.87 |
| Post-employment benefits-defined contribution plans | 653,058.78 | 240,210,938.77 | 240,863,997.55 | |
| Severance benefits | 114,539.74 | 114,539.74 | ||
| Total | 482,991,738.73 | 3,486,724,866.07 | 3,631,502,767.93 | 338,213,836.87 |
(2) Short-term employee benefits payable shown as follows:
Unit: CNY
| Item | Opening balance | Increase in current period | Decrease in current period | Closing balance |
| Wages, bonuses, allowances and grants | 481,025,926.67 | 2,851,577,362.59 | 2,997,303,933.72 | 335,299,355.54 |
| Employees’ welfare | 108,187,070.70 | 108,187,070.70 | ||
| Social insurance premiums | 348,382.20 | 112,339,335.92 | 112,687,718.12 | |
| Including: Medical Insurance | 281,110.32 | 89,584,951.68 | 89,866,062.00 | |
| Work-related injury insurance | 27,691.01 | 8,485,330.17 | 8,513,021.18 | |
| Maternity insurance premium | 39,580.87 | 14,269,054.07 | 14,308,634.94 | |
| Housing funds | 949,820.00 | 162,459,169.20 | 162,528,518.76 | 880,470.44 |
| Labor union expenditures and employee education | 14,551.08 | 11,836,449.15 | 9,816,989.34 | 2,034,010.89 |
funds
| funds | ||||
| Total | 482,338,679.95 | 3,246,399,387.56 | 3,390,524,230.64 | 338,213,836.87 |
(3) Defined Contribution Plan shown as follows:
Unit: CNY
| Item | Opening balance | Increase in current period | Decrease in current period | Closing balance |
| Basic endowment insurance premium | 633,253.23 | 232,894,538.54 | 233,527,791.77 | |
| Unemployment insurance premium | 19,805.55 | 7,316,400.23 | 7,336,205.78 | |
| Total | 653,058.78 | 240,210,938.77 | 240,863,997.55 |
24. Taxes payable
Unit: CNY
| Item | Closing balance | Opening balance |
| Value-added tax | 393,967,989.64 | 234,202,860.34 |
| Consumption tax | 26,998,106.27 | 229,128,457.84 |
| Enterprise income tax | 508,559,557.17 | 563,184,112.71 |
| Individual Income Tax | 25,174,574.76 | 46,912,680.60 |
| Urban maintenance and construction tax | 12,539,893.78 | 19,917,118.57 |
| Education Surcharge | 12,315,190.92 | 19,421,778.51 |
| Property tax | 15,274,168.78 | 15,177,169.95 |
| Land use tax | 4,615,997.78 | 4,438,533.76 |
| Stamp tax | 7,541,322.67 | 1,827,899.05 |
| Other tax | 2,485,060.69 | 2,485,193.85 |
| Total | 1,009,471,862.46 | 1,136,695,805.18 |
25. Non-current Liabilities Due within One Year
Unit: CNY
| Item | Closing balance | Opening balance |
| Lease liabilities due within one year | 25,080,946.40 | 23,684,406.75 |
| Total | 25,080,946.40 | 23,684,406.75 |
26. Other current liabilities
Unit: CNY
| Item | Closing balance | Opening balance |
| Output VAT to be transferred | 904,141,397.77 | 889,853,420.31 |
| Notes endorsed but not derecognized | 343,608,531.49 | 422,394,730.00 |
| Total | 1,247,749,929.26 | 1,312,248,150.31 |
27. Lease Liabilities
Unit: CNY
| Item | Closing balance | Opening balance |
| Lease liabilities | 48,709,685.88 | 3,715,300.93 |
| Total | 48,709,685.88 | 3,715,300.93 |
28. Long-term payables
Unit: CNY
Item
| Item | Closing balance | Opening balance |
| Special accounts payables | 196,013,394.53 | 196,459,834.53 |
| Total | 196,013,394.53 | 196,459,834.53 |
(1) Categories by nature
Unit: CNY
| Item | Closing balance | Opening balance |
| Special accounts payables | 196,013,394.53 | 196,459,834.53 |
(2) Special accounts payables
Unit: CNY
| Item | Opening balance | Increase in current period | Decrease in current period | Closing balance | Reason |
| Compensation for replacement of employee status | 196,459,834.53 | 446,440.00 | 196,013,394.53 | Formation of corporate restructuring | |
| Total | 196,459,834.53 | 446,440.00 | 196,013,394.53 |
29. Deferred incomes
Projects involving government grants:
Unit: CNY
| Liability item | Opening balance | Increase in current period | Cost reduction in current period | Closing balance | The reasons for the formation |
| Hubei Lihuacun liquor industry liquor brewing, filling project supporting facilities construction subsidies | 13,282,600.00 | 4,257,000.00 | 9,025,600.00 | Project subsidies | |
| Special fund for packaging logistics project in Shuanggou new area | 6,000,000.00 | 3,000,000.00 | 3,000,000.00 | Project subsidies | |
| Special fund for Harbin Binzhou brewery construction project | 41,202,900.00 | 41,202,900.00 | Project subsidies | ||
| Shuanggou sewage treatment project | 3,000,000.00 | 1,500,000.00 | 1,500,000.00 | Project subsidies | |
| The second batch of provincial- level industrial and information industry transformation and upgrading special funds in 2020 | 4,791,666.67 | 5,000,000.00 | 1,000,000.00 | 8,791,666.67 | Project subsidies |
| Supplementary funds for the Shuanggou Pottery Tan Warehouse project | 24,000,000.00 | 24,000,000.00 | Project subsidies | ||
| Total | 92,277,166.67 | 5,000,000.00 | 9,757,000.00 | 87,520,166.67 |
30. Share capital
Unit: CNY
| Opening balance | Increases/decreases in the current period (+, -) | Closing balance | |||||
| Issuance of new shares | Share donation | Conversion of reserves funds into shares | Others | Subtotal | |||
| Total shares | 1,506,988,000.00 | -542,926.00 | -542,926.00 | 1,506,445,074.00 | |||
Other notes:
According to the proposal passed at the first extraordinary general meeting of shareholders of the company in2023 on September 15, regarding the cancellation of the remaining shares in the repurchase special securitiesaccount, the company cancelled and repurchased 542,926 shares, and the share cancellation and reductionprocedures were completed on October 12, 2023.
31. Capital reserves
Unit: CNY
| Item | Opening balance | Increase in current period | Decrease in current period | Closing balance |
| Share premium | 741,502,550.13 | 244,727,667.97 | 55,735,754.79 | 930,494,463.31 |
| Other capital reserves | 163,148,128.78 | 81,609,539.19 | 244,727,667.97 | 30,000.00 |
| Total | 904,650,678.91 | 326,337,207.16 | 300,463,422.76 | 930,524,463.31 |
Other notes:
① The company confirms the ESOP plan fee to increase the capital reserves-other capital reserves
of CNY 81,609,539.19
② The company's cancellation of repurchased shares, totaling 542,926 shares, reduced the capital
reserves - share premium by CNY55,735,754.79.
③ Upon the expiration of the lock-up period for ESOP plan, an amount of CNY244,727,667.97 wastransferred from other capital reserves to share premium.
32. Treasury shares
Unit: CNY
| Item | Opening balance | Increase in current period | Decrease in current period | Closing balance |
| Share repurchase | 56,278,680.79 | 56,278,680.79 | ||
| Total | 56,278,680.79 | 56,278,680.79 |
Other explanations, including changes in the current period, reasons for the changes:
The company cancelled and repurchased 542,926 shares, resulting in a reduction of treasury stock byCNY56,278,680.79.
33. Other comprehensive incomes
Unit: CNY
| Item | Opening balance | Current period | Closing balance | |||||
| Amount in current period before income tax | Less: Previously recognized in other comprehensive income transferred to profit or loss | Less: previously recognized in other comprehensive income transferred to retained earnings | Less: income tax | Amount attribute to parent company after tax | Amount attribute to non-controlling shareholders after tax | |||
| II. Other comprehensive income that will be reclassified to profit or loss | 1,982,037.01 | 46,942.15 | 41,157.80 | 5,784.35 | 2,023,194.81 | |||
| Effect on conversion of financial statements denominated in foreign currencies | 1,982,037.01 | 46,942.15 | 41,157.80 | 5,784.35 | 2,023,194.81 | |||
| Total other comprehensive income | 1,982,037.01 | 46,942.15 | 41,157.80 | 5,784.35 | 2,023,194.81 | |||
Other notes, including adjustments for valid portion of the gains and or losses from cash flow hedging transferring to initial recognition amount of projects hedged.
34. Surplus reserves
Unit: CNY
| Item | Opening balance | Increase in current period | Decrease in current period | Closing balance |
| Statutory surplus reserves | 753,494,000.00 | 753,494,000.00 | ||
| Total | 753,494,000.00 | 753,494,000.00 |
35. Retained Earnings
Unit: CNY
| Item | Current period | Previous period |
| Retained Earnings before adjustment at the end of the last year | 44,364,203,149.57 | 39,505,614,090.53 |
| Retained Earnings after adjustment at the beginning of year | 58,801.63 | |
| The opening balance of retained earnings after adjustment | 44,364,203,149.57 | 39,505,672,892.16 |
| Add: net profit attributable to owners of the parent company for the current period | 10,015,930,040.27 | 9,377,865,479.41 |
| Less: Dividends payable on common shares | 5,634,104,576.76 | 4,519,335,222.00 |
| Retained earnings at the end of the current reporting period | 48,746,028,613.08 | 44,364,203,149.57 |
Notes for adjusting undistributed profits at the beginning of the period:
(1) Retained Earnings at the beginning of the period were affected by CNY0.00 due to the retrospectiveadjustment under the Accounting Standards for Business Enterprises and related new regulations.
(2) Retained Earnings at the beginning of the period were affected by CNY0.00 due to changes in accountingpolicies.
(3) Undistributed profits at the beginning of the period were affected by CNY0.00 due to the correction ofsignificant accounting errors.
(4) Retained Earnings s at the beginning of the period were affected by CNY0.00 due to changes in the scope ofconsolidation resulting from business combination involving enterprises under common control.
(5) Retained Earnings at the beginning of the period were affected by CNY0.00 in total due to otheradjustments
36. Operating revenue and cost of sales
Unit: CNY
| Item | Current period amount | Previous period amount | ||
| Operating revenue | Cost of sales | Operating revenue | Cost of sales | |
| Operating incomes | 32,489,436,696.05 | 7,761,633,378.60 | 29,499,863,067.64 | 7,214,917,301.54 |
| Other operating income | 636,840,855.46 | 438,611,876.82 | 605,033,119.06 | 430,615,963.18 |
| Total | 33,126,277,551.51 | 8,200,245,255.42 | 30,104,896,186.70 | 7,645,533,264.72 |
Whether the net profit is negative or not after deducting non-recurring profits and losses by audit,
□Yes ?No
Information on Operating revenue and cost of sales
Unit: CNY
| Category of Contra | Segment 1 | Segment 2 | Current period amount | Total | ||||
| . Operating | Cost of | .Operating | Cost of | .Operating | Cost of | . Operating | Cost of sales | |
revenue
| revenue | sales | revenue | sales | revenue | sales | revenue | ||
| Commodity type | ||||||||
| Including: | ||||||||
| liquor | 32,489,436,696.05 | 7,761,633,378.60 | 32,489,436,696.05 | 7,761,633,378.60 | ||||
| Other | 636,840,855.46 | 438,611,876.82 | 636,840,855.46 | 438,611,876.82 | ||||
| By operating regions | ||||||||
| Including: | ||||||||
| Type of market or customer | ||||||||
| Including: | ||||||||
| Type of contract | ||||||||
| Including: | ||||||||
| By the time of commodity transfer | ||||||||
| Including: | ||||||||
| By the contract time | ||||||||
| Including: | ||||||||
| By the selling channel | ||||||||
| Including: | ||||||||
| Total | 33,126,277,551.51 | 8,200,245,255.42 | 33,126,277,551.51 | 8,200,245,255.42 |
Other note:
N/A
The information related to the transaction price allocated to the remaining performance obligations:
The amount of revenue corresponding to performance obligations that have been contracted for but not yetfulfilled or not yet completed at the end of the reporting period is CNY7,516,605,557.37. Among this amount, it isexpected that CNY7,516,605,557.37 will be recognized as revenue in the fiscal year 2024.
37. Taxes and surcharges
Unit: CNY
| Item | Current period amount | Previous period amount |
| Consumption tax | 4,349,218,770.04 | 3,611,101,428.65 |
| Urban maintenance and construction tax | 397,160,440.05 | 340,401,921.12 |
| Educational surcharge | 392,222,222.83 | 337,972,048.98 |
| Property tax | 64,961,335.23 | 65,064,008.57 |
Land use tax
| Land use tax | 18,966,528.89 | 18,379,939.08 |
| Vehicle and vessel tax | 8,811.30 | 8,875.20 |
| Stamp tax | 46,044,367.98 | 14,303,404.79 |
| Environmental protection tax | 663,116.03 | 1,080,778.49 |
| Total | 5,269,245,592.35 | 4,388,312,404.88 |
38. General and administrative expenses
Unit: CNY
| Item | Current period amount | Previous period amount |
| Payroll | 733,508,090.53 | 774,749,241.22 |
| Travel expense | 25,415,153.72 | 14,520,700.63 |
| Office allowance | 8,557,932.30 | 7,460,258.87 |
| Water, electric and steam expense | 72,246,397.65 | 66,592,027.85 |
| Business entertainment expense | 26,452,270.06 | 21,636,429.90 |
| Depreciation cost | 408,509,046.01 | 422,769,117.64 |
| Repair charge | 50,787,009.79 | 39,597,394.14 |
| Amortization of intangible assets | 59,054,597.55 | 58,879,062.62 |
| Vehicle use expense | 20,497,511.65 | 19,074,484.31 |
| Shipping and handling cost | 26,862,025.90 | 25,978,095.37 |
| ESOP plan fee | 79,728,598.28 | 119,528,186.15 |
| Other expense | 252,804,515.62 | 364,888,297.05 |
| Total | 1,764,423,149.06 | 1,935,673,295.75 |
39. Selling and distribution expenses
Unit: CNY
| Item | Current period amount | Previous period amount |
| Advertising and promotion expense | 3,460,573,010.51 | 2,414,204,544.39 |
| Payroll | 1,278,306,975.33 | 1,177,066,920.45 |
| Travel expense | 473,214,108.76 | 433,273,104.21 |
| Labor expense | 29,938,594.80 | 47,961,453.63 |
| E-commerce expenses | 57,389,122.19 | 33,851,096.47 |
| Other expense | 87,531,889.03 | 72,783,688.70 |
| Total | 5,386,953,700.62 | 4,179,140,807.85 |
40. Research & Development expenses
Unit: CNY
| Item | Current period amount | Previous period amount |
| Material expenses | 157,434,871.03 | 121,940,738.99 |
| Payroll | 79,372,512.44 | 84,197,126.24 |
| Other expense | 47,946,497.86 | 47,437,111.16 |
| Total | 284,753,881.33 | 253,574,976.39 |
41. Financial expenses
Unit: CNY
| Item | Current period amount | Previous period amount |
| Interest expense | 1,707,107.98 | 694,325.50 |
| Bill discount expense | 5,362,271.92 | 5,887,512.78 |
| Interest income | -765,369,577.25 | -645,806,427.40 |
| Losses from currency exchange (Less: income) | 910,236.76 | 336,446.78 |
Bank charges
| Bank charges | 2,864,391.96 | 2,418,036.43 |
| Total | -754,525,568.63 | -636,470,105.91 |
42. Other income
Unit: CNY
| Sources of other income | Current period amount | Previous period amount |
| Government grants received | 51,085,965.67 | 60,162,525.57 |
| Withholding personal tax commission | 5,093,433.86 | 3,610,292.93 |
| Total | 56,179,399.53 | 63,772,818.50 |
43. Gains/losses of changes in fair value
Unit: CNY
| Gains/losses of changes in fair value | Current period amount | Previous period amount |
| Held-for-trading financial assets | -37,082,477.77 | -318,331,123.43 |
| Total | -37,082,477.77 | -318,331,123.43 |
44. Investment income
Unit: CNY
| Item | Current period amount | Previous period amount |
| Investment income from long-term equity investments under the equity method | -2,070,468.13 | 5,201,436.79 |
| Investment income from disposing long- term equity investments | -1,052,106.17 | |
| Investment income from financial assets held for trading during the holding period | 36,767,861.85 | 39,061,870.99 |
| Investment income from disposal of financial assets held for trading | 248,582,039.81 | 396,238,455.03 |
| Others | -27,758,655.92 | -13,584,025.11 |
| Total | 255,520,777.61 | 425,865,631.53 |
45. Credit Impairment Loss
Unit: CNY
| Item | Current period amount | Previous period amount |
| Credit impairment losses of accounts receivables | 1,200,734.41 | -1,565,965.47 |
| Credit impairment losses of other receivables | -319,351.09 | 819,879.51 |
| Total | 881,383.32 | -746,085.96 |
46. Losses from asset impairment
Unit: CNY
| Item | Current period amount | Previous period amount |
| Losses on inventory devaluation and Contract assets impairment loss | -2,742,667.54 | -2,333,823.54 |
| Others | -85,350.70 | |
| Total | -2,828,018.24 | -2,333,823.54 |
47. Gains from disposal of assets
Unit: CNY
| Gains from disposal of assets | Current period amount | Previous period amount |
| Gains from disposal of fixed assets | -5,304,286.63 | 1,846,300.27 |
| Gains from disposal of right-of-use assets | 21,309.31 | |
| Total | -5,282,977.32 | 1,846,300.27 |
48. Non-operating income
Unit: CNY
| Item | Current period amount | Previous period amount | Amount included in non-recurring profit and loss in current period |
| Liquidated damages income | 12,327,450.94 | 6,966,329.61 | 12,327,450.94 |
| Compensation payment | 17,220,582.75 | 10,662,216.44 | 17,220,582.75 |
| Account payables that are unable to pay | 1,549,941.67 | 3,463,801.85 | 1,549,941.67 |
| Others | 8,078,813.47 | 4,493,984.81 | 8,078,813.47 |
| Total | 39,176,788.83 | 25,586,332.71 | 39,176,788.83 |
49. Non-operating expenses
Unit: CNY
| Item | Current period amount | Previous period amount | Amount included in non-recurring profit and loss in current period |
| Donation expenses | 51,640,406.00 | 12,401,802.24 | 51,640,406.00 |
| Losses from disposal of fixed asset | 5,092,844.35 | 6,682,103.85 | 5,092,844.35 |
| Integrated fund | 53,621.46 | 66,741.89 | |
| Compensation expenses | 435,681.98 | 15,537.00 | 435,681.98 |
| Others | 6,690,744.46 | 12,341,516.75 | 6,690,744.46 |
| Total | 63,913,298.25 | 31,507,701.73 | 63,859,676.79 |
50. Income tax expense
(1) Details of income tax expense
Unit: CNY
| Item | Current period amount | Previous period amount |
| Income tax for the current reporting period | 3,009,825,870.95 | 3,306,448,635.67 |
| Deferred income tax expenses | 187,238,691.65 | -192,598,666.16 |
| Total | 3,197,064,562.60 | 3,113,849,969.51 |
(2) Adjustment for accounting profit and income tax expense
Unit: CNY
| Item | Current period amount |
| Total profit | 13,217,833,119.07 |
| Income tax expenses determined by statutory/applicable | 3,304,458,279.77 |
tax rate
| tax rate | |
| Impact from subsidiaries’ different tax rates | -318,064.16 |
| Adjust for impact from income tax expense in previous period | -15,463,521.00 |
| Tax effect of non-taxable income | -5,030,876.79 |
| Impact of non-deductible costs, expenses and losses | 8,127,898.78 |
| Deductible from deferred tax assets in previous period | -855,056.80 |
| Impact of deductible temporary differences or deductible losses for which no deferred income tax assets is recognized for the current period | 15,144,122.01 |
| Impact of use unrecognized deferred income tax assets in the prior period | -41,942,167.44 |
| Impact of additional deduction of R&D expenses | -68,398,842.50 |
| Other | 1,342,790.73 |
| Income tax expense | 3,197,064,562.60 |
51. Net other comprehensive income
Refer to note 33 for details.
52. Consolidated cash flow items
(1) Cash related to operation activities
Cash received from other operation activities
Unit: CNY
| Item | Current period amount | Previous period amount |
| Interest income | 510,038,375.40 | 398,200,995.54 |
| Liquidated damages income | 12,327,450.94 | 6,966,329.61 |
| Government grants | 46,328,965.67 | 75,197,192.24 |
| Charges of withholding individual income tax | 5,093,433.86 | 3,610,292.93 |
| Others | 326,642,759.68 | 66,782,450.92 |
| Total | 900,430,985.55 | 550,757,261.24 |
Cash paid for other operating activities
Unit: CNY
| Item | Current period amount | Previous period amount |
| Transportation fee | 25,051,690.74 | 28,032,045.07 |
| Advertising promotion expense | 3,540,003,293.93 | 2,243,614,041.05 |
| Repair charge | 45,704,796.31 | 39,389,355.92 |
| Travel expense | 503,056,183.81 | 435,008,309.39 |
| Entertainment expense | 43,206,639.87 | 23,994,929.18 |
| Labor expense | 73,562,470.06 | 91,759,676.26 |
| Others | 566,359,261.99 | 606,935,645.43 |
| Total | 4,796,944,336.71 | 3,468,734,002.30 |
(2) Cash related to investing activities
Other cash received related to investing activities
Unit: CNY
| Item | Current period amount | Previous period amount |
Significant cash received relating to investing activities
Unit: CNY
| Item | Current period amount | Previous period amount |
| Cash received from recovery of investments | 11,154,008,547.25 | 17,261,152,475.37 |
| Cash received from investment income | 257,591,245.74 | 420,664,194.74 |
| Total | 11,411,599,792.99 | 17,681,816,670.11 |
Other cash paid related to investing activities
Unit: CNY
| Item | Current period amount | Previous period amount |
Significant cash paid related to investing activities
Unit: CNY
| Item | Current period amount | Previous period amount |
| Cash paid for the acquisition and construction of fixed assets, intangible assets, and other long-term assets | 1,111,629,485.17 | 539,153,153.61 |
| Cash paid for investments | 9,640,808,034.84 | 13,131,786,086.81 |
| Total | 10,752,437,520.01 | 13,670,939,240.42 |
(3) Cash paid for other financing activities
Other cash received relating to financing activities
Unit: CNY
| Item | Current period amount | Previous period amount |
Other cash paid relating to financing activities
Unit: CNY
| Item | Current period amount | Previous period amount |
| Lease payment | 31,233,718.70 | 15,204,742.60 |
| Total | 31,233,718.70 | 15,204,742.60 |
Changes in liabilities generated from financing activities?Applicable □N/A
Unit: CNY
| Item | Current period amount | Increase for the period | Decrease for the period | Previous period amount | ||
| Cash change | Non-cash change | Cash change | Non-cash change | |||
| Lease liabilities (including | 27,399,707.68 | 78,495,088.16 | 31,233,718.70 | 870,444.86 | 73,790,632.28 | |
non-currentliabilities duewithin oneyear)
| non-current liabilities due within one year) | ||||||
| Dividends payable | 5,634,104,576.76 | 5,634,104,576.76 | ||||
| Total | 27,399,707.68 | 5,712,599,664.92 | 5,665,338,295.46 | 870,444.86 | 73,790,632.28 |
53. Supplementary Information about Cash Flow Statement
(1) Supplementary information about of cash flow statement
Unit: CNY
| Item | Current period amount | Previous period amount |
| Reconciliation of net profit to cash flow from operating activities | ||
| Net profit | 10,020,768,556.47 | 9,389,433,921.86 |
| Add: Impairment of assets | 1,946,634.92 | 3,079,909.50 |
| Fixed assets depreciation | 639,335,568.28 | 678,868,349.45 |
| Right-of-use assets depreciation | 27,594,763.53 | 11,177,822.64 |
| Amortization of intangible assets | 59,054,597.55 | 58,842,693.52 |
| Amortization of long-term deferred expenses | 4,026,169.92 | 4,026,169.92 |
| Gains on disposal of fixed assets, intangible assets and other long-term assets | 8,522,287.93 | -1,846,300.27 |
| Fixed asset scrapping losses | 1,853,533.74 | 6,682,103.85 |
| Losses (gains) from changes in fair value | 37,082,477.77 | 318,331,123.43 |
| Financial expense | 2,617,344.74 | 1,030,772.28 |
| Investments income | -255,520,777.61 | -425,865,631.53 |
| Decrease in deferred tax asset | 180,381,423.47 | -116,318,960.55 |
| Increase in deferred tax liabilities | 6,857,126.34 | -76,212,410.35 |
| Decrease in inventory | -1,226,697,174.83 | -922,733,979.02 |
| Decrease in operation receivables | 380,090,873.53 | -371,555,344.91 |
| Increase in operation payables | -3,582,948,946.71 | -4,789,890,533.79 |
| Others | -174,743,591.08 | -119,425,753.84 |
| Net cash flow from operating activities | 6,130,220,867.96 | 3,647,623,952.19 |
| Significant investing and financing activities not Involving cash flow: | ||
| Conversion of debt into capital | ||
| Convertible corporate bonds maturing within one year | ||
| Assets under leases | ||
| Net change in cash &cash equivalents | ||
| Closing balance of cash | 25,201,023,553.40 | 24,019,016,540.72 |
| Less: Opening balance of cash | 24,019,016,540.72 | 20,847,003,550.37 |
| Add: Closing balance of cash equivalents | ||
| Less: Opening balance of cash equivalents | ||
| Net Increase (decrease) in cash and cash equivalents | 1,182,007,012.68 | 3,172,012,990.35 |
(2) Composition of cash and cash equivalents
Unit: CNY
| Item | Closing balance | Opening balance |
| Cash | 25,201,023,553.40 | 24,019,016,540.72 |
| Including: cash on hand | 292.01 | |
| Unrestricted bank deposit | 25,154,451,473.76 | 23,974,964,633.03 |
| Cash equivalents | 46,571,787.63 | 44,051,907.69 |
| Closing balance of cash and cash Equivalents | 25,201,023,553.40 | 24,019,016,540.72 |
(3) Monetary funds not classified as cash and cash equivalents
Unit: CNY
| Item | Current period amount | Previous period amount | Reason |
| Interest receivable on time deposits | 611,764,093.46 | 356,432,891.61 | Interest receivable accrued on time deposits |
| Total | 611,764,093.46 | 356,432,891.61 |
54. Foreign currency transactions
(1) Foreign currency balance
Unit: CNY
| Item | Balance in foreign currency at the end of the reporting period | Exchange rate | Balance of CNY converted at the end of the reporting period |
| Cash and cash equivalents | |||
| Including ：USD | 1,571,981.46 | 7.0827 | 11,133,873.05 |
| EUR | 1,497,199.73 | 7.8592 | 11,766,792.12 |
| HKD | 3,085,498.47 | 0.9062 | 2,796,140.42 |
| AUD | 420,201.85 | 4.8484 | 2,037,306.65 |
| CLP | 937,238,985.00 | 0.008001 | 7,498,822.93 |
| CAD | 0.43 | 5.3673 | 2.31 |
| Accounts receivables | |||
| Including ：USD | |||
| EUR | |||
| HKD | |||
| Long-term loans | |||
| Including ：USD | |||
| EUR | |||
| HKD | |||
(2) Description of the overseas business entity, including the important foreign business entity, which shalldisclose its main foreign business place, bookkeeping standard currency and selection basis, and shall alsodisclose the reason for the change of the bookkeeping standard currency.
?Applicable □N/A
Foreign business entities
| Foreign business entities | Operation site | Functional currency | Choosing reason |
| JSSJ Industry (HK) Holdings Co., Limited | Hong Kong, China | HKD | Currency in the main economic environment of business operations |
| Hong Kong Zhaiugo International Trade Co., Ltd. | Hong Kong, China | HKD | Currency in the main economic environment of business operations |
| ZYG E-Commerce HK Limited | Hong Kong, China | HKD | Currency in the main economic environment of business operations |
| ZYG LTD | Cayman Islands | USD | Currency in the main economic environment of business operations |
| YangHe International Investment Ltd | British Virgin Islands | USD | Currency in the main economic environment of business operations |
| ZYG TECHNOLOGY INVESTMENT LTD | British Virgin Islands | USD | Currency in the main economic environment of business operations |
| YANGHE CHILE SPA | Santiago, Chile | CLP | Currency in the main economic environment of business operations |
| Yanghe Hong Kong Distillery Co., Ltd. | Hong Kong, China | HKD | Currency in the main economic environment of business operations |
VII. Changes in consolidated scope
1. Changes of Consolidation Scope due to Other Causes
Explain the change of merger scope caused by other reasons (such as new subsidiary, liquidation subsidiary,etc.) and the relevant situationEstablishing subsidiariesIn April 2023, the company holding subsidiary, Jiangsu Yanghe Investment Management Co., Ltd., jointlyinvested CNY150 million with Jiangsu Foris Agricultural Co., Ltd. to establish Jiangsu Yiguoxiang Biotechnology Co.,Ltd, of which Jiangsu Yanghe Investment Management Co., Ltd. contributed CNY112.5 million, accounting for 75%of its registered capital; Jiangsu Foris Agricultural Co., Ltd. contributed CNY37.5 million, accounting for 25% of itsregistered capital. Since April 2023, it has been included in the scope of consolidated financial statements.
VIII. Interests in other entities
1. Interests in subsidiaries
(1) Group composition:
| Name of subsidiaries | Registered capital | Major business location | Place of registration | Nature of business | Shareholding | Acquisition method | |
| Direct | Indirect | ||||||
| Nanjing Yanghe Blue Classic Co., Ltd | 1,000,000.00 | Nanjing, Jiangsu province | Nanjing, Jiangsu province | Commerce | 100.00% | Establishment | |
| Beijing Yanghe Commerce and | 3,000,000.00 | Fengtai, Beijing | Fengtai, Beijing | Commerce | 100.00% | Establishment | |
Trade Co., Ltd.
| Trade Co., Ltd. | |||||||
| Jiangsu Huaqu Wine Group Co., Ltd. | 50,000,000.00 | Nanjing, Jiangsu province | Nanjing, Jiangsu province | Commerce | 97.00% | Establishment | |
| Suqian Tianhai Commerce and Trade Co., Ltd. | 500,000.00 | Suqian, Jiangsu province | Suqian, Jiangsu province | Commerce | 100.00% | Establishment | |
| Suqian Yanghe Guibinguan Co., Ltd. | 700,000.00 | Suqian, Jiangsu province | Suqian, Jiangsu province | Hotel industry | 100.00% | Establishment | |
| Su Wine Group Trade Co., Ltd | 334,400,000.00 | Suqian, Jiangsu province | Suqian, Jiangsu province | Commerce | 83.63% | 16.37% | Establishment |
| Jiangsu Yanghe Liquor Operation Management Co., Ltd. | 10,000,000.00 | Suqian, Jiangsu province | Suqian, Jiangsu province | Commerce | 100.00% | Establishment | |
| Jiangsu Shuanggou Liquor Operation Co., Ltd. | 5,000,000.00 | Sihong, Jiangsu province | Sihong, Jiangsu province | Commerce | 100.00% | Establishment | |
| Jiangsu Dongdi Union International Trade Co., Ltd. | 5,000,000.00 | Suqian, Jiangsu province | Suqian, Jiangsu province | Commerce | 100.00% | Establishment | |
| Jiangsu Dongdixinghui International Trade Co., Ltd. | 5,000,000.00 | Suqian, Jiangsu province | Suqian, Jiangsu province | Commerce | 100.00% | Establishment | |
| Suqian Blue Dream Trade Co., Ltd. | 500,000.00 | Suqian, Jiangsu province | Suqian, Jiangsu province | Commerce | 100.00% | Establishment | |
| Siyang Lantu Liquor Operation Co., Ltd. | 3,000,000.00 | Siyang, Jiangsu province | Siyang, Jiangsu province | Commerce | 100.00% | Establishment | |
| JSSJ Industry (HK) Holdings Co., Limited | Hong Kong, China | Hong Kong，China | CORP | 100.00% | Establishment | ||
| Hubei Lihuacun Trade Co., Ltd. | 2,000,000.00 | Shiyan, Hubei province | Yunxian, Hubei province | Commerce | 100.00% | Establishment | |
| Jiangsu Shuanggou Distillery Stock Co., Ltd. | 110,000,000.00 | Sihong, Jiangsu province | Sihong, Jiangsu province | Liquor manufacture and sales | 99.99% | 0.01% | Business combinations involving enterprises not under common control |
| Sihong Shuanggou Antai Waste Recycling Co., Ltd. | 2,500,000.00 | Sihong, Jiangsu province | Sihong, Jiangsu province | Waste material recycle | 100.00% | Business combinations involving enterprises not under common control | |
| Hubei Lihuacun Liquor Industry Co., Ltd. | 5,000,000.00 | Shiyan, Hubei province | Yunxian, Hubei province | Process liquor, wine and fruit wine | 100.00% | Business combinations involving enterprises not under common control | |
| Ningxiang Miluochun Liquor Industry Co., Ltd. | 500,000.00 | Ningxiang, Hunan province | Ningxiang, Hunan province | Manufacture and sale of liquor and compound wine | 100.00% | Business combinations involving enterprises not under common control | |
| Harbin Binzhou Brewery Co., Ltd. | 2,200,000.00 | Binxian, Heilongjiang province | Binxian, Heilongjiang province | Liquor-making | 100.00% | Business combinations involving enterprises |
not under commoncontrol
| not under common control | |||||||
| Su Wine Group Jiangsu Wealth Management Co., Ltd. | 3,000,000,000.00 | Nanjing, Jiangsu province | Nanjing, Jiangsu province | Assets/investment management, information consultation | 100.00% | Establishment | |
| Ningxiang Miluochun Trade Co., Ltd. | 2,000,000.00 | Ningxiang, Hunan province | Ningxiang, Hunan province | Commerce | 100.00% | Establishment | |
| Suqian Blue Sky Trade Co., Ltd. | 2,000,000.00 | Suqian, Jiangsu province | Suqian, Jiangsu province | Commerce | 100.00% | Establishment | |
| Shiyan Yunyang Lihuacun Package Service Co.,Ltd. | 2,000,000.00 | Shiyan, Hubei province | Shiyan, Hubei province | Liquor, compound wine, health wine packaging service | 100.00% | Establishment | |
| Jiangsu Lion and Sheep Network Technology Co.,Ltd. | 10,000,000.00 | Nanjing, Jiangsu province | Nanjing, Jiangsu province | Network technology development, technical consultation, technical services; Software development | 100.00% | Establishment | |
| Jiangsu Zhaiugou E-commerce Co., Ltd | 198,670,000.00 | Nanjing, Jiangsu province | Nanjing, Jiangsu province | Commerce | 100.00% | Business combinations involving enterprises not under common control | |
| NanjingTongmeng City Logistics Co., Ltd. | 20,000,000.00 | Nanjing, Jiangsu province | Nanjing, Jiangsu province | Freight Transport, Warehouse service | 99.99% | Business combinations involving enterprises not under common control | |
| Nanjing Jinling Tongmeng City Logistics Co., Ltd. | 10,000,000.00 | Nanjing, Jiangsu province | Nanjing, Jiangsu province | Freight Transport, Warehouse service | 51.00% | Business combinations involving enterprises not under common control | |
| Huaian Tongmeng City Logistics Co., Ltd. | 10,000,000.00 | Huaian, Jiangsu province | Huaian, Jiangsu province | Freight Transport, Warehouse service | 51.00% | Business combinations involving enterprises not under common control | |
| Changzhou Jiezzhong Tongmeng City Logistics Co., Ltd. | 10,000,000.00 | Changzhou, Jiangsu province | Changzhou, Jiangsu province | Freight Transport, Warehouse service | 51.00% | Business combinations involving enterprises not under common control | |
| Nantong Tongmeng City Logistics Co., Ltd. | 10,000,000.00 | Nantong, Jiangsu province | Nantong, Jiangsu province | Freight Transport, Warehouse service | 51.00% | Business combinations involving enterprises not under common control | |
| Suzhou Tongmeng City Logistics Co., Ltd. | 10,000,000.00 | Suzhou, Jiangsu province | Suzhou, Jiangsu province | Freight Transport, Warehouse service | 51.00% | Business combinations involving enterprises not under common control |
Taizhou TongmengCity Logistics Co.,Ltd.
| Taizhou Tongmeng City Logistics Co., Ltd. | 10,000,000.00 | Taizhou, Jiangsu province | Taizhou, Jiangsu province | Freight Transport, Warehouse service | 51.00% | Business combinations involving enterprises not under common control | |
| Wuxi Tongmeng City Logistics Co., Ltd. | 10,000,000.00 | Wuxi, Jiangsu province | Wuxi, Jiangsu province | Freight Transport, Warehouse service | 51.00% | Business combinations involving enterprises not under common control | |
| Yancheng Tongmeng City Logistics Co., Ltd. | 10,000,000.00 | Yancheng, Jiangsu province | Yancheng, Jiangsu province | Freight Transport, Warehouse service | 51.00% | Business combinations involving enterprises not under common control | |
| Zhenjiang Tongmeng City Logistics Co., Ltd. | 10,000,000.00 | Zhenjiang, Jiangsu province | Zhenjiang, Jiangsu province | Freight Transport, Warehouse service | 51.00% | Business combinations involving enterprises not under common control | |
| Yangzhou Tongmeng City Logistics Co., Ltd. | 10,000,000.00 | Yangzhou, Jiangsu province | Yangzhou, Jiangsu province | Freight Transport, Warehouse service | 53.00% | Business combinations involving enterprises not under common control | |
| Suqian Tongmeng City Logistics Co., Ltd. | 10,000,000.00 | Suqian, Jiangsu province | Suqian, Jiangsu province | Freight Transport, Warehouse service | 51.00% | Business combinations involving enterprises not under common control | |
| Pizhou Tongmeng City Logistics Co., Ltd. | 10,000,000.00 | Xuzhou, Jiangsu province | Xuzhou, Jiangsu province | Freight Transport, Warehouse service | 51.00% | Business combinations involving enterprises not under common control | |
| Lianyungang Huaxing Tongmeng City Logistics Co., Ltd. | 10,000,000.00 | Lianyungang, Jiangsu province | Lianyungang, Jiangsu province | Freight Transport, Warehouse service | 51.00% | Business combinations involving enterprises not under common control | |
| Jiangsu Zhaibianli E-commerce Co., Ltd | 10,000,000.00 | Nanjing, Jiangsu province | Nanjing, Jiangsu province | Commerce | 100.00% | Business combinations involving enterprises not under common control | |
| Hongkong Zhaiugou International Trade Co., Ltd | Hong Kong, China | Hong Kong, China | Commerce | 100.00% | Business combinations involving enterprises not under common control | ||
| Guizhou Guijiu Liquor Operation Management Co., Ltd. | 816,000,000.00 | Guiyang, Guizhou province | Guiyang, Guizhou province | Commerce | 100.00% | Business combinations involving enterprises not under common control | |
| Guizhou Guijiu Trade Co., Ltd. | 2,000,000.00 | Guiyang, Guizhou province | Guiyang, Guizhou province | Commerce | 100.00% | Establishment | |
| ZYG E-Commerce HK Limited | Hong Kong, China | Hong Kong, China | Industrial investment | 100.00% | Business combinations involving enterprises not under common control |
ZYG LTD
| ZYG LTD | Cayman Islands | Cayman Islands | Industrial investment | 69.08% | Business combinations involving enterprises not under common control | ||
| YangHe International Investment Ltd | British Virgin Islands | British Virgin Islands | Industrial investment | 100.00% | Establishment | ||
| Jiangsu Shuanggou Healthy Liquor Research institute Co., Ltd. | 10,000,000.00 | Suqian, Jiangsu province | Suqian, Jiangsu province | Healthy wine, nutrition and health food research and development | 100.00% | Establishment | |
| ZYG TECHNOLOGY INVESTMENT LTD | British Virgin Islands | British Virgin Islands | Industrial investment | 71.03% | Business combinations involving enterprises not under common control | ||
| Jiangsu Blue Dream E- commerce Co., Ltd. | 10,000,000.00 | Suqian, Jiangsu province | Suqian, Jiangsu province | Commerce | 100.00% | Establishment | |
| Jiangsu Yanghe Weiketang Network Technology Co., Ltd. | 10,000,000.00 | Nanjing, Jiangsu province | Nanjing, Jiangsu province | Network technology development, technical consultation, technical service | 100.00% | Establishment | |
| Kweichow Moutai Town Guijiu Liquor Industry Co., Ltd | 260,000,000.00 | Renhuai, Guizhou province | Renhuai, Guizhou province | Liquor manufacture and sales | 100.00% | Business combinations involving enterprises not under common control | |
| Suqian Su Wine Logistics Co., Ltd. | 5,000,000.00 | Suqian,Jiangsu province | Suqian, Jiangsu province | Road general cargo transport, cargo distribution, freight forwarder | 100.00% | Establishment | |
| YANGHE CHILE SPA | Santiago, Chile | Santiago, Chile | Movable and real estate investment services, building construction services | 100.00% | Establishment | ||
| Jiangsu Yanghe Investment Management Co., Ltd. | 3,000,000,000.00 | Suqian, Jiangsu province | Suqian, Jiangsu province | Foreign investment, Asset management, Investment consulting | 50.00% | 50.00% | Establishment |
| Su Wine Group Nanjing Operation Management Co., Ltd. | 500,000,000.00 | Nanjing, Jiangsu province | Nanjing, Jiangsu province | Enterprise management consulting; Industrial investment; Food sales; Gift sales; House lease; Hotel management | 100.00% | Establishment |
Jiangsu YangmingLiwei liquor Co.,Ltd.
| Jiangsu Yangming Liwei liquor Co., Ltd. | 10,000,000.00 | Nanjing, Jiangsu province | Nanjing, Jiangsu province | Food sales, Gift sales | 100.00% | Establishment | |
| Yanghe Hong Kong Distillery Co., Ltd. | HongKong, China | Hong Kong,China | Industrial investment | 100.00% | Establishment | ||
| Jiangsu Yanghe Calligraphy and Painting Academy | 2,000,000.00 | Nanjing, Jiangsu province | Nanjing, Jiangsu province | Painting and calligraphy creation, exhibition; Academic research; Public art education; Cultural and creative products development and promotion | 100.00% | Establishment | |
| Jiangsu Shuanggou Wine Sales Co., Ltd | 100,000,000.00 | Sihong, Jiangsu Province | Sihong, Jiangsu Province | Commerce | 100.00% | Establishment | |
| Jiangsu Jiushang Internet Technology Co., LTD | 20,000,000.00 | Suqian, Jiangsu Province | Suqian, Jiangsu Province | Internet information service, alcohol sales | 51.00% | Establishment | |
| Jiangsu Yanghe Cultural Tourism Co., LTD | 50,000,000.00 | Suqian, Jiangsu Province | Suqian, Jiangsu Province | Tobacco retail, catering, accommodation, tourism business | 100.00% | Establishment | |
| Jiangsu Yanghe Cultural Tourism Operation Co., LTD. | 20,000,000.00 | Suqian, Jiangsu Province | Suqian, Jiangsu Province | Tobacco retail, catering, accommodation, tourism business | 80.00% | Establishment | |
| Siyang Blue Sky Packaging Service Co., Ltd | 24,000,000.00 | Sihong , Jiangsu Province | Sihong, Jiangsu Province | Wine production and packaging services | 100.00% | Establishment | |
| Tibet Earth's Third Pole Liquor Co., Ltd. | 400,000,000.00 | Lhasa City, Tibet Autonomous Region | Lhasa City, Tibet Autonomous Region | Liquor sales, food production, and food retailing | 51.00% | Establishment | |
| Guizhou Guijiu Liquor Industry Operation Co., Ltd | 500,000.00 | Zunyi City, Guizhou Province | Zunyi City, Guizhou Province | Commerce | 100.00% | Establishment | |
| Jiangsu Ulan Shangyin Catering Management Co., Ltd. | 10,000,000.00 | Nanjing, Jiangsu province | Nanjing, Jiangsu province | Catering Management | 100.00% | Establishment | |
| Jiangsu Yanghe Dream Investment Management Co., Ltd | 3,000,000,000.00 | Nanjing, Jiangsu province | Nanjing, Jiangsu province | equity investment | 100.00% | Establishment | |
| Jiangsu Yanghe Blue Investment Management Co., Ltd. | 10,000,000.00 | Nanjing, Jiangsu province | Nanjing, Jiangsu province | equity investment | 100.00% | Establishment | |
| Jiangsu Yiguoxiang Biotechnology Co., Ltd | 150,000,000.00 | Suqian, Jiangsu Province | Suqian, Jiangsu Province | Food production, beverage | 75.00% | Establishment |
production,liquorproduction,liquor sales,and foodretailing
production,liquorproduction,liquor sales,and foodretailing
Notes: 1.The company formerly known as Jiangsu Zhongshi Ji Liquor Industry Co., Ltd. has been renamedto Jiangsu Yangming Liwei Liquor Industry Co., Ltd
The shareholding ratio in the subsidiary is different from the voting ratio:
The basis for holding half or less of the voting rights but still controlling the invested entity, and forholding more than half of the voting rights but not controlling the invested entity:
For important structural subjects included in the scope of merging, the basis of control:
Basis for determining whether the company is an agent or a principal:
Other note:
2. Interests in joint ventures and associates
(1) Important joint ventures or associates
| Name of Joint venture or associate company | Main operating location | Registered location | Nature of business | Equity ownership percentage | Accounting treatment for investments in joint ventures or associates | |
| Direct | Indirect | |||||
| Nanjing Huatai Yanghe Equity Investment Fund (Limited Partnership) | Nanjing, Jiangsu province | Nanjing, Jiangsu province | Equity investment, venture capital | 60.00% | Equity method | |
Explanation of the difference between equity ownership percentage and voting rights in joint ventures orassociates:
Huatai Purple Gold Investment Co., Ltd. and Jiangsu Yanghe Blue Investment Management Co., Ltd. aregeneral partners, while Jiangsu Yanghe Dream Investment Management Co., Ltd. and Nanjing JiangningHigh-tech Zone Technology Entrepreneurship Investment Management Co., Ltd. are limited partners.Huatai Purple Gold Investment Co., Ltd. subscribed for CNY1,000 million with a contribution ratio of 20%;Jiangsu Yanghe Blue Investment Management Co., Ltd. subscribed for CNY10 million with a contributionratio of 0.20%; Jiangsu Yanghe Dream Investment Management Co., Ltd. subscribed for CNY2,990 millionwith a contribution ratio of 59.80%; Nanjing Jiangning High-tech Zone Technology EntrepreneurshipInvestment Management Co., Ltd. subscribed for CNY1,000 million with a contribution ratio of 20%. Thepartnership has established an Investment Decision Committee consisting of five members, with HuataiPurple Gold Investment Co., Ltd. appointing 2 members, Jiangsu Yanghe Blue Investment ManagementCo., Ltd. appointing 2 members, and Nanjing Jiangning High-tech Zone Technology EntrepreneurshipInvestment Management Co., Ltd. appointing 1 member. The executive managing partner is HuataiPurple Gold Investment Co., Ltd.
(2) Summary of financial information of significant joint ventures and associates
Unit: CNY
| Closing balance/Current period amount | Opening balance/Previous period amount | |
| Current assets | 1,992,133,681.31 | 10,980,935.69 |
| Non-current assets | 2,760,403.16 | |
| Total assets | 1,994,894,084.47 | 10,980,935.69 |
| Current liabilities | 109,970.74 | |
| Non-current liabilities | ||
| Total liabilities | 109,970.74 | |
| Minority interests | ||
| Equity attributable to owners of the parent company | 1,994,784,113.73 | 10,980,935.69 |
| Net assets attributable to shareholders based on ownership proportion | 1,196,870,468.24 | 6,980,561.41 |
| Adjustments: | ||
| --Goodwill | ||
| --Unrealized profits from internal transactions | ||
| --Others | ||
| Carrying value of investments in associates' equity | 1,196,870,468.24 | 6,980,561.41 |
| Fair value of equity investments in associates with publicly quoted prices | ||
| Revenue | 41,196,288.60 | 935.69 |
| Net profit | -5,216,821.96 | 935.69 |
| Net profit from discontinued operations | ||
| Other comprehensive income | ||
| Total comprehensive income | -5,216,821.96 | 935.69 |
| Dividends received from associates during the current year |
(3) Summary of financial information of insignificant joint ventures and associates
Unit: CNY
| Closing balance/Current period amount | Opening balance/Previous period amount | |
| Associates: | ||
| The aggregate amount of the following items calculated based on the Company’s equity share percentage of the associates | ||
| --Net profit | 909,717.87 | |
| --Other comprehensive income | 153,503.58 | |
| -- Total comprehensive income | 1,063,221.45 | |
| joint ventures: |
Total carrying amount of investment
| Total carrying amount of investment | 32,968,324.80 | 25,999,068.80 |
| The sum of the following items calculated according to the shareholding ratio | ||
| --Net profit | 1,059,625.04 | 4,291,157.51 |
| -- Total comprehensive income | 1,059,625.04 | 4,291,157.51 |
IX. Government grants
1. Government grants recognized as receivable at the end of the reporting period
□Applicable ?N/A
Reasons for not receiving the projected amount of government grants at the projected point in time
□Applicable ?N/A
2.Debt items related to government subsidies
?Applicable ?N/A
Unit: CNY
| Accounting item | Opening balance | Subsidy amount added this period | Amount included in non-operating income during this period | Amount transferred to other income during this period | Other changes during this period | Closing balance | Related to assets/income |
| Deferred income | 92,277,166.67 | 5,000,000.00 | 9,757,000.00 | 87,520,166.67 | Related to assets |
3. Government grants recognized in the current period's income statement
?Applicable ?N/A
Unit: CNY
| Accounting item | Current period amount | Previous period amount |
| Other income | 51,085,965.67 | 60,162,525.57 |
X. Risks related to financial instrumentsThe Group is exposed to various financial risks in the ordinary course of business, mainly including: creditrisk, liquidity risk, market risk, etc. The Company's management is fully responsible for the formulation ofrisk management objectives and policies, and takes responsibility for risk management objectives andpolicies. The objective of the Company’s risk management is to identify and analysis risk, minimizing theadverse impact of financial risks without excessive influence on the company's competitiveness andresilience.
1. Credit risks
Credit risk refers to the risk that one party of the financial instruments fails to perform its obligations andcauses the financial losses of the other party. Credit risk mainly related to notes receivables and accounts
receivable, in order to control the risk, the Company takes the following measures:
(1) Bank deposit
The company's bank deposits are mainly deposited in state-owned holding banks, large and medium-sizedlisted banks and other commercial banks with high credit. There is no significant credit risk and nosignificant loss caused by default.
(2) Notes receivables and accounts receivables
The Company mainly trades with distributors, according to company credit policy, and adopts the way ofdelivery after the payments finished. For some group purchase business, it only deals with the reputablegroup clients, and continuously monitors the balance of notes receivables and accounts receivables, as aresult, there is no collateral required, and credit risk management concentrates on the clients. The balanceof notes receivables and accounts receivables are small till 31 December 2021. The Company does not holdany collateral or other credit enhancement for the balance of accounts receivables.
(3) Other receivable
The other receivables are mainly saving deposits involving infringement dispute, deposits and petty cash,employee business loan and so on. The Company manages other receivables and continuously monitors itsbalance, to ensure the Company not to face significant bad debt risks.
2. Liquidity risk
Liquidity risk refers to the risk of capital shortage when enterprise performs its obligations related tofinancial liabilities. The Company uses various financing methods such as bill clearing and bank loan tooptimize the financing structure and maintain the balance between financing continuity and flexibility.The maturity of the financial liabilities held by the Company according to the undiscounted remainingcontractual obligations is analyzed as follows:
| Item | Closing balance | ||||
| Within 1 year | 1-2 years | 2-3 years | Over 3 years | Total | |
| Account payables | 1,425,873,552.42 | 1,425,873,552.42 | |||
| Other payables | 2,024,640,485.37 | 2,024,640,485.37 | |||
| Long-term payables | 196,013,394.53 | 196,013,394.53 | |||
(Continued)
| Item | Opening balance | ||||
| Within 1 year | 1-2 years | 2-3 years | Over 3 years | Total | |
| Account payables | 1,376,209,527.01 | 1,376,209,527.01 | |||
| Other payables | 1,854,922,517.23 | 1,854,922,517.23 | |||
| Long-term payables | 196,459,834.53 | 196,459,834.53 | |||
3. Market risk
Market risk is the fair value of financial instrument or future cash flow fluctuates due to the fluctuation ofmarket price, and it mainly includes: interest rate risk, foreign exchange risk, etc.
(1) Interest rate risk
Interest rate risk refers to the fair value of financial instrument or future cash flow fluctuates due to thefluctuation of interest rate. The Company faces the risk of market interest rate change mainly related to theCompany's borrowing limit.
(2) Foreign exchange risk
Foreign exchange risk arises from fluctuation in exchange rate, relevant to the assets and liabilities in foreign
currency. The less import and export business happened, the lower impact of exchange rate fluctuation oncompany's operation.
The amount in CNY of the Company’s assets and liabilities shown in foreign currencies as follows:
| Item | Closing balance | Opening balance | ||||
| Balance in foreign currency | Exchange rate | Balance in CNY | Balance in foreign currency | Exchange rate | Balance in CNY | |
| Cash and cash equivalents | ||||||
| Include: USD | 1,571,981.46 | 7.0827 | 11,133,873.05 | 2,325,513.37 | 6.9646 | 16,196,270.44 |
| EUR | 1,497,199.73 | 7.8592 | 11,766,792.12 | |||
| AUD | 420,201.85 | 4.8484 | 2,037,306.65 | 279,299.93 | 4.7992 | 1,340,416.22 |
| HKD | 3,085,498.47 | 0.9062 | 2,796,140.42 | |||
| CLP | 937,238,985.00 | 0.008001 | 7,498,822.93 | 471,084,627.00 | 0.008131 | 3,830,608.28 |
| CAD | 0.43 | 5.3673 | 2.31 | |||
Otherreceivables
| Other receivables | ||||||
| Include:HKD | 205,679.16 | 0.9062 | 186,390.57 | 155,679.16 | 0.8933 | 139,068.19 |
| Other payables | ||||||
| Include: USD | 512.13 | 7.0827 | 3,627.26 | 512.13 | 6.9646 | 3,566.78 |
| HKD | 80,000.00 | 0.9062 | 72,497.60 | 217,800.00 | 0.8933 | 194,560.74 |
| CLP | 222,853.00 | 0.008001 | 1,783.04 | 328,119.00 | 0.008131 | 2,668.09 |
| Net amount | 35,497,235.95 | 11,076,949.57 |
The amount of foreign currency financial assets and financial liabilities of the company is small, and exchangerate fluctuations have little impact on the company's business performance.
XI. Fair value disclosure
1. The Financial Assets and Financial Liabilities Measured at Fair Value at the end of theReporting Period
Unit: CNY
| Item | Closing fair value | |||
| Level 1 | Level 2 | Level 3 | Total | |
| Continuous fair value measurement | -- | -- | -- | -- |
| 1.Financial assets held for trading | 5,851,217,684.93 | 5,851,217,684.93 | ||
| (1) Debt instrument investment | 5,851,217,684.93 | 5,851,217,684.93 | ||
| 2.Other non-current financial assets | 1,034,217,169.78 | 4,498,575,111.48 | 5,532,792,281.26 | |
| Equity instrument investment | 1,034,217,169.78 | 4,498,575,111.48 | 5,532,792,281.26 | |
| 3.Receivables Financing: | 261,576,568.30 | 261,576,568.30 | ||
| Bank acceptance bill | 261,576,568.30 | 261,576,568.30 | ||
| Total assets continuously measured at fair value | 1,034,217,169.78 | 10,611,369,364.71 | 11,645,586,534.49 | |
| Non-Continuous fair value measurement | -- | -- | -- | -- |
2. Basis for determining the market price of continuous and non-continuous level 1 fair valuemeasurement items
| Item | Fair value | Active market price | |
| Trading price | Information source | ||
| Continuous fair value measurement | |||
| Other non-current financial assets | 1,034,217,169.78 | ||
| Equity instrument investment | 1,034,217,169.78 | Closing price | Local open market closing price |
| Total assets continuously measured at fair value | 1,034,217,169.78 | ||
3. Valuation techniques and qualitative and quantitative information of key parameters adoptedfor continuous and non-continuous level 3 fair value measurement it
| Item | Fair value | Valuation techniques |
| Continuous fair value measurement | ||
| 1.Trading financial assets: | 5,851,217,684.93 | |
| Debt instrument investment | 5,851,217,684.93 | Using expected rate of return as a key reference for evaluating fair value. |
| 2.Other non-current financial assets: | 4,498,575,111.48 | |
| Equity instrument investment | 4,498,575,111.48 | Using cost or the investee's net assets at the end of the period as a significant reference for assessing fair value. |
| 3.Receivables Financing: | 261,576,568.30 | |
| Bank acceptance bill | 261,576,568.30 | Using face value as a key reference for evaluating fair value. |
| Total assets continuously measured at fair value | 10,611,369,364.71 |
XII. Related parties and related party transactions
1. The parent company of the Company
| Name of parent company | Registration place | Business nature | Registered capital | Shareholding ratio by the parent company | Voting Ratio by the parent company |
| Jiangsu Yanghe Group Co., Ltd. | Suqian, Jiangsu | Grain purchase; self-supporting and agent of all kinds of goods and technology import and export business (except for goods and technology that the state limits enterprises to operate or prohibits the import and export); nickel, ferromolybdenum, refined ferronickel, nickel-chromium pig iron, nickel- | CNY 1.5 billion | 34.18% | 34.18% |
chromium ores, furnace
materials, steel,machinery parts castings,light stabilizer 944, lightstabilizer 622, antioxidant3114, organic fertilizers,compound fertilizers,chemical raw materials(except for hazardousmaterials), viscose Staplefiber, cotton balances,electric bicycles and theiraccessories, lithiumbatteries, hardware andelectricity sales; raw grainsales; housing rental;industrial investment;municipal utility projects,building constructionprojects, tourism andcultural industriesinvestment. (Itemssubject to approvalaccording to law, can onlycarry out businessactivities after approvalby the relevantdepartments)General: sales ofcommunicationsequipment; opticalcommunicationsequipment sales;electronic product sales;mobile communicationsequipment sales; mobileterminal equipmentsales; computer software,hardware and auxiliaryequipment wholesale;software development;information systemsintegration services (in
addition to projectssubject to approvalaccording to law, with abusiness license to carryout business activitiesindependently according
to law)
chromium ores, furnace
materials, steel,machinery parts castings,light stabilizer 944, lightstabilizer 622, antioxidant3114, organic fertilizers,compound fertilizers,chemical raw materials(except for hazardousmaterials), viscose Staplefiber, cotton balances,electric bicycles and theiraccessories, lithiumbatteries, hardware andelectricity sales; raw grainsales; housing rental;industrial investment;municipal utility projects,building constructionprojects, tourism andcultural industriesinvestment. (Itemssubject to approvalaccording to law, can onlycarry out businessactivities after approval
by the relevantdepartments)
General: sales of
communicationsequipment; optical
communications
equipment sales;electronic product sales;mobile communicationsequipment sales; mobileterminal equipmentsales; computer software,hardware and auxiliaryequipment wholesale;software development;information systemsintegration services (in
addition to projectssubject to approvalaccording to law, with abusiness license to carryout business activitiesindependently according
to law)
Information about the Company’s parent company:
The final control party of the Company is State-owned Assets Supervision and Administration Commission ofSuqian.Other statements:
2. Subsidiaries of the Company:
The information about the subsidiaries of the Company refers to NoteVI.1 Interests in Subsidiaries.
3. Joint venture and associate of the Company
The information about the joint venture and associate of the Company refers to the Note VI.2.
Other joint ventures and associates whose related party transactions with the Company in the current period orbalance formed from related party transactions with the Company in the prior period as follows:
| Name of joint venture and associate | Relationship with the Company |
| Jiangsu Su Wine Cultural Transmission Co., Ltd. | Associate |
| Nanjing Hesong Culture Technology Co., Ltd. | Associate |
| Jiangsu Xinghe Investment Management Co., Ltd. | Associate |
4. Other related party
| Name of other related party | Relationship with the Company |
| Shanghai Haiyan Logistics Development Co., Ltd. | Holding 9.67% shares |
| VSPT, Vi?a San Pedro Tarapacá S.A. | Joint stock company, holding 12.50% shares |
| Suqian Chanfa Entrepreneurship Investment Co., Ltd. | The same ultimate controlling party |
| Suqian Chanfa Technology Equity Investment Fund (Limited Partnership) | The same ultimate controlling party |
5. Related party transactions
(1) Related party transactions regarding sales and purchases of goods, provision of services and receivingservicesStatement of purchase of goods / Receipt of labor services
Unit: CNY
| Related Party | Transaction Content | Amount for the current period | Approved transaction amount | Whether exceeding the approved transaction amount | Amount for the prior period |
| VSPT, Vi?a San Pedro Tarapacá S.A | Red wine | 10,847,369.03 | 16,462,530.10 | ||
| Nanjing Hesong Culture Technology Co., Ltd. | Advertising and general publicity expense | 3,691,780.87 | 756,341.39 |
Statement of sales of goods/ rendering of labor services
Unit: CNY
| Related Party | Transaction Content | Current period amount | Previous period amount |
| Shanghai Haiyan Logistics Development Co., Ltd. | Sales of liquor | 16,715,216.83 | 866,000.02 |
| Jiangsu Su Wine Cultural Transmission Co., Ltd. | Sales of liquor | 470,992.66 | 40,369,222.60 |
| Nanjing Huatai Yanghe Equity Investment Fund (Limited Partnership) | Consulting service | 8,297,169.81 |
(2) Related party lease
The Company as a lessor
Unit: CNY
| Related party | Types of Leased Assets | Amount in current period | Amount in previous period |
The Company as a lessee
Unit: CNY
| Related | Types | Simplified rental | Variable lease | Rent paid | Interest expense | Increased use |
party
| party | of Leased Assets | fees for short-term leases and low value asset leases（If Applicable） | payments not included in the measurement of lease liabilities（If Applicable） | on lease liabilities assumed | rights assets | ||||||
| Current period amount | Previous period amount | Current period amount | Previous period amount | Current period amount | Previous period amount | Current period amount | Previous period amount | Current period amount | Previous period amount | ||
| Jiangsu Yanghe Group Co., Ltd | lease of houses | 96,330.28 | 298,165.14 | 4,236.33 | 68,263.37 | ||||||
(3) Compensation for key managers
Unit: CNY
| Item | Current period amount | Previous period amount |
(4) Other related-party transactions
Subsidiary Jiangsu Yanghe Investment Management Co., Ltd. (hereinafter referred to as "Yanghe Investment"),jointly established Suqian Huatai Chanfa Technology Equity Investment Fund (Limited Partnership) (hereinafterreferred to as "Suqian Huatai Chanfa Fund") with Huatai Purple Gold Investment Co., Ltd. (hereinafter referred toas "Huatai Purple Gold"), Suqian Chanfa Entrepreneurship Investment Co., Ltd. (hereinafter referred to as"Suqian Chanfa Entrepreneurship"), Suqian Chanfa Technology Equity Investment Fund (Limited Partnership)(hereinafter referred to as "Suqian Chanfa Fund"), and Nanjing Huatai Yanghe Equity Investment Fund (LimitedPartnership) (hereinafter referred to as "Huatai Yanghe Mother Fund").The target total subscribed capital ofSuqian Huatai Chanfa Fund is CNY500 million, with Huatai Purple Gold, Suqian Chanfa Entrepreneurship, SuqianChanfa Fund, Huatai Yanghe Mother Fund, and Yanghe Investment subscribing forCNY 1 million, CNY1 million,CNY249 million, CNY124 million, and CNY125 million, respectively. Huatai Purple Gold is the general partner andexecutive managing partner of the fund, Suqian Chanfa Entrepreneurship is a general partner, and the othercontributors are limited partners.
6. Receivables from and payables to related parties
(1) Payables
Unit: CNY
| Item | Related party | Closing balance | Opening balance |
| Contract liabilities | Shanghai Haiyan Logistics Development Co., Ltd. | 2,369,114.16 | 72,307.08 |
| Contract liabilities | Jiangsu Su Wine Cultural Transmission Co., Ltd. | 3,330,783.71 | 3,803,634.02 |
| Accounts payables | VSPT, Vi?a San Pedro Tarapacá S.A. | 1,589.42 | 6,508,528.42 |
| Other Payables | Shanghai Haiyan Logistics Development Co., Ltd. | 133,000.00 | 133,000.00 |
| Other Payables | Jiangsu Su Wine Cultural Transmission Co., Ltd. | 950,000.00 | 950,000.00 |
XIII. Share-based payment
1. Other information:
According to Phase I Core Backbone Shareholding Plan (Draft) of Jiangsu Yanghe Distillery Co., Ltd., deliberatedand approved at the second Extraordinary Shareholders' Meeting of 2021 held on August 2, 2021, the shareholdingscale of the shareholding plan does not exceed 9,118,384 share. The stock in this stock plan is derived from thecompany's A-share ordinary shares repurchased by the special account. The duration of the shareholding plan is36 months, and the lock-up period of the acquired shares is 24 months, which shall be calculated from the datewhen the draft shareholding plan is approved by the Shareholders' Meeting and the company announces the lasttransfer of the underlying shares to the shareholding plan. Upon expiration of the shareholding plan, theshareholding plan shall terminate automatically, and it may be extended upon the consent of more than half ofthe members of the management Committee and the approval of the board of directors. Upon expiration of thelock-up period, the stock rights and interests held in the stock holding plan will be disposed according to theassessment results of the company's performance objectives. The performance assessment of the shareholdingplan requires that the operating revenue in 2021 should increase by no less than 15% compared with 2020 andthe operating revenue in 2022 should increase by no less than 15% compared with 2021. If the performanceassessment indicators are not reached, all the underlying stock rights and interests held in the shareholding planshall be recovered by the management Committee and sold at an appropriate time after the expiration of the lock-up period, and shall be returned to the holder on the basis of the lower investment amount and the sold amount(after deducting relevant expenses), and the remaining profits shall be enjoyed by the Company.The performanceassessment criteria for this shareholding plan have been met, and the lock-up period expired on September 10,2023. All shares held by the plan have been unlocked, and the remaining repurchased shares have been canceled.The total expenses recognized for this employee shareholding plan in the current period amount toCNY81,609,539.19, credited to the capital reserve - other capital reserves for the same amount, with a cumulativetotal of CNY244,727,667.97 credited to the capital reserve - other capital reserves.XIV. Commitments and contingencies
1. Significant commitments
Significant commitments as of the balance sheet date
By the end of 31 December 2023, there were no significant commitments needed to be disclosed.
2. Contingencies
(1) There are no material contingencies that the Company is required to disclose, which should also beexplainedThe Company has no significant contingencies to disclose.XV. Post balance sheet event
1. Profit distribution
Unit: CNY
| Proposed dividend per 10 shares (yuan) | 46.60 |
| Proposed bonus shares per 10 shares (shares) | 0 |
| Proposed bonus shares per 10 shares (shares) | 0 |
| Dividend per 10 shares declared and approved for distribution (yuan) | 46.60 |
| Bonus shares per 10 shares declared and approved for distribution (shares) | 0 |
| Bonus shares per 10 shares declared and approved for | 0 |
distribution (shares)
| distribution (shares) | |
| Profit distribution plan | The Company intends to distribute a cash dividend of CNY46.60 (including tax) per 10 shares to all shareholders based on the existing total share capital of 1,506,445,074 shares, totaling a cash distribution of CNY7,020,034,044.84 (including tax) with no bonus shares and no capitalization. If there is any change in the total share capital of the Company before the share registration date for the implementation of the equity distribution, the distribution ratio will be adjusted in accordance with the principle that the total amount of distribution remains unchanged. |
2. Explanation of post-balance sheet date events for other assets and liabilities
By the end of April 25, 2024, the company has no post-balance sheet date events that require disclosure.
XVI. Notes to major items of financial statements of parent company
1. Accounts receivable
(1)Analysis by aging
Unit: CNY
| Aging | Closing balance | Opening balance |
| Within 1 year (including 1 year) | 95,503,189.71 | 1,204,313,384.24 |
| Total | 95,503,189.71 | 1,204,313,384.24 |
(2) Disclosure of accounts receivable by categories
Unit: CNY
| Type | Closing balance | Opening balance | ||||||||
| Carrying balance | Credit loss provision | Book value | Carrying balance | Credit loss provision | Book value | |||||
| Amount | Percentage (%) | Amount | Proportion of provision | Amount | Percentage (%) | Amount | Proportion of provision | |||
| Including: | ||||||||||
| Provision for bad debts by portfolio | 95,503,189.71 | 100.00% | 11,580.39 | 0.01% | 95,491,609.32 | 1,204,313,384.24 | 100.00% | 151,596.00 | 0.01% | 1,204,161,788.24 |
| Including: | ||||||||||
| Risk portfolio | 386,013.00 | 0.40% | 11,580.39 | 3.00% | 374,432.61 | 5,053,200.00 | 0.42% | 151,596.00 | 3.00% | 4,901,604.00 |
| Other portfolio | 95,117,176.71 | 99.60% | 95,117,176.71 | 1,199,260,184.24 | 99.58% | 1,199,260,184.24 | ||||
| Total | 95,503,189.71 | 100.00% | 11,580.39 | 0.01% | 95,491,609.32 | 1,204,313,384.24 | 100.00% | 151,596.00 | 0.01% | 1,204,161,788.24 |
Provision for bad debts by portfolio: risk portfolio
Unit: CNY
| Name of portfolio | Closing balance | ||
| Accounts receivables | Provision for bad debt | Proportion | |
| Within 1 year | 386,013.00 | 11,580.39 | 3.00% |
| Total | 386,013.00 | 11,580.39 | |
Notes to determine provision for bad debt by portfolio:
Provision for bad debts by portfolio: other portfolio
| Name of portfolio | Closing balance | ||
| Accounts receivables | Provision for bad debt | Proportion | |
| Accounts receivable of companies within the scope of consolidation | 95,117,176.71 | ||
| Total | 95,117,176.71 | ||
Notes to determine provision for bad debt by portfolio:
If the Company uses the accounts receivable provision for bad debts according to the general model of expected credit loss, please disclose the relevantinformation of provision for bad debt by referring to the disclosure method of other receivables
□Applicable ?N/A
Unit: CNY
(3) Provision for bad debt that is accrued, recovered or reversed during this period
Provision for bad debts during this period:
Unit: CNY
| Category | Opening balance | Changes in the current period | Closing balance | |||
| Provision | Recovered or reversed | Write off | Others | |||
| Provision for bad debt of accounts receivables | 151,596.00 | 140,015.61 | 11,580.39 | |||
| Total | 151,596.00 | 140,015.61 | 11,580.39 | |||
Significant amount of reversal or recovery during this period
Unit: CNY
| Company name | Amount recovered or reversed | Method |
| None |
(4) Top five entities with the largest balances of the accounts receivables and contractualassets
Unit: CNY
| Company’s name | Closing balance of the accounts receivables | Closing balance of the contractual assets | Total closing balance of the accounts receivables and contractual assets | Proportion in the total accounts’ receivables and contractual assets (%) | Provision amount |
| First | 91,431,217.66 | 91,431,217.66 | 95.74% | ||
| Second | 2,328,534.10 | 2,328,534.10 | 2.44% | ||
| Third | 880,000.00 | 880,000.00 | 0.92% | ||
| Fourth | 477,424.95 | 477,424.95 | 0.50% | ||
| Fifth | 386,013.00 | 386,013.00 | 0.40% | 11,580.39 | |
| Total | 95,503,189.71 | 95,503,189.71 | 100.00% | 11,580.39 |
2. Other receivables
Unit: CNY
| Item | Closing balance | Opening balance |
| Dividend receivable | 519,220.27 | |
| Other receivables | 2,510,474,686.55 | 1,068,086,225.72 |
| Total | 2,510,993,906.82 | 1,068,086,225.72 |
(1) Dividend receivable
1）Category of dividend receivable
Unit: CNY
| Item | Closing balance | Opening balance |
| Jiangsu Yanghe Micro Guest Hall Network Technology Co., Ltd. | 519,220.27 | |
| Total | 519,220.27 |
(2) Other receivables
1) Disclosure of other receivable by nature
Unit: CNY
| Nature of other receivables | Closing balance | Opening balance |
| Payments by related parties within the | 2,509,089,391.72 | 1,062,874,527.41 |
Group
| Group | ||
| Guarantee deposit | 15,994,592.00 | 18,498,496.00 |
| Business loans and petty cash | 126,160.91 | 1,128,524.66 |
| Other receivables | 2,908,216.70 | 2,602,307.10 |
| Total | 2,528,118,361.33 | 1,085,103,855.17 |
2) Other receivables by aging
Unit: CNY
| Aging | Closing balance | Opening balance |
| Within 1 year (including 1 year) | 2,493,474,240.21 | 739,643,544.05 |
| Within 1 year | 2,493,474,240.21 | 739,643,544.05 |
| 1-2 years | 3,232,853.31 | 314,455,495.91 |
| 2-3 years | 419,534.10 | 460,000.00 |
| Over 3 years | 30,991,733.71 | 30,544,815.21 |
| 3-4 years | 460,000.00 | 8,830,032.00 |
| 4-5 years | 8,830,032.00 | 848,000.00 |
| Over 5 years | 21,701,701.71 | 20,866,783.21 |
| Total | 2,528,118,361.33 | 1,085,103,855.17 |
3) According to the general model for expected credit losses
Provision for bad debts is made on the basis of a general model of expected credit losses:
Unit: CNY
| Provisions for debts | Phase 1 | Phase 2 | Phase 3 | Total |
| Future 12-month ECL | Lifetime ECL(without credit impairment) | Lifetime ECL(with credit impairment) | ||
| Balance as at 1 January 2023 | 250,164.49 | 16,767,464.96 | 17,017,629.45 | |
| Change of opening balance as at 1 January 2022 in current period | ||||
| Provision in 2023 | 806,332.60 | 806,332.60 | ||
| Reversal in 2023 | 180,287.27 | 180,287.27 | ||
| Balance as at 31 December 2023 | 69,877.22 | 17,573,797.56 | 17,643,674.78 |
Basis of classification of stages and percentage of provision for bad debtsSignificant change of the book balance of provision during the period
□Applicable ?N/A
4) Provision, recovery or reversal for bad debt during this period
Provision for bad debts in the current period:
Unit: CNY
| Category | Opening balance | Changes in the current period | Closing balance | |||
| Provision | Recovered or reversed | Write off | Other changes | |||
| Provision for other receivables bad debt | 17,017,629.45 | 626,045.33 | 17,643,674.78 | |||
| Total | 17,017,629.45 | 626,045.33 | 17,643,674.78 | |||
Significant amount of reversal or recovery during this period:
5) Top five entities with the largest balances of the other receivables
Unit: CNY
| Company’s Name | Category | Closing balance | Aging | Proportion in total receivables | Provisioning amount at period end |
| Jiangsu Shuanggou Liquor Sales Co., Ltd | Loan | 1,871,050,539.53 | Within 1 year | 74.01% | |
| Guizhou Guijiu Co., Ltd. | Loan | 484,780,044.34 | Within 1 year | 19.18% | |
| Guizhou Maotai Town Guijiu Liquor Industry Co., Ltd | Loan | 125,712,890.12 | Within 1 year | 4.97% | |
| Jiangsu Juntai Properties Co., Lt., Suqian Guotai Department Store Co., Ltd. | deposit | 15,000,000.00 | Over 5 years | 0.59% | 15,000,000.00 |
| Harbin Binzhou Brewery Co., Ltd. | Loan | 14,997,100.00 | Within 1 year 190,000.00, 1-2years 230,000.00,2-3years 400,000.00, over 3 years 14,177,100.00 | 0.59% | |
| 合计 | 2,511,540,573.99 | 99.34% | 15,000,000.00 |
3. Long-term equity investments
Unit: CNY
| Item | Closing balance | Opening balance | ||||
| Book balance | Impairment provision | Book value | Book balance | Impairment provision | Book value | |
| Investment in subsidiaries | 9,524,901,378.94 | 9,524,901,378.94 | 8,180,436,290.49 | 8,180,436,290.49 | ||
| Investments in joint ventures and associates | 5,300,199.49 | 5,300,199.49 | ||||
| Total | 9,530,201,578.43 | 9,530,201,578.43 | 8,180,436,290.49 | 8,180,436,290.49 | ||
(1) Investment in subsidiaries
Unit: CNY
| Investee | Opening balance | Increase or decrease in the current period | Closing balance | Closing balance of provision for impairment | |||
| Increase | Decrease | Provision for impairment | Others | ||||
| Suqian Yanghe Guibinguan Co., Ltd. | 700,000.00 | 700,000.00 | |||||
| Jiangsu Shuanggou Distillery Stock Co., Ltd. | 1,729,668,793.05 | 8,190,936.81 | 1,737,859,729.86 | ||||
| Su Wine Trade Group Co., Ltd. | 367,753,517.44 | 43,274,151.64 | 411,027,669.08 | ||||
| Jiangsu Yanghe | 10,983,280.00 | 10,983,280.00 | |||||
LiquorOperationManagement Co., Ltd
| Liquor Operation Management Co., Ltd | |||||||
| Jiangsu Dongdi Union International Trade Co., Ltd. | 5,000,000.00 | 5,000,000.00 | |||||
| Jiangsu Dongdixinghui International Trade Co., Ltd | 5,000,000.00 | 5,000,000.00 | |||||
| Siyang Lantu Liquor Operation Co., Ltd. | 3,161,700.00 | 3,161,700.00 | |||||
| Hubei Lihuacun Liquor Industry Co., Ltd. | 3,000,000.00 | 3,000,000.00 | |||||
| Ningxiang Miluochun Liquor Industry Co., Ltd. | 2,129,000.00 | 2,129,000.00 | |||||
| Harbin Binzhou Brewery Co., Ltd. | 2,000,000.00 | 2,000,000.00 | |||||
| Su Wine Group Jiangsu Wealth Management Co., Ltd. | 3,000,000,000.00 | 3,000,000,000.00 | |||||
| Jiangsu Lion and Sheep Network Technology Co., Ltd. | 5,460,000.00 | 5,460,000.00 | |||||
| Guizhou Guijiu Co., Ltd. | 943,300,000.00 | 943,300,000.00 | |||||
| Jiangsu Yanghe Weiketang Network Technology Co., Ltd. | 300,000.00 | 300,000.00 | |||||
| YANGHE CHILE SPA | 456,880,000.00 | 456,880,000.00 | |||||
| Jiangsu Yanghe Investment Management Co., Ltd. | 1,500,000,000.00 | 1,500,000,000.00 | |||||
| Yanghe Hong Kong Liquor | 18,000,000.00 | 18,000,000.00 |
Co., Ltd.
| Co., Ltd. | |||||||
| Jiangsu Jiushang Internet Technology Co., LTD | 5,100,000.00 | 5,100,000.00 | |||||
| Tibet Earth Third Pole Liquor Industry Co., Ltd | 102,000,000.00 | 102,000,000.00 | 204,000,000.00 | ||||
| Jiangsu Yanghe Dream Investment Management Co., Ltd | 20,000,000.00 | 1,186,000,000.00 | 1,206,000,000.00 | ||||
| Suqian City Sujiu Logistics Co., Ltd. | 5,000,000.00 | 5,000,000.00 | |||||
| Jiangsu Yanghe Cultural Tourism Co., Ltd. 1 | |||||||
| Siyang County Tianlan Packaging Service Co., Ltd. 2 | |||||||
| Jiangsu Blue Sky Drink and Catering Management Co., Ltd. 3 | |||||||
| Total | 8,180,436,290.49 | 1,293,000,000.00 | 51,465,088.45 | 9,524,901,378.94 |
Notes:
1.Jiangsu Yanghe Cultural Tourism Co., Ltd. has not made any investments yet.
2.Siyang County Tianlan Packaging Service Co., Ltd. has not made any investments yet.
3.Jiangsu Blue Sky Drink and Catering Management Co., Ltd. has not made any investments yet.
(2) Investment in joint ventures and associates
Unit: CNY
The recoverable amount is determined as the net of fair value less costs of disposal.
□Applicable ?N/A
The recoverable amount is determined by the present value of estimated future cash flows
□Applicable ?N/A
Reasons for differences between the foregoing information and information used for impairmenttesting in previous years or external information that is clearly inconsistent with the information.Reasons for differences between the information used in the company's impairment tests inprevious years and the actual situation in the current year that are clearly inconsistent.Other note:
4. Operating revenue and cost of sales
Unit: CNY
| Item | Current period amount | Previous period amount | ||
| Operating revenue | Cost of sales | Operating revenue | Cost of sales | |
| Primary business | 12,784,912,675.46 | 6,545,812,647.88 | 11,033,861,278.77 | 5,597,622,749.56 |
| Other business | 427,288,188.77 | 320,812,482.16 | 458,946,611.18 | 382,597,476.00 |
| Total | 13,212,200,864.23 | 6,866,625,130.04 | 11,492,807,889.95 | 5,980,220,225.56 |
Information relating to revenue
Unit: CNY
| Category of Contra | Segment 1 | Segment 2 | Current period amount | Total | ||||
| Operating revenue | Cost of sales | .Operating revenue | Cost of sales | .Operating revenue | Cost of sales | Operating revenue | Cost of sales | |
| Commodity type | ||||||||
| Including: | ||||||||
| liquor | 12,784,912,675.46 | 6,545,812,647.88 | 12,784,912,675.46 | 6,545,812,647.88 | ||||
| Other | 427,288,188.77 | 320,812,482.16 | 427,288,188.77 | 320,812,482.16 | ||||
Investee
| Investee | Opening balance (book value) | Opening balance of impairment provision | Current period changes | Closing balance (book value) | Closing balance of provision for impairment | |||||||
| Additional investment | Reduction of investment | Investment gains or losses recognized under the equity method | Adjustment for other comprehensive income | Other equity changes | Declaration of cash dividends or profits | Provision for impairment | Others | |||||
| 1.Joint ventures | ||||||||||||
| 2.Associates | ||||||||||||
| Suqian Yanghe Guibinguan Co., Ltd. | 5,000,000.00 | 300,199.49 | 5,300,199.49 | |||||||||
| Subtotal | 5,000,000.00 | 300,199.49 | 5,300,199.49 | |||||||||
| Total | 5,000,000.00 | 300,199.49 | 5,300,199.49 | |||||||||
Byoperatingregions
| By operating regions | ||||||||
| Including: | ||||||||
| Type of market or customer | ||||||||
| Including: | ||||||||
| Type of contract | ||||||||
| Including: | ||||||||
| By the time of commodity transfer | ||||||||
| Including: | ||||||||
| By the contract time | ||||||||
| Including: | ||||||||
| By the selling channel | ||||||||
| Including: | ||||||||
| Total | 13,212,200,864.23 | 6,866,625,130.04 | 13,212,200,864.23 | 6,866,625,130.04 |
Information relating to performance obligations
N/A
Information related to the transaction prices allocated to remaining performance obligations:
The amount of revenue corresponding to performance obligations under contracts that were signedbut not yet fulfilled or partially fulfilled as of the end of this reporting period isCNY16,052,768,704.31. Out of this amount, CNY16,052,768,704.31 is expected to be recognized asrevenue in 2024, with the remaining amount to be recognized in subsequent years.
5. Investment income
Unit: CNY
| Item | Current period amount | Previous period amount |
| Investment income from long-term equity investments under the cost method | 6,398,636,365.50 | 5,529,140,387.31 |
| Investment income from long-term equity investments under the equity method | 300,199.49 | |
| Investment income from financial assets | 6,057,651.32 | 3,865,643.47 |
held for trading during the holdingperiod
| held for trading during the holding period | ||
| Investment income from disposal of financial assets held for trading | 178,521,367.26 | 299,644,621.19 |
| Others | -27,758,655.92 | -11,790,752.31 |
| Total | 6,555,756,927.65 | 5,820,859,899.66 |
XVII. Supplementary information
1. Detailed statement of non-recurring profits and losses?Applicable □N/A
Unit: CNY
| Item | Amount | Note |
| Profit or loss from disposal of non- current assets | -10,375,821.67 | |
| Government grants accounted for, in the profit or loss for the current period (except for the government grants closely related to the business of the Company and given at a fixed amount or quantity in accordance with the state's uniform standards) | 51,085,965.67 | |
| In addition to the effective hedging business related to the company's normal business operations, changes in fair value from holding financial assets held for trading, derivative financial assets, financial liabilities held for trading, fair value changes, and investment income from disposal of financial assets held for trading and derivative financial assets, financial liabilities held for trading, derivative financial liabilities and other debt investments | 211,499,562.04 | |
| Other non-operating income and expense except the items mentioned above | -19,590,043.61 | |
| Less: Effect of income tax | 59,943,924.97 | |
| Effect of minority equity | -409,322.32 | |
| Total | 173,085,059.78 | -- |
Specific details of other profit and loss items that conform to the definition of non-recurring profitsand losses
□Applicable ?N/A
The Company does not have any Specific details of other profit and loss items that conform to thedefinition of non-recurring profits and lossesStatement for extraordinary gain and loss items that the Company defines according to thedefinition in Explanatory Announcement of Information Disclosure of Company that IssuesSecurities publicly No.1- Extraordinary Gain and Loss and definition of recurrent gain and lossitems that are listed as extraordinary gain and loss in the Explanatory Announcement ofInformation Disclosure of Company that Issues Securities publicly NO. 1- Extraordinary Gain andLoss:
□Applicable ?N/A
2. Return on equity and earnings per share
| Profit during reporting period | Weighted average ROE | EPS (CNY/Share) | |
| Basic EPS | Diluted EPS | ||
| Net profits attributable to ordinary shareholders of the Company | 20.34% | 6.6487 | 6.6487 |
| Net profits attributable to ordinary shareholders of the Company after deduction of extraordinary gain and loss | 19.99% | 6.5338 | 6.5338 |
3. Difference of the accounting data under accounting rules in and out of China
(1) Difference of the net profit and net assets disclosed in financial report, under both IAS(International Accounting Standards) and Chinese GAAP (Generally Accepted Accounting Principles)
□Applicable ?N/A
(2) Difference of the net profit and net assets disclosed in financial report, under both foreignaccounting rules and Chinese GAAP (Generally Accepted Accounting Principles)
□Applicable ?N/A
(3) Explain the reasons for differences in accounting data under domestic and foreign accountingstandards, and, where the data audited by an overseas audit institution are subject to adjustmentfor difference, indicate the name of the overseas institution.
4.Others
None.